SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
THE WEST COMPANY, INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined:
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
1) Amount previously paid: _________________________________________________
2) Form, Schedule or Registration No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
<PAGE>
[LOGO]
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1999
----------------------
Dear Shareholder,
The 1999 Annual Meeting of Shareholders of West Pharmaceutical Services,
Inc. will be held at the Company's headquarters, 101 Gordon Drive, Lionville,
Pennsylvania 19341, on Tuesday, April 27, 1999, at 9:30 A.M., to consider and
take action on the following:
1. Re-election of three directors: Tenley E. Albright, John W. Conway and
J. Roffe Wike, II, each for a term of three years;
2. Ratification of the appointment of PricewaterhouseCoopers LLP as
independent accountants for 1999;
3. Approval of the 1999 Non-Qualified Stock Option Plan for Non-Employee
Directors; and
4. Any other matters that properly come before the meeting.
Your Board of Directors recommends a vote "FOR" Proposals 1, 2 and 3.
Only shareholders of record at the close of business, Wednesday, March 17,
1999, are entitled to notice of and to vote at the meeting or any postponement
or adjournment.
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
March 24, 1999
<PAGE>
[LOGO]
PROXY STATEMENT
General Information About the Meeting and Voting of Shares
Meeting Date, Place and Time
We, the Board of Directors of West Pharmaceutical Services, Inc., invite
you to submit the enclosed proxy "vote card" for use at the Company's 1999
Annual Meeting of Shareholders. The meeting will be held on Tuesday, April 27,
1999, at 9:30 A.M., at the Company's headquarters, 101 Gordon Drive, Lionville,
Pennsylvania 19341. The proxy and this proxy statement are being mailed on or
about March 24, 1999.
Purpose of the Meeting
At the Annual Meeting, shareholders will act on the matters outlined in the
accompanying notice of meeting, including the election of directors,
ratification of the Company's independent accountants and approval of the 1999
Non-Qualified Stock Option Plan for Non-Employee Directors. In addition, the
Company's management will report on the performance of the Company and plans for
the future. Following the close of the formal meeting, management will respond
to questions from shareholders and other attendees.
Voting Rights
You may vote at the meeting, or any postponement or adjournment of the
meeting, only if you were the record owner of the Company's common stock at the
close of business on March 17, 1999. You are entitled to one vote for each share
owned.
Quorum
A quorum is necessary to take action at the meeting. A quorum means that
shareholders of record holding at least a majority of the outstanding shares are
present, either in person or represented by proxy. As of the record date,
15,099,072 shares of common stock were outstanding. Proxies received but marked
as abstentions and broker non-votes will be included in the calculation of the
number of shares considered to be present at the meeting.
Voting Procedures
You may vote "FOR," "AGAINST," or "WITHHOLD" your vote on, each of the
directors. You may vote "FOR," "AGAINST," or "ABSTAIN" from voting on, the
proposals to ratify the appointment of independent accountants and to approve
the 1999 Non-Qualified Stock Option Plan for Non-Employee Directors.
If you complete and properly sign the accompanying proxy vote card and
return it to the Company, it will be voted as you direct. A pre-addressed
envelope is enclosed for your convenience. If you are a registered shareholder
and attend the meeting, you may deliver your completed proxy card in person. If
any of your shares are held in "street name" and you wish to vote those shares
at the meeting, you will need to obtain a proxy from the institution that holds
those shares.
<PAGE>
Changing Your Vote
Even after you have submitted your proxy, you may revoke or change your
vote at any time before the proxy is exercised by filing with the Company's
Secretary either a notice of revocation or a duly executed proxy bearing a later
date. You may also vote in person at the meeting, although attendance at the
meeting will not by itself revoke a previously granted proxy.
Counting of Votes
Abstentions are counted toward the quorum requirement. Directors are
elected by a plurality of the votes cast at the meeting. A properly executed
proxy marked "WITHHOLD AUTHORITY" for the election of one or more directors will
not be voted on the director or directors indicated, although it will be counted
for purposes of determining whether there is a quorum.
A majority of votes cast "FOR" Proposals 2 and 3 is required for
shareholder approval of those proposals. A properly executed proxy marked
"ABSTAIN" with respect to either of these proposals will not be voted, although
it will be counted for purposes of determining whether there is a quorum.
Abstentions will not be counted as votes cast and, therefore, will have no
effect on the outcome of the vote.
If you hold your shares in "street name" through a broker or other nominee,
your broker or nominee may not be permitted to exercise voting discretion with
respect to some of the matters to be acted on. Thus, if you do not give your
broker or nominee specific instructions, your shares may not be voted on those
matters and will not be counted in determining the number of shares necessary
for approval. Shares represented by such "broker non-votes" will, however, be
counted in determining whether there is a quorum.
Our Recommendations
If you do not mark your voting instructions on a signed and returned card,
the persons named as proxy holders on the proxy card will vote according to our
recommendations. Our recommendations, together with the description of each
item, are described in this proxy statement. In summary, we recommend a vote
"FOR" each of the three proposals listed in the notice of meeting accompanying
this proxy statement.
With respect to any other matter that properly comes before the meeting,
the proxy holders will vote as we recommend or, if we make no recommendation, in
their own discretion. We are not aware of any matters to be presented at the
meeting other than those set forth in the notice of meeting.
PROPOSAL #1: ELECTION OF DIRECTORS
Our Board of Directors has three classes. Each year, the directors in one
class are elected to serve a three-year term. We may increase or decrease the
size of the Board, elect directors to fill vacancies on the Board and assign
directors to a class.
We have nominated Tenley E. Albright, John W. Conway and J. Roffe Wike, II,
for election as Class III directors at the 1999 Annual Meeting. All of the
nominees are incumbent directors. Each nominee has agreed to be named and to
serve if elected.
If any nominee becomes unavailable, which we do not expect, the Board's
Nominating and Corporate Governance Committee will recommend to us a replacement
nominee. We may then designate the other nominee to stand for election. If you
voted for the unavailable nominee, your vote will be cast for his or her
designated replacement.
2
<PAGE>
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Class III Director Nominees For Terms to Expire in 2002
- --------------------------------------------------------------------------------
Tenley E. Albright, M.D. Dr. Albright, age 63, is a physician and surgeon.
Director since 1993 She is Chairman of Western Resources, Inc. and a
member of the Corporation of the New England
Baptist Hospital and Woods Hole Oceanographic
Institution. Dr. Albright is a director of State
Street Bank and Trust Company, State Street Boston
Corporation and Whitehead Institute for Biomedical
Research. She is also Chairman of the Board of
Regents, National Library of Medicine at the
National Institute of Health. She is C Medical
School.
John W. Conway Mr. Conway, age 53, has been a director since 1997
Director since 1997 and President and Chief Operating Officer since
1998 of Crown, Cork & Seal Company, Inc., a
supplier of packaging products. He was its
Executive Vice President, Americas Division from
1996 to 1998 and prior thereto, its President,
International Division.
J. Roffe Wike, II Mr. Wike, age 72, was Senior Partner and a
Director since 1962 director of Cooke & Bieler, investment counselors,
until his retirement in 1994.
We recommend that you vote FOR these nominees.
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Class I Directors Whose Terms Expire in 2000
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William G. Little Mr. Little, age 56, has been Chairman of the Board
Director since 1991 of the Company since 1995 and Chief Executive
Officer since 1991. He was also the Company's
President from 1991 to 1998. Mr. Little is a
director of Fox Chase Cancer Center and Cytyc
Corporation.
William H. Longfield Mr. Longfield, age 60, is Chief Executive Officer
Director since 1995 and Chairman of the Board of C. R. Bard, Inc., a
medical device manufacturer. He is a director of
HCR Manor Care, Inc., the Health Industry
Manufacturers Association, Horizon Health
Corporation and Atlantic Health System.
Monroe E. Trout, M.D. Dr. Trout, age 67, has been Chairman of the Board
Director since 1991 of Cytyc Corporation, a medical diagnostic
company, since January 1998 and is Chairman
Emeritus of American Healthcare Systems, a network
of integrated healthcare systems, where he was
Chairman of the Board, President and Chief
Executive Officer until his retirement in 1995. He
was Chief Executive Officer of Cytran Inc., a
biotechnology company, from March 1996 to July
1996. Dr. Trout is a director of Science
Applicatio Baxter International Inc. and the
University of California San Diego Foundation.
Anthony Welters Mr. Welters, age 44, is Chairman, President and
Director since 1997 Chief Executive Officer of AmeriChoice
Corporation, a managed health-care services
holding company, and its predecessor companies.
Mr. Welters is a director of C. R. Bard, Inc.,
Health Care Leadership Council, New York
University School of Law, the National Board of
the Smithsonian Institution and Vice Chair of
Morehouse School of Medicine.
3
<PAGE>
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Class II Directors Whose Terms Expire in 2001
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George W. Ebright Mr. Ebright, age 60, retired in 1995 from Cytogen
Director since 1992 Corp., a biotechnology pharmaceutical company,
where he was Chairman of the Board and Chief
Executive Officer. He is a director of NABI and
Arrow International Incorporated.
L. Robert Johnson Mr. Johnson, age 57, is Managing General Partner
Director since 1989 of Founders Capital Partners, L.P., a venture
capital partnership. He is a director of Genetic
Microsystems Inc., Axint Technologies Corp., RSVP
Information Inc., Telesales Inc. and Agris
Corporation. Mr. Johnson is a member of the
Corporation of the Massachusetts Institute of
Technology and a trustee of the Maryland Institute
- College of Art.
John P. Neafsey Mr. Neafsey, age 59, is President of JN
Director since 1987 Associates, an investment consulting firm. He is
Chairman of the Board of Alliance Coal Company, an
advisory director of The Beacon Group of New York,
Chairman of the Management Policy Council, and a
director of Longhorn Partners Pipeline Company and
Provident Mutual Life Insurance Company of
Philadelphia. Mr. Neafsey is a trustee of Cornell
University.
Geoffrey F. Worden Mr. Worden, age 59, is President of South Street
Director since 1993 is a director of Princess House, Inc. and is
Chairman of the Board of Directors of the New York
City Outward Bound Center.
PROPOSAL #2: RATIFICATION OF APPOINTMENT OF
INDEPENDENT ACCOUNTANTS
Upon recommendation of the Board's Audit Committee, we reappointed
PricewaterhouseCoopers LLP as independent accountants for the Company in 1999,
subject to ratification by shareholders. If the appointment is not ratified, we
will consider the appointment of other auditors. A representative of
PricewaterhouseCoopers LLP is expected to be present at the Annual Meeting and
will have the opportunity to make a statement and to respond to questions from
shareholders.
We recommend that you vote FOR ratification of the appointment of
PricewaterhouseCoopers LLP as independent accountants for 1999.
4
<PAGE>
PROPOSAL #3: APPROVAL OF THE 1999 NON-QUALIFIED STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS
Background and Purpose of the 1999 Option Plan
We are seeking shareholder approval of the 1999 Non-Qualified Stock Option
Plan for Non-Employee Directors (the "1999 Option Plan") adopted by us in March
1999. The 1999 Option Plan would replace the 1992 Non-Qualified Stock Option
Plan for Non-Employee Directors, as amended (the "1992 Option Plan"), which
would be terminated upon adoption of the new plan. Under the 1992 Option Plan
stock options to purchase 1,500 shares of the Company's common stock are granted
each year to each director who is not an employee of the Company. Each grant of
stock options under the 1992 Option Plan "vested," or became exercisable, one
year after its grant date.
The 1999 Option Plan would award each non-employee director in office at
the 1999 Annual Meeting up to two stock options for 4,500 shares that vest over
a three-year period. These options would be granted on the date of this year's
Annual Meeting and (assuming they continue in office) on the date of the annual
meeting in 2002. Directors who join the Board after the 1999 Annual Meeting
would receive similar options, but covering a proportionately fewer number of
shares, depending on when they are first elected. The number and timing of
option grants are described more fully below.
The purpose of awarding grants with an extended vesting schedule, which is
consistent with recent stock-option grants to the Company's senior management,
is to provide greater incentive to outside directors to achieve long-term and
consistent growth in shareholder value, as measured by stock-price growth. In
doing so, the 1999 Option Plan is intended to assist the Company attract and
retain the services of knowledgeable and experienced non-employee directors.
If the 1999 Option Plan is not approved, we intend to continue the 1992
Option Plan until its current expiration date on the day immediately following
the annual meeting of shareholders in 2001.
Eligibility
Participation in the 1999 Option Plan would be limited to non-employee
directors of the Company, meaning directors who are not employees of the Company
or any of the Company's subsidiaries (as defined in section 424 (f) of the
Internal Revenue Code of 1986, as amended). There are currently 10 non-employee
directors.
Term and Termination
If the 1999 Option Plan is approved by shareholders, it would take effect
on April 27, 1999, the date of the 1999 Annual Meeting of Shareholders, and
would terminate January 1, 2005. No options would be granted after the
termination date. All options outstanding on the termination date would expire
according to their terms.
Awards and Grants Under the 1999 Option Plan
Under the 1999 Option Plan, each non-employee director in office on April
27, 1999, the date of the 1999 Annual Meeting, would be entitled to receive a
stock option to purchase 4,500 shares of common stock on that date. Each of
these directors who remains in office through the 2002 annual meeting of
shareholders would receive another 4,500-share option at that time. Non-employee
directors who join the Board after the 1999 Annual Meeting and before January 1,
2005 would be eligible to receive up to three stock options covering a total of
between 8,250 and 750 shares, depending on the date of his or her first
election. No eligible director could receive more than a total of 9,000 shares
under the 1999 Option Plan.
All options granted under the 1999 Option Plan would become exercisable in
three equal annual installments on the first through third anniversaries of the
grant date. Each stock option would expire 10 years from the date of grant,
unless exercised earlier or terminated under the terms of the 1999 Option Plan.
5
<PAGE>
The following table shows the size of the options and the timing of their grant
for all eligible directors under the 1999 Option Plan, assuming that each
director continues in office through January 1, 2005.
<TABLE>
<CAPTION>
Shares Underlying Stock Options and Date of Option Grant
---------------------------------------------------------------------------
Annual Meeting Date
------------------------------------------------------------
Date Director Election
Joins Board Date 1999 2000 2001 2002 2003 2004 Totals
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
On or before 1999 Annual Meeting 4,500 4,500 9,000
After 1999 Annual Meeting
and before January 1, 2000 750 3,000 4,500 8,250
Between January 1, 2000 and
2000 Annual Meeting 3,000 4,500 7,500
After 2000 Annual Meeting
and before January 1, 2001 750 1,500 4,500 6,750
Between January 1, 2001 and
2001 Annual Meeting 1,500 4,500 6,000
After 2001 Annual Meeting
and before January 1, 2002 750 4,500 5,250
Between January 1, 2002 and
2002 Annual Meeting 4,500 4,500
After 2002 Annual Meeting
and before January 1, 2003 750 3,000 3,750
Between January 1, 2003 and
2003 Annual Meeting 3,000 3,000
After 2003 Annual Meeting
and before January 1, 2004 750 1,500 2,250
Between January 1, 2004 and
2004 Annual Meeting
1,500 1,500
After 2004 Annual Meeting
and before January 1, 2005 750 750
</TABLE>
Exercise Price
The exercise price for all options granted under the 1999 Option Plan would
be 100% of the fair market value of the Company's common stock, generally
measured by the average of the highest and lowest prices of actual sales of the
Company's common stock on the New York Stock Exchange on the grant date. Option
holders would be able to pay the exercise price either in cash, in common stock
(having a fair market value on the exercise date equal to the total option
exercise price), or in a combination of cash and stock. If payment of the
exercise price is made in shares, the option holder may elect to deliver
previously owned shares or have the Company withhold a portion of the shares to
be received.
Time of Exercise
General. Options under the 1999 Option Plan would become immediately
exercisable if an eligible director retires from the Board and would remain
exercisable for one year following retirement (but no longer than six months
after death). Options (if otherwise exercisable) could be exercised for up to 90
days after termination of board service for any reason other than retirement or
removal for cause. Any unexercised option would terminate upon an eligible
director's removal for cause. During the non-employee director's lifetime,
options granted under the 1999 Option Plan could only be exercised by that
director and would not be transferable except by will, by the laws of
inheritance or under a qualified domestic relations order.
6
<PAGE>
Accelerated Vesting. For each 4,500-share option grant, a three-year
"benchmark" stock price would be set assuming a 10% annual growth rate in the
market price of the Company's common shares on the grant date. If the trading
price of the Company's common stock exceeds this benchmark and the average
trading price exceeds the benchmark level for at least 30 days, any unvested
portion of the option would immediately become exercisable.
In addition, all options granted under the 1999 Option Plan would
immediately become exercisable if a "change in control" occurs. A change in
control is generally defined as any such event that requires a report to the
Securities and Exchange Commission, and includes any acquisition or other
transaction that results in a change in ownership of more than 50% of the
Company's stock or a change in the majority of the Board over a two-year period
that is not approved by at least two-thirds of the directors.
Shares Eligible for Delivery Under the 1999 Option Plan
The 1999 Option Plan authorizes a maximum of 125,000 shares of common stock
to be delivered upon exercise of options. Such shares could be authorized and
unissued shares or treasury shares. We consider this amount sufficient to award
two 4,500-share stock options to each current director plus options to new
directors who may join the Board as a result of retirements during the plan
term. The authorized share amount includes shares that remain available under
the 1992 Option Plan after its termination. We could adjust the total number of
shares authorized to reflect a change in the number or kind of outstanding
shares due to a corporate transaction or reorganization.
Administration and Amendments
We have the power to interpret the Plan's provisions, supervise the 1999
Option Plan's administration and make all determinations necessary or advisable
to administer the 1999 Option Plan. We may amend or discontinue the 1999 Option
Plan, subject to the requirement of shareholder approval when necessary to
comply with any tax or regulatory requirements. Rights under outstanding
options, however, could not be adversely affected without the consent of the
option holder.
Other Information
Certain Federal Income Tax Consequences. Options granted under the 1999
Option Plan would not be intended to qualify as "incentive stock options" as
that term is defined in Section 422A of the Internal Revenue Code of 1986, as
amended. The exercise of a non-qualified stock option would result in ordinary
income for the optionee and a deduction for the Company measured by the
difference between the option price and the fair market value of the shares
received at the time of exercise. Upon the sale of stock acquired through
exercise of a non-qualified stock option, the gain (measured by the difference
between the sale price and the amount included in income upon exercise of the
option plus the option price) would be short-term or long-term capital gain. At
the time of a subsequent sale of any shares obtained upon the exercise of an
option, any gain or loss would be a capital gain or loss to the option holder.
Market Value of Common Stock. The closing market price of the Company's
common stock as reported on the New York Stock Exchange Composite Transactions
listing on March 19, 1999 was $34.875 per share.
We recommend that you vote FOR adoption of the 1999 Option Plan.
7
<PAGE>
INFORMATION ABOUT THE BOARD AND BOARD COMMITTEES
Board of Directors
We have designated directors who are independent of management as
"independent directors." All of the directors, other than the Company's Chief
Executive Officer William G. Little, are independent directors. The independent
directors' primary duties are to evaluate the performance of the Company's Chief
Executive Officer, to assure that he has appropriate leadership succession plans
and to review and monitor achievement of his long-range strategic plans for the
Company. One independent director i designated as the "Chairman, Independent
Directors." The Chairman, Independent Directors confers with the Chief Executive
Officer on the Board's agenda items and information requirements. He also calls
meetings of the independent directors. Monroe E. Trout is the current Chairman,
Independent Directors.
The Board met seven times last year and the independent directors met once.
All directors attended more than 75% of the total number of meetings of the
Board and the committees on which they served, except John W. Conway, who
attended four of the seven board meetings.
Board Committees
The Board has four standing committees: Audit, Compensation, Finance and
Nominating and Corporate Governance. Last year, the Audit Committee and the
Compensation Committee each met four times, the Finance Committee met six times
and the Nominating and Corporate Governance Committee met five times.
The Audit Committee performs the following functions: (1) recommends
annually to the Board the appointment of a firm of independent accountants for
the Company; (2) reviews the fees paid to the independent accountants; (3)
reviews with the accountants the scope and results of each annual audit; and (4)
reviews with the accountants and the Company's financial officers their comments
and recommendations. Directors Johnson (Chairman), Albright, Conway, Welters and
Worden serve on the Audit Committee.
The Compensation Committee determines the Company's compensation
arrangements with executive management and reports its actions to us. This
Committee also administers the Company's management incentive compensation
plans. Directors Longfield (Chairman), Ebright, Neafsey and Trout serve on the
Compensation Committee.
The Finance Committee serves as our liaison with management on important
financial transactions and financial-policy matters. The Finance Committee also
consults with and advises management on financial strategies, policies and
procedures, acquisitions, divestitures, major capital-expenditure requests and
similar matters. The Committee makes recommendations on these matters to us.
Directors Neafsey (Chairman), Conway, Ebright, Johnson, Wike and Worden serve on
the Finance Committee.
The Nominating and Corporate Governance Committee recommends nominees to be
elected to the Board and appointments to board committees and evaluates and
makes recommendations on director candidates. After review by the independent
directors, this Committee formally recommends to us a successor to the Chief
Executive Officer. The Nominating and Corporate Governance Committee also
reviews the Company's legal compliance policies and programs periodically with
the Company's General Counsel. The members of the Nominating and Corporate
Governance Committee are Directors Trout (Chairman), Albright, Longfield, Wike
and Welters.
Compensation of Directors
Each independent director receives an annual retainer of $20,000. He or she
also receives $1,500 for each board and independent-director meeting and $1,000
for each committee meeting attended. An additional annual fee of $3,500 is paid
to the chairman of each board committee and to the Chairman, Independent
Directors. Directors
8
<PAGE>
may defer all or any part of their director's fees. Deferred fees may be placed
either in an interest-bearing cash account or in a cash-only "phantom stock"
account. " Phantom stock" parallels the performance of the Company's common
stock. Directors receive their deferred fees upon their retirement or
termination as a director.
After five years of service on the Board, each independent director becomes
entitled to receive an annual retirement benefit. This benefit commences upon
retirement after age 60 and runs until the earlier of 15 years or the director's
death. The amount of the benefit is between 50% and 100%, depending on the
length of service, of his or her base annual retainer at the time of retirement.
Non-employee directors also receive annually an option to acquire 1,500
shares of common stock under the 1992 Option Plan. Each option expires five
years from the date of grant. However, as described above under the caption
"Background and Purpose of the 1999 Option Plan" on page 5, if the 1999 Option
Plan is approved by shareholders the 1992 Option Plan would be terminated and
directors would receive no options under 1992 Option Plan this year. Instead,
each non-employee director would receive a option to purchase 4,500 shares that
would vest in three annual installments of 1,500 shares each under the 1999
Option Plan.
OWNERSHIP OF COMPANY STOCK
The following table and footnotes contain information about persons who
beneficially own more than 5% of the outstanding common stock as of March 19,
1999. Except as indicated below, the beneficial owners have sole voting and
investment power over the shares shown opposite their names. This table was
compiled from Company records and Securities and Exchange Commission
share-ownership reports. The amount of shares beneficially owned is as of March
19, 1999, except as noted in the accompanying footnotes.
- --------------------------------------------------------------------------------
Amount and Percent
Name and Address of Nature of Beneficial of
Beneficial Owner Ownership Class
- --------------------------------------------------------------------------------
Jean Wike Faust ................................. 1,255,108(1) 8.3%
16 Fox Chase Road
Malvern, PA 19355
First Union Corporation ......................... 795,705(2) 5.2%
One First Union Center
Charlotte, NC 28288-0137
Franklin Resources, Inc. ........................ 1,524,800(3) 10.0%
777 Mariners Island Blvd.
6th Floor
San Mateo, CA 94404
Lazard Freres & Co. LLC ......................... 1,318,907(4) 8.7%
30 Rockefeller Plaza
New York, NY 10020
Trimark Financial Corporation ................... 811,300(5) 5.3%
One First Canadian Place
Suite 5600
P.O. Box 487
Toronto, ON M5X 1E5
William S. West.................................. 950,047(6) 6.2%
101 Gordon Drive
Lionville, PA 19341
J. Roffe Wike, II ............................... 1,626,339(1)(7) 10.7%
2125 Twinbrook Road
Berwyn, PA 19312
9
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- ----------
(1) Includes 226,000 shares held by a trust of which Mrs. Faust is the sole
beneficiary. As trustee, J. Roffe Wike, II, the brother of Mrs. Faust, has
sole investment and voting power over those shares. Also includes 576,328
shares held by a trust as to which Mrs. Faust and Mr. Wike share voting and
investment power.
(2) Based upon information as of December 31, 1998 set forth in a Schedule 13G
filing made by First Union Corporation dated February 11, 1999. Includes
(i) sole voting power with respect to 63,353 shares, (ii) shared voting
power with respect to 86,088 shares, (iii) sole investment power with
respect to 43,801 and (iv) shared investment power with respect to 651,686
shares.
(3) Based upon information as of December 31, 1998 set forth in a Schedule 13G
filing made by Franklin Resources, Inc. dated December 8, 1998. Includes
(i) sole voting power with respect to 1,406,800 shares and (ii) sole
investment power with respect to 1,517,800 shares.
(4) Based upon information as of December 31, 1998 set forth in a Schedule 13G
filing made by Lazard Freres & Co. LLC dated February 10, 1999. Includes
(i) sole voting power with respect to 1,027,207 shares and (ii) sole
investment power with respect to 1,318,907 shares.
(5) Based upon information as of December 31, 1998 set forth in a Schedule 13G
filing made by Trimark Financial Corporation dated February 1, 1999.
(6) Includes shared voting power over 446,264 shares. Does not include 184,074
shares owned by Mr. West's wife because he disclaims beneficial ownership
of those shares.
(7) Includes options to acquire 7,500 shares under the Company's 1992 Option
Plan. Does not include 7,840 shares owned by Mr. Wike's wife because he
disclaims beneficial ownership of those shares.
The following table shows the beneficial ownership of common stock by each
director, each executive officer named in the Summary Compensation Table on page
13 and all directors and executive officers as a group. The plan amounts are
included as of December 31, 1998 and all other information is as of March 19,
1999. Also included are "phantom-stock" units held in deferred-compensation
accounts by directors. Where a director or executive officer has the right to
acquire shares within 60 days after March 19, 1999, through the exercise of
stock options, these shares are treated as beneficially owned by the individual
and as outstanding when computing the percentages owned by the individual and
the group. The amounts include shares of common stock beneficially owned by the
individuals, common stock underlying stock options and stock granted under the
Company's incentive compensation plans and Savings Plan. The table is compiled
from information provided by the individuals and from Company records.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Right to Acquire Phantom Stock
Shares Owned Percent of Ownership Under Units Under
Directly and Common Stock Options Exercisable Directors' Deferred
Name Indirectly(1)(2) Outstanding Within 60 Days Compensation Plan
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tenley E. Albright 1,500 * 6,000
John W. Conway 0 * 1,500
J. E. Dorsey 9,971 * 57,000
George W. Ebright 2,500 * 7,500
Steven A. Ellers 7,125 * 37,000
Lawrence P. Higgins 1,395 * 19,000
L. Robert Johnson 7,500 * 6,000
William G. Little 58,881 * 73,000
William H. Longfield 1,000 * 4,500 3,394
Donald E. Morel, Jr. 4,295 * 28,461
John P. Neafsey 4,417 * 6,000 3,615
Monroe E. Trout 5,000 * 6,000 10,387
Anthony Welters 300 * 3,000
J. Roffe Wike, II 1,618,839 10.7% 7,500 13,006
Geoffrey F. Worden 3,500 * 6,000 4,428
All directors and executive officers
as a group (20 persons) 1,787,334 13.9% 368,161 34,830
</TABLE>
10
<PAGE>
- ------------------
* Indicates ownership of less than 1% of the shares outstanding.
(1) These amounts include restricted shares granted under the Company's
Management Incentive Bonus Plan, as follows: Mr. Little -- 1,566 shares;
Mr. Dorsey -- 863 shares; Mr. Ellers -- 350 shares; Mr. Morel -- 340
shares; Mr. Higgins -- 258 shares; and all directors and executive officers
as a group -- 4,723 shares. The holders of restricted shares have voting
power over the shares. The restricted shares are subject to transfer and
forfeiture restrictions.
(2) These amounts include shares granted as the Company's contributions under
the Company's Savings Plan, as follows: Mr. Little -- 930 shares;
Mr. Dorsey -- 418 shares; Mr. Ellers -- 1,129 shares; Mr. Morel -- 312
shares; Mr. Higgins -- 95 shares; and all directors and officers as a group
-- 7,820 shares. The holders of Savings Plan shares have voting power over
the shares. These shares vest in five equal annual installments over the
first five years of service for the Company.
BOARD COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
Compensation Philosophy
The overriding philosophy governing the Company's senior executive
compensation program is the alignment of shareholder and management interests by
rewarding management for adding value to the business and achieving results that
reflect constantly improving performance.
The components of compensation are base salary, annual incentive bonus and
long-term incentive compensation in the form of stock options. Consistent with
the Company's policy of attracting and retaining the highest caliber employees,
base salaries are targeted to the median of comparable positions, while total
compensation opportunity (i.e., base salary, bonus and stock options) is
designed to provide superior reward opportunities for superior results. Rewards
are earned primarily based on the level of achievement of performance goals
established by the Board of Directors. Individual performance also is a
consideration in the final determination of bonus awards.
Long-term incentive programs are designed to provide management with the
opportunity to create wealth by participating in the consistent improvement of
shareholder value.
A significant portion of executive compensation is "at risk." As described
in more detail below, annual bonuses are tied to achievement of financial and
strategic targets, and the value of stock options is dependent on an increase in
market value of common stock over the exercise price. In making compensation
decisions, the Committee relies heavily on survey data and recommendations from
an outside compensation consultant.
To further align management and shareholder interests, the Committee has
developed share-ownership goals, which call for executive officers to own common
stock with a market value equal to specified multiples of the executive's base
salary, ranging from 200% of base salary for senior executives to 500% of base
salary for the CEO. The Committee would like executives to reach their goal
within five to seven years of attaining their position. The Committee annually
reviews each executive's progress toward meeting his or her goal and has asked
the CEO to develop a plan for increasing the share ownership of executives who
fall short of their goals.
Base Salaries
In setting 1998 base salaries, the Committee relied primarily on
competitive market compensation data from four separate surveys of general
industry, which were compiled by a compensation consultant. The Committee also
considered recommendations of the Chief Executive Officer regarding individual
performance of other executives and their relative experience. All of the named
executive officers' base salaries for 1998 approximated the surveys' market
consensus median level.
11
<PAGE>
Management Incentive Bonus Plan
Each of the named executive officers participates in the Company's
Management Incentive Bonus Plan (the "Bonus Plan"). Payouts under the Bonus Plan
are based 75% on achievement of a specific corporate financial performance
target and 25% on achievement of strategic, non-financial goals. Bonus Plan
participants receive a full payout if the Company reaches its financial target
and all of the other goals are met. A higher payout is made when the Company
exceeds its financial target and no payout is made if the actual financial
performance is less than the prior year's performance.
To encourage share ownership, one-fourth of a Bonus Plan participant's
after-tax annual bonus is paid in shares of common stock, referred to as "bonus
shares." Each participant also receives a number of additional, restricted
shares equal to 25% of the number of bonus shares received. The restricted
shares are forfeited if the bonus shares are transferred within four years of
the date of grant.
The Committee used earnings-per-share (EPS) as the corporate financial
performance measurement for 1998. The 1998 EPS target under the Bonus Plan
(representing 75% of the bonus payout opportunity) corresponded to the EPS
target contained in management's operating plan for that year, which was
approved by the Board of Directors in December 1997. At that time, the Committee
decided to reserve the remaining 25% bonus opportunity to its discretionary
evaluation of management's success in accomplishing acquisitions and other
activities related to the Company's strategy to broaden its offering of products
and services.
The Committee decided to pay the named executives and Mr. Little 96.2% of
their bonus opportunity for 1998. This payout was based on the Committee's
confirmation that 96.2% of the 1998 EPS target had been achieved and the
Committee's judgment that management substantially achieved its 1998 objectives.
Based on the bonus payout, Mr. Little received a bonus of $352,813, which
included 1,482 bonus shares. He also received 371 restricted shares. The other
named executives also were paid in a combination of cash, bonus and restricted
shares.
Long-Term Incentive Compensation
Stock options are granted in numbers that are targeted to produce a
long-term compensation opportunity consistent with comparable positions within
general industry, based on a value determined by the Black-Scholes valuation
method. All options are granted with an exercise price equal to the fair market
value of a share of common stock on the grant date. In addition, the option
agreements contain forfeiture provisions, which will cause any unexercised
option to expire immediately if the executive engages in conduct detrimental to
the Company such as competitive activities. The named executive officers
received no grants of stock options in 1998.
Deductible Compensation under the Tax Laws
Under section 162(m) of the Internal Revenue Code, a publicly held
corporation such as the Company is denied a federal tax deduction for
compensation in excess of $1,000,000, which is paid to its chief executive
officer and its four most-highly compensated executive officers other than the
CEO. "Qualified performance-based compensation" and certain other compensation
is not subject to the deduction limitation. The Board of Directors has taken
action to ensure that awards of stock options, bonus and incentive shares under
the Company's incentive plans will be treated as qualified performance-based
compensation and, therefore, remain tax deductible by the Company. While there
is no firm policy on whether to permit executive compensation to exceed the
$1,000,000 limit, the Committee periodically monitors the compensation of
Company executives and believes that no tax deductions for executive
compensation will be lost in the near future.
William H. Longfield, Chairman
George W. Ebright
John P. Neafsey
Monroe E. Trout
12
<PAGE>
COMPENSATION OF NAMED EXECUTIVE OFFICERS
Summary Compensation Table
The following table contains information on compensation paid to the
Chairman and Chief Executive Officer and the four other most highly compensated
executive officers of the Company.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Long-Term
Annual Compensation Compensation Awards
-------------------------- -------------------------
Other Restricted Securities
Annual Stock Underlying All Other
Name & Principal Position Year Salary($)(1) Bonus($)(1) Compensation($) Award(s)($)(2) Options(#) Compensation($)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
William G. Little 1998 482,634 352,813 17,879 12,161 -0- 16,374
Chairman and 1997 461,538 371,902 6,376 12,819 165,000 14,701
Chief Executive Officer 1996 438,240 291,074 4,329 10,083 -0- 14,002
J. E. Dorsey 1998 314,722 213,227 12,270 7,350 -0- 9,436
President and 1997 284,320 198,193 4,703 6,831 90,000 8,525
Chief Operating Officer 1996 262,701 155,898 3,674 5,387 15,000 7,877
Steven A. Ellers 1998 207,022 101,979 7,374 3,403 -0- 6,205
Senior Vice President, 1997 173,287 78,077 5,754 3,257 55,000 5,181
Finance and Administration 1996 160,579 57,561 5,754 2,403 10,000 4,765
Donald E. Morel, Jr. 1998 203,755 80,038 6,839 3,339 -0- 6,107
Group President 1997 173,237 78,077 6,375 3,199 55,000 5,181
1996 158,212 57,561 4,414 2,287 10,000 4,743
Lawrence P. Higgins 1998 188,662 83,497 7,579 3,362 -0- 5,657
Vice President, Operations 1997 180,950 77,656 6,686 3,127 55,000 -0-
1996 109,744 48,470 3,858 1,520 -0- -0-
</TABLE>
- -----------------
(1) The Bonus columns include the value of any bonus (unrestricted) shares
awarded under the Bonus Plan, but not the value of any restricted shares,
which are shown in the Restricted Stock Award(s) column. Bonuses are paid
in the fiscal year following the fiscal year in which they are earned.
(2) Restricted stock awards are made in the fiscal year following the fiscal
year in 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 Company's common stock on the
grant date, which was $27.63 for 1996, $31.38 for 1997 and $32.82 for 1998
awards. Dividends are paid on restricted stock and reinvested in additional
shares of common stock.
The following table contains information on the restricted stock held by
the named executives at December 31, 1998. Values are determined by multiplying
the number of shares by $35.69, the December 31, 1998 closing price of the
common stock.
Number of Restricted Current Market Value
Name Shares Held of Restricted Shares Held
- --------------------------------------------------------------------------------
William G. Little 1,195 $42,650
J. E. Dorsey 639 22,806
Steven A. Ellers 220 7,851
Lawrence P. Higgins 155 5,532
Donald E. Morel, Jr. 238 8,494
(3) Represents Company contributions under the Company's Savings Plan and
Non-Qualified Deferred Compensation Plan for Designated Executive Officers.
With respect to Mr. Little, includes for 1998, 1997 and 1996 term life
insurance premiums paid by the Company of $1,901, $860 and $860,
respectively.
13
<PAGE>
1998 Stock Option Exercises and Year-End Option Values
The following table shows how many stock options were exercised by each of
the named executive officers in 1998. It also shows the number and value of
their unexercised options as of December 31, 1998.
Aggregated Option Exercises in Last Fiscal Year
and 1998 Year-End Option Values
<TABLE>
<CAPTION>
Shares Number of Shares Value of Unexercised
Acquired Underlying Unexercised In-the-Money
on Value Options Held at Options at
Name Exercise(#) Realized($)(1) Fiscal Year-End(#) Fiscal Year-End($)(1)(2)
- ---------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
W. G. Little 30,000 496,875 103,000 212,000 1,044,040 1,268,960
J. E. Dorsey 8,000 87,131 65,000 60,000 623,310 376,800
S. A. Ellers 4,500 44,659 41,500 36,000 401,635 226,080
D. E. Morel 1,439 13,131 36,561 36,000 345,051 226,080
L. P. Higgins -0- -0- 19,000 36,000 138,420 226,080
</TABLE>
- ----------
(1) Market value on the date of exercise of shares covered by options
exercised, less option exercise price.
(2) The dollar amounts shown under the Exercisable and Unexercisable columns of
this heading represent the number of exercisable and unexercisable options,
respectively, multiplied by the difference between the closing price of the
Company's common stock on December 31, 1998 ($35.69) and the exercise price
of the options.
Pension Plan Table
The following table shows estimated annual retirement benefits payable to
participants in the Company's Salaried Employees' Retirement Plan (the
"Retirement Plan") whose employment terminates at normal retirement (age 65).
The normal retirement benefit equals 1.9% of the average of a participant's five
highest consecutive calendar years of earnings out of the participant's last ten
calendar years of service, multiplied by his or her years of service up to 25
years, plus 0.5% of such earnings multiplied by his or her years of service in
excess of 25 but not more than 35 years.
In general, the earnings covered by the Retirement Plan are base salary,
bonuses and non-deferred cash payments, including a participant's contributions
to the Company's Savings Plan. The figures shown include benefits payable under
the Retirement Plan and the Company's related supplemental plans for certain
individuals. The figures are stated before reduction for Social Security
payments. Although age 65 is the normal retirement age under the Retirement
Plan, participants may retire upon reaching age 55. The amount of the benefit in
such cases will be reduced by 1/4 of 1% for each month for ages 60-64 and 1/3 of
1% for each month from ages 55-59.
Pension Plan Table
<TABLE>
<CAPTION>
Estimated Annual Retirement Benefits
Years of Pension Plan Participation
--------------------------------------------------------------------------
Five-Year
Average Annual Earnings 15 20 25 30 35
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$200,000 $ 57,000 $ 76,000 $ 95,000 $100,000 $105,000
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
500,000 142,500 190,000 237,500 250,000 262,500
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
800,000 228,000 304,000 380,000 400,000 420,000
850,000 242,250 323,000 403,750 425,000 446,250
</TABLE>
14
<PAGE>
As of December 31, 1998, the credited full years of service for the named
executive officers were as follows: Mr. Little -- 23 years; Mr. Dorsey -- 6
years; Mr. Ellers -- 15 years; Mr. Morel -- 6 years; and Mr. Higgins -- 2 years.
Employment and Other Agreements
Mr. Little has an employment agreement with the Company under which he
serves as Chief Executive Officer. His base annual salary is determined
according to Company compensation-review policies. The agreement also entitles
him to participate in the Company's annual and long-term incentive plans. The
Company may terminate his employment by giving two years' prior notice or
earlier for cause, or due to disability or death.
The Company has entered into agreements with each of the named executive
officers that provide benefits if their employment is terminated 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 persona affairs and thereby will be
better able to assist in evaluating such a proposal in an objective manner.
Each executive is entitled to receive severance compensation under his
agreement 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. The 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 termination. A "change in control" is generally defined as
any such event that requires a report to the Securities and Exchange Commission,
but includes any acquisition or other transaction that results in a change in
ownership of more than 50% of the Company' stock or a change in the majority of
the Board over a two-year period that is not approved by at least two-thir of
the directors. Each agreement prohibits the executive from being employed by any
competitor of the Company or competing with the Company in any part of the
United States (any market or territory, in the case of Mr. Little) for up to one
year following employment termination for any reason. The payment of severance
compensation is not conditioned upon the executive seeking other employment and
is not subject to reduction if the executive secures other employment consistent
with the agreement.
15
<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the cumulative total return to holders of the
Company's 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 for the five years ended December 31, 1998. Cumulative
total-return-to-shareholders is measured by dividing total dividends (assuming
dividend reinvestment) plus the 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, 1993 and is compared to
the cumulative total return of the S&P 400 and peer group over the period with a
like amount invested.
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 is composed of Amphenol
Corporation, Andrew Corporation, Applied Magnetics Corporation, Augat Inc.,
Beckman Instruments, Inc., C. R. Bard, Inc., CTS Corp., Millipore Corporation,
Pall Corporation, The Perkin-Elmer Corporation, Sealed Air Corporation and
Thomas & Betts Corporation.
TOTAL SHAREHOLDER RETURNS
(Dividends Reinvested)
[GRAPHIC]
In the printed version of the document, a line graph appears which depicts
the following plot points:
INDEXED RETURNS
<TABLE>
<CAPTION>
Base Years Ending
Period --------------------------------------------------
Company Name/Index Dec 93 Dec 94 Dec 95 Dec 96 Dec 97 Dec 98
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
WEST PHARMACEUTICAL SVCS INC 100 114.28 99.44 122.15 131.14 160.57
S&P 400 100 98.51 125.10 147.84 183.82 224.85
PEER GROUP 100 111.63 149.46 185.11 198.58 215.39
</TABLE>
16
<PAGE>
ADDITIONAL INFORMATION
Proxy Solicitation Costs. The Company will pay the entire cost of
preparing, assembling, printing, mailing and distributing these proxy materials.
The Company has retained Kisell-Blake Inc., 110 Wall Street, New York, New York
10005, to aid in the solicitation. For these services, the Company will pay
Kisell-Blake Inc. a fee of $4,000 and reimburse it for certain out-of-pocket
disbursements and expenses. Officers and regular employees of the Company may
solicit proxies by further mailing or personal conversations, or by telephone,
facsimile or electronic means. The Company will also reimburse brokerage houses
and other custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses for forwarding proxy and solicitation materials to
shareholders.
Shareholder Proposals for the 2000 Annual Meetings. Any shareholder of
record may submit a shareholder proposal for consideration at the 2000 annual
meeting or propose director candidates for consideration by the Nominating and
Corporate Governance Committee. In either case, your written proposal must be
received by the Office of the Secretary of the Company, 101 Gordon Drive,
Lionville, Pennsylvania 19341, on or before January 28, 2000, (90 days before
the anniversary date of the 1999 Annual Meeting on April 27, 1999). Your notice
must include information about yourself and your nominee, including name and
address, the number of shares you own, your intention to appear in person or by
proxy at the meeting to nominate your nominee(s), a description of all
arrangements or understandings between yourself and each of your nominee(s) and
any other person or persons for which the nominations are to be made and other
information required by Securities and Exchange Commission proxy rules. The
chairman of the meeting may refuse to acknowledge your nomination(s) if it is
not made in accordance with these instructions.
To obtain a copy of the relevant Bylaw provisions regarding the
requirements for making shareholder proposals and nominating director candidates
you may contact the Office of the Secretary of the Company, 101 Gordon Drive,
Lionville, Pennsylvania, 19341.
By Order of the Board of Directors
JOHN R. GAILEY III
Vice President, General Counsel and Secretary
March 24, 1999
17
<PAGE>
[LOGO]
PROXY
WEST PHARMACEUTICAL SERVICES, INC.
101 Gordon Drive, Lionville, Pennsylvania 19341
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John R. Gailey III and Steven A. Ellers 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 West Pharmaceutical Services, Inc., held of record by the undersigned
on March 17, 1999, at the Annual Meeting of Shareholders to be held on April 27,
1999 or any postponement or adjournment thereof.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this Proxy
will be voted FOR Proposals 1, 2 and 3.
(To be Signed on Reverse Side)
<PAGE>
|X| Please mark your
votes as in this
example.
<TABLE>
<CAPTION>
FOR WITHHOLD AUTHORITY FOR AGAINST ABSTAIN
-------- ------------------ --- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Election of all the to vote for 2. Ratification of the appointment
3 Class III | | nominees | | the nominees of PricewaterhouseCoopers LLP as | | | | | |
Directors listed listed below independent accountants of the
below corporation for the fiscal year
ending December 31, 1999.
(except as marked to the contrary) 3. Approval of the 1999
Non-Qualified Stock Option Plan | | | | | |
(INSTRUCTION: To withhold authority to vote for any for Non-Employee Directors.
individual nominee, strike a line through the nominee's name
in the list below.)
Tenley E. Albright, John W. Conway, J. Roffe Wike, II 4. In their discretion, the Proxies
are authorized to vote upon
such other matters as may
properly come before the
meeting.
This Proxy when properly executed will be
voted in the manner directed herein by the
undersigned shareholder. If no direction is
made, this Proxy will be voted FOR Proposals
1, 2 and 3.
</TABLE>
SIGNATURE(S)________________________________________ DATE ______________
Please sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee, guardian, or in any other representative
capacity, please so indicate.
