EXHIBIT (10)(e)
July 17, 2001
Mr. Lawrence P. Higgins
758 Inverness Way
Hershey Mills
West Chester, PA 19380
Dear Larry:
This letter (the "Agreement") sets forth the enhanced severance arrangement
agreed to by West Pharmaceutical Services, Inc. (the "Company") and you. The
terms contained in this Agreement represent an exception to, and provide for
benefits in excess of, the Company's standard severance policy. Please read this
letter carefully. It contains the terms and conditions of your severance,
including important deadlines with respect to the continuation of key benefits.
Each of the benefits listed below is expressly conditioned on your
complying with all of your obligations under this Agreement and the Agreement
and General Release (the "Release"), which is attached hereto as Exhibit "A" and
incorporated herein by reference. Each of such benefits is also expressly
conditioned on your complying with the provisions of Section 6 (Non-Disclosure
and Confidentiality) and Section 9 (Non-Competition) of the Second Amended and
Restated Change-in-Control Agreement dated as of March 25, 2000 between the
Company and you (such provisions being collectively referred to herein as the
"Non-Compete and Confidentiality Obligations").
1. Termination Date. Your last day of employment with the Company will be
June 29, 2001 (the "Termination Date"). Between the date of this
Agreement and the Termination Date, you will report to and your duties
will be specified by Steven A. Ellers.
2. Severance Payments. You will receive severance salary payments
totaling $418,038, paid biweekly in accordance with Company practice
with normal deductions such as health insurance and taxes, for the
period commencing on July 1, 2001 and continuing until June 27, 2003
(the "Severance Period"). These payments represent 12 weeks of
severance pay to which you would be entitled under the Company's
severance policy plus an additional 92 weeks of severance pay to be
provided in consideration of your execution of the Release. You will
receive the full amount of severance pay regardless of whether you
find other employment prior to the end of the Severance Period.
Any earned/unused vacation owed for this year will be paid to you as
soon as practical. You will not be eligible to receive salary
increases, cash bonuses or incentive stock-based grants or awards of
any kind on or after the Termination Date.
3. Financial Planning Assistance. You will receive $3,000 towards
financial planning, which will be paid to you in a lump sum within 30
days following the date on which you deliver an executed copy of this
Agreement to the Company.
4. Company Car. You may continue the use of your company car until the
Termination Date. You may purchase your company car from the Company
for the sum of $1.00 (one dollar). You must notify the Company if you
elect to purchase the car on or before the date on which you deliver
an executed copy of this Agreement to the Company.
5. Medical Coverage. The Company will continue standard medical and
dental benefits until the last day of the month prior to your becoming
65 years old. This coverage will be available to you and your
dependents. The levels of coverage will be those in effect from time
to time for employees of the Company. You and your dependents will
also be eligible for Executive Medical benefits currently available to
active senior executive officers of the Company. The Company will
continue to pay the same portion of the cost of the coverage as it did
when you were employed, and your cost will be deducted from your
severance payments.
6. Life Insurance. Coverage under the Company's group-term life insurance
policy, including any supplemental insurance coverage that you may
have purchased, will also continue through the end of the Severance
Period. You are eligible to convert this group-term life insurance
policy to an individual life policy. However, to do so, you must apply
and pay the first premium within 31 days after the end of the
Severance Period. A Group Conversion form will be mailed to you during
the 30-day period preceding the end of the Severance Period.
7. Short and Long-Term Disability. Your short and long term disability
insurance coverage will cease as of the Termination Date.
8. Deferred Compensation and Savings Plan. You will need to contact
American Express Trust Company at (800) 355-5770 to receive a complete
rollover/distribution package with respect to your participation in
the Company's Savings Plan. If you have an outstanding loan, you
should contact American Express promptly to ensure that you avoid any
adverse tax consequences.
Any balances in your accounts under the Deferred Compensation Plan for
Designated Executive Officers will be distributed to you in accordance
with your elections under that plan and applicable plan provisions. We
urge you to review the plan document and other information on the plan
that has been provided to you. If you have questions about the plan or
its operation, please contact John Gailey at (610) 594-3319.
9. Retirement Plan. You will be eligible to accrue up to an additional 12
months years-of-service credit under the West Pharmaceutical Services,
Inc. Employees' Retirement Plan. At the end of that period, a
calculation of your estimated pension benefit will be forwarded to
you.
Stock-Based Incentive Plans. Any unvested stock options and incentive
(restricted) shares awarded to you under the Long Term Incentive Plan
and 1998 Key Employee Incentive Compensation Plan will become vested
on the Termination Date. Solely for purposes of determining the
post-termination stock-option exercise period, you will be deemed to
have retired from the Company as of the Termination Date. Your bonus
shares and incentive shares will be issued to you as soon as practical
after termination. For your convenience, information concerning your
vested stock options is attached as Schedule I hereto.
You are encouraged to refer to the applicable plan documents and
information statements previously sent to you, as well as the
individual agreements covering such awards and grants, for additional
information.
10 Termination of Benefits. Participation in all other benefit or
compensation programs and arrangements not specifically continued in
accordance with this Agreement will cease as of the Termination Date.
11. Reimbursement of Expenses. You confirm that you have been reimbursed
for any outstanding qualified travel and entertainment expenses.
12. Outplacement Assistance. As part of the Company's commitment to you
and in exchange for the consideration given by the Company to you, you
will be provided with "executive" level outplacement services of a
value of up to $25,000 to be used as needed by you.
13. Notices. Any notifications or other communications required or
permitted under this Agreement shall be sent in writing via the U.S.
mails or facsimile to the following addresses:
If to you:
Mr. Lawrence P. Higgins
758 Inverness Way
Hershey Mills
West Chester, PA 19380
If to the Company:
West Pharmaceutical Services, Inc.
101 Gordon Drive
Lionville, PA 19341
Attention: General Counsel
Facsimile: 610 594-3013
or to such other address, or facsimile number, as may be notified in
writing in accordance with this paragraph.
14. Agreementand General Release. In exchange for the compensation package
described above, you expressly agree to and will sign the Release and
the Resignation Letter attached hereto as Exhibit "B" and deliver them
to the Company at the time of delivery of a countersigned copy of this
Agreement.
15. Miscellaneous.
(a) As noted in the first paragraph hereof, your breach of any
provision of this Agreement, the Release or the
Confidentiality and Non-Compete and Confidentiality
Obligations will result in an immediate termination of all
obligations of the Company hereunder.
(b) This Agreement will be binding upon and inure to your
benefit and the benefit of your personal representatives and
heirs and the Company and any successor of the Company. In
the event of your death prior to expiration of the Severance
Period, the balance of any unpaid cash severance payments
will be paid in a lump sum to the beneficiary listed on the
survivor beneficiary form attached to this Agreement as
Exhibit "C" no later than the end of the month following the
month in which death occurs. All other benefits otherwise
payable under this Agreement will terminate upon your death.
(c) Should any provision of this Agreement be adjudged to any
extent invalid by any court of competent jurisdiction, that
provision will be deemed modified to the extent necessary to
make it enforceable.
(d) This Agreement will be governed and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
(e) This Agreement, together with the Release, the Resignation
Letter and the Non-Compete and Confidentiality Obligations,
constitute the entire agreement and understanding between
you and the Company with respect to the subject matter
hereof and merges and supersedes all prior discussions,
agreements and understandings between you and the Company
with respect to such matters.
(f) This Agreement may be executed in one or more counterparts,
which together shall constitute a single agreement.
* * * * * * * *
By signing below, you signify your intent to be legally bound by the terms
of this Agreement.
Very truly yours,
West Pharmaceutical Services, Inc.
By: _______________________________
George R. Bennyhoff, Senior Vice
President, Human Resources
Intending to be legally bound, agreed to
and accepted this day of July, 2001
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Lawrence P. Higgins
ATTACHMENTS Release (attached as Exhibit "A") Resignation
Letter (attached as Exhibit "B") Designation of
Beneficiary (attached as Exhibit "C") Stock Options
information (attached as Schedule I)
EXHIBIT "A"
AGREEMENT AND GENERAL RELEASE
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NOTICE: This is a very important legal document, and you should thoroughly
review and understand the terms and effect of this document before signing it.
By signing this Agreement and General Release, you will be completely releasing
West Pharmaceutical Services, Inc. from all liability to you. Therefore, you
should consult with an attorney before signing this Agreement and General
Release. You have 45 days from the date of distribution of these materials to
consider this document. If you have not returned a signed copy of this Agreement
and General Release by that time, we will assume that you have elected not to
sign the Agreement and General Release. If you choose to sign the Agreement and
General Release, you will have an additional seven (7) days following the date
of your signature to revoke the Agreement and General Release, and the Agreement
and General Release shall not become effective or enforceable until the
revocation period has expired.
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Intending to be legally bound by the provisions of this Agreement and in
consideration of the negotiated payments and benefits specified in the
accompanying letter agreement which shall be incorporated as if fully set forth
within, dated July 17, 2001 between West Pharmaceutical Services, Inc. and me,
providing valuable consideration to which I would otherwise not be entitled, I,
LAWRENCE P. HIGGINS hereby release and discharge West Pharmaceutical Services,
Inc. and its affiliates, parents, subsidiaries, successors, and predecessors and
all of their employees, agents, attorneys, officers, and directors (individually
and collectively referred to as the "Company") from any and all claims and/or
causes of action, known or unknown, which I may have or could claim to have
against the Company in connection with my employment with the Company up to and
including the date of my signing of this General Release.
This General Release includes, but is not limited to, all claims arising
from or during my employment or as a result of the termination of my employment
and all claims arising under federal, state, or local laws prohibiting
employment discrimination based upon age, race, sex, religion, handicap,
national origin, or any other protected characteristic, including, but not
limited to, any and all claims arising under the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act of 1964 and 1991, the
Americans with Disabilities Act, the Family and Medical Leave Act, the Equal Pay
Act, the Pennsylvania Wage Payment and Collection Law, the Pennsylvania Human
Relations Act, any other federal, state or local labor or employment law, and
claims under the common law and/or growing out of any legal restrictions,
express or implied, in contract or on any other grounds, or the Company's right
to control or terminate the employment fits employees.
By signing below, I acknowledge that I have carefully read and fully
understand the provisions of this Agreement and General Release. I further
acknowledge that I am signing this Agreement and General Release knowingly and
voluntarily and without duress, coercion or undue influence. I further agree
that should I file a claim with any agency or any lawsuit in court which is
found to be barred in whole or in part by this General Release, I will pay the
legal fees and costs incurred by the Company in defending those claims found to
be barred and shall also be obligated to tender back upon filing of such
complaint in state or federal court or before any administrative agency any
consideration that I have received pursuant to the severance arrangements
provided within the accompanying Letter Agreement.
This Agreement and General Release constitutes the total and complete
understanding between me and the Company relating to the subject matter covered
by this Agreement and General Release and all other prior or contemporaneous
written oral agreements or representations, except the accompanying Letter
Agreement setting forth the terms of my severance arrangement, if any, otherwise
relating to the subject matter of this Agreement and General Release are null
and void. It is also expressly understood and agreed that the terms of this
Agreement and General Release may not be altered except in writing signed by
both the Company and me. I further understand and agree that the terms and
conditions of this Agreement and General Release shall not be communicated to
any persons other than those referred to herein and to my spouse or legal
counsel, if applicable.
INTENDING TO BE LEGALLY BOUND, I hereby set my hand and seal below:
Witnessed by:
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Witness LAWRENCE P. HIGGINS
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Dated Dated
Exhibit "B"
June 30, 2001
To the Board of Directors
West Pharmaceutical Services, Inc.
101 Gordon Drive
Lionville, PA 19341
To Whom It May Concern:
Please be advised that I hereby resign from all positions that I currently
hold with West Pharmaceutical Services, Inc., its subsidiaries and its
affiliated companies.
Very truly yours,
Lawrence P. Higgins
EXHIBIT "C"
DESIGNATION OF BENEFICIARY FOR SEVERANCE PAYMENTS
Designation of Beneficiary. I understand that I may designate one beneficiary
who, in the event of my death before all amounts due to me under the Severance
Letter Agreement dated July 17, 2001 have been distributed, will receive such
amounts. I hereby designate as my beneficiary:
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Name Relationship
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1.
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If the person named above as beneficiary does not survive
me, I hereby designate as my contingent beneficiary:
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2.
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If no beneficiary has been designated under this Exhibit,
or all beneficiary designations are ineffective, then
all amounts payable pursuant to the Severance Letter
Agreement shall be paid to my estate. Any benefits
which may be payable to my beneficiary shall be paid
in the form of a lump sum.
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I reserve the right to revoke or amend this designation of beneficiary by
written notice.
Date:
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Lawrence P. Higgins
Schedule I
Lawrence P. Higgins
Summary of Options as of May 10, 2001
Number of Option Price Last Date
Grant Date Shares Exercisable Per Share To Exercise
03/26/1997 8,518 $27.50 03/25/2002
08/05/1997 45,000 $29.40630 06/28/2002
03/25/2000 24,000 $26.03130 06/28/2002
05/02/2001 8,000 $26.75 06/28/2002