Exhibit 10 (b)
April 28, 1998
[NAME]
[ADDRESS]
Dear _____:
The Board of Directors (the "Board") of the Company and
the Compensation Committee (the "Committee") of the Board
have determined that it is in the best interests of the
Company and its shareholders for the Company to make the
following arrangements with you. These arrangements provide
for compensation to be paid to you in the event you should
leave the employment of the Company under the circumstances
described in this letter.
* * * * *
1. Background. The Board and the Committee recognize that
it is of the utmost importance to the Company to
provide for continuity of management and its
uninterrupted attention and dedication to the affairs
of the Company. Recent experience has indicated that
certain acquisitions or sales of assets or capital
stock of a company are unsettling to the management of
a corporation. Therefore, these arrangements are being
made to help assure the continuing dedication by you to
your duties to the Company notwithstanding the
occurrence of such acquisitions or sales of assets or
capital stock of the Company.
In particular, the Board believes it is important,
should the Company receive such proposals or
contemplate such actions, to enable you, without being
influenced by the uncertainties of your own situation,
to assess such proposals or actions and advise the
Board whether they are in the best interests of the
Company and its shareholders and to take such other
action regarding such actions or proposals as the Board
may determine to be appropriate. The Board also wishes
to demonstrate to its management personnel that the
Company is concerned with their welfare and intends to
see that they are treated fairly.
In view of the foregoing, and in consideration of your
continued employment with the Company, the Company
agrees with you as follows:
Definitions. As used in this Agreement, the
following terms will have the meanings described
below:
a) "Change in Control" shall mean a change in
control of a nature that would be required to
be reported in response to Item 1 of the
Current Report on Form 8-K as in effect on
April 28, 1998 pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934,
as amended (the "Act"), provided, that,
without limitation, a Change in Control shall
be deemed to have occurred if:
i) any "Person" (as such term is used in
Sections 13(d) and 14(d) of the Act),
other than:
a) the Company,
b) any Person who on the date hereof
is a Employee or officer of the
Company, or
c) a trustee or fiduciary holding
securities under an employee
benefit plan of the Company,
ii) is or becomes the "beneficial owner,"
(as defined in Rule 13-d3 under the
Act), directly or indirectly, of
securities of the Company representing
more than 50% of the combined voting
power of the Company's then outstanding
securities; or
iii) during any period of two consecutive
years during the term of this Agreement,
individuals who at the beginning of such
period constitute the board of Employees
of the Company cease for any reason to
constitute at least a majority thereof,
unless the election of each Employee who
was not a Employee at the beginning of
such period has been approved in advance
by Employees representing at least two-
thirds of the Employees then in office
who were Employees at the beginning of
the period; or
iv) the shareholders of the Company approve:
(A) a plan of complete liquidation of
the Company; or (B) an agreement for the
sale or disposition of all or
substantially all of the Company's
assets; or (C) a merger, consolidation,
or reorganization of the Company with or
involving any other corporation, other
than a merger, consolidation, or
reorganization that would result in the
voting securities of the Company
outstanding immediately prior thereto
continuing to represent (either by
remaining outstanding or by being
converted into voting securities of the
surviving entity), at least fifty
percent (50%) of the combined voting
power of the voting securities of the
Company (or the surviving entity, or an
entity which as a result of such
transaction owns the Company or all or
substantially all of the Company's
assets either directly or through one or
more subsidiaries) outstanding
immediately after such merger,
consolidation, or reorganization.
b) "Constructive Termination" will mean the
occurrence of any of the following events
(provided that you have not agreed in writing
that any of these events will apply to you):
i) the Company requires you to assume any
duties inconsistent with, or the Company
makes a significant diminution or
reduction in the nature or scope of your
authority or duties from, those assigned
to or held by you on the date of this
Agreement;
ii) a material reduction in your annual
salary or incentive compensation
opportunities;
iii) a relocation of your site of employment
to a location more than 50 miles from
your site of employment on the date of
this Agreement;
iv) the Company fails to provide you with a
reasonable number of paid vacation days
at least equal to the number of paid
vacation days to which you were entitled
in the last full calendar year prior to
the execution of this Agreement;
v) the Company fails to provide you with
substantially the same fringe benefits
that were provided to you immediately
prior to the date of this Agreement, or
with a package of fringe benefits that,
though one or more of such benefits may
vary from those in effect immediately
prior to the execution of this
Agreement, is substantially at least as
beneficial to you in all material
respects as such prior fringe benefits
taken as a whole; or
vi) a successor of the Company does not
assume the Company's obligations under
this Agreement, expressly or as a matter
of law.
vii) Notwithstanding the foregoing, no
Constructive Termination will be deemed
to have occurred under any of the
following circumstances:
a) You will have consented in writing
or given a written waiver to the
occurrence of any of the events
enumerated in clauses (i) through
(vi) above;
b) You will have failed to give the
Company written notice stating your
intention to claim Constructive
Termination and the basis for that
claim at least 10 days in advance
of the effective date of the
resignation; or
c) The event constituting a
Constructive Termination has been
cured or reserved by the Company
prior to the effective date of your
resignation.
c) "Retirement Plan" will mean The West Company,
Incorporated Employees Retirement Plan, and
any successor plan thereto.
d) "Savings/Deferred Comp Plan" will mean The
West Company Salaried Employees Savings
Plan, The West Company Non-Qualified Deferred
Compensation Plan for Designated Executive
Officers and any other similar plan
established from time to time that may allow
executive officers to defer taxation of
compensation.
3. Termination following a Change in Control. You will be
entitled to the benefits specified in Section 4 if, at
any time within two years after a Change in Control has
occurred, your employment by the Company is terminated
a) by the Company, other than by reason of death,
disability, continuous willful misconduct to the
detriment of the Company, or retirement at your
normal retirement date under the Retirement Plan,
or
b) as a result of your resignation within 30 days
following your Constructive Termination. You will
not be entitled to the benefits specified in
Section 4 if your employment terminates for any
other reason (including your voluntary resignation
after a Change in Control but without a
Constructive Termination) or if, at any time
thereafter, you are in breach of any of your
obligations under this Agreement.
4. Benefits Payable upon Termination of Employment. Upon
termination of employment as set forth in Section 3,
you will be entitled to the following benefits:
a) Severance Compensation. You will be entitled to
severance compensation in an amount equal to three
times the sum of
i) your highest annual base salary rate in
effect during the year of the termination of
your employment, plus
ii) the annual bonus paid or payable for the
fiscal year immediately preceding a Change in
Control or upon the termination of your
employment (whichever amount is greater);
provided, however, that if at any time before the third
anniversary of the termination of your employment, you
either (x) elect retirement under the Retirement Plan,
or (y) could have been compelled to retire under the
Retirement Plan if you had remained employed by the
Company, your severance compensation under this
paragraph 4(a) will be reduced by an amount equal to
the product obtained by multiplying such severance
compensation by a fraction of the numerator of which is
the number of days elapsed from the date of termination
of your employment until the date on which either of
the events described in clauses (x) or (y) first
occurs, and the denominator of which is 1095.
The severance compensation paid hereunder will not be
reduced to the extent of any other compensation for
your services which you receive or are entitled to
receive from any other employment consistent with the
terms of this Agreement.
b) Equivalent of Vested Savings/Deferred Comp Plan
Benefit. The Company will pay to you the
difference, if any, between
i) the benefit you would be entitled to receive
under the Savings/Deferred Comp Plan if the
Company's contributions to the
Savings/Deferred Comp Plan were fully vested
upon the termination of your employment and
ii) the benefit you are entitled to receive under
the terms of the Savings/Deferred Comp Plan
upon termination of your employment.
Any such benefit will be payable at such time and in
such manner as benefits are payable to you under the
Savings/Deferred Comp Plan.
c) Unvested Shares. All shares of the Company s
stock awarded to you pursuant to any Company
benefit plan, but which are unvested, will vest
immediately upon termination of your employment.
The provisions of this Section 4c. will supersede
the terms of any stock award made to you under any
such plan to the extent there is an inconsistency
between the two.
d) Employee and Executive Benefits. You will be
entitled to a continuation of all hospital, major
medical, medical, dental, life and other insurance
benefits not otherwise addressed in this Agreement
in the same manner and amount to which you were
entitled on the date of a Change in Control or on
the date of Constructive Termination of your
employment (whichever benefits are more favorable
to you) until the earlier of
i) a period of 36 months after termination of
your employment,
ii) your retirement under the Retirement Plan, or
iii) your eligibility for similar benefits with a
new employer
Assistance in finding new employment will be made
available to you by the Company if you so request.
Upon termination of your employment, Company cars must
be returned to the Company.
e) Certain Reduction of Payments. It is possible
that if you were to receive the full amount of the
payments or benefits described in the previous
paragraphs of this Section 4, some of those
payments or benefits could be subject to a "golden
parachute" excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended (the
"Excise Tax").
Furthermore, such payments or benefits could cause
other payments made or benefits provided to you
outside this Agreement to be subject to the Excise
Tax. Because payments or benefits subject to the
Excise Tax are not deductible by the Company,
paying benefits subject to the Excise Tax can
substantially reduce the benefits you actually
receive while increasing the cost of those
benefits.
Accordingly, any payments or other benefits to
which you become entitled because of a Change in
Control, whether under this Agreement or
otherwise, will be reduced, but only to the extent
necessary to insure that none of those payments is
an "excess parachute payment" within the meaning
of Section 280G(b) of the Internal Revenue Code.
The amount of any necessary reduction will be
determined by the accounting firm that was the
Company's independent auditors immediately prior
to a Change in Control (or in default thereof, an
accounting firm mutually agreed upon by the
Company and you), within 15 days after your
termination of employment. All determinations by
the accounting firm will be binding on you and the
Company.
Any such reduction will be made (i) first to
payments of severance compensation under Section
4(a) made at the most distant point in time
following your termination of employment, and (ii)
then, to the extent practicable, to other payments
or benefits (whether or not under this Agreement)
made at the most distant point in time following
your termination of employment. Only payments or
benefits that would otherwise be subject to the
Excise Tax will be reduced.
The costs of the accounting firm's supplying the
calculations and determinations described in this
Section 4(e) will be borne solely by the Company.
5. Payment of Severance Compensation. The severance
compensation set forth in Section 4a. will be payable
in 36 equal monthly installments commencing on the
first day of the month following the month in which
your employment terminates. However, you may elect in
writing, in accordance with the provisions of this
Section, to receive your severance compensation in a
lump sum at a later time or in installments in amounts
and at times elected by you, but your election will not
entitle you to receive severance compensation sooner
than permitted by the preceding sentence.
You must elect to receive amounts in installments or to
defer payments by filing a written election with the
Company. Such election must specify the time at which
payments are to be made and the amounts of such
payments. Your election to receive installment
payments or to defer payments will not be valid unless
it is made prior to the time you are entitled to
receive any payments under this Agreement. The last
such election in effect on the day before a termination
of employment will be controlling. No election may be
made on or after termination of employment.
The payment of deferred amounts must commence no
earlier than the first business day of the calendar
year following the termination of your employment and
no later than the third calendar year following the
attainment of normal retirement age under the
Retirement Plan.
6. Non-Disclosure and Confidentiality. You agree that you
will keep secret and maintain in confidence all
confidential information of the Company and will not
use such information other than for the Company's
benefit or disclose such information to anyone outside
of the Company, either during or after your employment
with the Company.
You also will promptly deliver to the Company on the
termination of your employment with the Company, or at
any time the Company requests, all memoranda, notes,
records and other documents (and all copies thereof)
relating to the Company's business or confidential
matters which you then have or control.
All inventions, improvements, new ideas and techniques
which relate to the Company's business which you make
or conceive during your employment with the Company or
within six months thereafter will be the Company's
property. Without additional compensation to you, you
will promptly inform the Company of such inventions,
improvements, ideas and techniques, and will assist the
Company in preserving them and will not disclose them
to anyone else without the Company's consent.
You understand that, as used in this Section, the term
"confidential information of the Company" includes all
information of a technical, commercial or other nature
of or about the Company (such as formulae, trade
secrets, customer lists and know-how) not made
available to the general public.
7. Legal Fees. The Company will pay all legal fees and
expenses which you may incur as a result of the
Company's contesting the validity or enforceability of
this Agreement.
8. Payments Final. In the event of a termination of your
employment under the circumstances described in this
Agreement, the arrangements provided for by this
Agreement, or any other agreement between the Company
and you in effect at that time and by any other
applicable plan of the Company in which you then
participate will constitute the entire obligation of
the Company to you, and performance of that obligation
will constitute full settlement of any claim that you
might otherwise assert against the Company on account
of such termination.
The Company's obligation to pay you under this
Agreement will be absolute and unconditional and will
not be affected by any circumstance, including without
limitation, any set-off, counterclaim, defense or other
rights the Company may have against you or anyone else
as long as you are not in beach of your obligations
under this Agreement.
9. Non-Competition. In view of the importance to the
Company of your continued employment and the harm that
the Company would suffer if a competitor obtained your
services, you will not, during the term of your
employment by the Company and for a period of one year
thereafter, whether or not a Change in Control occurs,
directly or indirectly, either alone or with others,
own, manage, operate, or control any business, or be
employed by any company in that part of its business,
which directly or indirectly competes with the Company,
its subsidiaries or affiliates in any part of the
United States.
The foregoing will not prevent your owning any security
registered under the Securities Exchange Act of 1934.
It is understood that a business competes with the
Company if it manufactures competitive products for
itself or for sale to others.
10. Duration of Agreement. This Agreement may not be
terminated by either party, except that (a) this
Agreement may be terminated at any time by the mutual
written consent of you and the Company, and (b) the
Company may also terminate this Agreement at the end of
each successive two-year period commencing on the date
of this Agreement. The Company may terminate this
Agreement under clause (b) of this Section 10 by giving
you written notice at least one year in advance of such
termination, except that such termination and written
notice will not be effective unless you will be
employed by the Company on the termination date.
11. Miscellaneous.
a) In consideration for the benefit of having the
protection afforded by this Agreement, you agree
that the provisions of Sections 6 and 9 of this
Agreement apply to you, and you will be bound by
them, whether or not a Change in Control occurs or
you actually receive the benefits specified in
Section 4.
b) This Agreement will be binding upon and inure to
the benefit of you, your personal representatives
and heirs and the Company and any successor of the
Company, but neither this Agreement nor any rights
arising hereunder may be assigned or pledged by
you.
c) The invalidity or unenforceability in any respect
of any provision of this Agreement will not affect
the validity or enforceability of such provision
in any other respect or the validity or
enforceability of any other provision.
d) This Agreement will be governed and construed in
accordance with the laws of the Commonwealth of
Pennsylvania.
e) This Agreement will constitute the entire
agreement and understanding between the Company
and you with respect to the subject matter hereof
and merges and supersedes all prior discussions,
agreements and understandings between the Company
and you with respect to such matters.
12. This Agreement amends, restates and supersedes the
agreement between you and the Company dated as of
_________ , (the Prior Agreement ), and the Prior
Agreement shall be null and void and have no further
effect.
If you are in agreement with the foregoing, please so
indicate by signing and returning to the Company the
enclosed copy of this letter, whereupon this letter will
constitute a binding agreement between you and the Company
and our mutual intention to be legally bound as of the date
and year first written above.
Very truly yours,
THE WEST COMPANY, INCORPORATED
By:_________________________________
William G. Little
Chairman of the Board,
President and Chief Executive Officer
Accepted and agreed to:
______________________________
[NAME]