-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GrztoR07BQgys4Nxto3l1kINqRSNuQN+JYWm8bGWE2/iSFlbFztDV+uAfWnDzU9S XLC2Bwo0JiYCN1JX0dbKrA== 0000105770-03-000094.txt : 20030813 0000105770-03-000094.hdr.sgml : 20030813 20030813122258 ACCESSION NUMBER: 0000105770-03-000094 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEST PHARMACEUTICAL SERVICES INC CENTRAL INDEX KEY: 0000105770 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED RUBBER PRODUCTS, NEC [3060] IRS NUMBER: 231210010 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08036 FILM NUMBER: 03839796 BUSINESS ADDRESS: STREET 1: 101 GORDON DR STREET 2: P O BOX 645 CITY: LIONVILLE STATE: PA ZIP: 19341-0645 BUSINESS PHONE: 6105942900 MAIL ADDRESS: STREET 1: 101 GORDON DRIVE STREET 2: PO BOX 645 CITY: LIONVILLE STATE: PA ZIP: 19341-0645 FORMER COMPANY: FORMER CONFORMED NAME: WEST CO INC DATE OF NAME CHANGE: 19990405 10-Q 1 file10q203.htm 10Q 2ND QTR. 2003 10Q2 2003>

                           SECURITIES AND EXCHANGE COMMISSION
                                 Washington, D.C. 20549

                                        FORM 10-Q

                    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                         OF THE SECURITIES EXCHANGE ACT OF 1934

                      For the Quarterly Period Ended June 30, 2003

                              Commission File Number 1-8036

                           WEST PHARMACEUTICAL SERVICES, INC.
                 (Exact name of registrant as specified in its charter)


               Pennsylvania                                    23-1210010
- -----------------------------------------    ---------------------------------------
    (State or other jurisdiction of          (I.R.S. Employer Identification Number)
     incorporation or organization)


     101 Gordon Drive, PO Box 645,
             Lionville, PA                               19341-0645
- -----------------------------------------    ---------------------------------------
(Address of principal executive offices)                 (Zip Code)




           Registrant's telephone number, including area code 610-594-2900

                                                    N/A

- --------------------------------------------------------------------------------------

       Former name, former address and former fiscal year, if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 19434 during the preceding
12 months, and (2) has been subject to such filing requirements for the past 90 days.
Yes X  No

Indicate by check mark whether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Exchange Act).  Yes_X_ No __

                         June 30, 2003 - 14,494,573

Indicate the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.





                                                                                  Page 2

                                        Index

                    Form 10-Q for the Quarter Ended June 30, 2003


                                                                                             Page

Part I -Financial Information

   Item 1.    Financial Statements (unaudited)

              Consolidated Statements of Income for the Three Months and Six Months
              ended June 30, 2003 and June 30, 2002                                              3

              Condensed Consolidated Balance Sheets at June 30, 2003 and December 31,
              2002                                                                               4

              Consolidated Statement of Shareholders' Equity for the Six Months ended
              June 30, 2003                                                                      5

              Condensed Consolidated Statements of Cash Flows for the Six Months ended
              June 30, 2003 and June 30, 2002                                                    6

              Notes to Condensed Consolidated Financial Statements                               7

   Item 2.    Management's Discussion and Analysis of Financial Condition and Results of
              Operations                                                                        13

   Item 3.    Quantitative and Qualitative Disclosure about Market Risk                         19

   Item 4.    Controls and Procedures                                                           19

Part II - Other Information

   Item 4.    Submission of Matters to a Vote of Security Holders                               20

   Item 6.    Exhibits and Reports on Form 8-K                                                  20

SIGNATURES                                                                                      21

              Index to Exhibits                                                                F-1,
                                                                                               F-2



                                                                                           Page 3

Part I.  Financial Information
Item 1.  Financial Statements.

West Pharmaceutical Services, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except per share data)

                                                         Three Months Ended                 Six Months Ended
                                                  June 30, 2003   June 30, 2002    June 30, 2003    June 30, 2002
- ------------------------------------------------------------------------------------------------------------------
Net sales                                             $ 126,400       $ 106,500        $ 244,200        $ 208,200
Cost of goods and services sold                          85,000          75,800          166,400          146,700
- ------------------------------------------------------------------------------------------------------------------
    Gross profit                                         41,400          30,700           77,800           61,500
Selling, general and administrative expenses             26,800          21,500           51,200           41,800
Costs associated with plant explosion, net                3,700              -             8,800                -
Other (income) expense, net                                 100            (600)             500           (2,400)
- -------------------------------------------------------------------------------------------------------------------
   Operating profit                                      10,800           9,800           17,300           22,100
Interest expense, net                                     1,700           2,500            3,600            4,900
- -------------------------------------------------------------------------------------------------------------------
   Income before income taxes                             9,100           7,300           13,700           17,200
Provision for income taxes                                2,900           2,200            4,200            6,000
- -------------------------------------------------------------------------------------------------------------------
   Income from consolidated operations                    6,200           5,100            9,500           11,200
Equity in net income of affiliated companies                700             100            1,200              300
- -------------------------------------------------------------------------------------------------------------------
   Income from continuing operations                      6,900           5,200           10,700           11,500
Discontinued operations, net of tax                           -             100                -             (100)
- -------------------------------------------------------------------------------------------------------------------
   Net income                                         $   6,900       $   5,300        $  10,700        $  11,400
===================================================================================================================
Net income (loss) per share:
   Basic
      Continuing operations                           $    0.48       $    0.36        $   0.74         $    0.80
      Discontinued operations                                 -            0.01               -             (0.01)
- -------------------------------------------------------------------------------------------------------------------
                                                      $    0.48       $    0.37        $   0.74         $    0.79
===================================================================================================================

   Assuming dilution
      Continuing operations                           $    0.48       $    0.36        $    0.74        $    0.80
      Discontinued operations                                 -            0.01                -            (0.01)
- -------------------------------------------------------------------------------------------------------------------
                                                      $    0.48       $    0.37        $    0.74        $    0.79
- -------------------------------------------------------------------------------------------------------------------

Average common shares outstanding                        14,483          14,430           14,481           14,398
Average shares assuming dilution                         14,483          14,507           14,481           14,450

Dividends declared per common share                   $    0.20       $    0.19        $    0.40        $    0.38

See accompanying notes to condensed consolidated financial statements.

                                                                                           Page 4

West Pharmaceutical Services, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands)
                                                        June 30,     December 31,
                                                           2003             2002
- --------------------------------------------------------------------------------
ASSETS
Current assets:
     Cash, including cash equivalents                 $  44,300        $  33,200
     Accounts receivable                                 80,900           66,600
     Inventories                                         45,000           41,300
     Income tax refundable                                2,500            3,600
     Deferred income tax benefits                         5,300            5,200
     Other current assets                                11,300           11,900
- --------------------------------------------------------------------------------
Total current assets                                    189,300          161,800
- --------------------------------------------------------------------------------
Property, plant and equipment                           516,600          499,600
Less accumulated depreciation and amortization         (294,500)        (276,300)
- --------------------------------------------------------------------------------
                                                        222,100          223,300
Investments in affiliated companies                      19,500           18,000
Goodwill                                                 38,200           35,500
Pension asset                                            50,700           53,000
Deferred income tax benefits                             21,400           19,900
Insurance receivable                                      6,600                -
Patents                                                   7,000            7,300
Other intangibles                                         1,900            1,700
Other assets                                             10,700            9,100
- --------------------------------------------------------------------------------
Total Assets                                          $ 567,400        $ 529,600
================================================================================

LIABILITES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Current portion of long-term debt                $  11,800        $  11,700
     Notes payable                                        3,700            4,100
     Accounts payable                                    21,900           19,200
     Accrued expenses:
        Salaries, wages and benefits                     19,300           17,000
        Income taxes payable                              8,100            9,400
        Restructuring costs                                 900            1,400
        Deferred income taxes                             2,400            2,400
        Other                                            31,000           23,000
- --------------------------------------------------------------------------------
Total current liabilities                                99,100           88,200
- --------------------------------------------------------------------------------
Long-term debt, excluding current portion               164,100          159,200
Deferred income taxes                                    49,700           48,500
Other long-term liabilities                              32,800           32,200
Shareholders' equity                                    221,700          201,500
- --------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity            $ 567,400        $ 529,600
================================================================================

See accompanying notes to condensed consolidated financial statements.


                                                                                           Page 5


West Pharmaceutical Services, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited)
(in thousands)

                                                                            Accumulated
                                                 Capital in                       other
                                         Common   excess of    Retained   comprehensive    Treasury
                                          stock   par value    earnings    income (loss)      stock       Total
- ----------------------------------------------------------------------------------------------------------------
Balance, December 31, 2002             $  4,300    $ 30,900   $ 261,200     $ (13,400)   $ (81,500)   $ 201,500

Net income                                                       10,700                                  10,700

Shares issued under stock plans                                                                400          400

Cash dividends declared                                          (5,800)                                 (5,800)

Foreign currency translation adjustment                                        15,000                    15,000

Minimum pension liability
translation adjustment                                                           (200)                     (200)

Fair value of financial instruments
adjustment                                                                        100                       100
- ----------------------------------------------------------------------------------------------------------------

Balance, June 30, 2003                 $  4,300    $ 30,900   $ 266,100     $   1,500    $ (81,100)   $ 221,700
================================================================================================================


See accompanying notes to condensed consolidated financial statements.

                                                                                           Page 6


West Pharmaceutical Services, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands)


                                                                   Six Months Ended
                                                                June 30,      June 30,
                                                                   2003          2002
- --------------------------------------------------------------------------------------
Cash flows provided by (used in) operating activities:
     Net income                                                $ 10,700      $ 11,400
     Loss from discontinued operations                               -            100
     Depreciation and amortization                               16,600        16,200
     Other non-cash items, net                                    2,400        (2,900)
     Changes in assets and liabilities, net of effects of
       discontinued operations                                   (4,000)       (9,600)
- ---------------------------------------------------------------------------------------
Net cash provided by operating activities
of continuing operations                                         25,700        15,200
- ---------------------------------------------------------------------------------------

Cash flows (used in) provided by investing activities:
     Property, plant and equipment acquired                     (18,100)      (20,600)
     Insurance proceeds received for explosion
      destroyed equipment                                         4,500             -
     Land acquired under government grant                        (2,000)            -
     Deposit held in trust from sale of assets                        -         4,300
     Customer advances, net of repayments                           700        (1,300)
- ---------------------------------------------------------------------------------------
Net cash used in investing activities
of continuing operations                                        (14,900)      (17,600)
- ---------------------------------------------------------------------------------------

Cash flows (used in) provided by financing activities:
     Net borrowings (repayments) under revolving
       credit agreements                                          4,500        (7,800)
     Repayment of subordinated debenture                              -        (4,300)
     Repayment of other long-term debt                             (200)         (200)
     Other notes payable, net                                      (600)          600
     Dividend payments                                           (5,800)       (5,500)
     Issuance of common stock                                         -         3,200
- ---------------------------------------------------------------------------------------
Net cash used in financing activities
of continuing operations                                         (2,100)      (14,000)
- ---------------------------------------------------------------------------------------
Net cash provided by discontinued operations                          -         1,200
- ---------------------------------------------------------------------------------------
Effect of exchange rates on cash                                  2,400         1,100
- ---------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents             11,100       (14,100)
Cash, including cash equivalents at beginning of period          33,200        42,100
- ---------------------------------------------------------------------------------------
Cash, including cash equivalents at end of period              $ 44,300      $ 28,000
=======================================================================================

See accompanying notes to condensed consolidated financial statements.


                                                                                           Page 7

                        West Pharmaceutical Services, Inc. and Subsidiaries
                  Notes to Condensed Consolidated Financial Statements (Unaudited)
                          (in thousands, except share and per share data)

1.   The interim consolidated financial statements for the six-month period ended June 30, 2003
     should be read in conjunction with the consolidated  financial statements and notes thereto
     of West Pharmaceutical Services, Inc. (the Company), appearing in the Company's 2002 Annual
     Report on Form 10-K.  The year-end condensed consolidated balance sheet data was derived from
     audited financial statements, but does not include all disclosures required by generally
     accepted accounting principles. Interim results are based on the Company's unaudited accounts.

     Interim Period Accounting Policy
     --------------------------------
     In the opinion of management, the unaudited Condensed Consolidated Balance Sheet, the
     unaudited Consolidated Statement of Shareholders' Equity, the unaudited Consolidated Statements
     of Income and the unaudited Condensed Consolidated Statements of Cash Flows as of and for
     the three and six-month periods ended June 30, 2003 and for the comparative periods in 2002
     contain all adjustments, consisting only of normal recurring accruals and adjustments, necessary
     for a fair presentation of the Company's financial position as of June 30, 2003 and the results
     of operations and cash flows for the respective periods.  The results of operations for any
     interim period are not necessarily indicative of results for the full year.

     Reclassification
     ----------------
     Certain reclassifications were made to prior period financial statements to be consistent
     with the current period reporting presentation.

     Income Taxes
     ------------
     The tax rate used for interim periods is the estimated annual effective consolidated tax rate,
     based on the current estimate of full year results, except that taxes related to specific
     events and taxes applicable to prior year adjustments, if any, are recorded as identified.

     Stock-Based Compensation
     ------------------------
     The Company accounts for stock-based compensation using the intrinsic value method
     prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
     to Employees," and related interpretations.  Accordingly, compensation cost for
     stock options is measured as the excess, if any, of the quoted market price of the
     Company's stock at the date of the grant over the amount an employee must pay to
     acquire the stock.



                                                                                          Page 8



                      West Pharmaceutical Services, Inc. and Subsidiaries
              Notes to Condensed Consolidated Financial Statements (Unaudited)
                       (in thousands, except share and per share data)
                                           (continued)

     The Company did not record compensation cost for stock options for the three and six-months
     ended June 30, 2003 and 2002 because stock option grants were made at 100% of the fair market
     value of the stock on the grant date.  If the fair value  based method prescribed in SFAS
     No. 123, "Accounting for Stock-Based Compensation," had been applied to stock option grants,
     the Company's net income and basic and diluted net income per share would have been reduced
     as summarized below:

                                                    Three Months Ended          Six Months Ended
                                                   6/30/03      6/30/02        6/30/03      6/30/02
   -------------------------------------------------------------------------------------------------
   Net income, as reported:                        $ 6,900     $  5,300       $ 10,700     $ 11,400
     Deduct: Total stock-based compensation
      expense determined  under the fair value
      method for all awards, net of tax               (300)        (300)          (500)        (700)
   -------------------------------------------------------------------------------------------------

   Pro forma net income                            $ 6,600     $  5,000       $ 10,200     $ 10,700
   =================================================================================================

   Net income per share:
    Basic, as reported                             $   0.48    $   0.37       $   0.74     $   0.79
    Basic, pro forma                               $   0.46    $   0.34       $   0.71     $   0.74

    Diluted, as reported                           $   0.48    $   0.37       $   0.74     $   0.79
    Diluted, pro forma                             $   0.46    $   0.34       $   0.71     $   0.74
   ---------------------------------------------------------------------------------------------------

2. Inventories at June 30, 2003 and December 31, 2002  were as follows:

                                             6/30/03     12/31/02
                 -------------------------------------------------
                 Finished goods            $  18,000     $ 18,900
                 Work in process              10,100        7,400
                 Raw materials                16,900       15,000
                 -------------------------------------------------
                                           $  45,000     $ 41,300
                 =================================================

3. Comprehensive income (loss) for the three and six-months ended June 30, 2003 and June 30,
   2002 was as follows:

                                                     Three Months Ended            Six Months Ended
                                                     6/30/03     6/30/02        6/30/03       6/30/02
   --------------------------------------------------------------------------------------------------
   Net income                                      $  6,900     $  5,300       $ 10,700     $  11,400
   Foreign currency translation adjustments          10,500       13,800         15,000         8,100
   Minimum pension liability translation
   adjustments                                         (300)        (300)          (200)         (200)
   Fair value adjustment on derivative financial
   instruments                                          100         (100)           100             -
   --------------------------------------------------------------------------------------------------
   Comprehensive income (loss)                     $ 17,200     $ 18,700       $ 25,600      $ 19,300
   ==================================================================================================





                                                                                           Page 9


                         West Pharmaceutical Services, Inc. and Subsidiaries
                   Notes to Condensed Consolidated Financial Statements (Unaudited)
                            (in thousands, except share and per share data)
                                              (continued)



4.  Net sales to external customers and operating profit (loss) by reporting segment
    for the three and six-months ended June 30, 2003 and June 30, 2002 were as follows:


                                       Three Months Ended       Six Months Ended
     Net Sales:                        6/30/03    6/30/02       6/30/03    6/30/02
     -----------------------------------------------------------------------------
     Pharmaceutical Systems          $ 125,200  $ 104,300     $ 241,400  $ 203,400
     Drug Delivery Systems               1,200      2,200         2,800      4,800
     -----------------------------------------------------------------------------
     Consolidated Total              $ 126,400  $ 106,500     $ 244,200  $ 208,200
     =============================================================================


                                         Three Months Ended        Six Months Ended
     Operating Profit (Loss):           6/30/03      6/30/02     6/30/03       6/30/02
     ----------------------------------------------------------------------------------
     Pharmaceutical Systems            $ 25,200     $ 18,200    $ 46,100     $  35,400
     Drug Delivery Systems               (3,700)      (3,800)     (7,200)       (6,300)
     Corporate costs                     (5,100)      (5,300)     (9,600)      (10,100)
     Pension income (expense)            (1,900)         700      (3,200)        1,400
     Costs associated with plant
      explosion                          (3,700)          -       (8,800)            -
     Argentina foreign exchange gain         -            -           -          1,700
     ----------------------------------------------------------------------------------
     Consolidated Total                $ 10,800     $  9,800    $ 17,300     $  22,100
     ==================================================================================

     During 2003, approximately $11,100 of property, plant and equipment and $2,400 of inventory
     in the Pharmaceutical Systems segment were destroyed in a plant explosion (see footnote #11).
     Compared with December 31, 2002, there were no other material changes in the amount of
     assets as of June 30, 2003 for any other reporting segment.

5.   Common stock issued at June 30, 2003 was 17,165,141 shares, of which 2,670,568 shares
     were held in treasury.  Dividends of $.20 per common share were paid in the second quarter
     of 2003 and a dividend of $.20 per share payable August 6, 2003 to holders of record on
     July 23, 2003 was declared on June 17, 2003.

     Below are the calculations of earnings (loss) per share for the three and six-months
     ended June 30, 2003 and 2002. The computation of diluted earnings per share for the
     three and six-months ended June 30, 2003 excluded 2,059,416 and 2,088,469 options,
     respectively, due to their antidilutive effect. The computation of diluted earnings per
     share for the three and six-months ended June 30, 2002 excluded 734,092 and 829,875 options,
     respectively, due to their antidilutive effect.



                                                                                             Page 10

                         West Pharmaceutical Services, Inc. and Subsidiaries
                  Notes to Condensed Consolidated Financial Statements (Unaudited)
                            (in thousands, except share and per share data)
                                             (continued)



                                              Three Months Ended     Six Months Ended
                                              6/30/03    6/30/02     6/30/03   6/30/02
     ---------------------------------------------------- -----------------------------
     Net income (loss):
       Income from continuing operations       $6,900     $5,200     $10,700   $11,500
       Discontinued operations                      -        100           -      (100)
                                               ------     ------     -------   -------
       Net income                              $6,900     $5,300     $10,700   $11,400

     Shares (in thousands):
       Average common shares outstanding       14,483     14,430      14,481    14,398
       Add: Dilutive stock options                  -         77           -        52
                                               ------     ------     -------   -------
     Average shares assuming dilution          14,483     14,507      14,481    14,450

     Basic net income (loss) per share:
       Income from continuing operations        $0.48      $0.36       $0.74     $0.80
       Discontinued operations                      -       0.01           -     (0.01)
                                               ------     ------      ------   -------
       Net income                               $0.48      $0.37       $0.74     $0.79

     Diluted net income (loss) per share:
       Income from continuing operations        $0.48      $0.36       $0.74     $0.80
       Discontinued operations                      -       0.01           -     (0.01)
                                                -----     ------       -----     -----
       Net income                               $0.48      $0.37       $0.74     $0.79

6.   The Company has accrued the estimated cost of environmental compliance expenses related
     to soil or ground water contamination at current and former manufacturing facilities.
     During the second quarter of 2003, the Company accrued $400 for environmental response
     activities at the Kinston facility.  Based on consultants' estimates of the costs of
     remediation in accordance with applicable regulatory requirements, the Company believes
     the accrued liability of $1,300 at June 30, 2003 is sufficient to cover the future costs
     of these remedial actions, which will be carried out over the next several years.  The
     Company does not anticipate any possible recovery from insurance or other sources.

7.   Goodwill by reportable segment as of June 30, 2003 and December 31, 2002 was as follows:


                                               6/30/03     12/31/02
                  -------------------------------------------------
                  Pharmaceutical Systems     $  36,200    $  33,500                                                                                                     $
                  Drug Delivery Systems          2,000        2,000
                  -------------------------------------------------
                                             $  38,200    $  35,500                                                                                                     $
                  =================================================


     The increase in the goodwill balance from December 31, 2002 is solely due to foreign
     currency translation adjustments.



                                                                                           Page 11


                    West Pharmaceutical Services, Inc. and Subsidiaries
             Notes to Condensed Consolidated Financial Statements (Unaudited)
                      (in thousands, except share and per share data)
                                    (continued)

     The cost and respective accumulated amortization for the Company's patents, was $11,500
     and $4,500, respectively, as of June 30, 2003, and $11,400 and $4,100, respectively, as
     of December 31, 2002.  The cost basis of patents includes the effects of foreign currency
     translation adjustments.  The Company recorded $200 and $400 of amortization expense for the
     three and six-months ended June 30, 2003 and 2002.  Amortization for the full year 2003 is
     estimated to be $700.  The estimated annual amortization expense for each of the next five
     years is approximately $700 per year.

8.   The following table details the activity related to the Company's restructuring reserve,
     which consists of accrued severance, benefits, contract termination costs and non-cash
     write-offs:

                                     Severance            Continuing   Discontinued
                                  and benefits    Other   operations     operations    Total
     ----------------------------------------------------------------------------------------

     Balance, December 31, 2002        $  800    $  500    $  1,300         $  100    $ 1,400                                                          $                                             $

     Cash payments                       (300)     (100)       (400)          (100)      (500)
     -----------------------------------------------------------------------------------------

     Balance, June 30, 2003            $  500    $  400    $    900         $    -    $   900                                                                                                       $
     =========================================================================================

     Reductions to the reserve balance represent severance and benefits payments and monthly
     payments for a terminated information systems contract.  The Company expects to complete all
     payments within the next twelve months.

9.   In December 2002, the Company sold its consumer healthcare research business, previously
     part of the Drug Delivery Systems segment.  The results of this business have been
     reflected as discontinued operations in the accompanying consolidated financial statements.
     Revenues and pretax profit from the discontinued operation were $1,200 and $100 for the
     three months ended June 30, 2002 and $3,200 and $500 for the six months ended June 30, 2002.
     After-tax profit for the discontinued operation was $100 and $300, respectively, for the
     three and six-months ended June 30, 2002.

     The Company was required to hold $4,300 of the proceeds from the 2001 sale of its
     contract manufacturing and packaging business in trust for the repayment of certain
     debentures that the Company agreed to redeem as part of the sale.  These debentures
     were repaid in the first quarter of 2002 resulting in a $400, net of tax, charge which
     was included in discontinued operations.

10.  Other (income) expense for the three and six-months ended June 30, 2003 and June 30, 2002
     were as follows:


                                                    Three Months Ended     Six Months Ended
                                                   6/30/03     6/30/02   6/30/03      6/30/02
     ----------------------------------------------------------------------------------------
     Foreign currency transaction (gains) losses    $ (400)    $ (700)    $ (400)   $ (2,300)
     Loss on sales of equipment and other assets       400          -        700           -
     Other                                             100        100        200        (100)
     ----------------------------------------------------------------------------------------
                                                    $  100     $ (600)    $  500    $ (2,400)
     ========================================================================================



                                                                                         Page 12


                          West Pharmaceutical Services, Inc. and Subsidiaries
                   Notes to Condensed Consolidated Financial Statements (Unaudited)
                           (in thousands, except share and per share data)
                                          (continued)


     During the first quarter of 2002, the Company's Argentina subsidiary recorded a foreign
     exchange gain of $1,700 on assets denominated in non-peso currencies due to the devaluation
     of the Argentine peso.  The foreign currency gain was subject to both Argentine federal
     income taxes and related U.S. dividend withholding taxes.

11.  On January 29, 2003, the Company's Kinston, North Carolina plant suffered an explosion
     and related fire that resulted in six deaths, a number of injured personnel and substantial
     damage to the building, machinery and equipment and inventories. The Company recognized $3,700
     and $8,800 of direct costs associated with the loss in the three and six-months ended June 30,
     2003, primarily for potentially uninsured costs, including deductibles, legal and
     investigational costs, and environmental response costs.  Certain additional costs associated
     with operating under the Company's manufacturing recovery plan, including production inefficiencies,
     additional freight and the use of overtime, are included in the results of operations.  In the
     second quarter of 2003, the Company recorded $2,600 in insurance recoveries related to these costs.
     While the Company believes that additional costs will be subject to insurance recovery, it is
     unable to estimate the ultimate amount of recovery at this time.

     As of June 30, 2003 the Company has recorded a $6,600 insurance receivable from its
     insurance provider.  The receivable includes $11,100 for the net book value of the Kinston
     plant's property, plant and equipment, $2,300 for the net book value of the inventory,
     $2,600 for business interruption recoveries and $5,600 of other recoverable costs, offset
     by a $15,000 cash advance from the Company's insurance provider.

     In the second quarter of 2003 the Company purchased land from Lenoir County, North Carolina
     for $2,000 on which the Company plans to rebuild its compression molding operation.  Under
     the terms of the agreement, commencing in 2005, the State will reimburse the Company $200
     per year as long as the Company complies with certain capital investment and employment conditions.

     The Company has been named a defendant in a lawsuit in connection with the explosion in
     which plaintiffs seek unspecified compensatory and punitive damages.   Because this lawsuit
     is in its early stages, the Company is unable to state these plaintiffs' alleged damages.
     The Company believes that overall it has sufficient insurance to cover any actual injuries
     and damage related to the January incident.




                                                                                           Page 13


Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations
         for the Three Months and Six Months ended June 30, 2003 versus June 30, 2002
         -------------------------------------------------------------------------------------

Net Sales
- ---------
Net sales for the second quarter of 2003 were $126.4 million compared to $106.5 million
reported in the second quarter of 2002. Sales increased 19% from the prior year quarter with
9% of the increase due to the impact of foreign currency translation.

Second quarter 2003 sales for the Pharmaceutical Systems segment were $125.2 million, a
$20.9 million or 20% increase from prior year quarter reported sales of $104.3 million.
Approximately 9% of the increase is the result of foreign currency translation.  Segment
sales increased in all geographic regions with significant increases in Europe from sales
of prefilled syringe components.  Facility expansions in France and Germany resulted in
increased sales volumes in the European region.  International sales grew 30% with 19%
of the increase resulting from foreign currency translation.  Sales in domestic markets
increased 12% from the prior year quarter, led primarily by continued demand for the Company's
Westar(R)line of ready-to-sterilize components.

Drug Delivery Systems segment revenues for the second quarter were $1.2 million in 2003,
compared to $2.2 million in the prior year quarter.  The decrease in revenue is due to
the continued weakness in demand for clinical research in the contract research unit.
Drug delivery business unit revenues improved slightly from those in the second quarter of 2002.

Net sales in the first half of 2003 were $244.2 million compared to $208.2 million in the
first six months of 2002. Sales increased 17% from the prior year with 8% of the increase
due to the impact of foreign currency translation. Overall price increases accounted for
1.7% of the sales increase over the first six months of 2002.  Pharmaceutical Systems segment
sales were 19% higher than the prior year with 8% of the increase resulting from foreign
currency translation. Drug Delivery Systems'revenues for the six-month period decreased
$2.0 million due to lower revenues in the contract research unit. Year-to-date 2003
revenues in the drug delivery business unit were up slightly from those in 2002. The same
factors that influenced the quarterly comparisons affected the six-month comparisons.

Operating Profit
- ----------------
The Company recorded operating profit of $10.8 million in the second quarter of 2003,
compared to $9.8 million in the prior year quarter.  Operating profit (loss) by operating
segment, including corporate costs, U.S. pension plan income (expense) and other charges
recorded in operating profit, for the three and six-months ended June 30, 2003 and
June 30, 2002 were as follows:



                                                                                           Page 14


Management's Discussion and Analysis of Financial Condition and Results of Operations
for the Three Months and Six Months ended June 30, 2003 versus June 30, 2002, continued
- ---------------------------------------------------------------------------------------

       Operating Profit (Loss)        Three Months Ended               Six Months Ended
       ($ in millions)           June 30, 2003  June 30, 2002    June 30, 2003    June 30, 2002
       -----------------------------------------------------------------------------------------

       Pharmaceutical Systems           $ 25.2         $ 18.2           $ 46.1           $ 35.4
       Drug Delivery Systems              (3.7)          (3.8)            (7.2)            (6.3)
       Corporate costs                    (5.1)          (5.3)            (9.6)           (10.1)
       Pension income (expense)           (1.9)           0.7             (3.2)             1.4
       Argentina foreign
       exchange gain                         -              -                -              1.7
       Costs associated with plant
       explosion                          (3.7)             -             (8.8)               -
       -----------------------------------------------------------------------------------------
       Consolidated Total               $ 10.8         $  9.8           $ 17.3           $ 22.1
       =========================================================================================

Pharmaceutical Systems' segment operating profit for the second quarter increased by $7.0 million,
of which $1.6 million is due to foreign currency translation, particularly in Europe, versus the
U.S. dollar.  Improvements in the 2003 second quarter resulted from increased gross profit generated
by sales volume increases. Gross margins in the Pharmaceutical Systems segment increased to 32.9%
compared to 29.3% in the prior year quarter, including the effects of production efficiencies in
Europe resulting from facility expansion projects in France and Germany. The improvements in Europe
were partially offset by additional costs resulting from the transfer of production from Kinston to
other manufacturing locations, including production inefficiencies, additional freight and the
use of overtime.  In the second quarter of 2003 the Company recorded $2.6 million in insurance
recoveries related to these costs.  Approximately 30% of the estimated recovery pertained to
operating expenses incurred in the first quarter of 2003. While the Company believes that additional
costs from the first and second quarter will be subject to insurance recovery, it is unable to
estimate the ultimate amount of the recovery at this time.  Selling, general and administrative
expenses were approximately 13% of net sales in both quarters.

Pharmaceutical Systems' segment operating profit for the first half of 2003 increased by
$10.7 million, of which $3.4 million is due to foreign currency translation.  The same
factors that influenced the quarterly comparisons affected the six-month comparisons.

In the Drug Delivery Systems' segment, second quarter 2003 operating losses decreased by
$0.1 million from the prior year quarter.  Operating losses in the clinical services business
unit increased as the business continues to suffer from reduced demand and competition
from full service clinical research organizations.  Modest improvements in drug delivery
technology revenue as well as decreased compensation costs led to decreased operating losses
in the drug delivery business unit.  Operating losses for the first half of 2003 were
$7.2 million compared to $6.3 million in 2002.  The increase in operating losses is due
primarily to the decrease in sales in the clinical services business unit.






                                                                                           Page 15

Management's Discussion and Analysis of Financial Condition and Results of Operations
for the Three Months and Six Months ended June 30, 2003 versus June 30, 2002, continued
- ---------------------------------------------------------------------------------------

Corporate costs were $5.1 million in the second quarter of 2003 down from $5.3 million in
2002.  The decrease in the second quarter 2003 is due to a $0.5 million decrease in information
systems project costs partially offset by a $0.3 million increase in incentive compensation.
For the six-month period, Corporate costs were $9.6 million, a decrease of $0.5 million from
the $10.1 million in 2002.  The decrease in the first half of 2003 is the result of a $1.2 million
decrease in information systems project costs and a $0.2 million decrease in other Corporate
costs partially offset by a $0.5 million increase in incentive compensation and a $0.4 million
increase in outside services costs.

U.S. pension plan expenses were $1.9 million in the second quarter of 2003 compared to income
of $0.7 million in the same period of 2002.  Year-to-date pension expense was $3.2 million in
2003 compared to income of $1.4 million in 2002.  The increase in pension expense is mainly
the result of lower returns on pension plan assets.  The Company expects the increase in pension
expense over comparable prior-year periods to continue at $2.3 million per quarter for the
remainder of 2003.

First quarter 2002 results include a $1.7 million foreign exchange gain recorded by the
Company's subsidiary in Argentina on net assets denominated in non-peso currencies due to
the devaluation of the Argentine peso.

Costs Associated With Plant Explosion
- -------------------------------------
During the first six months of 2003, the Company recognized $8.8 million of direct costs
associated with the January 29, 2003 Kinston explosion primarily for potentially uninsured
legal, investigational, and environmental response costs.

The Company believes full year potentially uninsured direct costs related to the Kinston
explosion will be approximately $10 million, subject to continuing risks that the scope and
cost of the legal response and investigation may increase.

Interest Expense, net
- ---------------------
Net interest costs were $1.7 million in the second quarter 2003 a decline of $0.8 million
from the $2.5 million in the prior year quarter.  For the six-months ended June 30, 2003
net interest costs were $3.6 million compared to $4.9 million in the prior year. The decrease
for the three and six-months ended June 30, 2003 is due to increased interest income from
customer advances of $0.3 million and $0.7 million, respectively, as well as a decrease
in interest expense of $0.4 million and $0.5 million, respectively, resulting from lower
average debt levels and lower interest rates in the current year. The remaining decrease
is due to an increase in interest income from international banks.

Provision for Income Taxes
- --------------------------
The effective tax rate for the second quarter of 2003 and 2002 was 31%.  The costs related
to the Kinston casualty loss in 2003 resulted in a 1% decrease in the effective tax rate
from the prior year quarter.  For the six-month period the effective tax rate was 30% in
2003 compared to 35% in 2002. The costs related to the Kinston casualty loss in 2003 resulted
in a 2% decrease in the effective tax rate from the prior year.  The foreign exchange gain
in 2002 generated a 2% increase in the effective tax rate.




                                                                                           Page 16


Management's Discussion and Analysis of Financial Condition and Results of Operations
for the Three Months and Six Months ended June 30, 2003 versus June 30, 2002, continued
- ---------------------------------------------------------------------------------------

Equity in Net Income of Affiliated Companies
- --------------------------------------------
Earnings in net income of affiliated companies was $0.7 million in the second quarter of
2003 up from the $0.1 million in the second quarter of 2002.  Earnings for the six-month
period were also up from the prior year with income of $1.2 million in 2003 compared to
$0.3 million in 2002.  Earnings from Daikyo Seiko, Ltd., a Japanese company in which the
Company has a 25% ownership interest, improved from the prior year due to increased sales.
Daikyo continues to experience increases in demand from its U.S. and European customers.
Results from the Company's 49% owned Mexican affiliates were up slightly from those in 2002.
Sales increases and efficiencies resulting from a restructuring completed in 2002 have begun
to benefit 2003 earnings.

Discontinued Operations
- -----------------------
In December 2002, the Company sold its consumer healthcare research business located in
Indianapolis, Indiana.  Second quarter 2002 income for this business of $0.1 million and
year-to-date 2002 income of $0.3 million have been reflected in discontinued operations
in the accompanying consolidated financial statements.

The Company was required to hold $4.3 million of the proceeds of the 2001 sale of the
contract manufacturing and packaging business in trust for the repayment of certain
debentures that the Company agreed to redeem as part of the sale. These debentures were
repaid in the first quarter of 2002 resulting in a $0.4 million, net of tax, charge which
was included in discontinued operations.

Net Income
- ----------
Net income for the second quarter of 2003 was $6.9 million, or $.48 per share, compared to
$5.3 million, or $.37 per share, in the second quarter of 2002.  Net income for the second
quarter of 2003 included $3.7 million of pre-tax costs ($2.5 million, or $0.17 per share,
net of tax) related to the explosion at the Kinston facility.  Net income for the second
quarter of 2002 included income from discontinued operations of $0.1 million, or $0.01 per
share, net of tax.  Average common shares outstanding were 14.5 million in the second
quarter of 2003 compared to 14.4 million in the second quarter of 2002.

Net income for the six-month period was $10.7 million, or $0.74 per share, compared to
$11.4 million, or $0.79 per share, for the 2002 period.  2003 results include $8.8 million
of pre-tax costs ($5.8 million, or $0.40 per share, net of tax) related to the Kinston
explosion.  2002 results include a $1.7 million foreign exchange gain ($0.8 million, or
$0.05 per share, net of tax) related to the devaluation of the Argentine peso and a loss
on discontinued operations of $0.1 million, or $0.01 per share, net of tax. Average common
shares outstanding were 14.5 million for the first six months of 2003 compared to
14.4 million in 2002.

Liquidity and Capital Resources
- -------------------------------
Working capital at June 30, 2003 was $90.2 million compared with $73.6 million at
December 31, 2002.  The working capital ratio at June 30, 2003 was 1.9 to 1. Accounts
receivable increased significantly, reflecting the increase in June 2003 sales levels
versus December 2002.  Days sales outstanding remained consistent with 2002 at 53 days.
Cash flow from operations was $25.7 million for the first six months of 2003, an increase
of $10.5 million from the prior year.  The increase is due to improved operating results
in the Company's Pharmaceutical Systems segment.  As a result of the Kinston explosion,
the Company has recorded a net insurance receivable of $6.6 million as of June 30, 2003.
The receivable includes $13.4 million for the net book value of property, plant, and
equipment and inventory destroyed in the explosion as well as $8.2 million of recoverable
costs and business interruption recoveries.  Theses costs were offset by the $15.0 million
advance from the Company's insurance carrier.


                                                                                           Page 17


Management's Discussion and Analysis of Financial Condition and Results of Operations
for the Three Months and Six Months ended June 30, 2003 versus June 30, 2002, continued
- ---------------------------------------------------------------------------------------

Capital spending for the six-month period ended June 30, 2003 was $18.1 million.  Expenditures
include new equipment purchases and equipment upgrades used in the production of the Company's
existing product lines, as well as expenditures focused on new products and expansion activities,
including the expansion of the Company's primary production facility for Westar products and expansions
at various European facilities.  Full year 2003 capital spending is projected to be approximately
$64.5 million, which includes $16 million related to the replacement of the damaged Kinston facility.
The Company expects that the Kinston construction project will be largely financed by replacement
cost coverage provided by the Company's property insurance policy.  In the second quarter of
2003, the Company purchased land under an economic development grant with the state of North
Carolina.  Under the terms of the agreement, the state will reimburse a portion of the purchase
price every year as long as the Company maintains minimum capital investment and workforce
conditions.  The Company paid cash dividends totaling $5.8 million ($0.40 per share) during the
first half of 2003.

Debt as a percentage of total invested capital (total debt and shareholders' equity) at
June 30, 2003 was 44.8% compared to 46.5% at December 31, 2002.  Total shareholders' equity
was $221.7 million at June 30, 2003 compared to $201.5 million at December 31, 2002.  The
increase in equity was due to current year net income and positive foreign currency
translation adjustments partially offset by dividend payments.

The Company believes that its financial condition, current capitalization and expected income
from operations will be sufficient to meet the Company's future expected cash requirements,
at least through July 2005, at which time the Company's revolving credit facility expires.
The Company fully expects to obtain similar credit facilities at that time.

The Company is subject to certain risks and uncertainties connected with the explosion at
the Company's Kinston, NC plant.  See the text under the caption "Cautionary Statement
Regarding Forward-Looking Information."

New Accounting Standards
- ------------------------
In November 2002, the Emerging Issues Task Force ("EITF") reached a consensus opinion on
EITF 00-21, "Revenue Arrangements with Multiple Deliverables."  The consensus provides
guidance on the timing of revenue recognition for sales arrangements that deliver more than
one product or service.  EITF 00-21 is effective for revenue arrangements entered into in
fiscal periods beginning after June 15, 2003. EITF 00-21 is not expected to have a material
effect on the Company's consolidated financial position or results of operations.

Market Risk
- -----------
The Company is exposed to various market risk factors such as fluctuating interest rates
and foreign currency rate fluctuations. These risk factors can impact results of operations,
cash flows and financial position. These risks are managed periodically with the use of
derivative financial instruments such as interest rate swaps and forward exchange contracts.
In accordance with Company policy, derivative financial instruments are not used for
speculation or trading purposes.

In order to minimize the exposure to foreign currency fluctuations, the Company borrowed
10.0 million British Pound Sterling (BPS) in 2002 and designated the borrowing as a hedge
of the Company's net investment in its U.K. subsidiaries.  Due to unfavorable interest rates,
the 10.0 million BPS debt was repaid in the first quarter of 2003.  The mark-to-market
currency adjustments recorded as a cumulative translation adjustment to shareholders'
equity will remain there until the disposal of the investment.




                                                                                           Page 18


Management's Discussion and Analysis of Financial Condition and Results of Operations
for the Three Months and Six Months ended June 30, 2003 versus June 30, 2002, continued
- ---------------------------------------------------------------------------------------

Due to continuing fluctuations in the Japanese Yen, in January 2003, the Company entered
into an arrangement to hedge its net investment in Daikyo Seiko, Ltd., a Japanese company
in which the Company has a 25% ownership interest.  The Company's strategy is to minimize
the exposure to foreign currency fluctuations by employing borrowings in the functional
currency of the investment. The Company borrowed 1.7 billion Yen under its five-year
revolving credit facility and has designated the borrowing as a hedge of its net investment
in the Company's investment in Daikyo.

In June 2003, the Company entered into a forward contract in order to hedge foreign currency
exposure on a cross currency intercompany loan.  The forward contract, which is designated
as a fair value hedge, terminated in July 2003 when the intercompany loan was repaid.
The notional amount for the forward contract taken out by a subsidiary with a BPS functional
currency was 12.4 million Danish Krone.

Cautionary Statement Regarding Forward-Looking Information
- ----------------------------------------------------------
Certain statements contained in this Report or in other company documents and certain
statements that may be made by management of the Company orally may contain forward-looking
statements as defined in the Private Securities Litigation Reform Act of 1995. These statements
can be identified by the fact that they do not relate strictly to historic or current facts.
They use words such as "estimate," "expect," "intend," "believe," "plan, " "anticipate" and
other words and terms of similar meaning in connection with any discussion of future operating
or financial performance or condition.  In particular, these include statements concerning
future actions, future performance or results of current and anticipated products, sales
efforts, expenses, the outcome of contingencies such as legal proceedings, and financial results.

Because actual results are affected by risks and uncertainties, the Company cautions investors
that actual results may differ materially from those expressed or implied in any forward
looking statement.

It is not possible to predict or identify all such risks and uncertainties, but factors that
could cause the actual results to differ materially from expected and historical results
include, but are not limited to: sales demand, timing of customers' projects; successful
development of proprietary drug delivery technologies and systems; regulatory, licensee
and/or market acceptance of products based on those technologies; competitive pressures;
the strength or weakness of the U.S. dollar; inflation; the cost of raw materials; the
availability of credit facilities; and, statutory tax rates.  With respect to the explosion
and fire at the Company's Kinston, NC plant, the following factors should also be taken into
consideration: the timely replacement of production capacity; the adequacy and timing of
insurance recoveries for property losses; the unpredictability of existing and future
possible litigation related to the explosion and the adequacy of insurance recoveries for
costs associated with such litigation; government actions or investigations affecting the
Company; the ability of the Company to successfully shift production and compounding capacity
to other plant sites in a timely manner, including the successful integration of experienced
personnel to other production sites; the extent of uninsured costs for, among other things,
legal and investigation services and incremental insurance; and regulatory approvals and
customer acceptance of goods from alternate sites.

The Company assumes no obligation to update forward-looking statements as circumstances
change.  Investors are advised, however, to consult any further disclosures the Company
makes on related subjects in the Company's 10-K, 10-Q and 8-K reports.





                                                                                           Page 19


Item 3.  Quantitative and Qualitative Disclosure about Market Risk.
         ---------------------------------------------------------

         The information called for by this item is included in the text under the caption
         "Market Risk" in Item 2. "Management's Discussion and Analysis of Financial Condition
         and Results of Operations" and should be read in conjunction with the Company's Form
         10-K filed for the year ended December 31, 2002.

Item 4.  Controls and Procedures.
         -----------------------

         The Company has established disclosure controls and procedures (as defined
         under SEC Rules 13a-15(e) and 15d-15(e) that are designed to, among other things,
         ensure that information required to be disclosed in the Company's periodic reports
         is recorded, processed, summarized and reported on a timely basis and that such
         information is made known to the Company's Chief Executive Officer and Chief
         Financial Officer (together, the "Certifying Officers") to allow timely decisions
         regarding required disclosure.

         The Certifying Officers have evaluated the effectiveness of the Company's disclosure
         controls and procedures as of the end of the period covered by this quarterly report,
         and based on such evaluation, have concluded that such disclosure controls and
         procedures are effective.

         Additionally, based on their evaluation of the Company's internal control over
         financial reporting, the Certifying Officers have also concluded that there has
         been no change during the period covered by this report to the Company's internal
         control over financial reporting that has materially affected, or is reasonably
         likely to materially affect, these internal controls.






                                                                                           Page 20


Part II - Other Information


Item 4.  Submission of Matters to a Vote of Security Holders.

         (a)  The Company held its annual meeting of shareholders on April 29, 2003.

         (c)  Three matters were voted on at the annual meeting:  (1) the election of four
              directors in Class I; (2) the approval of the Company's 2003 Employee Stock
              Purchase Plan; and (3) the ratification of the appointment of
              PricewaterhouseCoopers LLP as the Company's independent accountants for 2003.
              The results of the voting are as follows:



        Proposal #1 - Election of Directors
                                                       For           Withheld
                                                   ---------         --------
        William H. Longfield                       12,488,839         58,623
        Anthony Welters                            12,415,217        132,245
        Robert C. Young                            12,486,549         60,913
        Patrick J. Zenner                          12,486,646         60,816

        Proposal #2 - Approval of the 2003 Employee Stock Purchase Plan

                                 For                Against         Abstained
                              --------             ---------        ---------
                              7,537,311            3,494,767          12,456

        Proposal #3 - Ratification of Appointment of  Independent Accountants

                                 For                 Against       Abstained
                              12,259,350             282,337           5,774


Item 6.  Exhibits and Reports on Form 8-K

         (a)      See Index to Exhibits on pages F-1 and F-2 of this Report.

                  On April 22, 2003, the Company filed a Current Report on Form 8-K.
                  Under  Item 12 of that Report, the Company furnished to the Commission
                  the press release dated  April 22, 2003.



                                                                                            Page 21




                                    SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of  1934, the registrant
has duly  caused  this report  to be signed on its  behalf by the undersigned thereunt
duly authorized.





                               WEST PHARMACEUTICAL SERVICES, INC.
                               -------------------------------------------------
                               (Registrant)


August 13, 2003                /s/ Linda R. Altemus
- ----------------               -------------------------------------------------
Date                           Linda R. Altemus
                               Vice President and Chief Financial Officer





                                       INDEX TO EXHIBITS

Exhibit
Number

(2)         None

(3) (a)     Amended and Restated Articles of Incorporation of the Company through
            January 4, 1999 incorporated by reference to Exhibit (3)(a) of the Company's
            Annual Report on Form 10-K for the year ended December 31, 1998
            (File No. 1-8036).

(3) (b)     Bylaws of the Company, as amended through October 27, 1998, incorporated
            by reference to Exhibit (3)(b) to the Company's Form 10-Q for the quarter
            ended September 30, 1998 (File No. 1-8036).

(4) (a)     Form of  stock  certificate for common stock incorporated by reference
            to Exhibit (4) (a) of the Company's Annual Report on Form 10-K for the
            year ended December 31, 1998 (File No. 1-8036).

(4)(a)(1)   Article 5, 6, 8(c) and 9 of the Amended and Restated  Articles of Incorporation
            of the Company,  incorporated  by  reference  to Exhibit  (3)(a) of the Company's
            Annual Report on  Form 10-K for the year ended December 31, 1998 (File No. 1-8036).

(4)(a)(2)   Article  I and V of  the  Bylaws  of  the  Company,  as  amended, incorporated
            by reference to Exhibit (3)(b) to the Company's Form 10-Q for the quarter ended
            September 30, 1998 (File No. 1-8036).

(10) (a)    Change-In-Control Agreement, dated as of May 1, 2003, between the Company and
            Joseph E. Abbott.

(10) (b)    Second Amended and Restated Change-In-Control Agreement, dated as of May 1, 2003,
            between the Company and Michael A. Anderson.

(10) (c)    Change-In-Control Agreement, dated as of May 1, 2003, between the Company and
            Bruce S. Morra.

(10) (d)    Confidentiality and Non-Competition Agreement, dated as of April 7, 2003, between
            the Company and Bruce S. Morra.




                                        F - 1




                                  INDEX TO EXHIBITS

Exhibit
Number



(10) (e)      Amendment to Non-Competition Agreement, dated as of May 1, 2003, between the
              Company and Bruce S. Morra.

(10) (f) (1)  Extension Agreement, dated as of July 8, 2003, to Credit Agreement, dated as
              of July 26, 2000 (the "Credit Agreement") among the Company, the several banks
              and financial institutions listed on the signature pages thereto, and PNC Bank,
              National Association, as Agent.

(10) (f) (2)  Commitment and Acceptance, dated as of July 21, 2003, with respect to the
              Credit Agreement among the Company, Manufacturers and Traders Trust Company
              and PNC Bank, N.A.

(11)          Non Applicable.

(15)          None.

(18)          None.

(19)          None.

(22)          None.

(23)          Non Applicable.

(24)          None.

(31) (a)      Section 302 Certification by Donald E. Morel, Jr., Ph.D.

(31) (b)      Section 302 Certification by Linda R. Altemus.

(32) (a)      Certification by Donald E.  Morel, Jr., Ph.D., pursuant to 18 U.S.C.
              Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
              Act of 2002.

(32) (b)      Certification by Linda R. Altemus, pursuant to 18 U.S.C. Section 1350,
              as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                                          F-2

EX-10 3 exh10a.htm EXHIBIT 10A CHANGE IN CONTROL AGREE JEA Exhibit 10a

Exhibit (10) (a)

Execution Copy


CHANGE-IN-CONTROL AGREEMENT

        THIS IS A CHANGE-IN-CONTROL AGREEMENT (the “Agreement”) dated as of May 1, 2003 (the “Effective Date”) between West Pharmaceutical, Services, Inc., a Pennsylvania corporation, (the “Company”) and Joseph E. Abbott (“Executive”).

Background

        The Board of Directors of the Company and the Compensation Committee of the Board have determined that it is in the best interests of the Company and its shareholders for the Company to make the following arrangements with Executive. These arrangements provide for compensation in the event Executive should leave the employment of the Company under the circumstances described in this Agreement.

Agreement

        In consideration of the foregoing and each intending to be legally bound, the Company and Executive agree as follows:

1.     Definitions. As used in this Agreement, the following terms will have the meanings set forth below:

    (a)   An “Affiliate” of any Person means any Person directly or indirectly controlling, controlled by or under common control with such Person.

    (b)   Change in Control” means a change in control of a nature that would be required to be reported in response to Item 1 of a Current Report on Form 8-K as in effect on the Effective Date pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, (the “Act”) provided, that, without limitation, a Change in Control shall be deemed to have occurred if:

      (i)   Any Person, other than:

        (1) the Company,  

        (2) any Person who on the date hereof is a director or officer of the Company, or  

        (3) a trustee or fiduciary holding securities under an employee benefit plan of the Company,

is or becomes the “beneficial owner” (as defined in Rule 13-d3 under the Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities; or
 

      (ii)   During any period of two consecutive years during the term of this Agreement, individuals who at the beginning of such period constitute the Board of Directors of the Company cease for any reason to constitute at least a majority thereof, unless the election of each director who was not a director at the beginning of such period has been approved in advance by directors representing at least two-thirds of the directors then in office who were directors at the beginning of the period; or   

      (iii)   The shareholders of the Company approve: (A) a plan of complete liquidation of the Company; or (B) an agreement for the sale or disposition of all or substantially all of the Company’s assets; or (C) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization (collectively, a “Transaction”) that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the voting securities of the Company (or the surviving entity, or an entity which as a result of the Transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) outstanding immediately after the Transaction.

    (c)    “Code” means the Internal Revenue Code of 1986, as amended.

    (d)   The “Company’s Business” means: (i) the manufacture and sale of stoppers, closures, containers, medical device components and assemblies made from elastomers, metal and plastic for the health-care and consumer-products industries; (ii) the clinical trial business carried on by the Company’s GFI Research Center; (iii) the development of proprietary drug-delivery technologies that provide optimized therapeutic effects for challenging drug molecules, such as peptides and proteins, carbohydrates, oligonucleotides, as well as systems for vaccines, gene therapy and diagnostic applications; and (iv) any other business conducted by the Company or any of its Subsidiaries or Affiliates during the term of this Agreement and in which Executive has have been actively involved.

    (e)     “Constructive Termination” means the occurrence of any of the following events:

      (i)   The Company requires Executive to assume any duties inconsistent with, or the Company makes a significant diminution or reduction in the nature or scope of Executive’s authority or duties from, those assigned to or held by Executive on the Effective Date;

      (ii)     A material reduction in Executive’s annual salary or incentive compensation opportunities;

      (iii)   A relocation of Executive’s site of employment to a location more than 50 miles from Executive’s site of employment on the Effective Date;

      (iv)     The Company fails to provide Executive with substantially the same fringe benefits that were provided to Executive as of the Effective Date, or with a package of fringe benefits that, although one or more of such benefits may vary from those in effect as of the Effective Date, is substantially at least as beneficial to Executive in all material respects as such fringe benefits taken as a whole; or

      (v)   A successor of the Company does not assume the Company’s obligations under this Agreement, expressly or as a matter of law.

  Notwithstanding the foregoing, no Constructive Termination will be deemed to have occurred under any of the following circumstances:

        (1) Executive will have consented in writing or given a written waiver to the occurrence of any of the events enumerated in clauses (i) through (v) above;    

        (2) Executive will have failed to give the Company written notice stating Executive’s intention to claim Constructive Termination and the basis for that claim at least 10 days in advance of the effective date of Executive’s resignation; or  

        (3) The event constituting a Constructive Termination has been cured by the Company prior to the effective date of Executive’s resignation.     

    (f)   “Payment” means

      (i)   any amount due or paid to Executive under this Agreement,

      (ii)   any amount that is due or paid to Executive under any plan, program or arrangement of the Company and any of its Subsidiaries, and

      (iii)   any amount or benefit that is due or payable to Executive under this Agreement or under any plan, program or arrangement of the Company and any of its Subsidiaries not otherwise covered under clause (i) or (ii) hereof which must reasonably be taken into account under Section 280G of the Code and the Regulations in determining the amount of the “parachute payments” received by Executive, including, without limitation, any amounts which must be taken into account under the Code and Regulations as a result of (1) the acceleration of the vesting of any option, restricted stock or other equity award granted under any equity plan of the Company or otherwise, (2) the acceleration of the time at which any payment or benefit is receivable by Executive or (3) any contingent severance or other amounts that are payable to Executive.

    (g)   Person” means an individual, a corporation, a partnership, an association, a trust or other entity or organization.

    (h)   Regulations” means the proposed, temporary and final regulations under Section 280G of the Code or any successor provision thereto.

    (i)   Restrictive Period” means the period of time that commences on the Effective Date hereof and ends on the first anniversary of the Termination Date.

    (j)   Retirement Plan” means the West Pharmaceutical Services, Inc. Employees’ Retirement Plan and any successor plan thereto.

    (k)   Savings/Deferred Comp Plan” means The Company’s Salaried Employees’ Savings Plan, The Company’s Non-Qualified Deferred Compensation Plan for Designated Executive Officers and any other similar plan established from time to time that may allow executive officers to defer taxation of compensation.

    (l)     “Subsidiary” has the meaning ascribed to the term by Section 425(f) of the Code.

    (m)   Termination Date” means the date on which Executive ceases to be employed by the Company or any of its Subsidiaries or Affiliates for any reason.

2.    Termination Following a Change in Control.

    (a)   Executive will be entitled to the benefits specified in Section 3 (Benefits Payable Upon Termination of Employment) if,

      (i)   at any time within two years after a Change in Control has occurred, Executive’s employment by the Company is terminated:

        (1) by the Company, other than by reason of death, disability, continuous willful misconduct to the detriment of the Company, or retirement at Executive’s normal retirement date under the Retirement Plan, or  

        (2) as a result of Executive’s resignation at any time following Executive’s Constructive Termination; or  

      (ii)     Executive resigns for any reason within 30 days following the first anniversary of a Change in Control.

  Except as otherwise set forth in Section 2(b) Executive will not be entitled to the benefits specified in Section 3 hereof if Executive’s employment terminates for any other reason or if, at any time thereafter, Executive is in breach of any of Executive’s obligations under this Agreement.

    (b)   If the Company executes an agreement, the consummation of which would result in the occurrence of a Change in Control, then, with respect to a termination:

      (i)     by the Company, other than by reason of death, disability, continuous willful misconduct to the detriment of the Company, or retirement at Executive’s normal retirement date under the Retirement Plan, or

      (ii)     as a result of Executive’s resignation at any time following Executive’s Constructive Termination occurring after the date of such agreement (and, if such agreement expires or is terminated prior to consummation, prior to the expiration or termination of such agreement)

  a Change in Control shall be deemed to have occurred as of the date of the execution of such agreement and Executive will be entitled to the severance compensation specified in Section 3 hereof.

3.    Benefits Payable Upon Termination of Employment. Upon termination of employment as set forth in Section 2 (Termination Following a Change in Control) Executive will be entitled to the following benefits:

    (a)    Severance Compensation. Executive will be entitled to severance compensation in an amount equal to three times the sum of

      (i)     Executive’s highest annual base salary rate in effect during the year of the termination of Executive’s employment, plus

      (ii)     the aggregate amount of the annual bonuses paid or payable to Executive for the three fiscal years immediately preceding a Change in Control divided by the number of fiscal years as to which such bonuses were paid or payable;

  provided, however, that if at any time before the third anniversary of the Termination Date, Executive either (x) elects retirement under the Retirement Plan, or (y) could have been compelled to retire under the Retirement Plan if Executive had remained employed by the Company, Executive’s severance compensation under this Section 3(a) will be reduced by an amount equal to the product obtained by multiplying such severance compensation by a fraction the numerator of which is the number of days elapsed from the Termination Date until the date on which either of the events described in clauses (x) or (y) first occurs, and the denominator of which is 1095.

  The severance compensation paid hereunder will not be reduced to the extent of any other compensation for Executive’s services that Executive receives or is entitled to receive from any other employment consistent with the terms of this Agreement.

    (b)    Equivalent of Vested Savings/Deferred Comp Plan Benefit. The Company will pay to Executive the difference, if any, between

      (i)     the benefit Executive would be entitled to receive under the Savings/Deferred Comp Plan if the Company’s contributions to the Savings/Deferred Comp Plan were fully vested upon the termination of Executive’s employment, and

      (ii)     the benefit Executive is entitled to receive under the terms of the Savings/Deferred Comp Plan upon termination of Executive’s employment.

  Any such benefit will be payable at such time and in such manner as benefits are payable to Executive under the Savings/Deferred Comp Plan.

    (c)    Unvested Equity Awards. All stock options, other equity-based awards and shares of the Company’s stock granted or awarded to Executive pursuant to any Company compensation or benefit plan or arrangement, but which are unvested, will vest immediately upon termination of Executive’s employment. The provisions of this Section 3(c) will supersede the terms of any such grant or award made to Executive under any such plan or arrangement to the extent there is an inconsistency between the two.

    (d)    Employee and Executive Benefits.Executive will be entitled to a continuation of all hospital, major medical, medical, dental, life and other insurance benefits not otherwise addressed in this Agreement in the same manner and amount to which Executive was entitled on the date of a Change in Control or on the date of Constructive Termination of Executive’s employment (whichever benefits are more favorable to Executive) until the earlier of

      (i)        a period of 36 months after the Termination Date,  

      (ii)        Executive’s retirement under the Retirement Plan, or

      (iii)        Executive’s eligibility for similar benefits with a new employer.

  Assistance in finding new employment will be made available to Executive by the Company if Executive so requests. Upon termination of Executive’s employment, Company cars must be returned to the Company.

4.    Additional Payments.

    (a)    Gross-Up Payment. Notwithstanding anything herein to the contrary, if it is determined that any Payment would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any interest or penalties thereon, is herein referred to as an “Excise Tax”) then Executive shall be entitled to an additional payment (a “Gross-Up Payment”) in an amount that will place Executive in the same after-tax economic position that Executive would have enjoyed if the Excise Tax had not applied to the Payment.

    (b)    Determination of Gross-Up Payment. Subject to the provisions of Section 4(c) all determinations required under this Section 4, including whether a Gross-Up Payment is required, the amount of the Payments constituting excess parachute payments, and the amount of the Gross-Up Payment, shall be made by the accounting firm that was the Company’s independent auditors immediately prior to the Change in Control (or, in default thereof, an accounting firm mutually agreed upon by the Company and Executive) (the “Accounting Firm”) which shall provide detailed supporting calculations both to Executive and the Company within fifteen days of the Change in Control, the Termination Date or any other date reasonably requested by Executive or the Company on which a determination under this Section 4 is necessary or advisable. The Company shall pay to Executive the initial Gross-Up Payment within 5 days of the receipt by Executive and the Company of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, the Company shall cause the Accounting Firm to provide Executive with an opinion that the Accounting Firm has substantial authority under the Code and Regulations not to report an Excise Tax on Executive’s federal income tax return. Any determination by the Accounting Firm shall be binding upon Executive and the Company. If the initial Gross-Up Payment is insufficient to cover the amount of the Excise Tax that is ultimately determined to be owing by Executive with respect to any Payment (hereinafter an “Underpayment”) the Company, after exhausting its remedies under Section 4(c) below, shall promptly pay to Executive an additional Gross-Up Payment in respect of the Underpayment.

    (c)    Procedures. Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notice shall be given as soon as practicable after Executive knows of such claim and shall apprise the Company of the nature of the claim and the date on which the claim is requested to be paid. Executive agrees not to pay the claim until the expiration of the thirty-day period following the date on which Executive notifies the Company, or such shorter period ending on the date the Taxes with respect to such claim are due (the “Notice Period”). If the Company notifies Executive in writing prior to the expiration of the Notice Period that it desires to contest the claim, Executive shall: (i) give the Company any information reasonably requested by the Company relating to the claim; (ii) take such action in connection with the claim as the Company may reasonably request, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company and reasonably acceptable to Executive; (iii) cooperate with the Company in good faith in contesting the claim; and (iv) permit the Company to participate in any proceedings relating to the claim. Executive shall permit the Company to control all proceedings related to the claim and, at its option, permit the Company to pursue or forgo any and all administrative appeals, proceedings, hearings, and conferences with the taxing authority in respect of such claim. If requested by the Company, Executive agrees either to pay the tax claimed and sue for a refund or contest the claim in any permissible manner and to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts as the Company shall determine; provided, however, that, if the Company directs Executive to pay such claim and pursue a refund, the Company shall advance the amount of such payment to Executive on an after-tax and interest-free basis (the “Advance”). The Company’s control of the contest related to the claim shall be limited to the issues related to the Gross-Up Payment and Executive shall be entitled to settle or contest, as the case may be, any other issues raised by the Internal Revenue Service or other taxing authority. If the Company does not notify Executive in writing prior to the end of the Notice Period of its desire to contest the claim, the Company shall pay to Executive an additional Gross-Up Payment in respect of the excess parachute payments that are the subject of the claim, and Executive agrees to pay the amount of the Excise Tax that is the subject of the claim to the applicable taxing authority in accordance with applicable law.

    (d)    Repayments. If, after receipt by Executive of an Advance, Executive becomes entitled to a refund with respect to the claim to which such Advance relates, Executive shall pay the Company the amount of the refund (together with any interest paid or credited thereon after Taxes applicable thereto). If, after receipt by Executive of an Advance, a determination is made that Executive shall not be entitled to any refund with respect to the claim and the Company does not promptly notify Executive of its intent to contest the denial of refund, then the amount of the Advance shall not be required to be repaid by Executive and the amount thereof shall offset the amount of the additional Gross-Up Payment then owing to Executive.

    (e)    Further Assurances. The Company shall indemnify Executive and hold Executive harmless, on an after-tax basis, from any costs, expenses, penalties, fines, interest or other liabilities (“Losses”) incurred by Executive with respect to the exercise by the Company of any of its rights under this Section 4, including, without limitation, any Losses related to the Company’s decision to contest a claim or any imputed income to Executive resulting from any Advance or action taken on Executive’s behalf by the Company hereunder. The Company shall pay all legal fees and expenses incurred under this Section 4 and shall promptly reimburse Executive for the reasonable expenses incurred by Executive in connection with any actions taken by the Company or required to be taken by Executive hereunder. The Company shall also pay all of the fees and expenses of the Accounting Firm, including, without limitation, the fees and expenses related to the opinion referred to in Section 4(b).

5.    Payment of Severance Compensation.

    (a)     The severance compensation set forth in Section 3 (a) shall be payable in 36 equal monthly installments commencing on the first day of the month following the month in which Executive’s employment terminates. However, Executive may elect in writing, in accordance with the provisions of this Section, to receive Executive’s severance compensation in a lump sum at a later time or in installments in amounts and at times elected by Executive, but Executive’s election will not entitle Executive to receive severance compensation sooner than permitted by the preceding sentence.

    (b)     Executive must elect to receive amounts in installments or to defer payments by filing a written election with the Company, which specifies the time at which payments are to be made and the amounts of such payments. Executive’s election to receive installment payments or to defer payments will not be valid unless it is made prior to the time Executive is entitled to receive any payments under this Agreement. The last such election in effect on the day before a termination of employment will be controlling. No election may be made on or after termination of employment.

    (c)     The payment of deferred amounts must commence no earlier than the first business day of the calendar year following the termination of Executive’s employment and no later than the third calendar year following the attainment of normal retirement age under the Retirement Plan.

6.    Non-Disclosure and Confidentiality.

  (a)     Executive agrees that Executive will keep secret and maintain in confidence all confidential information of the Company and will not use such information other than for the Company’s benefit or disclose such information to anyone outside of the Company, either during or after Executive’s employment with the Company.

  (b)     Executive will promptly deliver to the Company on the termination of Executive’s employment with the Company, or at any time the Company requests, all memoranda, notes, records and other documents (and all copies thereof) relating to the Company’s business or confidential matters which Executive then has or controls.

  (c)     All inventions, improvements, new ideas and techniques which relate to the Company’s business which Executive makes or conceives during Executive’s employment with the Company or within six months thereafter will be the Company’s property. Without additional compensation to Executive, Executive will promptly inform the Company of such inventions, improvements, ideas and techniques, and will assist the Company in preserving them and will not disclose them to anyone else without the Company’s consent.

  (d)     Executive understands that, as used in this Section, the phrase “confidential information of the Company” includes all information of a technical, commercial or other nature of or about the Company (such as formulae, trade secrets, customer lists and know-how) not made available to the general public.

7.    Legal Fees. The Company will pay all legal fees and expenses which Executive may incur as a result of the Company’s contesting the validity or enforceability of this Agreement.

8.    Payments Final. In the event of a termination of Executive’s employment under the circumstances described in this Agreement, the arrangements provided for by this Agreement, and any other agreement between the Company and Executive in effect at that time and by any other applicable plan of the Company in which Executive then participates, will constitute the entire obligation of the Company to Executive, and performance of that obligation will constitute full settlement of any claim that Executive might otherwise assert against the Company on account of such termination. The Company’s obligation to pay Executive under this Agreement will be absolute and unconditional and will not be affected by any circumstance, including without limitation, any set-off, counterclaim, defense or other rights the Company may have against Executive or anyone else as long as Executive is not in beach of Executive’s obligations under this Agreement.

9.    Non-Competition.

    (a)     During the Restrictive Period, Executive will not, and will not permit any of Executive’s Affiliates, or any other Person, directly or indirectly, to:

    (b)     engage in competition with, or acquire a direct or indirect interest or an option to acquire such an interest in any Person engaged in competition with, the Company’s Business in the United States (other than an interest of not more than 5 percent of the outstanding stock of any publicly traded company);

      (i)      serve as a director, officer, employee or consultant of, or furnish information to, or otherwise facilitate the efforts of, any Person engaged in competition with the Company’s Business in the United States;

      (ii)     solicit, employ, interfere with or attempt to entice away from the Company any employee who has been employed by the Company or a Subsidiary in an executive or supervisory capacity in connection with the conduct of the Company’s Business within one year prior to such solicitation, employment, interference or enticement; or

      (iii)     approach, solicit or deal with in competition with the Company or any Subsidiary any Person which at any time during the 12 months immediately preceding the Termination Date:

        (1)   was a customer, client, supplier, agent or distributor of the Company or any Subsidiary;  

        (2)   was a customer, client, supplier, agent or distributor of the Company or any Subsidiary with whom employees reporting to or under the direct control of Executive had personal contact on behalf of the Company or any Subsidiary; or  

        (3)   was a Person with whom Executive had regular, substantial or a series of business dealings on behalf of the Company or any Subsidiary (whether or not a customer, client, supplier, agent or distributor of the Company or any Subsidiary).  

    (c)     For the avoidance of doubt, Executive agrees that the phrase “Person engaged in competition with the Company’s Business” as used in this Section includes, without limitation, the companies listed on Schedule “A” to this Agreement, their Affiliates and subsidiaries.

10.    Vesting in the Event of a Change in Control. In the event of a Change in Control, all stock options, equity-based awards and shares of the Company’s stock granted or awarded to Executive pursuant to any Company compensation or benefit plan or arrangement, but which are unvested at that time, will vest immediately upon such Change in Control. The provisions of this Section 10 will supersede the terms of any such grant or award made to Executive under any such plan or arrangement to the extent there is an inconsistency between the two.

11.    Duration of Agreement. This Agreement shall commence on the Effective Date and shall continue until terminated as provided in this Section. This Agreement may be terminated only under the following circumstances:

      (i)     At any time by the mutual written consent of Executive and the Company; and

      (ii)     By the Company at the end of each successive two-year period commencing on the Effective Date by giving Executive written notice at least one year in advance of such termination, except that such termination and written notice will not be effective unless Executive will be employed by the Company on the date of termination.

12.    Miscellaneous.

    (a)     In consideration for the benefit of having the protection afforded by this Agreement, Executive agrees that the provisions of Section 6 (Non-Disclosure and Confidentiality) and Section 9 (Non-Competition) of this Agreement apply to Executive, and Executive will be bound by them, whether or not a Change in Control occurs or Executive actually receives the benefits specified in Section 3 hereof.

    (b)     This Agreement will be binding upon and inure to the benefit of Executive, Executive’s personal representatives and heirs and the Company and any successor of the Company, but neither this Agreement nor any rights arising hereunder may be assigned or pledged by Executive.

    (c)     Executive acknowledges that a breach of the covenants contained in Section 6 (Non-Disclosure and Confidentiality) and Section 9 (Non-Competition) will cause the Company immediate and irreparable harm for which the Company’s remedies at law (such as money damages) will be inadequate. The Company shall have the right, in addition to any other rights it may have, to obtain an injunction to restrain any breach or threatened breach of such Sections. The Company may contact any Person with or for whom Executive works after Executive’s employment by the Company ends and may send that Person a copy of this Agreement.

    (d)     Should any provision of this Agreement be adjudged to any extent invalid by any competent tribunal, that provision will be deemed modified to the extent necessary to make it enforceable.

    (e)     This Agreement will be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania.

    (f)     This Agreement constitutes the entire agreement and understanding between the Company and Executive with respect to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings between the Company and Executive with respect to such matters.

    (g)     This Agreement may be executed in one or more counterparts, which together shall constitute a single agreement.

IN   WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.

EXECUTIVE  

By:                                                      
Joseph E. Abbott


WEST   PHARMACEUTICAL SERVICES, INC.

By:                                                      
Donald E. Morel, Jr., Ph.D.

President and Chief Executive Officer

Schedule “A”

List of Persons Engaged in Competition with the Company’s Business

3-M Drug Delivery Systems Division
Aerogen, Inc.
Alcoa, Inc.
Alkermes, Inc.
Alcan, Inc
ALZA Corporation (subsidiary of Johnson and Johnson
American Stelmi Corp. (division of Stelmi, SA)
Andrx Corporation
Antares Pharma, Inc. (f/k/a Medi-Ject)
Aradigm Corporation
Bentley Pharmaceuticals, Inc.
Blackhawk/Nepco
The Bespak Group
Biovail Corporation
Cardinal Health, Inc.
CIMA Labs, Inc.
Comar, Inc.
Elan Corporation, Plc
Elite Pharmaceuticals, Inc.
Emisphere Technologies, Inc.
Ethypharm SA
Erie Plastics Corp.
Ferro- Pfanstiehl Laboratories, Inc.
Flamel Technologies, Inc.
Focus Inhalation Oy
Guilford Pharmaceutical, Inc.
Helvoet Pharma (division of Datwyler Holding)
Innovative Drug Delivery Systems, Inc.
In-Site Vision, Inc.
Kerr Group, Inc.
Lavipharm Corporation
Nastech Pharmaceutical Company, Inc.
Nektar Therapeutics
Penwest Pharmaceuticals Company
Phasex Corporation
Plastech Molding and Fabricating, Inc.
Rehxam Corporation
RP Scherer, Inc. (subsidiary of Cardinal Health)
Rx Kinetix, Inc.
Sheffield Pharmaceuticals, Inc.
SkyePharma Plc
Stelmi S.A.
Tech Industries, Inc.
Unigene Laboratories, Inc
Wheaton Science Products (an Alcan Packaging company)

A-1

EX-10 4 exh10b.htm EXHIBIT 10B CHANGE IN CONTROL MAA Exhibit 10b

Exhibit (10) (b)

Execution Copy


SECOND AMENDED AND RESTATED


CHANGE-IN-CONTROL AGREEMENT

        THIS IS A CHANGE-IN-CONTROL AGREEMENT (the “Agreement”) dated as of May 1, 2003 (the “Effective Date”) between West Pharmaceutical, Services, Inc., a Pennsylvania corporation, (the “Company”) and Michael A. Anderson (“Executive”).

Background

        The Company and Executive are parties to an Amended and Restated Change-In-Control Agreement dated as of March 25, 2000 (the “2000 Agreement”), a copy of which is attached to this Agreement as Exhibit “A”. Under the 2000 Agreement, the Executive is eligible to receive severance compensation and certain other benefits in the event his employment is terminated by the Company other than for cause or by reason of death, disability, continuous misconduct to the detriment of the Company or retirement pursuant to the Company’s Retirement Plan, all as specified in Section 2 thereof.

        The Company now desires to provide Executive with certain enhanced compensation and benefits in the event that Executive’s employment is terminated following a Change in Control (as defined herein). The Company and Executive also desire to amend the 2000 Agreement, all as set forth in this Agreement

Agreement

        In consideration of the foregoing and each intending to be legally bound, the Company and Executive agree as follows:

1.    Definitions.As used in this Agreement, the following terms will have the meanings set forth below:

    (a)     An “Affiliate” of any Person means any Person directly or indirectly controlling, controlled by or under common control with such Person.

    (b)     “Change in Control” means a change in control of a nature that would be required to be reported in response to Item 1 of a Current Report on Form 8-K as in effect on the Effective Date pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, (the “Act”) provided, that, without limitation, a Change in Control shall be deemed to have occurred if:

      (i)     Any Person, other than:

        (1)   the Company,  

        (2)   any Person who on the date hereof is a director or officer of the Company, or  

        (3)   a trustee or fiduciary holding securities under an employee benefit plan of the Company,  

        is or becomes the “beneficial owner” (as defined in Rule 13-d3 under the Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities; or  

      (ii)   During any period of two consecutive years during the term of this Agreement, individuals who at the beginning of such period constitute the Board of Directors of the Company cease for any reason to constitute at least a majority thereof, unless the election of each director who was not a director at the beginning of such period has been approved in advance by directors representing at least two-thirds of the directors then in office who were directors at the beginning of the period; or

      (iii)      The shareholders of the Company approve: (A) a plan of complete liquidation of the Company; or (B) an agreement for the sale or disposition of all or substantially all of the Company’s assets; or (C) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization (collectively, a “Transaction”) that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the voting securities of the Company (or the surviving entity, or an entity which as a result of the Transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) outstanding immediately after the Transaction.

    (c)     “Code” means the Internal Revenue Code of 1986, as amended.

    (d)     The “Company’s Business” means: (i) the manufacture and sale of stoppers, closures, containers, medical device components and assemblies made from elastomers, metal and plastic for the health-care and consumer-products industries; (ii) the clinical trial business carried on by the Company’s GFI Research Center; (iii) the development of proprietary drug-delivery technologies that provide optimized therapeutic effects for challenging drug molecules, such as peptides and proteins, carbohydrates, oligonucleotides, as well as systems for vaccines, gene therapy and diagnostic applications; and (iv) any other business conducted by the Company or any of its Subsidiaries or Affiliates during the term of this Agreement and in which Executive has have been actively involved.

  (e)   “Constructive Termination” means the occurrence of any of the following events:

      (i)     The Company requires Executive to assume any duties inconsistent with, or the Company makes a significant diminution or reduction in the nature or scope of Executive’s authority or duties from, those assigned to or held by Executive on the Effective Date;

      (ii)       A material reduction in Executive’s annual salary or incentive compensation opportunities;

      (iii)     A relocation of Executive’s site of employment to a location more than 50 miles from Executive’s site of employment on the Effective Date;

      (iv)     The Company fails to provide Executive with substantially the same fringe benefits that were provided to Executive as of the Effective Date, or with a package of fringe benefits that, although one or more of such benefits may vary from those in effect as of the Effective Date, is substantially at least as beneficial to Executive in all material respects as such fringe benefits taken as a whole; or

      (v)      A successor of the Company does not assume the Company’s obligations under this Agreement, expressly or as a matter of law.

  Notwithstanding the foregoing, no Constructive Termination will be deemed to have occurred under any of the following circumstances:

        (1)   Executive will have consented in writing or given a written waiver to the occurrence of any of the events enumerated in clauses (i) through (v) above;    

        (2)   Executive will have failed to give the Company written notice stating Executive’s intention to claim Constructive Termination and the basis for that claim at least 10 days in advance of the effective date of Executive’s resignation; or  

        (3)   The event constituting a Constructive Termination has been cured by the Company prior to the effective date of Executive’s resignation.  

    (f)     “Payment” means

      (i)     any amount due or paid to Executive under this Agreement,

      (ii)     any amount that is due or paid to Executive under any plan, program or arrangement of the Company and any of its Subsidiaries, and

      (iii)     any amount or benefit that is due or payable to Executive under this Agreement or under any plan, program or arrangement of the Company and any of its Subsidiaries not otherwise covered under clause (i) or (ii) hereof which must reasonably be taken into account under Section 280G of the Code and the Regulations in determining the amount of the “parachute payments” received by Executive, including, without limitation, any amounts which must be taken into account under the Code and Regulations as a result of (1) the acceleration of the vesting of any option, restricted stock or other equity award granted under any equity plan of the Company or otherwise, (2) the acceleration of the time at which any payment or benefit is receivable by Executive or (3) any contingent severance or other amounts that are payable to Executive.

    (g)     “Person” means an individual, a corporation, a partnership, an association, a trust or other entity or organization.

    (h)     “Regulations” means the proposed, temporary and final regulations under Section 280G of the Code or any successor provision thereto.

    (i)     “Restrictive Period” means the period of time that commences on the Effective Date hereof and ends on the first anniversary of the Termination Date.

    (j)     “Retirement Plan” means the West Pharmaceutical Services, Inc. Employees’ Retirement Plan and any successor plan thereto.

    (k)     “Savings/Deferred Comp Plan” means The Company’s Salaried Employees’ Savings Plan, The Company’s Non-Qualified Deferred Compensation Plan for Designated Executive Officers and any other similar plan established from time to time that may allow executive officers to defer taxation of compensation.

    (l)     “Subsidiary” has the meaning ascribed to the term by Section 425(f) of the Code.

    (m)     “Termination Date” means the date on which Executive ceases to be employed by the Company or any of its Subsidiaries or Affiliates for any reason.

2.    Termination Following a Change in Control.

    (a)     Executive will be entitled to the benefits specified in Section 3 (Benefits Payable Upon Termination of Employment) if,

      (i)     at any time within two years after a Change in Control has occurred, Executive’s employment by the Company is terminated:

        (1)   by the Company, other than by reason of death, disability, continuous willful misconduct to the detriment of the Company, or retirement at Executive’s normal retirement date under the Retirement Plan, or  

        (2)   as a result of Executive’s resignation at any time following Executive’s Constructive Termination; or  

      (ii)     Executive resigns for any reason within 30 days following the first anniversary of a Change in Control.

  Except as otherwise set forth in Section 2(b) Executive will not be entitled to the benefits specified in Section 3 hereof if Executive’s employment terminates for any other reason or if, at any time thereafter, Executive is in breach of any of Executive’s obligations under this Agreement.

    (b)     If the Company executes an agreement, the consummation of which would result in the occurrence of a Change in Control, then, with respect to a termination:

      (i)     by the Company, other than by reason of death, disability, continuous willful misconduct to the detriment of the Company, or retirement at Executive’s normal retirement date under the Retirement Plan, or

      (ii)     as a result of Executive’s resignation at any time following Executive’s Constructive Termination occurring after the date of such agreement (and, if such agreement expires or is terminated prior to consummation, prior to the expiration or termination of such agreement)

  a Change in Control shall be deemed to have occurred as of the date of the execution of such agreement and Executive will be entitled to the severance compensation specified in Section 3 hereof.

3.    Benefits Payable Upon Termination of Employment. Upon termination of employment as set forth in Section 2 (Termination Following a Change in Control) Executive will be entitled to the following benefits:

    (a)    Severance Compensation. Executive will be entitled to severance compensation in an amount equal to three times the sum of

      (i)      Executive’s highest annual base salary rate in effect during the year of the termination of Executive’s employment, plus

      (ii)     the aggregate amount of the annual bonuses paid or payable to Executive for the three fiscal years immediately preceding a Change in Control divided by the number of fiscal years as to which such bonuses were paid or payable;

  provided, however, that if at any time before the third anniversary of the Termination Date, Executive either (x) elects retirement under the Retirement Plan, or (y) could have been compelled to retire under the Retirement Plan if Executive had remained employed by the Company, Executive’s severance compensation under this Section 3(a) will be reduced by an amount equal to the product obtained by multiplying such severance compensation by a fraction the numerator of which is the number of days elapsed from the Termination Date until the date on which either of the events described in clauses (x) or (y) first occurs, and the denominator of which is 1095.

  The severance compensation paid hereunder will not be reduced to the extent of any other compensation for Executive’s services that Executive receives or is entitled to receive from any other employment consistent with the terms of this Agreement.

    (b)    Equivalent of Vested Savings/Deferred Comp Plan Benefit. The Company will pay to Executive the difference, if any, between

      (i)     the benefit Executive would be entitled to receive under the Savings/Deferred Comp Plan if the Company’s contributions to the Savings/Deferred Comp Plan were fully vested upon the termination of Executive’s employment, and

      (ii)     the benefit Executive is entitled to receive under the terms of the Savings/Deferred Comp Plan upon termination of Executive’s employment.

  Any such benefit will be payable at such time and in such manner as benefits are payable to Executive under the Savings/Deferred Comp Plan.

    (c)    Unvested Equity Awards. All stock options, other equity-based awards and shares of the Company’s stock granted or awarded to Executive pursuant to any Company compensation or benefit plan or arrangement, but which are unvested, will vest immediately upon termination of Executive’s employment. The provisions of this Section 3(c) will supersede the terms of any such grant or award made to Executive under any such plan or arrangement to the extent there is an inconsistency between the two.

    (d)    Employee and Executive Benefits.Executive will be entitled to a continuation of all hospital, major medical, medical, dental, life and other insurance benefits not otherwise addressed in this Agreement in the same manner and amount to which Executive was entitled on the date of a Change in Control or on the date of Constructive Termination of Executive’s employment (whichever benefits are more favorable to Executive) until the earlier of

      (i)        a period of 36 months after the Termination Date,  

      (ii)         Executive’s retirement under the Retirement Plan, or

      (iii)        Executive’s eligibility for similar benefits with a new employer.

  Assistance in finding new employment will be made available to Executive by the Company if Executive so requests. Upon termination of Executive’s employment, Company cars must be returned to the Company.

4.    Additional Payments.

    (a)     Gross-Up Payment. Notwithstanding anything herein to the contrary, if it is determined that any Payment would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any interest or penalties thereon, is herein referred to as an “Excise Tax”) then Executive shall be entitled to an additional payment (a “Gross-Up Payment”) in an amount that will place Executive in the same after-tax economic position that Executive would have enjoyed if the Excise Tax had not applied to the Payment.

    (b)    Determination of Gross-Up Payment. Subject to the provisions of Section 4(c) all determinations required under this Section 4, including whether a Gross-Up Payment is required, the amount of the Payments constituting excess parachute payments, and the amount of the Gross-Up Payment, shall be made by the accounting firm that was the Company’s independent auditors immediately prior to the Change in Control (or, in default thereof, an accounting firm mutually agreed upon by the Company and Executive) (the “Accounting Firm”) which shall provide detailed supporting calculations both to Executive and the Company within fifteen days of the Change in Control, the Termination Date or any other date reasonably requested by Executive or the Company on which a determination under this Section 4 is necessary or advisable. The Company shall pay to Executive the initial Gross-Up Payment within 5 days of the receipt by Executive and the Company of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, the Company shall cause the Accounting Firm to provide Executive with an opinion that the Accounting Firm has substantial authority under the Code and Regulations not to report an Excise Tax on Executive’s federal income tax return. Any determination by the Accounting Firm shall be binding upon Executive and the Company. If the initial Gross-Up Payment is insufficient to cover the amount of the Excise Tax that is ultimately determined to be owing by Executive with respect to any Payment (hereinafter an “Underpayment”) the Company, after exhausting its remedies under Section 4(c) below, shall promptly pay to Executive an additional Gross-Up Payment in respect of the Underpayment.

    (c)    Procedures. Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notice shall be given as soon as practicable after Executive knows of such claim and shall apprise the Company of the nature of the claim and the date on which the claim is requested to be paid. Executive agrees not to pay the claim until the expiration of the thirty-day period following the date on which Executive notifies the Company, or such shorter period ending on the date the Taxes with respect to such claim are due (the “Notice Period”). If the Company notifies Executive in writing prior to the expiration of the Notice Period that it desires to contest the claim, Executive shall: (i) give the Company any information reasonably requested by the Company relating to the claim; (ii) take such action in connection with the claim as the Company may reasonably request, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company and reasonably acceptable to Executive; (iii) cooperate with the Company in good faith in contesting the claim; and (iv) permit the Company to participate in any proceedings relating to the claim. Executive shall permit the Company to control all proceedings related to the claim and, at its option, permit the Company to pursue or forgo any and all administrative appeals, proceedings, hearings, and conferences with the taxing authority in respect of such claim. If requested by the Company, Executive agrees either to pay the tax claimed and sue for a refund or contest the claim in any permissible manner and to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts as the Company shall determine; provided, however, that, if the Company directs Executive to pay such claim and pursue a refund, the Company shall advance the amount of such payment to Executive on an after-tax and interest-free basis (the “Advance”). The Company’s control of the contest related to the claim shall be limited to the issues related to the Gross-Up Payment and Executive shall be entitled to settle or contest, as the case may be, any other issues raised by the Internal Revenue Service or other taxing authority. If the Company does not notify Executive in writing prior to the end of the Notice Period of its desire to contest the claim, the Company shall pay to Executive an additional Gross-Up Payment in respect of the excess parachute payments that are the subject of the claim, and Executive agrees to pay the amount of the Excise Tax that is the subject of the claim to the applicable taxing authority in accordance with applicable law.

    (d)    Repayments. If, after receipt by Executive of an Advance, Executive becomes entitled to a refund with respect to the claim to which such Advance relates, Executive shall pay the Company the amount of the refund (together with any interest paid or credited thereon after Taxes applicable thereto). If, after receipt by Executive of an Advance, a determination is made that Executive shall not be entitled to any refund with respect to the claim and the Company does not promptly notify Executive of its intent to contest the denial of refund, then the amount of the Advance shall not be required to be repaid by Executive and the amount thereof shall offset the amount of the additional Gross-Up Payment then owing to Executive.

    (e)    Further Assurances. The Company shall indemnify Executive and hold Executive harmless, on an after-tax basis, from any costs, expenses, penalties, fines, interest or other liabilities (“Losses”) incurred by Executive with respect to the exercise by the Company of any of its rights under this Section 4, including, without limitation, any Losses related to the Company’s decision to contest a claim or any imputed income to Executive resulting from any Advance or action taken on Executive’s behalf by the Company hereunder. The Company shall pay all legal fees and expenses incurred under this Section 4 and shall promptly reimburse Executive for the reasonable expenses incurred by Executive in connection with any actions taken by the Company or required to be taken by Executive hereunder. The Company shall also pay all of the fees and expenses of the Accounting Firm, including, without limitation, the fees and expenses related to the opinion referred to in Section 4(b).

5.    Payment of Severance Compensation.

    (a)     The severance compensation set forth in Section 3 (a) shall be payable in 36 equal monthly installments commencing on the first day of the month following the month in which Executive’s employment terminates. However, Executive may elect in writing, in accordance with the provisions of this Section, to receive Executive’s severance compensation in a lump sum at a later time or in installments in amounts and at times elected by Executive, but Executive’s election will not entitle Executive to receive severance compensation sooner than permitted by the preceding sentence.

    (b)     Executive must elect to receive amounts in installments or to defer payments by filing a written election with the Company, which specifies the time at which payments are to be made and the amounts of such payments. Executive’s election to receive installment payments or to defer payments will not be valid unless it is made prior to the time Executive is entitled to receive any payments under this Agreement. The last such election in effect on the day before a termination of employment will be controlling. No election may be made on or after termination of employment.

    (c)     The payment of deferred amounts must commence no earlier than the first business day of the calendar year following the termination of Executive’s employment and no later than the third calendar year following the attainment of normal retirement age under the Retirement Plan.

6.    Non-Disclosure and Confidentiality.

    (a)     Executive agrees that Executive will keep secret and maintain in confidence all confidential information of the Company and will not use such information other than for the Company’s benefit or disclose such information to anyone outside of the Company, either during or after Executive’s employment with the Company.

    (b)     Executive will promptly deliver to the Company on the termination of Executive’s employment with the Company, or at any time the Company requests, all memoranda, notes, records and other documents (and all copies thereof) relating to the Company’s business or confidential matters which Executive then has or controls.

    (c)     All inventions, improvements, new ideas and techniques which relate to the Company’s business which Executive makes or conceives during Executive’s employment with the Company or within six months thereafter will be the Company’s property. Without additional compensation to Executive, Executive will promptly inform the Company of such inventions, improvements, ideas and techniques, and will assist the Company in preserving them and will not disclose them to anyone else without the Company’s consent.

    (d)     Executive understands that, as used in this Section, the phrase “confidential information of the Company” includes all information of a technical, commercial or other nature of or about the Company (such as formulae, trade secrets, customer lists and know-how) not made available to the general public.

7.    Legal Fees. The Company will pay all legal fees and expenses which Executive may incur as a result of the Company’s contesting the validity or enforceability of this Agreement.

8.    Payments Final. In the event of a termination of Executive’s employment under the circumstances described in this Agreement, the arrangements provided for by this Agreement, and any other agreement between the Company and Executive in effect at that time and by any other applicable plan of the Company in which Executive then participates, will constitute the entire obligation of the Company to Executive, and performance of that obligation will constitute full settlement of any claim that Executive might otherwise assert against the Company on account of such termination. The Company’s obligation to pay Executive under this Agreement will be absolute and unconditional and will not be affected by any circumstance, including without limitation, any set-off, counterclaim, defense or other rights the Company may have against Executive or anyone else as long as Executive is not in beach of Executive’s obligations under this Agreement.

9.    Non-Competition.

    (a)     During the Restrictive Period, Executive will not, and will not permit any of Executive’s Affiliates, or any other Person, directly or indirectly, to:

    (b)      engage in competition with, or acquire a direct or indirect interest or an option to acquire such an interest in any Person engaged in competition with, the Company’s Business in the United States (other than an interest of not more than 5 percent of the outstanding stock of any publicly traded company);

      (i)     serve as a director, officer, employee or consultant of, or furnish information to, or otherwise facilitate the efforts of, any Person engaged in competition with the Company’s Business in the United States;

      (ii)     solicit, employ, interfere with or attempt to entice away from the Company any employee who has been employed by the Company or a Subsidiary in an executive or supervisory capacity in connection with the conduct of the Company’s Business within one year prior to such solicitation, employment, interference or enticement; or

      (iii)     approach, solicit or deal with in competition with the Company or any Subsidiary any Person which at any time during the 12 months immediately preceding the Termination Date:

        (1)   was a customer, client, supplier, agent or distributor of the Company or any Subsidiary;  

        (2)   was a customer, client, supplier, agent or distributor of the Company or any Subsidiary with whom employees reporting to or under the direct control of Executive had personal contact on behalf of the Company or any Subsidiary; or  

        (3)   was a Person with whom Executive had regular, substantial or a series of business dealings on behalf of the Company or any Subsidiary (whether or not a customer, client, supplier, agent or distributor of the Company or any Subsidiary).  

    (c)     For the avoidance of doubt, Executive agrees that the phrase “Person engaged in competition with the Company’s Business” as used in this Section includes, without limitation, the companies listed on Schedule “A” to this Agreement, their Affiliates and subsidiaries.

10.    Vesting in the Event of a Change in Control. In the event of a Change in Control, all stock options, equity-based awards and shares of the Company’s stock granted or awarded to Executive pursuant to any Company compensation or benefit plan or arrangement, but which are unvested at that time, will vest immediately upon such Change in Control. The provisions of this Section 10 will supersede the terms of any such grant or award made to Executive under any such plan or arrangement to the extent there is an inconsistency between the two.

11.    Duration of Agreement. This Agreement shall commence on the Effective Date and shall continue until terminated as provided in this Section. This Agreement may be terminated only under the following circumstances:

      (i)     At any time by the mutual written consent of Executive and the Company; and

      (ii)     By the Company at the end of each successive two-year period commencing on the Effective Date by giving Executive written notice at least one year in advance of such termination, except that such termination and written notice will not be effective unless Executive will be employed by the Company on the date of termination.

12.    Amendment and Termination of Prior Agreement.

    (a)    Termination 2000 Agreement.The Company and Executive agree that the 2000 Agreement is hereby terminated and shall be of no further effect, and that neither party shall have any rights or obligations thereunder.

13.    Miscellaneous.

    (a)     In consideration for the benefit of having the protection afforded by this Agreement, Executive agrees that the provisions of Section 6 (Non-Disclosure and Confidentiality) and Section 9 (Non-Competition) of this Agreement apply to Executive, and Executive will be bound by them, whether or not a Change in Control occurs or Executive actually receives the benefits specified in Section 3 hereof.

    (b)     This Agreement will be binding upon and inure to the benefit of Executive, Executive’s personal representatives and heirs and the Company and any successor of the Company, but neither this Agreement nor any rights arising hereunder may be assigned or pledged by Executive.

    (c)     Executive acknowledges that a breach of the covenants contained in Section 6 (Non-Disclosure and Confidentiality) and Section 9 (Non-Competition) will cause the Company immediate and irreparable harm for which the Company’s remedies at law (such as money damages) will be inadequate. The Company shall have the right, in addition to any other rights it may have, to obtain an injunction to restrain any breach or threatened breach of such Sections. The Company may contact any Person with or for whom Executive works after Executive’s employment by the Company ends and may send that Person a copy of this Agreement.

    (d)     Should any provision of this Agreement be adjudged to any extent invalid by any competent tribunal, that provision will be deemed modified to the extent necessary to make it enforceable.

    (e)     This Agreement will be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania.

    (f)     This Agreement constitutes the entire agreement and understanding between the Company and Executive with respect to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings between the Company and Executive with respect to such matters.

    (g)     This Agreement may be executed in one or more counterparts, which together shall constitute a single agreement.

IN   WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.

EXECUTIVE  

By:                                                      
Michael A. Anderson


WEST   PHARMACEUTICAL SERVICES, INC.

By:                                                      
Donald E. Morel, Jr., Ph.D.

President and Chief Executive Officer

Schedule “A”

List of Persons Engaged in Competition with the Company’s Business

3-M Drug Delivery Systems Division
Aerogen, Inc.
Alcoa, Inc.
Alkermes, Inc.
Alcan, Inc
ALZA Corporation (subsidiary of Johnson and Johnson
American Stelmi Corp. (division of Stelmi, SA)
Andrx Corporation
Antares Pharma, Inc. (f/k/a Medi-Ject)
Aradigm Corporation
Bentley Pharmaceuticals, Inc.
Blackhawk/Nepco
The Bespak Group
Biovail Corporation
Cardinal Health, Inc.
CIMA Labs, Inc.
Comar, Inc.
Elan Corporation, Plc
Elite Pharmaceuticals, Inc.
Emisphere Technologies, Inc.
Ethypharm SA
Erie Plastics Corp.
Ferro- Pfanstiehl Laboratories, Inc.
Flamel Technologies, Inc.
Focus Inhalation Oy
Guilford Pharmaceutical, Inc.
Helvoet Pharma (division of Datwyler Holding)
Innovative Drug Delivery Systems, Inc.
In-Site Vision, Inc.
Kerr Group, Inc.
Lavipharm Corporation
Nastech Pharmaceutical Company, Inc.
Nektar Therapeutics
Penwest Pharmaceuticals Company
Phasex Corporation
Plastech Molding and Fabricating, Inc.
Rehxam Corporation
RP Scherer, Inc. (subsidiary of Cardinal Health)
Rx Kinetix, Inc.
Sheffield Pharmaceuticals, Inc.
SkyePharma Plc
Stelmi S.A.
Tech Industries, Inc.
Unigene Laboratories, Inc
Wheaton Science Products (an Alcan Packaging company)

A-1

EX-10 5 exh10c.htm EXHIBIT 10C BM Exhibit 10c

Exhibit (10) (c)

Execution Copy


CHANGE-IN-CONTROL AGREEMENT

        THIS IS A CHANGE-IN-CONTROL AGREEMENT (the “Agreement”) dated as of May 1, 2003 (the “Effective Date”) between West Pharmaceutical, Services, Inc., a Pennsylvania corporation, (the “Company”) and Bruce S. Morra (“Executive”).

Background

        The Company and Executive are parties to a “Confidentiality and Non-Competition Agreement” dated as of April 7, 2003 (the “Non-Competition Agreement”) a copy of which is attached hereto as Exhibit “A.” Under the Non-Competition Agreement, Executive is eligible to receive severance compensation and certain other benefits in the event his employment is terminated by the Company other than for cause or by reason of death, disability, continuous willful misconduct to the detriment of the Company or retirement pursuant to the Company’s Employees’ Retirement Plan.

        The Company now desires to provide Executive with certain enhanced compensation and benefits in the event that Executive’s employment is terminated following a Change in Control (as defined herein). The Company and Executive also desire to amend the Non-Competition Agreement, as set forth in this Agreement.

Agreement

        In consideration of the foregoing, the Company and Executive, each intending to be legally bound, agree as follows:

1.    Definitions.As used in this Agreement, the following terms will have the meanings set forth below:

    (a)     An “Affiliate” of any Person means any Person directly or indirectly controlling, controlled by or under common control with such Person.

    (b)     “Change in Control” means a change in control of a nature that would be required to be reported in response to Item 1 of a Current Report on Form 8-K as in effect on the Effective Date pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, (the “Act”) provided, that, without limitation, a Change in Control shall be deemed to have occurred if:

      (i)     Any Person, other than:

        (1)   the Company,  

        (2)   any Person who on the date hereof is a director or officer of the Company, or  

        (3)   a trustee or fiduciary holding securities under an employee benefit plan of the Company,  

  is or becomes the “beneficial owner” (as defined in Rule 13-d3 under the Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities; or

      (ii)     During any period of two consecutive years during the term of this Agreement, individuals who at the beginning of such period constitute the Board of Directors of the Company cease for any reason to constitute at least a majority thereof, unless the election of each director who was not a director at the beginning of such period has been approved in advance by directors representing at least two-thirds of the directors then in office who were directors at the beginning of the period; or

      (iii)     The shareholders of the Company approve: (A) a plan of complete liquidation of the Company; or (B) an agreement for the sale or disposition of all or substantially all of the Company’s assets; or (C) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization (collectively, a “Transaction”) that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the voting securities of the Company (or the surviving entity, or an entity which as a result of the Transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) outstanding immediately after the Transaction.

    (c)     “Code” means the Internal Revenue Code of 1986, as amended.

    (d)     “Constructive Termination” means the occurrence of any of the following events:

      (i)     The Company requires Executive to assume any duties inconsistent with, or the Company makes a significant diminution or reduction in the nature or scope of Executive’s authority or duties from, those assigned to or held by Executive on the Effective Date;

      (ii)     A material reduction in Executive’s annual salary or incentive compensation opportunities;

      (iii)     A relocation of Executive’s site of employment to a location more than 50 miles from Executive’s site of employment on the Effective Date;

      (iv)     The Company fails to provide Executive with substantially the same fringe benefits that were provided to Executive as of the Effective Date, or with a package of fringe benefits that, although one or more of such benefits may vary from those in effect as of the Effective Date, is substantially at least as beneficial to Executive in all material respects as such fringe benefits taken as a whole; or

      (v)     A successor of the Company does not assume the Company’s obligations under this Agreement, expressly or as a matter of law.

  Notwithstanding the foregoing, no Constructive Termination will be deemed to have occurred under any of the following circumstances:

        (1)   Executive will have consented in writing or given a written waiver to the occurrence of any of the events enumerated in clauses (i) through (v) above;  

        (2)   Executive will have failed to give the Company written notice stating Executive’s intention to claim Constructive Termination and the basis for that claim at least 10 days in advance of the effective date of Executive’s resignation; or  

        (3)   The event constituting a Constructive Termination has been cured by the Company prior to the effective date of Executive’s resignation.  

    (f)     “Payment” means

      (i)     any amount due or paid to Executive under this Agreement,

      (ii)     any amount that is due or paid to Executive under any plan, program or arrangement of the Company and any of its Subsidiaries, and

      (iii)     any amount or benefit that is due or payable to Executive under this Agreement or under any plan, program or arrangement of the Company and any of its Subsidiaries not otherwise covered under clause (i) or (ii) hereof which must reasonably be taken into account under section 280G of the Code and the Regulations in determining the amount of the “parachute payments” received by Executive, including, without limitation, any amounts which must be taken into account under the Code and Regulations as a result of (1) the acceleration of the vesting of any option, restricted stock or other equity award granted under any equity plan of the Company or otherwise, (2) the acceleration of the time at which any payment or benefit is receivable by Executive or (3) any contingent severance or other amounts that are payable to Executive.

    (g)     “Person” means an individual, a corporation, a partnership, an association, a trust or other entity or organization.

    (h)     “Regulations” means the proposed, temporary and final regulations under section 280G of the Code or any successor provision thereto.

    (i)     “Retirement Plan” means the West Pharmaceutical Services, Inc. Employees’ Retirement Plan and any successor plan thereto.

    (j)     “Savings/Deferred Comp Plan” means The Company’s Salaried Employees’ Savings Plan, The Company’s Non-Qualified Deferred Compensation Plan for Designated Executive Officers and any other similar plan established from time to time that may allow executive officers to defer taxation of compensation.

    (k)     “Subsidiary” has the meaning ascribed to the term by section 425(f) of the Code.

    (l)     “Termination Date” means the date on which Executive ceases to be employed by the Company or any of its Subsidiaries or Affiliates for any reason.

2.    Termination Following a Change in Control.

    (a)     Executive will be entitled to the benefits specified in Section 3 (Benefits Payable Upon Termination of Employment) if,

      (i)     at any time within two years after a Change in Control has occurred, Executive’s employment by the Company is terminated:

        (1)   by the Company, other than by reason of death, disability, continuous willful misconduct to the detriment of the Company, or retirement at Executive’s normal retirement date under the Retirement Plan, or  

        (2)   as a result of Executive’s resignation at any time following Executive’s Constructive Termination; or  

      (ii)     Executive resigns for any reason within 30 days following the first anniversary of a Change in Control.

  Except as otherwise set forth in Section 2(b) Executive will not be entitled to the benefits specified in Section 3 hereof if Executive’s employment terminates for any other reason or if, at any time thereafter, Executive is in breach of any of Executive’s obligations under this Agreement or the Non-Competition Agreement.

    (b)     If the Company executes an agreement, the consummation of which would result in the occurrence of a Change in Control, then, with respect to a termination:

      (i)     by the Company, other than by reason of death, disability, continuous willful misconduct to the detriment of the Company, or retirement at Executive’s normal retirement date under the Retirement Plan, or

      (ii)     as a result of Executive’s resignation at any time following Executive’s Constructive Termination occurring after the date of such agreement (and, if such agreement expires or is terminated prior to consummation, prior to the expiration or termination of such agreement)

  a Change in Control shall be deemed to have occurred as of the date of the execution of such agreement and Executive will be entitled to the severance compensation specified in Section 3 hereof.

3.    Benefits Payable Upon Termination of Employment. Upon termination of employment as set forth in Section 2 (Termination Following a Change in Control) Executive will be entitled to the following benefits:

    (a)    Severance Compensation. Executive will be entitled to severance compensation in an amount equal to three times the sum of:

      i)     Executive’s highest annual base salary rate in effect during the year of the termination of Executive’s employment, plus

      ii)     the aggregate amount of the annual bonuses paid or payable to Executive for the three fiscal years immediately preceding a Change in Control divided by the number of fiscal years as to which such bonuses were paid or payable;

  provided, however, that if at any time before the third anniversary of the Termination Date, Executive either (x) elects retirement under the Retirement Plan, or (y) could have been compelled to retire under the Retirement Plan if Executive had remained employed by the Company, Executive’s severance compensation under this Section 3(a) will be reduced by an amount equal to the product obtained by multiplying such severance compensation by a fraction the numerator of which is the number of days elapsed from the Termination Date until the date on which either of the events described in clauses (x) or (y) first occurs, and the denominator of which is 1095.

  The severance compensation paid hereunder will not be reduced to the extent of any other compensation for Executive’s services that Executive receives or is entitled to receive from any other employment consistent with the terms of this Agreement.

    (b)    Equivalent of Vested Savings/Deferred Comp Plan Benefit. The Company will pay to Executive the difference, if any, between

      (i)     the benefit Executive would be entitled to receive under the Savings/Deferred Comp Plan if the Company’s contributions to the Savings/Deferred Comp Plan were fully vested upon the termination of Executive’s employment, and

      (ii)     the benefit Executive is entitled to receive under the terms of the Savings/Deferred Comp Plan upon termination of Executive’s employment.

      Any   such benefit will be payable at such time and in such manner as benefits are payable to Executive under the Savings/Deferred Comp Plan.

      (c)    Unvested Equity Awards. All stock options, other equity-based awards and shares of the Company’s stock granted or awarded to Executive pursuant to any Company compensation or benefit plan or arrangement, but which are unvested, will vest immediately upon termination of Executive’s employment. The provisions of this Section 3(c) will supersede the terms of any such grant or award made to Executive under any such plan or arrangement to the extent there is an inconsistency between the two.

      (d)    Employee and Executive Benefits.Executive will be entitled to a continuation of all hospital, major medical, medical, dental, life and other insurance benefits not otherwise addressed in this Agreement in the same manner and amount to which Executive was entitled on the date of a Change in Control or on the date of Constructive Termination of Executive’s employment (whichever benefits are more favorable to Executive) until the earlier of

        (i)      a period of 36 months after the Termination Date,  

        (ii)      Executive’s retirement under the Retirement Plan, or  

        (iii)      Executive’s eligibility for similar benefits with a new employer.  

  Assistance in finding new employment will be made available to Executive by the Company if Executive so requests. Upon termination of Executive’s employment, Company cars must be returned to the Company.

4.    Additional Payments.

    (a)    Gross-Up Payment. Notwithstanding anything herein to the contrary, if it is determined that any Payment would be subject to the excise tax imposed by section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any interest or penalties thereon, is herein referred to as an “Excise Tax”) then Executive shall be entitled to an additional payment (a “Gross-Up Payment”) in an amount that will place Executive in the same after-tax economic position that Executive would have enjoyed if the Excise Tax had not applied to the Payment.

    (b)    Determination of Gross-Up Payment. Subject to the provisions of Section 4(c) all determinations required under this Section 4, including whether a Gross-Up Payment is required, the amount of the Payments constituting excess parachute payments, and the amount of the Gross-Up Payment, shall be made by the accounting firm that was the Company’s independent auditors immediately prior to the Change in Control (or, in default thereof, an accounting firm mutually agreed upon by the Company and Executive) (the “Accounting Firm”) which shall provide detailed supporting calculations both to Executive and the Company within fifteen days of the Change in Control, the Termination Date or any other date reasonably requested by Executive or the Company on which a determination under this Section 4 is necessary or advisable. The Company shall pay to Executive the initial Gross-Up Payment within five (5) days of the receipt by Executive and the Company of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, the Company shall cause the Accounting Firm to provide Executive with an opinion that the Accounting Firm has substantial authority under the Code and Regulations not to report an Excise Tax on Executive’s federal income tax return. Any determination by the Accounting Firm shall be binding upon Executive and the Company. If the initial Gross-Up Payment is insufficient to cover the amount of the Excise Tax that is ultimately determined to be owing by Executive with respect to any Payment (hereinafter an “Underpayment”) the Company, after exhausting its remedies under Section 4(c) below, shall promptly pay to Executive an additional Gross-Up Payment in respect of the Underpayment.

    (c)    Procedures. Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notice shall be given as soon as practicable after Executive knows of such claim and shall apprise the Company of the nature of the claim and the date on which the claim is requested to be paid. Executive agrees not to pay the claim until the expiration of the thirty-day period following the date on which Executive notifies the Company, or such shorter period ending on the date the Taxes with respect to such claim are due (the “Notice Period”). If the Company notifies Executive in writing prior to the expiration of the Notice Period that it desires to contest the claim, Executive shall: (i) give the Company any information reasonably requested by the Company relating to the claim; (ii) take such action in connection with the claim as the Company may reasonably request, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company and reasonably acceptable to Executive; (iii) cooperate with the Company in good faith in contesting the claim; and (iv) permit the Company to participate in any proceedings relating to the claim. Executive shall permit the Company to control all proceedings related to the claim and, at its option, permit the Company to pursue or forgo any and all administrative appeals, proceedings, hearings, and conferences with the taxing authority in respect of such claim. If requested by the Company, Executive agrees either to pay the tax claimed and sue for a refund or contest the claim in any permissible manner and to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts as the Company shall determine; provided, however, that, if the Company directs Executive to pay such claim and pursue a refund, the Company shall advance the amount of such payment to Executive on an after-tax and interest-free basis (the “Advance”). The Company’s control of the contest related to the claim shall be limited to the issues related to the Gross-Up Payment and Executive shall be entitled to settle or contest, as the case may be, any other issues raised by the Internal Revenue Service or other taxing authority. If the Company does not notify Executive in writing prior to the end of the Notice Period of its desire to contest the claim, the Company shall pay to Executive an additional Gross-Up Payment in respect of the excess parachute payments that are the subject of the claim, and Executive agrees to pay the amount of the Excise Tax that is the subject of the claim to the applicable taxing authority in accordance with applicable law.

    (d)    Repayments. If, after receipt by Executive of an Advance, Executive becomes entitled to a refund with respect to the claim to which such Advance relates, Executive shall pay the Company the amount of the refund (together with any interest paid or credited thereon after Taxes applicable thereto). If, after receipt by Executive of an Advance, a determination is made that Executive shall not be entitled to any refund with respect to the claim and the Company does not promptly notify Executive of its intent to contest the denial of refund, then the amount of the Advance shall not be required to be repaid by Executive and the amount thereof shall offset the amount of the additional Gross-Up Payment then owing to Executive.

    (e)    Further Assurances. The Company shall indemnify Executive and hold Executive harmless, on an after-tax basis, from any costs, expenses, penalties, fines, interest or other liabilities (“Losses”) incurred by Executive with respect to the exercise by the Company of any of its rights under this Section 4, including, without limitation, any Losses related to the Company’s decision to contest a claim or any imputed income to Executive resulting from any Advance or action taken on Executive’s behalf by the Company hereunder. The Company shall pay all legal fees and expenses incurred under this Section 4 and shall promptly reimburse Executive for the reasonable expenses incurred by Executive in connection with any actions taken by the Company or required to be taken by Executive hereunder. The Company shall also pay all of the fees and expenses of the Accounting Firm, including, without limitation, the fees and expenses related to the opinion referred to in Section 4(b).

5.    Payment of Severance Compensation.

    (a)     The severance compensation set forth in Section 3(a) shall be payable in 36 equal monthly installments commencing on the first day of the month following the month in which Executive’s employment terminates. However, Executive may elect in writing, in accordance with the provisions of this Section, to receive Executive’s severance compensation in a lump sum at a later time or in installments in amounts and at times elected by Executive, but Executive’s election will not entitle Executive to receive severance compensation sooner than permitted by the preceding sentence.

    (b)     Executive must elect to receive amounts in installments or to defer payments by filing a written election with the Company, which specifies the time at which payments are to be made and the amounts of such payments. Executive’s election to receive installment payments or to defer payments will not be valid unless it is made prior to the time Executive is entitled to receive any payments under this Agreement. The last such election in effect on the day before a termination of employment will be controlling. No election may be made on or after termination of employment.

    (c)     The payment of deferred amounts must commence no earlier than the first business day of the calendar year following the termination of Executive’s employment and no later than the third calendar year following the attainment of normal retirement age under the Retirement Plan.

6.    Legal Fees. The Company will pay all legal fees and expenses which Executive may incur as a result of the Company’s contesting the validity or enforceability of this Agreement.

7.    Payments Final. In the event of a termination of Executive’s employment under the circumstances described in this Agreement, the arrangements provided for by this Agreement, and any other agreement between the Company and Executive in effect at that time and by any other applicable plan of the Company in which Executive then participates, will constitute the entire obligation of the Company to Executive, and performance of that obligation will constitute full settlement of any claim that Executive might otherwise assert against the Company on account of such termination. The Company’s obligation to pay Executive under this Agreement will be absolute and unconditional and will not be affected by any circumstance, including without limitation, any set-off, counterclaim, defense or other rights the Company may have against Executive or anyone else as long as Executive is not in beach of Executive’s obligations under this Agreement or the Non-Competition Agreement.

8.    Vesting in the Event of a Change in Control. In the event of a Change in Control, all stock options, equity-based awards and shares of the Company’s stock granted or awarded to Executive pursuant to any Company compensation or benefit plan or arrangement, but which are unvested at that time, will vest immediately upon such Change in Control. The provisions of this Section 8 will supersede the terms of any such grant or award made to Executive under any such plan or arrangement to the extent there is an inconsistency between the two.

9.    Duration of Agreement. This Agreement shall commence on the Effective Date and shall continue until terminated as provided in this Section 9. This Agreement may be terminated only under the following circumstances:

      (i)     At any time by the mutual written consent of Executive and the Company; and

      (ii)     By the Company at the end of each successive two-year period commencing on the Effective Date by giving Executive written notice at least one year in advance of such termination, except that such termination and written notice will not be effective unless Executive will be employed by the Company on the date of termination .

10.     Amendment of Prior Agreements.

    (a)    Amendment of Non-Competition Agreement. The Company and Executive agree that the Non-Competition Agreement is amended in the manner set forth in the form of amendment attached to this Agreement as Exhibit “A.” The execution of such amendment by Executive shall be a condition to the Company’s execution of this Agreement.

11.    Miscellaneous.

    (a)     This Agreement will be binding upon and inure to the benefit of Executive, Executive’s personal representatives and heirs and the Company and any successor of the Company, but neither this Agreement nor any rights arising hereunder may be assigned or pledged by Executive.

    (b)     Should any provision of this Agreement be adjudged to any extent invalid by any competent tribunal, that provision will be deemed modified to the extent necessary to make it enforceable.

    (c)     This Agreement will be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania.

    (d)     This Agreement constitutes the entire agreement and understanding between the Company and Executive with respect to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings between the Company and Executive with respect to such matters.

    (e)     This Agreement may be executed in one or more counterparts, which together shall constitute a single agreement.

IN   WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.

EXECUTIVE  

By:                                                      
Bruce S. Morra, Ph.D.


WEST   PHARMACEUTICAL SERVICES, INC.

By:                                                      
Donald E. Morel, Jr., Ph.D., Chairman of the

Board, President and Chief Executive Officer

EX-10 6 exh10d03.htm EXHIBIT 10D CONFID NONUSE AGREE BM Exhibit 10d BM>



                                                                              Exhibit (10) (d)

                                                                              Execution Copy



                              CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
 ---------------------------------------------------------------------------------------------


This is a Confidentiality and  non-Competition  Agreement dated as of April 7, 2003 between
West  Pharmaceutical  Services,  Inc., a Pennsylvania corporation, (the "Company") and
Bruce S. Morra ("Executive").

In consideration  of the employment of Executive by the Company and the  compensation
and benefits  outlined below, and intending to be legally bound, the Company and
Executive hereby agree as follows:

1.       Definitions.  As used in this Section, the following terms shall have the meanings
         set forth below:

         1.1      An "Affiliate"  of any Person means any Person  directly or indirectly
                  controlling,  controlled by or under common control  with such Person.

         1.2      "Company's Business" means the business of the Company or any Affiliate
                  of the Company:

                  (a)  in the development of proprietary  drug-delivery  technologies tha
                       provide optimized  therapeutic  effects for challenging drug molecules,
                       such as peptides and proteins,  carbohydrates,  oligonucleotides,  as
                       well as systems for vaccines, gene therapy and diagnostic applications,
                       and other business being carried on by the Company's Drug Delivery
                       Development division in Lionville, Pennsylvania, and Nottingham, England;

                 (b)   the  performance  of human  clinical-trial  studies  and  related
                       services, all as carried on by the  Company's  Clinical Research
                       Group and GFI Research Center; and

                 (c)   any other  business  conducted  by the Company or any  Affiliate
                       of the Company  during the  Restrictive  Period in which Executive
                       has been actively involved while an employee of the Company
                       or any such Affiliate.

                  For the avoidance of doubt,  Executive  agrees that the phrase "Person
                  engaged in competition  with the Company's Business" as used in Section
                  2 hereof includes,  without  limitation,  the companies listed on
                  Exhibit "A" to this Agreement, their Affiliates and subsidiaries.

         1.3      "Exit Date" means the date on which Executive ceases to be employed by
                   the Company or any of its Affiliates.

         1.4      "Person" means an individual, a corporation, a partnership, an association,
                  a trust or other entity or organization.

         1.5      "Restrictive  Period" means the period of time that commences on the date
                  of this Agreement and ends on the first anniversary of the Exit Date.

         1.6      "Subsidiary" has the meaning ascribed to the term by section 425(f) of
                  the Internal Revenue Code.

2.       Covenant-Not-to-Compete.  During the  Restrictive  Period,  Executive  will not,
         and will not  permit  any of  Executive's Affiliates, or any other Person, directly
         or indirectly, to:

         2.1      engage in competition  with, or acquire a direct or indirect interest or
                  an option to acquire  such an interest in any Person engaged in competition
                  with, the Company's Business  anywhere in the world (other than an interest
                  of not more than five percent (5%) of the outstanding stock of any
                  publicly traded company);

         2.2      serve as a director,  officer,  employee or consultant of, or furnish
                  information to, or otherwise facilitate the efforts of, any Person
                  engaged in competition with the Company's Business anywhere in
                  the world,  provided,  however, that nothing contained in this clause
                  shall preclude Executive from continuing to serve as a member of the
                  board of directors  of  Polygenetics  Inc.,  Medisys  Technologies,
                  Inc. and NuSaf, LLC (provided he spends no more time relating to
                  such directorships than he does at the  date of  this  Agreement)
                  subject to his holding such directorships not being in  breach of
                  any other  provision  of this  Agreement  nor in any way in the
                  reasonable opinion of the Company be considered to impair  Executive's
                  ability to act at all times in the best interests of the Company or
                  adversely affect is performance of his duties as an employee of
                  the Company;

         2.3      solicit,  employ,  interfere  with or attempt to entice away from
                  the Company or any  Affiliate of the Company any employee who has
                  been employed by the Company or any such  Affiliate in an executive,
                  scientific or technical  capacity in connection  with the conduct of
                  the Company's  Business  within one year prior to such solicitation,
                  employment, interference or enticement; or

         2.4.     approach,  solicit or deal with in  competition  with the Company or
                  any Subsidiary any Person which at any time during the 12 months
                  immediately preceding the Exit Date:

                  (a)      was a customer, client, supplier, agent or distributor of
                           the Company or any Subsidiary;

                  (b)      was a customer, client, supplier, agent or distributor of
                           the Company or any Subsidiary with whom employees reporting
                           to or under Executive's direct control had personal contact
                           on behalf of the Company or any Subsidiary; or

                  (c)      was a Person with whom  Executive  had regular, substantial
                           or a series of business dealings on behalf of the Company or
                           any Subsidiary (whether or not a customer, client, supplier,
                          agent or distributor of the Company or any Subsidiary).

         The Restrictive Period shall be automatically extended for any period of time
         during which the Executive has breached, or threatened to breach, any provisions
         hereof.

3.       Benefits Payable Upon Termination of Employment.

         3.1      Executive  will be entitled to the benefits  specified in Section 3.2
                  hereof if  Executive's  employment  by the Company is terminated  by the
                  Company, other than by reason of death,  disability,  continuous  willful
                  misconduct to the detriment of the Company, or retirement pursuant to the
                  Company's Employees' Retirement Plan (or any successor pension plan
                  thereto) (the "Retirement Plan").  Executive  will not be entitled to
                  the  benefits  specified in Section 3.2 hereof if  Executive's  employment
                  terminates  for any other  reason,  including  without  limitation
                  Executive's voluntary  resignation, or if during the term of Executive's
                  employment or at any time  thereafter, Executive breaches any of the
                  covenants contained in Section 2 hereof.

         3.2      Upon termination of employment as set forth in Section 3.1 hereof,
                  Executive shall be entitled to the following benefits:

                  (a)      Compensation.  Executive's regular bi-weekly  salary as
                           in effect on the date of termination of Executive's  employment
                           will continue until the earlier of (i) a  period of 12  months
                           after termination of Executive's employment, or (ii) Executive
                           becomes employed on a full-time basis.

                  (b)      Employee  Benefits.  Executive will be entitled to a  continuation
                           of all medical,  dental and life insurance in the same manner
                           and amount to which  Executive was entitled on the date of
                           termination  of Executive's  employment until the earlier of
                           (i) a period of 12 months  after  termination  of  Executive's
                           employment,  or (ii) Executive's eligibility for similar benefits
                           with a new employer.

         3.3      Upon termination of Executive's  employment, Company cars must be returned
                  to the Company.  All other benefits not otherwise  addressed in this
                  Agreement  shall  terminate as of the date of  termination of Executive's
                  employment unless such termination is contrary to law.

4.       Inventions and Company Property.

         4.1      In  this Agreement the term "Inventions" includes inventions, ideas,
                  techniques, methods, developments, improvements and all other forms
                  of intellectual property.  All rights in Inventions which Executive
                  conceives, makes or obtains either alone or with others during
                  Executive's  employment by the Company (both before and after the date
                  of this  Agreement)  and  within six  months  after  Executive's
                  employment  ends,  are and shall be the property of the Company,
                  except as set forth in paragraph 4.2 hereof.

         4.2      This Agreement does not apply to Inventions that the Company determines
                  in its sole discretion to be unrelated to any matter of actual or potential
                  interest to the Company unless they are conceived,  made or obtained in the
                  course of  Executive's employment or with the use of the time, materials or
                  facilities of the Company.  This Agreement also does not apply to
                  inventions conceived, made or obtained by Executive before Executive's
                  employment by the Company, a complete listing of which is attached hereto
                  as a matter of record.

         4.3      Executive will make full and prompt  disclosure to the Company of all
                  Inventions that are defined by this Section 4 to be the Company's  property.
                  At the Company's request and expense (but without additional compensation to
                  Executive),  Executive will at any time take such actions as the Company
                  reasonably  considers necessary to obtain or preserve the Company's rights
                  in such Inventions.  These actions may include, but are not necessarily
                  limited to, signing and delivering applications, assignments and other
                  papers and testifying in legal proceedings.

5.       Confidential Information.  Executive will not, during or after Executive's employment
         with the Company,  use for himself or others, or disclose to others, any formulae,
         trade  secrets,  customer  lists,  know-how,  Inventions  which are the Company's
         property,  or other confidential  matters of the Company or its Affiliates unless
         authorized in writing to do so by the Company.  Executive  understands  that
         these matters are kept  confidential  and secret by the Company,  would be of
         great value to competitors,  and would result in  irreparable  harm the Company
         if known to competitors.  As used in this Agreement, the phrase "confidential
         matters of the Company" includes all information of a technical,  commercial
         or other nature and that any information not made available to the general
         public is to be considered confidential.

6.       Papers. All correspondence,  memoranda,  notes, records, reports, drawings,
         lists, photographs,  plans and other papers and items received or made by
         Executive in  connection  with  Executive's  employment  by the Company,
         in any form  including electronic, shall be the property of the Company.
         Executive  will  deliver all copies of such  materials to the Company upon
         request of the Company and, even if it does not request, when Executive's
         employment by the Company ends.

7.       Enforcement.  Executive  acknowledges  that a breach of this  Agreement will
         cause the Company  immediate and  irreparable harm for which the  Company's
         remedies at law (such as money  damages)  will be  inadequate.  The  Company
         shall have the right, in addition to any other rights it may have, to obtain
         an injunction to restrain any breach or threatened breach of this  Agreement.
         Should any provision of this  Agreement be adjudged to any extent invalid by
         any competent tribunal, that provision will be deemed modified to the extent
         necessary to make it enforceable.  The Company may contact any person with or
         for whom Executive works after Executive's employment by the Company ends and
         may send that person a copy of this Agreement.

8.       Binding Effect.  Executive's undertakings hereunder will bind him and Executive's
         heirs and legal representatives regardless of (a) the duration of Executive's
         employment by the Company,  (b) any change in Executive's duties or the
         nature of Executive's employment,  (c) the reasons for manner of termination
         of Executive's employment,  and (d) the amount of Executive's compensation.

9.       Miscellaneous.  This  Agreement (a) shall in no way bind Executive or the
         Company to a specific term of employment, (b) supersedes any prior understandings
         and constitutes the entire  understanding  between the Company and Executive
         about the subject matter covered by this Agreement, (c) may be  modified
         or varied only in writing  signed by the Company and Executive, (d) will
         inure to the benefit of the successors and assigns of the Company, and (e)
         will be governed by Pennsylvania law.


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.





_________________________________
BRUCE S. MORRA






_______________________________________
WEST PHARMACEUTICAL SERVICES, INC.
By: Richard D. Luzzi
Title: Vice-President, Human Resources








List below or on a separate page all previous Inventions referred to in
Section 3 above.

                  (If none, please so indicate.)




                                                            Exhibit "A"



3-M Drug Delivery Systems Division
Aerogen
Alkermes
ALZA Corp.
Andrx
Antares (Medi-Ject)
Aradigm
Bentley Pharmaceutical
Bestpak
Biovail Corp.
Elan Corp.
Elite Pharmaceuticals
Emisphere
Ethypharm SA
Ferro- Pfanstiehl
Focus Inhalation
Guilford Pharmaceutical
Innovative Drug Delivery Systems
In-Site Vision
Lavipharm Corp.
Nastech
Nektar
Penwest Pharmaceuticals
Phasex Corporation
RP Scherer
Rx Kinetix
Sheffield Pharmaceuticals
Unigene
EX-10 7 exh10e03.htm EXHIBIT 10E AMEND NON COMPETITION BM exhibit 10e

Exhibit (10) (e)

Execution Copy

AMENDMENT TO NON-COMPETITION AGREEMENT

THIS IS AN AMENDMENT TO LETTER AGREEMENT (the “Amendment Agreement”), dated as of May 1, 2003, between West Pharmaceutical Services, Inc., a Pennsylvania corporation, (the “Company”) and Bruce S. Morra (“Executive”).

Background

The Company and Executive are parties to a “Confidentiality and Non-Competition Agreement” dated as of April 7, 2003 (the “Non-Competition Agreement”). Under the Non-Competition Agreement, Executive is eligible to receive severance compensation and certain other benefits in the event his employment is terminated by the Company other than for cause or by reason of death, disability, continuous willful misconduct to the detriment of the Company or retirement pursuant to the Company’s Employees’ Retirement Plan, all as specified in Section 3 thereof.

The Company has offered Executive, and Executive has accepted, certain enhanced severance compensation and benefits in the event Executive’s employment is terminated following a “Change in Control” of the Company, as such term is defined in that certain Change-in-Control Agreement, of even date herewith, between the Company and Executive (the “Change-in-Control Agreement”).

The Company and Executive have agreed to modify the Non-Competition Agreement to clarify that he will continue to receive the benefits specified therein, but only in the event that his employment is terminated under circumstances where he is not also entitled to benefits under the Change-in-Control Agreement.

Agreement

In consideration of the foregoing, the Company and Executive, each intending to be legally bound hereby, agree as follows:

1.   Amendment of Section 3.1. Section 3.1 of the Non-Competition Agreement is hereby amended to read in its entirety as follows:

“Executive will be entitled to the benefits specified in Section 3.2 hereof if Executive’s employment by the Company is terminated by the Company, other than for cause or by reason of death, disability, continuous willful misconduct to the detriment of the Company or retirement pursuant to the Company’s Employees’ Retirement Plan (or any successor pension plant thereto) (the “Retirement Plan”); provided, however, that you will not be entitled to the benefits specified in Section 2 if:

      a)     Executive’s employment terminates for any other reasons, including, without limitation, voluntary resignation;

      b)     during the term of Executive’s employment or at any time thereafter, Executive breaches any of the covenants contained in Section 2 hereof; or

      c)     Executive becomes entitled to receive the severance and other benefits specified in Section 3 of the Change-in-Control Agreement” dated as of May 1, 2003 between Executive and the Company.

2.    Other Terms.

      (a)    Confirmation of Non-Competition Agreement. Except as otherwise set forth in this Amendment Agreement, the Non-Competition Agreement shall remain in full force and effect in accordance with its terms.

      (b)    Applicable Law. This Amendment Agreement shall be construed under and enforced in accordance with the laws of the Commonwealth of Pennsylvania, without regard to its conflicts-of-laws principles.

      (c)    Headings. The headings or titles of Sections appearing in this Amendment Agreement are provided for convenience and are not to be used in construing this Amendment Agreement.

  IN WITNESS WHEREOF, the parties have duly executed this Amendment Agreement as of the date first written above.

By:                                                      
Bruce S. Morra, Ph.D.


WEST   PHARMACEUTICAL SERVICES, INC.

By:                                                      
Donald E. Morel, Jr., Ph.D.

President and Chief Executive Officer

Schedule “A”

List of Persons Engaged in Competition with the Company’s Business

3-M Drug Delivery Systems Division
Aerogen, Inc.
Alcoa, Inc.
Alkermes, Inc.
Alcan, Inc
ALZA Corporation (subsidiary of Johnson and Johnson
American Stelmi Corp. (division of Stelmi, SA)
Andrx Corporation
Antares Pharma, Inc. (f/k/a Medi-Ject)
Aradigm Corporation
Bentley Pharmaceuticals, Inc.
Blackhawk/Nepco
The Bespak Group
Biovail Corporation
Cardinal Health, Inc.
CIMA Labs, Inc.
Comar, Inc.
Elan Corporation, Plc
Elite Pharmaceuticals, Inc.
Emisphere Technologies, Inc.
Ethypharm SA
Erie Plastics Corp.
Ferro- Pfanstiehl Laboratories, Inc.
Flamel Technologies, Inc.
Focus Inhalation Oy
Guilford Pharmaceutical, Inc.
Helvoet Pharma (division of Datwyler Holding)
Innovative Drug Delivery Systems, Inc.
In-Site Vision, Inc.
Kerr Group, Inc.
Lavipharm Corporation
Nastech Pharmaceutical Company, Inc.
Nektar Therapeutics
Penwest Pharmaceuticals Company
Phasex Corporation
Plastech Molding and Fabricating, Inc.
Rehxam Corporation
RP Scherer, Inc. (subsidiary of Cardinal Health)
Rx Kinetix, Inc.
Sheffield Pharmaceuticals, Inc.
SkyePharma Plc
Stelmi S.A.
Tech Industries, Inc.
Unigene Laboratories, Inc
Wheaton Science Products (an Alcan Packaging company)
EX-9 8 exh10f1.htm EXHIBIT10F1 EXTENSION AGREEMENT Exhibit 10f1
                                                                 Exhibit (10)(f)(1)



                                EXTENSION AGREEMENT

         EXTENSION AGREEMENT, dated as of July 8, 12003, among WEST PHARMACEUTICAL
SERVICES, INC., a Pennsylvania corporation (the "Company"), the direct and indirect
subsidiaries of the Company listed on the signature pages hereto (together with the
Company, collectively, the "Borrowers"), the several banks and other financial
institutions listed on the signature pages hereto (collectively, the "364 Day Banks"),
and PNC BANK, NATIONAL ASSOCIATION, as Agent (in such capacity, the "Agent").


                                W I T N E S S E T H:


       WHEREAS, the Borrowers, the 364 Day Banks, the other banks and financial
institutions party thereto and the Agent are parties to a Credit Agreement, dated
as of July 26, 2000 (as heretofore amended, supplemented or otherwise modified, the
"Credit Agreement");

       WHEREAS, pursuant to Section 2.14(d) of the Credit Agreement, the Borrower
have requested an extension of the 364 Day Commitments under the Credit Agreement
from July 20, 2003 until July 19, 2004; and

       WHEREAS, each of the 364 Day Banks has agreed to extend its 364 Day Commitment
until July 19, 2004 on the terms and subject to the conditions set forth herein.

       NOW, THEREFORE, in consideration of the foregoing and for other consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

       1.   Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined.

       2.   Extension of 364 Day Commitments.  Effective on and as of July 21, 2003,
the 364 Day Commitments of each of the 364 Day Banks shall be extended until
July 19, 2004 and the date "July 20, 2003" appearing in the definition of the term
"364 Day Termination Date" is hereby changed to "July 19, 2004".

       3.   Representations and Warranties.  The Borrowers hereby represent and
warrant to the 364 Day Banks and the Agent that:

           (a)   There exists no Default or Event of Default under the Credit
Agreement as amended hereby;

           (b)   The representations and warranties made in the Credit Agreement
are true and correct in all material respects on and as of the date hereof as if
made on and as of the date hereof; and

           (c)   The execution and delivery of this Extension Agreement by and on
behalf of the Borrowers has been duly authorized by all requisite action on behalf
of the Borrowers and this Extension Agreement constitutes the legal, valid and
binding obligation of the Borrowers, enforceable against them in accordance with
its terms.

       4.  Effectiveness.  This Extension Agreement shall become effective on the
date on which the Agent shall have received (a) counterparts hereof duly executed
by the Borrowers and each 364 Day Bank, (b) an extension fee for the benefit of
each 364 Day Bank in the amount of 10 basis points (.10%) on the amount of such
such arrangement fees as shall have been agreed to with the Borrowers.

       5.  Limited Effect.  Except as expressly amended by this Extension Agreement,
the Credit Agreement shall continue to be, and shall remain, unaltered and in full
force and effect in accordance with its terms and the Borrowers hereby confirm all
of the provisions of the Credit Agreement and the other Loan Documents.

       6.  Release.  Recognizing and in consideration of each of the 364 Day Banks
extending its 364 Day Commitment, each of the Borrowers hereby waives and releases
all of the Banks and the Agent and their officers, attorneys, agents, and employees
from any liability, suit, damage, claim, loss or expense of any kind or nature
whatsoever and howsoever arising that such Borrower ever had or now has against any
of them arising out of or relating to any Bank's or the Agent's acts or omissions
with respect to this Extension Agreement, the Credit Agreement, the other Loan
Documents or any other matters described or referred to herein or therein.

       7.   Miscellaneous.

           (a)   Expenses.  Each of the Borrowers agrees to pay all of the Agent's
reasonable out-of-pocket expenses incurred in connection with the preparation,
negotiation and execution of this Extension Agreement and the other documents executed
in connection herewith, including, without limitation, the reasonable fees and
expenses of Ballard Spahr Andrews and Ingersoll, LLP.

           (b)   Governing Law.  This Extension Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.

           (c)   Successor and Assigns.  The terms and provisions of this Extension
Agreement shall be binding upon and shall inure to the benefit of the Borrowers,
the Agent and the Banks and their respective successors and assigns.

           (d)   Counterparts.  This Extension Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original, and all of
which shall constitute one and the same instrument.

           (e)   Headings.  The headings of any paragraph of this Extension
Agreement are for convenience only and shall not be used to interpret any provision
hereof.

           (f)   Modifications.  No modification hereof or any agreement referred
to herein shall be binding or enforceable unless in writing and signed on behalf
of the party against whom enforcement is sought.

    IN WITNESS WHEREOF, the parties hereto have caused this Extension Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.

                                             WEST PHARMACEUTICAL SERVICES, INC.


                                             By: _______________________________
                                             Name: _____________________________
                                             Title: ____________________________


                                             WEST PHARMACEUTICAL SERVICES
                                              OF FLORIDA, INC.


                                             By:________________________________
                                             Name:______________________________
                                             Title:_____________________________


                                             WEST PHARMACEUTICAL SERVICES
                                              LAKEWOOD, INC.


                                             By:________________________________
                                             Name:______________________________
                                             Title:_____________________________


                                             WEST PHARMACEUTICAL SERVICES
                                              GROUP LIMITED


                                             By:________________________________
                                             Name:______________________________
                                             Title:_____________________________



                                             PACO LABORATORIES, INC.


                                             By:________________________________
                                             Name:______________________________
                                             Title:_____________________________


                                             WEST PHARMACEUTICAL SERVICES
                                              CANOVANAS, INC.


                                             By:________________________________
                                             Name:______________________________
                                             Title:_____________________________


                                             WEST PHARMACEUTICAL SERVICES
                                             OF DELAWARE, INC.


                                             By:________________________________
                                             Name:______________________________
                                             Title:_____________________________


                                             WEST PHARMACEUTICAL SERVICES
                                              VEGA ALTA, INC.


                                              By:_______________________________
                                              Name:_____________________________
                                              Title:____________________________


                                              WEST PHARMACEUTICAL
                                               CLEVELAND, INC.


                                               By:______________________________
                                               Name:____________________________
                                               Title:___________________________



                                               PNC BANK, NATIONAL ASSOCIATION,
                                                 as a 364 Day Bank and as Agent


                                               By:______________________________
                                               Name:____________________________
                                               Title:___________________________


                                               WACHOVIA BANK, NATIONAL
                                                 ASSOCIATION (formerly known as
                                                 FIRST UNION NATIONAL BANK)


                                                By:_____________________________
                                                Name:___________________________
                                                Title:__________________________



                                                NATIONAL CITY BANK


                                                By:_____________________________
                                                Name:___________________________
                                                Title:__________________________


                                                CITIZENS BANK OF PENNSYLVANIA


                                                By:_____________________________
                                                Name:___________________________
                                                Title:__________________________

EX-10 9 exh10f2.htm EXHIBIT 10F2 COMMITMENT AND ACCEPTANCE Exhibit 10 f 2
                                                               Exhibit (10)(f)(2)



                              COMMITMENT AND ACCEPTANCE


     This Commitment and Acceptance (this "Commitment and Acceptance"), dated as
of July 21, 2003, is entered into among the parties listed on the signature pages
hereof.  Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Credit Agreement (as defined below).

                                PRELIMINARY STATEMENTS

     Reference is made to that certain Credit Agreement dated as of July 26, 2000
by and among West Pharmaceutical Services, Inc. (the "Company"), the direct and
indirect subsidiaries of the Company party thereto, the several banks and other
financial institutions party thereto (collectively, the "Banks") and PNC Bank,
National Association, as Agent (in such capacity, the "Agent") for the Banks (as
amended, modified, supplemented or restated from time to time, the "Credit Agreement").

     Pursuant to Section 2.14(e) of the Credit Agreement, the Borrowers have
requested an increase in the 364 Day Commitments from $44,537,037.04 to $55,000,000
(the "Requested Increase").  Such increase in the aggregate 364 Day Commitments
is to become effective on July 21, 2003 (the "Increase Date").  In connection with
such requested increase in the aggregate 364 Day Commitments, the Borrowers, the
Agent and Manufactures and Traders Trust Company (the "Additional 364 Day Bank")
hereby agree as follows:

      1.  ADDITIONAL 364 DAY BANK'S COMMITMENT.  Effective as of the Increase Date,
the Additional 364 Day Bank shall become a party to the Credit Agreement as a 364
Day Bank, shall have (subject to the provisions of Sections 2.14(e) and 9.6(j) of
the Credit Agreement) all of the rights and obligations of a 364 Day Bank thereunder,
shall be bound by the terms and provisions thereof and shall thereupon have a 364
Day Commitment under and for purposes of the Credit Agreement in an amount equal
to the amount set forth opposite its name on the signature page hereof.

     2.   REPRESENTATIONS AND AGREEMENTS OF ADDITIONAL 364 DAY BANK.  The Additional
364 Day Bank hereby (i) represents and warrants that it is legally authorized to
enter into this Commitment and Acceptance, (ii) confirms that it has received a
copy of the Credit Agreement, together with copies of the financial statements
requested by it and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Commitment a
Acceptance, (iii) agrees that it will, independently and without reliance upon the
Agent or any Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, (iv) appoints and authorizes the Agent
to take such action as agent on its behalf and to exercise such powers under
the Loan Documents as are delegated to the Agent by the terms thereof, toget
perform in accordance with their terms all of the obligations which by the terms
of the Loan Documents are required to be performed by it as a 364 Day Bank, (vi)
agrees that its payment instructions and notice instructions are as set forth in
the attachment to Schedule 1, (vii) confirms that none of the funds, monies, assets
or other consideration being used to make the commitment and acceptance hereunde
are "plan assets" as defined under ERISA and that its rights, benefits and inte
if applicable, attaches the forms prescribed by the Internal Revenue Service o
the United States certifying that it is entitled to receive payments under the
Loan Documents without deduction or withholding of any United States federal
income taxes.

    3.   REPRESENTATIONS OF BORROWER.  Each of the Borrowers hereby represent
Event of Default existed and (b) the Increase Date (i) no Default or Event of
Default shall have occurred and then be continuing and (ii) the representations
and warranties contained in Article III of the Credit Agreement are true and correct
in all material respects (except to the extent any such representation or warranty
is stated to relate solely to an earlier date).

    4.   AGENT'S FEE.  On or before the Increase Date, the Borrowers shall pay to
the Agent an administrative fee in the amount of $3,000.00.

    5.   GOVERNING LAW.  This Commitment and Acceptance shall be governed by the
internal law, and not the law of conflicts, of the Commonwealth of Pennsylvania.

    6.   NOTICES.  For the purpose of notices to be given under the Credit Agreement,
until notice of a change is delivered, the address of the Additional 364 Day Bank
shall be the address set forth in Schedule 1.



      IN WITNESS WHEREOF, the parties hereto have executed this Commitment and
Acceptance by their duly authorized officers as of the date first above written.

                               WEST PHARMACEUTICAL SERVICES, INC.

                               By: _________________________________________
                               Name:  ______________________________________
                               Title:  _____________________________________


                               WEST PHARMACEUTICAL SERVICES, OF FLORIDA, INC.

                               By: _________________________________________
                               Name:  ______________________________________
                               Title:  _____________________________________


                               WEST PHARMACEUTICAL SERVICES LAKEWOOD, INC.

                               By: ________________________________________
                               Name: ______________________________________
                               Title: _____________________________________


                               WEST PHARMACEUTICAL SERVICES GROUP LIMITED

                               By: _______________________________________
                               Name: _____________________________________
                               Title: ____________________________________


                               PACO LABORATORIES, INC.

                               By: _______________________________________
                               Name: _____________________________________
                               Title: ____________________________________


                               WEST PHARMACEUTICALS SERVICES CANOVANAS, INC.

                               By:_________________________________________
                               Name:_______________________________________
                               Title:______________________________________

                               WEST PHARMACEUTICAL SERVICES OF
                               DELAWARE, INC.

                               By:_________________________________________
                               Name:_______________________________________
                               Title:______________________________________

                               WEST PHARMACEUTICAL SERVICES
                               VEGA ALTA, INC.

                               By:_________________________________________
                               Name:_______________________________________
                               Title:______________________________________

                               WEST PHARMACEUTICAL CLEVELAND, INC.

                               By:_________________________________________
                               Name:_______________________________________
                               Title:______________________________________



                               PNC BANK, NATIONAL ASSOCATION, as Agent

                               By: ________________________________________
                               Name: ______________________________________
                               Title: _____________________________________


  ADDITIONAL 364 DAY           MANUFACTURERS AND TRADERS TRUST COMPANY
  BANK'S COMMITMENT
                               By: ________________________________________
  $10,462,962.96
                               Name: ______________________________________
                               Title: _____________________________________








                                SCHEDULE 1

                       TO COMMITMENT AND ACCEPTANCE

                     ADMINISTRATIVE INFORMATION SHEET



Attach Administrative Information Sheet for Additional 364 Day Bank

EX-31 10 exh31a.htm EXHIBIT 31A DEM Exhibit 31 a>

Exhibit 31 (a)

CERTIFICATION

I, Donald E. Morel, Jr., PhD., certify that:

1.

I have reviewed this quarterly report on Form 10-Q of West Pharmaceutical Services, Inc.;


2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:


  (a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

  (b)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

  (c)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


  (a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

  (b)   Any fraud, whetheror not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/Donald E. Morel, Jr., Ph.D.
Donald E. Morel, Jr., Ph.D.

Chairman of the Board,
President and Chief Executive Officer

August 13, 2003

EX-31 11 exh31b.htm EXHIBIT 31B LRA Exhibit 31 () LRA

         Exhibit 31 (b)

CERTIFICATION

I, Linda R. Altemus, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of West Pharmaceutical Services, Inc.;


2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:


  (a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

  (b)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

  (c)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


  (a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

  (b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


/s/ Linda R. Altemus
Linda R. Altemus
Vice President and Chief Financial Officer


August 13, 2003

EX-32 12 exh32a.htm EXHIBIT32A DEM Exhibit 32 (a) DEM

Exhibit 32 (a)



         CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of West Pharmaceutical Services, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2003 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Donald E. Morel, Jr., Chairman, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)     The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)     The information contained in the Report fairly presents, in all material respects, the financial position and results of operations of the Company.

/s/ Donald E. Morel, Jr., Ph.D.
Donald E. Morel, Jr., Ph.D.

Chairman of the Board,
President and Chief Executive Officer

August 13, 2003

EX-32 13 exh32b.htm EXHIBIT 32B LRA Exhibit 32 (a) DEM

Exhibit 32 (b)



         CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of West Pharmaceutical Services, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2003 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Linda R. Altemus, Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)     The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)     The information contained in the Report fairly presents, in all material respects, the financial position and results of operations of the Company.


/s/ Linda R. Altemus
Linda R. Altemus

Vice President and Chief Financial Officer


August 13, 2003

-----END PRIVACY-ENHANCED MESSAGE-----