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
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(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:
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2) Aggregate number of securities to which transaction applies:
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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:
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4) Proposed maximum aggregate value of transaction:
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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>
[GRAPHIC OMITTED]
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 2000
-----------------------
Dear Shareholder,
The 2000 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 25, 2000, at 9:30 A.M., to consider and
take action on the following:
1. Re-election of four directors: William G. Little, William H. Longfield,
Monroe E. Trout and Anthony Welters, each for a term of three years;
2. Ratification of the appointment of PricewaterhouseCoopers LLP as
independent accountants for 2000; and
3. Any other matters that properly come before the meeting.
Your Board of Directors recommends a vote "FOR" Proposals 1 and 2.
Only shareholders of record at the close of business, Friday, March 17,
2000, 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 23, 2000
<PAGE>
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 2000
Annual Meeting of Shareholders. The meeting will be held on Tuesday, April 25,
2000, 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 23, 2000.
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 and
ratification of the Company's independent accountants. 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, 2000. 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,
14,716,965 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
proposal to ratify the appointment of independent accountants.
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.
1
<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
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.
A majority of votes cast "FOR" Proposal 2 is required for shareholder
ratification of the Company's independent accountants. A properly executed proxy
marked "ABSTAIN" with respect to this proposal 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 one or more 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.
Our Recommendations
If you return your signed proxy card without indicating any voting
instructions, the proxy holders will vote your shares according to our
recommendations, which are to vote "FOR" each of the two proposals listed in the
accompanying notice of meeting.
On 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.
PROPOSAL #1: ELECTION OF DIRECTORS
Our Board of Directors is divided into 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 William G. Little, William H. Longfield, Monroe E. Trout
and Anthony Welters for election as Class I directors at the 2000 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
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Class I Director Nominees For Terms to Expire in 2003
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William G. Little Mr. Little, age 57, 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 61, is Chief Executive Officer and
Director since 1995 Chairman of the Board of C. R. Bard, Inc., a medical-
device manufacturer. He is a director of Manor Care,
Inc., the Health Industry Manufacturers Association,
Horizon Health Corporation and Atlantic Health
System. Mr. Longfield is a trustee of Centenary
College.
Monroe E. Trout, M.D. Dr. Trout, age 68, 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 Applications International
Corporation (SAIC), Baxter International Inc. and
the University of California San Diego Foundation.
Anthony Welters Mr. Welters, age 45, 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.
We recommend that you vote FOR these nominees.
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Class II Directors Whose Terms Expire in 2001
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George W. Ebright Mr. Ebright, age 61, 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 58, is Managing General Partner of
Director since 1989 Founders Capital Partners, L.P., a venture capital
partnership. He is a director of Axint Technologies
Corp., RSVP Information Inc., and Telesales Inc.
Mr. Johnson is a member of the Corporation of the
Massachusetts Institute of Technology and a trustee
of the Maryland Institute - College of Art.
3
<PAGE>
John P. Neafsey Mr. Neafsey, age 60, is President of JN Associates,
Director since 1987 an investment consulting firm. He is Chairman of the
Board of Alliance Resources, LP, 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 60, is President of South Street
Director since 1993 Capital, Inc., an investment company. Mr. Worden
is a director of Princess House, Inc. and is
Chairman of the Board of Directors of the New York
City Outward Bound Center.
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Class III Directors Whose Terms Expire in 2002
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Tenley E. Albright, M.D. Dr. Albright, age 64, 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,
Whitehead Institute for Biomedical Research and the
Massachusetts Society for Medical Research. She is
Chairman of the Alumni Fund, Harvard Medical School.
John W. Conway Mr. Conway, age 54, 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 to that time, its President, International
Division.
J. Roffe Wike, II Mr. Wike, age 73, was Senior Partner and a director
Director since 1962 of Cooke & Bieler, investment counselors, until his
retirement in 1994.
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 2000,
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.
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We recommend that you vote FOR ratification of the
appointment of PricewaterhouseCoopers LLP as
independent accountants for 2000.
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4
<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, except for 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 is 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.
Board Committees
The Board has five committees: Audit, Compensation, Finance, Nominating and
Corporate Governance and Technology. Last year, the Audit Committee and the
Compensation Committee each met four times, the Finance Committee met three
times, the Nominating and Corporate Governance Committee met three times and the
Technology Committee met twice.
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 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), 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, Wike and Worden serve on the
Finance Committee.
The Nominating and Corporate Governance Committee evaluates and makes
recommendations on director and officer nominees and appointments to board
committees. 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), Longfield, Wike and Welters.
The Technology Committee oversees and assists in the development of the
Company's drug-delivery strategy and business, periodically reviews the
Company's technology portfolio and advises us on such matters. The members of
the Technology Committee are Directors Albright (Chairman), Ebright, Johnson,
Welters and Trout.
5
<PAGE>
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 may defer all or any part of their director fees. Deferred
fees may be placed either in an interest-bearing cash account or in a
"stock-equivalents" account, which parallels the performance of the Company's
common stock. Stock-equivalents are settled in cash when a director leaves the
Board.
In May 1999, the Board terminated its retirement plan for non-employee
directors. Retirement benefits accrued as of the termination date were converted
into stock-equivalents. The number of stock-equivalents credited upon conversion
was determined by reference to the fair market value of Company's common stock
at that time.
Non-employee directors also receive once every three years an option to
purchase 4,500 shares that vests in three annual installments of 1,500 shares.
OWNERSHIP OF COMPANY STOCK
The following table and footnotes contain information about persons who
beneficially own more than 5% of the outstanding common stock. 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 17, 2000, except as noted in
the accompanying footnotes.
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Amount and Percent
Name and Address of Nature of Beneficial of
Beneficial Owner Ownership Class
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Jean Wike Faust .......................... 1,242,681 (1) 8.34%
16 Fox Chase Road
Malvern, PA 19355
First Union Corporation .................. 1,161,902 (2) 7.79%
One First Union Center
Charlotte, NC 28288-0137
Franklin Resources, Inc. ................. 1,454,600 (3) 9.8 %
777 Mariners Island Blvd.
6th Floor
San Mateo, CA 94404
Lazard Freres & Co. LLC .................. 1,138,904 (4) 7.63%
30 Rockefeller Plaza
New York, NY 10020
Trimark Financial Corporation ............ 811,300 (5) 5.4 %
One First Canadian Place
Suite 5600
P.O. Box 487
Toronto, ON M5X 1E5
J. Roffe Wike, II ........................ 1,339,497 (1)(6) 8.99%
2125 Twinbrook Road
Berwyn, PA 19312
- ---------------
(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 576,061
shares held by a trust as to which Mrs. Faust and Mr. Wike share voting
and investment power.
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(2) Based upon information as of December 31, 1999 set forth in a Schedule 13G
filing made by First Union Corporation dated February 14, 2000. Includes
(i) sole voting power with respect to 19,690 shares, (ii) shared voting
power with respect to 495,148 shares, (iii) sole investment power with
respect to 800 shares and (iv) shared investment power with respect to
651,354 shares.
(3) Based upon information as of December 31, 1999 set forth in a Schedule 13G
filing made by Franklin Resources, Inc. dated February 12, 2000. Includes
(i) sole voting power with respect to 1,380,000 shares and (ii) sole
investment power with respect to 1,454,600 shares.
(4) Based upon information as of December 31, 1999 set forth in a Schedule 13G
filing made by Lazard Freres & Co. LLC dated February 3, 2000. Includes (i)
sole voting power with respect to 899,596 shares and (ii) sole investment
power with respect to 1,138,904 shares.
(5) Based upon information as of December 31, 1999 set forth in a Schedule 13G
filing made by Trimark Financial Corporation dated February 1, 2000.
(6) Includes options to acquire 10,500 shares under the Company's stock-option
plans. 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
10 and all directors and executive officers as a group. The amounts include
shares of common stock beneficially owned by the individuals, common stock
underlying stock options and shares held under the Company's
incentive-compensation plans and Savings Plan. Also included are
stock-equivalents held by directors in deferred-compensation accounts. The
Savings Plan amounts are included as of December 31, 1999 and all other
information is as of the record date (i.e., March 17, 2000).
No director or officer beneficially owns more than 1% of the Company's
outstanding common stock, except for Mr. Wike, who beneficially owns 8.99%. All
directors and officers as a group beneficially own 10.23% of the outstanding
shares. Shares underlying stock options exercisable within 60 days after the
record date are treated as beneficially owned by the individual and as
outstanding when computing the percentages owned by the individual and the
group. The table is compiled from information provided by the individuals and
from Company records.
<TABLE>
<CAPTION>
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Shares Owned Right to Acquire Ownership Stock-Equivalents Units Under
Directly and Under Options Exercisable Directors' Deferred
Name Indirectly(1)(2) Within 60 Days Compensation Plan
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<S> <C> <C> <C>
Tenley E. Albright 1,500 6,000 2,494
John W. Conway 800 1,500 330
George W. Ebright 2,928 6,000 3,065
Steven A. Ellers 11,556 36,000 -
John R. Gailey III 8,657 19,944 -
Lawrence P. Higgins 2,310 26,518 -
L. Robert Johnson 7,500 6,000 4,237
William G. Little 60,643 146,000 -
William H. Longfield 1,000 4,500 6,265
Donald E. Morel, Jr. 8,775 22,061 -
John P. Neafsey 5,945 4,500 9,765
Monroe E. Trout 11,000 0 14,986
Anthony Welters 300 3,000 360
J. Roffe Wike, II 1,339,497 6,000 17,491
Geoffrey F. Worden 3,500 6,000 8,367
All directors and executive
officers as a group (21 persons) 1,525,304 371,023 67,360
</TABLE>
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(1) These amounts include restricted shares awarded under the Company's
Management Incentive Bonus Plan, as follows: Mr. Little -- 1,619 shares;
Mr. Ellers -- 438 shares; Mr. Morel -- 450 shares; Mr. Higgins -- 371
shares; Mr. Gailey -- 368 shares; and all directors and executive officers
as a group -- 4,530 shares. The holders of restricted shares have voting
power over the shares. The restricted shares are subject to transfer and
forfeiture restrictions.
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<PAGE>
(2) These amounts include shares contributed by the Company under the
Company's Savings Plan, as follows: Mr. Little -- 934 shares; Mr. Ellers
-- 1,134 shares; Mr. Morel -- 313 shares; Mr. Higgins -- 95 shares; Mr.
Gailey -- 79 shares; and all directors and officers as a group -- 7,119
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 to the Company.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Securities Exchange Act of 1934 and related
Securities and Exchange Commission rules, the Company's directors and officers
must file initial reports of their beneficial ownership of the Company's common
stock and subsequent changes to that ownership. Three of the Company's officers
and directors missed the due date for filing reports for 1999 transactions. Mr.
Higgins, the Company's Vice President, Operations, reported in February 2000 a
1999 exercise of stock options for 182 shares. John W. Conway, a director,
reported in February 2000 the 1999 purchase of 800 shares. J. Roffe Wike, II, a
director, reported in February 2000 the 1999 sale of 227 shares by a trust in
which Mr. Wike shares voting and investment power.
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 executives,
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.
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 for senior management. These goals 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 and annually reviews each executive's progress. At the Committee's
direction, the CEO has established specific interim stock-ownership objectives
for those executives who are progressing slowly in achieving their goals. A
portion of any cash bonus earned, in excess of the "bonus shares" mentioned
later, may be converted into shares of common stock for executives who fail to
meet these goals.
Base Salaries
In setting 1999 base salaries, the Committee relied primarily on
competitive market compensation data from four industry groups, which were
compiled by an independent compensation consultant. The Committee also
considered recommendations of the Chief Executive Officer regarding individual
performance of other executives and their relative experience. The named
executive officers' base salaries for 1999 approximated the market consensus
median level.
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<PAGE>
Management Incentive Bonus Plan
Each of the executive officers named in the Summary Compensation Table
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 goals
determined by the Committee. Bonus Plan participants receive a full payout if
the Company reaches its financial target and 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 1999. The 1999 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 1998. At that time, the Committee
agreed that payout of the remaining 25% bonus opportunity would be based on its
discretionary evaluation of management's success in growing revenues through new
products and new business opportunities such as acquisitions, mergers and
licensing agreements.
The Committee decided to pay the named executives and Mr. Little 93% of
their bonus opportunity for 1999. This payout reflected the Committee's judgment
that while the Company substantially achieved its EPS target, revenue growth
fell short of expectations in 1999. Based on the bonus payout, Mr. Little
received a bonus of $358,522, which included 1,896 bonus shares. He also
received 475 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. No stock options were granted to the
named executive officers in 1999.
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
$1,000,000 limit, the Committee periodically monitors the compensation of
Company executives and believes that no tax deductions for executive
compensation will be lost in the near future.
William H. Longfield, Chairman
John P. Neafsey
Monroe E. Trout
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Compensation of Named Executive Officers
Summary Compensation Table
The following table contains information on compensation paid to the
Chairman and Chief Executive Officer and the four other most highly compensated
executive officers of the Company.
<TABLE>
<CAPTION>
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Long-Term
Annual Compensation Compensation Awards
------------------- -------------------
Other Restricted Securities
Annual Stock Underlying All Other
Name & Principal Position Year Salary($)(1) Bonus($)(1) Compensation($) Award(s)($)(2) Options(#) Compensation($)(3)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
William G. Little 1999 505,555 358,522 - 12,357 - 17,313
Chairman and 1998 482,634 352,813 - 12,161 - 16,374
Chief Executive Officer 1997 461,538 371,902 - 12,819 165,000 14,701
Steven A. Ellers 1999 220,714 104,632 - 4,282 - 6,615
Senior Vice President and 1998 207,022 101,979 - 3,403 - 6,205
Chief Financial Officer 1997 173,287 78,077 - 3,257 55,000 5,181
Donald E. Morel, Jr. 1999 219,324 104,632 - 4,216 - 6,573
Division President, 1998 203,755 80,038 - 3,339 - 6,107
Drug Delivery Systems 1997 173,237 78,077 - 3,199 55,000 5,181
Lawrence P. Higgins 1999 196,995 74,405 - 2,942 - 6,615
Vice President, Operations 1998 188,662 83,497 - 3,362 - 5,657
1997 180,950 77,656 - 3,127 55,000 -0-
John R. Gailey III 1999 189,785 71,426 - 2,811 - 5,687
Vice President, General 1998 177,944 71,188 - 2,969 - 5,332
Counsel and Secretary 1997 161,386 69,211 - 2,770 32,000 4,837
</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 average of the high and low prices of the Company's common
stock on the grant date, which was $31.47 for 1997, $32.81 for 1998 and
$26.06 for 1999 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, 1999. Values are determined by multiplying the number of
shares by $30.94, the December 31, 1999 closing price of the common stock.
Number of Restricted Current Market Value
Name Shares Held of Restricted Shares Held
- -------------------------------------------------------------------------------
William G. Little 1,144 $35,395
Steven A. Ellers 273 8,446
Donald E. Morel, Jr. 288 8,910
Lawrence P. Higgins 258 7,982
John R. Gailey III 260 8,044
10
<PAGE>
(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 1999, 1998 and 1997 term life
insurance premiums paid by the Company of $2,153, $1,901 and $860,
respectively.
1999 Stock Option Exercises and Year-End Option Values
The following table shows how many stock options were exercised by each of
the named executive officers in 1999. It also shows the number and value of
their unexercised options as of December 31, 1999.
Aggregated Option Exercises in Last Fiscal Year
and 1999 Year-End Option Values
<TABLE>
<CAPTION>
Shares Number of Shares Value of Unexercised
Acquired Underlying Unexercised In-the-Money
on Value Options Held at Options at
Name Exercise(#) Realized($)(1) Fiscal Year-End(#) Fiscal Year-End($)(1)(2)
- ------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William G. Little 30,000 600,937 146,000 139,000 $161,059 $181,588
Steven A. Ellers 14,500 171,531 38,000 27,000 $146,186 $ 41,342
Donald E. Morel 23,500 290,108 22,061 27,000 $ 41,521 $ 41,342
Lawrence P. Higgins 1,482 9,146 26,518 27,000 $ 56,842 $ 41,342
John R. Gailey III 11,056 149,587 26,444 14,400 $ 97,479 $ 22,049
</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, 1999 ($30.94) 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 plan 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 with 10 years of service 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.
11
<PAGE>
Pension Plan Table
<TABLE>
<CAPTION>
Estimated Annual Retirement Benefits
Years of Pension Plan Participation
----------------------------------------------------------------------
Five-Year
Average Annual 15 20 25 30 35
Earnings
- -----------------------------------------------------------------------------------------
<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
900,000 256,500 342,000 427,500 450,000 472,500
</TABLE>
As of December 31, 1999, the credited full years of service for the named
executive officers were as follows: Mr. Little -- 24 years; Mr. Ellers -- 16
years; Mr. Morel -- 7 years; Mr. Higgins -- 3 years; and Mr. Gailey -- 9 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 personal 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-thirds 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 Messrs. Little and Morel)
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.
12
<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, 1999. 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, 1994 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, PE Corp. Biosystems (formerly Perkin-Elmer Corporation),
Sealed Air Corporation and Thomas & Betts Corporation.
[GRAPHIC]
In the printed version of the document, a line graph appears which depicts the
following plot points:
13
<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 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. You may also be contacted by
officers and other employees of the Company about submitting your proxy by
further mailing, personal conversations, by telephone, facsimile or electronic
means.
Shareholder Proposals for the 2001 Annual Meetings. Any shareholder of
record may submit a shareholder proposal for consideration at the 2001 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 26, 2001, (90 days before
the anniversary date of the 2000 Annual Meeting on April 25, 2000). 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 23, 2000
14
<PAGE>
[GRAPHIC OMITTED]
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, 2000, at the Annual Meeting of Shareholders to be held on April 25,
2000 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 and 2.
(To be Signed on Reverse Side)
<PAGE>
<TABLE>
|X| Please mark your
votes as in this
example.
FOR WITHHOLD AUTHORITY FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1. Election of all the to vote for 2. Ratification of the appointment
4 Class I nominees the nominees of PricewaterhouseCoopers LLP as
Directors listed listed below independent accountants of the
below corporation for the fiscal year
ending December 31, 2000.
(except as marked to the contrary) 3. In their discretion, the Proxies
are authorized to vote upon such other
(INSTRUCTION: To withhold authority to vote for any matters as may properly come before the
individual nominee, strike a line through the nominee's name meeting.
in the list below.)
William G. Little, William H. Longfield, Monroe E. Trout, This Proxy when properly executed will
Anthony Welters be voted in the manner directed herein
by the undersigned shareholder. If no
direction is made, this Proxy will be
voted FOR Proposals 1 and 2.
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.
</TABLE>
