Exhibit 10 (e)
West Pharmaceutical Services, Inc.
Executive Incentive Bonus Plan
The Incentive Bonus Plan is based on the following concepts:
* Excellent service to our customers will create shareholder
value.
* Employees must share in the Company's success.
* Earnings per share (EPS) is the measurement of success for
the total corporation.
Here's how the plan works:
TARGET BONUS
The target bonus is a specific percentage of your base salary (in
effect on December 31 of the prior year) and represents the
amount of bonus you will receive if 100% of all performance
factors is achieved.
PERFORMANCE FACTORS
There are two performance factors which are used to calculate
bonuses:
* 75% of the bonus calculation (referred to as the "EPS
Portion") will depend on achievement of the earnings-per-
share (EPS) target contained in the Company s business plan
for the bonus year.
* 25% of the bonus calculation will be based on the board of
directors' evaluation of:
1. Our success in growing revenues from West's current
businesses
2. Our success in growing West's revenues through new
business opportunities (acquisitions, mergers,
licensing agreements, etc.)
The EPS Portion of your bonus is tied directly to the percentage
achievement of the EPS target. Thus, for example, if the Company
achieves 110% of budgeted EPS results, you will receive 110% of
your Bonus Portion. Of course, this means that your EPS Portion
will be less than 100% if EPS results fall short of budget. There
is no "maximum" payout opportunity, but no bonus at all will be
paid if EPS does not equal at least 89% of the EPS target.
ILLUSTRATION OF BONUS CALCULATION
An executive earning $120,000, whose target bonus opportunity is
30%, would have his/her bonus calculated as follows if the
Company achieves an 101% of budgeted EPS and the Board
determines that management has achieved 100% for revenue
growth success:
Target Bonus %Achieved Bonus% Bonus$
EPS 75% x Bonus = Opp. x (from scale) = Earned x Salary = Earned
Rev. Target Bonus Bonus$
Growth 25% x Bonus = Opp. x %Achieved = Earned x Salary = Earned
EPS 75% x 30% = 22.5% x 101% = 22.73% x 120,000 = $27,276
Rev.
Growth 25% x 30% = 7.5% x 100% = 7.5% x 120,000 = $9,000
Total Bonus Earned 30.4% = $36,276
BONUS AND INCENTIVE SHARES
You will receive a portion of your annual bonus in shares of the
Company's common stock. Here's how this program works:
* Your total bonus award will be calculated applying
appropriate tax deductions. 75% of that after-tax amount
will be paid in cash (check) and 25% will be paid in shares
of the Company s common stock (referred to as Bonus
Shares ) based on the fair market value of the shares at the
time of award.
* A number of restricted shares (referred to as "Incentive
Shares") equal to 25% of the Bonus Shares will also be
issued to you at that time.
* The Bonus Shares and Incentive will be deposited into an
account in your name with a brokerage firm selected by the
Company. You will receive dividends from Bonus Shares and
Incentive Shares, which will be automatically reinvested in
additional shares of stock.
* The Incentive Shares will vest (i.e., will be yours to keep)
at the end of four years from the date of award, so long as
you do not sell or transfer your Bonus Shares during that
period.
* If you sell the Bonus Shares or leave the Company for any
reason other than disability, retirement or death, the
Incentive Shares awarded to you will be forfeited.
* If your employment terminates due to death, retirement or
disability, the restrictions will lapse and you will be
entitled to receive a portion of the Incentive Shares
according to the following schedule:
25% with at least one but less than two years continuous
ownership of the Bonus Shares.
50% with at least two but less than three years
continuous ownership of the Bonus Shares.
75% with at least three but less than four years
continuous ownership of the Bonus Shares.
Ownership records will be reviewed annually to verify continuous
ownership.
STOCK OWNERSHIP GUIDELINE
Your personal stock ownership guideline is_________% of your base
salary and is expected to be achieved in 5-7 years from the year
an individual becomes eligible to participate in the Incentive
Bonus Plan.
MONITORING OUR PROGRESS
Our progress in achieving the EPS target will be communicated
throughout the year, and your manager will review your individual
objectives on a quarterly basis.
Use your TQM skills to lead the organization in overachieving our
business objectives. You will share in the reward when we
succeed.
ELIGIBILITY
Eligibility and the amount and type of awards under this plan are
solely at the discretion of management and are not guaranteed
under any circumstances. Participants must be active employees
on December 31, 1999 to be eligible for bonus payment
consideration.