Exhibit 10 (a)
WEST PHARMACEUTICAL SERVICES, INC.
RETIREMENT PLAN
FOR
NON-EMPLOYEE DIRECTORS
Adopted October 30, 1990
Reflecting Amendments
Effective on November 5, 1991, April 28, 1998 and May 27, 1999
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PLAN DOCUMENT
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RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS
1. Background and Purpose. This Retirement Plan was first
adopted to give appropriate recognition to the past services
of non-employee Directors of the Company and to assist in
attracting and retaining individuals of superior talent and
achievement as Directors of the Company. In April 1999 the
Board of Directors agreed to discontinue the Plan, allowing
current Directors to elect a distribution of stock-
equivalents in lieu of retirement benefits and closing the
Plan to future Directors. As a result of this decision, the
Compensation Committee of the Board, under authority
delegated to it by the Board, adopted amendments to the
Plan, effective May 27, 1999.
2. Definitions. For purposes of this Plan, the following words
and phrases shall have the meanings indicated below:
a) "Plan" means the West Pharmaceutical Services, Inc.
Retirement Plan for Non-Employee Directors, as amended
through May 27, 1999.
b) "Company" means West Pharmaceutical Services, Inc.
(formerly named "The West Company, Incorporated").
c) "Director" means a duly elected member of the Board.
d) "Participant" means a Director eligible to receive
benefits under the Plan pursuant to Section 4 hereof.
e) "Board" means the Board of Directors of the Company.
f) "Years of Service" means the number of completed,
twelve consecutive month periods beginning on the first
day an individual becomes a Director and on each
anniversary thereof, throughout which the Director was
a member of the Board. Years of Service include such
twelve consecutive month periods of membership on the
Board before and after January 1, 1990.
g) "Base Retainer" means the amount of annual retainer
payable to non-employee Directors for service on the
Board. The Base Retainer shall not include any Board
meeting fees or other payments for membership or
attendance, chairmanship of Board Committees or
otherwise.
h) "Disability" means that a physician acceptable to the
Compensation Committee has concluded that the
Participant is unable to engage in substantial gainful
activity by reason of a physical or mental impairment
which will be of long-continued and indefinite
duration.
i) "Electing Director" means any Participant in office on
May 27, 1999 who makes an election to continue to
receive benefits at retirement under paragraph 3b) ii)
of the Stock-Equivalents Plan
j) "Stock-Equivalents Plan" means the West Pharmaceutical
Services, Inc. Stock-Equivalents Compensation Plan.
3. Effective Date. The Plan shall be effective as of January 1,
1990.
4. Eligiblity for Participation. Directors who have not been
employees of the Company or any of its subsidiaries or
affiliates shall be eligible to receive a retirement benefit
under the Plan to the extent set forth below:
a) Any Participant receiving retirement benefits as of May
27, 1999 under the Plan shall continue to be eligible
to receive the benefits set forth in Section 5 a)
hereof.
b) Any Electing Director shall be entitled to receive the
retirement benefits specified in the Stock-Equivalents
Plan.
c) No other person shall be entitled to any benefits
whatsoever under the Plan.
5. Retirement Benefits.
a) Normal Retirement Benefit. A Participant who has
completed a minimum of five (5) Years of Service as a
Director and who ceases to be a Director before May 27,
1999 shall be entitled to receive an annual retirement
benefit commencing at age sixty (60) computed as
follows:
1) An amount equal to fifty percent (50%) of the
Participant s Base Retainer at the time of
retirement, plus
2) An amount equal to ten percent (10%) of the
Participant's Base Retainer at the time of
retirement for each full Year of Service in excess
of five (5) Years of Service, but not in excess of
ten (10) Years of Service.
b) Retirement Benefit for Electing Directors. An Electing
Director who ceases to be a Director on or after May
27, 1999 shall be entitled to receive an annual
retirement benefit in the amount set forth in the
Stock-Equivalents Plan, payable in accordance with
Section 6 hereof.
c) Maximum Retirement Benefit. The maximum annual
retirement benefit payable under this Plan shall be
equal to one-hundred percent (100%) of the
Participant's Base Retainer at the time of retirement.
d) Disability Retirement Benefit. In the event an
Electing Director ceases to be a Director by reason of
Disability, the Electing Director shall be entitled to
receive disability benefits determined in accordance
with the Stock-Equivalents Plan. The Electing
Director's disability benefit shall be paid in
accordance with the provisions of Section 6 hereof.
6. Payment and Duration of Retirement Benefits.
a) All retirement benefits shall be payable in quarterly
installments on the first day of the calendar quarter.
b) Retirement benefits shall continue for no more than
fifteen (15) years. Upon the death of a retired
Participant, benefit payments will cease with the month
immediately following the date of the retired
Participant's death. Spousal payments may then begin as
described in Section 6 c).
c) If a retired Participant dies before receiving the full
fifteen (15) years of benefits, the surviving spouse,
if any, shall receive fifty percent (50%) of any
remaining benefit payments. If there is no surviving
spouse at the time of a retired Participant's death or
if the surviving spouse dies before receiving the
remaining benefit payments, then there will be no
further payment obligations under the Plan.
7. No Funding. This Plan shall not be deemed to create any
trust, escrow or other funding arrangement. No retirement
benefit payable under the Plan shall be considered
segregated funds and all such amounts shall, at all times
prior to the payment of same, be and continue to be the
property of the Company commingled with its other assets.
The right of any Participant or his or her eligible spouse
to benefits under this Plan shall be an unsecured claim
against the general assets of the Company.
8. Plan Administration. The general administration of the Plan
and the responsibility for interpreting the Plan and
carrying out its provisions shall be vested in the
Compensation Committee. The Compensation Committee may adopt
such rules and regulations as it may deem necessary for the
proper administration of this Plan, and its decision in all
matters shall be final, conclusive and binding. If one or
more members of the Committee are disqualified by personal
interest from taking part in a particular decision, the
remaining member or members of the Committee (although less
than a quorum) shall have full power to act on the matter.
9. Termination of the Plan. The Board reserves the right to
terminate the Plan at any time without the consent of any
current or former Director. Upon termination of the Plan,
all Participants shall continue to have the right to receive
benefits earned and accrued hereunder prior to such
termination.
10. Amendment of the Plan. The Board has the right to amend the
Plan at any time and from time to time without the consent
of any current or former Director.
11. Change in Control.
a) Notwithstanding any other provision of this Plan, in
the event of a Change in Control (as defined herein),
each Electing Director in service on the Board
immediately prior to the effective time of the Change
in Control shall, at the Electing Director's option, be
entitled to either:
A) a $20,000 annual retirement benefit
commencing at age sixty (60), payable in
accordance with Section 6 hereof; or
B) a lump sum payment in the amount of the
present value of an annuity equal to $20,000
paid annually for fifteen years, such lump
sum payment to be in lieu of any payment
under Sections 5 or 6 hereof or under the
Stock-Equivalents Plan.
b) Within sixty (60) days following a Change in Control as
defined herein, a Participant or surviving spouse who
is already receiving payments under the Plan at the
time of a Change in Control will be paid a lump sum
equal to the present value of the remaining annuity
payments as of the time of the Change in Control.
c) 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:
1) any "Person" (as such term is used in Sections
13(d) and 14(d) of the Act), other than:
the Company,
any Person who on the date hereof is a
director or officer of the Company, or
a trustee or fiduciary holding securities
under an employee benefit plan of the
Company,
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
2) during any period of two consecutive years during
the term of this Plan, individuals who at the
beginning of such period constitute the Board
cease for any reason to constitute at least a
majority thereof, unless the election of each
director who was not a director at the beginning
of such period has been approved in advance by
directors representing at least two-thirds of the
directors then in office who were directors at the
beginning of the period; or
3) the shareholders of the Company approve: (1) a
plan of complete liquidation of the Company; or
(2) an agreement for the sale or disposition of
all or substantially all of the Company's assets;
or (3) 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.
d) For purposes of this Section, present value will be
calculated using the Pension Benefit Guaranty
Corporation interest rate that would be used on that
date for purposes of determining lump sum distributions
upon Plan termination.
e) Notwithstanding any other provisions of this Plan, this
Section 11 shall apply only to Directors who have not
been employed by the Company or any of its subsidiaries
or affiliates and whether or not any such person has
attained five or more Years of Service.
12. Miscellaneous.
a) No Agreement to Retain Directors. The Plan does not in
any way obligate the shareholders to continue to retain
a Director on the Board, nor does this Plan limit the
right of the shareholders to terminate a Director's
service on the Board.
b) Rights Non-Assignable. No retirement benefit payable
hereunder may be assigned, pledged, mortgaged or
hypothecated and, to the extent permitted by law, no
such retirement benefit shall be subject to legal
process or attachment for the payment of any claims
against any person entitled to receive the same.
c) Withholding. Payments made by the Company under this
Plan to any eligible Participant shall be subject to
such withholding as shall, at the time of such payment,
be required under any income tax or other laws, whether
of the United States or any other jurisdiction.
d) Successorship. It is the intent that the obligation of
the Company to pay benefits accrued or payable
hereunder shall be binding upon any successor
corporation or organization which shall succeed to
substantially all of the assets and business of the
Company. The term Company wherever used herein shall
mean and include any such corporation or organization
after such succession, and such obligations shall be
deemed to have been expressly assured by any such
corporation or other organization.
e) Governing Law. This Plan shall be governed by the laws
of the Commonwealth of Pennsylvania and shall be
construed for all purposes in accordance with the laws
of said Commonwealth.
* * * *
Certified True and Correct Copy of the Plan as Amended Through
May 27, 1999.
[CORPORATE SEAL] WEST PHARMACEUTICAL SERVICES, INC.
Date: By:
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John R. Gailey III
Secretary