<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ChiRex Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Notes:
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ChiRex Inc.
[LOGO]
ChiRex Inc.
NOTICE OF 1999 ANNUAL MEETING
AND
PROXY STATEMENT
April 21, 1999
<PAGE>
ChiRex Inc.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 21, 1999
To our Stockholders:
The Annual Meeting of Stockholders of ChiRex Inc., a Delaware corporation
("ChiRex"), will be held on April 21, 1999, at 5:00 P.M., Eastern Standard
Time, at Ritz-Carlton, Amelia Island, Florida, following the Fourth Biannual
Symposium on Process Chemistry sponsored by ChiRex and at any adjournment
thereof, for the purpose of acting upon the following matters as well as such
other business as may properly come before the Annual Meeting or any
adjournment thereof:
(1) the election of one Class III director;
(2) the ratification of the appointment of Arthur Andersen LLP as
independent auditors for fiscal year 1999; and
(3) the approval of the amendment to the Amended and Restated 1995
Director Stock Option Plan.
Only stockholders of record at the close of business on March 12, 1999 will
be entitled to vote at the Annual Meeting or any adjournment thereof.
Your vote is important. To support your Board, please mark, date and sign
the enclosed proxy card and return it promptly in the accompanying envelope.
Your proxy may be revoked by delivering written notice of revocation to the
Secretary Elect of ChiRex prior to the time voting is declared closed or by
attending the Annual Meeting and voting your shares in person.
By Order of the Board of Directors,
JON E. TROPSA
Secretary Elect
Stamford, Connecticut
March 19, 1999
<PAGE>
ChiRex Inc.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
April 21, 1999
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of ChiRex Inc. ("ChiRex" or the "Company") of proxies to be
voted at the Annual Meeting of Stockholders to be held on April 21, 1999, at
5:00 P.M., Eastern Standard Time, at Ritz-Carlton, Amelia Island, Florida,
following the Fourth Biannual Symposium on Process Chemistry sponsored by
ChiRex and at any adjournment thereof, for the purposes set forth in the
accompanying Notice. This Proxy Statement and the accompanying proxy card are
first being sent to stockholders on or about March 19, 1999.
Only holders of Common Stock of ChiRex, par value $.01 per share ("Common
Stock"), at the close of business on March 12, 1999 will be entitled to vote at
the Annual Meeting. At that date there were 11,899,727 shares of Common Stock
outstanding. Each stockholder is entitled to one vote for each share of Common
Stock held by him or her on the record date. The presence in person or by proxy
of stockholders holding a majority of the shares of Common Stock will
constitute a quorum for the transaction of business at the Annual Meeting.
Abstentions and broker non-votes will be included in the computation of the
number of shares of Common Stock that are present for purposes of determining
the presence of a quorum.
ChiRex's address is 300 Atlantic Street, Suite 402, Stamford, Connecticut
06901.
ITEM I. ELECTION OF DIRECTOR
At the 1999 Annual Meeting, one Class III director is to be elected to hold
office until the 2002 Annual Meeting, or until his or her successor has been
duly elected and qualified. The Board of Directors proposes for election Eric
N. Jacobsen, who is now a director of the Company.
The Board of Directors currently consists of 4 directors, divided into three
classes. On July 7, 1998, Alan R. Clark resigned as the Chief Executive Officer
and from the Board of Directors. On September 1, 1998, Elizabeth M. Greetham
resigned from the Board of Directors.
Stockholders voting at the Annual Meeting may not vote for more than the
number of nominees listed in this Proxy Statement. The nominee receiving the
votes of a plurality of the shares of Common Stock present, either in person or
by proxy, and voting at the Annual Meeting shall be elected a director. The
persons named in the enclosed proxy card (Michael A. Griffith and Jon E.
Tropsa) have advised that unless otherwise instructed in any form of proxy,
they intend to vote FOR the election of the nominee. They also have advised
that in the event the nominee shall not be available for election, they will
vote for the election of such substitute nominee, if any, as the Board of
Directors may propose. However, the Board of Directors has no reason to believe
that the nominee will not be available for election as director.
NOMINEE FOR CLASS III DIRECTOR
(Term expiring in 2002)
ERIC N. JACOBSEN
Professor Eric N. Jacobsen, Ph.D., 39, is a Professor in the Department of
Chemistry and Chemical Biology at Harvard University. He is a member of the
ChiRex Inc. Scientific Advisory Board and, as of October 1, 1998, serves as the
Scientific Director of the ChiRex Technology Center on a consultancy basis. He
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also currently serves as consultant to Merck & Co., Inc. and Versicor, Inc.,
where he is co-founder and Chairman of the Scientific Advisory Board. Prior to
joining the faculty at Harvard, Professor Jacobsen served from 1988 to 1993 at
the University of Illinois at Urbana-Champaign, most recently as Associate
Professor. He received his B.S. in Chemistry from New York University, his
Ph.D. from the University of California, Berkeley, and has served as a National
Institute of Health Postdoctoral Fellow at the Massachusetts Institute of
Technology.
CONTINUING CLASS I DIRECTORS
(Term expiring in 2000)
MICHAEL A. GRIFFITH
Mr. Griffith, 40, has served as Chairman of the Board and Chief Executive
Officer of the Company since September 1, 1998. He has served as co-CEO from
July 7, 1998, as Chief Financial Officer from April 10, 1996 and as Secretary
from September 5, 1996, to September 1, 1998, and has been a member of the
Board of Directors since October 17, 1996. From June 1994 until April 1996, Mr.
Griffith was a Director at Credit Suisse First Boston and prior to that was a
Vice President at BT Securities Corporation, a subsidiary of Bankers Trust
Company. Mr. Griffith holds a Master of Management in finance, marketing and
international economics from the J.L. Kellogg Graduate School of Management at
Northwestern University and a Bachelor of Science in Business Administration
from the University of Kansas.
W. DIETER ZANDER
Mr. Zander, 83, was educated in Germany and Switzerland and founded Henley &
Co., Inc., a chemical pharmaceutical company with offices in the United States
and Canada. In 1980, Henley & Co., Inc. was sold to Boehringer Ingelheim GmbH.
Mr. Zander later joined Arnhold and S. Bleichroeder, Inc., a privately owned
investment bank, where he is currently a Managing Director in the International
Corporate Finance Department.
CONTINUING CLASS II DIRECTOR
(Term expiring in 2001)
DIRK DETERT, PH.D.
Dr. Detert, 58, has 27 years of experience in the pharmaceutical industry.
Dr. Detert was formerly the General Manager of Wellcome GmbH with
responsibility for Central Europe and Germany, as a Managing Director. He is a
former Member of the Board of the German Pharmaceutical Association and the
German Chemical Association. Dr. Detert holds a Ph.D. in Chemistry from the
University of Alberta, Edmonton, Canada and a Bachelor of Science in chemistry
from the University of Kiel.
Except as otherwise indicated, the nominees and continuing directors have
held the principal occupations described above during the past five years.
Committees of the Board of Directors
The standing committees of the Board of Directors are the Audit Committee
and Compensation Committee. During 1998, 12 meetings of the Board of Directors
were held. The Audit Committee met once and the Compensation Committee met
twice during 1998. Each director attended at least 75% of the total meetings of
the Board of Directors and the committees on which they served.
The Audit Committee reviews the results and scope of the audit and other
services provided by the Company's independent public accountants. Current
members of the Audit Committee are Mr. Zander and Dr. Detert.
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The Compensation Committee makes recommendations concerning salaries and
compensation for employees of and consultants to the Company, and administers
and grants stock options and awards pursuant to the Company's equity incentive
plans. Current members of the Compensation Committee are Mr. Zander and
Professor Jacobsen.
Compensation of Directors
The Company pays to its non-employee directors a $10,000 annual fee payable
at the Annual Meeting of Shareholders plus $1,500 per meeting of the Board
attended per day and reimburses directors for their out-of-pocket expenses
incurred in attending meetings. Directors who are members of any committee of
the Board also receive $1,000 per committee meeting attended. In addition, each
non-employee director participates in the Company's Amended and Restated 1995
Director Stock Option Plan, as described below.
The Amended and Restated 1995 Director Stock Option Plan (the "Director
Plan") was adopted by the Board of Directors in February 1997 and approved by
the stockholders of the Company at the 1997 Annual Meeting. Under the terms of
the Director Plan, members of the Board of Directors of the Company who are not
employees of the Company or any subsidiary of the Company are eligible to
receive non-statutory options to purchase shares of Common Stock. A total of
100,000 shares of Common Stock may be issued upon exercise of options granted
under the Director Plan. Each eligible member of the Board of Directors will be
granted an option to purchase 3,000 shares of Common Stock on the date of his
or her initial election to the Board of Directors (an "Initial Option").
Subject to the stockholders' approval of the amendment to the Director Plan as
described in Item III of this Proxy Statement, each eligible member of the
Board of Directors then in office will receive an additional option (an "Annual
Option") to purchase a specified number of shares to be determined by the Board
of Directors upon the close of business on the date of each meeting of the
stockholders. Each Initial Option will become exercisable on a cumulative basis
as to one-fifth of the shares subject to the option on each of the first,
second, third, fourth and fifth anniversaries of the date of grant of such
option. Each Annual Option will become exercisable in full immediately prior to
the annual meeting of the stockholders next following the date of grant. The
exercise price of options granted under the Director Plan will equal the
closing price of the Common Stock on the Nasdaq National Market on the date of
grant. Except in cases of death or disability, options granted under the
Director Plan must be exercised within 90 days after the date he or she ceases
to be a member of the Board of Directors of the Company. In addition, the
options are personal and no rights granted under the Director Plan may be
transferred, assigned, pledged or hypothecated in any way, except by will or by
the laws of descent and distribution. No option is exercisable after the
expiration of seven years from the date of grant.
On February 9, 1999, the Board of Directors adopted an amendment to the
Amended and Restated 1995 Director Stock Option Plan which will be submitted
for stockholder approval at the Annual Meeting. See "Item III. Approval of
Amendment to Amended and Restated Director Stock Option Plan."
Certain Transactions
Professor Jacobsen, a director of the Company and a member of the Company's
Scientific Advisory Board, entered into a new consulting agreement dated
October 1, 1998, with the Company and its wholly owned subsidiary, ChiRex
Technology Center, Inc. Such consulting agreement supersedes the earlier
agreement dated July 19, 1996. Pursuant to the new consulting agreement, Dr.
Jacobsen received options to purchase 100,000 shares at $11.25. In 1998, the
Company paid professor Jacobsen $77,500 for consulting services rendered
pursuant to his consulting agreements.
Pursuant to the consulting agreements dated as of April 18, 1998, the
Company paid $100,000 to each of Elizabeth M. Greetham and W. Dieter Zander, a
former member and a present member, respectively, of the Board of the Directors
of the Company, for services rendered with respect to certain business
opportunities.
In connection with Alan R. Clark's resignation as Chairman and Chief
Executive Officer of the Company on July 3, 1998, the Company agreed to pay Mr.
Clark (Pounds)331,250 ($549,875, assuming an exchange
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rate of $1.66 per (Pounds)1.00) and other compensation representing all amounts
owed to Mr. Clark under the compromise agreement entered into in connection
with his resignation. See "Executive Employment and Other Amounts--Settlement
Agreements and Consulting Agreement."
In connection with John Graham Thorpe's resignation as Vice President,
Commercial Development, of the Company on June 30, 1998, the Company paid Mr.
Thorpe (Pounds)70,000 ($116,200) for and other compensation representing all
amounts owed to Mr. Thorpe under a compromise agreement entered into in
connection with his resignation. See "Executive Employment and Other Amounts--
Settlement Agreements and Consulting Agreement."
In connection with John E. Weir's resignation as Vice President, Finance,
and Treasurer of the Company on July 9, 1998, the Company agreed to pay Mr.
Weir (Pounds)30,000 ($49,800) and other compensation representing all amounts
owed to Mr. Weir under the compromise agreement and the consulting agreement
entered into in connection with his resignation. See "Executive Employment and
Other Amounts--Settlement Agreements and Consulting Agreement."
Executive Officers
The following table sets forth certain information, as of December 31, 1998,
with respect to the executive officers of the Company:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Michael A. Griffith(a).. 40 Chief Executive Officer and Director
Ian D. Shott............ 41 Chief Operating Officer
Frank J. Wright......... 51 Executive Vice President, Corporate Development
Jon E. Tropsa........... 43 Vice President, Finance
Roger B. Pettman,
Ph.D................... 43 Vice President, General Manager ChiRex Technology Center
David F. Raynor......... 54 Vice President, Dudley Operations
Ian M. Brown............ 42 Vice President, Annan Operations
</TABLE>
- --------
(a) See "Item I. Election of Director--Continuing Class I Director."
Ian D. Shott became the Chief Operating Officer of the Company on September
1, 1998. From 1993 until joining the Company, Mr. Shott served as an executive
at Lonza Fine Chemicals, a Swiss-based contract manufacturing firm. At Lonza,
he held the positions of General Manager, Exclusive Fine Chemicals, and Head of
International Supply Chain Management. Previously, he served at ICI and then
Zeneca Fine Chemicals for 15 years, culminating in the position of Business
General Manager. Mr. Shott holds a B.Sc. in Chemical Engineering from the
Imperial College in London.
Frank J. Wright became the Executive Vice President, Corporate Development,
of the Company on December 17, 1998. Mr. Wright joined the Company as Vice
President, Annan Operations, in November 1997, following the acquisition of
Glaxo Wellcome's Annan facility by the Company. During the previous 16 years,
Mr. Wright served in senior positions at Glaxo Wellcome in outsourcing and
procurement, manufacturing strategy and corporate development. He trained as a
mechanical engineer and studied strategic business and management development
at Liverpool University and London Business School.
Jon E. Tropsa became Vice President, Finance, of the Company on September 1,
1998. He served as Corporate Controller of the Company from September 1997 to
July 1998 and as Vice President, Controller and Treasurer from July 1998 to
September 1998. From April 1997 through September 1997, Mr. Tropsa was
Corporate Controller for Dynacast Inc., in Yorktown Heights, New York and from
March 1990 through March 1997 Mr. Tropsa was Corporate Controller of Hargro
Associates of Stamford, Connecticut. Mr. Tropsa holds a B.S. in accounting from
Babson College and is a Certified Public Accountant.
4
<PAGE>
Roger B. Pettman, Ph.D., became Vice President, General Manager ChiRex
Technology Center, on September 1, 1998. Prior to this date, he served as Vice
President, Sales and Marketing, from March 1996. From 1992 until the March
1996, Dr. Pettman was Vice President, Sales and Marketing of SepraChem Inc. He
was United States Business Development Manager for Shell Fine Chemical Co. from
1990 to 1992. He holds a B.Sc. degree and Ph.D. in chemistry from Sheffield
University and completed two years postdoctoral study at Stanford University.
David F. Raynor has served as Vice President, Dudley Operations, of the
Company since March 6, 1996. From 1991 until March 1996, he was Operations
Director of Sterling Organics Limited and was a member of the MBO Team. Mr.
Raynor held several senior positions with Sterling Organics Limited since 1975.
He holds a degree in chemistry, is a fellow of the Royal Society of Chemistry
and obtained a general management qualification from Henley Business School.
Ian M. Brown became Vice President, Annan Operations, of the Company on
September 1, 1998. Mr. Brown joined the Company in November 1997, following the
acquisition of Glaxo Wellcome's Annan facility by the Company. During the
previous ten years, Mr. Brown served in various senior positions at Annan in
manufacturing. Mr. Brown holds a B.Sc. degree in chemistry from Heriot-Watt
University, Edinburgh, is a Member of the Royal Society of Chemistry and has a
general management qualification from Henley Business School.
Stock Ownership of Certain Persons
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of December 31, 1998 (unless otherwise
indicated by footnote) by (i) each person or entity known to the Company to
beneficially own more than 5% of the Common Stock, (ii) each of the Directors,
(iii) each of the executive officers named under "Executive Compensation" and
(iv) all Directors and executive officers as a group.
<TABLE>
<CAPTION>
Common Stock
Beneficially
Owned
---------------
Name Number Percent
---- ------- -------
<S> <C> <C>
American Express Company(1)............................. 900,000 7.6%
American Express Tower
200 Vesey Street
New York, NY 10285
Warburg Pincus Asset Management, Inc.(2)................ 846,800 7.2%
466 Lexington Avenue
New York, NY 10017
Ardsley Partners (3).................................... 845,000 7.1%
646 Steamboat Road
Greenwich, CT 06830
Michael A. Griffith(4).................................. 118,000 1.0%
Dirk Detert(4).......................................... 4,200 *
Eric N. Jacobsen(4)..................................... 8,117 *
W. Dieter Zander(4)..................................... 5,635 *
Ian D. Shott............................................ 0 *
Frank J. Wright(4)...................................... 18,000 *
Jon E. Tropsa(4)........................................ 12,000 *
Roger B. Pettman(5)..................................... 123,857 1.0%
David F. Raynor(6)...................................... 69,956 *
Ian M. Brown............................................ 0 *
Directors and executive officers as a group (ten
persons)(7)............................................ 359,765 3.0%
</TABLE>
- --------
* Less than one percent
5
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(1) As reported on Schedule 13G filed with the Securities and Exchange
Commission ("SEC") for the year ended December 31, 1998. American Express
Company is the parent holding company of American Express Financial
Corporation, a registered Investment Adviser under Section 203 of the
Investment Advisers Act of 1940, and IDS Discovery Fund, Inc., a registered
Investment Company under Section 8 of the Investment Company Act of 1940.
According to the Schedule 13G, American Express Company has shared
dispositive power for 900,000 shares; American Express Financial
Corporation has shared dispositive power for 900,000 shares; and IDS
Discovery Fund, Inc. has sole voting power for 900,000 shares and shared
dispositive power over 900,000 shares.
(2) As reported on Schedule 13G filed with the SEC for the year ended December
31, 1998. According to the Schedule 13G, Warburg Pincus has sole voting
power for 546,500 shares, shared voting power for 257,200 shares and sole
dispositive power for 846,800 shares.
(3) As reported on Schedule 13G filed with the SEC for the year ended December
31, 1998. According to the Schedule 13G, Ardsley Partners has shared voting
and dispositive power for 845,000 shares and Mr. Philip J. Hempleman has
shared voting power and dispositive power for 845,000 shares.
(4) Represents shares subject to vested options.
(5) Includes 98,857 shares subject to vested options.
(6) Includes 12,000 shares subject to vested options.
(7) Includes an aggregate of 276,809 shares subject to vested options.
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Executive Compensation
The following table sets forth the compensation for the years ended December
31, 1996, 1997 and 1998 for the Company's Chief Executive Officer, its former
Chief Executive Officer and each of its four other executive officers whose
annual salary and bonus for the fiscal years ended December 31, 1996, 1997 and
1998 exceeded $100,000 (the Chief Executive Officer and such other executive
officers are hereinafter referred to as the "Named Executive Officers"):
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long-Term
Compensation (1) Compensation
------------------ Awards
Name and Principal Securities All Other
Position Year Salary($) Bonus($) Underlying Compensation ($)
------------------ ---- --------- -------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Michael A. Griffith
(2).................... 1998 266,667 150,000 175,000 (3)
Chairman and Chief
Executive Officer 1997 180,000 0 125,000
1996 109,485 69,009 125,000
Ian D. Shott (4)........ 1998 77,937 49,800 100,000 38,894(4)
Chief Operating Officer
Frank J. Wright (5)..... 1998 133,087 20,000 60,000 (6)
Executive Vice
President, Corporate
Development
Jon E. Tropsa (7)....... 1998 118,750 25,000 90,000 (3)
Vice President, Finance
Roger B. Pettman........ 1998 150,000 20,000 25,000 (3)
Vice President, General
Manager ChiRex
Technology Center 1997 150,000 0 25,000
1996 139,816 51,049 102,857(8) 325,000(9)
David F. Raynor......... 1998 142,760 23,127 0 (6)
Vice President,
Operations 1997 135,300 0 60,000
1996 110,498 48,545 20,253(10)
Alan R. Clark (11)...... 1998 111,386 0 0 601,667(6)
Former Chairman and
Chief Executive
Officer 1997 206,250 0 150,000
1996 149,193 73,151 0 84,240(10)
</TABLE>
- --------
(1) Compensation for Messrs. Clark and Raynor was paid in Great Britain pounds
sterling and amounts shown were translated from Great Britain pounds
sterling into U.S. Dollars at the rate of $1.66 per (Pounds)1.00 for 1998,
$1.65 per (Pounds)1.00 for 1997 and $1.56 per (Pounds)1.00 for 1996. For
the period from January 1, 1996 until March 11, 1996, compensation for Dr.
Pettman was paid by SepraChem Inc., and compensation for Messrs. Clark and
Raynor was paid by Sterling Organics Limited. Amounts paid by SepraChem
Inc. to Dr. Pettman for the period from January 1, 1996 until March 11,
1996 were $66,000 (including a $37,000 bonus). Amounts paid by Sterling
Organics Limited to Messrs. Clark and Raynor for the period from January 1,
1996 until March 11, 1996, were $68,553 (including a $32,208 bonus) and
$52,546 (including a $23,550 bonus), respectively.
(2) Mr. Griffith was elected Chief Executive Officer and Chairman of the Board
of the Company as of September 1, 1998. Accordingly, his compensation for
1998 includes compensation as Chief Executive Officer and Chairman of the
Board only from the effective date. Pursuant to his employment agreement,
Mr. Griffith's current annual compensation as Chief Executive Officer and
Chairman is $300,000 plus a guaranteed annual minimum bonus of $150,000.
(3) Mr. Griffith, Mr. Tropsa and Dr. Pettman participate in a Company sponsored
401(k) program. The incremental cost of such perquisite in 1998 was not in
excess of the lesser of (a) $50,000 and (b) 10% of the amounts reported as
Salary and Bonus for 1998 in the Summary Compensation Table.
(4) Mr. Shott was elected Chief Operating Officer as of September 1, 1998.
Accordingly, his compensation for 1998 reflects compensation from September
1, 1998 to December 31, 1998. Pursuant to his employment agreement, Mr.
Shott's current annual compensation as Chief Operating Officer is
(Pounds)150,000 ($249,000). All other compensation of $38,894 for Mr. Shott
in 1998 represents compensation for relocation related expenses.
7
<PAGE>
(5) Mr. Wright was elected Executive Vice President, Corporate Development, as
of September 1, 1998. Accordingly, his compensation for 1998 includes
compensation as Executive Vice President, Corporate Development, only from
the effective date. Pursuant to his employment agreement, Mr. Wright's
current annual compensation as Executive Vice President, Corporate
Development, is $160,000.
(6) The Company provided certain U.K. executives use of a Company leased
automobile and gas and maintenance allowances. The incremental cost of such
perquisites in 1998 was not in excess of the lesser of (a) $50,000 and (b)
10% of the amounts reported as Salary and Bonus for 1998 in the Summary
Compensation Table. The Company discontinued the U.K. car policy on March
1, 1999.
(7) Mr. Tropsa was elected Vice President, Finance, as of September 1, 1998.
Accordingly, his compensation for 1998 includes compensation as Vice
President, Finance, only from the effective date. Pursuant to his
employment agreement, Mr. Tropsa's current annual compensation as Vice
President, Finance, is $125,000.
(8) Represents options to purchase 87,857 shares of common stock which were
granted in exchange for options to purchase common stock of SepraChem Inc.
in connection with the merger of a wholly owned subsidiary of the Company
with and into SepraChem Inc. and options to purchase 15,000 shares of
common stock granted under the 1995 Stock Incentive Plan.
(9) Represents the fair market value at the time of grant of 25,000 shares of
common stock of the Company granted in exchange for 56,911 shares of common
stock of SepraChem Inc. which were transferred to Dr. Pettman prior to the
merger of a wholly owned subsidiary of the Company with and into SepraChem
Inc.
(10) Other compensation for Messrs. Clark and Raynor in 1996 represents
payments made pursuant to a management retention program entered into in
connection with the management buy-out on August 10, 1995.
(11) Mr. Clark resigned as Chairman of the Board and Chief Executive Officer of
the Company on July 7, 1998. Accordingly, his compensation for 1998
reflects compensation for the period from January 1, 1998 to July 7, 1998.
All other compensation of $601,667 for Mr. Clark in 1998 represents
compensation for all amounts owed to him under the compromise agreement
entered into in connection with his resignation, and automobile, gas and
maintenance allowances.
8
<PAGE>
Stock Option Grants
The following table sets forth certain information concerning stock options
granted in fiscal year 1998 to the Named Executive Officers.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of
Number of Percent of Stock Price
Securities Total Options Exercise Appreciation for
Underlying Granted to or Base Option Term(1)
Options Employees Price Expiration ---------------------
Name Granted(#) in Fiscal Year ($/Sh) Date 5%($) 10%($)
- ---- ---------- -------------- ------------------------- ---------------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Michael A. Griffith
(2).................... 175,000 23.6% $14.19 and $11.50 6/15 and 9/24/05 846,642 1,973,035
Ian D. Shott (3)........ 100,000 13.5% $16.25 and $11.50 9/01 and 9/24/05 609,378 1,420,111
Frank J. Wright (4)..... 60,000 8.1% $15.00, $14.19 and $11.50 2/12, 6/15 and 9/24/05 322,500 751,562
Jon E. Tropsa (5)....... 90,000 12.1% $15.00, $14.19 and $11.50 2/12, 6/15 and 9/24/05 462,950 1,078,869
Roger B. Pettman........ 25,000 3.4% $11.50 9/24/05 117,041 272,756
David F. Raynor......... 0 0%
Alan R. Clark........... 0 0%
</TABLE>
- --------
(1) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock appreciation of 5% and 10% compounded
annually from the date the respective options were granted to their
expiration date. Actual gains, if any, on stock option exercises will
depend on the future performance of the Common Stock and the date on which
the options are exercised.
(2) Mr. Griffith received two option grants in 1998. The first was granted on
June 15, 1998 for 25,000 shares at an exercise price of $14.19. The second
was granted on September 24, 1998 for 150,000 shares at an exercise price
of $11.50. The grants have been consolidated for the table above.
(3) Mr. Shott received two option grants in 1998. The first was granted on
September 1, 1998 for 75,000 shares at an exercise price of $16.25. The
second was granted on September 24, 1998 for 25,000 shares at an exercise
price of $11.50. The grants have been consolidated for the table above.
(4) Mr. Wright received three option grants in 1998. The first was granted on
February 12 for 10,000 shares at an exercise price of $15.00. The second
was granted on June 15, 1998 for 25,000 shares at an exercise price of
$14.19. The third was granted on September 24, 1998 for 25,000 shares at an
exercise price of $11.50. The grants have been consolidated for the table
above.
(5) Mr. Tropsa received three option grants in 1998. The first was granted on
February 12, 1998 for 10,000 shares at an exercise price of $15.00. The
second was granted on June 15, 1998 for 25,000 shares at an exercise price
of $14.19. The third was granted on September 24, 1998 for 55,000 shares at
an exercise price of $11.50. The grants have been consolidated for the
table above.
9
<PAGE>
Stock Option Exercises
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised In-
Unexercised Options the-Money Options at
at Fiscal Year-End(#) Fiscal Year-End($)
------------------------- -------------------------
Shares
Acquired on Value
Name Exercise(#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Michael A. Griffith..... 0 0 118,000/307,000 1,205,250/3,077,563
Frank J. Wright......... 0 0 18,000/82,000 79,835/450,278
Jon E. Tropsa........... 0 0 12,000/88,000 71,875/714,688
Ian D. Shott............ 0 0 0/100,000 0/640,625
Roger B. Pettman........ 0 0 98,857/54,000 1,864,040/563,250
David F. Raynor......... 0 0 12,000/48,000 136,500/546,000
Alan R. Clark........... 0 0 70,000/0 683,750/0
</TABLE>
Retirement Benefits
Employees of the Company who are domiciled in the U.K. are entitled to
participate in the ChiRex Pension Plan (the "Pension Plan"). Messrs. Wright,
Shott and Raynor currently participate in the Pension Plan.
Currently, the Company is required to make a contribution equal to 9% of
each participant's annual salary and each participant is required to make a
contribution equal to 3% of his or her annual salary. The funding of the
Pension Plan has been designed to provide sufficient assets to satisfy the
pension liabilities of all participants on a going forward basis. In order to
satisfy the past service liabilities of Pension Plan participants who had
previously participated in the pension plan maintained by Sanofi Winthrop,
assets valued at approximately (Pounds)31 million were transferred from Sanofi
Winthrop to the trust maintained for the Pension Plan. The amount of the asset
transfer was calculated by the Company's actuary and is sufficient to satisfy
the past service liabilities under the Sanofi Winthrop plan that were assumed
by the Company (including the senior executive supplemental pension benefits
for Mr. Raynor, described below).
Upon reaching age 65, a vested participant in the Pension Plan is entitled
to receive a basic benefit equal to the product of (i) 1/60th, multiplied by
(ii) years of continuous service (up to a maximum of 40 years), multiplied by
(iii) final average basic earnings in excess of the state basic pension. Mr.
Raynor is entitled to receive a supplemental pension benefit for senior
executives related to their participation in the Sterling Winthrop Senior
Executive Pension Plan (the "Executive Pension Plan"), which is equal to the
product of (i) 1/30th, multiplied by (ii) years of continuous service (up to a
maximum of 20 years), multiplied by (iii) the participant's final average basic
earnings in excess of the state basic pension. For purposes of the Pension
Plan, final average basic earnings is defined as a participant's highest
average 12 months of basic salary in the past 5 years, plus such participant's
average additional compensation defined as the average of the highest 3
consecutive years of additional earnings in the past ten years (excluding the
value of any stock options).
Vesting occurs under the Pension Plan after the completion of two years of
service. The Pension Plan provides for annual pension increases for
participant's pay status equal to the lesser of (i) 5% a year or (ii) the
increase in the Retail Price Index. The Pension Plan also provides for early
retirement, ill health retirement and death in service benefits.
10
<PAGE>
The following table provides estimates of annual retirement benefits payable
under the Pension Plan:
Pension Plan Table
<TABLE>
<CAPTION>
Years of Service
Final Average --------------------------------------------------------------
Compensation(1) 10 20 30 40 or more
--------------- ------- ------- ------- ----------
<S> <C> <C> <C> <C>
$ 80,000 $12,900 $25,800 $38,700 $ 51,600
100,000 16,250 32,500 48,750 65,000
120,000 19,580 39,160 58,740 78,320
140,000 22,900 45,800 68,700 91,600
160,000 26,250 52,500 78,750 105,000
180,000 29,580 59,160 88,740 118,320
</TABLE>
- --------
(1) Compensation and annual retirement benefits for all employees covered under
the Pension Plan are paid in Great Britain pounds sterling and amounts
shown were translated from Great Britain pounds sterling into U.S. Dollars
at the rate of $1.66 per (Pounds)1.00.
Mr. Raynor has been credited with 23 years of service. Under the Executive
Pension Plan, the estimated annual retirement benefits of Mr. Raynor are
equivalent to the estimated benefits payable under the Pension Plan for
employees with 40 or more years of service. The Pension Plan defines
"compensation" generally to include all remuneration to an employee for
services rendered, including base pay, bonuses and special forms of pay. The
definition of "covered compensation" under the Pension Plan, is not
substantially different than the amount reflected in the Annual Compensation
column of the Summary Compensation Table set forth above.
Executive Employment Agreements
The Company is party to employment agreements with each of the Named
Executive Officers. Under each agreement, such executive is entitled to receive
an annual base salary and, in certain cases, an annual bonus based on the
Company's performance. The agreements also entitle the executives to
participate in certain retirement benefit programs maintained by the Company.
The Company shall have the right to terminate each executive's employment
immediately upon the occurrence of certain for "cause" events. Each executive's
employment may also be terminated by the Company without cause; provided,
however, that the Company pays to the executive a specified percentage of his
salary and other compensation and certain expenses in connection with such
termination.
Settlement Agreements and Consulting Agreement
In connection with Alan R. Clark's resignation as Chairman and Chief
Executive Officer of the Company on July 3, 1998, the Company agreed to pay Mr.
Clark (Pounds)331,250 ($549,875, assuming an exchange rate of $1.66 per
(Pounds)1.00), representing all amounts owed to Mr. Clark under a compromise
agreement entered into in connection with his resignation as Chairman and Chief
Executive Officer of the Company and certain expenses associated with his
resignation. Of this amount, (Pounds)165,625 ($274,948), plus interest, was
paid in October 1998. The remaining amount, plus interest, was paid in January
1999. The Company also paid (Pounds)1,200 ($1,992) in lieu of fuel expenses and
certain other expenses related to his resignation. In addition, the Company
agreed to provide Mr. Clark with welfare benefit coverage for a period of one
year and allow early vesting of certain shares. The settlement agreement
contains certain restrictive covenants, including provisions relating to
noncompetition, nonsolicitations, nondisclosure of proprietary information and
nonpublication of disparaging remarks by Mr. Clark and the Company about each
other, and provides for release of all claims by Mr. Clark against the Company.
In connection with J. Graham Thorpe's resignation as Vice President,
Commercial Development, of the Company on June 30, 1998, the Company paid Mr.
Thorpe (Pounds)70,000 ($116,200) in lieu of 12 months notice, (Pounds)11,197
($18,587) in lieu of certain benefits, (Pounds)14,500 ($23,070) in compensation
for loss of office, (Pounds)10,000 ($16,600) in augmentation to pension,
representing all amounts owed to Mr. Thorpe under a compromise agreement
entered into in connection with his resignation. The Company also paid certain
expenses in connection with his resignation.
11
<PAGE>
In connection with John E. Weir's resignation as Vice President, Finance,
and Treasurer, of the Company on July 9, 1998, the Company agreed to pay
(Pounds)33,000 ($54,780), in six equal installments commencing July 1998, in
compensation for loss of office, (Pounds)7,560 ($12,550) in augmentation to
pension and (Pounds)1,200 ($1,992) in lieu of fuel expenses, representing all
amounts owed to Mr. Weir under a compromise agreement and a consulting
agreement entered into in connection with his resignation. The Company also
gifted to Mr. Weir his company car and paid certain expenses in connection with
his resignation.
Compensation Committee Report on Executive Compensation
Overview And Philosophy
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for developing and making recommendations to the Board of Directors
with respect to the Company's executive compensation policies. In addition, the
Committee, pursuant to authority delegated by the Board of Directors,
recommends on an annual basis the compensation to be paid to the Company's
Chief Executive Officer and each of the other executive officers of the
Company.
The Committee has adopted the following objectives as guidelines for its
compensation decisions:
. Provide a competitive total compensation package that enables the
Company to attract and retain key executives;
. Integrate all compensation programs with the Company's short term and
long term business objectives and strategic goals; and
. Ensure that compensation is meaningfully related to the value created
for stockholders.
Executive Officer Compensation Program Components
The Committee reviews the Company's compensation program to ensure that
salary levels and incentive opportunities are competitive and reflect the
performance of the Company. The Company's compensation program for executive
officers consists of base salary, annual incentive compensation and long-term
compensation in the form of stock options. In addition, Messrs. Wright, Shott
and Raynor are provided pension benefits.
Base Salary
Base salary levels for the Company's executive officers are determined, in
part, through comparisons with companies in the pharmaceutical outsourcing and
pharmaceutical fine chemical industries and other companies with which the
Company competes for personnel in both the United Kingdom and United States. In
addition, the Committee also evaluates individual experience and performance
and specific issues particular to the Company, such as success in developing
new customer relationships, delivering revenue and earnings growth, furthering
the Company's proprietary technology position, creation of stockholder value
and achievement of other specific Company milestones. The Committee reviews
each executive's salary once a year and may increase each executive's salary at
that time based on: (i) the individual's increased contribution to the Company
over the prior 12 months; (ii) the individual's increased responsibilities over
the prior 12 months; and (iii) any increase in competitive pay levels.
Individual contributions are measured with respect to specific individual
accomplishments established for each executive.
Annual Incentive Compensation
The Company's officers are eligible to receive annual cash and/or stock
incentive compensation at the time their base salaries are reviewed based on
achieving defined specific goals and objectives during the 12 months prior to
review. This compensation is intended to provide a direct financial incentive
in the form of an annual cash bonus to executives who achieve (i) earnings per
share targets, (ii) corporate objectives and (iii) personal
12
<PAGE>
objectives. Bonus awards are set at a level competitive within the U.K. and
U.S. pharmaceutical chemical and global contract manufacturing industry as well
as among a broader group of service manufacturing and high technology companies
of comparable size and complexity. Such companies are not necessarily included
in the indices used to compare shareholder returns in the Total Return
Performance Graph.
Stock Option Program
The stock option program is the Company's long-term incentive plan for
executive officers and, to a lesser degree, all other employees. The Committee
strongly believes that by providing those persons who have substantial
responsibility for the management and growth of the Company with an opportunity
to increase their ownership of Common Stock, the best interest of shareholders
and executives will be more closely aligned.
Generally, stock options are granted once every year with exercise prices
equal to the prevailing market value of the Common Stock on the date of grant,
have seven year terms and have vesting periods of five years. Awards are made
at a level calculated to be competitive within both the industry, and a broader
group of service manufacturing and high technology companies of comparable size
and complexity.
CEO Compensation
In September 1998, the Committee established the terms of Mr. Griffith's
employment contract as the Company's Chairman of the Board and Chief Executive
Officer. Under the employment agreement, Mr. Griffith is entitled to receive a
base salary and annual bonus. The agreement also entitles Mr. Griffith to
participate in certain U.S. benefit programs maintained by the Company. The
agreement has an initial term expiring on December 31, 2001 and may be
automatically extended from year to year thereafter. The agreement may be
terminated by the Company at any time. If the termination is without cause, the
Company is required to pay Mr. Griffith 250% of his then current base salary in
a lump sum payment. The agreement also provides for the payment of salary and
bonus, vesting of certain deferred compensation, stock option and similar
benefits if a change in control of the Company occurs. In establishing the
terms of compensation for Mr. Griffith, the Committee sought to attract and
retain a key executive officer while continuing to tie a significant percentage
of such compensation to Company performance and stock price appreciation. With
respect to Mr. Griffith's base salary, it remains the Committee's intent to
provide him with a level of stability and certainty each year and not have this
particular component of compensation affected to any significant degree by
Company performance factors.
It is the Committee's objective to have an increasing percentage of Mr.
Griffith's total compensation each year tied to stock-based compensation,
consistent with the interests of shareholders.
Summary
After its review of all existing programs, the Committee continues to
believe that the Company's compensation program for its executive officers is
competitive with the compensation programs provided by other companies with
which the Company competes. The committee intends that any amounts to be paid
under the annual incentive plan will be appropriately related to corporate and
individual performance, yielding awards that are directly linked to the
achievement of Company goals and annual financial and operational results.
We conclude our report with the acknowledgment that no member of the
Committee is a former or current officer or employee of the Company or any of
its subsidiaries.
Compensation Committee
W. Dieter Zander
Eric N. Jacobsen
13
<PAGE>
Total Return Performance Graph
The following graph, and the table which follows, compares the total return
of the Common Stock to the total return of the Nasdaq Composite Index and a
group of Company peers which consists of Alusuisse-Lonza Holdings AG, DSM
Andeno B.V. and Oxford Asymmetry plc. The graph assumes an investment of $100
at the close of business on December 31, 1997 in each of the Common Stock, the
Nasdaq Composite Index and the peer group.
<TABLE>
<CAPTION>
December 31, 1997 December 31, 1998
----------------- -----------------
<S> <C> <C>
ChiRex............................... $100 $121
Peer Group........................... $100 $108
Nasdaq Composite Index............... $100 $139
</TABLE>
14
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
The Company believes that during fiscal year 1998 its executive officers and
directors have complied with Section 16(a) of the Securities Exchange Act of
1934, and the rules and regulations adopted thereunder.
ITEM II. RATIFICATION OF AUDITORS
The Board of Directors has, subject to stockholder ratification, appointed
Arthur Andersen LLP to audit the accounts of ChiRex and its subsidiaries for
fiscal 1999.
The following resolution concerning the appointment of independent auditors
will be offered at the meeting:
"RESOLVED, that the appointment by the Board of Directors of the Company of
Arthur Andersen LLP to audit the accounts of the Company and its subsidiaries
for the fiscal year 1999 is hereby ratified."
Representatives of Arthur Andersen LLP will be present at the Annual Meeting
with the opportunity to make a statement and to respond to appropriate
questions. Submission of the appointment to stockholders is not required.
However, the Board of Directors will reconsider the appointment if it is not
approved by the stockholders. The appointment will be deemed ratified if a
majority of the shares of Common Stock present, either in person or by proxy,
and voting on the matter vote in favor of the proposal.
ITEM III. APPROVAL OF AN AMENDMENT TO THE AMENDED
AND RESTATED 1995 DIRECTOR STOCK OPTION PLAN
The Board of Directors has, subject to stockholder approval, adopted an
Amendment to the Amended and Restated 1995 Director Stock Option Plan (the
"Amendment") attached hereto as Annex A. The Amendment amends the Amended and
Restated 1995 Director Stock Option Plan to allow the Board of Directors to
determine, at the beginning of the fiscal year of the Company, the number of
shares of Common Stock to be granted to the members of the Board of Directors
of the Company who are not employees of the Company or any subsidiary of the
Company.
Because Messrs. Zander and Detert and Professor Jacobsen participate in the
Amended and Restated 1995 Director Stock Option Plan and may benefit from the
proposed Amendment, each has a personal interest in the adoption of this
proposal.
The Amendment became effective on February 9, 1999, the date on which it was
adopted by the Board of Directors, but all grants (if any) will be conditional
upon the approval of the Amendment by the holders of the Common Stock. If the
Amendment is not approved, the current Director Plan will be amended to allow
10,000 shares to be granted annually to the non-employee directors of the
Company.
Tax Effects. There are no Federal tax consequences to the non-employer
director upon the grant or receipt of the option. On exercise of the option,
the excess of the date-of-exercise fair market value of the shares acquired
over the option price will generally be taxable to the director as ordinary
income and deductible by the Company. The disposition of shares acquired upon
exercise of the option will generally result in a capital gain or loss for the
director, but will have no tax consequences for the Company.
The persons named in the enclosed proxy card (Messrs. Griffith and Tropsa)
have advised that they intend to vote to approve the Amendment unless contrary
direction is indicated on the proxy card.
The Board of Directors recommends that the stockholders vote for the
ratification of the Amendment.
15
<PAGE>
The following resolution will be offered at the meeting:
"RESOLVED, that the Amendment, substantially in the form attached hereto as
Annex A, to the Amended and Restated 1995 Director Stock Option Plan is hereby
approved."
SOLICITATION OF PROXIES
The expenses of solicitation of proxies for the Annual Meeting, including
the cost of preparing and mailing this Proxy Statement and the accompanying
material, will be paid by ChiRex. Such expenses may also include the charges
and expenses of banks, brokerage houses and other custodians, nominees or
fiduciaries for forwarding proxies and proxy material to beneficial owners of
shares. Solicitation may be made by mail, telephone, telegraph and personal
interview, and by regularly engaged officers and employees of ChiRex, who will
not be additionally compensated therefor. ChiRex has arranged for the services
of Corporate Investor Communications, Inc. ("CIC") to assist in the
solicitation of proxies. The fees of CIC, estimated at $4,000 excluding out-of-
pocket expenses, will be paid by ChiRex.
MISCELLANEOUS
The Board of Directors knows of no other matters to be voted upon at the
Annual Meeting. If any other matters properly come before the Annual Meeting,
it is the intention of the persons named in the enclosed proxy card (Messrs.
Griffith and Tropsa) to vote on such matters in accordance with their judgment.
Any stockholder who executes a proxy card may revoke it by giving written
notice to the Secretary of ChiRex or by giving to the Secretary a duly executed
form of proxy bearing a date later than the proxy card being revoked, at any
time before such proxy is voted. Attendance at the meeting shall not have the
effect of revoking a proxy unless the stockholder so attending shall, in
writing, so notify the Secretary of the meeting prior to the voting of the
proxy.
A proxy card which is properly signed, dated and not revoked will be voted
in accordance with the instructions contained thereon. If no instructions are
given, the persons named on the proxy card solicited by the Board of Directors
intend to vote: (i) FOR the election of the nominee for director, (ii) FOR the
ratification of the appointment of Arthur Andersen LLP as the Company's
independent auditors for the 1999 fiscal year and (iii) FOR the approval of the
Amendment to the Amended and Restated 1995 Director Stock Option Plan.
Any stockholder may strike out the names of the proxies designated by the
Board of Directors on the proxy card and may write in and substitute the name
of any other person and may deliver the revised proxy card to such other person
whom the stockholder may wish to designate as proxy for the purpose of
representing such stockholder at the meeting.
Voting Information: Under Delaware General Corporate law and the Company's
Amended and Restated By-Laws, the presence of a quorum is required to transact
business at the 1998 Annual Meeting of Stockholders. A quorum is defined as the
presence, either in person or by proxy, of a majority of the shares of Common
Stock issued and outstanding and entitled to vote at the meeting. Abstentions
and broker non-votes will be included in the computation of the number of
shares of Common Stock that are present for purposes of determining the
presence of a quorum.
Each stockholder shall have one vote for each share of Common Stock entitled
to vote and a proportionate vote for each fractional share so held, if any.
Votes cast, in person or by proxy, at the Annual Meeting will be tabulated
by representatives of Boston EquiServe, the persons appointed by the Board of
Directors to act as inspectors of election for the Annual Meeting. The
inspectors of election will determine the number of shares outstanding, the
shares represented at the Annual Meeting, the existence of a quorum and the
authenticity, validity and effect of proxies; receive
16
<PAGE>
votes or ballots; hear and determine all challenges and questions in any way
arising in connection with the right to vote; determine when the polls will
close; and determine the results of the election.
Assuming the presence of a quorum, (i) the nominee receiving the votes of a
plurality of the shares present, either in person or by proxy, at the Annual
Meeting shall be elected a director, (ii) the affirmative vote of a majority of
the shares present, either in person or by proxy, and voting at the Annual
Meeting is required for ratification of the independent auditors and (iii) the
affirmative vote of a majority of the shares present, either in person or by
proxy, and voting at the Annual Meeting is required to approve the Amendment.
Stockholder Proposals: Proposals which are the proper subject for inclusion
in the proxy statement and for consideration at an annual meeting may be
presented by stockholders. Under current SEC rules, to be included in ChiRex's
proxy statement and proxy card, any proposal by a stockholder intended to be
presented at the 2000 Annual Meeting of Stockholders must be received by
ChiRex, subject to certain exceptions, no later than November 20, 1999. Under
the Company's Amended and Restated By-Laws, notice of any stockholder proposal
intended to be presented at the 2000 Annual Meeting (whether or not included in
the Company's proxy statement) must be received by the Secretary of ChiRex,
subject to certain exceptions, no later than February 11, 2000, but not earlier
than January 22, 2000. Any such notice shall set forth as to each proposal (i)
a brief description of the business desired to be brought before the annual
meeting and the reasons therefor; (ii) the name and address of the stockholder
proposing such business; (iii) the class and number of shares beneficially
owned by such stockholder; (iv) any material interest of the stockholder in
such business; and (iv) if applicable, a representation that the stockholder
intends to solicit proxies in support of such proposal.
Please fill in, sign and date the enclosed form of proxy and return it in
the accompanying addressed envelope which requires no further postage if mailed
in the United States. If you attend the Annual Meeting and wish to vote your
shares in person, you may do so. Your cooperation in giving this matter your
prompt attention will be appreciated.
Stamford, Connecticut
March 19, 1999
17
<PAGE>
CHIREX INC.
Statement of Amendment to
the Amended and Restated
1995 Director Stock Option Plan
The second sentence of Section 3(a) is amended effective February 9, 1999,
to read as follows:
"Annual options to purchase a specified number of shares of Common
Stock (as determined by the Board each year prior to the annual meeting
of stockholders for such year) will be granted upon the close of
business on the date of each annual meeting of the stockholders to each
eligible Director then in office (the "Annual Option")."
A-1
<PAGE>
1492-AR99
<PAGE>
- --------------------------------------------------------------------------------
DETACH HERE
CHIREX INC.
300 Atlantic Street
Suite 402
Stamford, Connecticut 06901
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Michael A. Griffith and Jon E. Tropsa, jointly
and severally, with full power of substitution, and hereby authorizes them to
represent and to vote, as designated on the reverse side, all shares of common
stock of ChiRex Inc. (the "Company") held of record by the undersigned on March
12, 1999 at the Annual Meeting of Stockholders to be held on April 21, 1999 and
any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS
GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE VOTED FOR SUCH
PROPOSAL.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE SIDE
<PAGE>
Dear Stockholder:
Please take note of the important information enclosed with this Proxy.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on the proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy in the enclosed
postage paid envelope.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
ChiRex Inc.
DETACH HERE
- --------------------------------------------------------------------------------
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE.
1. Election of Director
Nominee: Eric N. Jacobsen
FOR WITHHELD
[ ] [ ]
[ ]
-------------------------------------
For any nominee except as noted above
2. Ratify the appointment of Arthur Andersen LLP as independent auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approve the amendment to the Amended and Restated 1995 Director Stock Option
Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. In their discretion, the proxies are authorized to vote upon other business
that may properly come before the meeting.
Please sign exactly as name appears hereon. Joint owners should each sign.
Executors, administrators, trustees, guardians or other fiduciaries should give
full title as such. If signing for a corporation, please sign in full corporate
name by a duly authorized officer.
MARK HERE FOR ADDRESS
CHANGE AND NOTE AT LEFT [ ]
Please be sure to sign and date this Proxy. Date
-----
- --------------------------------------------------
Shareholder sign here Co-owner sign here
DETACH CARD
DETACH CARD
PLEASE VOTE, SIGN, DATE, DETACH AND RETURN THE ABOVE PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
