UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

 

SCHEDULE 14A
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the Securities Exchange Act of 1934 (Amendment No.        )
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West Pharmaceutical Services, Inc.
(Name of Registrant as Specified In Its Charter)
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NOTICE OF 2007 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 1, 2007

Dear Shareholder,

The 2007 Annual Meeting of Shareholders of West Pharmaceutical Services, Inc. will be held at the Company’s headquarters, 101 Gordon Drive, Lionville, Pennsylvania 19341, on Tuesday, May 1, 2007, at 9:30 AM.  The items of business at the meeting are:

1.               to elect L. Robert Johnson, John P. Neafsey and Geoffrey F. Worden as Class II Directors, each for a term of three years;

2.               to approve the adoption of the West Pharmaceutical Services 2007 Omnibus Incentive Compensation Plan; and

3.               to transact such other business that may properly come before the meeting and any adjournment or postponement.

The Board of Directors unanimously recommends a vote “FOR” proposals 1 and 2 above.

Only shareholders of record at the close of business on Friday, March 23, 2007, are entitled to notice of and to vote at the meeting or any postponement or adjournment of the meeting.

You can vote by proxy on the Internet, or by dating, signing and returning the enclosed proxy in the enclosed envelope.  It is important that your shares be represented and voted, whether or not you expect to attend the meeting in person.

	By Order of the Board of Directors,
	JOHN R. GAILEY III
	Vice President, General Counsel and Secretary
March 29, 2007

 

TABLE OF CONTENTS

General Information About the Meeting
Proxy Solicitation
Shareholders of Record and Beneficial Owners
Householding
Shareholders Entitled to Vote
Quorum and Voting Requirements
Voting Methods
Changing Your Vote
Nominees
Voting on Other Matters
Proposal #1 — Election of Directors
Governance of the Company
Governance Principles
Code of Business Conduct
Director Qualifications
Director Independence
Review and Approval of Related Transactions
Executive Sessions of Independent Directors and Chairman, Independent Directors
Board and Committee Membership
Audit Committee Financial Experts
Role of Compensation Consultants
Candidate Selection Process
Meetings of the Board and its Committees
Communicating with the Board
Security Ownership of Certain Beneficial Owners and Management
Compensation Discussion and Analysis
Compensation Committee Report
2006 Executive Compensation
Summary Compensation Table
Grants of Plan-Based Awards in 2006
Outstanding Equity Awards at Fiscal Year-End 2006
Option Exercises and Stock Vested in 2006
Retirement Plan Benefits
Nonqualified Deferred Compensation
Payments on Employment Termination or Change in Control
2006 Director Compensation
Director Compensation in 2006
Audit Committee
Audit Committee Report
Policy on Pre-Approval of Audit and Permissible Non-Audit Services
Audit and Non-Audit Fees
Proposal # 2 — Approval of the 2007 Omnibus Incentive Compensation Plan
Description of the 2007 Plan
Equity Compensation Plan Information
Shareholder Proposals for the 2008 Annual Meeting
Appendix A — 2007 Omnibus Incentive Compensation Plan

 

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WEST PHARMACEUTICAL SERVICES, INC.

101 Gordon Drive

Lionville, Pennsylvania 19341

(610) 594-2900

PROXY STATEMENT

 

General Information About the Meeting

Proxy Solicitation

The Board of Directors is soliciting your proxy to vote on matters that will be presented at the Company’s 2007 Annual Meeting of Shareholders and at any adjournment or postponement.  This Proxy Statement and the Company’s Form 10-K Annual Report, along with the accompanying proxy card or voting instructions, are being mailed on or about March 29, 2007.  This Proxy Statement contains information on these matters to assist you in voting your shares.

A proxy is your legal designation of another person to vote on your behalf.  By completing the enclosed proxy card, you are giving John R. Gailey III and William J. Federici the authority to vote your shares in the manner you indicate on the proxy card.  Mr. Gailey and Mr. Federici have been appointed by the Board of Directors to act in that capacity.

Proxies may be solicited on our behalf by directors, officers or employees in person or by telephone, facsimile or other electronic means.  We will pay the cost of soliciting proxies.

Shareholders of Record and Beneficial Owners

If your shares are registered directly in your name with West’s transfer agent American Stock Transfer & Trust Company, you are considered the “shareholder of record” of those shares.  These proxy materials have been mailed directly to you by West.

If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the “beneficial owner” of shares held in street name.  These proxy materials have been forwarded to you by your broker, bank or other holder of record who is considered the shareholder of record of those shares.  As the beneficial owner, you have the right to direct your broker, bank or other holder of record on how to vote your shares by using the proxy card included in the mailing or by following their instructions for voting on the Internet.

Householding

West has adopted the process referred to as “householding” for mailing the Proxy Statement and Annual Report to reduce the volume of duplicate information you receive and reduce the Company’s printing and mailing costs.  Householding means that shareholders who share the same last name and address will receive only one copy of the materials, unless we receive contrary instructions from any shareholder at that address.  We will continue to mail a proxy card to each shareholder of record.

If you prefer to receive multiple copies of the proxy material at the same address, additional copies will be provided to you promptly upon written or oral request.  If you are a shareholder of record, you may contact us by writing to the Vice President, General Counsel and Secretary, West Pharmaceutical Services, Inc., 101 Gordon Drive, Lionville, PA 19341 or by calling (610) 594-3319.

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Shareholders Entitled to Vote

You are entitled to receive notice and to vote at the meeting only if you were a shareholder of record at the close of business on March 23, 2007.  If you were a shareholder of record on that date, you will be entitled to vote all of the shares that you held on that date.  Each outstanding share of the Company’s common stock, par value $.25 per share, will be entitled to one vote on each matter considered at the meeting.  As of the record date, 32,993,785 shares of West Common Stock were issued and outstanding.  Each share of common stock is entitled to one vote on the matters to be brought before the meeting.

Quorum and Voting Requirements

A quorum is necessary to take action at the meeting.  A quorum means that shareholders of record holding at least a majority of the outstanding shares of the Company’s common stock are present, either in person or represented by proxy.  Shareholders of record who are present at the meeting and who abstain, including brokers holding customers’ shares of record who cause abstentions to be recorded at the meeting, are considered shareholders who are present for quorum purposes.

If you are a beneficial owner, your bank, broker or other holder of record is permitted to vote your shares on the election of directors even if the broker does not receive voting instructions from you, but they generally are not entitled to vote on certain other matters unless they receive voting instructions from their customers.  These are considered to be “broker non-votes.”

Directors will be elected by plurality vote and the three nominees who receive the most votes will be elected.  The proposal to approve the 2007 Omnibus Incentive Compensation Plan requires the affirmative vote of at least a majority of the votes cast at the meeting.  Abstentions and broker non-votes will not be taken into account in determining the outcome of the election.  Only votes “for” the director nominees and “for” approval of the 2007 Omnibus Incentive Compensation Plan will affect the outcome.  Votes withheld from director nominees, abstentions and broker non-votes are not considered to be “votes,” and therefore will have no effect on the outcome of the vote.

The Board of Directors recommends a vote FOR each of the nominees to the Board and FOR the proposal to approve the 2007 Omnibus Incentive Compensation Plan.

Voting Methods

You may vote using any of the following methods:

Proxy Card or Voting Instruction Card.  Be sure to complete, sign and date the card and return it in the prepaid envelope.  If you are a shareholder of record and you return your signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote FOR the election of directors and FOR the adoption of the 2007 Omnibus Incentive Compensation Plan on your behalf.

Via the Internet.  The Internet voting procedure is designed to authenticate votes cast by use of a personal identification number.  The procedure allows shareholders to appoint a proxy and provide voting instructions and to confirm that their actions have been properly recorded.  The website for Internet voting is www.voteproxy.com.  Specific instructions to be followed are set forth on the enclosed proxy card.  Please have your proxy card handy when you go online.  Internet voting facilities for shareholders of record will be available 24 hours a day, and will close at 11:59 PM Eastern Time on April 30, 2007.

In Person at the Meeting.  If you are a shareholder of record and attend the meeting, you may deliver your completed proxy card in person.  If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or other holder of record and present it to the judge of elections with your ballot to be able to vote.

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Changing Your Vote

Even after you have submitted your proxy, you may revoke or change your vote at any time before the proxy is exercised by filing with the Company’s Secretary either a notice of revocation or a duly executed proxy bearing a later date.  You may also vote in person at the meeting, although attendance at the meeting will not by itself revoke a previously granted proxy.

Nominees

If any nominee becomes unavailable, which the Board does not expect, the Board’s Nominating and Corporate Governance Committee will recommend to the Board a replacement nominee.  The Board may then designate the other nominee to stand for election.  If you voted for the unavailable nominee, your vote will be cast for his replacement.

Voting on Other Matters

As of the date this Proxy Statement was printed, we did not know of any other matters to be raised at the Annual Meeting.  If other matters are properly presented for consideration, the persons named in your proxy card will have the discretion to vote on those matters for you.

PROPOSAL #1 — ELECTION OF DIRECTORS

Our Board of Directors is divided into three classes.  Each year, the directors in one class are elected to serve a three-year term.  The Board has nominated L. Robert Johnson, John P. Neafsey and Geoffrey F. Worden for election as Class II Directors.  All candidates have previously been elected by shareholders.  All of the nominees have agreed to be named and to serve if elected.  William H. Longfield has informed the Board of his intention to retire from the Board at the Annual Meeting.

Information on the nominees and incumbent directors follows.

Nominees For Directors in Class II For Terms to Expire in 2010

 

Name, Age and Year of Appointment as a Director		Position, Principal Occupation, Business Experience and Directorships
L. Robert Johnson Age 65 Director since 1989		Mr. Johnson is Managing Partner of Founders Capital Partners, a venture capital angel group. He is Chairman of the Board of HealthBanks Inc. Mr. Johnson is a member of the Corporation of the Massachusetts Institute of Technology and a trustee of the Scholarship Foundation of Santa Barbara.
John P. Neafsey Age 67 Director since 1987		Mr. Neafsey is President of JN Associates, an investment consulting firm. He is Chairman of the Board of Alliance Resources, LP and Constar, Inc. He is a trustee emeritus and presidential counselor of Cornell University and an overseer of Weill/Cornell Medical College.
Geoffrey F. Worden Age 67 Director since 1993		Mr. Worden is President of South Street Capital, Inc., a consulting and investment company. Mr. Worden is a director of Princess House, Inc. and New York City Outward Bound.

 

The Board of Directors recommends a vote “FOR” the election of each of these nominees.

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Continuing Class III Directors Whose Terms Expire in 2008

 

Name, Age and Year of Appointment as a Director		Position, Principal Occupation, Business Experience and Directorships
Jenne K. Britell, Ph.D. Age 64 Director since 2005		Dr. Britell is Chairman and Chief Executive Officer of Structured Ventures, Inc., advisors to private equity and venture-capital firms. She was formerly the Senior Advisor to eBay and its PayPal subsidiary for financial services, and prior to that time, a senior executive with GE Capital, most recently as President of Global Commercial and Mortgage Banking and Executive Vice President of Global Consumer Finance. Dr. Britell is a trustee of Fox Chase Cancer Center and a director of Crown Holdings, Inc., U.S.-Russia Investment Fund, Quest Diagnostics Incorporated and United Rentals, Inc.
Donald E. Morel, Jr., Ph.D. Age 49 Director since 2002		Dr. Morel has been our Chairman of the Board since March 2003 and our Chief Executive Officer since April 2002. He was our President from April 2002 to June 2006 and prior to that time, Chief Operating Officer.
Robert C. Young, M.D. Age 67 Director since 2002		Dr. Young recently retired as President of Fox Chase Cancer Center, a research hospital. He is Chairman of the Board of Scientific Advisors of the National Cancer Institute and serves on the Board of Directors of Human Genome Sciences. Dr. Young also is a past President of the American Cancer Society and former member of the National Cancer Policy Board of the Institute of Medicine.

 

Continuing Class I Directors Whose Terms Expire in 2009

 

Name, Age and Year of Appointment as a Director		Position, Principal Occupation, Business Experience and Directorships
Paula A. Johnson, M.D., MPH Age 47 Director since 2005		Dr. Johnson is a cardiologist and Executive Director of the Connors Center for Women’s Health and Gender Biology and Chief of the Division of Women’s Health at Brigham and Women’s Hospital. She is also an Associate Professor at Harvard Medical School.
William H. Longfield Age 68 Director since 1995		Mr. Longfield is the retired Chief Executive Officer and Chairman of the Board of C. R. Bard, Inc., a medical device manufacturer. He is also a director of Horizon Health Corporation, Applera Corporation and Manor Care, Inc. He is a trustee of Atlantic Health System.
Anthony Welters Age 52 Director since 1997		Mr. Welters is Executive Vice President of UnitedHealth Group, Inc. Previously, he served as President and Chief Executive Officer of AmeriChoice Corporation, a UnitedHealth Group Company. He is Vice Chair of New York University, Chairman of Morehouse School of Medicine and a director of C. R. Bard, Inc. and Qwest Communications International, Inc., and is a Trustee of the New York University School of Medicine and School of Law and the Library of Congress. He is also a member of the Council of the National Museum of African American History and Culture.
Patrick J. Zenner Age 60 Director since 2002		Mr. Zenner is the retired President and Chief Executive Officer of Hoffmann-La Roche Inc., a pharmaceutical manufacturer. Mr. Zenner is a member of the Board of Directors of ArQule, Inc., CuraGen Corporation, Dendrite International, Inc., Praecis Pharmaceuticals Inc., Geron Corporation, EXACT Sciences Corporation, Sciele Pharma, Inc. and Xoma Ltd.

 

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Governance of the Company

Governance Principles

Our Board of Directors’ Corporate Governance Principles, which include guidelines for determining director independence and qualifications for directors, are published on our website at www.westpharma.com under the Investor — Corporate Governance captions.  You may also receive a copy of the Corporate Governance Principles upon request from the Company’s Secretary.  The Board of Directors regularly reviews corporate governance developments and modifies its Corporate Governance Principles as warranted.  Any modifications are reflected on our website.

Code of Business Conduct

All of our employees, officers and directors are required to comply with the Company’s Code of Business Conduct.   The Code of Business Conduct covers fundamental ethical and compliance-related principles and practices such as our commitment to product and service quality, accurate accounting records and financial reporting, avoiding conflicts of interest, the protection and use of Company property and information, and compliance with legal requirements applicable to our operations.

The Code of Business Conduct can be found on our website at www.westpharma.com under the Investor — Corporate Governance captions, and a printed copy may be obtained upon request from the Company’s Secretary.  There have been no waivers of the Code.

Director Qualifications

The Board and the Nominating and Corporate Governance Committee consider, at a minimum, the following factors in recommending potential new Board members or the continued service of existing members:

·                  A director is nominated based on his or her professional experience.  A director’s traits, expertise and experience add to the skill-set of the Board as a whole and provide added value in areas needed for the Board to operate effectively.

·                  A director must have high standards of integrity and commitment, and exhibit independence of judgment, a willingness to ask hard questions of management and the ability to work well with others.

·                  A director should be willing and able to devote sufficient time to the affairs of the Company and be free of any disabling conflict.

·                  All of the directors, except for the chief executive officer, should be “independent” as outlined in West’s Independence Standards.

·                  A director should exhibit confidence and a willingness to express ideas and engage in constructive discussion with other Board members, Company management and all relevant persons.

·                  A director should actively participate in the decision-making process, be willing to make difficult decisions, and demonstrate diligence and faithfulness in attending Board and committee meetings.

·                  The Board generally seeks active or former senior level executives of public companies, particularly companies with international operations, leaders in the healthcare or public health fields and individuals with financial expertise.

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Director Independence

The Board of Directors has determined that to be considered independent, a director may not have a direct or indirect material relationship with the Company.  In making this determination the Board, after review and recommendation by its Nominating and Corporate Governance Committee, will apply the following Independence Standards when assessing the independence of a director:

1.                                       A director will not be considered “independent” if:

(i)             the director is, or has been within the last three years, an employee of the Company;

(ii)          an immediate family member of the director is, or has been within the last three years, employed by the Company as an executive officer;

(iii)       the director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $100,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service with the Company;

(iv)      (A) the director or an immediate family member of the director is a current partner of a firm that is the Company’s internal or external auditor; or (B) the director is a current employee of such a firm; or (C) the director has an immediate family member who is a current employee of such a firm and who participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; or (D) the director or an immediate family member of the director was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on the Company’s audit within that time;

(v)         the director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee; or

(vi)      the director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues.

2.                                       No director, or immediate family member of a director, may serve as a paid consultant or advisor to the Company or to any executive officer of the Company, or may have a personal services contract with the Company or with any executive officer of the Company.

3.                                       Audit Committee members may not have any direct or indirect financial relationship with the Company other than as directors, and may not be affiliated persons of the Company.  Audit Committee members may receive directors’ fees in the form of cash, stock, stock units or other in-kind consideration ordinarily available to directors.

4.                                       The following not-for-profit relationship will not be considered to be a material relationship that would impair a director’s independence: if a director of the Company, or a director’s spouse, serves as an executive officer of a not-for-profit organization, and the Company’s or the Herman O. West Foundation’s discretionary annual charitable contributions to the organization, in the aggregate, are less than $1 million or 2% of that organization’s annual revenues, whichever is greater.

In accordance with these Standards, the Board conducted its annual review of director independence.  During the review, the Board considered transactions and relationships between each director and member of his or her immediate family and the Company and its subsidiaries and affiliates.  The Board also considered charitable contributions to not-for-profit organizations of which our directors or their immediate family members are executive officers, none of which approached the levels set forth in the Standards.  As a result of this review, the Board

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affirmatively determined that all of the directors are independent directors except Dr. Morel, who is a Company employee.  Tenley E. Albright and George W. Ebright, who were directors in 2006 but are no longer on the Board, were determined last year to be independent using the same standards set forth above.  The Board’s Independence Standards meet or exceed the applicable director independence requirements of the New York Stock Exchange and Securities and Exchange Commission.

Review and Approval of Related Transactions

The Board has had a long-standing policy of not permitting transactions in excess of $100,000 involving the Company in which any director, officer or other related person has a material interest and that would require disclosure under SEC rules.  Each year, the Board, through its Nominating and Corporate Governance Committee, reviews certain business or other relationships between the Company and entities with which certain officers, directors and immediate family members are affiliated.  The Board recently conducted its review for the 2006 fiscal year and confirmed that there were no such relationships or transactions.  It is expected that these procedures and practices will be embodied in a formal written policy this year.

Executive Sessions of Independent Directors and Chairman, Independent Directors

Executive sessions or meetings of only non-management directors are held regularly to conduct a self-assessment of the Board’s performance and to review management’s strategy and operating plans, the criteria by which the CEO and other senior executives are measured, management’s performance against those criteria, and any other relevant topics.  Last year, non-management directors held six executive sessions.

One independent director is designated as “Chairman, Independent Directors.”  The Chairman, Independent Directors confers with the chief executive officer on the Board’s agenda items and information requirements.  He also calls meetings of the independent directors and presides at executive sessions of the independent directors.  Mr. Welters is the current Chairman, Independent Directors.

Board and Committee Membership

The Board has five committees: Audit Committee; Compensation Committee; Nominating and Corporate Governance Committee; Finance Committee; and Innovation and Technology Committee.  The Board has adopted a written charter for each of these committees, copies of which are posted on the Company’s website, www.westpharma.com under the Investor — Corporate Governance captions.  You may obtain a printed copy of each committee’s charter upon request from the Company’s Secretary.

The following table shows the current membership of each Board committee:

Audit		Compensation		Nominating and Corporate Governance		Finance		Innovation and Technology
Jenne K. Britell		L. Robert Johnson *		Paula A. Johnson		Jenne K. Britell		L. Robert Johnson
John P. Neafsey*		William H. Longfield		William H. Longfield		John P. Neafsey		Paula A. Johnson
Geoffrey F. Worden		Anthony Welters		Anthony Welters*		Geoffrey F. Worden*		Robert C. Young*
Patrick J. Zenner				Robert C. Young				Patrick J. Zenner

* Chairman

The Audit Committee assists the Board in its oversight of (1) the integrity of the Company’s financial statements; (2) the independence and qualifications of the Company’s independent registered public accounting firm; (3) the performance of the Company’s internal audit function and independent registered public accounting firm; and (4) the compliance by the Company with legal and regulatory requirements.  In carrying out these responsibilities, the Audit Committee, among other things:

·                  reviews and discusses the Company’s annual and quarterly financial statements with management and the independent registered public accounting firm;

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·                  manages the relationship between the Company and the independent registered public accounting firm, including: having sole authority for their appointment, retention and compensation; reviewing the scope of their work; approving non-audit and audit services; and confirming the independence of the independent registered public accounting firm; and

·                  oversees management’s implementation and maintenance of disclosure controls and procedures and internal control over financial reporting.

Audit Committee Financial Experts.  The Board has determined that each current member of the Audit Committee is an “audit committee financial expert” within the meaning of SEC regulations.

The Compensation Committee monitors the effectiveness of the Company’s executive compensation programs in achieving the Board’s compensation philosophy; reviews and approves corporate goals and objectives relevant to the compensation of the Company’s executive officers and evaluates their performance against those goals and objectives; and, either as a committee or together with the other independent directors, determines and approves their compensation levels based on that evaluation.  Final decisions regarding the CEO’s total direct compensation are made by the independent directors in executive session.  The Committee also makes recommendations to the Board with respect to incentive and equity-based compensation plans.  In overseeing the administration of those plans, the Committee approves all grants and awards to executive officers, establishes performance goals and determines whether or not those goals have been attained.  The details of the processes and procedures involved in the area of executive compensation are described in the Compensation Discussion and Analysis beginning on page 11 for the executives’ total direct compensation.  Each year, the Committee approves the Compensation Committee Report, included on page 17 of this proxy statement.

Role of Compensation Consultants.  The Compensation Committee engages Towers Perrin HR Services to advise it on executive pay and related issues, as needed.  During 2006, Towers Perrin performed the following tasks:

·                  Prepared competitive market data with respect to the compensation of the executive officer group;

·                  Provided input on the Committee’s pay recommendations for the chief executive officer;

·                  Provided input on compensation program design, compensation philosophy, comparator groups against which to benchmark the Company’s executive compensation, pay levels and incentive pay mix;

·                  Provided information on executive compensation trends; and

·                  Provided competitive compensation data on non-employee directors’ compensation (for use by the Nominating and Corporate Governance Committee).

The Nominating and Corporate Governance Committee identifies qualified individuals to serve as Board members; recommends nominees for director and officer positions; determines the appropriate size and composition of the Board and its committees; monitors a process to assess Board effectiveness; and considers matters of corporate governance.  After review by the independent directors, the Committee formally recommends to the Board a successor to the CEO.  The Committee also reviews director compensation annually and makes recommendations to the full Board on the form and level of director compensation.  The Committee administers director equity-based compensation, such as stock options and stock-equivalent units, which are awarded under the Company’s equity-based plans.

Candidate Selection Process.  To identify new, non-management director candidates, the Nominating and Corporate Governance Committee considers individuals suggested or recommended from a variety of sources, including Committee members, other members of the Board, including the chief executive officer, customers, suppliers, advisors to the Board and the Company’s security holders.  The Committee has not in the past employed a third-party search firm, but it reserves the right to do so.  All persons recommended for nomination to the Board, regardless of the source of the recommendation, are evaluated in the same manner by the Committee.

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Any recommendations for director candidates should be submitted in writing to the Chairman of the Nominating and Corporate Governance Committee c/o West Pharmaceutical Services, Inc., 101 Gordon Drive, Lionville, Pennsylvania 19341, and must contain or be accompanied by the following information: (1) the name and address of the nominating shareholder as they appear on the Company’s books and the number of shares of the Company’s common stock beneficially owned by the nominating shareholder; (2) as to each recommended nominee: (A) his or her name, age, business address and, if known, residence address; (B) his or her principal occupation or employment; (C) the number and class of the Company’s securities beneficially owned by him or her; (D) information necessary to determine if such recommended nominee is an “independent director” as outlined in the Company’s Bylaws; and (E) any other information regarding the recommended nominee that is required to be included in a proxy statement filed with the SEC; (3) a description of any arrangements or understandings among the shareholder and each recommended nominee and any other persons pursuant to which the recommended nomination is to be made by the nominating shareholder; (4) the consent of each recommended nominee to serve as a director of the Company if so elected; and (5) reasons that the person recommended would be a desirable member of the Board.

The Finance Committee serves as the Board’s liaison with management on important financial transactions and financial-policy matters.  The Committee consults with and advises management on financial strategies, policies and procedures, acquisitions, divestitures and capital-expenditure requests.  The Committee also monitors the performance of the Company’s savings and retirement plan investment committee.

The Innovation and Technology Committee provides guidance to the Board on strategies relating to technical and commercial innovation.  The Committee reviews emerging technology issues and trends that may affect the Company and its business.  The Committee also reviews the Company’s major innovation and technological programs and overall patent strategies, and assists the Board in making well-informed choices about investments in new technology.

Meetings of the Board and its Committees

The Board met 6 times last year.  Board committees met as follows during 2006: Audit — 8 times; Compensation — 8 times; Nominating and Corporate Governance — 2 times; Finance — 8 times; and Innovation and Technology — 2 times.  All directors, except Mr. Welters, attended more than 75% of the total number of meetings of the Board and the committees on which he or she served.  Mr. Welters attended 12 of the 16 meetings, or 75%, of the Board and Board committees on which he served.  Due to a business conflict, he was unable to attend two special Compensation Committee meetings that were called on short notice.  He was unable to attend a regularly scheduled Board meeting because of an unanticipated meeting of the board of directors of the company where he is employed.

Under the Company’s Corporate Governance Principles, each director is expected to attend the Annual Meeting of Shareholders unless prevented from doing so by illness or emergency.  All directors attended the 2006 Annual Meeting.

Communicating with the Board

Interested parties can communicate with the Chairman, Independent Directors or the non-management directors as a group by sending a letter addressed to the Board of Directors, c/o John R. Gailey III, Vice President, General Counsel and Secretary, West Pharmaceutical Services, Inc., 101 Gordon Drive, Lionville, PA  19341.

Communications to a particular director should be addressed to that director at the address shown above.  The Vice President, General Counsel and Secretary maintains a log of all communications received through this process.  Communications to specific directors are forwarded to those directors.  All other communications to the Board are transmitted directly to the Chairman, Independent Directors who makes the determination as to whether these messages should, in turn, be forwarded to a particular Board committee or to management for further handling.

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Security Ownership of Certain Beneficial Owners and Management

The following table shows the number of shares of our common stock beneficially owned by (a) each director of the Company; (b) each Named Executive Officer listed in the Summary Compensation Table; (c) all directors and executive officers as a group; and (d) each person or group known by the Company to own more than 5 percent of the outstanding shares of West common stock.  Unless otherwise noted, the information is stated as of March 15, 2007, and the beneficial owners exercise sole voting and/or investment power over their shares.  

Name		Common Stock(1)		Options Exercisable Within 60 Days		Percent of Class		Stock-Equivalent Units(2)
Jenne K. Britell		0		9,100		*		2,922
Steven A. Ellers		133,146		228,172		1.1	%	—
William J. Federici		32,942		132,245		*		—
John R. Gailey III		10,806		47,570		*		—
L. Robert Johnson		12,000		37,200		*		21,537
Paula A. Johnson		0		10,300		*		3,226
Robert J. Keating		32,462		37,570		*		—
William H. Longfield		5,000		37,200		*		47,867
Donald E. Morel, Jr.		197,136		541,410		2.2	%	—
John P. Neafsey		24,709		6,400		*		56,018
Anthony Welters		600		37,200		*		17,345
Geoffrey F. Worden		7,524		37,200		*		39,579
Robert C. Young		7,000		19,200		*		14,179
Patrick J. Zenner		2,750		23,950		*		7,196
All directors and executive officers as a group (19)		553,705	(3)	1,394,397		5.9	%	209,869
Franklin Advisory Services, LLC One Parker Plaza, Sixteenth Floor Fort Lee, NJ 07024		3,673,473	(4)	0		11.1	%	—

(1)          With respect to executive officers, includes (i) shares held in participant accounts under the Company’s 401(k) Savings Plan, Non-Qualified Deferred Compensation Plan for Designated Officers and Employees and 2003 Employee Stock Purchase Plan and (ii) incentive shares (time-vested restricted stock) awarded under various incentive plans, as follows: 

(2)          These units are held under the Company’s Non-Qualified Deferred Compensation Plan for Non-Employee Directors.  The value of a director’s unit account is measured by the price of our common stock.

(3)          Includes 47,094 shares held by the Company’s charitable foundation.  Paula A. Johnson, a member of the Board, and Richard D. Luzzi, an executive officer of the Company, are trustees of the foundation and, in that capacity, are each deemed to be the beneficial owner of the shares held by the foundation because they share voting and investment power over those shares.  Dr. Johnson and Mr. Luzzi disclaim any economic interest in shares held by the foundation.

(4)          Based on information as of December 31, 2006 set forth in a Schedule 13G filing dated January 31, 2007 made by Franklin Resources, Inc. (“FRI”), Charles B. Johnson, Rupert H. Johnson, Jr. and Franklin Advisory Services, LLC.  Represents shares beneficially owned by one or more open or closed-end investment companies or other managed accounts, which are advised by direct and indirect investment advisory subsidiaries of FRI.  Charles B. Johnson and Rupert H. Johnson, Jr. are principal owners of FRI, and they, along with FRI and each of FRI’s advisory subsidiaries, disclaim any economic interest or beneficial ownership in any of the shares covered by the Schedule.  They disclaim the existence of a group.

* Less than 1 percent of the Company’s outstanding shares of common stock.

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Compensation Discussion and Analysis

The following Compensation Discussion and Analysis describes the important elements of compensation for the Company’s executive officers identified in the Summary Compensation Table (“Named Executive Officers”).  As more fully described on page 8, the Compensation Committee makes all decisions regarding the total direct compensation — i.e., base salary, annual bonus and long-term incentive opportunities — of the Company’s executive officers, including the Named Executive Officers.  The Committee’s recommendations for the total direct compensation of the chief executive officer are subject to approval of the independent directors.

Compensation Philosophy and Objectives

The objectives of our compensation programs are to:

·                  build upon and expand West’s position as the world’s premier manufacturer of components and systems for injectable drug delivery;

·                  drive Company performance by rewarding management for achieving annual and long-term operating goals, with superior rewards for exceeding goals;

·                  attract and retain the type of highly skilled and experienced management necessary to lead the Company and achieve its strategic objectives; and

·                  provide shareholders with a superior rate of return over time.

Each component of our compensation programs is designed to achieve the following specific purposes:

·                  Base salary and benefits are intended to attract and retain executives and to reward skills, experience and performance in the roles they play within the Company.  They are designed to reflect the practices in industries where we compete for talent.

·                  Annual incentives are designed to keep employees focused on meeting or exceeding the objectives contained in the annual operating plan approved by our Board of Directors.  Individual performance goals are weighted to reflect their relative importance.

·                  Long-term incentives, which consist primarily of stock options and performance-vesting share (“PVS”) units, focus executives’ efforts on achieving multi-year financial-performance objectives and link management compensation with the interests of shareholders.  All equity awards are made under the shareholder-approved 2004 Stock-Based Compensation Plan (the “2004 Plan”).

·                  The benefits provided by change-in-control severance agreements encourage key employees to continue managing the Company’s business in the face of rumored or actual fundamental corporate changes without being unduly distracted by the uncertainties of their personal affairs.

We evaluate the success of our programs by overall business performance and the ability to attract and retain key management.

Setting Executive Compensation

The Compensation Committee reviews the effectiveness of the Company’s compensation programs in achieving the compensation objectives set forth above.  The Committee has hired Towers Perrin HR Services, an outside compensation consultant, to assist it in this process.  The consultant has a direct reporting relationship to the Committee.  As part of this review, the Committee considers annual competitive compensation analyses prepared by the consultant of the positions of each corporate officer, including the Named Executive Officers.  For 2006, the analyses were based on compensation data collected from a broad sample of companies from various industries with

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revenues between $500 million and $1.0 billion.  The industry data are adjusted to reflect the Company’s estimated revenue scale and projected market salary increases.

Last year, the Committee also began using “tally sheets” as part of its review of executive compensation.  The tally sheets contain all components of compensation, including salary, annual and long-term incentives, the value of stock, stock option and PVS unit awards, as well as the estimated compensation to be received upon retirement, voluntary and involuntary termination and termination following a change in control of the Company.  Tally sheets are prepared for all executive officers, including the Named Executive Officers.  The Committee believes that current and future performance of the Company and increased value for shareholders should be the determining factors in setting compensation for the Named Executive Officers.

Total direct compensation is generally targeted to be within the 50th to 75th percentile of the market as defined by the consultant’s survey data.  Typically, base salaries are set at or near (i.e., 15% above or below) the 50% percentile, while the combination of salary and the expected value of annual bonus and long-term incentive opportunities is targeted to be near the top end of the percentile range if maximum performance is achieved.  Since the value of stock-based awards at the time they are vested and earned depends on stock price appreciation and longer-term operating performance over the award period, individual compensation levels may vary from the intended target.  Consistent with the compensation philosophy set forth above, performance-based compensation generally represents a greater percentage of the total compensation of the executives who have the most influence over and responsibility for the achievement of performance objectives.

The Committee determines base salaries and sets the annual and long-term incentive opportunities for all executives early every year.  Salary adjustments take effect in late April or early May.  The Committee reviews the CEO’s total direct compensation with the compensation consultant, who prepares comparative compensation market data and a five-year salary history, and presents its recommendations to the independent directors in executive session.  The Board and Committee take into consideration the CEO’s performance and the performance of the Company when deciding on any adjustments to his salary or incentive opportunities.  The CEO proposes base salaries and annual and long-term incentives for other executive officers based on his evaluation of individual performance and expected future contributions and a review of survey data from the consultant’s competitive analyses.

In late 2006, the Committee with the assistance of its consultant began an evaluation of the competitiveness of the Company’s executive-compensation practices and whether changes to the design of its compensation programs and methodologies were warranted.  The Committee believed such an effort was appropriate in light of the changing size, structure and complexity of the Company, the Company’s performance in absolute terms and relative to the industry as a whole, and the need to attract and retain the talent required to support the Company’s continued growth.    As a result of this effort, the Committee agreed to use a group of 23 industry-specific companies as a primary benchmark of the Company’s executive compensation.  The comparator group was selected and agreed to by the Committee and management.  The companies in this primary comparator group are: Baxter International, Inc.; Becton Dickinson & Co.; Cooper Industries, Inc.; Tyco Healthcare; Hospira, Inc.; Beckman Coulter, Inc.; Pall Corporation; C. R. Bard, Inc.; Dentsply International Inc.; Dade Behring Inc.; Invacare Corporation; Varian Medical Systems, Inc.; AptarGroup, Inc.; Kinetic Concepts, Inc.; Respironics, Inc.; Edwards Lifesciences LLC; Millipore Corporation; Advanced Medical Optics, Inc.; Arrow International, Inc.; Datascope Corp.; Mentor Corporation; Theragenics Corporation; and Rochester Medical Corporation.  The Committee also decided to use as a secondary benchmark a broader group of companies with revenues of $500 million to $2 billion from the chemicals, electronics and scientific equipment, healthcare/medical products, industrial manufacturing and pharmaceuticals industries that participate in the consultant’s annual compensation surveys.  This broader group represents the marketplace where the Company may compete for talent.

Following the adoption of the new comparator groups, the Committee reviewed a comparison of the Company’s executive compensation prepared by the consultant, which revealed that while base salaries were within or below the median competitive range of the primary comparator group, total direct compensation levels were below the competitive range due to generally below-market annual and long-term incentive awards.  Taking these results into consideration, the Committee decided to increase the annual bonus opportunities and expected value of long-term incentive awards of the executive officer group for the 2007 plan year.

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Elements of Executive Pay

Base Salary

Base salaries generally are based on job responsibilities and individual contribution, with reference to base salary market data shown in compensation analyses prepared by the Committee’s compensation consultant.  Although base salaries are targeted at a competitive range of the market median (+/- 15%), salary levels within that range may vary according to the executive’s experience, length of service in the position, the Committee’s subjective view of personal performance, and the influence of compensation structures in markets where the Company competes for talent.  In 2006, the base salaries of all Named Executive Officers were within that range.  The Summary Compensation Table on page 17 includes the base salaries of the Named Executive Officers that were approved for 2006.

Annual Incentive Awards

Annual incentive awards are made under the Company’s Management Incentive Plan (“MIP”).  The specific performance goals in the MIP are intended to promote achievement of the Company’s short-term financial objectives by providing incentive-compensation opportunities to those individuals within the management team who are in the best position to influence Company performance.

The target bonus opportunity is a specific percentage of the executive’s base salary as of December 31 of the plan year and represents the amount of bonus the executive could receive if 100% of all performance goals are achieved.  The resulting amount is then multiplied by the combined achievement of the weighted performance goals.  The target bonus opportunities for the Named Executive Officers for 2006 and 2007 are as follows:

 

Over the past several years, the Committee has selected earnings-per-share (“EPS”) and corporate cash flow as contained in the Board-approved annual operating plan as the two primary weighted performance goals.  The Committee believes that these two goals appropriately measure the Company’s year-over-year performance and management’s efforts to position the Company for future growth.  The targets are based on exchange-rate and other assumptions contained in the approved operating plan.  At the conclusion of the period, the Company’s reported results are adjusted to take into account these assumptions and to exclude the effect of one-time or non-recurring items.  For 2006, the weighted targeted performance goals were:

·                  EPS of $1.65 (weighted 65%); and

·                  cash flow of $23.9 million (weighted 35%).

Performance against the EPS and cash-flow goals determines the final bonus for Dr. Morel, Mr. Federici, Mr. Gailey and other corporate-based executives.  For operational executives, including Mr. Ellers and Mr. Keating, the 2006 performance objectives included EPS (weighted 25%) and a combination of net sales, operating profit and divisional cash flow at the global operations level or regional level (weighted 75% in total).  The ratio between payout and performance for the EPS and cash-flow performance goals is shown in the following table:

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Performance between percentages in the performance goals are straight-line interpolated.  Executives will receive awards at prorated levels if at least one criterion, but not all, is met.

MIP awards are paid in cash, but executives may elect to have all or a portion of the bonus paid in the form of shares of common stock referred to as “bonus shares.”  The number of shares to be received is based on the value of a share of common stock on the date the bonus awards are made under the MIP.  As an inducement to acquire and hold shares, the Company will grant one additional time-vested restricted share, referred to as an “incentive share,” for each four bonus shares received.  Incentive shares vest only if the bonus shares are held for four years, a provision designed to encourage long-term stock ownership.  Unvested incentive shares are forfeited upon employment termination, except termination due to retirement in which case a prorated portion is vested based on the time elapsed between the grant date and retirement date.  Executives who have not met their share-ownership goals are required to take at least 25% of the after-tax amount of their MIP award in bonus shares until they have met their goals.

Overall growth in sales of higher-value products, strong operating profit growth in pharmaceutical packaging components and continued cost-savings and efficiency efforts helped drive record financial performance in 2006.  Adjusted to budgeted exchange rates and excluding non-recurring items, the Company achieved EPS of $1.88 versus the $1.65 EPS target and cash flow of $39.1 million versus the $23.9 million cash-flow target.  As a result, the 2006 MIP payout ranged between 132.6% and 147.7% for the Named Executive Officers.  The MIP payouts are shown as Non-Equity Incentive Plan Compensation in the Summary Compensation Table on page 17 and accompanying footnotes.

Long-Term Incentives

The Company provides two forms of long-term incentive awards to certain key employees, including the Named Executive Officers: non-qualified stock options that vest over time and PVS units, which entitle the recipient to receive a number of shares of West’s common stock dependent on achievement of multi-year financial performance goals.  The combination of stock-based incentives is intended to provide appropriate incentives to work toward increasing shareholder value through the achievement of longer-term financial performance goals.

After the salary and annual bonus opportunity for executive officers is set, the value of targeted long-term opportunities is established to place the individual’s total direct compensation relative to the market.  The Committee’s practice is to determine the targeted dollar amount of equity compensation and to then grant long-term incentive awards that have a fair value equal to that amount on the grant date.  The value of long-term awards is roughly divided equally between the two types of award.  The Committee uses a Binomial Lattice model to value stock options; PVS units are valued based on the discounted value of the stock, adjusted for risk of forfeiture.

As with the determination of base salaries and MIP award opportunities, the Committee exercises judgment in view of the above criteria, taking into consideration CEO recommendations in setting long-term award target levels for non-CEO executives and discussions with the independent directors regarding the target levels for the CEO.  Long-term grants have no effect on the amount of an employee’s retirement benefits.

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Stock Options.  Stock options provide for financial gain derived from the potential appreciation in stock price from the date that the option is granted until the date that the option is exercised.  The exercise price of stock-option grants is the average of the high and low price of West common stock on the grant date.  Stock options granted since 2004 are exercisable in equal installments on the first through fourth anniversaries of the grant date and have a term of 10 years from the grant date.  Options that are vested — i.e., exercisable — at the time of an employee’s retirement or termination due to disability will remain exercisable through the remainder of the term.  Upon an employee’s death, vested options may be exercised for up to one year.  Upon termination for any other reasons (other than cause), vested options may be exercised for 90 days.  Options will expire immediately in the event of a for-cause termination.  A change in control of the Company will cause any outstanding options to become immediately vested.

PVS Units.  PVS unit awards provide for a medium-term incentive compensation opportunity that pays out only if certain performance measures are met over a three-year period.  For PVS units awarded in 2006, payouts will depend on achievement of performance levels based on two equally weighted performance measures — compound annual revenue growth and return on invested capital (“ROIC”) — for the period beginning on January 1, 2006 and ending on December 31, 2008.  The Committee set a target revenue growth and ROIC goal of 10% each.  The payout opportunity is capped at 200% and actual payouts may range from 0% to 200% based on actual results.  The following table shows the potential payout for the 2006 awards:

 

Performance between points is straight-line interpolated.

In setting the targeted revenue-growth and ROIC goals, the Committee considered past performance, the Company’s cost of capital and information relative to sales growth in the markets in which the Company operates.  The value of 2006 PVS units awarded to each Named Executive Officer is reflected in the Summary Compensation Table on page 17 and the Grants of Plan-Based Awards Table on page 19.

Equity-Awards Policy

In February 2007, the Committee approved a written policy on granting equity awards, which formalized and refined existing practices and procedures the Committee has followed for many years.  Under the policy, the Committee will make all equity awards (other than grants for newly hired employees and grants for promotions or for retention purposes) once per year at its meeting in February or March, following the release of earnings for the preceding fiscal year.  To address the need to grant options at other times, the Committee may delegate authority to make equity awards to a Plan Committee, subject to certain guidelines and an overall annual share limitation.  The Plan Committee is prohibited from making any awards or grants to officers of the Company.  The Plan Committee is composed of the Company’s chief executive and chief human resources officers, general counsel and controller or his designee.  The policy also confirms that the grant date of any equity award is the date the award is approved at a meeting of the Compensation Committee or Plan Committee and that the exercise price of any stock option is determined as of the grant date in compliance with the terms of the applicable incentive plan.

Stock Ownership Requirements

Recognizing the importance of aligning interests between management and shareholders through potential stock ownership, the Committee first adopted share-ownership goals for senior management in 1994.  These goals call for executive officers to own West common stock with a market value equal to specified multiples of the executive’s

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base salary, ranging from 200% of base salary for senior executives to 500% of base salary for the chief executive officer.  The Committee expects executives to reach their goal within five to seven years of attaining their position and annually reviews each executive’s progress.  All Named Executive Officers currently meet their guidelines.

Benefits

Dr. Morel, Mr. Federici, Mr. Ellers and Mr. Gailey participate in a variety of retirement, health and welfare benefits available to salaried U.S.-based employees, including the Company’s qualified defined-benefit Salaried Employees’ Retirement Plan (“Retirement Plan”) and nonqualified Supplemental Employees’ Retirement Plan (“SERP”).  The various benefits are designed to enable the Company to attract and retain its workforce in a competitive marketplace.  The Retirement Plan and the SERP are more fully described under Retirement Plan Benefits on page 23.

West’s qualified 401(k) Savings Plan, which was recently amended as of January 1, 2007, allows highly compensated employees to contribute up to 15% of their pay or $15,000 ($15,500 in 2007) on a pre-tax basis.  The Company provides a 100% match on the first 3% of pay and a 50% match on the next 2%, which vests immediately.  Prior to the amendment, the Company match was 50% on the first 6% of pay, and the match vested 20% per year for the participant’s first five years of service.  Participants may choose to invest their account balances among a variety of investment options.  Distributions are made in a lump sum upon employment termination.  U.S.-based Named Executive Officers are eligible to participate in the 401(k) Plan, subject to the Internal Revenue Code contribution limits, and may also defer certain of their compensation above those limits into the Company’s Non-Qualified Deferred Compensation Plan for Designated Officers and Employees (“Employee Deferred Compensation Plan”).  Compensation eligible for deferral into the Employee Deferred Compensation Plan are base salary, annual MIP awards and bonus shares.  The Employee Deferred Compensation Plan is described under Nonqualified Deferred Compensation on page 24.

Other Compensation

We provide our Named Executive Officers with other benefits, reflected in the All Other Compensation column of the Summary Compensation Table on page 17, that we believe are reasonable and competitive.  In total, they represent a small percentage of the executives’ overall compensation, and include premiums paid on life insurance policies and Company contributions to deferred compensation plan accounts.   Dr. Morel, Mr. Federici, Mr. Ellers, Mr. Gailey, along with other U.S.-based executive officers, receive the use of a Company-leased automobile, reimbursement of up to $1,500 per year for financial planning and participate in a health-and-welfare plan that provides enhanced medical and dental insurance versus that available to the salaried workforce.  The enhanced welfare plan includes reimbursement for co-pays and medical-related out-of-pocket expenses.  Mr. Keating receives use of a Company-leased automobile and reimbursement for a golf-club membership.  The Company also provides him with a variety of perquisites and benefits that the Company considers customary for overseas assignments of senior executive personnel.

Change-in-Control Arrangements

The Named Executive Officers are eligible for benefits and payments if there is a change in control, as described under Payments on Employment Termination or Change in Control beginning on page 25.

Deductibility of Executive Compensation

Under section 162(m) of the Internal Revenue Code, a publicly held corporation such as the Company is denied a federal tax deduction for compensation in excess of $1,000,000, which is paid to its chief executive officer and its four most-highly compensated executive officers other than the chief executive officer.  “Qualified performance-based compensation” and certain other compensation are not subject to the deduction limitation.  Our Board of Directors has taken action to ensure that awards of stock options, PVS units and other stock awards under the 2004 Plan and previous stock-based incentive plans will be treated as qualified performance-based compensation and, therefore, remain tax deductible by the Company.  However, cash incentive awards are not considered qualified performance-based compensation.  In this regard, for 2006, the amount of salary and non-equity bonus in excess of $1,000,000 for any U.S.-based Named Executive Officer was not deductible for federal income-tax purposes.

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On February 27, 2007, the Board of Directors approved the 2007 Omnibus Incentive Compensation Plan, which will be become effective at the 2007 Annual Meeting if approved by shareholders.  The new plan provides for the payment of both stock-based and cash incentive compensation.  If approved by shareholders, the new plan will be administered so that future cash and stock awards will be considered qualified performance-based compensation under section 162(m) and therefore not subject to the deduction limitation.

Compensation Committee Report

The Compensation Committee, composed of independent directors, reviewed and discussed the above Compensation Discussion and Analysis with the Company’s management.  Based on the review and discussions, the Compensation Committee recommended to the Company’s Board of Directors, and the Board of Directors approved, that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into West’s Annual Report on form 10-K for the fiscal year ended December 31, 2006.

Compensation Committee

L. Robert Johnson, Chairman

William H. Longfield

Anthony Welters

2006 Executive Compensation

The following table summarizes the compensation of the Named Executive Officers for the fiscal year ended December 31, 2006.  The Named Executive Officers are the Company’s Chief Executive Officer, Chief Financial Officer, and three other most highly compensated executive officers ranked by their total compensation (reduced by the amount in column (h)).

Summary Compensation Table

Name and Principal Position (a)		Year (b)		Salary(1) ($) (c)		Bonus(2) ($) (d)		Stock Awards(3) ($) (e)		Option Awards(4) ($) (f)		Non-Equity Incentive Plan Compensation(5) ($) (g)		Change in Pension Value and Nonqualified Deferred Compensation Earnings(6) ($) (h)		All Other Compensation(7) ($) (i)		Total ($) (j)
Donald E. Morel, Jr. Chairman of the Board and Chief Executive Officer		2006		664,059		200		1,159,851		574,926		915,904		263,085		143,177		3,721,202
William J. Federici Vice President and Chief Financial Officer		2006		376,190		100		246,652		106,455		280,797		41,828		69,736		1,121,758
Steven A. Ellers President and Chief Operating Officer		2006		388,145		200		492,467		212,814		340,478		301,376		76,321		1,811,801
Robert J. Keating President, Europe and Asia Pacific		2006		311,929	*	0		147,349		65,922		327,289	*	0		279,182	*	1,131,671	*
John R. Gailey III Vice President, General Counsel and Secretary		2006		273,578		200		133,786		59,173		168,419		81,168		55,002		771,326

(1)          Amounts shown are not reduced to reflect the Named Executive Officers’ elections, if any, to defer receipt of salary into the Employee Deferred Compensation Plan.

(2)          Represents annual holiday bonuses.  The amounts vary according to the executive’s years of service.

(3)          The amounts included in this column reflect the compensation costs of incentive (time-vesting restricted) shares and PVS units recognized as expense in West’s financial statements under FAS 123R.  The costs relate to stock awards made in February 2006 under the 2004 Plan, as well as outstanding prior awards.  See Note 17 of the Notes to Financial Statements contained in the Company’s 2006 Form 10-K for the assumptions made in determining FAS 123R values.  The fair value of all stock-based compensation awards is recognized as an expense

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over the related performance or service period required for the awards to vest.  Incentive shares vest over four years and PVS unit awards pay out at the end of the three-year performance period.  The expense for PVS unit awards reflects estimated performance payout factors.

The following table summarizes the portion of 2006 expense attributable to unearned PVS unit awards by year of award and the total number of outstanding unvested incentive shares granted to each Named Executive Officer and the associated compensation costs for 2006.

 

(4)          The amounts included in this column reflect the compensation costs of stock option awards recognized as expense in West’s financial statements under FAS 123R.  The options generally become exercisable in four equal installments over four years following the grant date.  The FAS 123R value as of the grant date for options is spread over the number of months of service required for the grant to become non-forfeitable.  The costs relate to options granted in February 2006 under the 2004 Plan, as well as outstanding prior awards granted in March 2005, May 2004 and, in the case of Dr. Morel, March 2002.  As noted in Note 17 of the Notes to Financial Statements contained in the Company’s 2006 Form 10-K, the value used for recognition of expense for stock options was calculated using the Black-Scholes option pricing model based on the following weighted average assumptions:

 

The following table summarizes the 2006 expense attributable to stock options by grant date of the award:

 

(5)          The amounts included in this column are the annual MIP incentive amounts for 2006, which were paid in early 2007, ranging between 132.6% and 147.7% of target.  Amounts shown are not reduced to reflect the Named Executive Officers’ elections, if any, to defer receipt of awards into the Employee Deferred Compensation Plan.  MIP payouts are in cash, except participants may elect to have up to 100% of their MIP award paid in shares of West common stock, referred to as “bonus shares,” valued at the date the award is approved by the Compensation Committee.  The following executive officers elected to receive shares as part of their award:

 

(6)          The amounts shown in this column are solely an estimate of the increase in actuarial present value of the Named Executive Officers’ age-65 accrued benefit under the Company’s retirement plans for 2006.  Assumptions are further described under Retirement Plan Benefits on page 23.  No amount is payable from the plans before a participant attains age 55 (except in the case of a disability retirement).

(7)          Represents (i) reimbursements for financial-planning services, (ii) costs of providing a Company-leased vehicle, including lease payments, gas, maintenance and insurance, (iii) Company matching contributions to the Employee Deferred Compensation Plan and 401(k) Plan, (iv) Company-paid premiums for executive medical plan coverage, (v) Company-paid life insurance premiums, (vi) dividend equivalents paid in 2006 on incentive shares and unearned PVS units and (vii) tax gross-ups.

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All Other Compensation — 2006

Name		Financial Planning Reimbursement			Use of Company Car			Deferred Comp Plan/Savings Plan Company Match			Company Paid Medical Plan Costs			Life Insurance			Dividend Equivalents			Tax Gross-ups			Other			Total
Donald E. Morel, Jr.		$	0		$	34,493		$	19,760		$	12,285		$	4,433		$	57,850		$	14,356		$	0		$	143,177
William J. Federici		0			23,833			11,286			12,285			974			12,376			8,982			0			69,736
Steven A. Ellers		750			20,338			11,644			7,651			990			25,204			9,744			0			76,321
Robert J. Keating		11,497		*	19,007		*	—			3,602		*	9,183		*	7,430			77,190		*	151,273		(a)*	279,182
John R. Gailey III		0			17,355			8,207			12,285			663			6,701			9,791			0			55,002

(a)          Represents the following: cost-of-living allowance — $47,483; Company payment for the purchase of private retirement benefit — $77,575; Company-paid retirement administration fee — $7,600; airfare for spouse and child — $7,585; overseas premium — $9,776; and golf club membership — $1,254.

*                 The dollar amounts shown were converted from Euros to U.S. Dollars at the rate of 0.7974, the average monthly exchange rate for 2006, except life insurance premium payments included as All Other Compensation.  The life-insurance policy is paid in Australian Dollars and converted to U.S. Dollars at the rate of 1.3289, the average monthly exchange rate for 2006.

The following table provides information on stock options, incentive shares (time-vested restricted stock) and PVS units granted in 2006 to each of the Company’s Named Executive Officers.  The amount of these awards that was expensed in 2006 is shown in the Summary Compensation Table on page 17.

Grants of Plan-Based Awards in 2006

				Estimated Future Payouts Under Non-Equity Incentive Plan Awards						Estimated Future Payouts Under Equity Incentive Plan Awards						All Other Stock Awards: Number of Shares		All Other Option Awards: Number of Securities Under-		Exercise or Base Price of		Closing Price on		Grant Date Fair Value of Stock and
Name (a)		Grant Date (b)		Threshold ($) (c)		Target ($) (d)		Maximum ($) (e)		Threshold (#) (f)		Target (#) (g)		Maximum (#) (h)		of Stock or Units (#) (i)		lying Options (#) (j)		Option Awards ($/Sh) (k)		Grant Date ($/Sh) (l)		Option Awards ($) (m)
Donald E. Morel, Jr.		2/24/06		310,000	(1)	620,000	(1)	930,000	(1)
		2/24/06								12,691	(2)	25,381	(2)	50,762	(2)									827,040	(4)
		2/24/06														935	(3)							30,649	(4)
		2/24/06																74,257	(4)	32.59	(4)	32.78	(4)	777,062	(4)
William J. Federici		2/24/06		95,041	(1)	190,081	(1)	285,122	(1)
		2/24/06								3,279	(2)	6,557	(2)	13,114	(2)									213,660	(5)
		2/24/06														367	(3)							12,030	(5)
		2/24/06																19,183	(4)	32.59	(4)	32.78	(4)	200,741	(5)
Steven A. Ellers		2/24/06		128,379	(1)	256,758	(1)	385,137	(1)
		2/24/06								5,552	(2)	11,104	(2)	22,208	(2)									361,824	(5)
		2/24/06														1,104	(3)							36,189	(5)
		2/24/06																32,488	(4)	32.59	(4)	32.78	(4)	339,971	(5)
Robert J. Keating		2/24/06		81,678	(1)	163,356	(1)	245,034	(1)
		2/24/06								1,587	(2)	3,173	(2)	6,346	(2)									103,392	(5)
		2/24/06																9,282	(4)	32.59	(4)	32.78	(4)	97,131	(5)
John R. Gailey III		2/24/06		57,005	(1)	114,009	(1)	171,014	(1)
		2/24/06								1,587	(2)	3,173	(2)	6,346	(2)									103,392	(5)
		2/24/06														133	(3)							4,334	(5)
		2/24/06																9,282	(4)	32.59	(4)	32.78	(4)	97,131	(5)

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(1)          The amounts represent the minimum, target and maximum awards under the MIP.  Eligible executives have a MIP target bonus opportunity, specified as a percentage of base salary as in effect on December 31 of the plan year.  The award payout is calculated by multiplying the target bonus opportunity by the percentage achievement of weighted performance measures.  The principal corporate performance measures for 2006 were EPS (weighted 65%) and cash flow (weighted 35%), with additional global and regional performance measures for operational executives.  For the Named Executive Officers, the target bonus opportunity ranges from 40% to 80% of base salary, depending on position, and represents the payout if 100% of the performance measures are met.  If actual performance exceeds the performance measures, up to 150% of the target bonus opportunity could be paid.  An 85% achievement would yield a threshold payout of 50% of the target bonus opportunity.  No payouts are made if actual achievement falls below 85% of the performance measures.  MIP participants, including the Named Executive Officers, may elect to receive up to 100% of their MIP payout in shares of common stock referred to as “bonus shares,” valued at the market price of the common stock on the date of award.  Any participant who elects to receive bonus shares will also receive additional shares of time-vested restricted stock, called “incentive shares,” equal to 25% of the number of bonus shares received.  Terms of the incentive shares are explained in note (3) below.

(2)          PVS units are rights to receive a certain number of shares of West common stock depending on achievement of two equally weighted performance targets over a three-year performance period.  The number of shares that will be payable for the 2006 grants depends on the Company’s performance against compound average sales growth and return-on-invested-capital targets over the period commencing January 1, 2006 and ending December 31, 2008.

All PVS units have a grant date FAS 123R value of $32.585 per share.  There can be no assurance that any shares of common stock will be earned at the end of the performance period.

(3)          The amounts represent the number of incentive shares (time-vested restricted stock) awarded to the Named Executive Officers who have elected to receive a portion of their annual MIP payout in the form of bonus shares.  Incentive shares vest at the rate of 25% per year from the date of grant.  Incentive shares are forfeited if the bonus shares are transferred during that time or if the executive’s employment terminates for any reason other than retirement.  Dividends are paid on restricted stock and reinvested in additional shares.

(4)          Options allow the recipient to purchase a share of West common stock for the fair market value of a share of common stock on the grant date.  Options become exercisable in four equal installments on the first through fourth anniversaries of the grant date.  Options are granted for a 10-year term.  Options that are exercisable on the date of retirement under the Company’s retirement plans remain exercisable for the balance of their term.  Option holders whose employment terminates for other reasons must exercise their vested options within 90 days following their termination date.  Unvested options expire immediately upon employment termination, except under certain terminations following a change in control of the Company, in which case all unvested options immediately vest as of the date of termination.

The exercise price of all options granted in 2006 equals the average of the high and low of West common stock on the grant date, so the exercise price of the stock options reported under column (l) was less than the closing price of West common stock on the grant date as reported under column (k).

Column (m) represents the aggregate FAS 123R values of options granted during 2006.  The per-option FAS 123R grant date value was $10.4645 each for all options.  See Note 17 of the Notes to Financial Statements contained in the Company’s 2006 Form 10-K for the assumptions made in determining FAS 123R values.

(5)          The grant date fair value was calculated in accordance with FAS 123R.

 

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The following table contains information on the current holdings of stock options, unearned PVS units and unvested incentive shares held by the Named Executive Officers on December 31, 2006.

Outstanding Equity Awards at Fiscal Year-End 2006

		Option Awards										Stock Awards
Name (a)		Number of Securities Underlying Unexercised Options (#) Exercisable (b)		Number of Securities Underlying Unexercised Options (#) Unexercisable (c)		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d)		Option Exercise Price ($) (e)		Option Expiration Date (f)		Number of Shares or Units of Stock That Have Not Vested (#) (g)		Market Value of Shares or Units of Stock That Have Not Vested ($) (h)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j)
Donald E. Morel, Jr.		40,730	(1)			0		14.70		8/5/07		3,801	(7)	194,725	*	174,684	(8)	8,949,061	*
		8,167	(2)	60,000				13.02		3/25/10
		248,423	(3)					13.99		4/30/12
		75,935	(4)					11.30		4/28/08
		68,000	(3)	68,000				19.37		5/5/14
		23,795	(3)	71,388				24.20		4/11/15
				74,257	(3)			32.59		2/24/16
William J. Federici		100,000	(5)			0		13.51		8/17/08		1,734	(7)	88,833	*	35,530	(8)	1,820,202	*
		12,300	(3)	12,300				19.37		5/5/14
		4,500	(3)	13,500				25.53		3/5/15
				19,183	(3)			32.59		2/24/16
Steven A. Ellers		110,000	(1)			0		13.02		3/25/10		4,029	(7)	206,406	*	71,362	(8)	3,655,875	*
		50,000	(4)					11.30		4/28/08
		26,700	(3)	26,700				19.37		5/5/14
		10,000	(3)	30,000				25.53		3/5/15
				32,488	(3)			32.59		2/24/16
Robert J. Keating		16,000	(6)			0		14.41		3/8/12		769	(7)	39,396	*	21,876	(8)	1,120,707	*
		8,500	(3)	8,500				19.37		5/5/14
		3,250	(3)	9,750				25.53		3/5/15
				9,282	(3)			32.59		2/24/16
John R. Gailey III		28,800	(1)			0		13.02		3/25/10		700	(7)	35,861	*	19,716	(8)	1,010,051	*
		7,300	(3)	7,300				19.37		5/5/14
		2,750	(3)	8,250				25.53		3/5/15
				9,282	(3)			32.59		2/24/16

(1)          Options granted in August 1997 and March 2000, generally become exercisable in five equal installments on the first through fifth anniversaries of the grant date and expire on the date shown in column (f), the 10th anniversary of their grant date.

(2)          Option granted in March 2000, generally becomes exercisable in two installments and expires on the date shown in column (f), the tenth anniversary of its grant date.

(3)          Options granted in April 2002, May 2004, March 2005, April 2005, and February 2006 generally become exercisable in four equal installments on the first through fourth anniversaries of the grant date and expire on the date shown in column (f), the 10th anniversary of the grant date.

(4)          Options granted in April 2003 generally become exercisable on the first anniversary of the grant date and expire on the date shown in column (f), the fifth anniversary of the grant date.

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(5)          Option granted in August 2003 generally becomes exercisable in two equal installments on the first and second anniversaries of the grant date and expires on the date shown in column (f), the fifth anniversary of the grant date

(6)          Option granted in March 2002 generally becomes exercisable on the first anniversary of the grant date and expires on the date shown in column (f), the tenth anniversary of the grant date.

(7)          Amounts represent the total number of unvested incentive shares (time-vested restricted stock) that have been awarded from 2003 through 2006.  Incentive-share awards vest 25% per year for four years from the date of grant.  If the incentive shares become vested, the executive receives additional shares as if dividends had been paid on the incentive shares from the grant date and reinvested in additional shares.  Unvested incentive shares (and any associated dividend rights) are forfeited upon employment termination, except due to retirement where a prorated portion is vested based on the time elapsed between the grant date and retirement date.

(8)          Amounts represent unearned PVS units that were awarded in 2004, 2005 and 2006, and assume a maximum payout of 200% pursuant to SEC requirements because the previous fiscal year’s performance achieved greater than the target performance measure.

*                 The market value of the unvested incentive shares and unearned PVS units is based on the closing price of West common stock on December 29, 2006 of $51.23.

The following table shows the number of shares of West common stock acquired by the Named Executive Officers during 2006 upon the exercise of stock options and the vesting of incentive shares and PVS units.

Option Exercises and Stock Vested in 2006

		Option Awards				Stock Awards
		Number of Shares Acquired on Exercise		Value Realized on Exercise (1)		Number of Shares Acquired on Vesting (2)		Value Realized on Vesting (3)
Name (a)		(#) (b)		($) (c)		(#) (d)		($) (e)
Donald E. Morel, Jr.		229,585		5,428,272		24,587		800,578
William J. Federici		0		—		8,236		268,370
Steven A. Ellers		115,000		3,035,091		18,396		598,995
Robert J. Keating		50,000		1,776,424		5,662		184,496
John R. Gailey III		64,000		1,778,691		5,107		166,161

(1)          The value realized is equal to the difference between the option exercise prices and the fair market value of West common stock on the dates of exercise, multiplied by the number of options exercised.

(2)          Reflects PVS units that were awarded in 2004 and earned in February 2006 and incentive shares that were awarded in 2003 and vested in February 2006, including additional shares awarded pursuant to dividend equivalents.  The following table shows the number of vested incentive shares and PVS unit payouts, and the number of additional shares distributed due to dividend equivalents.

 

(3)          The value of the PVS units upon vesting was determined by multiplying the number of PVS units by the relevant performance factors at the end of the period (125%) and then multiplying by fair market value of West common stock on the payout date, February 24, 2006, which was $32.59.  The value of vested incentive shares is determined based on the fair market value of common stock on the vesting date, March 9, 2006, which was $31.43.

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Retirement Plan Benefits

Employees Retirement Plan.  U.S.-based full-time salaried employees of the Company, which includes all Named Executive Officers other than Mr. Keating, are eligible to participate in the Retirement Plan and 401(k) Plan.  U.S.-employed Named Executive Officers (i.e., all Named Executive Officers except Mr. Keating) also are entitled to participate in the SERP, which is described below.

Until December 31, 2006, West maintained a traditional defined-benefit pension plan, which calculated retirement benefits for participants as a percentage of average annual earnings.  The normal retirement benefit equals 1.9% of the average of a participant’s five highest consecutive calendar years of compensation out of the participant’s last 10 calendar years of service, multiplied by his or her years of service up to 25 years, plus 0.5% of such average multiplied by his or her years of service in excess of 25 but not more than 35 years.

In general, compensation covered by the Retirement Plan consists of base salary, overtime, bonuses (paid in cash or stock) and other cash remuneration, plus a participant’s contributions to the Company’s 401(k) Plan and amounts contributed to the Employee Deferred Compensation Plan.  Although age 65 is the normal retirement age, participants with 10 years of service may retire upon reaching age 55, with reduced benefits based on age at the retirement date.  A participant vests in his or her benefit upon reaching three years of credited service.

Effective January 1, 2007, the accrued benefits under the Retirement Plan’s pension formula were frozen, and the pension benefits for all existing and new participants will be expressed as a “cash balance” type formula.  Under the cash-balance approach, an allocation is made at the end of each calendar year to a participant’s hypothetical cash-balance account.  The allocation is determined by the age of the participant and the percentage of annual compensation assigned to that age band by the basic cash-balance formula.  For participants who have attained minimum age and service requirements, an additional annual allocation referred to as a “transition benefit” will be made to their accounts to replace all or part of the benefit for participants who were participating in the Retirement Plan on December 31, 2006.  The transition benefit allocation percentage is based on the age of the participant as of January 1, 2007.  The transition benefit at January 1, 2007 for the Named Executive Officers who are eligible to participate was 8%.  The transition benefit percentage will remain for the duration of the transition period, which continues for twelve years or until retirement, whichever comes first.   Each year, the balance in the hypothetical account will be credited with interest at a rate equal to the 30-Year Treasury Bond Rate.

The benefit that each participant will receive at retirement will be the sum of the accrued benefit under the old pension formula as of December 31, 2006, plus the amount allocated to the participant’s cash-balance account.

The Retirement Plan is subject to qualified-plan Internal Revenue Code limits on the amount of annual benefit that may be paid under the plan, and on the amount of compensation that may be taken into account in calculating retirement benefits.  For 2006, the limit on compensation that may be used was $220,000, and is $225,000 for 2007.  The limit on annual benefits payable for an employee retiring at age 65 in 2006 was $175,000, and for 2007 is $180,000.  Benefits in excess of those permitted under the statutory limits are paid from the SERP, described below.

Supplemental Employees’ Retirement Plan.  The SERP is a nonqualified defined benefit plan that provides retirement benefits that would otherwise be provided under the Retirement Plan, but are prohibited from being paid from the Retirement Plan by Internal Revenue Code limits.  The benefit paid by the SERP is the excess of the total benefit accrued under the Retirement Plan over the amount of benefit the Retirement Plan is permitted to provide under Internal Revenue Code regulations.

The table below shows the actuarial present values of the Named Executive Officers’ accumulated pension benefit under the Retirement Plan and SERP, through December 31, 2006, and their credited years of service.  The benefits were determined using assumptions consistent with those used by the Company in its financial statements.

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Pension Benefits

(1)          Equals the number of full years of credited service as of December 31, 2006.  Credited service begins with the anniversary of a participant’s hire date and ends with his or her last full month of employment.

(2)          An actuarial present value of the benefits is calculated by estimating expected future payments starting at an assumed retirement age, weighting the estimated payments by the estimated probability of surviving to each post-retirement age, and discounting the weighted payments at an assumed discount rate to reflect the time value of money.  The actuarial present value represents an estimate of the amount which, if invested as of December 31, 2006 at a discount rate of 5.9%, would be sufficient on an average basis to provide estimated future payments based on the current accumulated benefit.  Estimated future payments are assumed to be in the form of a single lump-sum payment at retirement determined using interest-rate and mortality assumptions contained in the RP2000 Mortality Table, in accordance with applicable Internal Revenue Code regulations.  The assumed retirement age for each Named Executive Officer is 65, the earliest age at which the executive could retire without any benefit reduction due to age.  Actual benefit present values will vary from these estimates depending on many factors, including an executive’s actual retirement age, final service, future compensation levels, interest-rate movements and regulatory changes.

(3)          Mr. Keating is based in Germany and is not eligible to participate in the Company-sponsored retirement plans.

Nonqualified Deferred Compensation

The Employee Deferred Compensation Plan, an unfunded, unsecured deferred compensation plan, allows participants who are highly compensated employees to defer any whole percentage of their base salary, any whole percentage of their cash bonus and any whole number of their bonus shares.  Annual deferral amounts and earnings on those amounts are distributed five years after the year of deferral, but the participant may elect another later date for the distribution, which may be employment termination.  Participation is limited to U.S.-based full-time employees whose annual base salary is at least $150,000.

The table shows the executive contributions, earnings and account balances for the Named Executive Officers in the Employee Deferred Compensation Plan.

Nonqualified Deferred Compensation in 2006

Name (a)		Executive Contributions in Last FY ($) (b)		Registrant Contributions in Last FY (1) ($) (c)		Aggregate Earnings in Last FY (2) ($) (d)		Aggregate Withdrawals/ Distributions ($) (e)		Aggregate Balance at Last FYE ($) (f)
Donald E. Morel, Jr.		255,282		50,552		440,809		53,886		1,539,267
William J. Federici		70,646		23,310		267,810		0		625,504
Steven A. Ellers		202,988		47,846		610,785		95,267		1,614,556
Robert J. Keating (3)		—		—		—		—		—
John R. Gailey III		51,242		8,207		88,835		0		404,733

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(1)          These amounts reflect the Company match under the Employee Deferred Compensation Plan and 401(k) Plan, which are also included in the Summary Compensation Table in the “All Other Compensation” column.

(2)          These amounts reflect the net gains (losses) attributable to the investment funds in which the executives have chosen to invest their contributions and the Company’s matching contributions under the Employee Deferred Compensation Plan and 401(k) Plan.

(3)          Mr. Keating is based in Germany and is not eligible to participate in the Employee Deferred Compensation Plan and 401(k) Plan.

Executives may invest their account balances in a selection of investment options that generally mirrors the funds in the 401(k) Plan.  The available investment options change periodically.  As of December 31, 2006, participants could choose among several different investments, including domestic and international equity funds, money market and bond funds managed by the Plan’s trustee.  All employer contributions are invested in a Company stock fund.  Participants can change their investment selections prospectively at any time.

When participants elect to defer amounts, they also choose when the amounts ultimately will be distributed to them.  Amounts deferred in any given year will be distributed five years later, but the participant may elect to receive the distribution at a later time, including upon employment termination.  Distributions at employment termination are made either in a lump sum or in 10 equal annual installments, at the election of the participant.

Payments on Employment Termination or Change in Control

Payments Under Benefit Plans

Generally, if a Named Executive Officer voluntarily terminates employment (other than for death or disability), he would receive the following benefits:

·                  Accrued but unpaid compensation.

·                  Accrued vacation.

·                  Under the 2004 Plan, outstanding vested stock options would be exercisable for 90 days after the termination date.  If the employment termination is due to retirement under a Company-sponsored plan, outstanding stock options would be exercisable for the full balance of their term.  Outstanding PVS units and unvested incentive shares would be canceled as of the termination date, except for exigent circumstances as determined by the Compensation Committee.

·                  If the employment termination occurs prior to December 31 of any MIP plan year, they would not receive payment of any annual incentive award for that plan year.  The full amount of the annual MIP incentive award would be payable if they terminate on December 31.

·                  Benefits accrued under the Retirement Plan and SERP would be paid according to the terms of those plans applicable to terminated employees.  Those benefits are described under Retirement Plan Benefits beginning on page 23.

·                  For all Named Executive Officers, to the extent that the amount payable under the Retirement Plan exceeds the amount available for distribution due to IRS limits, the remaining amount would be paid under the SERP on termination of employment.

·                  Account balances in the Employee Deferred Compensation Plan would be paid according to the terms of that plan (which requires a six month grace period after the occurrence of the termination event) and the elections of the individual participant.  Participants may elect distributions in a lump sum or in five equal annual installments.

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If Mr. Ellers voluntarily terminates employment, since he is retirement eligible, he will receive the following:

·                  Accrued but unpaid compensation.

·                  Accrued vacation.

·                  Benefits accrued under the Retirement Plan and SERP would be paid according to the terms of those plans applicable to retired employees.  Those benefits are described under Retirement Plan Benefits beginning on page 23.

·                  Outstanding vested stock options would be exercisable for the full balance of their term.  Outstanding PVS units and unvested incentive shares would be canceled as of the termination date.

·                  If the employment termination occurs prior to December 31 of any MIP plan year, no payment would be made for annual incentive award for that plan year.  The full amount of the annual MIP incentive award would be payable if he is terminated on December 31.

·                  Account balances in the Employee Deferred Compensation Plan would be paid according to the terms of that plan (which requires a six month grace period after the occurrence of the termination event) and the elections of the individual participant.  Participants may elect distributions in a lump sum or in five equal annual installments.

·                  To the extent that the amount payable under the Retirement Plan exceeds the amount available for distribution due to IRS limits, the remaining amount would be paid under the SERP on termination of employment.

·                  Post retirement medical and dental insurance coverage would be available on the same basis as other retired employees.

In case of disability, Messrs Morel, Federici, Ellers and Gailey and Mr. Keating, with respect to bullet 5 only, would be eligible for the following benefits:

·                  Salary continuation for six months.

·                  Benefits, including Social Security, up to 60% of base salary or $25,000 per month, whichever is less, under the Company’s long-term disability plan.

·                  Continued accrual of credited service under Retirement Plan and SERP until his normal retirement date or later, according to the terms of those plans.

·                  Medical and dental insurance coverage would be available on the same basis as to other disabled employees.

·                  Under the 2004 Plan, outstanding unvested stock options would continue to vest and outstanding vested stock options would be exercisable for the term of the option.  Outstanding PVS units and unvested incentive shares would be paid out at the end of the respective performance periods based upon the achievement of the applicable performance goals.

In case of death, a Named Executive Officer’s beneficiaries or estate would receive the following benefits:

·                  Life insurance benefits under the Company’s group policy would be payable equal to one times base compensation up to a maximum of $500,000, plus any supplemental life insurance elected and paid for the Named Executive Officer.  Dr. Morel, will also receive a benefit of $1,750,000 payable under the terms of a term life insurance policy paid for by the Company.  For Mr. Keating, a benefit of approximately $435,560 would be payable under the terms of a term life insurance paid for by the Company.

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·                  For a Named Executive Officer who is eligible for “final average pay formula” benefits under the Retirement Plan: A married or non-married Named Executive Officer’s spouse, beneficiaries or estate, as the case may be, would receive the same monthly benefit that would have been payable to him or her under a 50% joint and survivor annuity. This benefit is the same for all similarly situated employees.

·                  For a Named Executive Officer who is eligible for “cash balance” formula benefits under the Retirement Plan:  A married or non-married Named Executive Officer’s spouse, beneficiaries or estate, as the case may be, would receive 100% of the benefit accrued under that formula. This benefit is the same for all similarly situated employees.

·                  For all Named Executive Officers, to the extent that the amount payable under the Retirement Plan exceeds the amount available for distribution due to IRS limits, the remaining amount would be paid under the SERP at the employee’s death.

·                  Under the SERP, for the retirement eligible Named Executive Officers at death, a married Named Executive Officer’s spouse would receive the same monthly benefit that would have been payable to him or her under a 50% joint and survivor annuity.

·                  If the Named Executive Officer is married, medical and dental coverage would be available to his spouse on the same basis as other married employees, i.e., if retirement eligible at death, coverage would be available to his spouse on the same basis as other retirement eligible employees. If not retirement eligible, COBRA coverage would be available for 36 months.

·                  Under the 2004 Plan, outstanding vested stock options would be exercisable for one year (but not after the end of the original option term). Outstanding PVS units and unvested incentive shares would be paid out at the end of the respective performance periods based upon the achievement of the applicable performance goals.

Mr. Keating does not participate in and is therefore not entitled to any benefits under any of the Company’s Retirement Plans.

If a Named Executive Officer is terminated for cause:

·                  Benefits accrued under the Retirement Plan and SERP would be paid according to the terms of those plans applicable to terminated or retirement eligible employees, as described in the voluntary termination sections above.

·                  Under the 2004 Plan, outstanding vested stock options would terminate immediately and unvested incentive shares and unearned PVS units would be canceled as of the termination date.

·                  Any annual incentive award for that year would be forfeited.

·                  A Named Executive Officer would be entitled to receive all accrued but unpaid compensation.

·                  A Named Executive Officer would be entitled to receive an amount for his accrued vacation, a benefit generally provided to full-time West employees.

·                  Mr. Keating does not participate in and is therefore not entitled to any benefits under any of the Company’s Retirement Plans.

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Payments Under Employment Agreement

In 2002, we entered into an employment agreement with Dr. Morel.  The Company may terminate his employment by giving two years’ prior notice, or earlier upon his death, due to a disability or for cause (as defined in the agreement).  The Company may also terminate his employment without cause and without giving the requisite notice, but in such an event, he would be entitled to receive a lump sum severance payment equal to his annual base salary in effect on the termination date, plus an amount equal to his salary for the next year if it has been set (or if not set, two times his current base salary).  The amount would have been approximately $1,550,000 if his employment would have been terminated by the Company without cause on December 31, 2006.  Any severance pay would be contingent upon a release and other customary provisions, including compliance with non-competition, non-solicitation and confidentiality obligations contained in the agreement.

For purposes of his agreement, termination for “cause” is defined as: the conviction of a felony; the willful failure to perform his job duties; gross negligence or willful misconduct in the performance of his duties; willful misconduct that materially injures the Company; or the violation of the non-compete, the non-solicitation or the confidentiality obligations under the agreement.

If Dr. Morel’s employment is terminated without cause and there is also a change in control, he would receive either the lump sum amount described above or the amount payable under the change in control provisions described below, whichever is larger.

Payments on Change in Control

We have entered into agreements with each of the Named Executive Officers, as well as certain other officers of the Company, which provide the following benefits upon qualifying terminations of employment in connection with or within two years following a change in control of the Company.  For Dr. Morel, Mr. Federici, Mr. Ellers and Mr. Gailey, the agreements provide for the following compensation and benefits if their employment is terminated under certain circumstances following a change in control of the Company:

·                  Cash severance pay equal to three times the sum of the executive’s highest annual base salary in effect during the year of termination.  The severance would be reduced on a pro rata basis if the executive retires within three years following the change in control.

·                  An amount equal to the average annual bonus paid or payable to the executive for the three years immediately preceding the change in control.

·                  Immediate vesting of any unvested benefits and employer matching contributions under the Company’s 401(k) Plan and the Employee Deferred Compensation Plan as of the termination of the executive’s employment.

·                  Immediate vesting of all unvested stock options, shares of stock and other equity-based awards granted or awarded under any compensation or benefit plan or arrangement.

·                  Continued medical, dental, life and other insurance benefits for 36 months after termination of the executive’s employment, or until his retirement or eligibility for similar benefits with a new employer.

·                  Available outplacement benefits.

Mr. Keating’s agreement provides for continuation of his base salary for 18 months if his employment is terminated under the same circumstances.

Terminations of employment that entitle the executive to receive severance benefits consist of (i) resignation following a constructive termination of his employment, (ii)  employment termination other than by reason of death, disability, willful misconduct or normal retirement, or (iii) voluntary resignation during a one-time, 30-day period beginning 12 months following the change in control.

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A “change in control” under the agreements is defined generally as any such event that requires a report to the SEC, but includes any of the following:

·                  any person or entity other than the Company, any current director or officer of the Company or a trustee or fiduciary holding the Company’s securities, becomes the beneficial owner of more than 50% of the combined voting power of the Company’s outstanding securities;

·                  an acquisition, sale, merger or other transaction that results in a change in ownership of more than 50% of the combined voting power of the Company’s stock;

·                  a change in the majority of the Board of Directors over a two-year period that is not approved by at least two-thirds of the directors then in office who were directors at the beginning of the period; or

·                  execution of an agreement with the Company, which if consummated, would result in any of the above events.

A “constructive termination” generally includes any of the following Company actions without the executive’s written consent following a change in control:

·                  significantly reducing or diminishing the nature or scope of executive’s authority or duties;

·                  materially reducing the executive’s annual salary or incentive compensation opportunities;

·                  changing the executive’s office location so that he must commute more than 50 miles, as compared to his commute as of the date of the agreement;

·                  failing to provide substantially similar fringe benefits, or substitute benefits that were substantially similar taken as a whole, to the benefits provided as of the date of the agreement; or

·                  failing to obtain a satisfactory agreement from any successor to West to assume and agree to perform the obligations under the agreement.

·                  However, no constructive termination will have occurred if the executive:

·                  fails to give the Company written notice of his intention to claim constructive termination and the basis for that claim at least 10 days in advance of the effective date of executive’s resignation; or

·                  the Company cures the circumstances giving rise to the constructive termination prior the effective date of executive’s resignation.

To receive the severance benefits under the agreement, the executive must agree not to be employed by any competitor of the Company or compete with the Company in any part of the United States (any market or territory, in the case of Dr. Morel) for up to one year (two years, in the case of Dr. Morel) following employment termination for any reason.

The Named Executive Officers (other than Mr. Keating) are entitled to full indemnification for any excise taxes that may be imposed by Section 4999 of the Internal Revenue Code, as amended, in connection with the change in control, including interest and penalties, and payment of their legal fees and expenses if the Company contests the validity or enforceability of the agreement. Mr. Keating is not entitled to such indemnification because he is an overseas employee.

The following table reflects additional payments to the Named Executive Officers in the event of a termination following a change in control that qualifies them for severance and other benefits under the agreements described above.

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