10-K
1
ANNUAL REPORT
This report contains __ pages
including the cover page
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
----------------
Commission File Number 0-5884
---------
THE WEST COMPANY, INCORPORATED
--------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1210010
------------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identificaton Number)
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
--------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
----------------------- ------------------------------------------
Common Stock, par value New York Stock Exchange
$.25 per share
Securities registered pursuant to Section 12(g) of the Act:
None
----
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes _X_ No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
As of March 17, 1995, the Registrant had 16,508,400 shares of its Common Stock
outstanding. The market value of Common Stock held by non-affiliates of the
Registrant as of that date was $416,837,100.
Exhibit Index appears on pages F-1, F-2, F-3 and F-4.
DOCUMENTS INCORPORATED BY REFERENCE
------------------------------------
Documents incorporated by reference: (1) portions of the Registrant's Annual
Report to Shareholders for the Company's 1994 fiscal year (the "1994 Annual
Report to Shareholders") are incorporated by reference in Parts I and II; and
(2) portions of the Registrant's definitive Proxy Statement (the "Proxy
Statement") are incorporated by reference in Part III.
PART I
Item l. Business
--------
The Company
-----------
The West Company, Incorporated is engaged in one industry segment - the design,
development, manufacture and marketing of stoppers, closures, containers,
medical device components and assemblies made from elastomers, metal, glass and
plastic that meet the unique filling, sealing, dispensing and delivery needs of
the health care and consumer products markets. The Company also manufactures
related packaging machinery. The Company's products include pharmaceutical-
packaging components (stoppers, seals, caps, containers and dropper bulbs),
components for medical devices (parts for syringes and components for blood
sampling and analysis devices and for intravenous administration sets) and
packaging components for consumer products.
The Company was incorporated in 1923. The executive offices of the Company are
located at 101 Gordon Drive, PO Box 645, Lionville, Pennsylvania 19341-0645,
approximately 35 miles from Philadelphia. The telephone number at the Company's
executive offices is 610-594-2900. As used herein, the term "Company" includes
The West Company, Incorporated and its consolidated subsidiaries, unless the
context otherwise indicates.
Principal Products -Pharmaceutical Packaging Components
--------------------------------------------------------
The Company manufactures a broad line of pharmaceutical stoppers from natural
rubber and a variety of synthetic elastomers. Several hundred proprietary
formulations of these substances are molded into a range of stopper sizes used
in packaging serums, vaccines, antibiotics, anesthetics, intravenous solutions
and other drugs. Most formulae are specially designed to be compatible with
drugs so that the drugs will remain effective and unchanged during storage. The
Company's rubber laboratories not only develop formulations, but also conduct
preliminary compatibility tests on customers' new drugs, and in the United
States file formulation information with the Food and Drug Administration to
assist its customers' new drug applications.
A broad line of aluminum seals which securely hold the stoppers on glass or
plastic containers is manufactured by the Company. The Company also makes a wide
variety of seals lined with its specially formulated rubber discs or other
materials. Aluminum seals include closures with tamper-evident tabs or plastic
FlipOffR buttons which must be removed before the drug can be withdrawn. The
Company also designs, manufactures and sells capping machines for use with
Company-designed metal caps and seals and other packaging equipment.
The majority of pharmaceutical-packaging components currently manufactured by
the Company are used in packaging injectable drugs. Included in this category of
products are syringe parts used by pharmaceutical manufacturers to package their
drugs in pre-filled unit-dose disposable syringes.
Products used in the packaging of non-injectable drugs include rubber dropper
bulbs, plastic contraceptive drug packages and child-resistant and
tamper-evident plastic closures. The Company also manufactures and markets a
range of Counter CapR products. These devices are plastic child resistant caps
that advance, or count, every time a bottle of oral medication is opened or
closed, thereby promoting compliance with medication instructions. In addition,
the Company manufactures injection blow-molded plastic bottles and containers
for the pharmaceutical industry.
In January 1992, the Company entered into a partnership with Schott Corporation
to continue the glass vial, ampoule and cartridge manufacturing operations
formerly carried on by the Company at its Cleona, Pennsylvania site. The
partnership, Schott West Pharmaceutical Glass Company, is owned 60% by Schott
Corporation
and 40% by the Company.
In January 1994, the Company acquired Senetics, Inc., a Boulder Colorado company
specializing in the development of innovative closure and delivery systems for
the oral and inhalation drug delivery markets.
In May 1994, the Company acquired a 51% interest in Schubert Seals A/S, a Danish
manufacturer of rubber components and metal seals servicing the European
pharmaceutical industry.
Principal Products - Components for Medical Devices
----------------------------------------------------
The Company manufactures rubber and plastic components for empty disposable
syringes. Typical components include plungers, hubs and needle covers which are
assembled into finished empty disposable syringes by the Company's customers.
Blood-sampling system components manufactured by the Company include vacuum tube
stoppers and needle valves. The Company also makes a number of specialized
rubber and plastic components for blood analyzing systems.
Also included in this category are Company-manufactured and Company-purchased
components assembled into drug-transfer devices.
The Company also manufactures and sells disposable infant nursers and individual
nurser components to infant formula manufacturers.
Principal Products
Packaging Components for the Consumer Products Industries
-----------------------------------------------------------------
The Company manufactures a wide range of plastic threaded closures for the
personal-care industry, mainly for such products as cosmetics and toiletries.
The Company offers many different standard threaded closure designs in a wide
range of sizes and colors, in addition to closures designed for specific
customers and specialty packaging. The Company also manufactures custom and
stock plastic containers for personal-care products.
The Company manufactures a variety of custom-designed and proprietary plastic
closures, some of which are tamper evident, for distillers and food and beverage
processors.
Order Backlog
--------------
Orders on hand at December 31, 1994 were approximately $99 million, compared
with approximately $90 million at the end of 1993. Orders on hand include those
placed by customers for manufacture over a period of time according to a
customer's schedule or upon confirmation by the customer. Orders are generally
considered firm when goods are manufactured or orders are confirmed. The Company
also has contractual arrangements with a number of its customers, and products
covered by these contracts are included in the Company's backlog only as orders
are received from those customers.
Raw Materials
--------------
The Company uses four basic raw materials in the manufacture of its products:
rubber, aluminum, plastic and glass. Approximately 25% of the total rubber used
by the Company is natural rubber, substantially all of which is imported from
Sri Lanka and Malaysia. Plastics and aluminum are purchased as needed from
several sources. The Company has been receiving adequate supplies of raw
materials to meet its production needs, and it foresees no significant
availability problems in the near future. However, the political stability and
seasonal weather conditions of countries which supply natural rubber may be
significant factors in the continuing supply of this commodity. Synthetic
elastomers and plastics currently purchased by the Company are made from
petroleum derivatives, the cost and availability of which are dependent on the
supply of petroleum feedstocks. Also, the Company is dependent on sole sources
of supply with respect to certain other raw material ingredients in older
product formulations. In the event the supplier discontinues production the
Company may be required to stockpile these materials until new formulations are
qualified with customers.
The Company is pursuing a supply chain management strategy of aligning with
vertically integrated suppliers that control their own feed stocks. This will
result in reducing the number of raw materials suppliers. In some cases, the
Company will purchase raw
materials from a single source. this strategy is expected to assure quality,
secure supply and reduce costs. However, it could result in risks to the
Company's supply lines in the event of a supplier production problem. These
risks will be managed by selecting suppliers with backup plans and fail-safe
mechanisms as part of their operating standards.
Laboratory, Research and Engineering
-------------------------------------
Pharmaceutical packaging components must meet the rigid specifications set by
the pharmaceutical industry relating to the function of the package, material
compatibility, and freedom from chemical and physical contamination. Rubber
formulations that involve contact with injectable pharmaceutical products are
required to pass shelf-life tests extending from six months to three years. New
rubber compounds must be tested to show that they do not cause precipitation in
the customer's product or affect its potency, sterility, effectiveness, color or
clarity. In addition, in the United States the Food and Drug Administration may
review and inspect certain of the Company's facilities for adequacy of methods
and procedures and qualifications of technical personnel.
The Company maintains its own laboratories for testing raw materials and
finished goods to assure adherence to customer specifications and to safeguard
the quality of its products. The Company also uses its laboratory facilities for
research and development of new rubber and thermoplastic compounds and for
testing and evaluating new products and materials.
The Company maintains engineering staffs responsible for product and tooling
design and testing and for the design and construction of processing equipment.
In addition, a corporate product research department develops new packaging and
device concepts for identified market needs.
Research, development and engineering expenditures for the creation and
application of new and improved products and processes were approximately
$12,000,000 in 1994, $11,400,000 in 1993 and $11,100,000 in 1992. Approximately
140 professional employees were engaged full time in such activity in 1994.
Employees
----------
As of December 31, 1994, the Company and its subsidiaries had 3,680 full-time
employees.
Patents and Licenses
---------------------
The patents owned by the Company have been valuable in establishing the
Company's market share and in the growth of the Company's business and may
continue to be of value in the future, especially in view of the Company's
continuing development of its own
proprietary products. Nevertheless, the Company does not consider its business
or its earnings to be materially dependent upon any single patent or patent
right.
The Company also has an agreement with Daikyo Seiko, Ltd., a Japanese company in
which the Company has a 25% ownership position, relating to the sharing and
cross-licensing of certain technology.
Major Customers
-----------------
The Company serves major pharmaceutical and hospital supply/medical device
companies, many of which have several divisions with separate purchasing
responsibilities. The Company also sells to many of the leading manufacturers of
personal-care products. The Company distributes its products primarily through
its own sales force and also through regional distributors in the United States
and Asia/Pacific.
Becton Dickinson and Company ("B-D") accounted for approximately 11% of the
Company's consolidated net sales during the Company's last fiscal year. The
principal products sold to B-D are components made of rubber, metal and plastic
used in their disposable syringes and blood sampling and analysis devices. B-D
has manufactured a portion of its own rubber components for a number of years.
The Company expects to continue as a major B-D supplier.
Excluding B-D, the next ten largest customers accounted for approximately 28% of
the Company's consolidated net sales in 1994, and no one of these customers
accounted for more than 6% of 1994 consolidated net sales.
Competition
------------
The Company competes with several companies, some of which are larger than the
Company, across its major pharmaceutical packaging component and medical device
component product lines. In addition, many companies worldwide compete with the
Company for business related to specific product lines. However, although there
are no industry statistics available, the Company believes that it supplies a
major portion of the domestic industry requirements for pharmaceutical rubber
and metal packaging components, and has a significant share of the European
market for these components. Because of the special nature of these products,
competition is based primarily on product design and performance, although total
cost is becoming more important as health care markets worldwide face increasing
government controls and pressure to control overall costs.
The Company is one of the leading domestic producers of threaded plastic
closures, although there are numerous competitors in the field of plastics.
In addition, some of the Company's customers also manufacture a portion of their
own plastic, rubber and glass components.
Environmental Matters
------------------------
The Company does not believe that it will have any material expenditures
relating to environmental matters other than those discussed in the Note
"Commitments and Contingencies" of Notes to Consolidated Financial Statements of
the 1994 Annual Report to Shareholders, incorporated by reference herein.
International
---------------
The Note "Affiliated Companies" and the Note "Industry Segment and
Operations by Geographic Area" of Notes to Consolidated Financial
Statements of the 1994 Annual Report to Shareholders are
incorporated herein by reference.
The Company believes that its international business does not involve a
substantially greater business risk than its domestic business. However,
economic and competitive factors vary in the countries in which the Company's
international subsidiaries and affiliates do business. The future growth and
performance of the Company's international subsidiaries and affiliates are
dependent on these factors and the political stability of the countries where
they do business.
The Company's financial condition and results are impacted by fluctuations in
exchange rate markets (See Notes "Summary of Significant Accounting Policies -
Foreign Currency" and "Other Income (Expense)" of Notes to Consolidated
Financial Statements of the 1994 Annual Report to Shareholders, incorporated
herein by reference). Hedging by the Company of these exposures is discussed in
the Note "Debt" and in the Note "Fair Value of Financial Instruments" of Notes
to Consolidated Financial Statements of the 1994 Annual Report to Shareholders,
incorporated herein by reference.
Item 2. Properties
-----------
The Company maintains eleven manufacturing plants and two mold and die
production facilities in the United States, including one manufacturing plant in
Puerto Rico, and a total of ten manufacturing plants and two mold and die
production facilities in Germany, England, France, Denmark, Argentina, Brazil
and Singapore.
The Company's executive offices, U.S. research and development center and pilot
plant are located in a leased facility at Lionville, Pennsylvania, about 35
miles from Philadelphia. All other Company facilities are used for manufacturing
and distribution, and facilities in Eschweiler, Germany and Boulder, Colorado
are also used for research and development activities.
The manufacturing facilities of the Company are well-maintained, are operating
generally on a two or three-shift basis and are adequate for the Company's
present needs.
The principal facilities in the United States, including Puerto Rico, are as
follows:
- United States facilities include approximately 1,036,000 square feet of
owned and 332,000 square feet of leased space in Pennsylvania, Florida,
Nebraska, North Carolina and Puerto Rico.
The principal international facilities are as follows:
- Europe facilities include approximately 346,000 square feet of owned space
and 145,000 square feet of leased space in Germany, England, Denmark and
France.
- Latin America facilities include approximately 99,000 square feet of owned
space in Argentina and Brazil.
- Asia/Pacific facilities include approximately 92,000 square feet
of owned space in Singapore.
Of the aforementioned currently owned facilities, approximately 464,000 square
feet are subject to mortgages to secure the Company's real estate mortgage
notes. See the Note "Debt" of Notes to Consolidated Financial Statements of the
1994 Annual Report to Shareholders, which information is incorporated herein by
reference.
Sales office facilities in separate locations are leased under short-term
arrangements.
The Company also holds for sale 106,100 square feet of former
manufacturing facility space in the United States.
Item 3. Legal Proceedings.
-----------------
A. Wayne, New Jersey
------------------
The Company is a party to an Administrative Consent Order with the New Jersey
Department of Environmental Protection (DEP) under which the Company is required
to submit and perform a cleanup plan for property formerly owned by the Company
in Wayne, New Jersey. The DEP has approved the Company's plan which permits a
plastic waste- disposal area to be capped and to remain in place, subject to
placing a use restriction on that portion of the property, and subject to the
DEP's further determination of the extent to which groundwater monitoring will
be required. The present owner of the property has thus far declined to provide
the use restriction and the Company has initiated legal action against him to
compel him to provide the use restriction. The DEP has not yet taken final
action with respect to any further remedial steps such as ground water
monitoring which may be required as part of the cleanup plan.
See the Note "Commitments and Contingencies" of Notes to Consolidated Financial
Statements of the 1994 Annual Report to Shareholders, which information is
incorporated herein by reference.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 4 (a) Executive Officers of the Registrant
-----------------------------------
The executive officers of the Company at March 28, 1995 were as follows:
Name Age Business Experience During Past Five Years
---- --- ------------------------------------------
George Bennyhoff 1 51 Senior Vice President, Human Resources
and Public Affairs since March 1986.
Wendy Dixon1 39 Group Vice President, The Americas,
since March 1995;previously Executive
Vice President and General Manager of
International Operations for Osteotech,
Inc. from May 1993 to February 1995; and
prior thereto held the following
positions with Centocor, Inc.: Vice
President, Business Development from
August 1992 to April 1993, Vice
President, European Marketing & Sales
from October 1990 to August 1992, Vice
President, European Marketing & Business
Development from June 1989 to October
1990.
Jerry E. Dorsey 50 Executive Vice President and Chief
Operating Officer since June 1994;
previously Group President from August
1993 to June, 1994; President, Health
Care Division from May 1992 to July 1993
for the Company; and prior thereto
President and Chief Executive Officer of
Foster Medical from 1990 to May 1992.
Steven A. Ellers1 44 Vice President, Operations since June
1994; previously Vice President
Asia/Pacific and Managing Director,
Singapore for the Company from May 1990
to May 1994
--------
1 Holds position as corporate officer elected by the Board of Directors for one
year term.
There are no family relationships among the executive officers of the
Company.
John R. Gailey III1 40 General Counsel and Secretary since May
1994; previously Corporate Counsel and
Secretary of the Company from December
1991 to April 1994 and; prior thereto an
Associate with the law firm of Dechert
Price & Rhoads.
Stephen M. Heumann1 53 Vice President and Treasurer since May
1994; previously Treasurer from December
1990 to April 1994 and Assistant
Treasurer from May 1990 through November
1990 for the Company.
Raymond J. Land1 50 Senior Vice President, Finance and
Administration from October 1991;
previously General Manager - Premium
Meals for Campbell Soup Company.
William G. Little1 52 Director, President and Chief Executive
Officer from May 1991; previously
Division President, Kendall, Inc. from
1990 to May 1991.
Anna Mae Papso1 51 Vice President since March 1991 and
Corporate Controller since May 1989.
Ulf C. Tychsen 50 Group Vice President, Europe and
Asia/Pacific, since January 1995;
previously President, Sales & Marketing
from June 1994 to December 1994 and
President, Europe Division from July
1992 to June 1994 for the Company; and
prior thereto Managing Director,
Marketing and Sales for Schulke & Mayr
Gmbh.
Victor E. Ziegler1 64 Executive Vice President since January
1992; previously Division President from
July 1991 to January 1992 and Group
President for the Company.
--------
1 Holds position as corporate officer elected by the Board of Directors for one
year term.
There are no family relationships among the executive officers of the
Company.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
--------------------------------------------------
The Company's common stock is listed on the New York Stock Exchange
and the high and low prices for the stock for each calendar quarter
in 1994 and 1993 were as follows:
First Quarter Second Quarter Third Quarter Fourth Quarter Year
High Low High Low High Low High Low High Low
1994 25 3/4 23 3/4 24 3/4 21 1/4 25 3/4 21 5/8 29 1/8 25 1/2 29 1/8 21 1/4
1993 24 3/8 19 7/8 23 1/2 22 3/8 25 1/4 23 1/4 24 7/8 23 1/2 25 1/4 19 7/8
As of December 31, 1994, the Company had 1,344 shareholders of record. There
were also 2,200 holders of shares registered in nominee names. The Company's
Common Stock paid a quarterly dividend of $.10 per share in each of the first
three quarters of 1993; $.11 per share in the fourth quarter of 1993 and each of
the first three quarters of 1994; and $.12 per share in the fourth quarter of
1994.
Item 6. Selected Financial Data.
-----------------------
Information with respect to the Company's net sales, income (loss) from
consolidated operations, income (loss) before change in accounting method,
income (loss) before change in accounting method per share and dividends paid
per share is incorporated by reference to the line items corresponding to those
categories under the heading "Ten-Year Summary - Summary of Operations" of the
1994 Annual Report to Shareholders. Information with respect to total assets and
total debt is incorporated by reference to the line items corresponding to those
categories under the heading "Ten-Year Summary - Year End Financial Position" of
the 1994 Annual Report to Shareholders.
Item 7. Management's Discussion and Analysis Financial Condition
and Results of Operations.
---------------------------------------------------------
The information called for by this Item is incorporated by reference to the text
appearing in the "Financial Review" section of the 1994 Annual Report to
Shareholders.
Item 8. Financial Statements and Supplementary Data.
-------------------------------------------
The information called for by this Item is incorporated by reference to
"Consolidated Financial Statements", "Notes to the Consolidated Financial
Statements", and "Quarterly Operating and
Per Share Data (Unaudited)" of the 1994 Annual Report to
Shareholders.
Subsequent Event
----------------
On March 24, 1995, the Company announced that it had entered into
a definitive merger agreement with PACO Pharmaceutical Services, Inc. pursuant
to which the Company will acquire all of PACO's common stock at $12.25 per share
in cash. The purchase price of approximately $54 million is being funded from
cash balances and existing bank facilities.
PACO's a provider of contract packaging and contract
manufacturing services for pharmaceutical and personal health care companies.
The following table presents selected financial information on PACO's financial
results for its fiscal year ended March 31, 1994 and for the nine months ended
December 31, 1994 and its financial position as of March 31, 1994 and December
31, 1994.
For the Year For the Nine Months
Ended March 31, 1994 Ended December 31, 1994
--------------------- -----------------------
(unaudited)
Income Statement:
Net Sales $ 68,000 $ 48,400
Gross Profit 10,600 6,500
Income before taxes 2,900 2,300
Income before account-
ing change 2,300 1,700
Net Income 1,900 1,700
-------------- ------------------
Balance Sheet: March 31, 1994 December 31, 1994
-------------- ------------------
Currents assets $ 24,300 $ 23,200
Noncurrent assets 35,900 35,800
-------------- ------------------
$ 60,200 $ 59,000
-------------- ------------------
Current liabilities $ 6,800 $ 5,300
Noncurrent liabilities 9,800 9,600
Shareholders' equity 43,600 44,100
-------------- ------------------
$ 60,200 $ 59,000
-------------- ------------------
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.
-----------------------------------------------------------
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
---------------------------------------------------
Information called for by this Item is incorporated by reference to "ELECTION OF
DIRECTORS" and "STOCK OWNERSHIP OF DIRECTORS and EXECUTIVE OFFICERS - Section
16(a) Reporting" in the Proxy Statement.
Information about executive officers of the Company is set forth in Item 4 (a)
of this report.
Item 11. Executive Compensation.
-----------------------
Information called for by this Item is incorporated by reference to "EXECUTIVE
COMPENSATION" and "BOARD OF DIRECTORS AND ITS COMMITTEES - Compensation of
Directors" contained in the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
---------------------------------------------------
Information called for by this Item is incorporated by reference to "STOCK
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS" and "STOCK OWNERSHIP OF DIRECTORS AND
EXECUTIVE OFFICERS" contained in the Proxy Statement.
Item 13. Certain Relationships and Related Transactions.
-----------------------------------------------
Information called for by this Item is incorporated by reference to "BOARD OF
DIRECTORS AND ITS COMMITTEES - Compensation of Directors" and "BOARD OF
DIRECTORS AND ITS COMMITTEES - Certain Transactions" in the Proxy Statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
-------------------------------------------------------
(a) 1. The following report and consolidated financial statements,
included in the 1994 Annual Report to Shareholders, have been
incorporated herein by reference:
Consolidated Statements of Income for the years ended
December 31, 1994, 1993 and 1992
Consolidated Balance Sheets at December 31, 1994 and
1993
Consolidated Statements of Shareholders' Equity for the
years ended December 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows for years ended
December 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
Report of Independent Accountants
(a) 2. Supplementary Financial Information
Schedules are omitted because they are either not applicable, not
required or because the information required is contained in the
consolidated financial statements or notes thereto.
(a) 3. See Index to Exhibits on pages F-1, F-2, F-3 and F-4 of
this Report.
(b) There were no reports on Form 8-K filed by the Company
in the fourth quarter of 1994.
(c) The exhibits are listed in the Index to Exhibits on
pages F-1, F-2, F-3 and F-4 of this Report.
(d) Financial Statements of affiliates are omitted because
they do not meet the tests of a significant subsidiary
at the 20% level.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, The West Company, Incorporated has duly caused this report to be
signed on its behalf by the
undersigned, thereunto duly authorized.
THE WEST COMPANY, INCORPORATED
(Registrant)
By Raymond J. Land
---------------------------------
Raymond J. Land
Senior Vice President,
Finance and Administration
(Principal Financial Officer)
March 30, 1995
---------------------------------
Date
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons in the capacities and on the
dates indicated.
Signature Title Date
--------- ------ -------
William G. Little Director, President and March 30, 1995
--------------------------------- Chief Executive Officer
William G. Little
(Principal Executive Officer)
William S. West Director, Chairman March 30, 1995
----------------------------------
William S. West*
Tenley E. Albright Director March 30, 1995
-----------------------------------
Tenley E. Albright *
William J. Avery Director March 30, 1995
-----------------------------------
William J. Avery*
George W. Ebright Director March 30, 1995
------------------------------------
George W. Ebright*
George J. Hauptfuhrer Director March 30, 1995
------------------------------------
George J. Hauptfuhrer*
L. Robert Johnson Director March 30, 1995
------------------------------------
L. Robert Johnson*
Signature Title Date
--------- ------ -------
Raymond J. Land Senior Vice President, March 30, 1995
-------------------------------------- Finance and Administration
Raymond J. Land Officer
(Principal Financial Officer)
John P. Neafsey Director March 30, 1995
--------------------------------------
John P. Neafsey*
Anna Mae Papso Vice President and March 30, 1995
-------------------------------------- Corporate Controller
Anna Mae Papso
(Principal Accounting Officer)
Walter F. Raab Director March 30, 1995
---------------------------------------
Walter F. Raab*
Monroe E. Trout Director March 30, 1995
---------------------------------------
Monroe E. Trout*
J. Roffe Wike, II Director March 30, 1995
---------------------------------------
J. Roffe Wike, II*
Hans Wimmer Director March 30, 1995
---------------------------------------
Hans Wimmer*
Signature Title Date
--------- ------ -------
Geoffrey F. Worden Director March 30, 1995
----------------------------------------
Geoffrey F. Worden*
Victor E. Ziegler Director March 30, 1995
----------------------------------------
Victor E. Ziegler
* By Raymond J. Land pursuant to a power of attorney.
INDEX TO EXHIBITS
Exhibit Page
Number Number
------ ------
(3) (a) Restated Articles of Incorporation of the Company, incorporated by reference
to Exhibit (4) to the Company's Registration Statement on Form S-8
(Registration No. 33-37825).
(3) (b) Bylaws of the Company, as amended and restated December 13, 1994,
(4) (a) Form of stock certificate for common stock incorporated by reference to Exhibit
(3) (b) to the Company's Annual Report on Form 10-K for the year ended
December 31, 1989 (File No. 0-5884).
(4) (b) Flip-In Rights Agreement between the Company and American Stock Transfer
& Trust Company, as Rights Agent, dated as of January 16, 1990, incorporated
by reference to Exhibit 1 to the Company's Form 8-A Registration Statement
(File No. 1-8036).
(4) (c) Flip-Over Rights Agreement between the Company and American Stock
Transfer & Trust Company, as Rights Agent, dated as of January 16, 1990,
incorporated by reference to Exhibit 2 to the Company's Form 8-A Registration
Statement (File No. 1-8036).
(5) None.
(9) None.
(10) (a) Amended and Restated Put and Call Agreement dated as of March 23, 1993
between Hans Wimmer, Wimmer Holding GbR and the Company, incorporated
by reference to The Company's Annual Report on Form 10-K for the year
ended December 31, 1992 (File No. 5-0884).
(10) (b) Registration Rights Agreement dated March 23, 1993 between the Company
and Hans Wimmer, incorporated by reference to The Company's Annual
Report on Form 10-K for the year ended December 31, 1992 (File No. 5-0884).
(10) (c) Lease dated as of December 31, 1992 between Lion Associates, L.P. and
LuMont Keystone/Lionville Trust, relating to the lease of the Company's
headquarters in Lionville, Pa., incorporated by reference to The Company's
Annual Report on Form 10-K for the year ended December 31, 1992 (File No.
5-0884).
Exhibit Page
Number Number
------ ------
(10) (d) Long-Term Incentive Plan, as amended March 2, 1993, incorporated by
reference to The Company's Annual Report on Form 10-K for the year ended
December 31, 1992 (File No. 5-0884).
(10) (e) 1995 Annual Incentive Bonus Plan, incorporated by reference to The
Company's Annual Report on Form 10-K for the year ended December 31,
1993 (File No. 5-0884).
(10) (f) Non-Qualified Stock Option Plan for Non-Employee Directors, incorporated by
reference to The Company's Annual Report on Form 10-K for the year ended
December 31, 1992 (File No. 5-0884).
(10) (g) Pension agreement dated February 17, 1994 between Pharma-Gummi Wimmer
West GmbH and Ulf Tychsen.
(10) (h) Form of agreement between the Company and six of its executive officers,
incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1991 (File No.0-5884).
(10) (i) Schedule of agreements with executive officers.
(10) (j) Supplemental Employees' Retirement Plan, incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December 31,
1989 (File No. 0-5884).
(10) (k) Retirement Plan for Non-Employee Directors of the Company, as amended
November 5, 1991, incorporated by reference to the Company's Annual Report
on Form 10-K for the year ended December 31, 1991 (File No. 5-0884).
(10) (l) Employment Agreement dated May 20, 1991 between the Company and
William G. Little, incorporated by reference to the Company's Annual Report
on Form 10-K for the year ended December 31, 1991 (File No. 5-0884).
(10) (m) Management Contract dated as of March 7, 1986, between Hans Wimmer and
Pharma-Gummi Wimmer West GmbH, as amended, incorporated by reference
to The Company's Annual Report on Form 10-K for the year ended December
31, 1992 (File No. 5-0884).
(10) (n) Management Contract between Hans Wimmer and Pharma-Metall GmbH,
incorporated by reference to The Company's Annual Report on Form 10-K for
the year ended December 31, 1992 (File No. 5-0884).
Exhibit Page
Number Number
------ ------
(10) (o) Management Contract between Hans Wimmer and Gressenicher Werkzeugbau
GmbH, incorporated by reference to The Company's Annual Report on Form 10-K for the year ended
December 31, 1992 (File No. 5-0884).
(10) (p) Management Contract dated May 8, 1986 between Hans Wimmer and Pharma-
Gummi Italia S.r.l, incorporated by reference to The
Company's Annual Report
on Form 10-K for the year ended December 31, 1992 (File
No. 5-0884).
(10) (q) Contract of Employment dated April 2, 1992 between
Ulf C. Tychsen and
Pharma-Gummi Wimmer West GmbH, and related letter
agreement of even
date and Addendum No. 1 dated September 26, 1994.
(10) (r) Extract from minutes of ordinary and extraordinary general meeting
of the
partners of Pharma-Gummi France S.A.R.L. relating to remuneration of Hans
Wimmer as General Manager, incorporated by reference to The Company's
Annual Report on Form 10-K for the year ended December 31, 1992 (File No.
5-0884).
(10) (s) Non-qualified Deferred Compensation Plan for Designated Executive
Officers.
(10) (t) Letter Agreement dated March 22, 1993 between the Company and Hans
Wimmer, incorporated by reference to The Company's Annual Report on Form
10-K for the year ended December 31, 1992 (File No. 5-0884).
(10) (u) Non-qualified Deferred Compensation Plan for Outside Directors,
incorporated
by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1989 (File No. 0-5884).
(10) (v) Agreement and Plan of Merger dated March 24, 1995 Among the
Company,
Stoudt Acquisition Corp. and Paco Pharmaceutical Services, Inc.
incorporated
by reference to the Company's Schedule 14 D-1 filed concurrently with this
report.
(11) Not Applicable.
(12) Not Applicable.
(13) 1994 Annual Report to Shareholders.
(16) Not applicable.
(18) None.
Exhibit Page
Number Number
------ ------
(21) Subsidiaries of the Company.
(22) None.
(23) Consent of Independent Accountants.
(24) Powers of Attorney.
(27) Financial Data Schedules.
(28) Not applicable.
(99) None.
EX-3.B
2
BY-LAWS
As Amended and Restated
December 13, 1994
THE WEST COMPANY, INCORPORATED
---------------------------
BYLAWS
------
ARTICLE I
SHAREHOLDERS
------------
Section 1. Meetings.
--------------------
(a) Annual Meeting.
--------------- The annual meeting of the
shareholders for the election of directors and for other business shall be held
at such time as may be fixed by the board of directors, on the first Thursday of
May in each year (or, if such is a legal holiday, on the next following day,) or
on such other day as may be fixed by the board of directors.
(b) Special Meetings.
---------------- Special Meetings of the
shareholders may be called at any time by the Chairman of the
Board, the President, or a majority of the board of directors.
(c) Place.
------ Meetings of the shareholders shall be held
at such place as may be fixed by the board of directors.
Section 2. Notice.
------------------- Written notice of the time and place of all meetings of
shareholders and of the purpose of each special meeting of shareholders shall be
given to each shareholder entitled to vote thereat at least five days before the
date of the meeting, unless a greater period of notice is required by law in a
particular case.
Section 3 Voting.
------------------ Except as otherwise provided herein, or in the Articles of
Incorporation, or by applicable law, every shareholder shall have the right at
every shareholders' meeting to one vote for every share standing in his name on
the books of the Company which is entitled to vote at such meeting. Every
shareholder may vote either in person or by proxy. No shareholder shall be
entitled to participate in any meeting of shareholders by means of conference
telephone or similar
communications equipment unless the Board of Directors shall have provided by
resolution for such participation.
Section 4 Quorum.
------------------ The presence, in person or by proxy, of the holders of a
majority of the outstanding shares of stock of the Company entitled to vote at a
meeting shall constitute a quorum. If a quorum is not present no business shall
be transacted except to adjourn to a future time.
-2-
Section 5. Nomination of Directors.
-----------------------------------
(b) Notice Required.
--------------------- Nominations for election of directors at
a meeting of shareholders may be made by the Board of Directors or by any
shareholder entitled to vote for the election of directors at such meeting;
provided, however, that such nominations made by such a shareholder shall be
made by written notice (the "Nomination Notice") of the shareholder's intent to
nominate a director at the meeting given to and received by the Secretary of the
Company in the manner and within the time specified in this Section 5. The
Nomination Notice shall be delivered to the Secretary of the Company not less
than 60 days nor more than 90 days prior to such meeting of the shareholders
called for the election of directors; provided, however, that in the event less
than 21 days' notice or prior public disclosure of the date of the meeting is
given to shareholders or made, the Nomination Notice shall be delivered to the
Secretary of the Company not later than the earlier of (i) the seventh day
following the day on which notice of the date of the meeting was first mailed to
shareholders or such public disclosure was made, whichever occurs first, or (ii)
the fourth day prior to the meeting. In lieu of delivery to the Secretary, the
Nomination Notice may be mailed to the Secretary by certified mail, return
receipt requested, but shall be deemed to have been given only upon actual
receipt by the Secretary.
(b) Contents of Notice.
------------------ The Nomination Notice shall be
in writing and shall contain or be accompanied by:
(1) the name and address, as they appear on the
Company's books, of the shareholder giving the Nomination
Notice;
(2) a representation of the number and class of the
Company's securities that the shareholder giving the Nomination Notice
owns beneficially and that the shareholder is the holder of record of
the Company's shares and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the Nomination
Notice;
(3) as to each proposed nominee, (i) his name, age,
business address and, if known, residence address, (ii) his principal
occupation or employment, (iii) the number and class of the Company's
securities beneficially owned by him and (iv) such other information
regarding such nominee as would have been required to be included in a
proxy statement filed pursuant to the Securities and
-3-
Exchange Commission under the Securities Exchange Act of 1934, as
amended, (or pursuant to any successor act or regulation) had proxies
been solicited with respect to such nominee by the management or Board
of Directors of the Company;
(4) a description of all arrangements or
understandings among the shareholder giving the Nomination Notice and
each proposed nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are
to be made by the shareholder; and
(5) the consent of each proposed nominee to serve
as a director of the Company if so elected.
The Company may require any proposed nominee to furnish such other information
as may reasonably be required by the Company to determine the eligibility of the
nominee to serve as a director.
(c) Determination of Compliance.
---------------------------- If a judge or judges
of election shall not have been appointed pursuant to these bylaws, the chairman
of the meeting may, if the facts warrant, determine and declare to the meeting
that any nomination made at the meeting was not made in accordance with the
procedures of this Section 5 and, in such event, the nomination shall be
disregarded. Any decision by the chairman of the meeting shall be conclusive and
binding upon all shareholders of the Company for any purpose.
(d) Exception.
---------- The procedures of this Section 5 shall
not apply to nominations with respect to which proxies shall have been solicited
pursuant to a proxy statement filed pursuant to Regulation 14A of the rules and
regulations promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended (or pursuant to any successor act or
regulation).
Section 6. Notice of Business at Annual Meetings.
-------------------------------------------------
(a) Notice Required.
---------------- At an annual meeting of
shareholders, only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before an annual meeting,
business must be (1) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (2) otherwise
properly
-4-
brought before the meeting by or at the direction of the Board of Directors or
(3) properly brought before the meeting by a shareholder. For business relating
to the election of directors of the Company, to be properly brought before an
annual meeting by a shareholder the procedures in Section 5 of this Article II
must be complied with. If such business relates to any other matter, the
shareholder must give written notice (the "Business Notice") of the
shareholder's intent to propose business at the annual meeting to the Secretary
of the Company in the manner and within the time specified in this Section 6.
The Business Notice shall be delivered to the Secretary of the Company not less
than 60 days nor more than 90 days prior to such meeting; provided, however,
that in the event that less than 21 days' notice or prior public disclosure of
the date of the meeting is given to shareholders or made, the Business Notice
shall be delivered to the Secretary of the Company not later than the earlier of
(i) the seventh day following the day on which such notice of the date of the
meeting was first mailed to shareholders or such public disclosure was made,
whichever occurs first, or (ii) the fourth day prior to the meeting. In lieu of
delivering to the Secretary, the Business Notice may be mailed to the Secretary
by certified mail, return receipt requested, but shall be deemed to have been
given only upon receipt by the Secretary.
(b) Content of Notice.
------------------ The Business Notice shall be
in writing and shall contain or be accompanied by the following as to each
matter the shareholder proposes to bring before the annual meeting: (1) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (2) the name and
address, as they appear on the Company's books, of the shareholder giving the
Business Notice, (3) the number and class of the Company's securities
beneficially owned by him, and (4) any material interest of the shareholder
giving the Business Notice in such business. Notwithstanding anything in these
bylaws to the contrary, no business shall be conducted at any annual meeting
except in accordance with the procedures set forth in this Section 6, except
that any shareholder proposal which complies with Rule 14a-8 of the proxy rules
(or any successor provision) promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended, and is to be
included in the Company's proxy statement for an annual meeting of shareholders
shall be deemed to comply with the requirements of this Section 6.
(c) Determination of Compliance.
---------------------------- If a judge or judges
of election shall not have been appointed pursuant to these
-5-
bylaws, the chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that any business brought before the meeting was not done
so in accordance with the procedures of this Section 6 and, in such event, the
business shall be disregarded. Any decision by the chairman of the meeting shall
be conclusive and binding upon all shareholders of the Company for any purpose.
ARTICLE II
DIRECTORS
---------
Section 1. Number and Term.
---------------------------- Subject to the provisions of the Articles of
Incorporation and of applicable law, the board of directors shall have the
authority to (i) determine the number of directors to constitute the board, and
(ii) fix the terms of office of the directors and classify each director in
respect of the time for which he shall hold office.
Section 2 Powers.
------------------ The business of the Company shall be managed by the board of
directors which shall have all powers conferred by applicable law and these
bylaws. The board of directors shall elect, remove or suspend officers,
determine their duties and compensations, and require security in such amounts
as it may deem proper.
Section 3. Committees.
----------------------- The board of directors shall establish and maintain a
Compensation Committee and an Audit Committee and may establish such other
committees as it shall deem appropriate. Each such committee shall consist of
one or more directors and shall have such powers and duties as the board of
directors shall determine.
Section 4. Meetings.
----------------------
(a) Regular Meetings.
----------------- Regular meetings shall be held
at such times as the board shall designate by resolution. Notice
of regular meetings need not be given.
(b) Special Meetings.
----------------- Special meetings of the board
may be called at any time by the Chairman of the Board or the
President and shall be called by him upon the written request of
one-third of the directors. Notice of the time, place and
-6-
general nature of the business to be transacted at each special meeting shall be
given to each director at least 24 hours (in the case of notice by telephone) or
two days (in the case of notice by other means) before such meeting.
(c) Place.
------ Meetings of the board of directors shall
be held at such place as the board may designate or as may be
designated in the notice calling the meeting.
(d) Participation.
-------------- One or more directors may
participate in a meeting of the board or a committee of the board by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other.
Section 5. Quorum.
------------------- A majority of all the directors in office shall constitute a
quorum for the transaction of business at any meeting and, except as provided in
Article VI, the acts of a majority of the directors present at any meeting at
which a quorum is present shall be the acts of the board of directors.
Section 6. Vacancies.
---------------------- Vacancies in the board of directors, including vacancies
resulting from an increase in the number of directors, shall be filled only by a
majority of the directors then in office, though less than a quorum, and each
person so elected shall be a director to serve for the balance of the unexpired
term and until his successor is duly elected and qualified.
Section 7. Independent Directors.
----------------------------------
(a) Definition of Independent Director.
------------------------------------ For purposes
of these bylaws, the term "Independent Director" shall mean a director who: (i)
is not employed by the Company or its subsidiaries (collectively, the
"Company"); (ii) does not have personal services contract(s) with the Company
involving significant payments; (iii) is not employed in an executive capacity
with a firm that does substantial business with the Company; (iv) is not
employed in an executive capacity with a significant customer or supplier of the
Company; and (v) is not a spouse, parent, sibling or child of any person
described by (i) through (iv). Notwithstanding the foregoing, the ownership of
equity or debt securities of the Company, or derivatives thereof,
-7-
shall not by itself disqualify any person from being classified
as an Independent Director.
(b) Interpretation and Application of This Bylaw.
--------------------------------------------- The
board of directors shall have the exclusive right and power to interpret and
apply provisions of this bylaw, including, without limitation, the definitions
of terms used in and guidelines for the application of this bylaw. In the case
of any such interpretation or application to a specific person which results in
such person being classified as an Independent Director, the board of directors
shall have determined that such person is independent of management and free
from any relationship that, in the opinion of the board of directors, would
interfere with such person's exercise of independent judgment as a board member.
Each director has a duty to disclose all circumstances that may have a bearing
on his or her classification as an Independent Director.
(c) Duties of Independent Directors.
-------------------------------- Independent
Directors shall have the following special duties and responsibilities:
(1) to evaluate, periodically and at least annually,
the performance of the chief executive officer of the Company,
including, among other things, a determination of the manner in which
he or she is fulfilling responsibilities to directors, shareholders,
employees, customers and other constituencies.
(2) to assure that the chief executive officer
has appropriate leadership succession plans for the Company;
and
(3) to review and monitor achievement of the
chief executive officer's long-range strategic plans for the
Company.
(d) Chairman, Independent Directors.
-------------------------------- Immediately after
adoption of this bylaw, and thereafter at the first board meeting after each
annual meeting of shareholders, the Independent Directors shall elect from their
membership one director to be chairman, whose term shall be annual, but who may
not be elected to serve more than four annual terms in succession. The chairman
shall preside at all meetings of Independent Directors and, in addition, shall
have the following special duties and responsibilities:
-8-
(1) to confer with the chief executive officer in
advance of each board meeting to assure that (i) the board agenda
contains those items that the Independent Directors believe are
important to their understanding and evaluation of the Company and its
affairs, and (ii) the information provided to and presentations made to
the board, and other communications are in keeping with the board's
needs and wishes; and
(2) to be available to call meetings of the
Independent Directors whenever he or she deems appropriate, and
generally to be a focal point for Board discussion on any subject where
a board member believes the chief executive officer would not be the
appropriate person to call such meeting.
Section 8. Limitation on Liability.
------------------------------------ A director shall not be personally liable
for monetary damages for any action taken on or after January 27, 1987, or for
the failure to take any action on or after the date, unless (i) the director has
breached or failed to perform the duties of his office under Section 8363 of the
Pennsylvania Directors' Liability Act (Act 145 of 1986, P.L. 1458), relating to
standard of care and justifiable reliance, and (ii) the breach or failure to
perform constitutes self-dealing, willful misconduct or recklessness. The
provisions of this Section 6 shall not apply to (i) the responsibility or
liability of a director pursuant to any criminal statute, or (ii) the liability
of a director for the payment of taxes pursuant to local, state or federal law.
Any repeal or modification of any provision of this Section 8 of Article II
shall be prospective only and shall not affect, to the detriment of any
director, any limitation on the personal liability of a director of the Company
existing at the time of such repeal or modification.
ARTICLE III
OFFICERS
---------
Section 1. Election.
-------------------- At its first meeting after each annual meeting of
shareholders, the board of directors shall elect a chairman, a president, a
treasurer, a secretary, a controller and such other officers as it deems
advisable. Any two or more offices may be held by the same person.
-9-
Section 2. Chairman.
--------------------- The chairman shall preside at all meetings of the board
and of the shareholders. In the absence of the chairman, a director selected by
a majority of the board shall discharge the duties of the chairman.
Section 3. President.
---------------------- Except as the board of directors may otherwise prescribe
by resolution, the president shall be the chief executive officer of the Company
and shall have general supervision over the business and operations of the
Company and may perform any act and execute any instrument or other papers for
the conduct of such business and operations.
Section 4. Other Officers.
--------------------------- The duties and powers of the other officers shall be
those usually related to their offices or as may be designated by the president,
except as otherwise prescribed by resolution of the board of directors.
Section 5. General.
-------------------- In the absence of the president, the chairman, or any other
officer or officers designated by the board shall exercise the powers and
perform the duties of the president. The president, or any officer or employee
authorized by him, may appoint, remove or suspend agents or employees of the
Company, other than officers appointed by the Board, and may determine their
duties and compensation.
ARTICLE IV
INDEMNIFICATION
----------------
Section 1. Right to Indemnification.
------------------------------------- The Company shall indemnify to the extent
not prohibited by applicable law, any person who was or is a party (which shall
include for purposes of this Article IV the giving of testimony or similar
involvement) or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director, officer,
employee or agent of the Company or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including an employee
benefit plan, against any liability, penalty, damages, excise tax assessed with
respect to an employee benefit plan, costs, expenses (including attorneys'
fees), judgments, fines and
-10-
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, whether or not the indemnified liability
arises or arose from any threatened, pending or completed action by or in the
right of the Company. The board of directors may, and on request of any such
person shall be required to, determine in each case whether applicable law
prohibits indemnification, or such determination shall be made by independent
legal counsel if the board so directs or if the board is not empowered by law to
make such determination. If there has been a change in control (as such term is
used in Item 6(a) of Schedule 14A promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended) of the Company
between (1) the time of the action or failure to act giving rise to the claim
for indemnification and (2) the time such claim is made, at the option of the
person seeking indemnification the permissibility of indemnification shall be
determined by independent legal counsel selected jointly by the Company and the
person seeking indemnification. The fees and expenses of such counsel shall be
paid by the Company. The obligations of the Company to indemnify a director,
officer, employee or agent under this Article IV, including the duty to advance
expenses, shall be a contract between the Company and such person, and no
modification or repeal of any provision of this Article IV shall affect, to the
detriment of the director, officer, employee or agent such obligations of the
Company in connection with a claim based on any act or failure to act occurring
before such modification or repeal.
Section 2. Advancement of Expenses.
------------------------------------ Expenses (including attorney's fees)
incurred in defending an action, suit or proceeding referred to in this Article
IV shall be paid by the Company in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
indemnified person to repay such amount if it shall ultimately be determined
that such person is not entitled to be indemnified by the Company as authorized
in this Article IV or otherwise.
Section 3. Indemnification Not Exclusive.
------------------------------------------ The indemnification and advancement
of expenses provided by this Article IV shall not be deemed exclusive of any
other right to which one indemnified may be entitled under any agreement, vote
of shareholders or otherwise, both as to action in his official capacity and as
to action in another capacity while holding that office, and shall inure to the
benefit of the heirs, executors and administrators of any such person.
-11-
Section 4. Insurance, Security and Other Indemnification.
---------------------------------------------------------- The board of
directors shall have the power to (a) authorize the Company to purchase and
maintain, at the Company's expense, insurance on behalf of the Company and
others to the extent that power to do so has not been restricted by applicable
law, (b) create any fund of any nature, whether or not under the control of a
trustee, or otherwise secure in any manner any of its indemnification
obligations and (c) give other indemnification to the extent not prohibited by
applicable law.
ARTICLE V
CERTIFICATES OF STOCK
---------------------
Section 1. Share Certificates.
------------------------------- Every shareholder of record shall be entitled to
a share certificate representing the shares held by him. Every share certificate
shall bear the corporate seal and the signature (which may be a facsimile
signature) of the chairman, president or a vice president and the secretary or
an assistant secretary or treasurer of the Company.
Section 2. Transfers.
---------------------- Shares of stock of the Company shall be transferable on
the books of the Company only by the registered holder or by duly authorized
attorney. A transfer shall be made only upon surrender of the share certificate.
ARTICLE VI
CERTAIN MATTERS RELATING TO
PENNSYLVANIA ACT NO. 36 OF 1990
-------------------------------
In accordance with the provisions of Section 2571(b)(2)(i) of the
Pennsylvania Associations Code, as amended, Subchapter H, Disgorgement by
Certain Controlling Shareholders Following Attempts to Acquire Control, of
Chapter 25 of the Pennsylvania Associations Code shall not be applicable to the
Company.
ARTICLE VII
AMENDMENTS
----------
Except as restricted by applicable law, the authority to
adopt, amend and repeal the bylaws of the Company is expressly vested in the
Board of Directors, subject to the power of the shareholders to change such
action. These bylaws may be changed
-12-
at any regular or special meeting of the board of directors by
the vote of a majority of all the directors in office.
-13-
EX-10.G
3
PENSION AGREEMENT
Pension Agreement - Only for translation
between
Pharma-Gummi Wimmer West GmbH, Eschweiler (company)
and
Mr. Ulf C. Tychsen, born on 4. October 1944
The company will grant to Mr. Tychsen company pension benefits subject to the
following provisions:
ss. 1 Old-age pension
1. Upon reaching the normal retirement age, Mr. Tychsen shall
receive an old-age pension payable throughout his entire life
after.
2. The normal retirement age shall be the completed 65th year of
life.
3. The annual old-age pension benefits shall be determined on the
basis of his pensionable income and the pensionable period of
service.
4. The pensionable income shall be the basic gross annual salary
Mr. Tychsen has last received. If Mr. Tychsen has not
received an annual salary, the pensionable income shall be 13
basic gross monthly salaries. Not pensionable are e.g.
bonuses, holiday salary, voluntary payments, asset-forming
contributions etc..
Page 2 Pension Agreement Ulf C. Tychsen
5. The pensionable period of service shall be full years and months of
active employment since joining the company, but not more than 40
completed years of service.
6. The annual pension shall amount for every year of service to
a) 0.5% of the pensionable income not exceeding the ceiling
of the social security insurance and
b) 1.5 % of the pensionable exceeding this ceiling,
c) The pension resulting from a) and b) altogether with gross
pensions resulting from the national insurance scheme shall
not exceed 75 % of the pensionable income. A state
pension, altered by an equalization of pensions in case of
a divorce, will be considered as if such an equalization
had not taken place.
7. Upon reaching the early retirement age according to the social security
insurance Mr. Tychsen will have the right to receive early old-age
pension determined according to para.6. The early old-age pension shall
be reduced by 0.5 % for each month preceding the normal retirement age.
8. In the case that Mr. Tychsen leaves the company before
reaching the early retirement age vested benefits according to
Art. 1. Para. 1 of the Corporate Pension Law (BetrAVG) will
be maintained.
ss. 2 Disability pension
1. Mr. Tychsen shall receive a disability pension, if he ceases
his activities for the company because of occupational
disability or loss of his capability to earn his living as
defined by the provisions governing the social insurance.
2. The annual disability pension shall be determined in line with
the same principles as applicable for the annual old-age
pension, i. e. according to Art. 1 Paras. 4 to 6. However, in
addition to the pensionable years of service actually worked
by Mr. Tychsen, those years of service shall be considered as
pensionable in the meaning of Art. 1 Para. 5 as well, which he
could have worked until the completion of his 55th year of
life.
Page 3 Pension Agreement Ulf C. Tychsen
3 . The claim to a disability pension shall exist only for as long
as the conditions of disability are met. The decision of the
Social Security Insurance Institution shall be evidence for
the occurrence of the disability. Mr. Tychsen is obliged to
indicate any change in the statement of the Social Security
Insurance Institution regarding the disability. If the
disability continues until the retirement age in accordance
with Art. 1. Para. 2 is reached, Mr. Tychsen shall receive as
from this date a live-long old-age pension in the amount of
the disability pension.
ss. 3 Widow's pension
1. The spouse of Mr. Tychsen shall receive a life-long widow's
pension after his death if the marriage took place before a
pensionable event within the meaning of Art. 1 Paras. 1 and 7,
Art. 2 Para. 1, and if it lasted until the time of his death.
Widow's pension will not be granted if the marriage took place
during the last 6 months before Mr. Tychsen has died.
2. Should Mr. Tychsen die after a pensionable event within the
meaning of Art. 1. Paras. 1 and 7, Art. 2 Para. 1, the
widow's pension shall amount to 60 % of the pension which he
last
received. Should Mr. Tychsen die before a pensionable event,
the widow's pension shall amount to 60 % of the pension which
he would last have received if at the time of his death he had
become disabled within the meaning of Art. 2 Para. 1.
3. Notwithstanding Para. 2, the following is applicable if the
spouse is more than 15 full years younger than Mr. Tychsen:
for each full year which exceeds this age difference of 15
full years, the widow's pension will be reduced by 1
percentage point.
4. The widow's pension shall be cancelled upon expiration of the
month during which the widow has married again.
ss. 4 Equalization of pensions
1. If pension payments arising from the relinquished right of the
pension beneficiary are to be paid directly by the company to
the equalization beneficiary, and these payments are subject to
taxes and social insurance fees (i.e. health insurance fees),
then the pension beneficiary is responsible for paying these
taxes and insurance fees. Other agreements between the pension
beneficiary and the equalization beneficiary resp. decisions by
the family court can only be taken into account at the time when
they are known to the company in original or in publicly
certified form.
Page 4 Pension Agreement Ulf C. Tychsen
2. After the death of the pension beneficiary, the equalization
beneficiary can, in the case of an extended equalization along
the lines of obligation law, demand an equalization pension from
the company only in the amount in which he or she would receive
a survivor's pension if the marriage had continued until the
death of the pension beneficiary. If several other claims are
to be equalized along the lines of obligation law, then the
company is only required to pay the equalization pension to the
extent to which this claim stands in relation to all other
existing claims to pension equalizations along the lines of
obligation law.
3 . A survivor's pension paid to the widow or the widower of the
pension beneficiary is to be reduced by the amount arrived at
according to the equalization pension ascertained and paid
according to Para. 2. The reduction will also occur and continue
to occur after the death of the equalization beneficiary.
Sentence no. 2 is not valid if the company has, along the line
of Para. 2, paid payments that do not exceed the amount of two
years' worth of the payment period. If the company has paid
such payments, then these payments are to be deducted from the
company's outstanding pension obligations to the survivor.
ss. 5 Orphan's pension
1. Mr. Tychsen shall be granted an orphan's pension for his
children.
2. The orphan's pension shall be paid up to the 18th year of life of the
children. As long as the orphan is still undertaking education (school or
profession) the orphan's pension will continue to be paid until the
completed 27th year of life.
3. Should Mr. Tychsen die after a pensionable event within the
meaning of Art. 1 Paras. 1. and 7, Art. 2 Para. 1, the orphan's
pension shall amount to 20%, the full orphan's pension to 40 %
of the pension which Mr. Tychsen last received. Should Mr.
Tychsen die before a pensionable event, the orphan's pension
shall amount to 20%, the full orphan's pension to 40% of the
pension Mr. Tychsen would last have received if at the time of
his death he had become disabled as defined by Art. 2 Para. 1.
Page 5 Pension Agreement Ulf C. Tychsen
ss. 6 Coincidence of benefits
The total of the widow's pension, orphan's pensions plus equalization payments
shall not exceed 100 % of the pension which was last received by Mr. Tychsen or
would have been received by him, if at the time of his death he had become
disabled as defined by Art. 1 Para. 1. If they do indeed exceed this base
pension, then the survivor's pensions will each be reduced by the same
percentage as the percentage in which they altogether were in excess of the
above mentioned base pension.
ss. 7 Payment
The pension benefits shall be paid to the beneficiaries monthly, in twelve equal
installments payable at the end of the month after deduction of the taxes and
dues (e.g. taxes to be withheld, contributions to the legal health insurance of
the pensioner) . The first payment shall be made for the month subsequent to the
event giving rise to the pension, but at the earliest as of the date on which
the compensations and subsequent compensations or temporary allowances in
connection with the employment contract cease. The last payment shall be made
for the month during which the conditions for the payment of the pension have
ceased to exist or the pension beneficiary dies.
ss. 8 Adjustment
The company is obliged according to Art, 16 of the Corporate Pension Law
(BetrAVG) to review an adjustment of pensions and to decide at equitable
discretion; especially the concerns of the pensioner and the economic situation
of the company have to be taken into account.
ss. 9 Restraint on disposal
The claims for pensions under this pension agreement may neither be pledged nor
assigned or used as collateral for loans. If they are pledged, assigned or used
as collateral all the same, this shall be ineffective as regards the company.
ss. 10 Proviso
The company reserves the right to reduce or cease the benefits
under this pension agreement, if
Page 6 Pension Agreement Ulf C. Tychsen
a) the legal, especially the fiscal treatment of the allocations
which are made or have been made for the scheduled financing
of the pension payments has changed so significantly that the
maintenance of the promised benefits is no longer acceptable,
or
b) the pension beneficiary commits acts which contravene in a
gross manner the principle of good faith or would give grounds
for dismissal without notice.
ss. 11 Reinsurance
1. The company shall have the right to have its obligations under this
agreement reinsured in part or in whole by a life insurance contract
concluded in respect of the life of Mr.Tychsen. All claims under such a
contract shall be attributable exclusively to the company.
2. For the case that the company decides to conclude such an insurance
contract, Mr. Tychsen shall undertake to furnish all required data, and
especially to undergo a medical checkup upon request of the insurance
company, to submit the required records and to agree to the conclusion of
the insurance contract.
ss. 12 Concluding provisions
1. Modifications of and amendments to this pension agreement
shall be made in writing.
2 . If certain provisions of this agreement are or become ineffective, or if
any regulation is omitted in this agreement, they shall not affect the
effectiveness of the other provisions. In the case mentioned in clause 1
the parties to the agreement shall agree on a valid provision or on a
provision compensating the omission.
3. With conclusion of this pension agreement all previous
pensions promises, orally or in written, become invalid.
4. Place of performance for all claims under this agreement is
Eschweiler.
Eschweiler, 17.02.1994
Hans Wimmer
(Pharma-Gummi Wimmer West GmbH) Herr Ulf C. Tychsen
EX-10.I
4
SCHEDULE OF AGREEMENTS WITH EXECUTIVE OFFICERS
Exhibit 10 (i)
SCHEDULE OF AGREEMENTS WITH EXECUTIVE OFFICERS
----------------------------------------------
The Company has entered into agreements with the following
individuals. Such agreements are substantially identical in all material
respects to the form of agreement set forth in Exhibit (10) (h).
George R. Bennyhoff
J. E. Dorsey
Stephen M. Heumann
Raymond J. Land
Anna Mae Papso
Victor E. Ziegler
EX-10.Q
5
CONTRACT OF EMPLOYMENT AND EMPLOYMENT AGREEMENT
2nd April, 1992
Mr. Ulf Christian Tychsen
Farmisener Landstr. 28b
2000 Hamburg 67
Dear Mr. Tychsen,
I am enclosing the Contract of Employment and the Employment Agreement agreed
with you and would like to confirm once more the conditions not contained in
these contracts.
The target bonus under the "TWC Incentive Bonus Plan 1992" will be 50%
in your case. You will receive a guaranteed bonus of at least 20% of
your basic salary by 31.12.1993.
As already mentioned you can select a car of your choice up to a value
of DM 70,000.-- inclusive of VAT. I would be grateful if, in view of
long delivery periods, you could specify your choice as soon as
possible.
Consideration is being given at present to a plan to take out pension
insurance on behalf of managerial staff or to grant corresponding
pension concessions. In the event of such a general solution not being
realised, we hereby guarantee you that in your case a special agreement
will be reached for you which, upon your reaching the age of
retirement, will provide you with a pension which will amount to 20% of
your basic salary as it stands at that time. A prerequisite herefor,
however, is a ten year period of employment.
We will provide you with a company-owned apartment which you can use
free of charge for one year.
You are entitled to participate in the "TWC Inc. Non-Qualified
Stock Option". 8,000 shares will be set aside for you. Please
sign and return the attached agreement also.
Should you not avail of your car for weekend trips home, we will
provide you with a fly-and-save ticket during your first year.
We look forward to hearing from you and remain
Yours sincerely
(sgnd.]
Hans Wimmer
Enclosures
TWC Incentive Bonus Plan 1992
TWC Non-Qualified Stock Option Agreement
Organigrammie Europe
Contract of Employment
Employment Agreement
I accept the contents of this letter.
[sgnd.]
Ulf Christian Tychsen
Eschweiler, 2nd April, 1992
CONTRACT OF EMPLOYMENT
Dear Mr. Tychsen,
The following agreements are agreed in relation to your employment.
ss. 1 Position
------------
You shall be employed at managerial level in our company from 01.01.1993. It
shall be possible for the contract to commence at an earlier date. It is
intended to appoint you to the position of Managing Director. We reserve the
right to assign other appropriate managerial duties to you if required for
operational reasons.
You undertake to devote your full working capacity to the service of the
Company. The assumption of any ancillary profitable employment shall require the
express prior written agreement of the Management. This shall also apply for
involvement in other companies and for involvement in the supervisory organs of
other companies.
The period of employment shall commence on date of entry.
ss. 2 Remuneration
----------------
1.
As remuneration for your employment you shall receive a monthly salary of DM
21,000.-- gross (in words: twenty-one thousand German Marks), payable at the end
of each month. Payment for overtime required shall be regarded as having been
made on payment of the agreed remuneration.
2 .
In addition to your monthly remuneration you shall receive the following by way
of voluntary social welfare benefits:
- a Christmas bonus equivalent to a 13th month's salary;
- holiday money equivalent at present to the amount of DM 33.--
gross per day of holidays to which you are entitled;
- contributions to employees' savings schemes in accordance with the
terms of the respectively valid Employees' Savings Scheme Act currently
amounting to DM 78.-- gross per month.
Assignment of or pledging salary payments shall not be admissible without the
consent of the Company.
ss.3 Payment of Salary in the Event of Illness or Death
------------------------------------------------------
1.
In the event of non-culpable inability to work as a result of an accident or
illness you shall initially continue to receive your salary in accordance with
ss. 2 (1) for six weeks. Thereafter for a period of 6 months you shall receive
an allowance in addition to the cash payment provided by your legal health
insurance fund or provident association which, together with such sickness
benefit, shall be equivalent to the amount of your net payments under ss. 2 (1)
. In the case of private health insurance the daily sick benefit agreed with the
private health insurance company shall apply as a basis for calculating the
allowance, at least, however, a fictitious daily sickness benefit, which would
have been paid by the competent insurer under the legal health insurance scheme
in the event of compulsory health insurance.
Appropriate evidence of any sickness benefit allowances received must be
provided.
You shall assign to the Company any claims for compensation against
third-parties to which you are entitled in connection with the occurrence of
your inability to work to the amount of the allowance paid, and/or you shall
refund to the Company any payments made by third-parties subsequently in
relation thereto.
2 .
In the event of your death your surviving dependents (widow, dependent children)
shall continue to receive your salary as under ss. 2 (1) for a period of three
months, commencing with the end of the month during which the death occurred.
The Company shall be entitled to pay the benefit to any of the named persons
without any liability to the other surviving dependents.
ss. 4 Fringe Benefits
-----------------
1.
For the duration of the employment relationship the Company shall supply you
with an appropriate intermediate-sized car, which may also be used for private
journeys. Running and maintenance costs shall be borne by the Company. The
employee shall assume responsibility for paying tax on this benefit in kind
arising out of private use.
2 .
The Company shall take out an accident insurance policy in your favor:
in the event of death: DM 200,000.--
in the event of invalidity: DM 400,000.--
The insurance shall expire on the date of your departure from the Company's
services.
3.
During business trips you shall be insured against the loss of your luggage up
to a maximum sum of DM 10,000.-- under a group insurance policy which does not
name the parties covered individually. in the case of business trips abroad
there is also an additional foreign health insurance which also includes return
transportation to Germany if required for medical reasons.
ss. 5 Holidays
------------
According to the regulations currently applicable, you are entitled to 30
working days annual holidays. In the event of your entering and leaving the
Company during the year the holidays shall be calculated pro rata temporis.
ss. 6 Term of Contract and Termination
------------------------------------
This Contract shall be concluded for an indefinite period. The employment
relationship can be terminated by either party under observance of a period of
notice of 6 months to the end of each half-year. An extension of the periods of
notice as a result of legal provisions shall apply for both contractual
partners. Notification of termination must be submitted in writing. The Company
shall be entitled to suspend you on full pay following the issuing of notice.
The employment relationship shall cease, without any special notice being
required, on expiry of the month in which you complete your 65th yearlife.
The right to immediate termination for an important reason (ss. 626 BGB) remains
unaffected (BGB = German Civil Code).
ss. 7 Secrecy
---------
1.
You undertake to maintain secrecy regarding all business matters, in particular
trade secrets, knowledge of which was acquired by you during your employment.
The obligation to observe secrecy extends to all the trade secrets of
third-parties which the latter have made accessible to the Company subject to
the proviso that they be handled as business and/or manufacturing secrets.
You also assume this obligation on the part of the Company as your own personal
obligation both to the same extent and for the same term.
Insofar as legally admissible, the obligation to observe secrecy shall continue
to apply after termination of the employment relationship. Upon leaving the
Company you also undertake to return to the Company all the documentation in
your possession which related to your activities within the framework of the
employment relationship.
2.
Publications and lectures regarding materials, of which you
gained knowledge during your service or which are within the scope of your
duties, shall require the prior consent of the Management.
ss. 8 Final Provisions
--------------------
1.
No agreements were made apart from this Contract. Alterations of and amendments
to this Contract must be made in writing in order to be valid.
2 .
The Parties are agreed that, in accordance with ss. 26 of the Federal Data
Protection Act (BDSG), data regarding your person shall be stored for the
purposes of efficient operations. According to the same Act (ss.5 BDGS) you may
only process, make known, render accessible or otherwise use protected data
relating to persons in order to fulfil a specific function. Breaches of this act
are punishable according to ss. 41 BDSG, among others. The signature attached to
this Contract shall also apply as a declaration of consent to this obligation.
3 .
Should individual provisions of this Contract be or become invalid, this shall
not affect the validity of the remaining provisions. An appropriate provision
which approximates most closely to the economic objective being strived for by
both parties shall be agreed in place of the invalid provisions or for the
purpose of filling possible loopholes in the contract.
4 .
In the event of being appointed Managing Director, this Contract of Employment
shall be suspended for the duration of the validity of the Employment Agreement
of the Managing Director.
We hope that you will be happy with our Company and we wish you lots of success
in your work.
Yours sincerely
Pharma-Gummi Wimmer West GmbH
(sgnd.)
Hans Wimmer
(Managing Shareholder)
I accept the terms of this Contract.
[sgnd.]
Ulf Christian Tychsen
Addendum to. 1
-------------
to
--
Employment Agreement
--------------------
by and between
Pharma-Gummi Wimmer West GmbH, Stolberger Strasse 21-41, D-52249
Eschweiler, Germany, ("Company"), acting through its managing
director (Geschaftsfuhrer), Mr. Hans Wimmer,
and
Mr. Ulf Christian Tychsen, Farmsener LandstraBe 78b, 22359
Hamburg, Germany.
dated this 26th day of September, 1994
Preamble
--------
On (April 2], 1992, Mr.Tychsen and the Company entered into an employment
relationship based on Contracts of Employment dated April 2, 1992; the TWC
Incentive Bonus Plan 1992; The Non- Qualified Stock Option Agreement; the
Organigramme Europe; and a letter containing additional conditions dated April
2, 1992 (collectively the "Agreement").
Mr. Tychsen has not assumed any job, work or assignment which
would be in competition with the Company's business since his
employment with the Company.
Both parties hereto wish to specify the extent to which Mr. Tychsen is by
operation of law barred from engaging in any competitive activity during his
employment with the Company.
In view of the crucial importance of the proprietary information made accessible
to Mr. Tychsen by the Company, both parties hereto agree that Mr. Tychsen should
be subject to a reasonable non-competition covenant after the termination of his
employment relationship with the Company.
NOW, THEREFORE, the parties hereto agree on the following amendment to the
Agreement:
1. General Non-Competition Covenant
---------------------------------
1.1 During the term of his employment with the Company, Mr.
Tychsen will not assume any job, work or assignment in the
same business and territory in which the Company or an
affiliate of the Company is active (the "Company's
Business") , regardless whether such activities are actual
or potential pursuant to the Company's Articles of
Incorporation (Satzung). This restriction includes without
limitation
(a) any acquisition or holding of interests in any enterprise which
is engaged in the Company's Business ("Competitor"), either
directly or indirectly or by way of sub-participation
(Unterbeteiligung) or as silent partner (Stille Beteiligung),
(b) the performance of services for any Competitor or an affiliate
of any Competitor, either as employee, consultant, counsel, or
member of any board, regardless whether such services are
remunerated or not, and
(c) any self-employed competing activity.
The term "affiliate" shall have the meaning ascribed thereto in ss.15
of the German Stock Corporation Act (Aktiengesetz).
For the purposes of this clause, the territory in which the Company or
affiliates of the Company are active shall be Europe (including Russia
and Turkey) and North America.
1.2 The non-competition covenant shall not prevent Mr. Tychsen
from acquiring or holding shares of stock or other
securities traded on any recognized stock exchange, provided
that (a) such interest does not give Mr. Tychsen any
influence on the management of a Competitor and (b) the
interest does not exceed ten (10) per cent of the
outstanding securities.. This clause shall, furthermore, not
apply to any job, work or assignment assumed by Mr. Tychsen
in the interest and with the consent of the Company.
2 . Post-Employment Non-Competition Covenant
-----------------------------------------
2.1 For a period of one (1) year following the termination (Beendigung),
for whatever reason, of the employment relationship with the Company,
Mr. Tychsen may not engage in any competing activity as defined in
Section 1 hereof.
2. 2 For the term of this post-employment non-competition
covenant, the Company shall pay to Mr. Tychsen a
Compensation (Karenzentschadigung) in the amount of twelve
(12) times the last monthly gross salary pursuant toss.2 (l)
of the Agreement, but not less than the amount payable under
ss. 74b(2), (3) of the German Commercial Code (HGB) . The
Compensation shall be paid in bi-monthly installments at the
end of each two-months period after the day of the
termination in accordance with the pertinent tax and social
security laws, provided, however, that Mr. Tychsen discloses
to the Company all requisite information about his income
from other professional activities prior to the maturity of
the installment.
3. Penalty Clause
---------------
Notwithstanding any other rights of the Company, in each case of
violation of the foregoing non-competition covenants Mr. Tychsen shall
be liable to the Company for a contractual penalty (Vertragsstrafe) in
the amount of six (6) times the last monthly gross salary pursuant to
ss. 2(l) of the Agreement. In case of a continuous violation, the
Company shall be entitled to the full contractual penalty for every
month, or part of a month, during which Mr. Tychsen is in violation of
the non-competition covenant. For the enforcement of this contractual
penalty clause, the Company shall not be required to establish any
actual damages.
4. Termination
-----------
Notwithstanding the provisions contained in the Agreement, the company
may terminate the Agreement for cause in accordance with ss. 626 of the
German Civil Code (BGB) if Mr. Tychsen violates the non-competition
covenant pursuant to Section 1 hereof.
5. Final Provisions
----------------
5.1 Sections ss.ss. 60, 61 and 74 to 75d of the German Commercial Code
(HGB) shall apply to the extent not validly altered by the foregoing
provisions.
5.2 The Agreement and this Addendum have been drawn up in the
English language.
5.3 To the extent not affected by this Addendum, the terms and
provisions of the Agreement remain binding and enforceable.
5.4 The invalidity, illegality or unenforceability of any
provision in this Addendum shall not affect the validity,
legality or enforceability of the remaining provisions. The
invalid, illegal or unenforceable provision shall be
replaced by a valid, legal and enforceable provision
reflecting as closely as possible the economic intention
pursued by the parties with the former provision. The same
shall apply to issues the parties intended but failed to
address.
Place: Eschweiler Place Lionville
-------------------- -----------------------
Date: 20.09.94 Place 11.11.94
------------------- ------------------------
PHARMA-GUMMI WIMMER WEST GMBH
By: Hans Wimmer By: Ulf Tychsen
---------------------- ---------------------------
EX-10.S
6
NON-QUALIFIED DEFERRED COMPENSATION PLAN
AMENDMENT NO. 1
THE WEST COMPANY, INCORPORATED
NON-QUALIFIED DEFERRED COMPENSATION PLAN FOR
DESIGNATED EXECUTIVE OFFICERS
The West Company, Incorporated hereby amends its Non-Qualified
Deferred Compensation Plan for Designated Executive Officers as set
forth below:
I. SECTION 3(b) is hereby re-numbered as Section 3(c) and a new
Section 3(b) is hereby inserted as follows:
(b) Notwithstanding Section 3(a) above, if an eligible
Executive Officer is hired by the Company during a calendar year, the Executive
Officer may elect to participate in the Plan by notifying the Company's
Secretary in writing before the Executive Officer performs any services for the
Company how much of his Compensation shall be deferred. An election so made
shall be irrevocable during that calendar year and shall apply to each calendar
year thereafter until the Executive Officer changes his election in accordance
with the procedure set forth in Section 3(a) above.
To record the adoption of this Amendment No. 1 to the Plan,
The West Company, Incorporated has caused its authorized officers to affix its
name and seal this 7th day of March, 1995.
[CORPORATE SEAL] THE WEST COMPANY,
INCORPORATED
Attest: By:
---------------------------- ---------------------------
John R. Gailey III George R. Bennyhoff
Secretary Senior Vice President
Human Resources
EX-13
7
FINANCIAL REPORTS
FINANCIAL REVIEW
--------------------
The Company operates in one industry segment: manufacturing and marketing
specialized products that satisfy the unique filling, sealing, dispensing and
delivery needs of the health care and consumer products industries. Over 85% of
the Company's revenues are generated by the health care market. The Company's
products include stoppers, closures, containers, medical device components and
assemblies made from elastomers, metal, plastic and glass. The Company also
manufacturers related packaging machinery.
The following is management's discussion and analysis of the Company's
operating results for the three years ended December 31, 1994 and its financial
position as of year-end 1994. The information should be read in conjunction with
the financial statements and accompanying notes appearing elsewhere in this
report.
RESULTS OF OPERATIONS
---------------------
The Company's 1994 net income was $27.3 million, or $1.70 per share, compared
with net income of $23.5 million, or $1.48 per share, in 1993 and $19.7 million,
or $1.26 per share, in 1992. In 1993, the Company standardized December 31 as
the reporting year end for all consolidated subsidiaries. This change required
all international subsidiaries to report December 1993 results in the reporting
year 1993, resulting in the inclusion of 13 months of operating results in 1993
for these subsidiaries. Also in 1993 the Company lengthened the life of certain
production equipment, which reduced depreciation expense. The depreciable life
of this equipment now corresponds to its historical pattern of use and more
closely matches industry practice. These two changes added approximately $.07
per share to 1993 earnings compared with 1992 and about $.01 per share to 1993
earnings compared with 1994. In 1993, the Company also adopted Statement of
Financial Accounting Standards (SFAS) No. 109, which changed the Company's
accounting for income taxes to the liability method. The cumulative impact of
this method of income tax accounting was to reduce deferred tax liabilities
recorded as of January 1, 1993, adding $.06 per share to 1993 net income.
NET SALES
----------
Net sales were $365.1 million in 1994, an increase of 5% compared with
reported sales in 1993, which included $8.8 million of international
subsidiaries' sales attributable to December 1992 operations. Adjusting for that
extra month would improve the annual sales increase to 7%. This improvement
reflects increased sales to international health care markets, including the
acquisition of a subsidiary in Europe, and increased domestic consumer product
demand.
Increased health care market sales were generated by continued market
penetration in the Asia/Pacific region, acquisitions and volume increases in
European and domestic health care markets. The volume increases were the result
of new product offerings by customers and increased demand. Acquisitions during
1994 included Senetics, Inc., a domestic company specializing in innovative
closure systems for oral and inhalation drug delivery, and a 51%
1
interest in Schubert Seals A/S, a Danish manufacturer of metal seals for the
European pharmaceutical industry. The acquired companies added $8.4 million to
1994 sales. Sales in domestic and European markets have been negatively impacted
by price reductions on certain products due to government and consumer pressure
to reduce health care costs and by competition. The weaker U.S. dollar compared
with European and Asia/Pacific currencies added $2.3 million to reported 1994
sales amounts. Demand in Brazil for health care products increased during the
later part of year as a result of that country's economic plan, which has
stabilized the currency, but sales in South American health care markets were
lower for the year. Measured at consistent currency exchange rates, health care
sales increased by 5% over the comparable 12 months of 1993.
Domestic consumer products sales rose 18% in 1994. This increase reflects
primarily the increased demand for Spout-Pak(R) for gable carton juice
containers manufactured by International Paper Company and for the SAFETY
SQUEASE TM product manufactured for The Procter & Gamble Company's Scope(R) and
Aleve(R) products. Also machinery sales increased by $2.4 million, returning to
1992 levels, following 1993 delays in customers' capital spending programs.
In 1993, net sales increased by 3%, or $10.5 million, over 1992 levels.
Compared with 1992, this reported sales increase was reduced by $10.6 million
because of translation rate differences caused by the stronger U.S. dollar, but
increased by $8.1 million due to the inclusion of December 1993 operating
results of international subsidiaries. The inclusion of that additional month's
results in 1993 standardized the reporting year end for all consolidated
entities. Taking these two factors into account shows that worldwide health care
market sales grew at more than 5% in 1993. The growth was evident in all markets
served and came mainly from additional value-added products and services.
Especially notable was market penetration in the Asia/Pacific region. Sales to
consumer products markets declined by 8% compared with 1992, reflecting the
combined impact of product and customer rationalization and delays in customers'
new product market introductions. Sales of machinery declined in 1993 by $3
million as health care reform proposals caused customers to delay their capital
spending programs.
GROSS PROFIT
------------
The consolidated gross margin improved in 1994 to 31.8%, and gross profit
grew to $116.1 million, an 11% increase over 1993. This 1.8 percentage point
improvement in the gross margin compared with 1993 was the result, in part, of
higher sales volume, but a significant portion of the increase reflects the use
of Total Quality Management Technique, Manufacturing Resource Planning systems
and new technologies, which combined to improve productivity, yields and
logistics. These factors were evident in a 8% increase in the gross profit
earned on sales to the health care markets, with higher contributions generated
from sales to all market regions served. Margin increases in domestic and South
American operations improved significantly, while Asia/Pacific and European
markets generated margins comparable to 1993.
2
Gross profit on consumer products market sales more than doubled in 1994
compared with 1993. This reflects the significant increase in volume, the higher
value-added product sales made possible through the product rationalization
programs begun several years ago and the productivity improvements generated
through the programs discussed above. Gross profit related to machinery
operations increased primarily due to the volume of orders and higher sales in
the year.
The Company began installing Manufacturing Resource Planning systems in 1993.
In addition, more than 90% of the Company's employees have been trained in Total
Quality Management principles during 1993 and 1994. The remaining employees,
most of whom are located at international manufacturing facilities, will be
trained in 1995. The intent of these initiatives is to make the Company more
responsive to customer requirements and to improve shareholder value. The
continued benefits of these programs are expected to be evident in greater
efficiencies and customer satisfaction.
The gross margin in 1993 was 30%, and gross profit was $104.6 million, an 8%
increase over 1992. The gross margin was 1.4 percentage points higher than in
1992. The reduction in depreciation expense caused by the extension of the
useful life of certain production equipment was responsible for a .5 percentage
point increase in the 1993 margin. The remaining improvement reflected the
higher sales of value-added products, the benefits of restructuring activities
and the Total Quality Management and Manufacturing Resource Planning initiatives
begun in 1993. Gross profit on health care industry sales increased 7%,
reflecting these factors. Margins improved in all regions served except Europe.
European operations were adversely impacted by turbulent foreign exchange
markets, recession in Germany, and the closing of a low-cost manufacturing
facility in Serbia due to the United Nations embargo. Consumer products markets
generated a lower gross profit in 1993 due to a volume decline, although
mitigated by cost-savings programs. Consumer products operations continued to
focus on leading consumer products manufacturers, such as Procter & Gamble and
International Paper, and their need for innovative packaging systems that result
in value-added products. New product introduction delays by such companies
impacted 1993 negatively. Machinery operations achieved a higher gross margin on
1993 sales, although gross profit was down 15% due to lower volume.
EXPENSES
--------
Selling, general and administrative expenses have absorbed a higher
percentage of the sales dollar in each of the past three years. These expenses,
as a percentage of sales, were 18.9% in 1994, 18.2% in 1993 and 16.9% in 1992.
Selling, general and administrative expenses increased by $5.5 million in 1994,
or 9%, over 1993 levels. The increase is attributable in part to severance costs
related to a global reorganization and to productivity improvements. The
reorganization established global functional responsibilities and anticipated
the year-end 1994 buyout of the minority owners of five European subsidiaries.
The increase also reflects rent and other expenses related to the Company's new
headquarters facility, which became occupied in
3
September 1993; consolidation of expenses of acquired companies; higher costs
related to self-insured claims and outside service costs; and exchange rate
differences. Training and systems development will continue to improve
productivity and reduce costs.
The increase in 1993 selling, general and administrative expenses was 11%,
amounting to a $6.4 million increase over 1992. Outside service costs, including
training and systems development, and the move to the new corporate headquarters
facility were the primary causes of the increase.
Other expenses, net, in 1994 totaled $1.7 million compared with $.5 million
in 1993 and $.9 million in 1992. Included in this item are foreign currency
losses totaling $2.3 million, $5.4 million and $5.1 million, respectively. These
translation losses are driven by the high inflation in Brazil, which has been
significantly reduced since mid-1994 as a result of Brazil's economic plan
designed to reduce inflation and stabilize the currency. Also included are
foreign currency transaction losses of $.5 million in 1994, $.2 million in 1993
and $.5 million in 1992. The higher transaction losses in 1994 and 1992 were due
primarily to the realignment of European currencies. Foreign exchange losses are
offset in part by interest income totaling $1.2 million, $2.3 million, and $2.9
million in 1994, 1993, and 1992, respectively. Interest income was generated
mainly in Brazil and has been reduced in 1994 due to the economic program that
reduced interest rates and in 1993 due to reduced cash balances. Increased cash
balances in other geographic areas have produced interest income, which
partially offset the Brazilian reduction in 1994. In 1994, losses on real estate
totaled $.5 million compared with $1.4 million of gains in 1993 from the
Company's sale of its former headquarters and research center facilities and its
ownership interest in Tri/West Systems, Inc.
INTEREST
---------
Interest costs totaled $3.5 million in 1994, $3.4 million in 1993 and $4.1
million in 1992. Interest capitalized as a part of capital asset acquisitions
was approximately the same in each of the three years. Interest expense
attributable to the consolidation of companies acquired in 1994, mainly
attributable to capitalized leases, masked the further reduction in 1994
interest expense. This reduction was attributable to lower average domestic debt
levels and lower average interest rates on European debt. In 1993, the lower
interest costs resulted from an approximate $13 million decline in average debt
levels during the year. Average interest rates were also lower in 1993 compared
with 1992; however, the net cost of interest rate swaps increased.
INCOME TAXES
-------------
The Company adopted the liability method of income tax accounting beginning in
1993 as mandated by SFAS No. 109 requirements. The effective tax rate in 1994
was 31.8% versus 38.2% in 1993. The unusually low 1994 tax rate reflects the
one-time impact of a net refund of foreign taxes paid by subsidiaries in prior
years. The refund was triggered by the payment of dividends. In addition,
4
foreign tax loss carryforwards were assured realization due to the tax
consolidation of several operating subsidiaries, thereby reducing the tax asset
valuation allowance previously recorded on these potential tax benefits. The
transactions were made possible by the acquisition of the minority ownership in
these subsidiaries at year-end 1994. Finally, the 1994 effective income tax rate
declined due to lower state income tax liabilities and due to the higher
proportion of earnings being generated in lower-tax jurisdictions.
The 1993 effective tax rate of 38.2% represented a 2.9 percentage point drop
in the effective tax rate compared with 1992. The decline in the effective tax
rate resulted from the favorable settlement of a foreign tax audit issue, the
larger proportion of earnings generated in low-tax countries and a significant
reduction in the effective tax rate in Brazil. The 1993 decrease in the
statutory tax rate in Germany and lower state taxes offset the impact of the
increase in the U.S. federal tax rate. Because these tax rate changes largely
offset each other, the adoption of SFAS No. 109 did not have a material impact
on the 1993 tax provision.
The tax provision in 1992 was determined using previously accepted income tax
accounting principles, and deferred taxes were provided on the differences in
income for financial reporting and tax return purposes. At 41.1%, the 1992
effective tax rate reflected the mix of earnings, with higher-taxed European and
Latin American earnings offset in part by lower-taxed operations in Singapore
and Puerto Rico. The resulting effective rate was 3.2 percentage points above
the rate on domestic operations.
MINORITY INTERESTS AND EQUITY IN AFFILIATES
-------------------------------------------
Minority interests increased to $1.9 million in 1994 compared with $1.7 million
in 1993 and 1992. The increase primarily reflects the acquisition of a majority
interest in Schubert Seals A/S in mid- 1994. The increase was offset in part by
the November 30, 1994 acquisition of the remaining minority ownership in five
European subsidiaries.
Income from affiliates decreased in 1994 to half of the 1993 level. The
reduction reflects the translation loss on net monetary assets of the Company's
affiliates in Mexico due to the devaluation of the Mexican peso in late
December. Offsetting these losses in part was continued improvement in the glass
manufacturing operations of Schott West Pharmaceutical Glass Company in which
the Company holds a 40% interest. After losses in 1992, this joint venture
produced near breakeven results in 1993, and in 1994 has produced profits. The
turnaround resulted from the technical expertise of the Company's joint venture
partner, which improved product quality and increased productivity. Sales
increased in each of the past three years. Operating results of the Company's
affiliates in Japan and Mexico were lower in both 1994 and 1993 due to lower
margins and sales.
5
CHANGES IN ACCOUNTING METHODS
------------------------------
The Company adopted SFAS No. 109 beginning in 1993. Prior financial statements
were not restated, and the cumulative impact to January 1, 1993 of applying SFAS
No. 109 principles was a $1.1 million reduction in the deferred tax liabilities
reported at December 31, 1992. This cumulative impact was reported separately in
the 1993 income statement, net of minority interest.
The Company also adopted SFAS No. 112, Employer's Accounting for Postemployment
Benefits. This accounting standard covers all types of benefit plans provided to
former or inactive employees and requires recognition of a liability under
certain circumstances during employees' active service or when an employee is
terminated. This accounting change did not have any significant impact on 1993
operating results.
FINANCIAL POSITION
--------------------
The Company's financial position continues to be strong. Working capital totaled
$50.4 million at December 31, 1994, with a ratio of current assets to current
liabilities of 1.6:1. That year-end level was reduced significantly by the
liability to the former minority owners of five European subsidiaries for the
final installment of the acquisition price, which was paid in early 1995.
Receivable balances were higher at year-end 1994 as a function of a much
stronger December sales period. Inventory levels, excluding inventories of
companies acquired in 1994, were close to year end 1993 positions. Better
production planning systems have aided the control of inventories while assuring
customer needs can be met. Implementation of these systems at additional
manufacturing sites is expected to further reduce inventory requirements.
Cash from operating activities totaled $49.8 million in 1994. In addition, the
Company sold three former manufacturing properties, generating additional cash
of $3.4 million. These available funds more than covered cash requirements in
1994 including $27.1 million of capital expenditures, $7.2 million of dividends
to shareholders ($.45 per share) and $13.9 million of cash payments for 1994
acquisitions. Cash from exercise of employee stock options totaled $3.4 million.
New debt increased the debt to invested capital (total debt, minority interests
and shareholders' equity) ratio to 20.1%. Debt stood at $57.8 million at
year-end 1994 compared with $32.3 million at year-end 1993. Cash balances also
increased $22 million from December 31, 1993, and totaled $27.2 million at
December 31, 1994. The increase in assets noted above decreased the asset
turnover ratio to 1.04. Return on shareholders' equity was 13.2% equal to 1993.
1995 REQUIREMENTS
------------------
On January 2, 1995, the remaining 25.5 million deutsche marks due for the
acquisition of the minority owners' interests in five European subsidiaries was
paid using available cash and new debt facilities. Cash requirements for capital
projects in 1995 are estimated at $44 million. These projects focus on new
product tooling, cost reduction and quality improvements through
6
technological upgrades. Acquisition and implementation of new information
management systems will continue as will maintenance and improvements to the
existing production capacity. The 1986 currency and interest rate swap agreement
covering a DM20 million liability and a $7.2 million receivable expired early in
1995. The excess liability was funded with available cash and new debt
facilities. Cash requirements for remedial activity related to environmental
cleanup are not expected to exceed $1 million in 1995. In 1994, payments related
to environmental cleanup totaled $.8 million. Included in these payments are
amounts paid by the Company to perform testing and remedial work in Puerto Rico.
These payments complete the Company's obligation under a settlement agreement
with other potentially responsible parties signed in 1993 related to this site.
The Company has been indemnified by other financially responsible parties
against future government claims relating to groundwater contamination at the
site. All of the payments made in 1994 were covered by the estimated liability
recorded in prior years.
In 1995, in addition to cash flow from operations, the Company expects proceeds
from sale of stock arising from the exercise expiring employee stock options to
generate proceeds of $3.1 million. Management believes that this cash, available
credit facilities ($30 million short-term and DM35 million long-term at year-end
1994) and the Company's current capitalization provide sufficient flexibility to
meet cash flow requirements in the future.
7
CONSOLIDATED STATEMENTS OF INCOME
THE WEST COMPANY, INCORPORATED AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(in thousands, except per share data)
1994 1993 1992
------------------------------------------------------------------------------
Net sales $365,100 100% $348,700 100% $338,200 100%
Cost of goods sold 249,000 68 244,100 70 241,500 71
--------------------------------------------------------------------------------
Gross profit 116,100 32 104,600 30 96,700 29
Selling, general and administrative expenses 69,000 19 63,500 18 57,100 17
Other expense, net 1,700 1 500 - 900 1
--------------------------------------------------------------------------------
Operating profit 45,400 12 40,600 12 38,700 11
Interest expense 3,300 1 3,100 1 3,900 1
--------------------------------------------------------------------------------
Income before income taxes and minority interests 42,100 11 37,500 11 34,800 10
Provision for income taxes 13,400 3 14,300 4 14,300 4
Minority interests 1,900 1 1,700 1 1,700 1
--------------------------------------------------------------------------------
Income from consolidated operations 26,800 7% 21,500 6% 18,800 5%
Equity in net income of affiliated companies 500 1,000 900
--------------------------------------------------------------------------------
Income before cumulative effect of change in
accounting method 27,300 22,500 19,700
Cumulative effect to January 1, 1993 of the change
in accounting for income taxes - 1,000 -
--------------------------------------------------------------------------------
Net income $ 27,300 $ 23,500 $ 19,700
--------------------------------------------------------------------------------
Net income per share:
Income before cumulative effect of change in
accounting method $ 1.70 $ 1.42 $ 1.26
Cumulative effect of change in accounting method - .06 -
--------------------------------------------------------------------------------
$ 1.70 $ 1.48 $ 1.26
--------------------------------------------------------------------------------
Average shares outstanding 16,054 15,838 15,641
--------------------------------------------------------------------------------
8
The accompanying notes are an integral part of the financial statements.
9
CONSOLIDATED BALANCE SHEETS
THE WEST COMPANY, INCORPORATED AND SUBSIDIARIES AT DECEMBER 31, 1994 AND 1993
(in thousands, except per share data)
1994 1993
------------------------------
ASSETS
Current assets:
Cash, including equivalents (1994--$15,900; 1993--$1,700) $ 27,200 $ 5,200
Accounts receivable, less allowance (1994--$1,000; 1993--$1,100) 57,800 43,300
Inventories 38,100 34,500
Other current assets 13,600 12,000
------------------------------
Total current assets 136,700 95,000
------------------------------
Property, plant and equipment 366,800 322,800
Less accumulated depreciation and amortization 174,600 150,000
------------------------------
192,200 172,800
Investments in affiliated companies 21,900 17,800
Goodwill 33,900 12,700
Assets held for disposition 1,400 5,200
Deferred charges and other assets 11,300 5,700
------------------------------
$397,400 $309,200
------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 19,200 $ 5,400
Notes payable 2,700 2,300
Accounts payable 19,300 14,100
Accrued expenses:
Salaries, wages and benefits 11,700 10,000
Deferred revenue and deposits 3,700 3,700
Other 29,700 13,100
------------------------------
Total current liabilities 86,300 48,600
------------------------------
Long-term debt, excluding current portion 35,900 24,600
Deferred income taxes 24,400 18,400
10
Other long-term liabilities 21,600 18,600
Minority interests 1,900 10,900
Shareholders' equity:
Common Stock, par value $.25 per share; shares authorized: 50,000
shares issued: 1994--16,845; 1993--16,845
shares outstanding: 1994--16,464; 1993--15,915 4,200 4,200
Capital in excess of par value 23,200 20,000
Cumulative foreign currency translation adjustments 17,100 11,000
Retained earnings 189,800 169,900
------------------------------
234,300 205,100
Less Treasury Stock (1994--381 shares; 1993--930 shares) 7,000 17,000
------------------------------
Total shareholders' equity 227,300 188,100
------------------------------
$397,400 $309,200
------------------------------
Certain items have been reclassified for 1993 to conform with 1994
classifications. The accompanying notes are an integral part of the financial
statements.
11
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
THE WEST COMPANY, INCORPORATED AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
Cumulative
foreign
Capital in currency
Common excess of translation Retained Treasury
(in thousands, except per share) Stock par value adjustments earnings Stock Total
------------------------------------------------------------------------------------------
Balance, January 1, 1992 $4,100 $14,000 $11,900 $139,700 $(17,100) $152,600
------------------------------------------------------------------------------------------
Net income 19,700 19,700
Shares issued under stock option plans 100 5,300 200 5,600
Cash dividends declared ($.40 per share) (6,300) (6,300)
Translation adjustments 300 300
Repurchase of Common Stock (3,300) (3,300)
------------------------------------------------------------------------------------------
Balance, December 31, 1992 4,200 19,300 12,200 153,100 (20,200) 168,600
------------------------------------------------------------------------------------------
Net income 23,500 23,500
Shares issued under stock plans 700 3,200 3,900
Cash dividends declared ($.42 per share) (6,700) (6,700)
Translation adjustments (1,200) (1,200)
------------------------------------------------------------------------------------------
Balance, December 31, 1993 4,200 20,000 11,000 169,900 (17,000) 188,100
------------------------------------------------------------------------------------------
Net income 27,300 27,300
Shares issued under stock plans 300 3,400 3,700
Shares issued for acquisition 2,900 6,600 9,500
Cash dividends declared ($.46 per share) (7,400) (7,400)
Translation adjustments 6,100 6,100
------------------------------------------------------------------------------------------
Balance, December 31, 1994 $4,200 $23,200 $17,100 $189,800 $ (7,000) $227,300
------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
12
CONSOLDIATED STATEMENTS OF CASH FLOWS
THE WEST COMPANY, INCORPORATED AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(in thousands) 1994 1993 1992
------------------------------------------------
Cash flows from operating activities:
Income before accounting change $ 27,300 $ 22,500 $ 19,700
Adjustments to reconcile income before accounting
change to net cash from operating activities:
Depreciation and amortization 23,100 22,000 23,600
Loss (gain) on sales of real estate and investments 500 (1,400) -
Deferred income taxes (2,700) 2,500 500
Minority interests 1,900 1,700 1,700
Equity in undistributed earnings of affiliated companies, net (200) (500) (100)
(Increase) in accounts receivable (8,900) (4,900) (600)
(Increase) decrease in inventories (700) 2,700 (4,400)
(Increase) decrease in other current assets 2,500 3,000 (4,800)
Increase (decrease) in other current liabilities 3,000 (7,100) (2,900)
Other operating items 4,000 (2,000) 1,300
------------------------------------------------
Net cash provided by operating activities 49,800 38,500 34,000
------------------------------------------------
Cash flows from investing activities:
Property, plant and equipment acquired (27,100) (33,500) (22,400)
Proceeds from sales of assets 3,700 8,000 7,500
Payments for acquisitions, net of cash acquired (13,900) - -
------------------------------------------------
Net cash used in investing activities (37,300) (25,500) (14,900)
------------------------------------------------
Cash flows from financing activities:
New long-term debt 18,100 1,600 5,500
Repayment of long-term debt (3,000) (6,500) (26,700)
Notes payable, net (3,000) (2,700) 5,900
Issuance of Common Stock, net 3,400 3,900 5,600
Repurchase of Treasury Stock - - (3,300)
Capital contribution by minority owner 400 - 500
Dividend payments (7,200) (7,000) (6,300)
------------------------------------------------
Net cash provided by (used in) financing activities 8,700 (10,700) (18,800)
------------------------------------------------
13
Effect of exchange rates on cash 800 (100) -
------------------------------------------------
Net increase in cash and cash equivalents 22,000 2,200 300
Cash and cash equivalents at beginning of year 5,200 3,000 2,700
------------------------------------------------
Cash and cash equivalents at end of year $ 27,200 $ 5,200 $ 3,000
------------------------------------------------
Supplemental cash flow information:
Interest paid (net of amounts capitalized) $ 3,000 $ 3,000 $ 4,600
Income taxes paid $ 13,700 $ 11,900 $ 10,300
------------------------------------------------
Certain items have been reclassified for 1993 to conform with 1994
classifications. The accompanying notes are an integral part of the financial
statements.
14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of the Company and all significant majority-owned subsidiaries. For
years ending prior to 1993, international subsidiaries are included in
consolidated financial statements based on fiscal years ending November 30. In
1993, international subsidiaries are included in consolidated financial
statements based on the 13 months ended December 31. The inclusion of the
additional month in 1993 added $8,100 to revenues, $2,100 to gross profit and
net income per share of approximately $.01. Material intercompany transactions
and accounts are eliminated in consolidation. An affiliated company reports on
the basis of the fiscal year ending October 31. Investments in affiliated
companies in which ownership exceeds 20% are accounted for on the equity method.
STATEMENT OF CASH FLOWS: Cash flows from operating activities are reported under
the indirect method; cash equivalents include time deposits, certificates of
deposit and all highly liquid debt instruments with original maturities of three
months or less.
INVENTORIES: Inventories are valued at the lower of cost or market. The cost of
inventories located in the United States is determined on the last-in, first-out
(LIFO) method; the cost of inventories located outside the United States is
determined principally on the average cost method.
FOREIGN CURRENCY TRANSLATION: Foreign currency transaction gains and losses and
translation gains and losses of subsidiaries operating in high-inflation
economies are recognized in the determination of net income. Foreign currency
translation adjustments of other subsidiaries and affiliates operating outside
the United States are accumulated as a separate component of shareholders'
equity.
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are carried at
cost. Maintenance and minor repairs and renewals are charged to expense as
incurred. Upon sale or retirement of depreciable assets, costs and related
depreciation are eliminated, and gains or losses are recognized in the
determination of net income.
DEPRECIATION AND AMORTIZATION: For financial reporting purposes, depreciation is
computed principally on the straight-line method over the estimated useful lives
of the assets. For income tax purposes, depreciation is computed using
accelerated methods. Goodwill is being amortized on the straight-line method
over periods ranging from 30 to 40 years.
RESEARCH AND DEVELOPMENT: Research, development and engineering expenditures for
the creation and application of new or improved products and processes, which
amounted to $12,000, $11,400 and $11,100 in 1994, 1993 and 1992, respectively,
are expensed as incurred.
INCOME TAXES: Beginning in 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 109, Accounting for Income Taxes, which
provides that income taxes be accounted for under the liability method.
Under the liability method, deferred income taxes are recognized by applying
enacted statutory tax rates, applicable to future years, to temporary
15
differences between the tax bases and financial statement carrying values of the
Company's assets and liabilities. Prior-year financial statements have not been
restated. The cumulative effect of adopting SFAS No. 109 is reported in the 1993
Consolidated Statement of Income net of applicable minority interests. In 1992,
the provision for deferred income taxes is applicable to timing differences
between taxable income and income for financial reporting purposes.
United States income taxes and withholding taxes are accrued on the
portion of earnings of international subsidiaries and affiliates (which qualify
as joint ventures) intended to be remitted to the parent company.
NET INCOME PER SHARE: Net income per share is based on the weighted average
number of shares of Common Stock outstanding during each period. Common Stock
equivalents are not material.
OTHER INCOME (EXPENSE)
Other income (expense) includes the following:
1994 1993 1992
--------------------------------------------
Interest income $ 1,200 $ 2,300 $2,900
Foreign exchange losses (2,800) (5,600) (5,600)
Gain (loss) on sales of real estate
and investments (500) 1,400 -
Other 400 1,400 1,800
--------------------------------------------
$ (1,700) $ (500) $ (900)
--------------------------------------------
ACQUISITIONS AND INVESTMENTS
On November 30, 1994, the Company acquired the remaining minority ownership
interests in five European subsidiary companies. The total purchase price for
the minority interests in these subsidiaries was DM45,000. The cash portion of
the purchase price totaled DM30,000 of which DM4,500 was paid at closing and
DM25,500 on January 2, 1995; the balance of the consideration, DM15,000, was
paid through delivery of 363,214 shares of the Company's Common Stock at
closing.
On May, 20, 1994, the Company acquired a 51% ownership interest in Schubert
Seals A/S, a Danish manufacturer of metal seals and related products mainly for
the pharmaceutical industry. The total purchase was 31,000 kroner. The cash
portion of the purchase price for these acquisitions was financed principally
using new debt facilities. The acquisitions are being accounted for as
purchases, and Schubert Seals A/S has been consolidated from June 1, 1994. The
excess of the purchase price over the net assets acquired and minority interests
acquired approximates $20,000 and is being amortized over 40 years.
The following table presents selected financial information for the years ended
December 31, 1994 and 1993 on a pro forma (unaudited) basis assuming the
acquisitions noted above had occurred on January 1, 1994 and 1993:
16
1994 1993
--------------------------
Net sales $369,300 $359,900
Income before taxes 40,100 35,700
Income from consolidated
operations 27,200 21,800
Net income 27,700 23,800
Net income per share $ 1.72 $ 1.50
--------------------------
In 1994, the Company acquired Senetics, Inc., a company specializing in
the development of innovative delivery technologies for oral and inhalation drug
delivery markets and a 10% ownership interest in DANBIOSYST UK LIMITED, a
company specializing in noninvasive drug delivery methods. The total
consideration for these acquisitions was $5,600, all of which was paid in cash.
The acquisition of Senetics is being accounted for as a purchase, and the
company has been consolidated since the beginning of the year. Additional
consideration may be due depending on the sales of Senetics' products and other
conditions during the period from acquisition to January 5, 1999. Such
additional consideration would be accounted for as goodwill. Pro forma results
of the Senetics acquisition, assuming it had been made at beginning of 1993,
would not be materially different from the results reported.
INCOME TAXES
Income before income taxes and minority interests was derived as follows:
1994 1993 1992
--------------------------------------------
Domestic operations $26,500 $ 24,100 $22,100
International operations 15,600 13,400 12,700
--------------------------------------------
$42,100 $37,500 $34,800
--------------------------------------------
The related provision for income taxes consists of:
1994 1993 1992
--------------------------------------------
Currently payable:
Federal $9,500 $ 7,100 $ 7,100
State 600 2,000 2,000
International 6,000 2,700 4,700
--------------------------------------------
16,100 11,800 13,800
--------------------------------------------
17
Deferred:
Federal (300) 300 300
State - 100 -
International (2,400) 2,100 200
--------------------------------------------
(2,700) 2,500 500
--------------------------------------------
$13,400 $14,300 $14,300
--------------------------------------------
A reconciliation of the United States statutory corporate tax rate to the
Company's effective consolidated tax rate on income before income taxes and
minority interests is as follows:
1994 1993 1992
--------------------------------------------
Statutory corporate tax rate 35.0 % 35.0 % 34.0 %
Tax on international operations
(less than) in excess of
United States tax rate (3.4) (.3) 2.1
Prior-year international
tax adjustment - (1.1) 1.2
State income taxes, net of Federal
tax benefit .9 3.7 3.9
Other (.7) .9 (.1)
--------------------------------------------
Effective tax rate 31.8 % 38.2 % 41.1 %
--------------------------------------------
The net current and noncurrent components of deferred income taxes recognized in
the balance sheet at December 31, 1994 and 1993 are:
1994 1993
---------------------------
Net current assets $ 3,100 $ 3,000
Net noncurrent liabilities 24,400 18,400
---------------------------
The 1992 tax provision included deferred taxes related to the following timing
differences between income for tax and financial reporting purposes:
1992
-------
Accelerated depreciation $ 500
Loss on asset dispositions 400
Severance and deferred compensation (700)
Capitalized interest 100
Environmental compliance 200
-------
$ 500
-------
18
The following is a summary of the significant components of the Company's
deferred tax assets and liabilities as of December 31, 1994 and 1993 determined
in accordance with the provisions of SFAS No. 109. The adoption of SFAS No. 109
did not have a material impact on the tax provision in 1993.
1994 1993
--------------------------
Deferred tax assets:
Loss on asset dispositions
and plant closings $ 700 $ 1,800
Severance and deferred
compensation 7,900 7,200
Net operating loss carryovers 2,600 3,900
Foreign tax credit carryovers 1,900 2,300
Other 1,900 500
Valuation allowance (4,100) (5,700)
--------------------------
Total deferred tax assets $10,900 $10,000
--------------------------
Deferred tax liabilities:
Accelerated depreciation $29,600 $25,200
Severance and deferred compensation 600 -
Other 2,000 200
--------------------------
Total deferred tax liabilities $32,200 25,400
--------------------------
At December 31, 1994, subsidiaries had operating tax loss carryovers of
$8,700, which will be available to apply against the future taxable income of
such subsidiaries. The carryover periods expire beginning with $500 in 1995 and
continue through 1998. A valuation allowance has been recognized to offset the
related deferred tax asset to the extent realization is uncertain.
At December 31, 1994, unremitted earnings of international
subsidiaries, on which deferred income taxes have not been provided, amounted to
$51,000. Tax credits that would become available upon distribution of such
earnings could reduce income taxes then payable at the United States statutory
rate. As of December 31, 1994, the Company had available foreign tax credit
carryovers of approximately $1,900 expiring in 1995 through 1999. A valuation
allowance has been recognized to offset the related deferred tax asset to the
extent realizations is uncertain.
INVENTORIES
Inventories at December 31 include the following:
1994 1993
-----------------------------------------
Finished goods $17,200 $14,100
Work in process 4,700 4,700
Raw materials 16,200 15,700
-----------------------------------------
$38,100 $34,500
-----------------------------------------
19
Included above are inventories located in the United States that are valued on
the LIFO basis, amounting to $16,200 and $14,300 at December 31, 1994 and 1993,
respectively, which are approximately $8,000 and $8,500, respectively, lower
than replacement value.
PROPERTY, PLANT AND EQUIPMENT
A summary of property, plant and equipment at December 31 is presented in the
following table:
1994 1993
-------------------------------------------
Land $ 4,000 $ 3,400
Buildings and improvements 97,000 87,900
Machinery and equipment 196,400 170,400
Molds and dies 53,600 46,600
Construction in progress 15,800 14,500
-------------------------------------------
$ 366,800 $ 322,800
-------------------------------------------
Effective January 1, 1993, the Company changed the estimated life of its
elastomer molds and dies to six and four years, respectively, from three years.
The change allocates this equipment cost to better reflect expectations of
production service and is more consistent with industry practice. The effect of
the change was to reduce depreciation expense by $1,800 and increase net income
by $.06 per share in 1993.
AFFILIATED COMPANIES
At December 31, 1994, the following affiliated companies were accounted for
under the equity method:
Location Ownership
Interest
--------------------------------------------
West Rubber de Mexico S.A. Mexico 49%
Aluplast S.A. de C.V. Mexico 49%
Pharma-Tap S.A. de C.V. Mexico 49%
Schott West Pharmaceutical
Glass Company U.S.A. 40%
Daikyo Seiko, Ltd. Japan 25%
--------------------------------------------
20
A summary of the financial information for these companies is presented below:
1994 1993
-------------------------------------------
Balance Sheet:
Current assets $ 91,800 $ 72,900
Noncurrent assets 84,800 74,500
-------------------------------------------
Total assets $176,600 $147,400
-------------------------------------------
Current liabilities $ 46,400 $ 36,700
Noncurrent liabilities 64,400 49,600
Owners' equity 65,800 61,100
-------------------------------------------
Total liabilities and owners' equity $176,600 $147,400
-------------------------------------------
1994 1993 1992
-------------------------------------------
Income Statement:
Net sales $89,600 $83,500 $74,600
Gross profit 23,700 21,100 18,000
Net income 1,800 2,700 2,800
-------------------------------------------
Unremitted income of affiliated companies included in consolidated retained
earnings amounted to $9,100, $8,900 and $8,400 at December 31, 1994, 1993 and
1992, respectively. Dividends received from affiliated companies in 1994, 1993
and 1992 were $600 in each of the years.
DEBT
SHORT-TERM: At December 31, 1994, the Company had available unused short-term
lines of credit amounting to $30,000 and an unused long-term credit line of
DM35,000; a fee ranging from 1/12% to 1/8% per annum is payable on the available
credit lines. Other notes payable in the amounts of $2,700 and $2,300 at
December 31, 1994 and 1993, respectively, are payable within one year and bear
interest at weighted average interest rates of 7.4% and 8.2%, respectively.
LONG TERM:
1994 1993
-------------------------------------------
Unsecured:
Tax-exempt industrial revenue bonds, due 1995
to 2005 (3.67% to 3.97%) (a) $11,200 $11,600
Other notes, due 1995 to 1997
(6.0% to 10.13%) 27,500 14,500
Collateralized:
Mortgage notes, due 1995 to 2006 (3.5% to
11%) (b) 16,400 3,900
-------------------------------------------
Total long-term debt 55,100 30,000
Less current portion 19,200 5,400
-------------------------------------------
$35,900 $24,600
-------------------------------------------
21
(a) The proceeds of industrial revenue bonds that were not required for the
respective construction projects have been invested by the Company. Use of these
excess funds and earnings thereon is restricted to servicing the debt. The
aggregate of unexpended proceeds and earnings thereon of $1,300 is reflected as
a reduction of the principal outstanding on the bonds. (b) Real estate,
machinery and equipment with a carrying value of $22,000 at December 31, 1994
are pledged as collateral.
Long-term debt maturing in the years following 1995 is: $6,000 in 1996,
$11,600 in 1997, $600 in 1998 and $700 in 1999.
Certain of the financing agreements, among other things, require the
maintenance of certain working capital, interest coverage and debt to
capitalization ratios and tangible net worth; restrict the sale of assets; and
limit the payment of dividends. At December 31, 1994, under the most restrictive
debt agreement, retained earnings free of restriction were $67,000.
Interest costs incurred during 1994, 1993 and 1992 were $3,500, $3,400 and
$4,100, respectively, of which $200, $300 and $200, respectively, were
capitalized as part of the cost of acquiring certain assets.
To finance and hedge a portion of the 1986 purchase of ownership interests
in certain European subsidiaries, the Company entered into a currency and
interest rate swap agreement which matured early in 1995. Under the agreement,
the Company exchanged $7,200 bearing interest at LIBOR plus 1/8% for DM20,000
bearing interest at 7.5%. A swap agreement expired in 1994 under which the
Company agreed to swap $2,700 bearing interest at LIBOR for DM5,000 bearing
interest at 6.33%.
Principal and/or interest amounts due under swap agreements are presented in
the financial statements on a net basis.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of estimated fair value of financial instruments as
of December 31, 1994 is provided in accordance with the requirements of
Statement of Financial Accounting Standards No. 119. The estimated fair values
are based on methods appropriate to the circumstances:
Carrying Value Estimated Fair Value
------------------------ --------------------------
1994 1993 1994 1993
------------------------ --------------------------
Cash and cash equivalents $ 27,200 $5,200 $ 27,200 $5,200
Short- and long-term debt 57,800 32,300 56,200 32,600
Forward exchange contracts (400) 800
------------------------ --------------------------
Methods used to estimate the fair market values of the above listed financial
instrument are as follows: cash and cash equivalents are estimated at carrying
values that approximate market, due to the short-maturity of cash equivalents.
Debt is estimated based on current market quotes for instruments of similar
maturity. Interest rate swaps (see preceding Debt
22
Note) and forward exchange rate contracts are valued at published market prices,
market prices of comparable instruments or quotes.
Forward exchange contracts are used only to hedge raw material purchase
commitments and foreign-currency-denominated loans. At December 31, 1994, the
Company had $14,200 of forward exchange rate contracts to buy various foreign
currencies in 1995. Gains/losses on contracts used to hedge raw material
purchases are deferred and will adjust the cost of such inventory.
BENEFIT PLANS
PENSION PLANS: The Company and certain international subsidiaries sponsor
defined benefit pension plans. The United States plans cover substantially all
domestic employees and members of the Company's Board of Directors. The plans
call for benefits to be paid to eligible participants at retirement based on
compensation rates near retirement and/or on length of service. Contributions to
the United States employee plans reflect investment performance of plan assets,
benefits attributed to employees' service to date and service expected in the
future. Assets of the United States employee plans and one international
subsidiary plan consist primarily of common and preferred stocks,
investment-grade corporate bonds, guaranteed insurance contracts and United
States government obligations; other international subsidiary plans and the plan
for directors are not funded.
Total pension expense for 1994, 1993 and 1992 includes the following:
1994 1993 1992
-------------------------------------------------
Service cost $ 2,900 $ 2,600 $ 2,400
Interest cost 6,200 5,900 5,500
Actual return on assets (500) (12,600) (6,400)
Net amortization and deferral (8,500) 4,500 (1,800)
-------------------------------------------------
Pension expense (income) $ 100 $ 400 $ (300)
-------------------------------------------------
The following sets forth the funded status of the employee pension plans and the
amounts included in the accompanying balance sheets at December 31, 1994 and
1993:
United States Plans International Plans
---------------------------- --------------------------
1994 1993 1994 1993
---------------------------- --------------------------
Vested benefit obligations
(VBO) $(58,700) $(66,300) $(2,900) $(2,300)
---------------------------- --------------------------
Accumulated benefit
obligations (ABO) $(60,400) $(68,200) $(3,200) $(2,500)
---------------------------- --------------------------
Projected benefit
obligations (PBO) $(72,200) $(84,200) $(3,300) $(2,500)
Plan assets at fair value 92,900 96,500 - -
---------------------------- --------------------------
Assets in excess of (less
than) PBO 20,700 12,300 (3,300) (2,500)
Unrecognized net gain (11,300) (5,700) - (600)
Unrecognized prior
service cost (300) 1,700 - 600
Unamortized transition asset (6,400) (7,200) - -
---------------------------- --------------------------
Prepaid pension cost
(accrued liability)
included in the balance sheet $ 2,700 $ 1,100 $(3,300) $(2,500)
---------------------------- --------------------------
23
Information with respect to the unfunded pension plan for the Company's
nonemployee directors is as follows:
1994 1993
------------ ------------
VBO $(700) $(800)
------------ ------------
ABO $(800) $(800)
------------ ------------
PBO $(900) $(900)
Unrecognized net gain 200 -
Unrecognized prior service 200 300
cost
------------ ------------
Balance sheet liability $(900) $(600)
------------ ------------
United States Plans International Plans
---------------------------- --------------------------
1994 1993 1994 1993
---------------------------- --------------------------
Assumptions:
Discount rate 8.25% 7.0% 7.5% 7.5%
Rate of increase in
compensation 6.0% 5.75% 3.0% 3.0%
Directors' retainer
increase 5.5% 5.5% - -
Long-term rate of
return on assets 9.0% 9.0% - -
---------------------------- --------------------------
OTHER RETIREMENT BENEFITS: The Company provides minimal life insurance benefits
for certain United States retirees and pays a portion of health care (medical
and dental) costs for retired United States salaried employees and their
dependents. Benefits for plan participants age 65 and older are coordinated with
Medicare. Retirees' contributions to the cost of such benefits may be adjusted
from time to time. The Company's obligation is unfunded.
Total expense recognized for 1994, 1993 and 1992 with respect to these
nonpension retirement benefits includes the following:
24
1994 1993 1992
--------------------------------------------
Service Cost $ 500 $ 500 $ 500
Interest Cost 1,000 1,000 1,000
--------------------------------------------
$ 1,500 $ 1,500 $ 1,500
--------------------------------------------
The following sets forth the accrued obligation included in the accompanying
balance sheets at December 31, 1994 and 1993 applicable to each employee group
for nonpension retirement benefits:
1994 1993
---------------------------
Retired employees $(4,600) $ (6,000)
Active employees--fully eligible (1,700) (2,100)
Active employees--
not fully eligible (5,400) (6,600)
---------------------------
Total (11,700) (14,700)
Unrecognized (gain) loss from
assumption changes (2,900) 1,000
---------------------------
Balance sheet liability $(14,600) $(13,700)
---------------------------
The discount rates used were 8.25% for 1994 and 7% for 1993; the health care
cost trend was 14% in 1994 and 1993, decreasing to 5.5% by 2007. Increasing the
assumed trend rate for health care costs by one percentage point would result in
an accrued obligation of $12,200 at December 31, 1994 for these retirement
benefits and an increase of $100 in the related 1994 expense.
OTHER
The Company provides certain postemployment benefits for terminated and disabled
employees, including severance pay, disability-related benefits and health care
benefits. Statement of Financial Accounting Standards No. 112, Employer's
Accounting for Postemployment Benefits, requires these costs to be accrued over
the employee's active service period under certain circumstances or at the date
of the event triggering the benefit. The Company adopted this accounting
practice in 1993, and the impact was insignificant.
The Company also sponsors a defined contribution savings plan for
salaried and certain hourly United States employees. Company contributions are
equal to 50% of each participant's contribution up to 6% of their base
compensation. Total expense under the plan in 1994, 1993 and 1992 was $800, $800
and $600, respectively.
CAPITAL STOCK
The Company has 3,000,000 shares of Preferred Stock authorized, none of which
has been issued.
Through December 31, 1994, the Company has acquired 1,113,900 shares of
its Common Stock under a repurchase program covering up to 1,600,000 shares
announced in 1989. Purchases (sales) of Common Stock held in treasury during
the three years ended December 31, 1994 are as follows:
25
1994 1993 1992
------------------------------------------------
Shares held at
beginning of year 929,700 1,103,900 950,200
Purchases, net,
at fair market value 11,200 9,400 163,700
Shares issued for acquisition (363,200) - -
Stock option exercises (196,600) (183,600) (10,000)
------------------------------------------------
Shares held at end of year 381,100 929,700 1,103,900
------------------------------------------------
The Company's Shareholders Rights Plan entitles a shareholder to purchase 1/1000
of a share of a newly designated series of the Company's Preferred Stock at a
price of $75.00 with each Right. A Right becomes exercisable if a person or
group ("acquiror") acquires 15% or more of the Common Stock or commences a
tender offer that would result in the acquiror owning 18% or more of the Common
Stock. After the Rights become exercisable and in the event the Company is
involved in a merger or other business combination, sale of 50% or more of its
assets or earning power, or if an acquiror purchases 18% or more of the Common
Stock or engages in self-dealing transactions, a Right will entitle its holder
to purchase common stock of the surviving company having a market value twice
the exercise price of the Right. The Rights may be redeemed by the Company at
$.001 per Right at any time before certain events occur. Two Rights are attached
to each share of Common Stock, and such rights will not trade separately unless
they become exercisable. All Rights expire on January 15, 2000.
In 1990, the Company made an offering under an employee stock purchase
plan, which provides for the sale of the Company's Common Stock to substantially
all employees at 85% of fair market value. An employee's purchases are limited
annually to 10% of base compensation. The original offer expired on December 31,
1991, but was extended to December 31, 1995. Shares are purchased in the open
market, or Treasury shares are used.
STOCK OPTION AND AWARD PLANS
The Company has a long-term incentive plan for officers and key management
employees of the Company and its subsidiaries that provides for the grant
through March 8, 1998 of stock options, stock appreciation rights, restricted
stock awards and performance awards. A maximum of 2,125,000 shares of Common
Stock or stock equivalents are available for issue under this plan of which
568,600 shares are available at December 31, 1994 for future grant. A committee
of the Board of Directors determines the terms and conditions of grants, except
that the exercise price of certain options cannot be less than 100% of the fair
market value of the stock on the date of grant, no stock options or stock
appreciation rights can be exercised during the six months immediately following
the date of grant and all stock options and stock appreciation rights must
expire no later than 10 years after the date of grant. All outstanding stock
option grants expire five years from date of grant.
Option activity under this plan during the three years ended December
31, 1994 is summarized below:
26
1994 1993 1992
------------------------------------------------
Options outstanding, January 1 737,600 735,900 859,600
Granted 197,400 187,900 177,900
Exercised ($13.25 to $24.94
per share) (193,600) (181,700) (290,600)
Forfeited (15,000) (4,500) (11,000)
------------------------------------------------
Options outstanding, December 31 726,400 737,600 735,900
------------------------------------------------
Average option price $19.62 $17.95 $17.02
------------------------------------------------
Under the Company's management incentive plan, participants are paid cash
bonuses on the attainment of certain financial goals. In 1993, bonus
participants were offered the opportunity to purchase Common Stock with up to
25% of their cash bonus award. Beginning in 1994, bonus participants are
required to use 25% of their cash bonus, after certain adjustments for taxes
payable, to purchase Common Stock of the Company at current fair market value.
Bonus participants are given a restricted stock award equal to one share for
each four shares of Common Stock purchased bonus awards. These stock awards vest
at the end of four years provided that the participant has not made a
disqualifying disposition of the stock purchased. In 1994 and 1993, restricted
stock awards for 3,000 shares and 1,900 shares, respectively, were granted, and
in 1994, 500 shares were forfeited. Compensation expense is being recognized
over the vesting period based on the fair market value of Common Stock on the
award date: $24.94 per share in 1994 and $20.81 per share in 1993.
An executive stock compensation plan, which expired in 1989, provided
for the granting to key employees of shares without payment to the Company or
incentive stock options. Grants were at the discretion of a committee of the
Board of Directors, subject to certain conditions as to exercise price and time
period. Option activity under this plan for the year ended December 31, 1992 is
summarized below:
1992
----------
Options outstanding, January 1 68,200
Exercised ($14.00 to $19.25 per share) (64,800)
Forfeited (3,400)
----------
Options outstanding, December 31 -
----------
A nonqualified stock option plan for nonemployee directors was approved in 1992.
The plan provides for the annual granting to each eligible director of options
covering 1,500 shares at an option price equal to 100% of the fair market value
of the Company's Common Stock on the date of grant. Common Stock issued pursuant
to the plan may not exceed 100,000 shares. Option activity under this plan
during the three years ended December 31, 1994 is summarized below:
27
1994 1993 1992
------------------------------------------------
Options outstanding, January 1 27,000 15,000 --
Granted 16,500 15,000 15,000
Exercised ($20.625) (3,000) -- --
Forfeited (4,500) (3,000) --
------------------------------------------------
Options outstanding, December 31 36,000 27,000 15,000
------------------------------------------------
Average option price $22.72 $21.875 $20.625
------------------------------------------------
COMMITMENTS AND CONTINGENCIES
At December 31, 1994, the Company was obligated under various operating lease
agreements with terms ranging from one month to 20 years. Rental expense in
1994, 1993 and 1992 was $5,000, $4,000 and $2,300, respectively. Minimum rentals
for noncancelable operating leases with initial or remaining terms in excess of
one year are: 1995--$5,100; 1996--$4,700; 1997--$4,300; 1998--$4,000;
1999--$3,800 and thereafter $55,000.
At December 31, 1994, outstanding contractual commitments for the
purchase of equipment and raw materials amounted to $13,300, all of which is due
to be paid in 1995.
The Company has accrued the estimated cost of environmental compliance
expenses related to current and former manufacturing facilities. The ultimate
cost to be incurred by the Company cannot be fully determined; however, based on
information currently available, the Company believes the accrued liability is
sufficient to cover the future costs of required remedial actions.
The Company guarantees 40% of the debt of Schott West Pharmaceutical
Glass Company under a $5,000 line of credit, of which $4,400 was outstanding at
December 31, 1994.
INDUSTRY SEGMENT AND OPERATIONS BY GEOGRAPHIC AREA The West Company and its
affiliated companies operate in one industry segment. The Company develops,
manufactures and markets stoppers, closures, containers, medical device
components and assemblies made from elastomers, metal, plastic and glass for the
health care and consumer products markets. The Company also manufactures related
packaging machinery. Total sales include sales to one customer of approximately
$40,200, $41,900 and $38,800 in 1994, 1993 and 1992, respectively. Operating
information and identifiable assets by geographic area of manufacture are shown
below:
1994 1993 1992
------------------------------------------------
Net sales:
United States $216,600 $207,500 $205,800
Europe 114,200 107,000 102,800
Other 34,300 34,200 29,600
------------------------------------------------
Total $365,100 $348,700 $338,200
------------------------------------------------
28
Income from consolidated
operations:
United States $ 16,400 $ 14,400 $ 12,800
Europe 5,500 3,700 3,600
Other 4,900 3,400 2,400
------------------------------------------------
$ 26,800 $ 21,500 $ 18,800
------------------------------------------------
Equity in net income (loss) of affiliated companies:
United States $ 200 $ - $ (500)
Other 300 1,000 1,400
------------------------------------------------
$ 500 $ 1,000 $ 900
------------------------------------------------
Income before cumulative effect
of change in accounting method $ 27,300 $ 22,500 $ 19,700
------------------------------------------------
Identifiable assets:
United States $ 179,000 $156,900 $147,800
Europe 151,000 97,600 106,200
Other 45,500 36,900 34,400
------------------------------------------------
$ 375,500 $291,400 $288,400
------------------------------------------------
Investments in affiliated companies:
United States $ 3,300 $ 2,800 $ 2,800
Europe 2,700 - -
Other 15,900 15,000 13,200
------------------------------------------------
$ 21,900 $ 17,800 $ 16,000
------------------------------------------------
Total assets $ 397,400 $309,200 $304,400
------------------------------------------------
29
QUARTERLY OPERATING AND PER SHARE DATA (UNAUDITED)
THE WEST COMPANY, INCORPORATED AND SUBSIDIARIES
(in thousands of dollars, except per share data)
1994 Three Months Ended 1993 Three Months Ended
---------------------------------------------------- ------------------------------------------------
Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Oct. 3 July 4 April 4
---------------------------------------------------- ------------------------------------------------
Net sales 99,100 87,400 91,500 87,100 92,800 81,900 87,100 86,900
Gross profit 32,000 25,400 29,800 28,900 29,500 24,100 26,900 24,100
Income before change in
accounting method 7,200 5,600 7,500 7,000 5,900 4,800 6,200 5,600
Net income 7,200 5,600 7,500 7,000 5,900 4,800 6,200 6,600
Net income before change in
accounting method per share .44 .35 .47 .44 .37 .30 .39 .36
Net income per share .44 .35 .47 .44 .37 .30 .39 .42
Dividends paid per share .12 .11 .11 .11 .11 .10 .10 .10
Common Stock price:
High 29 1/8 25 3/4 24 3/4 25 3/4 24 7/8 25 1/4 23 1/2 24 3/8
Low 25 1/2 21 5/8 21 1/4 23 3/4 23 1/2 23 1/4 22 3/8 19 7/8
---------------------------------------------------- ------------------------------------------------
First quarter 1993 results include gains on sale of real estate amounting to
$.04 per share. Fourth quarter 1993 results include the full-year effect of a
change in the life of certain operating assets, which increased net income by
$.06 per share, and four months operating results for international
subsidiaries.
30
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND THE BOARD OF DIRECTORS OF THE WEST COMPANY,
INCORPORATED:
We have audited the accompanying consolidated balance sheets of The West
Company, Incorporated and Subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of income, shareholders' equity, and cash flows
for each of the three years in the period ended December 31, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of The
West Company, Incorporated and Subsidiaries as of December 31, 1994 and 1993,
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended December 31, 1994 in conformity with
generally accepted accounting principles.
As discussed in the summary of Significant Accounting Policies Note to
the Consolidated Financial Statements, the Company changed its method of
accounting for income taxes in 1993.
Coopers and Lybrand, L.L.P.
600 Lee Road
Wayne, Pennsylvania
February 24, 1995
31
TEN YEAR SUMMARY
THE WEST COMPANY, INCORPORATED AND SUBSIDIARIES
(in thousands, except per share data)
1994 1993 1992
---------------------------------------------------
SUMMARY OF OPERATIONS
Net sales $ 365,100 348,700 338,200
Operating profit (loss) $ 45,400 40,600 38,700
Income (loss) before income taxes and minority interests $ 42,100 37,500 34,800
Provision for income taxes 13,400 14,300 14,300
Minority interests 1,900 1,700 1,700
---------------------------------------------------
Income (loss) from consolidated operations 26,800 21,500 18,800
Equity in net income of affiliated companies 500 1,000 900
---------------------------------------------------
Income (loss) before change in accounting method $ 27,300 22,500 19,700
---------------------------------------------------
Income (loss) before change in accounting method per share (a)(b) $ 1.70 1.42 1.26
Average shares outstanding (b) 16,054 15,838 15,641
Dividends paid per common share (b) $ .45 .41 .40
---------------------------------------------------
Research, development and engineering expenses $ 12,000 11,400 11,100
Capital expenditures $ 27,100 33,500 22,400
---------------------------------------------------
YEAR-END FINANCIAL POSITION
Working capital $ 50,400 46,400 37,700
Total assets $ 397,400 309,200 304,400
Total invested capital:
Total debt $ 57,800 32,300 42,000
Minority interests 1,900 10,900 10,100
Shareholders' equity 227,300 188,100 168,600
---------------------------------------------------
Total $ 287,000 231,300 220,700
---------------------------------------------------
PERFORMANCE MEASUREMENTS
Gross margin (c) % 31.8 30.0 28.6
Operating profitability (d) % 12.4 11.7 11.5
Tax rate % 31.8 38.2 41.1
32
Asset turnover ratio (e) 1.04 1.11 1.10
Return on average shareholders' equity % 13.2 13.2 12.3
Total debt as % of total invested capital % 20.1 14.0 19.1
---------------------------------------------------
Shareholders' equity per share $ 13.81 11.82 10.71
Stock price range (b) 29 1/8 - 21 1/4 25 1/4 - 19 7/8 24 1/8 - 16 3/4
---------------------------------------------------
(a) Based on average shares outstanding.
(b) Adjusted for 2-for-1 stock split effective May 18, 1987.
(c) Net sales minus cost of goods sold, including applicable depreciation and
amortization, divided by net sales.
(d) Operating profit (loss) divided by net sales.
(e) Net sales divided by average total assets; 1993 asset turnover ratio is
based on 12 months'sales for international subsidiaries.
1994 includes for the first time the results of two affiliates in which majority
ownership was acquired in 1994. 1993 includes 13 months of operating results in
international subsidiaries. Beginning in 1992 the Company's ownership interest
in glass manufacturing operating results is reported as equity in net income of
affiliates. Prior to the 1992 sale of a majority interest in such operation,
operating results were fully consolidated. 1991 includes a restructuring charge
that reduced operating results by $1.37 per share. 1990 includes a restructuring
charge that reduced operating results by $.45 per share, and 1990 included for
the first time the results of two companies in which controlling ownership was
acquired in 1989. 1988 included for the first time the results of an affiliate
in which majority ownership was acquired in 1988. 1986 included for the first
time the results of five affiliates in which majority ownership was acquired in
1986.
33
TEN YEAR SUMMARY
THE WEST COMPANY, INCORPORATED AND SUBSIDIARIES
(in thousands, except per share data)
1991 1990 1989 1988 1987 1986 1985
---------------------------------------------------------------------------------------------------------------------------
329,600 323,200 308,700 285,400 253,300 235,600 190,100
(1,600) 15,600 38,700 30,100 25,600 31,300 24,700
(7,700) 9,600 34,400 26,100 22,100 29,400 23,400
4,700 6,400 13,200 10,100 9,500 13,200 10,400
(2,400) 300 2,100 1,400 1,000 900 100
---------------------------------------------------------------------------------------------------------------------------
(10,000) 2,900 19,100 14,600 11,600 15,300 12,900
1,500 1,400 1,600 2,800 2,100 1,700 2,100
---------------------------------------------------------------------------------------------------------------------------
(8,500) 4,300 20,700 17,400 13,700 17,000 15,000
---------------------------------------------------------------------------------------------------------------------------
(.55) .27 1.28 1.07 .85 1.06 .95
15,527 15,793 16,235 16,249 16,195 16,126 15,745
.40 .40 .31 .29 .27 .245 .225
---------------------------------------------------------------------------------------------------------------------------
10,800 10,900 11,900 11,300 9,700 9,100 6,800
25,600 33,200 34,300 29,700 43,100 29,300 19,800
---------------------------------------------------------------------------------------------------------------------------
26,500 36,500 50,400 53,000 45,200 36,200 40,300
313,200 343,500 313,000 298,900 280,100 238,200 179,200
---------------------------------------------------------------------------------------------------------------------------
58,400 78,500 58,100 55,200 60,500 44,300 30,400
8,400 11,700 9,100 10,600 6,200 5,500 500
152,600 176,100 179,700 171,400 155,800 138,900 119,500
---------------------------------------------------------------------------------------------------------------------------
219,400 266,300 246,900 237,200 222,500 188,700 150,400
---------------------------------------------------------------------------------------------------------------------------
25.4 24.4 26.5 25.0 25.3 26.5 26.8
(.5) 4.8 12.5 10.5 10.1 13.3 13.0
61.7 66.5 38.5 38.6 42.9 45.0 44.5
1.00 .98 1.01 .99 .98 1.13 1.13
34
(8.9) 2.4 11.8 10.6 9.3 13.2 13.3
26.6 29.5 23.5 23.3 27.2 23.5 20.2
---------------------------------------------------------------------------------------------------------------------------
9.81 11.37 11.15 10.53 9.61 8.61 7.54
18 3/4-11 1/8 20-10 1/2 22 5/8-14 7/8 17 1/2-12 1/4 22 1/8-12 1/2 17 1/8-12 1/4 13 5/8 - 8 3/4
35
EX-21
8
SUBSIDIARIES OF THE COMPANY
Exhibit 21
SUBSIDIARIES OF THE COMPANY
At January 2, 1995 the subsidiaries of The West Company, Inc. were as follows:
State/Jurisdiction Direct Stock
of Incorporation Ownership (%)
------------------ -------------
The West Company, Incorporated Pennsylvania
TWC of Florida, Incorporated Florida 100.0
Citation Plastics Company New Jersey 100.0
The West Company of Puerto Rico, Inc. Delaware 100.0
The West Company of Delaware Delaware 100.0
The West Company De Colombia S.A. Colombia 52.9 (1)
The West Company GmbH Germany 100.0
Pharma-Metall GmbH Germany 100.0
Gressenicher Werkzeugbau GmbH Germany 100.0
Schubert Seals A/S Denmark 51.0
Pharma-Gummi Wimmer West GmbH Germany 100.0
Pharma-Gummi Beograd Yugoslavia 84.7 (2)
West Pharma Group Ltd. England 100.0
Pharma Gummi (U.K.) Ltd. England 100.0 (3)
Pharma-Gummi France S.A. France 100.0
Pharma-Gummi Italia S.r.L. Italy 100.0
West Rubber de Espana S.A. Spain 82.1
West Pharmapack Pte. Ltd. Singapore 100.0
West Pharmapackaging Pty. Ltd. Australia 100.0
West Argentina S.A.C. E.I. Argentina 100.0
West do Brasil Comercio E Industria Ltda. Brazil 100.0
West Pharmapack de Venezuela, C.A. Venezuela 100.0
West Company Korea Ltd. Korea 100.0
West International Sales Corporation U.S. Virgin Islands 100.0
West Pharmaceutical Glass Co. Pennsylvania 100.0
Senetics, Inc. Colorado 100.0
(1) In addition, 46.16% is owned directly by The West Company, Inc.;
1.55% is held in treasury by The West Company De Colombia S.A.
(2) Affiliated company accounted for on the cost basis.
EX-23
9
CONSENT OF INDEPENDENT ACCOUNTANTS
COOPERS certified public accountants
& LYBRAND
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
The West Company, Incorporated on Form S-8, (Registration Nos. 2-95618, 2-45534,
33-29506, 33-32580, 33-37825, 33-61074 and 33-61076) of our report, which
includes an explanatory paragraph stating that the Company changed its method
of accounting for income taxes in 1993, dated February 24, 1995 on our audits
of the consolidated financial statements and financial statement schedules of
The West Company, Incorporated and subsidiaries as of December 31, 1994 and
1993, and for the years ended December 31, 1994, 1993 and 1992, which report is
included in this Annual Report on Form 10-K.
COOPERS & LYBRAND, L.L.P.
600 Lee Road
Wayne, Pennsylvania
March 29, 1995
EX-24
10
POWER OF ATTORNEY
POWER OF ATTORNEY
The undersigned hereby authorizes and appoints William G. Little and
Raymond J. Land, and each of them, as her attorneys-in-fact to sign on her
behalf and in her capacity as a director of The West Company, Incorporated, and
to file, the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and all amendments, exhibits and supplements thereto.
Date: March 17, 1995 Tenley E. Albright, M.D.
--------------- --------------------------------
Tenley E. Albright, M.D.
POWER OF ATTORNEY
The undersigned hereby authorizes and appoints William G. Little and
Raymond J. Land, and each of them, as his attorneys-in-fact to sign on his
behalf and in his capacity as a director of The West Company, Incorporated, and
to file, the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and all amendments, exhibits and supplements thereto.
Date: March 17, 1995 William J. Avery
-------------- --------------------
William J. Avery
POWER OF ATTORNEY
The undersigned hereby authorizes and appoints William G. Little and
Raymond J. Land, and each of them, as his attorneys-in-fact to sign on his
behalf and in his capacity as a director of The West Company, Incorporated, and
to file, the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and all amendments, exhibits and supplements thereto.
Date: March 19, 1995 G. W. Ebright
-------------- -------------------
George W. Ebright
POWER OF ATTORNEY
The undersigned hereby authorizes and appoints William G. Little and
Raymond J. Land, and each of them, as his attorneys-in-fact to sign on his
behalf and in his capacity as a director of The West Company, Incorporated, and
to file, the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and all amendments, exhibits and supplements thereto.
Date: March 17, 1995 George J. Hauptfuhrer, Jr.
-------------- --------------------------------
George J. Hauptfuhrer, Jr.
POWER OF ATTORNEY
The undersigned hereby authorizes and appoints William G. Little and
Raymond J. Land, and each of them, as his attorneys-in-fact to sign on his
behalf and in his capacity as a director of The West Company, Incorporated, and
to file, the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and all amendments, exhibits and supplements thereto.
Date: March 23, 1995 L. Robert Johnson
-------------- -----------------------
L. Robert Johnson
POWER OF ATTORNEY
The undersigned hereby authorizes and appoints William G. Little and
Raymond J. Land, and each of them, as his attorneys-in-fact to sign on his
behalf and in his capacity as a director of The West Company, Incorporated, and
to file, the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and all amendments, exhibits and supplements thereto.
Date: March 20, 1995 J. P. Neafsey
-------------- --------------------
John P. Neafsey
POWER OF ATTORNEY
The undersigned hereby authorizes and appoints William G. Little and
Raymond J. Land, and each of them, as his attorneys-in-fact to sign on his
behalf and in his capacity as a director of The West Company, Incorporated, and
to file, the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and all amendments, exhibits and supplements thereto.
Date: March 21, 1995 Walter F. Raab
-------------- -----------------------
Walter F. Raab
POWER OF ATTORNEY
The undersigned hereby authorizes and appoints William G. Little and
Raymond J. Land, and each of them, as his attorneys-in-fact to sign on his
behalf and in his capacity as a director of The West Company, Incorporated, and
to file, the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and all amendments, exhibits and supplements thereto.
Date: March 18, 1995 Monroe E. Trout
-------------- ---------------------
Monroe E. Trout, M.D.
POWER OF ATTORNEY
The undersigned hereby authorizes and appoints William G. Little and
Raymond J. Land, and each of them, as his attorneys-in-fact to sign on his
behalf and in his capacity as a director of The West Company, Incorporated, and
to file, the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and all amendments, exhibits and supplements thereto.
Date: March 18, 1995 William S. West
-------------- ---------------------
William S. West
POWER OF ATTORNEY
The undersigned hereby authorizes and appoints William G. Little and
Raymond J. Land, and each of them, as his attorneys-in-fact to sign on his
behalf and in his capacity as a director of The West Company, Incorporated, and
to file, the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and all amendments, exhibits and supplements thereto.
Date: March 17, 1995 J. Roffe Wike, II
-------------- -----------------------
J. Roffe Wike, II
POWER OF ATTORNEY
The undersigned hereby authorizes and appoints William G. Little and
Raymond J. Land, and each of them, as his attorneys-in-fact to sign on his
behalf and in his capacity as a director of The West Company, Incorporated, and
to file, the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and all amendments, exhibits and supplements thereto.
Date: March 29, 1995 Hans Wimmer
------------- ------------------------
Hans Wimmer
POWER OF ATTORNEY
The undersigned hereby authorizes and appoints William G. Little and
Raymond J. Land, and each of them, as his attorneys-in-fact to sign on his
behalf and in his capacity as a director of The West Company, Incorporated, and
to file, the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and all amendments, exhibits and supplements thereto.
Date: March 17, 1995 Geoffrey F. Worden
------------- ------------------------
Geoffrey F. Worden
EX-27
11
FINANCIAL DATA SCHEDULE
5
12-MOS
DEC-31-1994
DEC-31-1994
27,200
0
57,800
0
38,100
136,700
366,800
23,100
397,400
86,300
57,800
4,200
0
0
223,100
397,400
365,100
365,100
249,000
249,000
70,700
0
3,300
42,100
13,400
27,300
0
0
0
27,300
1.70
0