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, 19982000
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Commission File Number 1-8036
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WEST PHARMACEUTICAL SERVICES, INC.
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-1210010
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
101 Gordon Drive, PO Box 645, Lionville, PA 19341-0645
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 610-594-2900
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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Common Stock, par value New York Stock Exchange
$.25 per share
Securities registered pursuant to Section 12(g) of the Act: None
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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 .
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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. [_X_]
As of March 17, 1999,22, 2001, the Registrant had 15,099,07214,335,556 shares of its Common Stock
outstanding. The market value of Common Stock held by non-affiliates of the
Registrant as of that date was $514,312,140.$331,151,344.
Exhibit Index appears on pages F-1, F-2, F-3, F-4 and F-4.F-5.
DOCUMENTS INCORPORATED BY REFERENCE
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Documents incorporated by reference: 1) portions of the Registrant's Annual
Report to Shareholders for the Company's 19982000 fiscal year (the "1998"2000 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.
2
PART I1
Item l.1. Business
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The Company
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West Pharmaceutical Services, Inc. (formerly The West Company, Incorporated)
applies value-added servicestechnologies to the process of bringing new drug therapies
and healthcare products to global markets. West's technologies include the
design and manufacture of packaging components for pharmaceutical, healthcare
and consumer products; the research and development of drug delivery systems,systems;
contract manufacturing and packaging services; clinical services; contract
laboratory servicesservices; and other services that support the manufacturing, filling
and packaging of pharmaceutical, healthcare and consumer products. The Company's
activities are organized in three operating segments: 1) the Device Product
Development segment (consisting of four regional business units serving global
markets) designs, manufactures and sells stoppers, closures, medical device
components and assemblies made from elastomers, metal and plastics; 2) the
Contract Services segment (consisting of twothree business units serving mainly the
United States and Puerto Rico markets)market) provides contract manufacturing and contract packaging
services to the pharmaceutical and personal care industries, and contract laboratory
services for testing injectable drug packaging;packaging and 3)clinical research for Phase
I, II and III studies as well as post clinical studies; and the Drug Delivery
Research and Development segment (consisting of two business units) identifies
and develops drug delivery systems for biopharmaceutical and other drugs to
improve their therapeutic performance and/or their method of administration. As
of December 31, 1998,2000, the Company and its subsidiaries had 4,8004,700 employees.
The Company, a Pennsylvania business corporation, was founded 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
in this Item, the term "Company" includes West Pharmaceutical Services, Inc. and
its consolidated subsidiaries, unless the context otherwise indicates.
Device Product Development
Principal Products
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Pharmaceutical Stoppers
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The Company is the world's largest independent manufacturer of stoppers for
sealing drug vials and other pharmaceutical containers. Several hundred
proprietary formulations are molded from natural rubber and synthetic elastomers
into a variety of 3
stopper sizes, shapes and colors. The stoppers are used in
packaging serums, vaccines, antibiotics, anesthetics, intravenous solutions and
other drugs.drugs and solutions.
Most stopper formulations are specially designed to be compatible with drugs so
that the drugs will remain effective and unchanged during storage. New
rubberelastomeric compounds must be tested to show that they do not leach into the
customer's product or affect its potency, sterility, effectiveness, color or
clarity. The Company's laboratories conduct tests to determine the compatibility
of its stoppers with customers' drugs and, in the United States, file
formulation information with the Food and Drug Administration in support of
customers' new drug applications.
Stoppers usually are washed, sterilized and subject to other pre-
usepre-use processes
by the customer or a third-party before they are fitted on the container. However, theThe
Company has recently introduced a value-added line of stoppers that are pre-washed and
ready to be sterilized, eliminating several steps in customers' incoming
processes. The Company is also marketing a line of pre-
sterilizedpre-sterilized stoppers that
can be introduced directly into customers' sterile drug-filling operations.
Metal Seals
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The Company also offers a broad line of aluminum seals in various sizes, shapes,
and colors. The seals are crimped onto glass or plastic pharmaceutical
containers to hold the stoppers securely in place. The top of aluminum seals
often contains tamper-evident tabs or plastic covers, which must be removed
before the drug can be withdrawn.
Some aluminum seals are sold with specially formulated rubber or elastomeric
discs pre-fitted inside the seal. These "lined" seals may be placed directly
onto the pharmaceutical container, thus eliminating the need for a separate
stopper.
Other Products
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Other products for the pharmaceutical industry include:
* Products used in the packaging of non-injectable drugs such as
rubber dropper bulbs, plastic contraceptive drug packages, and
child-resistant and tamper-evident plastic closures
* Plastic containers, bottles, and containersclosures for the pharmaceutical
industry
Rubberconsumer and
medical device and diagnostic markets.
* Elastomeric and plastic components for empty and pre-filled
disposable syringes such as plungers, hubs, and needle covers
4* Blood-sampling system components, including vacuum tube stoppers and
needle valves, and a number of specialized rubberelastomeric and plastic
components for blood-analyzing systems and other medical devices
* Components for IV Sets
* Disposable infant nursers and individual nurser components
The Company also manufactures a wide range of standard and custom-designedcustom- designed
plastic threaded caps and containers for the personal-care industry. The caps,
produced mainly for cosmeticshealth and toiletries,beauty aids, come in many different sizes and
colors. The Company also makes closures for food and beverage processors. The
Company focuses its efforts on multiple-piece closures that require high-speed
assembly.
Product Development
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The Company maintains its own laboratories for testing raw materials and
finished goods to assure conformity to customer specifications and to safeguard
product quality. Laboratory facilities are also used for development of new
products. Engineering staffs are responsible for product and tooling design and
testing and for the design and construction of processing equipment. In
addition, a corporate product development department develops new packaging and
device concepts. Approximately 12094 professional employees were engaged full time
in these
activities in 1998.2000. Development and engineering expenditures for the creation
and application of new and improved device products and manufacturing processes
were approximately $9.2$9.3 million in 1998, $8.82000, $8.9 million in 19971999, and $8.9 million
in 1996,1998, net of cost reimbursements by customers.
Contract Services
Principal Services
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Contract Packaging and Contract Manufacturing
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The Company entered into the pharmaceutical services market in 1995 with its
acquisition of Paco Pharmaceutical Services, Inc. ("Paco"). Paco's name was
changed to West Pharmaceutical Services Lakewood, Inc. ("West Lakewood").
West Lakewood provides contract manufacturing and packaging of products for
pharmaceutical and consumer-products companies. With its flexible manufacturing
environment and workforce, West Lakewood has the capability to make and package
a variety of products according to customers' specifications, usually employing
customer-supplied raw materials. Once its work is complete, West Lakewood
delivers the finished product to the customer for final sale and distribution to
the end user.
Customers typically use West Lakewood services on a temporary basis to
supplement their own manufacturing or packaging capability in times of peak
demand and during a new-product introduction or special promotion. However, West
Lakewood does retain long-term business in both the manufacturing and packaging
areas. West Lakewood operates a facility in Lakewood, New Jersey. The Canovanas,
Puerto Rico facility was closed in early 2001 in connection with the Company's
2000 restructuring plan.
West Lakewood contract packaging and manufacturing processes and services are
subject to the Good Manufacturing Practice standards applicable to the
pharmaceutical industry as well as to numerous other federal and state laws and
regulations governing the manufacture, handling and packaging of drugs and other
regulated substances.
West Lakewood manufactures liquids, creams, solids, suspensions, and powders.
Products produced include:
* headache and cold medications
* skin lotions
* deodorants
* toothpaste and mouthwash
West Lakewood contract packaging services include the design, assembly and
filling of a broad variety of packages, including:
* blister packages (i.e., a plastic film with a foil backing)
* bottles and tubes
* laminated and other flexible pouches or strip packages
* aluminum and plastic liquid cup containers
* paperboard specialty packages
* innovative tamper-evident and child-resistant packages
Although the type of package depends on the requirements of the customer,
blister packaging or bottles typically are used for tablets and capsules while
aluminum or plastic cups, pouches, bottles and tubes are used for liquids,
creams, ointments and powders.
Clinical Services
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The Company entered into the clinical services market with its April 1999
acquisition of the Clinical Services division of Collaborative Clinical
Research, Inc. The Clinical Services Group operates three business units. These
Business units, which are described more fully below, are: a Phase I-through-IV
Clinical Trial research facility (the "GFI Research Center"); a clinical
research group (CRO) that conducts marketing and clinical research studies for
customers' prescription drugs, consumer products, and OTC switch projects; and a
site management organization (SMO) that provides assistance for clinical trial
studies. The SMO unit will be closed in early 2001, with ongoing studies being
supported through their conclusion.
West's GFI Research Center conducts Phase I through Phase IV clinical research
trials and provides other clinical research services including device and actual
use studies at its 80-bed unit located in Evansville, Indiana. Phase I research
is substantially more demanding than other phases of the clinical research
process because healthy volunteers must typically be sequestered for the
duration of the study. Phase II-IV studies are frequently more specialized with
respect to therapeutic patient populations required. The diversity of GFI's
service offering has aided the development of both their recruitment and
clinical operations capabilities.
The CRO performs a variety of Rx clinical services that assist client companies
in completing Phase II-IV clinical trials and consumer-related research that
assists sponsor companies with Rx-to-OTC switch and other consumer product
research studies. The CRO capabilities include project management, clinical
study, site identification, patient recruitment, monitoring, data
management/statistics and report writing. West is distinguished by its' unique
blend of clinical research and marketing research as well as specialty patient
recruitment services.
Clinical Services division contracts provide a fixed price for each component or
service delivered. The ultimate contract value depends on such variables as the
number of research sites selected, the number of patients enrolled and
other services required by the Sponsor. These contracts range in duration from
several months to several years. As services are performed over the life of the
contract, revenue is earned under the percentage-of- completion method utilizing
units of delivery. Costs associated with contract revenue are recognized as
incurred. Cash flows vary with each contract, although generally a portion of
the contract fee is paid at the time the trial begins, with the balance paid as
pre-determined contract milestones are satisfied. Pre-payments received are
recorded as a liability under "deferred revenue" until work has been completed
and revenue has been recognized. Generally, Sponsors may terminate a contract
with the Company with or without cause. In the event of termination, the Company
is entitled to payment for all work performed through the termination date and
for costs associated with termination of the study.
Contract Laboratory Services
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In 1998, the Company established the contract laboratory services business,
which provides testing services to analyze customers' drug product packaging.
Regulatory agencies require drug companies to demonstrate that packaging
components will not contaminate the drug. The test data generated is acceptable
for U.S. Food and Drug Administration (FDA) submissions. The services offered
include extractables testing, method development and validation, stability
testing for extractables and active substances, moisture analysis of closures,
quantification of closure surface silicone, and other custom services. The
Company's laboratory complies with applicable Good Manufacturing Practice (GMP)
standards and is FDA registered.
Research and Development
Drug Delivery Systems
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Since 1993, the Company has been developing proprietary drug delivery systems
for various drug and biological products for which alternative methods and
routes of administration might improve therapeutic performance or the cost
effectiveness of the therapy. In furtherance of that effort, in 1998 the Company
completed the acquisition of DanBioSyst UK Ltd (DBS), a research and development
company located in Nottingham, England. DBS was re-named West Pharmaceutical
Services Drug Delivery & Clinical Research Center, LTD. in 1999 and its
operations integrated with the Company's Lionville based drug delivery
operations to form a new operating segment, Drug Delivery Research and
Development.
West Drug Delivery engages in both independent and client-funded research to
develop unique delivery technologies, patenting these where possible, and,
subject to any rights granted or ceded in connection with client funding,
retains the rights to exploit the patented technology. West Drug Delivery has
patents or patent applications covering a range of delivery technologies for
various routes of administration, including nasal, oral, parenteral, pulmunary,
rectal and vaginal. West Drug Delivery then seeks to license the technologies to
pharmaceutical companies for use in combination with their drug products.
Alternatively, West will develop unique versions of generic drug products, which
incorporate its proprietary delivery technologies, and then seek development and
marketing partners or licensees for the resulting products. West Drug Delivery
also maintains laboratory and clinical scale manufacturing capabilities that
support client and internal development projects.
In 2000, West Drug Delivery's efforts were focused on: client-funded projects;
on the further development of proprietary formulations of the drugs morphine and
leuprolide, both using the Company's patented chitosan-based nasal delivery
system; and on the development of a proprietary formulation of budesonide (a
steroid) using the company's Targit(R) system, an orally administered, specially
coated, starch capsule system designed to bypass normal digestion and deliver
the drug to particular regions of the colon for local and systemic effect.
Initial human studies of the nasal morphine product were completed and the
product was licensed to a third party for further development in 2001.
West Drug Delivery had 65 employees as of December 31, 2000 and total expenses,
net of revenues received, were $9.0 million in 2000 and $7.7 million in 1999.
Recent Developments
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The Company has taken steps to expand its product offerings and improve
competitiveness of both its Device Product Development and Contract Services
operating segment.
The Company increased its capacity in the components area with
the acquisition of Schubert Seals A/S, a Danish manufacturer of
rubber components and metal seals servicing the European
pharmaceutical industry. A 51% ownership interest was acquired
in May 1994 and the remaining 49% in December 1995. The
company's name was recently changed to "West Pharmaceutical
Services Danmark A/S."segments.
In 1996 and 1997, the Company implemented a major restructuring plan announced
in 1996. The plan included the closing or downsizing of six manufacturing
facilities, withdrawal from the machinery business and an approximate 5%
reduction in the workforce. The restructuring was designed to reduce the costs
associated with multiple plant sites and shift certain production capacity to
lower-cost locations. In 1998, a further 1% 5
reduction in the workforce, made
possible by manufacturing and other operating efficiencies, was announced.
(Additional information pertaining to thesethe 1998 activities is incorporated by
reference to the Note "Restructuring Charges" of Notes to Consolidated Financial
Statements of the 19982000 Annual Report to Shareholders.)
In 1998, the Company acquired Betraine Limited, a company located in the U.K.,England,
which manufactures precision injection molded plastic components for the
healthcare and consumer industries. The acquisition expanded global capabilities
in the non-
injectablenon-injectable market. Contract Services
Principal Services
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Contract Packaging and Contract Manufacturing
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The Company entered into the pharmaceutical services market in
1995 with its acquisition of Paco Pharmaceutical Services, Inc.
("Paco"). Paco'sCompany's name was recently changed to West
Pharmaceutical Services Lakewood, Inc. (West Lakewood)Lewes (West-Lewes).
West Lakewood providesIn 1999, the Company changed its business plan with respect to its plastics
strategy concerning future market demands and total capacity requirements. As a
result, the Company reversed a portion of its 1996 restructuring reserve
pertaining to its Puerto Rico facility and wrote off the assets associated with
a proprietary plastic product line that had not gained market acceptance.
In November 2000, the Company announced a plan to streamline operations and
improve operating efficiencies by reducing or consolidating business units in
its Contract Services and Device Product Development segments. The plan included
the closure of two plants in Puerto Rico engaged in contract manufacturingpackaging and
packaging of
products for pharmaceuticalplastics device molding and consumer-products companies.
With its flexible manufacturing environment and workforce, West
Lakewood has the capability to quickly undertake to make and
package products according to customers' specifications, usually
employing customer-supplied raw materials. Oncesterile-fill suite at the operation is
complete, West Lakewood delivers the finished product to the
customer for final sale and distribution to the end user.
Customers typically use West Lakewood services on a temporary
basis to supplement their own manufacturing or packaging
capability during a new-product introduction or special
promotion. However, West Lakewood does retain long-term
business in both the manufacturing and packaging areas. West
Lakewood operates facilities in Lakewood, New
Jersey facility, and Canovanas, Puerto Rico.
West Lakewood contract packagingthe initiation of other staff reduction cost control
measures. In addition, the site management organization (SMO) business
operations of the Clinical Services business unit was closed as the business
model has proven unsuccessful in the marketplace and manufacturing processes and
services are subjectestimated growth has not
materialized. An after-tax charge of $15.5 million was taken to fourth quarter
2000 earnings to reflect the Good Manufacturing Practice standards
applicable to the pharmaceutical industry as well as to numerous
other federal and state laws and regulations governing the
manufacture, handling and packagingwritedown of drugsgoodwill, asset write-offs, severance
charges, and other regulated
substances.
West Lakewood manufactures liquids and creams, solids,
suspensions, and powders. These products produced include:
headache and cold medications
skin lotions
6
deodorants
toothpaste and mouthwash
metaproterenol and albuterol, products used for inhalation
therapy.
West Lakewood contract-packaging services include the design,
assembly and filling of a broad variety of packages, including
"blister" packages (i.e., a plastic film with a foil
backing)
bottles and tubes
laminated and other flexible pouches or strip packages
aluminum and plastic liquid cup containers
paperboard specialty packages
innovative tamper-evident and child-resistant packages
Although the type of package depends on the requirements of the
customer, blister packaging or bottles typically are used for
tablets and capsules while aluminum or plastic cups, pouches,
bottles and tubes are used for liquids, creams, ointments and
powders.
Contract Laboratory Services
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In 1998, the Company established the contract laboratory services
business, which provides testing services to analyze customers'
injectable product packaging. Regulatory agencies require drug
companies to demonstrate that packaging components will not
contaminate the drug. The test data is generated in a format
acceptable for U.S. Food and Drug Administration (FDA)
submissions. The services offered include product/closure
interaction testing, extractables testing, moisture analysis of
closures, particle quantification/analysis, quantification of
closure surface silicone, and other custom services. The
Company's laboratory complies with applicable Good Manufacturing
Practice standards and its laboratory will be FDA registered.
Research and Development
Drug Delivery Systems
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In 1993, the Company began developing drug-delivery systems for
bio-pharmaceuticals and other drugs that are difficult to
administer effectively through traditional injectable or oral
routes. Improving the therapeutic performance of these drugs in
an economical fashion calls for sophisticated delivery solutions.
7
To advance the Company's efforts in this area, in 1994 the
Company began acquiring interests in DanBioSyst UK Ltd. (DBS) in
10% annual increments; and in March 1998, acquired the remaining
70% ownership interest, making DBS a wholly-owned subsidiary.
DBS is a research company located in Nottingham, England, which
specializes in identifying and developing systems for delivery of
complex drug molecules, or to assist in delivering drugs to a
specific site in the body. DBS engages in research to develop
these unique systems and then patents this technology. DBS has
patents or patent applications covering a range of delivery
platforms including nasal, oral, parenteral, pulmonary and
rectal/vaginal. DBS enters into agreements with
biopharmaceutical and other drug companies, to apply its delivery
system technology to the customers' drug molecule to achieve the
desired result.
The Company's Lionville-based resources are dedicated to
development of drug delivery systems. This group's work, until
recently, was focused on the Ocufit SR system, a silicone rod
small enough to fit behind the eyelid. The Ocufit SR can be
designed to release a number of different drugs in predefined
quantities over time periods ranging from two weeks to several
months without physical intervention. The Ocufit SR is being
jointly developed with Escalon Medical Corporation, which owns
the basic technology. An Investigative New Drug Application was
filed with the FDA late in 1998, and Escalon is now conducting
Phase I clinical trials. The Lionville group is also developing
products based on DBS patented technology. The current projects
relate to nasal delivery of leuprolide and morphine and further
development of the Targit delivery system, a coated starch
capsule, designed to deliver medication to a specific site in the
body.
The Company had 58 employees directly engaged in these activities
as of December 31, 1998 and total expenses were $5.3 million, net
of revenues received, in 1998.restructuring related costs.
Order Backlog
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Device product orders on hand at December 31, 1998 were2000, was approximately $90$92
million, compared with approximately $80$96 million at the end of 1997.1999. 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.
West Lakewood's twelve-month backlog of unfilled customer orders was
approximately $18$11 million at December 31, 19982000 and $9 million at December 31,
1997.1999. Backlog is defined by West Lakewood as orders written 8
and included in
production schedules during the next 12twelve months. Such orders generally may be
cancelled by the customer without penalty.
The Clinical Services division backlog consists of signed contracts yet to be
completed. Contracts included in backlog are subject to termination or delay at
any time and therefore the backlog is not necessarily a meaningful predictor of
future results. Delayed contracts remain in the Company's backlog until
canceled. As of December 31, 2000, the Clinical Services division's backlog was
$6.5 million; at December 31, 1999 the backlog was $6.2 million.
Raw Materials
--------------
The Company uses three basic raw materials in the manufacture of its device
products: rubber; aluminum;elastomers, aluminum, and plastic. 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.
The Company is pursuing a supply chain management strategy, which involves
purchasing from integrated suppliers that control their own sources of supply.
This strategy has reduced the number of raw-materialsraw materials suppliers used by the
Company. In some cases, the Company will purchase raw materials from a single
source to assure quality and reduce costs. This strategy increases the risks
that the Company's supply lines may be interrupted in the event of a supplier
production problem. These risks are managed by selecting suppliers with multiple
manufacturing sites, rigid-rigid quality control systems, surplus inventory levels and
other methods of maintaining supply in case of interruption in production.
Patents and Licenses
---------------------
The Company's device products patents and trademarks have been useful in
establishing the Company's market share and in the growth of the Company's
manufactured device product 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 current
manufactured device product business or its earnings to be materially dependent
upon any single patent or trademark.
Although not material at this time, the Company believes its drug delivery
development capabilities will play an increasingly important role in the future.
DBSThe Drug Delivery operating segment has a growing portfolio of patented
technology, which is critical to ourthe Company's success because a significant
amount of future income is expected to be derived from licensing this technology
to customers.
Major Customers
-----------------
The Company provides manufactured device components and/or contract services to
major pharmaceutical, biotechnology and hospital supply/medical device
companies, many of which have several divisions with separate purchasing
responsibilities. The Company also provides contract-packagingcontract packaging and contract-manufacturingcontract
manufacturing services for many of the leading manufacturers of personal-care
products.personal care
products and clinical research services to full service contract research
organizations. The Company distributes its products and services
9 primarily
through its own sales force but also uses regional distributors in the United
States and Asia/Pacific. The business
units have separate sales forces butin the Company is increasing
the sales effort of each group to sell all of the Company's
capabilities.Asia/Pacific region.
Becton Dickinson and Company ("B-D"BD") accounted for approximately 12%13% of the
Company's 19982000 consolidated net sales. The principal products sold to B-DBD are
synthetic rubber, natural rubber, metal and plastic components used in B-D'sBD's
disposable syringes and blood sampling and analysis devices. The Company expects
to continue as a major B-DBD supplier.
Excluding B-D,BD, the next ten largest customers accounted for approximately 30%35% of
the Company's consolidated net sales in 1998,2000 but no one of these customers
accounted for more than 5%7% of 19982000 consolidated net sales.
Competition
------------
The Company competes with several companies, some of which are larger than the
Company, across its major Device Product Development product lines. In addition,
many companies worldwide compete with the Company for business related to
specific product lines. However, the Company believes that it supplies a major
portion of the U.S. market requirements for pharmaceutical elastomer 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 increasingly
more important as pharmaceutical companies initiatecontinue with aggressive cost-control measurescost control
programs across their entire operations. Competitors often compete on the basis
of price. The Company differentiates itself from its competition as a
"full-service" supplier whichthat is able to provide pre-sale compatibility studies
and other services and sophisticated post- sale technical support on a global
basis.
The Company competes against numerous competitors in the field of plastic
closures for consumer products, many of which are larger than the Company and
command dominantsignificant market shares. The Company attempts to differentiatedifferentiates itself through its
expertise in high-
speedhigh-speed assembly of multiple-piece closures.closure systems.
The U.S. contract-packagingcontract packaging and manufacturing service industry is highly
competitive. For packaging services, West Lakewood competes with three
significant companies, only twoall of which are larger than it. For contract-manufacturingcontract
manufacturing services, West Lakewood competes with four major competitors and
several smaller regional companies; several of these competitors are larger than
it. In addition, most domestic pharmaceutical companies maintain in-house
manufacturing and packaging capabilities and at times will offer their excess
capacity to manufacture or package other 10
companies' products on a contract
basis. However, most large pharmaceutical and personal healthcare companies have
traditionally made extensive use of contract packagers and manufacturers during
times of peak demand, during the introduction of a new product and for
production of samples and special product promotions.
The clinical research industry is highly fragmented and comprised of several
large, full-service Contract Research Organizations (CROs), many small CROs and
limited services providers. The major competitors in the industry include the
research departments of pharmaceutical companies and CROs.
Many companies provide proprietary drug delivery technologies to the
pharmaceutical and biotechbiotechnology markets. However, unlike West, the majority of
these companies are focused on a single route of drug administration, and very
few have capabilities necessary to take drug products through all stages of the
development process and commercial manufacture. The three largest companies, the
market leaders, have multiple-delivery technologies, but their strong franchises
are in oral, controlled-release delivery systems. West's drug delivery
technologies, none of which is currently in commercial production, are in less
competitive segments that do not compete with the market leaders.
Environmental Regulations
----------------------------------------------------------------------------
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 19982000 Annual Report to Shareholders, incorporated herein by reference herein.reference.
International
---------------
The Note "Affiliated Companies" and the Note "Segment Information" of Notes to
Consolidated Financial Statements of the 19982000 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. FinancialAlthough
financial crises have been evident at various times during recent years in the
Asia/Pacific region and more
recently in our major markets in South America and have at times
resulted in a decline in demand for the Company's products in these regions;
however,regions,
direct sales to customers in these markets have historically not been
significant, representingsignificant. In 2000, such sales represented less than 10% of consolidated
sales.
The Company's financial condition and results are impacted by fluctuations in
exchange-rate markets (See Notes "Summary of Significant Accounting Policies -
Foreign Currency Translation" and "Other Income (Expense)" of Notes to
Consolidated Financial Statements of the 19982000 Annual Report to Shareholders,
incorporated herein by reference). Hedging by the Company of these exposures is
discussed in the Note "Debt""Summary of Significant Accounting Policies - Financial
Instruments" and in the Note "Financial Instruments" of Notes to Consolidated
Financial 11
Statements of the 19982000 Annual Report to Shareholders, incorporated
herein by reference.
Item 2. Properties
-----------
In the Device Product Development operating segment, the Company maintains nineeight
manufacturing plants and two mold and die production facilities in the United
States, one manufacturing plant in Puerto Rico, and a total of eight
manufacturing plants and two mold and die production facilities in Germany,
England, France, Denmark, Brazil and Singapore. The Puerto Rico facility is
scheduled to be closed in mid-year 2001.
In the Contract Services operating segment, the Company maintains one facility
in the United States and one facility in Puerto RicoLakewood, New Jersey to provide contract manufacturing and packaging
services. Clinical research services are provided by West Evansville from leased
space in Indianapolis, Indiana and Evansville, Indiana. Contract Laboratorylaboratory
services are provided from the Company's Lionville, Pennsylvania facility.
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. The Company conducts drug delivery research and
development in a leased facility located in Nottingham, England. All other
company facilities are used for manufacturing and distribution, and facilities
in Eschweiler, Germany, are also used for development activities for device
product development activities.products.
The manufacturing production facilities of the Company are well-maintained,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 and Puerto Rico are as follows:
- - Approximately 839,000775,000 square feet of owned and 997,0001,085,000 square feet of
leased space in Pennsylvania, New Jersey, Florida, Nebraska, North
Carolina, Ohio and Puerto Rico.Indiana.
The principal international facilities are as follows:
- - Approximately 530,000500,000 square feet of owned space and 67,70086,000 square feet of
leased space in Germany, England, Denmark and France.
- - Approximately 69,000250,000 square feet of owned space in Brazil.
- - Approximately 92,00090,000 square feet of owned space in Singapore.
Of the aforementioned currently owned facilities, approximately
354,000 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 1998 Annual
12
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 former manufacturing facility space in
Puerto Rico - totaling 42,000 square feet.
Item 3. Legal Proceedings.
-----------------
None
13
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 4 (a) Executive Officers of the Registrant
None.
Item 4 (a) Executive Officers of the Registrant
-----------------------------------------
The executive officers of the Company at March 31, 199930, 2001 were as follows:
Name Age Business Experience During Past Five
Years
---- --- ---------------------------------------
George R. Bennyhoff1 55 Senior Vice President, Human Resources
and Public Affairs.
Jerry E. Dorsey1 54 President and Chief Operating Officer
since September 1998, previously
Executive Vice President and Chief
Operating Officer from June 1994 to
August 1998; Group President from
August 1993 to June 1994; President,
Health Care Division from May 1992 to
July 1993 for the Company.
Steven A. Ellers1 48 Senior Vice President and Chief
Financial Officer since March 1998;
previously Group President from August
1997 to February 1998; Corporate Vice
President, Sales from April 1996 to
July 1997; Vice President, Operations
from June 1994 to March 1996; Vice
President Asia/Pacific and Managing
Director, Singapore from May 1990 to
May 1994 for the Company.
John R. Gailey III1 44 Vice President since December 1995,
General Counsel since May 1994 and
Secretary.
Stephen M. Heumann1 57 Vice President since May 1994 and
Treasurer.
Lawrence P. Higgins1 59 Vice President, Operations since May
1996 and prior to joining the Company
an international business consultant
from 1994 to 1996 and Senior Vice
President International Operations for
Revlon, Inc., a cosmetics company,
from 1992 to 1994.Name Age Business Experience During Past Five Years
- ---- --- ----------------------------------------
Joseph E. Abbott 1 48 Corporate Controller. Previously Director
of Internal Audit since 1997; Controller,
Clopay Corp. from June 1996 to April 1997;
previously Controller, ARCO Chemical
Americas.
George R. Bennyhoff 1 57 Senior Vice President, Human Resources
and Public Affairs.
Steven A. Ellers 1 50 Executive Vice President previously Senior
Vice President and Chief Financial Officer
since March 1998; Group President from
August 1997 to February 1998; Corporate
Vice President, Sales from April 1996 to
July 1997; previously Vice President,
Operations.
John R. Gailey III 1 46 Vice President, General Counsel and
Secretary.
Stephen M. Heumann 1 59 Vice President, Treasurer and Assistant
Secretary.
Lawrence P. Higgins 1 Holds position as corporate officer elected by the Board of
Directors for one year term.
14
Name Age Business Experience During Past Five
Years
---- --- ---------------------------------------
William G. Little1 56 Chairman of the Board since May 1995,
Director and Chief Executive Officer
for the Company and President of the
Company until September 1998.
Donald E. Morel, Jr.1 41 Group President since March 1998;
previously, Corporate Vice President,
Scientific Services from May 1995 to
February 1998; Vice President, Research
& Development from August 1993 to May
1995 and prior thereto Director
Research & Development, Health Care
Products Division from May 1993 to
August 1993 for the Company.
Anna Mae Papso1 55 Vice President and Corporate Controller
Anthony A. Sinkula 61 Vice President, Operations since May
1996. Prior to joining the Company,
Mr. Higgins was an international business
consultant.
1 Holds position as corporate officer elected by the Board of Directors for a
one-year term.
Name Age Business Experience During Past Five Years
- ---- --- --------------------------------------
Herbert F. Hugill 1 53 Division President, Sales and Contract
Services since June 2000; previously
Division President, Clinical Services
since November 1999 and General Manager
of the Clinical Services Group from its
acquisition in April 1999. Previously
Mr. Hugill served as Chief Operating
Officer and Director from December 1997
of Collaborative Clinical Research,
Inc. from which the Company purchased
the Clinical Service Division. From
1996 to 1997 Mr. Hugill was President
and Chief Executive Officer and a
Director of Mediscience Technology
Corp., a development stage biomedical
technology company, and prior thereto
President, RP Scherer North America, a
drug delivery systems company.
William G. Little 1 58 Chairman of the Board and Chief
Executive Officer, President of the
Company until September 1998.
Donald E. Morel, Jr.,Ph.D.1 43 Division President, Drug Delivery
Systems since November 1999; Group
President from March 1998 to October 1999;
Corporate Vice President, Scientific
Services from May 1995 to February 1998.
Anna Mae Papso 1 57 Corporate Vice President, Finance since
June 2000; Previously Vice President &
Corporate Controller.
Anthony A. Sinkula, Ph.D.1 63 Vice President and Chief Scientific
Officer since July 1998 and prior to
joining the Company a consultant to
several major pharmaceutical companies
and the National Cancer Institute.
1 Holds position as corporate officer elected by the Board of Directors for one yeara
one-year term.
15
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 19982000 and 19971999 were as
follows:
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
High Low High Low High Low High Low High Low
1998 321/4 2815/16 33 28 30 25 3511/16 27 3511/16 25
1997 291/4 27 30 27 343/16 281/2 351/16 28 351/16 272000 31.88 23.00 25.50 19.63 23.88 19.63 25.00 20.69 31.88 19.63
1999 36.69 31.81 39.38 31.81 40.44 37.63 38.25 30.88 40.44 30.88
As of December 31, 1998,2000, the Company had 1,9031,780 shareholders of record. There
were also 2,9002,200 holders of shares registered in nominee names. The Company's
common stock paid a quarterly dividend of $.14$.16 per share in each of the first
three quarters of 1997; $.151999; $.17 per share in the fourth quarter of 19971999 and each of
the first three quarters of 1998;2000; and $.16$.18 per share in the fourth quarter of
1998.2000.
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 (basic and assuming
dilution) 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 19982000 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- Year-End Financial Position" of the 19982000 Annual Report to Shareholders.
Item 7. Management's Discussion and Analysis of 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 19982000 Annual Report to
Shareholders.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk
--------------------------------------------------------
The information called for by this Item is incorporated by reference to the
Notes "Financial Instruments", and "Summary of Significant Accounting Policies"
of Notes to Consolidated Financial Statements of the 19982000 Annual Report to
Shareholders.
16
Item 8. Financial Statements and Supplementary Data.
-------------------------------------------
The information called for by this Item is incorporated by reference to
"Consolidated Financial Statements", "Notes to Consolidated Financial
Statements", and "Quarterly Operating and Per Share Data (Unaudited)" of the
19982000 Annual Report to Shareholders.
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 "PROPOSAL
#1: ELECTION OF DIRECTORS" and "OWNERSHIP"STOCK OWNERSHIP OF COMPANY
STOCK"DIRECTORS AND EXECUTIVE
OFFICERS" 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
"INFORMATION ABOUT THE BOARD"COMPENSATION OF DIRECTORS AND BOARD COMMITTEES -
Compensation of Directors"NAMED EXECUTIVE OFFICERS"; and "BOARD
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION"; and "COMPENSATION OF NAMED EXECUTIVE
OFFICERS" 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 "OWNERSHIP"STOCK
OWNERSHIP OF COMPANY STOCK"DIRECTORS AND EXECUTIVE OFFICERS" contained in the Proxy Statement.
Item 13. Certain Relationships and Related Transactions.
-----------------------------------------------
None
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 19982000 Annual Report to Shareholders, have been
incorporated herein by reference:
17
Consolidated Statements of Income for the years ended
December 31, 1998, 19972000, 1999 and 19961998
Consolidated Statements of Comprehensive Income
for the years ended December 31, 1998,
19972000, 1999 and
19961998
Consolidated Balance Sheets at December 31, 19982000 and
19971999
Consolidated Statements of Shareholders' Equity for the
years ended December 31, 1998, 19972000, 1999 and 19961998
Consolidated Statements of Cash Flows for the years
ended December 31, 1998, 19972000, 1999 and 19961998
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, F-4 and
F-4F-5 of this Report.
(b) There were no reports on Form 8-K filed by the Company
in the fourth quarter of 1998.2000.
(c) The exhibits are listed in the Index to Exhibits on pages F-1, F-2,
F-3, F-4 and F-4F-5 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.
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, West Pharmaceutical Services, Inc. has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
WEST PHARMACEUTICAL SERVICES, INC.
(Registrant)
By /s/ Steven A. EllersM. Papso
- --------------------------------
Steven A. Ellers
SeniorAnna Mae Papso
Corporate Vice President, and Chief Financial OfficerFinance
March 31, 199930, 2001
- --------------------------------
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
--------- ------ -------
/s/ William G. Little Chairman, Director March 31, 1999
---------------------------------30, 2001
- ---------------------------------- and Chief Executive Officer
William G. Little Officer
(Principal Executive Officer)
/s/ Joseph E. Abbott Corporate Controller March 30, 2001
- ---------------------------------- (Principle Accounting Officer)
Joseph E. Abbott
/s/ Tenley E. Albright Director March 31, 199930, 2001
- -----------------------------------
Tenley E. Albright *
/s/ John W. Conway Director March 31, 1999
___________________________________30, 2001
- -----------------------------------
John W. Conway*
/s/ George W. Ebright Director March 31, 199930, 2001
- ------------------------------------
George W. Ebright*
Steven A. Ellers Senior Vice President March 31, 1999
------------------------------------ and Chief Financial
Steven A. Ellers Officer/s/ L. Robert Johnson Director March 31, 1999
------------------------------------
L. Robert Johnson*
William H. Longfield Director March 31, 1999
--------------------------------------
William H. Longfield*
2030, 2001
- ------------------------------------
L. Robert Johnson*
Signature Title Date
--------- ------ -------
/s/ William H. Longfield Director March 30, 2001
- --------------------------------------
William H. Longfield*
/s/ John P. Neafsey Director March 31, 199930, 2001
- --------------------------------------
John P. Neafsey*
/s/ Anna Mae Papso Corporate Vice President, March 31, 199930, 2001
- -------------------------------------- and Corporate ControllerFinance
Anna Mae Papso (Principal Accounting(Chief Financial Officer)
/s/ Monroe E. Trout Director March 31, 199930, 2001
- ---------------------------------------
Monroe E. TroutTrout*
/s/ Anthony Welters Director March 31, 199930, 2001
- ---------------------------------------
Anthony Welters*
J. Roffe Wike, II Director March 31, 1999
---------------------------------------
J. Roffe Wike, II*/s/ Geoffrey F. Worden Director March 31, 1999
----------------------------------------
Geoffrey F. Worden*
* By William G. Little30, 2001
- ----------------------------------------
Geoffrey F. Worden*
* By John R. Gailey III pursuant to a power of attorney.
21
INDEX TO EXHIBITS
Exhibit
Number
(3) (a) Amended and Restated Articles of Incorporation of the
Company through January 4, 1999.
(3) (b) Bylaws of the Company, as amended through October 27, 1998,
incorporated by reference to Exhibit (3)(b) to the
Company's Form 10-Q for the quarter ended September 30,
1998 (File No. 1-8036).
(4) (a) Form of stock certificate for common stock.
(4) (b) Flip-In Rights Agreement between the Company and American
Stock Transfer & Trust Company, as Rights Agent, dated as
of January 16, 1990, incorporated by reference to Exhibit 1
to the Company's Form 8-A Registration Statement (File No.
1-8036).
(4) (c) Flip-Over Rights Agreement between the Company and American
Stock Transfer & Trust Company, as Rights Agent, dated as
of January 16, 1990, incorporated by reference to Exhibit 2
to the Company's Form 8-A Registration Statement (File No.
1-8036).
(9) None.
(10) (a) Lease dated as of December 31, 1992 between Lion
Associates, L.P. and the Company, relating to the lease of
the Company's headquarters in Lionville, Pa.,Exhibit
Number
(3) (a) Amended and Restated Articles of Incorporation
of the Company through January 4, 1999
incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1992 (File No. 1-8036).
(10) (b) First Addendum to Lease dated as of May 22, 1995 between
Lion Associates, L.P. and the Company, incorporated by
reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1995 (File No. 1-8036).
(10) (c) 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. 1-
8036).
(10) (d) Amendments to the Long Term Incentive Plan, dated April 30,
1996, incorporated herein by reference to the Company's
Form 10Q for the quarter ended June 30, 1996 (File No. 1-
8036).
(10) (e) Executive Incentive Bonus Plan 1999.
22
F - 1
Exhibit
Number
(10) (f) Non-Qualified Stock Option Plan for Non-Employee Directors,
reflecting amendments effective April 30, 1996 and April
28, 1998 incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended March
31, 1998 (File No. 1-8036).
(10) (g) Form of amended and restated agreement between the Company
and certain of its executive officers, incorporated by
reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1998 (File No.1-8036).
(10) (h) Schedule of agreements with executive officers,
incorporated herein by reference to the Company's Quarterly
Report on Form 10Q for the quarter ended March 31, 1998
(File No.1-8036).
(10) (i) 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. 1-8036).
(10) (j) Amendment No. 1 to Supplemental Employees' Retirement Plan,
incorporated by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 (File No. 1-
8036).
(10) (k) Amendment No. 2 to Supplemental Employees' Retirement Plan,
incorporated by reference to the Company's Quarterly Report
on Form 10-Q for the period ended September 30, 1995 (File
No. 1-8036).
(10) (l) Retirement Plan for Non-Employee Directors of the Company,
as amended April 28, 1998, incorporated by reference to the
Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998 (File No. 1-8036).
(10) (m) 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. 1-8036).
(10) (n) Non-Qualified Deferred Compensation Plan for Designated
Executive Officers and Amendments Nos. 1 and 2 thereto.
(10) (o) Non-qualified Deferred Compensation Plan for Outside
Directors and Amendment No. 1 thereto.
23
F - 2
Exhibit
Number
(10) (p) Lease Agreement, dated August 31, 1978, between Paco
Packaging, Inc. and Nineteenth Lakewood Corp., as amended
by Amendment of Lease, dated November 30, 1978, Second
Amendment of Lease, dated August 6, 1979, Third Amendment
of Lease, dated July 24, 1980 and Fourth Amendment of
Lease, dated August 14, 1980, incorporated by reference to
the Exhibits to Paco Pharmaceutical Services, Inc's
Registration Statement on Form S-1, Registration No. 33-
48754, filed with the Commission.
(10) (q) Fifth Amendment of Lease, dated May 13, 1994, to the Lease
Agreement, dated August 31, 1978, between Paco Packaging,
Inc. and Nineteenth Lakewood Corp., incorporated by
reference to the Exhibits to Paco Pharmaceutical Services,
Inc.'s Annual Report on Form 10-K for the year ended March
31, 1994 (File number 0-20324).
(10) (r) Lease Agreement, dated December 9, 1977, between Paco
Packaging, Inc. and New Oak Street Corp., as amended by the
Amendment to Lease Agreement, dated August 31, 1978, Second
Amendment of Lease, dated April 8, 1979 and Third Amendment
of Lease, dated November 16, 1983, incorporated by
reference to the Exhibits to Paco Pharmaceutical Services,
Inc.'s Registration Statement on Form S-1, Registration No.
33-48754, filed with the Commission.
(10) (s) Lease Agreement, dated April 7, 1986, between Northlake
Realty Co. Inc. and Paco Packaging, Inc., as amended by
Amendment to Lease, dated July 1, 1986, Second Amendment of
Lease, dated June 15, 1987 between Paco Packaging and C. P.
Lakewood, L. P., Agreement, dated December 29, 1987, and
Lease Modification Agreement, dated December 13, 1989,
incorporated by reference to the Exhibits to Paco
Pharmaceutical Services, Inc.'s Registration Statement on
Form S-1, Registration No. 33-48754, filed with the
Commission.
(10) (t) Collective Bargaining Agreement, dated December 1, 1997, by
and between Paco Pharmaceutical Services, Inc. and Teamster
Local 35 (affiliated with the International Brotherhood of
Teamsters), incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31,
1997 (File No.1-8036).
(10) (u) 1998 Key Employee Incentive Compensation Plan, dated
March 10, 1998, incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1997 (File No.1-8036).
(10) (v) Asset Purchase Agreement Among Collaborative Clinical
Research, Inc., GFI Pharmaceutical Services, Inc., and WCE
clinical Evaluations and West Pharmaceuticals, Inc. dated
December 28, 1998.
24
F - 3
Exhibit
Number
(11) Not Applicable.
(12) Not Applicable.
(13) Portions of 1998 (File No. 1-8036).
(3) (b) Bylaws of the Company, as amended through
October 27, 1998, incorporated by reference to
Exhibit (3)(b) to the Company's Form 10-Q for
the quarter ended September 30, 1998 (File No.
1-8036).
(4) Miscellaneous long term debt instruments and credit
facility agreements of the Company, under which the
underlying authorized debt is equal to less than ten
percent of the total assets of the Company and its
subsidiaries on a consolidated basis, may not be
filed as exhibits to this report pursuant to Section
(b) (4) (iii) A of Item 601 of Reg S-K. The Company
agrees to furnish to the Commission, upon request,
copies of any such unfiled instruments. (File No.
1-8036).
(4) (a) Form of stock certificate for common stock
incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1998 (File No. 1-8036).
(4) (b) Note Purchase Agreement dated as of April 8, 1999
among the Company and the insurance companies
identified on a schedule thereto, incorporated by
reference to the Company's Form 10-Q for the quarter
ended September 30, 2000. (File No. 1-8036).
(4) (c) Credit Agreement, dated as of July 26, 2000
among the Company, the banks identified on a
schedule thereto, and PNC Bank, N.A., as agent
for the banks, incorporated by reference to the
Company's Form 10-Q for the quarter ended
September 30, 2000. (File No. 1-8036).
(9) None.
(10) (a) Lease dated as of December 31, 1992 between
Lion Associates, L.P. and the Company,
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. 1-8036).
F - 1
Exhibit
Number
(10) (b) First Addendum to Lease dated as of May 22,
1995 between Lion Associates, L.P. and the
Company, incorporated by reference to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1995 (File No. 1-
8036).
(10) (c) 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. 1-
8036).
(10) (d) Amendments to the Long Term Incentive Plan,
dated April 30, 1996, incorporated herein by
reference to the Company's Form 10Q for the
quarter ended June 30, 1996 (File No. 1-8036).
(10) (e) 1999 Non-Qualified Stock Option Plan for Non-
Employee Directors, effective as of April 27,
1999, incorporated by reference to the
Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1999 (File No. 1-
8036).
(10) (f) Form of Director Stock Option Agreement,
incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999 (File No. 1-8036)..
(10) (g) Form of second amended and restated agreement
between the Company and certain of its executive
officers dated as of March 25, 2000, incorporated
by reference to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2000.
(File No. 1-8036).
(10) (h) Schedule of agreements with executive officers,
incorporated by reference to the Company's
Quarterly Report on Forms 10-Q for the quarter
ended June 30, 2000. (File No.1-8036).
(10) (i) 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. 1-8036).
(10) (j) Amendment No. 1 to Supplemental Employees'
Retirement Plan, incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31,
1995 (File No. 1- 8036).
F - 2
Exhibit
Number
(10) (k) Amendment No. 2 to Supplemental Employees'
Retirement Plan, incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the period ended September
30, 1995 (File No. 1-8036).
(10) (l) Retirement Plan for Non-Employee Directors
reflecting amendments effective on November 5,
1991, April 28, 1998 and May 27, 1999,
incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999 (File No. 1-8036).
(10) (m) Amended and Restated Employment Agreement dated
as of March 25, 2000 between the Company and William G.
Little, incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 2000. (File No. 1-8036).
(10) (n) Non-Qualified Deferred Compensation Plan for
Designated Executive Officers adopted August 30,
1994, reflecting amendments effective on March 7,
1995, April 28, 1998 and April 1, 2000, incorporated
by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2000.
(File No. 1-8036).
(10) (o) Deferred Compensation Plan for Outside
Directors, as amended and restated effective
May 27, 1999, incorporated by reference to the
Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1999 (File No.
1-8036).
(10) (p) 1999 Stock-Equivalent Compensation Plan for
Non-Employee Directors, incorporated by reference to the
Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1999 (File No. 1-8036).
(10) (q) Lease Agreement, dated August 31, 1978,
between Paco Packaging, Inc. and Nineteenth
Lakewood Corp., as amended by Amendment of
Lease, dated November 30, 1978, Second
Amendment of Lease, dated August 6, 1979,
Third Amendment of Lease, dated July 24, 1980
and Fourth Amendment of Lease, dated August
14, 1980, incorporated by reference to the
Exhibits to Paco Pharmaceutical Services,
Inc's Registration Statement on Form S-1,
Registration No. 33-48754, filed with the
Commission.
F - 3
Exhibit
Number
(10) (r) Fifth Amendment of Lease, dated May 13, 1994,
to the Lease Agreement, dated August 31, 1978,
between Paco Packaging, Inc. and Nineteenth
Lakewood Corp., incorporated by reference to
the Exhibits to Paco Pharmaceutical Services,
Inc.'s Annual Report on Form 10-K for the year
ended March 31, 1994 (File number 0-20324).
(10) (s) Lease Agreement, dated December 9, 1977,
between Paco Packaging, Inc. and New Oak
Street Corp., as amended by the Amendment to
Lease Agreement, dated August 31, 1978, Second
Amendment of Lease, dated April 8, 1979 and
Third Amendment of Lease, dated November 16,
1983, incorporated by reference to the
Exhibits to Paco Pharmaceutical Services,
Inc.'s Registration Statement on Form S-1,
Registration No. 33-48754, filed with the
Commission.
(10) (t) Lease Agreement, dated April 7, 1986, between
Northlake Realty Co. Inc. and Paco Packaging,
Inc., as amended by Amendment to Lease, dated
July 1, 1986, Second Amendment of Lease, dated
June 15, 1987 between Paco Packaging and C. P.
Lakewood, L. P., Agreement, dated December 29,
1987, and Lease Modification Agreement, dated
December 13, 1989, incorporated by reference
to the Exhibits to Paco Pharmaceutical
Services, Inc.'s Registration Statement on
Form S-1, Registration No. 33-48754, filed
with the Commission.
(10) (u) Collective Bargaining Agreement, dated
December 1, 1997, by and between Paco
Pharmaceutical Services, Inc. and Teamster
Local 35 (affiliated with the International
Brotherhood of Teamsters), incorporated by
reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1997
(File No.1-8036).
(10) (v) 1998 Key Employee Incentive Compensation Plan,
dated March 10, 1998, incorporated by
reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1997
(File No.1-8036).
F - 4
Exhibit
Number
(10) (w) Asset Purchase Agreement Among Collaborative
Clinical Research, Inc., GFI Pharmaceutical
Services, Inc., and Collaborative Holdings, Inc.
and the Company dated December 21, 1998,
incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1998 (File No.1-8036).
(10) (x) Form of Bonus Agreement between the Company
and certain of its executive officers dated
as of December 21, 2000. Portions of this
Exhibit have been omitted pursuant to a request
for confidential treatment.
(10) (y) Schedule of agreements with certain executive
officers.
(11) Not Applicable.
(12) Not Applicable.
(13) Portions of 2000 Annual Report to Shareholders.
(16) Not applicable.
(18) None.
(21) Subsidiaries of the Company.
(22) None.
(23) Consent of Independent Accountants.
(24) Powers of Attorney.
(27) Financial Data Schedules
(99) None.
F - 4 5