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, 20002001
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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_][X]
As of March 22, 2001,26, 2002, the Registrant had 14,335,55614,419,590 shares of its Common Stock
outstanding. The market value of Common Stock held by non-affiliates of the
Registrant as of that date was $331,151,344.$432,587,700.
Exhibit Index appears on pages F-1, F-2, F-3 F-4 and F-5.F-4.
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 20002001 fiscal year (the "2000"2001 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.
PART 1
Item 1. Business
West Pharmaceutical Services, Inc. (formerly The West Company, Incorporated)(the Company) applies value-added
technologies to the process of bringing new drug therapies and healthcare
products to global markets. West'sThe Company's technologies include drug formulation
research and development, clinical research and laboratory services, and the
design, development, and manufacture of packaging components and systems for pharmaceutical, healthcaredispensing
and consumer products; research and development of drug delivery systems;
contract manufacturing and packaging services; clinical services; contract
laboratory services; and other services that support the manufacturing, filling
and packaging ofdelivering pharmaceutical, healthcare, and consumer products.
The Company's
activities are organized in threeDuring 2001 the Company consolidated operations into two operating segments:
1) the Device Product
DevelopmentPharmaceutical Systems 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 three business units serving mainly the
United States market)plastics and provides contract manufacturing and contract packaging
services to the pharmaceutical and personal care industries, contract laboratory services for testing injectable
drug packaging and clinical research for Phase
I, II and III studies as well as post clinical studies; andpackaging.
2) the Drug Delivery Research and DevelopmentSystems 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. This segment also provides clinical research for Phase I, II
and III studies and clinical and marketing research services mostly for consumer
products organizations.
As of December 31, 2000,2001, the Company and its subsidiaries had 4,7003,960 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 DevelopmentPharmaceutical Systems Segment
Principal ProductsProducts/Services
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Pharmaceutical Stoppers
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The Company is the world's largest independent manufacturer of rubber stoppers
for sealing injectable drug vials and other pharmaceutical containers. Several
hundred proprietary rubber formulations are molded from natural rubber and
synthetic elastomers into a variety of stopper sizes, shapes, and colors. The
stoppers are used in packaging serums, vaccines, antibiotics, anesthetics,
intravenous solutions and other drugs and solutions.solutions to assure the integrity of
these solutions during the product's approved shelf life.
Most stopper formulations are specially designed to be compatible with drugsa given
drug so that the drugsdrug will remain effectivesafe and unchangedeffective during storage. New
elastomeric compoundscomponents must be tested with each drug solution to show that
theyingredients do not leach into the customer's product or affect itsthe drug's
potency, sterility, effectiveness, color or clarity. The Company's laboratories
conduct tests to determine the compatibility of its rubber stoppers with
customers' drugs and, in the United States, file formulation information in its
Drug Master File with the Food and Drug Administration in support of customers'
new drug applications.
StoppersRubber stoppers are usually are washed, sterilized and subject to other pre-use
processes by the customer or a third-party before they are fitted on the filled
container. The Company has introduced a value-added line of stoppers that are
pharmaceutically pre-washed and ready to be sterilized, eliminating several
steps in customers' incoming processes. The Company is also marketingdeveloping a line of
pre-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.colors that help its customers differentiate and distinguish its drug
solutions. The seals are crimped onto glass or plastic pharmaceutical containers
to hold the rubber stoppers securely in place. The top of the 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. In recent years, the Company has upgraded production processes for
metal seal manufacturing, clearly bringing them to state-of-the-art capability.
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 systems used for lyophilized drug reconstitution and delivery,
which are molded and fabricated in a clean room environment,
* Plastic containers, bottles, and closures for the consumer and medical
device and diagnostic markets.markets,
* Elastomeric and plastic components for empty and pre-filled disposable
syringes such as plungers, hubs, and needle covers,
* Blood-sampling system components, including vacuum tube stoppers and
needle valves, and a number of specialized elastomeric and plastic
components for blood-analyzing systems and other medical devices,
* Components for IV Sets, and
* Disposable infant nursers and individual nurser components
The Company also manufactures a wide range of standard and custom- designed
plastic threaded caps and containers for the personal-care industry. The caps,
produced mainly for health and beauty aids, come in many different sizes and
colors.components.
The Company also makes closures for food and beverage processors. The
Company focusesprocessors, focusing its
efforts on multiple-piece closures that require high-speed assembly.
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 and
its interaction with drug product. Services offered include extractables and
leachables 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, is FDA registered, and is also approved for handling DEA type I-IV
products.
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 9495 professional employees were engaged in these
activities in 2000.2001. Development and engineering expenditures for the creation
and application of new and improved device products and manufacturing processes
were approximately $10.0 million in 2001, $9.6 million in 2000, and $9.3 million
in 2000, $8.9 million in 1999, and $8.9 million
in 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 --------------------------Segment
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Drug Delivery
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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,pulmonary,
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. Research and development expenditures for the drug
delivery business unit were $7.8 million in 2001, $7.5 million in 2000 and $4.9
million in 1999.
In 2000,2001, West Drug Delivery's efforts were focused on: client-funded projects;
on the further development of proprietary formulations of the drugs morphine,
calcitonin, insulin, flu vaccine, and leuprolide, bothall using the Company's
patented chitosan-based nasal delivery system;system (ChiSysTM) ; and on the
development of a proprietary formulation of budesonide (a steroid) using the
company's Targit(R)Company's TargitR 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 theThe nasal morphine product were completed and the product was licensed to
a third party for further development in 2000 and phase II clinical trials for
nasal morphine were completed in 2001. WestThe ChiSysTM technology was licensed to a
third party for delivery of a flu vaccine in 2001; phase II clinical trials for
the nasal flu vaccine were also completed in 2001. Phase I trials for nasal
leuprolide, nasal insulin, and TargetR budesonide were also completed in 2001.
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. Clinical Services operates two distinct divisions and performs as
a business unit within the Drug Delivery had 65 employeesSystems segment. The two business
divisions, which are described more fully below, are: a Phase I-through-IV
Clinical Trial research facility (the "GFI Research Center"); and a clinical
research organization (CRO) that conducts marketing and clinical research
studies for customers' prescription drugs, consumer products, and
over-the-counter (OTC) switch projects.
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.
West Consumer Healthcare Research (WCHR) is a niche CRO serving the biotech and
pharmaceutical industries. WCHR conducts a unique blend of marketing research
and clinical research "under one roof." These services include Phase III, Phase
IV, Rx-to-OTC switch work and specialty work in naturalistic studies including
label and package insert comprehension, consumer self-selection, self-diagnosis,
and actual use studies. In addition, WCHR performs claims substantiation
studies, experience trials, volumetric forecasting on IND drugs, and other
unique and customized research solutions that include clinical and/or marketing
research objectives. The Company has access to market research sites and
clinical sites across the United States and utilizes a central medical
operations group comprised of nurses and physicians for many of its studies.
Clinical Services' contracts provide a fixed price for each component or service
delivered. The ultimate contract value depends on such variables as the number
of December 31, 2000research sites selected, the number of patients enrolled and total expenses,
netother services
required by sponsors. These contracts range in duration from several months up
to two years. As services are performed over the life of revenuesthe 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 were $9.0 million in 2000are recorded as a
liability under "deferred revenue" until work has been completed and $7.7 million in 1999.revenue has
been earned. 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.
Recent Developments
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The Company has taken steps to expand its product offerings and improve the
competitiveness of botheach of its Device Product Development and Contract Services operating segments.
In 1996 and 1997,November 2001, the Company implementedsold all the operating assets of its contract
manufacturing and packaging business unit to DPT Lakewood, Inc., an affiliate of
DPT Laboratories, Ltd. and DFB Pharmaceuticals, Inc. The sales price totaled
$29.8 million, consisting of $28 million of cash and a major$1.8 million note due in
2003. The sale resulted in a net loss of $25.2 million, or $1.76 per share. The
balance of the proceeds received was used to repay outstanding debt. Following
the sale, the Company announced that it had consolidated its operations into two
segments: Pharmaceutical Systems and Drug Delivery Systems.
In 2001, the Company recorded a net restructuring plan announced
in 1996.charge of $2.9 million. The
plan includedcharge consisted of a restructuring provision of $4.9 million relating
principally to the closing or downsizingtermination of sixapproximately 25 mid-and senior level
management positions, and a $2.0 million adjustment related to the sale of a
Puerto Rico plastic device manufacturing facilities, withdrawalfacility held for sale from the machinery2000
restructuring program.
In 2000, the Company recorded a restructuring charge of $15.0 million. This
charge covered a $9.2 million goodwill write-down to the site management
organization of the clinical services business unit, a $2.7 million reduction to
the estimated net realizable value of a plastic device manufacturing plant in
Puerto Rico, and an approximate 5%
reduction$3.1 million of accrued severance, benefit, and asset disposal
costs.
Also, in 2000, the workforce. TheCompany recorded $5.8 million of restructuring was designed to reduce the costs
associatedcharges in
connection with multiple plant sites and shift certain production capacity to
lower-cost locations. In 1998, a further 1% reduction in the workforce, made
possible byits contract manufacturing and other operating efficiencies, was announced.
(Additional information pertainingpackaging operations. This charge
consisted of a $5.0 million reduction to the 1998 activities is incorporated by
referenceestimated net realizable value of
assets to the Note "Restructuring Charges"be sold and $0.8 million of Notes to Consolidated Financial
Statementsaccrued severance, benefit, and asset
disposal costs. These costs are recorded as part of the 2000 Annual Report to Shareholders.)
In 1998, the Company acquired Betraine Limited, a company located in England,
which manufactures precision injection molded plastic components for the
healthcare and consumer industries. The acquisition expanded global capabilities
in the non-injectable market. The Company's name was changed to West
Pharmaceutical Services Lewes (West-Lewes).discontinued operations.
In 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 packaging and
plastics device molding and the sterile-fill suite at the Lakewood, New
Jersey facility, and the 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 estimated growth has not
materialized. An after-tax charge of $15.5 million was taken to fourth quarter
2000 earnings to reflect the writedown of goodwill, asset write-offs, severance
charges, and other restructuring related costs.
Order Backlog
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Device productPharmaceutical Systems orders on hand at December 31, 2000, was2001, were approximately
$92$105 million, compared with approximately $96$92 million at the end of 1999. Orders2000. Firm
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
Drug Delivery Systems segment backlog, of unfilled customer orders was
approximately $11 million at December 31, 2000 and $9 million at December 31,
1999. Backlogwhich is defined by West Lakewood as orders written and included in
production schedules duringprimarily related to the
next twelve months. Such orders generally may be
cancelled by the customer without penalty.
The Clinical Services division backlogclinical services business unit, 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.cancelled. As of December 31, 2000,2001, the Clinical Services division'sDrug Delivery Systems segment backlog
was $6.5$4.1 million; at December 31, 19992000 the backlog was $6.2$6.5 million.
Raw Materials
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The Company uses three basic raw materials in the manufacture of its device
products: 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 materialsmaterial 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 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, theThe Company believes its drug delivery development capabilities will play an
increasingly important role in the future. The Drug Delivery operating segmentdrug delivery business unit has a
growing portfolio of patented technology,technologies, which is critical to the Company's
success because a significant amount of future income is expected to be derived
from licensing this technology to customers.
Major Customers
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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 packagingclinical research and contract
manufacturing services for many of the leading manufacturers of personal care
products and clinicalmarket
research services to full service contract research and consumer product
organizations. The Company distributes its products and services primarily
through its own sales force but also uses regional distributors in the United
States and in the Asia/Pacific region.
Becton Dickinson and Company ("BD") accounted for approximately 13% of the
Company's 20002001 consolidated net sales. The principal products sold to BD are
synthetic rubber, natural rubber, metal and plastic components used in BD's
disposable and pre-filled syringes and blood sampling and analysis devices. The
Company expects to continue as a major BD supplier.
Excluding BD, the next ten largest customers accounted for approximately 35%30% of
the Company's consolidated net sales in 20002001 but no one of these customers
accounted for more than 7%4% of 20002001 consolidated net sales.
Competition
------------
The Company competes with several companies, some of which are larger than the
Company, across its major Device Product DevelopmentPharmaceutical Systems 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 continue with aggressive cost 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 that 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 significant market shares. The Company differentiates itself through its
expertise in high-speed assembly of multiple-piece closure systems.
The U.S. contract packaging and manufacturing service industry is highly
competitive. For packaging services, West Lakewood competes with three
significant companies, all of which are larger than it. For contract
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 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 biotechnology 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 20002001 Annual Report to Shareholders, incorporated herein by reference.
International
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The Note "Affiliated Companies" and the Note "Segment Information" of the Notes
to Consolidated Financial Statements of the 20002001 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. Although
financial crises have been evident at various times during recent years in the
Asia/Pacific region and 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,
direct sales to customers in these markets have historically not been
significant. In 2000,2001, such sales represented less than 10%11% 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 20002001 Annual Report to Shareholders,
incorporated herein by reference). Hedging by the Company of these exposures is
discussed in the Note "Summary of Significant Accounting Policies - Financial
Instruments" and in the Note "Financial Instruments" of the Notes to
Consolidated Financial Statements of the 20002001 Annual Report to Shareholders,
incorporated herein by reference.
Item 2. Properties
-----------
In the Device Product DevelopmentPharmaceutical Systems operating segment, the Company maintains eight
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.Contract laboratory services are provided from the Company's
Lionville, Pennsylvania facility.
In the ContractDrug Delivery Services operating segment, the Company maintains oneconducts drug
delivery research and development in a leased facility located in Lakewood, New Jersey to provide contract manufacturing and packaging
services.Nottingham,
England. Clinical research services are provided by West Evansville from leased
space in Indianapolis, Indiana and Evansville, Indiana. Contract laboratory
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 products.
The manufacturing production facilities of the Company are well maintained and
are operating generally on a two-two or three-shift basisthree shift basis. The facilities in Germany
and France are adequate for the
Company's present needs.both being expanded to meet increased customer demand.
The principal facilities in the United States and Puerto Rico are as follows:
- - Approximately 775,000671,000 square feet of owned and 1,085,000564,000 square feet of
leased space in Pennsylvania, New Jersey, Florida, Nebraska, North Carolina, Ohio and
Indiana.
The principal international facilities are as follows:
- - Approximately 500,000531,000 square feet of owned space and 86,00091,000 square feet of
leased space in Germany, England, Denmark, France, Spain, and France.Italy.
- - Approximately 250,000 square feet of owned space in Brazil.
- - Approximately 90,000 square feet of owned space in Singapore.
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
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 30, 200128, 2002 were as follows:
Name Age Business Experience During Past Five Years
- ---- --- ----------------------------------------
Joseph E. Abbott 1 4849 Vice President and Corporate Controller.Controller since
March 2002 and Corporate Controller since
December 2000. Previously Director of
Internal Audit since 1997; Controller,
Clopay Corp.Audit.
Linda R. Altemus 50 Vice President and Chief Financial Officer;
Vice President, Finance and Administration
from June 19962001 to March 2002; Chief
Information Officer from June 2000 to
June 2001; Vice President, Management
Information Systems from March 1999
to June 2000 and Director Information
Systems from May 1997 to March 1999.
Michael A. Anderson 46 Vice President and Treasurer since June 2001;
Vice President, Finance & Administration for
Drug Delivery Systems from November 1999 to
June 2001; Vice President, Business
Development from April 1997;
previously Controller, ARCO Chemical
Americas.1997 to October 1999.
George R. Bennyhoff 1 5758 Senior Vice President, Human Resources
and Public Affairs.
Steven A. Ellers 1 5051 Executive Vice President previouslysince June 2000;
Senior Vice President and Chief Financial
Officer sincefrom March 1998;1998 to June 2000.
Previously Group President from
August 1997 to February 1998; Corporate
Vice President, Sales from April 1996 to
July 1997; previously Vice President,
Operations.President.
John R. Gailey III 1 4647 Vice President, General Counsel and Secretary.
Stephen M. Heumann 1 59 Vice President, Treasurer and Assistant
Secretary.
Lawrence P. Higgins 1 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.L. Hugill 1 5354 President of the Americas, Pharmaceutical
Systems Division since January 2002;
President, Global Sales and Contract
Services since June 2000; previouslyMarketing from
May 2001 until January 2002. Division
President, Clinical Services sincefrom November
1999 until May 2001 and General Manager of
the Clinical Services Group from its
acquisition in April 1999
until November 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 5859 Chairman of the Board and Chief Executive
Officer, President of the Company until
September 1998.
Donald E. Morel, Jr.,Ph.D.1 43 44 President and Chief Operating Officer
since May 2001; Division President, Drug
Delivery Systems since November 1999;from October 1999 to May
2001; Group President from MarchApril 1998 to
October 1999;1999. Previously Corporate Vice
President, Scientific ServicesServices.
Michael Myers 40 President, Drug Delivery Systems since
December 2001. Previously Dr. Myers was
Executive Vice President, Business Development
at Flamel Technologies, Ltd., Washington, DC
from May2000 to 2001, and former President,
Pharmaceutical Division of Fuisz Technologies,
Ltd., Chantilly, Virginia from 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 a
one-year term.2000.
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 20002001 and 19992000 were as
follows:
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
High Low High Low High Low High Low High Low
2001 26.16 22.75 27.60 22.80 28.35 23.12 28.30 23.30 28.35 22.75
2000 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, 2000,2001, the Company had 1,7801,792 shareholders of record. There
were also 2,2002,197 holders of shares registered in nominee names. The Company's
common stock paid a quarterly dividend of $.16$.17 per share in each of the first
three quarters of 1999; $.172000; $.18 per share in the fourth quarter of 19992000 and each of
the first three quarters of 2000;2001; and $.18$.19 per share in the fourth quarter of
2000.2001.
Item 6. Selected Financial Data.
-----------------------
Information with respect to the Company's net sales, income from continuing
operations, (loss) income from consolidateddiscontinued operations, income (loss) before change in accounting method,
income (loss) before change in accounting method per share from
continuing operations (basic and assuming dilution), (loss) income per share
from discontinued operations (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"Five-Year Summary - Summary of Operations" of the
20002001 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"Five-Year Summary
- - Year-End Financial Position"
of the 20002001 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 20002001 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 20002001 Annual Report to
Shareholders.
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
20002001 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 "STOCK OWNERSHIP OF 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
"COMPENSATION OF DIRECTORS AND NAMED EXECUTIVE OFFICERS"; and "BOARD
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION" 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 "STOCK
OWNERSHIP OF 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 20002001 Annual Report to Shareholders, have been incorporated
herein by reference:
Consolidated Statements of Income for the years ended December 31,
2001, 2000 1999 and 19981999
Consolidated Statements of Comprehensive (Loss) Income for the years
ended December 31, 2001, 2000 1999 and 19981999
Consolidated Balance Sheets at December 31, 20002001 and 19992000
Consolidated Statements of Shareholders' Equity for the years ended
December 31, 2001, 2000 1999 and 19981999
Consolidated Statements of Cash Flows for the years ended December 31,
2001, 2000 1999 and 19981999
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-5F-4 of this Report.
(b) There were no reportsReports on Form 8-K
Current Report on Form 8-K filed byon November 20, 2001 announcing the
Company
indisposition of all assets of West Pharmaceutical Services Lakewood,
Inc., Charter Laboratories, Inc. and Paco Laboratories, Inc.
Current Report on Form 8-K dated November 30, 2001 (date of earliest
event reported), filed on December 17, 2001 including the fourth quarterunaudited
pro forma Consolidated Balance Sheet as of 2000.September 30, 2001 and
unaudited pro forma Consolidated Statements of Income for the year
ended December 31, 2000 and the nine months ended September 30, 2001
for West Pharmaceutical Services, Inc. The unaudited pro forma
consolidated financial statements reflect the sale of West
Pharmaceutical Services Lakewood, Inc., Charter Laboratories, Inc. and
Paco Laboratories, Inc.
(c) The exhibits are listed in the Index to Exhibits on pages F-1, F-2,
F-3 F-4 and F-5F-4 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.
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/ A. M. PapsoLinda R. Altemus
- --------------------------------
Anna Mae Papso
Corporate-----------------------------------------------
Linda R. Altemus
Vice President Financeand Chief Financial Officer
March 30, 200128, 2002
- -------------------------------------------------------------------------------
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 30, 200128, 2002
- ---------------------------------- and Chief Executive Officer
William G. Little (Principal Executive Officer)
/s/ Joseph E. Abbott Vice President and March 28, 2002
- ---------------------------------- Corporate Controller
March 30, 2001
- ----------------------------------Joseph E. Abbott (Principle Accounting Officer)
Joseph E. Abbott
/s/ Tenley E. Albright Director March 30, 200128, 2002
- -----------------------------------
Tenley E. Albright *
/s/ Linda R. Altemus Vice President and March 28, 2002
- ----------------------------------- Chief Financial Officer
Linda R. Altemus
/s/ John W. Conway Director March 30, 200128, 2002
- -----------------------------------
John W. Conway*
/s/ George W. Ebright Director March 30, 200128, 2002
- ------------------------------------
George W. Ebright*
/s/ L. Robert Johnson Director March 30, 200128, 2002
- ------------------------------------
L. Robert Johnson*
Signature Title Date
--------- ------ -------
/s/ William H. Longfield Director March 30, 200128, 2002
- --------------------------------------
William H. Longfield*
/s/ John P. Neafsey Director March 30, 200128, 2002
- --------------------------------------
John P. Neafsey*
/s/ Anna Mae Papso Corporate Vice President, March 30, 2001
- -------------------------------------- Finance
Anna Mae Papso (Chief Financial Officer)
/s/ Monroe E. Trout Director March 30, 2001
- ---------------------------------------
Monroe E. Trout*
/s/ Anthony Welters Director March 30, 200128, 2002
- ---------------------------------------
Anthony Welters*
/s/ Geoffrey F. Worden Director March 30, 200128, 2002
- ----------------------------------------
Geoffrey F. Worden*
* By John R. Gailey III pursuant to a power of attorney.
INDEX TO EXHIBITS
Exhibit
Number
(3) (a) Amended and Restated Articles of Incorporation of the
Company through January 4, 1999 incorporated by reference to
Exhibit (3)(a) of the Company's Annual Report on Form 10-K
for the year ended December 31, 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.instruments (File
No. 1-8036).
(4) (a) Form of stock certificate for common stock incorporated by
reference to Exhibit (4) (a) of 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 Exhibit (4)(b) of the
Company's Form 10-Q for the quarter ended September 30, 2000.2000
(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 (the "Credit Agreement"),
incorporated by reference to Exhibit (4) (c) of the
Company's Form 10-Q for the quarter ended September 30, 2000.2000
(File No. 1-8036).
(4) (c) (1) First Amendment dated as of September 14, 2000, to the
Credit Agreement.
(4) (c) (2) Second Amendment dated as of November 17, 2000, to the
Credit Agreement.
(4) (c) (3) Joinder and Assumption Agreement dated as of February 28,
2001, with respect to the Credit Agreement.
(4) (c) (4) Third Amendment dated as of February 28, 2001 to the Credit
Agreement.
(4) (c) (5) Fourth Amendment dated as of July 13, 2001 to the Credit
Agreement, incorporated by reference to Exhibit (10) (a) of
the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2001.
F - 1
Exhibit
Number
(4) (c) (6) Extension Agreement dated as of January 5, 2001 to the
Credit Agreement.
(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 Exhibit (10)(d) of 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 Exhibit (10)(a) of
the Company's Form 10Q for the quarter ended June 30, 1996
(File No. 1-8036).
(10) (d) (1) Amendment to the Long Term Incentive Plan, Effective October
30, 2001.
(10) (e) 1999 Non-Qualified Stock Option Plan for Non- Employee
Directors, effective as of April 27, 1999, incorporated by
reference Exhibit (10)(c) of 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 DirectorAmendment No. 1 to 1999 Non-Qualified Stock Option Agreement,
incorporated by reference to the Company's
Quarterly Report on Form 10-QPlan for
the quarter
ended JuneNon-Employee Directors, Effective October 30, 1999 (File No. 1-8036)..2001.
(10) (g) Form of second amendedSecond Amended and restated agreementRestated Change-in-Control
Agreement between the Company and certain of its executive
officers dated as of March 25, 2000, incorporated by
reference to Exhibit(10)(b) of the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2000.2000
(File No. 1-8036).
(10) (g) (1) Form of Amendment No.1 to Second Amended and Restated
Change- in-Control Agreement dated as of May 1, 2001 between
the Company and certain of its executive officers.
(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).officers.
(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).
F - 2
Exhibit
Number
(10) (j) Amendment No. 1 to Supplemental Employees' Retirement Plan,
incorporated by reference to Exhibit (10)(l) of 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 Exhibit (10)(c) of 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 Exhibit (10)(a) of the
Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2000.2000 (File No. 1-8036).
(10) (n)(l) (1) Amendment No.1 to Amended and Restated Employment Agreement,
dated as of May 1, 2001, between the Company and William G.
Little.
(10) (m) Non-Qualified Deferred Compensation Plan for Designated
Executive Officers adopted August 30,
1994, reflecting amendmentsas amended and restated effective on March 7,
1995, April 28, 1998 and April
1, 2000, incorporated by reference to Exhibit (10)(a) of the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2000.2000 (File No. 1-8036).
(10) (o)(n) Deferred Compensation Plan for Outside Directors, as amended
and restated effective May 27, 1999, incorporated by
reference to Exhibit(10)(a) of the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1999
(File No. 1-8036).
(10) (p)(o) 1999 Stock-EquivalentStock-Equivalents Compensation Plan for Non-Employee
Directors, incorporated by reference to Exhibit (10)(a) of
the Company's Quarterly Report on Form 10-Q for the quarter
ended JuneSeptember 30, 1999 (File No. 1-8036).
(10) (q) Lease Agreement,(p) 1998 Key Employee Incentive Compensation Plan, 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,March
10, 1998, 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(y) 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,(q) Asset Purchase Agreement, dated March 10, 1998,as of November 15, 2001, by
and among DFB Pharmaceuticals, Inc., DPT Lakewood, Inc.,
West Pharmaceutical Services, Inc., West Pharmaceutical
Services Lakewood, Inc., Charter Laboratories, Inc. and Paco
Laboratories, Inc., incorporated by reference to Exhibit 2.1
of the Company's AnnualCurrent Report on form 8-K dated November
20, 2001 (File No. 1-8036).
(10)(r) Side letter dated November 30, 2001, incorporated by
reference to Exhibit 2.2 of the Company's Current Report on
Form 10-K for the year ended December 31, 19978-K dated November 20, 2001 (File No.1-8036).
F - 43
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,(s) Amendment No.1 to 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.Key Employees Incentive Compensation
Plan, effective October 30, 2001.
(11) Not Applicable.
(12) Not Applicable.
(13) Portions of 20002001 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 - 54