<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 ss.240.14a-11(c) or ss.240.14a-12
SHIRE PHARMACEUTICALS GROUP PLC
--------------------------------------------------------------------------------
(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)(1) and
0-11.
(1) Title of each class of securities to which transaction
applies:
______________________________________________________________
(2) Aggregate number of securities to which transaction applies:
______________________________________________________________
(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):
______________________________________________________________
(4) Proposed maximum aggregate value of transaction:
______________________________________________________________
(5) Total fee paid:
______________________________________________________________
[ ] 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:
______________________________________________________________
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[LOGO]
SHIRE PHARMACEUTICALS GROUP PLC
EAST ANTON, ANDOVER
HAMPSHIRE SP10 5RG ENGLAND
June 5, 2000
Dear Shareholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual General Meeting of Shareholders of Shire Pharmaceuticals Group plc (the
"Company"). The Annual General Meeting will be held at 11:00 A.M. on July 7,
2000, at the offices of West LB Panmure Limited at New Broad Street House,
35 New Broad Street, London EC2M 1SQ, England.
The business to be conducted at the meeting is outlined in the attached
Notice of Annual General Meeting and Proxy Statement. In addition, members of
management will report on the Company's operations and answer shareholder
questions.
It is important that your shares be represented at the meeting whether or
not you plan to attend. Accordingly, we request your cooperation by promptly
signing, dating and mailing the enclosed proxy in the envelope provided for your
convenience. If you attend the meeting and wish to vote in person, you may
revoke your proxy at that time.
Sincerely,
------------------------------------------------------------------
Dr. James H. Cavanaugh
CHAIRMAN OF THE BOARD
<PAGE>
SHIRE PHARMACEUTICALS GROUP PLC
EAST ANTON, ANDOVER
HAMPSHIRE SP10 5RG ENGLAND
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
June 5, 2000
To the Shareholders of SHIRE PHARMACEUTICALS GROUP PLC:
The Annual General Meeting of Shire Pharmaceuticals Group plc will be held
at the offices of West LB Panmure Limited at New Broad Street House, 35 New
Broad Street, London EC2M 1SQ England on July 7, 2000 at 11:00 A.M. for the
purposes of considering and, if thought fit, passing the following resolutions
of which the resolutions numbered 1 to 16 will be proposed as ordinary
resolutions and the resolutions numbered 17, 18 and 19 as special resolutions.
ORDINARY BUSINESS:
ORDINARY RESOLUTIONS
1. To receive and consider the Directors' Report and Accounts for the year
ended December 31, 1999.
2. To reappoint Arthur Andersen Chartered Accountants as Auditors and
authorize the Directors to fix their remuneration.
3. To re-elect Rolf Stahel as Director.
4. To re-elect Dr. Barry Price as Director.
5. To re-elect Dr. James Cavanaugh as Director.
6. To elect Angus Russell as Director.
7. To elect Dr. Zola Horovitz as Director.
8. To elect Ronald Nordmann as Director.
9. To elect Joseph Smith as Director.
10. To elect John Spitznagel as Director.
SPECIAL BUSINESS:
ORDINARY RESOLUTIONS
11. To adopt, establish and approve the Shire Pharmaceuticals Group plc 2000
Executive Share Option Scheme.
12. To approve amendments to the Shire Pharmaceuticals Sharesave scheme.
13. To approve amendments to the Shire Pharmaceuticals Group plc Employee
Stock Purchase Plan.
14. To approve amendments to the Shire Pharmaceuticals Group plc Long Term
Incentive Plan.
15. To authorize the Directors to establish supplements or appendices for
the Shire Pharmaceuticals Group plc 2000 Executive Share Option Scheme, the
Shire Pharmaceuticals Sharesave Scheme, the Shire Pharmaceuticals Group plc
Employee Stock Purchase Plan and the Shire Pharmaceuticals Group plc Long Term
Incentive Plan.
16. To authorize the Directors to allot and issue relevant securities under
Section 80 of the Companies Act 1985.
<PAGE>
SPECIAL RESOLUTIONS
17. To authorize the Directors to disapply statutory pre-emption rights.
18. To disapply further statutory pre-emption rights in relation to repaying
the DLJ credit facility.
19. To adopt new Articles of Association.
Only those shareholders registered in the register of members of the Company
as at 6:00 p.m. on July 5, 2000 (or, in the case of adjournment, as at 48 hours
before the time of the adjourned meeting) shall be entitled to attend and vote
at the meeting in respect of the number of shares registered in their name at
that time.
Your vote is important. If you do not expect to be present at the meeting
and wish your ordinary shares to be voted, please sign and date the enclosed
Proxy and mail it promptly in the enclosed reply envelope addressed to
Computershare Services PLC at P.O. Box 1075, The Pavillions, Bridgewater Road,
Bristol, BS 99 3FA.
A member entitled to attend and vote may appoint one or more proxies to
attend and, on a poll, vote instead of him. A proxy need not also be a member.
By Order of the Board of Directors
----------------------------------------------------------------------
Neil C. Harris
COMPANY SECRETARY
<PAGE>
SHIRE PHARMACEUTICALS GROUP PLC
EAST ANTON, ANDOVER
HAMPSHIRE SP10 5RG
PROXY STATEMENT FOR THE
2000 ANNUAL GENERAL MEETING OF SHAREHOLDERS
------------------------
SOLICITATION AND REVOCATION OF PROXIES
The Board of Directors of Shire Pharmaceuticals Group plc (the "Company") is
soliciting the accompanying proxy for use at the Annual General Meeting of
Shareholders (the "Meeting") to be held on July 7, 2000 at the offices of West
LB Panmure Limited at New Broad Street House, 35 New Broad Street, London EC2M
1SQ England. If a proxy is received before the Meeting, as indicated below, the
shares represented by it will, on a poll, be voted unless the proxy is revoked
by written notice prior to the Meeting. If matters other than those set forth in
the accompanying Notice of Annual General Meeting are presented at the Meeting
for action, the proxy holders will vote the proxies as they think fit. The
approximate date on which a definitive proxy statement and the accompanying
proxy will first be mailed to shareholders is approximately June 5, 2000.
SHAREHOLDERS ENTITLED TO VOTE AND SHARES OUTSTANDING
Only shareholders of record at the close of business on July 5, 2000 will be
entitled to vote at the Meeting. As of May 25, 2000 there were 252,032,536
Ordinary Shares of the Company, nominal value 5p (the "Ordinary Shares")
outstanding and entitled to vote at the Annual General Meeting, of which
89,335,554 were held in the name of Guarantee Nominees Limited, as nominee for
Morgan Guaranty Trust Company of New York as depositary (the "Depositary") which
issues Company sponsored American Depositary Receipts ("ADRs") evidencing
American Depositary Shares which, in turn, each represent three Ordinary Shares.
Each registered holder of Ordinary Shares present in person at the Meeting
is entitled to one vote on a show of hands, and every holder present in person
or by proxy shall, upon a poll, have one vote for each Ordinary Share held by
such holder. In the event that the proxy card is executed but does not indicate
by marking a vote "FOR", "AGAINST" or "ABSTAIN" the proxy may vote or abstain at
his discretion.
A member entitled to attend and vote may appoint one or more proxies to
attend and, on a poll, vote instead of him. A proxy need not also be a member.
The appointment of a proxy will not preclude a member of the Company from
attending and voting in person at the meeting if he or she so desires.
Proxy voting cards from holders of Ordinary Shares must be received by the
Registrar not later than 11:00 A.M. on July 7, 2000, (or not less than
forty-eight hours before any adjournment of the Meeting.)
A Deposit Agreement exists between Morgan Guaranty Trust Company and the
holders of ADRs pursuant to which holders of ADRs are entitled to instruct the
Depositary as to the exercise of voting rights pertaining to the Ordinary Shares
so represented. The Depositary has agreed it will endeavor, insofar as
practicable, to vote (in person or by delivery to the Company of a proxy) the
Ordinary Shares registered in its name in accordance with the instructions of
the ADR holders. Instructions from the ADR holders should be sent to the
Depositary so that the instructions are received by no later than 3:00 P.M. New
York City time on June 30, 2000.
Any holder of ADRs giving instructions to the Depositary has the power to
revoke the instructions by delivery of notice to the Depositary at Morgan
Guaranty Trust Company of New York, Depositary, P.O. Box 9383, Boston, MA
02205-9958 at any time so that the Depositary receives, by no later than the
close of business on June 29, 2000 duly executed instructions bearing a later
date or time than the date or time of the instructions being revoked.
<PAGE>
The Company will, in future proxy statements, include shareholder proposals
complying with the applicable rules of the U.S. Securities and Exchange
Commission and any applicable U.S. state laws. In order for a proposal by a
shareholder to be included in the proxy statement relating to the Annual General
Meeting of shareholders to be held in 2001, that proposal must be received in
writing by the Secretary of the Company at the Company's principal executive
office no later than March 1, 2001.
The cost of soliciting proxies in the form enclosed will be borne by the
Company. In addition to the solicitation by mail, proxies may be solicited
personally, or by telephone, or by employees of the Company. The Company may
reimburse brokers, custodians, nominees, the Depositary and other recordholders
of the Company's Ordinary Shares or ADRs for their expenses in sending proxy
material to the beneficial owners of such Ordinary Shares.
Shareholders may obtain copies of the Company's Annual Report on Form 10-K
as filed with the Securities and Exchange Commission without charge by writing
to the Company at East Anton, Andover, Hampshire SP10 5RG England, attention
Company Secretary.
Resolutions 1 to 10 represent the business of the Company which is commonly
transacted at annual general meetings. Resolutions 11, 12, 13, 14 and 15 relate
to the Shire Pharmaceuticals Group plc Employees' Share Schemes. Resolutions 1
to 16 will be proposed as ordinary resolutions and the resolutions numbered 17,
18 and 19 as special resolutions. Ordinary Resolutions require approval by a 50%
plus vote of shareholders and Special Resolutions require approval by a 75% vote
of shareholders.
2
<PAGE>
RESOLUTION 1. DIRECTORS' REPORT AND ACCOUNTS
Under U.K. law, each company is required to present at a shareholders'
meeting copies of the company's audited annual financial statements, a report of
the directors and the report of the auditors on those financial statements.
Shareholders are being asked to adopt the financial statements. Adoption merely
means that the shareholders acknowledge that the financial statements have been
distributed and presented at the meeting; it does not in anyway waive or limit
any rights shareholders may have with respect to the financial statements.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RESOLUTION 1.
RESOLUTION 2. REAPPOINTMENT OF AUDITORS
The Board of Directors recommends that its appointment of the firm of Arthur
Andersen as the auditors of the Company for the fiscal year ended December 31,
2000, be approved and that the Board be given the authority to determine their
remuneration. Arthur Andersen has served as the Company's independent auditors
since January, 1994. The Company is advised that no member of Arthur Andersen
has any direct financial interest or material indirect financial interest in the
Company or any of its subsidiaries or, during the past three years, has had any
connection with the Company or any of its subsidiaries in the capacity of
promoter, underwriter, voting trustee, director, officer or employee. A
representative of such firm is expected to be present at the meeting, will be
available to answer questions and will be afforded an opportunity to make a
statement if he or she so desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE
APPOINTMENT OF ARTHUR ANDERSEN AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE
YEAR 2000.
RESOLUTIONS 3 TO 10. ELECTION AND RE-ELECTION OF DIRECTORS
The Company currently has ten Directors.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- -------- --------
<S> <C> <C>
Dr. James Cavanaugh........... 63 Non-Executive Chairman
Rolf Stahel................... 55 Chief Executive
Angus Russell................. 43 Group Finance Director
Dr. Wilson Totten............. 45 Group Research and Development Director
Dr. Barry Price............... 56 Senior Non-Executive Director
Dr. Bernard Canavan........... 64 Non-Executive Director
Dr. Zola Horovitz............. 65 Non-Executive Director
Ronald Nordmann............... 58 Non-Executive Director
Joseph Smith.................. 61 Non-Executive Director
John Spitznagel............... 58 Non-Executive Director
</TABLE>
The Articles of Association of the Company provide that one-third of the
Directors who are subject to retirement by rotation, or if their number is not
three or a multiple of three, then the number nearest to but not exceeding
one-third shall retire at the Meeting. The Directors to retire by rotation at
the Meeting include, so far as necessary to obtain the number required, first, a
director who wishes to retire and not offer himself for reappointment, and,
second, those Directors who have been longest in office since their last
appointment or reappointment.
3
<PAGE>
In accordance with the Articles of Association, Rolf Stahel and Dr. Barry
Price retire by rotation and offer themselves for re-election. Angus Russell who
was appointed Group Finance Director on December 13, 1999, Dr. Zola Horovitz who
was appointed a non-executive Director on December 23, 1999, Ronald Nordmann who
was appointed a non-executive Director on December 23, 1999, Joseph Smith who
was appointed a non-executive Director on December 23, 1999 and John Spitznagel
who was appointed a non-executive Director on December 23, 1999 offer themselves
for election. In addition, Dr. James Cavanaugh who was last appointed on March
24, 1997 offers himself for re-election in accordance with the Combined Code in
order that his term of office does not exceed three years.
INFORMATION WITH RESPECT TO NOMINEES
The following information sets forth the name and age of each nominee, all
other positions or offices, if any, now held by him with the Company and his
principal occupation during the past five years.
DR. JAMES CAVANAUGH, 63, joined the Board on March 24, 1997 and was
appointed as Non-executive Chairman with effect from May 11, 1999.
Dr. Cavanaugh is the President of HealthCare Ventures LLC. Formerly he was
President of SmithKline & French Laboratories, the U.S. pharmaceutical division
of SmithKline Beecham Corporation. Prior to that, he was President of SmithKline
Beecham Corporation's clinical laboratory business and, before that, President
of Allergan International. Prior to his industry experience, Dr. Cavanaugh
served as Deputy Assistant to the President of the U.S. for Health Affairs on
the White House Staff in Washington, D.C. He is a Non-executive Director of
MedImmune, Inc. and Diversa Corporation.
ROLF STAHEL, 55, joined the Group in March 1994 as Chief Executive from
Wellcome plc where he worked for 27 years. From April 1990 until February 1994,
he served as Director of Group Marketing reporting to the Chief Executive. A
business studies graduate of KSL Lucerne, Switzerland, he attended the 97th
Advanced Managers Program at Harvard Business School.
ANGUS RUSSELL, 43, joined Shire in December 1999 as Group Finance Director,
previously he worked for ICI, Zeneca and Astra Zeneca for a total of 19 years.
Mr. Russell is a chartered accountant, having qualified with Coopers & Lybrand
and is a member of the Association of Corporate Treasurers. His last position
was Vice President-Corporate Finance at Astra Zeneca PLC.
DR. BARRY PRICE, 56, joined the Board on January 24, 1996 having spent 28
years with Glaxo holding a succession of key executive positions with Glaxo
Group Research. He is a non-executive Director of Celltech Chiroscience plc and
Chairman of Antisoma plc. Dr. Price is Chairman of the Remuneration Committee.
DR. ZOLA HOROVITZ, 65, has served as a non-executive Director since December
1999. Dr. Horovitz has been self-employed as a consultant in the biotechnology
and pharmaceutical industries since 1994. Previously he held various positions
at Squibb Corporation and its successor corporation, Bristol-Myers Squibb & Co.,
including that of Vice President, Business Development and Planning.
RONALD NORDMANN, 58, joined as a non-executive director in December 1999 and
has been a financial analyst in healthcare equities since 1971. From
September 1994 until January 2000, he was a portfolio manager and partner at
Deerfield Management.
JOSEPH SMITH, 61, has served as a non-executive director since December
1999. From 1989 to 1997, Mr. Smith served in various positions at Warner-Lambert
Company, including President of Park-Davis Pharmaceuticals and President of the
Shaving Products Division (Schick and Wilkinson Sword).
JOHN SPITZNAGEL, 58, joined the Board in December 1999 following service as
President and Chief Executive Officer of Roberts since September 1997. He was
Executive Vice President-Worldwide Sales and Marketing from March 1996 to
September 1997, having served as President of Reed and Carnick Pharmaceuticals
from September 1990 until July 1995.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH
NOMINEE AS DIRECTOR NAMED ABOVE.
4
<PAGE>
CONTINUING DIRECTORS
DR. WILSON TOTTEN, 45, joined the Board as Group R&D Director in
January 1999. Dr. Totten is a medical doctor and has wide experience in the
pharmaceutical industry covering all phases of drug development. He has
substantial experience in the field of CNS disorders. His last position was Vice
President of Clinical Research & Development with Astra Charnwood where he
served from 1995 to 1997, having previously worked for Fisons Pharmaceuticals
from 1989 to 1995, and prior to that with 3M Health Care and Eli Lilly.
DR. BERNARD CANAVAN, 64, joined the Board as a non-executive Director in
March 1999. Dr. Canavan is a medical doctor. He was employed by American Home
Products for over 25 years until he retired in January 1994. He was President of
that corporation from 1990 to 1994. Dr. Canavan is Chairman of the Audit
Committee.
EXECUTIVE OFFICERS
The following table sets forth as of the date hereof the executive officers
of the Company.
<TABLE>
<CAPTION>
NAME POSITION(S)
---- ----------------------------------
<S> <C>
Rolf Stahel............................. Chief Executive
Angus Charles Russell................... Chief Financial Officer
Joseph Wilson Totten.................... Group Research Development Officer
</TABLE>
Biographies for Messrs. Stahel and Russell can be found under "Information
With Respect to Nominees." A biography for Dr. Totten can be found under
"Continuing Directors."
5
<PAGE>
SHARE OWNERSHIP OF DIRECTORS, OFFICERS AND CERTAIN BENEFICIAL OWNERS
Set forth in the following table is the beneficial ownership of Ordinary
Shares as of April 1, 2000 for (i) each person (or group of affiliated persons)
known to the Company to be the beneficial owner of more than 5% of Ordinary
Shares, (ii) all Directors, (iii) each of the Company's executive officers,
including the Company's Chief Executive Officer and (iv) all Directors and
executive officers as a group. Except as indicated by the notes to the following
table, the holders listed below have sole voting power and investment power over
the shares beneficially held by them. The address of each of the Company's
Directors and executive officers is that of the Company.
<TABLE>
<CAPTION>
NUMBER OF ORDINARY PERCENT OF
SHARES OUTSTANDING
NAME BENEFICIALLY OWNED(1) SHARES
---- --------------------- -----------
<S> <C> <C>
Yamanouchi Group Holding, Inc. (2).......................... 15,791,706 6.5%
4747 Willow RoadPleasanton, California 94588-2740
James Cavanaugh (3)......................................... 12,244,810 4.9
Rolf Stahel................................................. 896,683 *
Angus Russell............................................... -- *
Wilson Totten............................................... -- *
Barry Price................................................. 31,350 *
Bernard Canavan............................................. 3,000 *
Zola Horovitz............................................... 186,898 *
Ronald Nordmann............................................. 140,808 *
Joseph Smith................................................ 203,320 *
John Spitznagel............................................. 1,347,924 *
All Directors and Executive Officers as a Group............. 15,054,793 5.9%
</TABLE>
------------------------
* Less than 1%
(1) For purposes of this table, a person or a group of persons is deemed to have
"beneficial ownership" as of a given date of any shares which that person
has the right to acquire within 60 days after that date. For purposes of
computing the percentage of outstanding shares held by each person or a
group of persons named above on a given date, any shares which that person
or persons has the right to acquire within 60 days after that date are
deemed to be outstanding, but are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person.
(2) Based solely on information disclosed in the Schedule 13G filed by
Yamanouchi Group Holding, Inc. on January 6, 2000.
(3) Dr. Cavanaugh is the President of HealthCare Ventures LLC, a management
company for a number of limited partnerships which have interests in
12,244,810 ordinary shares. Dr. Cavanaugh is also a general partner in these
limited partnerships.
6
<PAGE>
BOARD OF DIRECTORS' MEETINGS, COMMITTEES AND FEES
The Board of Directors held nine meetings during 1999. Each incumbent
director attended at least 75% of the aggregate of the total number of meetings
of the Board of Directors and the total number of meetings held by all
committees of the Board of Directors on which the Director served during 1999
(including in the case of each director for purposes of this calculation only
such committee and Board meetings as occurred after such Director commenced
service on the Board of Directors).
The Board of Directors has a standing Remuneration Committee, a standing
Audit Committee and a standing Nomination Committee. The membership of these
committees is determined from time to time by the Board.
The Remuneration Committee, which in 1999 consisted of Dr. Price as Chairman
and Dr. Cavanaugh and Dr. Canavan held four meetings during 1999. The
Remuneration Committee meets regularly and acts within agreed terms of
reference. The Remuneration Committee reviews and authorizes salaries, bonuses
and other matters relating to compensation of the executive officers, including
the granting of options.
The Audit Committee, which consists of Dr. Canavan, as Chairman, Dr.
Cavanaugh AND Dr. Price, held four meetings during 1999. In addition, it has
been our practice to provide detailed financial information at each meeting of
the Board of Directors. The principal functions of the Audit Committee are to
review the scope of the annual audit and the annual audit report of the
independent auditors, recommend the firm of independent auditors to perform such
audits, consider non-audit functions proposed to be performed by the independent
auditors, review the functions performed by the internal audit staff, ascertain
whether the recommendations of auditors are satisfactorily implemented and
recommend such special studies or actions which the Committee deems desirable.
The Board has recently delegated responsibility to a Nomination Committee
made up of two non-executive Directors and one executive director. The Chairman
of the Nomination Committee is Dr. Cavanaugh. The Nomination Committee intends
to adopt formal and transparent procedures for such appointments during the
course of the year. The Nomination Committee will consider suggestions regarding
candidates for election to the Board submitted by shareholders in writing to the
Company Secretary. With regard to the Annual General Meeting in 2001, any such
suggestion must be received by the Company Secretary no later than the date by
which shareholder proposals for such Annual General Meeting must be received as
described above under the heading "Shareholders Entitled to Vote and Shares
Outstanding."
Our non-executive Directors receive (pound)20,000 (approximately $32,000) on
an annual basis for their services. We reimburse non-executive Directors for
out-of-pocket travel expenditures relating to their service on the Board.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our executive
officers and DIRECTORS and persons who own more than 10% of a registered class
of our equity securities to file initial reports of ownership and changes in
ownership with the SEC and to furnish copies of these reports to the Company. We
are a foreign private issuer for reporting purposes in 1999. As a result, our
executive officers, Directors and persons who own more than 10% of our equity
securities were not required to file such reports with the SEC.
REMUNERATION COMMITTEE INTERLOCKS, INSIDER PARTICIPATION
AND CERTAIN TRANSACTIONS
The members of the Remuneration Committee in 1999 were Dr. Barry Price,
Dr. James Cavanaugh and Dr. Bernard Canavan, none of which has at any time been
an executive officer of the Company. There were no Remuneration Committee
interlocks or insider participation in compensation decisions in 1999.
7
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1999 the Group divested its Indianapolis manufacturing plant and
30 non-strategic products to Integrity Pharmaceutical Corporation for a total
consideration of $1.5 million, together with a royalty on net sales of products
over a ten year period. Roger Griggs, who resigned as a Director on
December 31, 1998, was at the time of the sale, a controlling shareholder of
Integrity Pharmaceutical Corporation.
In April 1999 Roberts Pharmaceutical Corporation made a loan in the sum of
$283,000 to Mr. Spitznagel. The loan is unsecured and bears interest at the rate
of 4.15%, per annum. 10% of the principal outstanding plus accrued interest is
repayable on each of the first four anniversaries of the loan and the balance of
principal plus accrued interest is repayable on the fifth anniversary of the
loan. Mr. Spitznagel repaid the full outstanding balance of the loan on March
29, 2000.
Mr. Spitznagel entered into a consultancy agreement with the Company in
December 1999, which provided that:
i. if he has good reason, as defined in his service agreement with
Roberts, to terminate his employment with Roberts under his service
agreement, that the Company will cause Roberts to provide him with the
payments and benefits he is entitled to upon a 'good reason' termination;
ii. Mr. Spitznagel would provide consulting services to the Company for
at least 42 months following the merger with Roberts, unless Mr. Spitznagel
terminates the consultancy agreement prior to the end of the 42nd month upon
30 days notice; and
iii. the Company would pay Mr. Spitznagel at the rate of $400,000 per
annum for his consulting services, $150,000 per annum as an office holder,
$250,000 per annum to comply with certain restrictive covenants contained
therein and $150,000 per annum for tax, financial and estate planning
advice, life insurance and health insurance.
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth, for 1999, 1998 and 1997, the compensation of
the executive officers of the Company and the former Chief Financial Officer who
left the Company during 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
---------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
----------------- -------- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Rolf Stahel......................... 1999 $486,000 $195,000 -- -- $69,000(1)
Chief Executive 1998 $405,000 $191,000 -- -- $60,000
1997 $277,000 $ 37,000 -- -- $42,000
Angus Russell (2)................... 1999 $ 17,000 -- -- -- $ 2,000(3)
Chief Financial Officer
Wilson Totten(4).................... 1999 $230,000 $ 92,000 -- -- $39,000(5)
Group Research and
Development Officer
Stephen Stamp (6)................... 1999 $261,000 $105,000 -- -- $41,000(7)
Former Chief Financial Officer 1998 $236,000 $113,000 -- -- $38,000
1997 $172,000 $ 16,000 -- -- $16,000
</TABLE>
------------------------
(1) Mr. Stahel's other compensation consists of Company pension contributions
and other benefits provided.
(2) Mr. Russell commenced serving the Company as an executive officer on
December 13, 1999.
(3) Mr. Russell's other compensation consists of Company pension contributions.
(4) Mr. Totten commenced serving the Company as an executive officer on
January 1, 1999.
(5) Mr. Totten's other compensation consists of Company pension contributions.
(6) Mr. Stamp resigned as Chief Financial Officer of the Company on
December 13, 1999
(7) Mr. Stamp's other compensation consisted of Company pension contributions
and other benefits provided.
The following table sets forth information with respect to grants of stock
options to each of the executive officers during the year ended December 31,
1999.
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENTAGE OF VALUE AT ASSUMED ANNUAL
NUMBER OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED FISCAL 1999 PER SHARE DATE 5% 10%
---- ---------- ------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Rolf Stahel...................... -- -- -- -- -- --
Angus Russell.................... 4,181 * 11.645(2) 12/12/09 18,000 57,000
45,819 * 11.645(2) 12/12/06 96,000 337,000
Wilson Totten.................... 25,000 * 7.616(3) 05/11/06 144,000 261,000
Stephen Stamp.................... -- -- -- -- -- --
</TABLE>
------------------------
* Less than 1%.
9
<PAGE>
(1) The potential realizable value uses the hypothetical rates specified by the
Securities and Exchange Commission and is not intended to forecast future
appreciation, if any, of the Company's stock price. The Company did not use
an alternative formula for this valuation as the Company is not aware of any
formula which will determine with reasonable accuracy a present value based
on future unknown or volatile factors. In fact, the Company disavows the
ability of this or any other valuation model to predict or estimate the
Company's future stock price or to place a reasonably accurate present value
on the stock options because all models depend on assumptions about the
stock's future price movement, which is unknown. The value indicated is a
net amount, as the aggregate exercise price, translated at the rate of
exchange in place at December 31, 1999, has been deducted from the final
appreciated value.
(2) The exercise price was (pound)7.175 per share, and has been translated at
the rate of exchange in place at the date of grant.
(3) The exercise price was (pound)4.705 per share, and has been translated at
the rate of exchange in place at the date of grant.
The following table sets forth information with respect to each of the
executive officers concerning the value of all exercised and unexercised stock
options of such individuals at December 31, 1999.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Rolf Stahel.................. 440,000 3,013,000(1) 882,856 91,775 5,724,00 416,000
Angus Russell................ -- -- -- 50,000 -- --(4)
Wilson Totten................ -- -- -- 175,000 -- 691,000
Stephen Stamp................ 160,000 1,088,000(2) 474,284 -- 3,596,000 --
</TABLE>
------------------------
(1) The value realized by Mr. Stahel on exercise of share options on May 11,
1999 was (pound)1,865,000, which has been translated at the rate of exchange
in place at the date of exercise.
(2) The value realized by Mr. Stamp on exercise of share options on April 6,
1999 and May 11, 1999 was (pound)674,000, which has been translated at the
rate of exchange in place at the applicable date.
(3) The value of unexercised In-the-Money options is a net amount, as the
aggregate exercise price, translated at the rate of exchange in place at
December 31, 1999, has been deducted from the unexercised value.
(4) The Company's stock price at December 31, 1999 was lower than the exercise
price of Mr. Russell's stock options at that date.
EMPLOYMENT AGREEMENTS
The Company entered into an employment contract with Rolf Stahel on
October 21, 1996 which is terminable by either party on the giving of 12 months'
notice. In connection with such agreement Mr. Stahel was paid a salary of
$486,000 for the year ended December 31, 1999 and is entitled to a discretionary
bonus of up to 55% of such salary as determined by the Remuneration Committee on
a yearly basis.
The Company entered into an employment contract with Angus Russell on
October 29, 1999 which is terminable by either party on the giving of 12 months'
notice. In connection with such agreement Mr. Russell was paid a salary of
$17,000 for the year ended December 31, 1999 and is entitled to a
10
<PAGE>
discretionary bonus of up to 50% of such salary as determined by the
Remuneration Committee on a yearly basis. Mr. Russell commenced his employment
with the Company on December 13, 1999.
The Company entered into an employment contract with Wilson Totten on
December 30, 1998 which is terminable by either party on the giving of 12
months' notice. In connection with such agreement Mr. Totten was paid a salary
of $230,000 for the year ended December 31, 1999 and is entitled to a
discretionary bonus of up to 50% of such salary as determined by the
Remuneration Committee on a yearly basis.
REPORT OF THE REMUNERATION COMMITTEE ON EXECUTIVE COMPENSATION
REMUNERATION POLICY
The Remuneration Committee's policy on the remuneration of executive
officers is directed at the retention and motivation of executive officers by
ensuring that their remuneration is competitive with companies within the sector
of emerging pharmaceutical companies, taking into account the interests of the
shareholders.
In developing remuneration policy and fixing remuneration, consideration is
given to the salary data of Directors of comparable companies of a similar size
in industry generally and, more specifically, in the emerging pharmaceuticals
sector. The Chief Executive also advises the Remuneration Committee on other
executive remuneration and on individual performance. External agencies are also
used to advise on levels of remuneration as appropriate. No Director is involved
in determining his own remuneration. The procedures and criteria for determining
remuneration policy are regularly reviewed by the Remuneration Committee.
ANNUAL BONUSES
The annual bonuses payable to executive officers are established on the
basis of objectives for the Company and personal objectives. They include
measurable and quantitative criteria related to financial performance. For the
year ended December 31, 1999, these included revenue and earnings targets. The
maximum annual bonus for each executive officer for the year ended December 31,
1999, is 40% of salary.
SHARE OPTIONS
Share options are granted to executive officers as an incentive. The grant
of options is wholly discretionary. In granting share options, the Remuneration
Committee takes into account the advice and recommendations of the Chief
Executive and individual salary levels and positions within the Company.
RETIREMENT BENEFITS
The Company contributes 10% of salary to the personal pension of the
executive officers.
FEES FOR NON-EXECUTIVE DIRECTORS
The remuneration of each of the non-executive Directors was determined by
the Board. Dr. Cavanaugh has waived his right to receive his remuneration of
(pound)20,000 (approximately $32,000) for 1999.
LONG-TERM INCENTIVE PLAN
The Long-Term Incentive Plan was adopted at the general meeting on June 30,
1998. Under this plan, the Company may at any time, with the approval of the
Remuneration Committee, grant, or request that trustees grant, an award to any
full-time employee of any member of the Company.
11
<PAGE>
An award may be made to any full-time employee (including a Director who is
also such an employee) of the Company on the terms set out in the plan and upon
such other terms as the Board (or a committee appointed by the Board) may
specify, provided that no award may be granted to an employee who is within two
years of his or her contractual retirement age.
BARRY PRICE
JAMES CAVANAUGH
BERNARD CANAVAN
12
<PAGE>
PERFORMANCE GRAPH
The following graph compares the performance of the Company's Ordinary
Shares to the S&P 500 Index and the Nasdaq Biotechnology Index for the dates
indicated.
PERFORMANCE GRAPH APPEARS HERE
Comparison of Cumulative Total Return of $100 invested on February 14,
1996(1) in Shire Ordinary Shares, the S&P 500 Index and the Nasdaq Biotechnology
Index.
<TABLE>
<CAPTION>
12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Shire...................................... $136 $164 $221 $353
S&P 500 Index.............................. $113 $148 $188 $224
Nasdaq Biotechology Index.................. $ 94 $ 94 $136 $274
</TABLE>
------------------------
(1) The Company's Ordinary Shares began trading on the London Stock Exchange on
February 15, 1996.
RESOLUTIONS 11 TO 15
As explained in the Chairman's letter, the Company has undertaken a review
of its employee share plans in the light of the commercial environment in which
it now operates and also to take account of best practice.
As a result of this review the Company is seeking the approval of
shareholders to adopt the Shire Pharmaceutical Group plc 2000 Executive Share
Option Scheme (the "Executive Scheme"). A summary of the principal terms of the
proposed Executive Scheme is set out at Appendix 1 to this document.
Following this review the Company is also seeking the approval of
shareholders to amend the Shire Pharmaceuticals Sharesave Scheme (the "Sharesave
Scheme"), the Shire Pharmaceuticals Group plc Employee Stock Purchase Plan (the
"Stock Purchase Plan") and the Shire Pharmaceuticals Group plc Long Term
Incentive Plan (the "Long Term Incentive Plan"). The amendments to the Sharesave
Scheme, the Stock Purchase Plan and the Long Term Incentive Plan relate to the
removal of certain dilution limits as set out in Appendix 2 of this document.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RESOLUTIONS 11 TO 15.
13
<PAGE>
RESOLUTION 16
This resolution gives authority to the Directors, for a period of 5 years
from the date of the passing of the resolution to allot relevant securities
within the limits of the authorized share capital up to a nominal amount of
(pound)4,197,625.90 being the equivalent of 33 1/3 per cent of the total share
capital of the Company in issue on May 17, 2000. This authority replaces a
similar authority granted at the Annual General Meeting on May 10, 1999 and at
the Extraordinary General Meeting on December 22, 1999.
The Directors are actively considering the possibility of re-financing the
Group's borrowings. This could involve the issue of shares or other securities
falling within the scope of s.80 of the Companies Act 1985 which would involve
the use of the power granted by this resolution. The proceeds raised from the
shares or other securities issued under the power granted by this resolution
would potentially be used to finance the repayment of the existing credit
agreement consisting of $125 million under a five-year term loan facility,
acquiring, in-licensing and marketing specialty products, funding product
development, financing strategic corporate acquisitions, and/or general
corporate purposes.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RESOLUTION 16.
RESOLUTION 17. ISSUE OF EQUITY SECURITIES FOR CASH
The passing of resolution 17 will permit the Directors, for a period of
5 years from the date of the passing of the resolution, to make issues of equity
securities for cash by way of rights free of the statutory pre-emption
provisions. The issue of equity securities for cash other than by way of a
pro-rata issue shall be limited to a maximum of (pound)611,297.55 being the
equivalent of 5 per cent of the issued ordinary share capital at the date of the
last published accounts of the Company. This represents 4.85% of the issued
ordinary share capital as of May 25, 2000. This power will replace the power
granted at the Annual General Meeting on May 10, 1999.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RESOLUTION 17.
RESOLUTION 18. ISSUE OF EQUITY SECURITIES FOR CASH
The passing of Resolution 18 will supplement the power of the directors
under Resolution 17 by permitting the directors for a period of 5 years from the
date of the passing of the resolution to make issues of equity securities for
cash free of statutory pre-emption provisions, but only to raise funds for the
purpose of repaying in whole or in part any outstanding amounts under the Credit
Agreement entered into on 19th November, 1999 with DLJ Capital Funding, Inc. as
agent (the "Credit Agreement") provided that such amount shall not exceed the
Sterling equivalent of $125 million.
The passing of Resolution 18 in conjunction with Resolution 17 gives the
directors power to make issues for cash free of statutory pre-emption rights in
an amount in excess of the 5% annual guideline of the investor protection
committee. Use of these powers would also cause the company to exceed the
guideline that in any period of three years no more than 7 1/2% of the company's
equity share capital should be issued for cash free of statutory pre-emption
rights, the company having issued 6,000,000 ordinary shares for cash in the
United Kingdom and the United States on April 1, 1998. However, in this latter
respect, the directors believe that the increase in the Company's issued share
capital arising as a result of the merger with Roberts justifies exceeding the
relevant guideline.
Notwithstanding the above, the directors recommend that Resolution 18 be
passed. This recommendation is based on the view of the directors that it is in
the best interests of the shareholders as a whole for the company to be able to
repay amounts outstanding under the Credit Agreement. The amount to be paid to
the Company in respect of the equity securities to be allotted pursuant to the
authority conferred by the passing of this resolution will not exceed the
sterling equivalent of $125 million, this being justified as it is the current
amount outstanding under the term loan portion of the Credit Agreement. The
resolution does
14
<PAGE>
not permit the issue of more (pound)430,000 in nominal value of equity
securities. This represents 3.4% of the issued share capital of the Company as
of May 25, 2000.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RESOLUTION 18.
RESOLUTION 19. ARTICLES OF ASSOCIATION
The opportunity is being taken to update certain provisions of the Company's
Articles of Association to take account, INTER ALIA, of the fact that the
Company's ordinary shares may be held in uncertificated form and to ensure
compliance with the Combined Code. There follows an explanation of the
amendments to the existing Articles.
(a) As currently drafted, the Company's Articles of Association do not cater
for the ability of shareholders to hold their ordinary shares in uncertificated
form. Following the introduction of CREST in 1996, the Company has relied on a
board resolution (as is permitted by the relevant Regulations) to authorize the
holding of and dealing in the Company's ordinary shares in uncertificated form.
The proposed new Articles have been updated to reflect the ability to hold
ordinary shares in the Company in uncertificated form. In addition to
incorporating express permission in the Articles for shares to be held in
uncertificated form, the proposed new Articles contain additional consequential
changes to the provisions dealing with transfers and transmission of shares,
fractions resulting from alterations of share capital, payment of dividends,
record dates, service of notice and destruction of documents.
(b) The existing Articles incorporate lengthy wording in relation to the
giving of authority under section 80 of the Companies Act 1985 (the "Act") for
directors to allot shares and under section 89 of the Act disapplying preemption
rights on the issue of equity securities. These provisions were originally
included in order to reduce the complexity of the resolutions relating to the
granting of the section 80 authority and the disapplication of section 89 at
each and every Annual General Meeting. Now that The Listing Rules of the London
Stock Exchange permit the taking of section 89 disapplications for periods of
five years (rather than one year, which was previously the case), it is
considered that the length of the provisions in the Articles is outweighed by
the inconvenience of passing lengthier resolutions every five years.
Consequently, the new Articles contain no such wording.
(c) The provisions in the current Articles dealing with the retirement by
rotation of directors are not fully compliant with the Combined Code (which
became effective for financial years ending on or after 31st December, 1998).
The Combined Code provides that all Directors should submit themselves for re-
election at regular intervals of at least every three years. The existing
Articles require that a number nearest to (but not exceeding) one third of the
Directors are required to retire each year, and that Directors wishing to retire
and not offer themselves up for reappointment are counted first in making up
that number. Consequently, it is possible under the current Articles for a
director to submit himself for re-election outside the three year period set by
the Combined Code. The relevant provisions in the Articles have been amended to
bring them into line with the Combined Code.
(d) The limit on the maximum amount payable in respect of Directors' fees
was increased from (pound)150,000 to (pound)500,000 by an ordinary resolution of
the Company passed on 22nd December, 1999 in connection with the acquisition of
Roberts Pharmaceutical Corporation. The increase was proposed in view of the
additions to the board of Directors of the Company following the acquisition,
and the new Articles incorporate the new limit.
(e) The current provision in the Articles allowing the Directors to borrow
money limits the aggregate amount of borrowings of the group to a sum equal to
the higher of 2.5 times the adjusted capital and reserves and (pound)20,000,000.
The borrowing powers were extended by the ordinary resolution passed by the
Company on 22nd December, 1999 in connection with the acquisition of Roberts
Pharmaceutical Corporation. This extension authorized the borrowing of up to
$250,000,000 pursuant to a facility agreement entered into on 19th November,
1999, which was required in order to service the group's
15
<PAGE>
immediate needs. Since that extension expires on the date of this Annual General
Meeting, the limit on aggregate borrowings has required amendment to reflect
this additional facility and to allow further borrowings under it. The proposed
amendments introduce a fixed limit of $400,000,000 on the borrowings of the
group, which is considered to be the most appropriate basis for a company whose
net worth derives substantially from investment in intellectual property, rather
than calculating the limit on the basis of the adjusted capital and reserves.
The sum of $400,000,000 proposed as the limit of borrowings is 4.6 times 1999
EBITDA (before exceptional merger related charges). The Directors consider that
this limit is reasonable in view of the current business and prospects of the
group, and that it should not impede future expansion.
(f) In addition, there are the following further amendments:
(i) the new Articles will expressly provide for payment of dividends in
any currency;
(ii) the new Articles will not distinguish between special business and
ordinary business at Annual General Meetings;
(iii) the new Articles will contain provisions dealing with a situation
where it is impractical or unreasonable for any reason to hold a general
meeting on the date or at the time or place specified in the notice
convening the meeting. Notice of the postponed meeting shall, if
practicable, be placed in two national newspapers, but it will not be
necessary to give notice of the business to be transacted at the postponed
meeting;
(iv) the Chairman of a general meeting may invite any person to attend
and speak if he considers that this will assist in the deliberations of the
meeting, even if that person is not a shareholder or a director of the
Company.
Copies of the proposed amendments to the Articles are available for
inspection from the date hereof during normal business hours on any week day at
the Company's registered office at East Anton, Andover, Hampshire, SP10 5RG and
at the offices of Slaughter and May, 35 Basinghall Street, London, EC2V 5DB.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RESOLUTION 19.
---------------------------------------------------------------------------
By Order of the Board of Directors,
---------------------------------------------------------------------------
Neil Harris
COMPANY SECRETARY
Dated: June 5, 2000
Your vote is important. Shareholders who do not expect to be present at the
Annual General Meeting and who wish to have their shares voted on a poll are
requested to sign and date the enclosed proxy and return it in the enclosed
envelope. No postage is required if mailed in the United States.
16
<PAGE>
SHIRE
Registered No. 2883758
ANNUAL GENERAL MEETING 2000
Notice of meeting and letter from the Chairman
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
WHEN CONSIDERING WHAT ACTION YOU SHOULD TAKE YOU ARE RECOMMENDED TO SEEK YOUR
OWN FINANCIAL ADVICE FROM YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT
OR OTHER PROFESSIONAL ADVISER DULY AUTHORISED UNDER THE FINANCIAL SERVICES ACT
1986, IF YOU ARE IN THE UK, OR FROM ANOTHER APPROPRIATELY AUTHORISED INDEPENDENT
FINANCIAL ADVISER.
IF YOU HAVE SOLD OR TRANSFERRED ALL YOUR ORDINARY SHARES IN SHIRE
PHARMACEUTICALS GROUP PLC, PLEASE SEND THIS DOCUMENT AND THE ACCOMPANYING PROXY
CARD TO THE PURCHASER OR TRANSFEREE OR OTHER AGENT THROUGH WHOM THE SALE OR
TRANSFER WAS EFFECTED FOR TRANSMISSION TO THE PURCHASER OR TRANSFEREE.
ALL ENQUIRIES CONCERNING THIS DOCUMENT SHOULD BE ADDRESSED TO THE COMPANY
SECRETARY, SHIRE PHARMACEUTICALS GROUP PLC, EAST ANTON, ANDOVER,
HAMPSHIRE, SP10 5RG
LETTER FROM THE CHAIRMAN OF SHIRE PHARMACEUTICALS GROUP PLC
DIRECTORS REGISTERED OFFICE:
East Anton
Andover
Hampshire SP10 5RG
5TH JUNE 2000
TO THE HOLDERS OF ORDINARY SHARES AND, FOR INFORMATION ONLY, TO PARTICIPANTS IN
THE SHIRE EMPLOYEE SHARE SCHEMES.
Dear Shareholder,
NOTICE OF ANNUAL GENERAL MEETING
You will find the notice of the Annual General Meeting (the "AGM"), to be held
on 7 July 2000, enclosed with this letter together with an explanation of the
resolutions to be proposed at the AGM and a form of proxy. Following the merger
with Roberts Pharmaceutical Corporation Shire Pharmaceuticals Group plc (the
"Company") is now subject to additional US Securities and Exchange Commission
("SEC") rules which have meant that the Company is obliged to file a proxy
statement with the SEC. A copy of the proxy statement is also enclosed with this
letter.
In addition to the business which is conducted at the AGM every year, for
example, the approval of accounts, appointment of directors, granting of section
80 authority and section 89 disapplication, this year there is further special
business which is detailed in the attached notice of AGM.
The Company is seeking your approval to update certain provisions of its
Articles of Association (the "Articles") to take account, inter alia, of the
fact that the Company's ordinary shares may be held in uncertificated form and
to ensure compliance with the Combined Code. A brief explanation of the proposed
amendments to the existing Articles is set out in the section headed
"Explanation of Resolutions".
Additionally, the Company is seeking your approval to adopt a new executive
share option scheme, the Shire Pharmaceuticals Group plc 2000 Executive Share
Option Scheme (the "Executive Scheme") to replace its existing 1996 Executive
Share Option Scheme.
The Company is also seeking your approval for amendments that it is proposed be
made to the Shire Pharmaceuticals Sharesave Scheme (the "Sharesave Scheme"), the
Shire Pharmaceuticals Group plc Employee Stock Purchase Plan (the "Stock
Purchase Plan") and the Shire Pharmaceuticals Group plc Long Term Incentive Plan
(the "Long Term Incentive Plan").
The adoption of the new Executive Scheme and the amendments to the other schemes
are all proposed as a result of a review of the Company's employee share plans
in the light of the commercial environment in which we now operate and also to
take account of current best practice.
<PAGE>
The Company is committed to enabling its employees to participate as
shareholders and considers employee share ownership to be a vital component in
its global reward strategy, particularly as the Company increasingly faces
intense competition for its most talented people in an international market. The
review concluded that the increasing internationality of the Company's business,
particularly in the US, meant that the Company's employees' share schemes no
longer provide the necessary flexibility required to incentivise employees
effectively.
A summary of the principal terms of the proposed Executive Scheme is set out at
Appendix 1 to this document. A summary of principal amendments to be made to the
Sharesave Scheme, the Stock Purchase Plan and the Long Term Incentive Plan is
set out at Appendix 2 to this document.
FURTHER INFORMATION
SUBSTANTIAL SHAREHOLDINGS
As at 25th May 2000 the Company has been notified, in accordance with sections
198 to 208 of the Companies Act 1985, of the following substantial interests in
its issued share capital.
<TABLE>
<CAPTION>
No. of
ordinary
Notes shares Percentage
---------- ------------ ----------
<S> C> <C> <C>
Funds Advised by:
AXA-UAP S.A (i) 6,625,998 2.6
Healthcare Ventures LLC (ii) 12,244,810 4.9
</TABLE>
NOTES
i) AXA-UAP S.A's interest includes 4,787 shares registered to AXA Sun Life UK
Investment Co. ICVC, 50,957 shares registered to Sun Life Nominees Ltd. A/c,
213,793 shares registered to Sun Life Pensions Management Ltd. A/c X, 5,416,652
shares registered to Sun Life Assurance Society plc, 52,641 shares registered to
Sun Life Unit Assurance Ltd. A/c X, 31,875 shares registered to Sun Life
Pensions Management Ltd, 3,319 shares registered to Equitable US, 806,974 shares
registered to AXA Equity & Law Assurance Ltd. and 45,000 shares registered to
AXA Equity & Law Unit Trust Managers Ltd.
ii) HealthCare Ventures LLC interests includes 3,554,720 shares registered to
HealthCare Ventures II, 5,508,032 shares registered to HealthCare Ventures III,
1,617,528 registered to HealthCare Ventures IV and 1,564,530 shares registered
to HealthCare Ventures V.
In addition to the above, the Company has been notified that as at 25th May 2000
Guaranty Nominees Limited held 89,335,554 shares in its capacity as the
Depositary of the Company's American Despository Receipts (ADR) facility. Each
ADR equates to three of the Company's ordinary shares of 5p each.
DIRECTORS' SHAREHOLDINGS*
Directors who held office at the end of the year had interests in the share
capital of the Company as follows:
<TABLE>
<CAPTION>
No. of ordinary shares of 5p each
Notes 25th May 31 December 31 December
2000 1999 1998
-------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
J H Cavanaugh (i) 12,244,810 12,244,810 12,244,810
R Stahel (ii) 13,827 13,827 13,827
A C Russell 0 0 N/A
J W Totten 0 0 N/A
B Price 31,350 31,350 31,350
B Canavan 3,000 0 N/A
Z Horovitz 3,128 3,128 N/A
R Nordmann 3,128 3,128 N/A
J Smith 125,120 125,120 N/A
J Spitznagel 57,624 75,503 N/A
R Vukovich N/A 5,422,922 N/A
-------- ---------- ----------- -----------
</TABLE>
*All interest are beneficial unless otherwise stated.
NOTES
(i) Dr Cavanaugh is the President of HealthCare Ventures LLC, which is the
management company for a number of limited partnerships which have interests in
12,244,810 ordinary shares. Dr Cavanaugh is also a general partner in these
partnerships which aquired their ordinary shares following the acquisition of
Pharmavene Inc. in March 1997.
(ii) Mr Stahel exercised options in the Shire Holdings Limited Share Option
Scheme for 440,000 ordinary shares in the Company at 50p per share on 11 May
1999. Mr Stahel disposed of these shares on 12 May 1999 at a price of
(pound)4.73.
<PAGE>
Copies of the proposed amendments to the Articles are available for inspection
from the date hereof during normal business hours on any week day at the
Company's registered office at East Anton, Andover, Hampshire, SP10 5RG and at
the offices of Slaughter and May, 35 Basinghall Street, London, EC2V 5DB.
Copies of the draft rules of the Executive Scheme and the rules of the Sharesave
Scheme, the Stock Purchase Plan and the Long Term Incentive Plan showing the
proposed amendments are available for inspection from the date hereof during
normal business hours on any week day at the Company's registered office at East
Anton, Andover, Hampshire, SP10 5RG and at the offices of Arthur Andersen, 1
Surrey Street, London, WC2R 2PS.
Copies will remain available up to and including the date of the AGM (or any
adjourned meeting) and will also be available for inspection at the offices of
West LB Panmure, 35 New Broad Street, London EC2M 1SQ for at least 15 minutes
prior to and during the AGM.
RECOMMENDATION
The Directors have considered Resolutions 1 to 19 which deal with, inter alia,
the proposals relating to the Articles and the Shire Pharmaceuticals Group plc
employees' share schemes to be put to shareholders and believe they are in the
best interests of shareholders as a whole and accordingly recommend that
shareholders vote in favour of them at the AGM as they intend to do in respect
of their aggregate beneficial holdings of 12,481,987 ordinary shares,
representing 4.95 per cent of the issued share capital of the Company as at 25
May 2000.
Yours faithfully,
DR JAMES H CAVANAUGH
Chairman
<PAGE>
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of Shire Pharmaceuticals
Group plc will be held at the offices of West LB Panmure Limited at 35 New Broad
Street, London EC2M 1SQ on 7 July 2000 at 11.00am for the purposes of
considering and, if thought fit, passing the following resolutions, of which the
resolutions numbered 1 to 16 will be proposed as ordinary resolutions and the
resolutions numbered 17 to 19 as special resolutions:
ORDINARY BUSINESS
1) To receive and consider the Directors' Report and Accounts for the year
ended 31 December 1999.
2) To re-appoint Arthur Andersen as Auditors and authorise the Directors to
fix their remuneration.
3) To re-elect Rolf Stahel as Director.
4) To re-elect Dr Barry Price as Director.
5) To re-elect Dr James Cavanaugh as Director.
6) To elect Angus Russell as Director.
7) To elect Dr Zola Horovitz as Director.
8) To elect Ronald Nordman as Director.
9) To elect Joseph Smith as Director.
10) To elect John Spitznagel as Director.
SPECIAL BUSINESS
ORDINARY RESOLUTIONS
11) That:
a) the Shire Pharmaceuticals Group plc 2000 Executive Share Option Scheme
(the "Executive Scheme") the main provisions of which are summarised
in Appendix 1 to the Chairman's Letter to shareholders dated 5 June
2000 be adopted and established; and
b) the directors be authorised to do all acts and things they may
consider necessary or desirable to carry the Executive Scheme into
effect including the making of such modifications to the draft rules
to obtain Inland Revenue approval thereto.
12) That:
a) subject to the approval of the Inland Revenue, the amendment to the
Shire Pharmaceuticals Sharesave Scheme (the "Sharesave Scheme") which
is summarised in Appendix 2 to the Chairman's Letter to shareholders
dated 5 June 2000 be approved; and
b) the directors be authorised to do all acts and things they may
consider necessary or desirable to the Sharesave Scheme including the
making of such modifications to the rules to retain Inland Revenue
approval thereto.
13) That the amendment to the Shire Pharmaceuticals Group plc Employee Stock
Purchase Plan as summarised in Appendix 2 to the Chairman's Letter to
shareholders dated 5 June 2000 be approved.
14) That the amendments to the Shire Pharmaceuticals Group plc Long Term
Incentive Plan as summarised in Appendix 2 to the Chairman's Letter to
shareholders dated 5 June 2000 be approved.
15) That the directors be authorised to establish supplements or appendices to
the Shire Pharmaceuticals Group plc 2000 Executive Share Option Scheme, the
Shire Pharmaceuticals Sharesave Scheme, the Shire Pharmaceuticals Group plc
Employee Stock Purchase Plan and the Shire Pharmaceuticals Group plc Long
Term Incentive Plan (the "Schemes") or other schemes based on these Schemes
in order to take account of local tax, exchange control or securities laws
in overseas territories as they consider appropriate, subject however, to
the conditions that:
a) any shares made available under such supplements, appendices or other
schemes shall be treated as counting against any overall or individual
limit contained in the Schemes; and
b) once established, the provisions of such supplements, appendices or
other schemes may not be amended without the prior sanction of the
Company in general meeting if such sanction would be required to amend
the comparable provisions of the appropriate Schemes.
16) That in substitution for all existing authorities (save to the extent the
same may have been exercised by the issue of relevant securities prior to 7
July 2000 or by reason of any offer or agreement made prior to 7 July 2000
which would or might require relevant securities to be allotted on or after
7 July 2000 ), the Directors be and they are hereby generally and
unconditionally authorised pursuant to Section 80 of the Companies Act 1985
to exercise all or any of the powers of the Company to allot relevant
securities (within the meaning of that section) up to an aggregate nominal
amount equal to (pound)4,197,625.90 for a period expiring (unless
previously renewed, varied or revoked by the Company in general meeting)
five years after the date of the passing of this Resolution save that the
Company may before such expiry make an offer or agreement which would or
might require relevant securities to be allotted after such expiry and the
Directors may allot relevant securities pursuant to any such offer or
agreement as if the authority conferred hereby had not expired.
<PAGE>
SPECIAL RESOLUTIONS
17) That, subject to the passing of the previous resolution, in substitution
for all existing authorities, the Directors be and they are hereby
empowered pursuant to Section 95 of the Companies Act 1985 to allot equity
securities (within the meaning of Section 94(2) of the Companies Act 1985)
of the Company pursuant to the authority conferred by the passing of the
previous resolution as if Section 89(1) of the Companies Act 1985 did not
apply to such allotment provided that this power:
(i) shall expire five years after the date of the passing of this
Resolution, save that the Company may make an offer or agreement which
would or might require equity securities to be allotted after such
expiry and the Directors may allot equity securities pursuant to any
such offer or agreement as if the power conferred hereby had not
expired; and
(ii) shall be limited to:
a) allotment of equity securities where such securities have been offered
(whether by way of a rights issue, open offer or other pre-emptive
offer) to holders of ordinary shares in proportion (as nearly as may
be) to their existing holdings of ordinary shares but subject to the
Directors having a right to make such exclusions or other arrangements
in connection with such offering as they may deem necessary or
expedient:
1) to deal with equity securities representing fractional
entitlements;
2) to deal with ordinary shares represented by depository receipts;
and
3) to deal with legal or practical problems under the laws of, or
the requirements of any recognised regulatory body or any stock
exchange in, any territory; and
b) allotments of equity securities for cash otherwise than pursuant to
paragraph (a) up to an aggregate nominal amount of approximately
(pound)611,297.55.
18) That, subject to the passing of resolution 16, and in addition and without
prejudice to all existing authorities, including any authority conferred by
the passing of resolution 17, the Directors be and they are hereby
empowered pursuant to Section 95 of the Companies Act 1985 to allot equity
securities (within the meaning of section 94(2) of the Companies Act 1985)
of the Company pursuant to the authority conferred by the passing of
resolution 16 as if section 89(1) of the Companies Act 1985 did not apply
to such allotment provided that this power:
(i) shall expire five years after the date of the passing of this
Resolution, save that the Company may make an offer or agreement which
would or might require equity securities to be allotted after such
expiry and the Directors may allot equity securities pursuant to any
such offer or agreement as if the power conferred hereby had not
expired; and
(ii) shall be limited to allotment of equity securities to raise funds
solely for the purpose of repaying in whole or in part any outstanding
amounts under the facility agreement entered into on 19 November 1999
between inter alia, the Company, Roberts Pharmaceutical Corporation
and the Company's subsidiaries in the United States of America as
borrowers and DLJ Capital Funding, Inc. as agent; and
(iii)shall not involve the allotment of more than (pound)430,000 in
nominal value of equity securities.
19) That the Company adopt new Articles of Association in the form produced to
the meeting, as initialled for the purposes of identification only by the
Chairman.
By Order of the Board
NEIL C HARRIS
Secretary 5 June 2000
REGISTERED OFFICE:
East Anton
Andover
Hampshire
SP10 5RG
Notes
1) A member entitled to attend and vote may appoint one or more proxies to
attend and, on a poll, vote instead of him. A proxy need not also be a
member. The appointment of a proxy will not preclude a member of the
Company from attending and voting in person at the meeting if he or she so
desires.
2) A form of proxy is enclosed. To be valid the form of proxy (and the power
of attorney or other authority, if any, under which it is signed or a
notarially certified copy of such authority) must reach the Registrar,
Computershare Services PLC at PO Box 1075, The Pavilions, Bridgwater Road,
Bristol, BS99 3FA not later than 11am on 5 July 2000 (or 48 hours before
any adjournment of the meeting).
3) The Company, pursuant to Regulation 34 of the Uncertificated Securities
Regulations 1995, specifies that only those shareholders registered in the
register of members of the Company as at 6.00pm on 5 July 2000 (or, in the
case of adjournment, as at 48 hours before the time of the adjourned
meeting) shall be entitled to attend and vote at the meeting in respect of
the number of shares registered in their name at that time. Changes to
entries on the register after such time will be disregarded in determining
the right of any person to attend and/or vote at the meeting.
<PAGE>
4) There will be available for inspection at the Company's registered office
at East Anton, Andover, Hampshire, SP10 5RG during normal business hours on
any week day (excluding Saturdays, Sundays and public holidays) from the
date of this notice until the date of the Annual General Meeting and at the
meeting from 10.45am until the close of the meeting:
- copies of the service contracts of the Directors with the Company;
- the register of Directors' share interests;
- copies of the existing Articles of Association;
- copies of the Articles of Association proposed for adoption in accordance
with Resolution 19 above;
- the rules of the Shire Pharmaceuticals Group plc 2000 Executive Share
Option Scheme as proposed in accordance with Resolution 11;
- the rules of the Shire Pharmaceuticals Sharesave Scheme as proposed in
accordance with Resolution 12;
- the rules of the Shire Pharmaceuticals Group plc Employee Stock Purchase
Plan as proposed in accordance with Resolution 13;
- the rules of the Shire Pharmaceutical Group plc Long Term Incentive Plan as
proposed in accordance with Resolution 14.
EXPLANATION OF RESOLUTIONS
Resolutions 1 to 10 represent the business of the Company which is commonly
transacted at Annual General Meetings. Resolutions 11, 12, 13, 14 and 15 relate
to the Shire Pharmaceuticals Group plc employees' share schemes. Resolutions 1
to 16 will be proposed as ordinary resolutions and the resolutions numbered 17
to 19 as special resolutions
RESOLUTION 1 ANNUAL REPORT
This resolution receives the Company's annual report and accounts for the year
ended 31 December 1999. Resolution 2 Reappointment of Auditors The approval of
shareholders is sought for the reappointment of Arthur Andersen as the Company's
auditors for the next financial year and to provide the Board with authority to
determine their remuneration.
RESOLUTIONS 3 TO 10 ELECTION AND RE-ELECTION OF DIRECTORS
The Company currently has ten Directors.
The Articles of Association of the Company provide that one-third of the
Directors who are subject to retirement by rotation, or if their number is not
three or a multiple of three, then the number nearest to but not exceeding
one-third shall retire at the Meeting. The Directors to retire by rotation at
the Meeting include, so far as necessary to obtain the number required, first, a
director who wishes to retire and not offer himself for reappointment, and,
second, those directors who have been longest in office since their last
appointment or reappointment.
In accordance with the Articles of Association, Rolf Stahel and Dr Barry
Price retire by rotation and offer themselves for re-election. Angus Russell
who was appointed Group Finance Director on 13 December 1999, Dr Zola
Horovitz who was appointed a non-executive Director on 23 December 1999,
Ronald Nordmann who was appointed a non-executive Director on 23 December
1999, Joseph Smith who was appointed a non-executive Director on 23 December
1999 and John Spitznagel who was appointed a non-executive Director on 23
December 1999 offer themselves for election. In addition, Dr James Cavanaugh
who was last appointed on 24 March 1997 offers himself for re-election in
accordance with the Combined Code in order that his term of office does not
exceed three years.
The biographical details of those directors standing for election and
re-election are set out below.
RESOLUTIONS 11 TO 15
As explained in the Chairman's letter, the Company has undertaken a review of
its employee share plans in the light of the commercial environment in which it
now operates and also to take account of best practice.
As a result of this review the Company is seeking the approval of shareholders
to adopt the Shire Pharmaceutical Group plc 2000 Executive Share Option Scheme
(the "Executive Scheme"). A summary of the principal terms of the proposed
Executive Scheme is set out at Appendix 1 to this document.
Following this review the Company is also seeking the approval of shareholders
to amend the Shire Pharmaceuticals Sharesave Scheme (the "Sharesave Scheme"),
the Shire Pharmaceuticals Group plc Employee Stock Purchase Plan (the "Stock
Purchase Plan") and the Shire Pharmaceuticals Group plc Long Term Incentive Plan
(the "Long Term Incentive Plan"). The amendments to the Sharesave Scheme, the
Stock Purchase Plan and the Long Term Incentive Plan relate to the removal of
certain dilution limits as set out in Appendix 2 of this document.
RESOLUTION 16
This resolution gives authority to the directors, for a period of 5 years from
the date of the passing of the resolution to allot relevant securities within
the limits of the authorised share capital up to a nominal amount of
(pound)4,197,625.90 being the equivalent of 33 1 /3 per cent of the total share
capital of the Company in issue on 17 May 2000. This authority replaces a
similar authority granted at the Annual General Meeting on 10 May 1999 and the
authority passed on 22 December 1999.
The directors are actively considering the possibility of re-financing the
Group's borrowings. This could involve the issue of shares or other securities
falling within the scope of s.80 of the Companies Act 1985 which would involve
the use of the power granted by this resolution. The proceeds raised from the
shares or other securities issued under the power granted by this resolution
would potentially be used to finance the repayment of the existing credit
agreement consisting of a $125 million five-year term loan facility, acquiring,
in-licensing and marketing speciality products, funding product development,
financing strategic corporate acquisitions, and/or general corporate purposes.
<PAGE>
RESOLUTION 17 ISSUE OF EQUITY SECURITIES FOR CASH
The passing of resolution 17 will permit the directors, for a period of 5
years from the date of the passing of the resolution to make issues of equity
securities for cash by way of rights free of the statutory pre-emption
provisions. The issue of equity securities for cash other than by way of a
pro-rata issue shall be limited to a maximum of (pound)611,297.55 being the
equivalent of 5 per cent of the issued ordinary share capital at the date of
the last published accounts of the Company. This represents 4.85 per cent of
the issued ordinary share capital on 25 May 2000. This power will replace
the power granted at the Annual General Meeting on 10 May 1999.
RESOLUTION 18: SPECIFIC DISAPPLICATION OF SECTION 89
The passing of resolution 18 will supplement the power of the directors under
resolution 17 by permitting the directors for a period of 5 years from the date
of the passing of the resolution to make issues of equity securities for cash
free of statutory pre-emption provisions, but only to raise funds for the
purpose of repaying in whole or in part any outstanding amounts under the credit
agreement entered into on 19 November 1999 with DLJ Capital Funding, Inc. as
agent (the "Credit Agreement") provided that such amount shall not exceed the
sterling equivalent of US$125 million.
The passing of resolution 18 in conjunction with resolution 17 gives the
directors power to make issues for cash free of statutory pre-emption rights in
an amount in excess of the annual 5 per cent guideline of the Investor
Protection Committee. Use of these powers would also cause the Company to exceed
the guideline that in any period of three years no more than 7.5 per cent of the
Company's equity share capital should be issued for cash free of statutory
pre-emption rights, the Company having issued 6,000,000 ordinary shares for cash
in the United Kingdom and the United States on 1 April 1998. However, in this
latter respect, the directors believe that the increase in the Company's issued
share capital arising as a result of the merger with Roberts justifies exceeding
the relevant guideline.
Notwithstanding the above, the Directors recommend that resolution 18 be passed.
This recommendation is based on the view of the Directors that it is in the best
interests of the shareholders as a whole for the Company to be able to repay
amounts outstanding under the Credit Agreement. The amount to be paid to the
Company in respect of the equity securities to be allotted pursuant to the
authority conferred by the passing of this resolution will not exceed the
sterling equivalent of US$ 125 million, this being justified as it is the
current amount outstanding under the term loan portion of the Credit Agreement.
The resolution does not permit the issue of more than (pound)430,000 in nominal
value of equity securities. This represents 3.4 per cent of the issued share
capital of the Company as at 25 May 2000.
RESOLUTION 19 ARTICLES OF ASSOCIATION
The opportunity is being taken to update certain provisions of the Company's
Articles of Association to take account, inter alia, of the fact that the
Company's ordinary shares may be held in uncertificated form and to ensure
compliance with the Combined Code. There follows a brief explanation of the
amendments to the existing Articles.
a) As currently drafted, the Company's Articles of Association do not cater
for the ability of shareholders to hold their ordinary shares in
uncertificated form. Following the introduction of CREST in 1996, the
Company has relied on a board resolution (as is permitted by the relevant
Regulations) to authorise the holding of and dealing in the Company's
ordinary shares in uncertificated form. The proposed new Articles have been
updated to reflect the ability to hold ordinary shares in the Company in
uncertificated form. In addition to incorporating express permission in the
Articles for shares to be held in uncertificated form, the proposed new
Articles contain additional consequential changes to the provisions dealing
with transfers and transmission of shares, fractions resulting from
alterations of share capital, payment of dividends, record dates, service
of notice and destruction of documents.
b) The existing Articles incorporate lengthy wording in relation to the giving
of authority under section 80 of the Companies Act 1985 (the "Act") for
directors to allot shares and under section 89 of the Act disapplying
pre-emption rights on the issue of equity securities. These provisions were
originally included in order to reduce the complexity of the resolutions
relating to the granting of the section 80 authority and the disapplication
of section 89 at each and every Annual General Meeting. Now that The
Listing Rules of the London Stock Exchange permit the taking of section 89
disapplications for periods of five years (rather than one year, which was
previously the case), it is considered that the length of the provisions in
the Articles is outweighed by the inconvenience of passing lengthier
resolutions every five years. Consequently, the new Articles contain no
such wording.
c) The provisions in the current Articles dealing with the retirement by
rotation of directors are not fully compliant with the Combined Code (which
became effective for financial years ending on or after 31 December 1998).
The Combined Code provides that all directors should submit themselves for
re-election at regular intervals of at least every three years. The
existing Articles require that a number nearest to (but not exceeding) one
third of the directors are required to retire each year, and that directors
wishing to retire and not offer themselves up for reappointment are counted
first in making up that number. Consequently, it is possible under the
current Articles for a director to submit himself for re-election outside
the three year period set by the Combined Code. The relevant provisions in
the Articles have been amended to bring them into line with the Combined
Code.
d) The limit on the maximum amount payable in respect of director's fees was
increased from (pound)150,000 to (pound)500,000 by an ordinary resolution
of the Company passed on 22 December 1999 in connection with the
acquisition of Roberts Pharmaceutical Corporation. The increase was
proposed in view of the additions to the board of directors of the Company
following the acquisition, and the new Articles incorporate the new limit.
<PAGE>
e) The current provision in the Articles allowing the directors to borrow
money limits the aggregate amount of borrowings of the group to a sum equal
to the higher of 2.5 times the adjusted capital and reserves and
(pound)20,000,000. The borrowing powers were extended by the ordinary
resolution passed by the Company on 22 December 1999 in connection with the
acquisition of Roberts Pharmaceutical Corporation. This extension
authorised the borrowing of up to US$250,000,000 pursuant to a facility
agreement entered into on 19 November 1999, which was required in order to
service the group's immediate needs. Since that extension expires on the
date of this Annual General Meeting, the limit on aggregate borrowings has
required amendment to reflect this additional facility and to allow further
borrowings under it. The proposed amendments introduce a fixed limit of
US$400,000,000 on the borrowings of the group, which is considered to be
the most appropriate basis for a company whose net worth derives
substantially from investment in intellectual property (research and
development), rather than calculating the limit on the basis of the
adjusted capital and reserves. The sum of US$400,000,000 proposed as the
limit of borrowings is 4.6 times 1999 EBITDA (before exceptional merger
related charges). The directors consider that this limit is reasonable in
view of the current business and prospects of the group, and that it should
not impede future expansion.
f) There are a number of further amendments, mainly of a minor or technical
nature, of which the principal ones are as follows:
(i) the new Articles will expressly provide for payment of dividends in
any currency;
(ii) the new Articles will not distinguish between special business and
ordinary business at Annual General Meetings;
(iii)the new Articles will contain provisions dealing with a situation
where it is impractical or unreasonable for any reason to hold a
general meeting on the date or at the time or place specified in the
notice convening the meeting. Notice of the postponed meeting shall,
if practicable, be placed in two national newspapers, but it will not
be necessary to give notice of the business to be transacted at the
postponed meeting;
(iv) the Chairman of a general meeting may invite any person to attend and
speak if he considers that this will assist in the deliberations of
the meeting, even if that person is not a shareholder or a director of
the Company.
BIOGRAPHICAL DETAILS OF DIRECTORS STANDING FOR ELECTION AND RE-ELECTION
The following information sets forth the name and age of each nominee, all other
positions or offices, if any, now held by him with the Company and his principal
occupation during the past five years.
Dr James Cavanaugh, 62, joined the Board on 24 March 1997 and was appointed as
Non-executive Chairman with effect from 11 May 1999. Dr Cavanaugh is the
President of HealthCare Ventures LLC. Formerly he was President of SmithKline &
French Laboratories, the US pharmaceutical division of SmithKline Beecham
Corporation. Prior to that, he was President of SmithKline Beecham Corporation's
clinical laboratory business and, before that, President of Allergan
International. Prior to his industry experience, Dr Cavanaugh served as Deputy
Assistant to the President of the US for Health Affairs on the White House Staff
in Washington, DC. He is a Non-executive Director of MedImmune, Inc and
LeukoSite, Inc.
Rolf Stahel, 55, joined the Group in March 1994 as Chief Executive from Wellcome
plc where he worked for 27 years. From April 1990 until February 1994, he served
as Director of Group Marketing reporting to the Chief Executive. A business
studies graduate of KSL Lucerne, Switzerland, he attended the 97th Advanced
Managers Program at Harvard Business School.
Angus Russell, 43, joined Shire in December 1999 as Group Finance Director,
previously he worked for ICI, Zeneca and Astra Zeneca for a total of 19 years.
Mr Russell is a chartered accountant, having qualified with Coopers & Lybrand
and is a member of the Association of Corporate Treasurers. His last position
was Vice President Corporate Finance at Astra Zeneca PLC.
Dr. Barry Price, 56, joined the Board on 24 January 1996 having spent 28 years
with Glaxo holding a succession of key executive positions with Glaxo Group
Research. He is a non-executive Director of Celltech Chiroscience plc and
Chairman of Antisoma plc. Dr Price is Chairman of the Remuneration Committee.
Dr. Zola Horovitz, 65, has served as a non-executive Director since December
1999. Dr Horovitz has been self employed as a consultant in the biotechnology
and pharmaceutical industries since 1994. Previously he held various positions
at Squibb Corporation and its successor corporation, Bristol Myers Squibb & Co,
including that of Vice President, Business Development and Planning,
Ronald Nordmann, 58, joined as a non-executive director in December 1999 and has
been a financial analyst in healthcare equities since 1971. From September 1994
until January, 2000, he was a portfolio manager and partner at Dearfield
Management.
Joseph Smith, 61, has served as a non-executive director since December 1999.
From 1989 to 1997, Mr Smith served in various positions at Warner-Lambert
Company, including President of Park-Davis Pharmaceuticals and President of the
Shaving Products Division (Schick and Wilkinson Sword).
John Spitznagel, 58, joined the Board in December 1999 following service as
President and Chief Executive Officer of Roberts since September 1997. He was
Executive Vice President-Worldwide Sales and Marketing from March 1996 to
September 1997, having served as President of Reed and Carnick Pharmaceuticals
from September 1990 until July 1995.
<PAGE>
APPENDIX 1
Summary of the proposed Shire Pharmaceuticals Group plc
2000 Executive Share Option Scheme (the "Executive Scheme")
INTRODUCTION
The Executive Scheme enables options over ordinary shares in the Company to be
granted to selected employees and full-time directors.
It is divided into two parts: Part A which is intended to be approved by the
Inland Revenue, offering favourable tax treatment on the exercise of options and
Part B, the unapproved part.
No payment will be required for the grant of options.
PART A
1) ELIGIBILITY
With the approval of the Remuneration Committee (the "Committee") options to
acquire ordinary shares may be granted to selected employees and full-time
directors of the Company or any of its Subsidiaries (other than those due to
retire within two years of grant).
2) GRANT OF OPTIONS
Options may be granted by the Committee within 42 days of shareholder approval
of the Executive Scheme or within 42 days of the date Part A is approved by the
Inland Revenue. Thereafter, options may be granted within 42 days following the
announcement by the Company of its results for any period, or at any other time
when the Committee believes that exceptional circumstances exist to justify the
grant of options. No option may be granted more than 10 years after the date of
adoption of the Executive Scheme. The Committee will, however, review the
operation of the Executive Scheme after five years to consider whether it still
meets the Company's business needs.
Options will be neither transferable (other than to personal representatives
following death) nor pensionable.
Options granted under the Executive Scheme will normally be exercisable only if
performance-related criteria imposed by the Committee are met (see section 8
below).
3) EXERCISE PRICE
The price per share at which ordinary shares may be acquired upon the exercise
of an option will be determined by the Committee at the time of grant but will
be not less than the higher of:
a) the middle-market quotation of ordinary shares for the dealing day
immediately preceding the grant date as derived from the Official List (or
such other price as may be agreed with the Inland Revenue); and
b) in the case of an option to subscribe for shares, the nominal value of such
shares.
4) EXERCISE OF OPTIONS
An option will normally only be exercisable after the third anniversary of the
date of grant and cannot in any event be exercised later than the tenth
anniversary of the date of grant. In addition, an option will not normally be
capable of exercise on any occasion unless the relevant performance conditions
(referred to in section 8 below) are met, unless:
- any optionholder dies, when his or her option will become immediately
exercisable by his or her personal representatives for a period of 12
months thereafter;
- any optionholder leaves the Company or any of its Subsidiaries;
- by reason of injury, disability, or redundancy; or
- if the company or business with which he or she holds office or employment
is sold outside the Company or any of its Subsidiaries.
when he or she may exercise his or her option by the latest of (i) 12 months
after the date of termination of employment; (ii) 42 months after the grant
date; and (iii) 42 months after the last tax-relieved exercise by him of an
Inland Revenue approved company share option.
If an optionholder leaves employment at retirement he or she may also exercise
his or her option during this period, but in these circumstances only if the
relevant performance criteria have been satisfied.
If an optionholder leaves the Group for any other reason, he or she may only
exercise an option with the approval of the Committee.
Early exercise of options within specified periods is also permitted in the
event of a take-over or reconstruction or winding up of the Company, subject to
meeting the relevant performance criteria unless the Committee resolves
otherwise. In the case of a take-over or reconstruction options may be exchanged
for options over the acquiring company's shares, but only with the consent of
the acquiring company.
5) RIGHTS ATTACHING TO THE SHARES
All ordinary shares issued upon the exercise of options will rank equally in all
respects with other ordinary shares for the time being in issue (save as regards
any rights attaching to such ordinary shares by reference to a record date prior
to the allotment of such shares) and application to the London Stock Exchange
will be made for any allotted shares to be admitted to the Official List.
<PAGE>
6) VARIATION OF SHARE CAPITAL
In the event of any variation in the share capital of the Company, the Committee
may adjust the total number of ordinary shares subject to any option and/or the
exercise price under any option with the prior approval of the Inland Revenue.
7) ALTERATION OF THE EXECUTIVE SCHEME
The Committee may, at any time alter or add to the Executive Scheme but may not
make any alteration or addition to the advantage of participants without the
prior approval of shareholders in general meeting except for minor amendments
(i) for the purpose of administration of the Executive Scheme or (ii) to take
account of any change in legislation or (iii) to obtain or maintain favourable
tax or regulatory treatment for optionholders, the Company or any of its
Subsidiaries. No alteration may be made to the disadvantage of participants
without their majority consent. Any alterations require the approval of the
Inland Revenue.
8) PERFORMANCE CONDITIONS
The performance conditions to be imposed on options will be determined by the
Committee before such options are granted. In making such determination the
Committee will have regard to the guidance issued from time to time by the
bodies representing institutional shareholders, insofar as they are
appropriate to the Company, and will seek to identify factors which represent
a fair measure of performance and genuinely reflect the efforts and
achievements of the Company's management.
It is proposed that the performance conditions applying to the first grant of
options under the Executive Scheme will relate to the compound growth in the
Company's share price. If the compound rate increase is at least 20.5 per
cent per annum over a minimum three-year measurement period an option will
become exercisable in whole. If it increases by at least 14.5 per cent per
annum (compounded) 60 per cent of an option will become exercisable. If these
conditions are not met after the initial three year measurement period, they
will thereafter be tested quarterly by reference to compound annual share
price growth over an extended period. If the share price does not meet these
conditions the relevant option will lapse.
The Committee will from time to time be able to vary any such performance
conditions as they apply to outstanding options if, in their opinion, to do
so would more effectively achieve the object of affording realistic
incentives to optionholders.
The Committee have discretion to decide the form* in which performance
conditions will be set, taking into account particularly their accounting and
taxation consequences.
9) SCHEME LIMITS
(i) Individual Limits
An individual's participation under Part A of the Executive Scheme is
limited so that the aggregate market value of shares (measured at the
date of grant) comprised in subsisting approved options held by
him/her cannot exceed (pound)30,000. For these purposes, the value of
the ordinary shares under option will be their market value at the
date of the option grant.
A limit on the value of ordinary shares which may be put under option
on an annual basis to an individual under the Executive Scheme will be
set from time to time by the Committee in the light of current market
practice and the markets in which the Company operates. No option will
be granted in excess of this limit without the prior approval of the
Committee.
(ii) Overall Limit
The number of shares issuable pursuant to options granted under the
Executive Scheme, when aggregated with the number of shares issued or
issuable pursuant to rights granted under all group employees' share
schemes, within the previous period of ten years, may not exceed 10
per cent of the Company's issued ordinary share capital at the date of
grant. For the purpose of this limit options which lapse will cease to
count and any options granted prior to or on the date of the Company
obtaining its listing on the London Stock Exchange will not be
included.
* In accordance with the requirements of fixed compensation plan accounting
under US GAAP, any option would be exercisable with no restriction other than
that the optionholder remains employed within the Shire Pharmaceuticals Group
plc for a period of six weeks prior to the expiry of the option.
PART B
The provisions of Part A of the Executive Scheme above apply equally to options
granted under Part B, with the following exceptions:
(i) the provisions of Part A requiring Inland Revenue consent for any actions
of the Committee will not apply to options granted under Part B;
(ii) the limit referred to in section 9 (i) of Part A will not apply to options
granted under Part B;
(iii) options under Part B of the Executive Scheme may be transferable at the
consent of the Board; and
(iv) the maximum number of shares over which incentive stock options within the
meaning of section 422 of the United States of America Internal Revenue
Code of 1986 (as amended) may be granted under Part B of the Executive
Scheme is 25,000,000.
<PAGE>
APPENDIX 2
Summary of the proposed amendments to the Shire Pharmaceuticals Sharesave
Scheme, Shire Pharmaceuticals Group plc Stock Purchase Plan and Shire
Pharmaceuticals Group plc
LONG TERM INCENTIVE PLAN
Shire Pharmaceuticals Sharesave Scheme (the "Sharesave Scheme") and Shire
Pharmaceuticals Group plc Stock Purchase Plan (the "Stock Purchase Plan")
The rules of the Sharesave Scheme and Stock Purchase Plan will be amended to
remove the dilution limits in each scheme that the number of shares issuable
pursuant to options granted under the Sharesave Scheme and the Stock Purchase
Plan, when aggregated with the number of shares issued or issuable pursuant to
rights granted under all group employees' share schemes, within the previous
period of five years, may not exceed 5 per cent of the Company's issued ordinary
share capital at the date of grant. However, the dilution limit that the number
of shares issuable pursuant to options granted under the Sharesave Scheme and
Stock Purchase Plan when aggregated with the number of shares issued or issuable
under all group employees' share schemes, within the previous period of ten
years, may not exceed 10 per cent of the Company's issued ordinary share capital
at the date of grant, will remain.
Shire Pharmaceuticals Group plc Long Term Incentive Plan (the "Long Term
Incentive Plan")
The rules of the Long Term Incentive Plan will be amended to remove the dilution
limits:
(i) that the number of shares issuable pursuant to options granted under the
Long Term Incentive Plan, when aggregated with the number of shares issued
or issuable pursuant to rights granted under all group executive share
option schemes, within the previous period of ten years, may not exceed 5
per cent of the Company's issued ordinary share capital at the date of
grant;
(ii) that the number of shares issuable pursuant to options granted under the
Long Term Incentive Plan, when aggregated with the number of shares issued
or issuable pursuant to rights granted under all group executive share
option schemes, within the previous period of three calendar years, may
not exceed 3 per cent of the Company's issued ordinary share capital at
the date of grant; and
(iii) that the number of shares issuable pursuant to options granted under the
Long Term Incentive Plan, when aggregated with the number of shares issued
or issuable pursuant to rights granted under all group employees' share
schemes, within the previous period of five calendar years, may not exceed
5 per cent of the Company's issued ordinary share capital at the date of
grant.
However, the dilution limit that the number of shares issuable pursuant to
options granted under the Long Term Incentive Plan when aggregated with the
number of shares, issued or issuable under all group employees' share schemes,
within the previous period of ten years, may not exceed 10 per cent of the
Company's issued ordinary share capital at the date of grant, will remain.
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SHIRE PHARMACEUTICALS GROUP PLC
EAST ANTON, ANDOVER, HAMPSHIRE SP10 5RG ENGLAND
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
I/We, being a member/members of SHIRE PHARMACEUTICALS GROUP PLC,
HEREBY APPOINT the Chairman of the meeting or _____________________
as my/our proxy and on a poll to vote for me/us and on my/our behalf at the
ANNUAL GENERAL MEETING of the Company to be held on July 7, 2000 and at any
adjournment thereof.
Ordinary Resolutions:
As ordinary business
1. To receive the Report and Accounts
[ ] For [ ] Against [ ] Abstain
2. To reappoint Arthur Andersen as Auditors and authorize the
Directors to fix their remuneration
[ ] For [ ] Against [ ] Abstain
3. To re-elect Mr. Rolf Stahel as Director
[ ] For [ ] Against [ ] Abstain
4. To re-elect Dr. Barry Price as Director
[ ] For [ ] Against [ ] Abstain
5. To re-elect Dr. James Cavanaugh as Director
[ ] For [ ] Against [ ] Abstain
6. To elect Angus Russell as Director
[ ] For [ ] Against [ ] Abstain
7. To elect Dr. Zola Horovitz as Director
[ ] For [ ] Against [ ] Abstain
8. To elect Ronald Nordmann as Director
[ ] For [ ] Against [ ] Abstain
9. To elect Joseph Smith as Director
[ ] For [ ] Against [ ] Abstain
10. To elect John Spitznagel as Director
[ ] For [ ] Against [ ] Abstain
Special Business:
Ordinary Resolutions
11. To adopt, establish and approve the Shire Pharmaceuticals Group
plc 2000 Executive Share Option Scheme
[ ] For [ ] Against [ ] Abstain
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12. To approve amendments to the Shire Pharmaceuticals Sharesave
Scheme
[ ] For [ ] Against [ ] Abstain
13. To approve amendments to the Shire Pharmaceuticals Group plc
Employee Stock Purchase Plan
[ ] For [ ] Against [ ] Abstain
14. To approve amendments to the Shire Pharmaceuticals Group plc Long
Term Incentive Plan
[ ] For [ ] Against [ ] Abstain
15. To authorize the Directors to establish supplements or appendices
for the Shire Pharmaceuticals Group plc 2000 Executive Share Option Scheme, the
Shire Pharmaceuticals Sharesave Scheme, the Shire Pharmaceuticals Group plc
Employee Stock Purchase Plan and the Shire Pharmaceuticals Group plc Long Term
Incentive plan
[ ] For [ ] Against [ ] Abstain
16. To authorize the Directors to allot and issue relevant securities
under Section 80 of the Companies Act of 1985
[ ] For [ ] Against [ ] Abstain
Special Resolutions:
17. To authorize the Directors to disapply statutory pre-emption
rights
[ ] For [ ] Against [ ] Abstain
18. To disapply further statutory pre-emption rights in relation
to repaying the DLJ credit facility
[ ] FOR [ ] AGAINST [ ] ABSTAIN
19. To adopt new Articles of Association
[ ] For [ ] Against [ ] Abstain
Please indicate your vote by an X in the appropriate boxes. Unless
otherwise indicated, the proxy will abstain or vote on all business transacted
at the meeting as he/she thinks fit.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE.)
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<PAGE>
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(CONTINUED FROM OTHER SIDE.)
SIGNED THIS DAY OF 2000
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SIGNATURE(S)
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NAME(S) IN FULL
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ADDRESS
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POSTCODE
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NOTES
(i) To be valid, this form of proxy (and the power of attorney or other
authority, if any, under which it is signed or a notarially certified
copy of such authority) must be deposited with the Registrar of the
Company, Computershare Services PLC, at the address overleaf, not less
than 48 hours before the meeting or any adjournment thereof.
(ii) A member may appoint one or more proxies of his own choice, by deleting
the reference to the Chairman of the meeting and inserting the named of
his prox(ies), in the space provided. A proxy need not be a member of
the Company.
(iii) In the case of joint holders, the vote of the senior who tenders a vote,
whether in person or by proxy, shall be accepted to the exclusion of the
votes of the other joint holders and, for this purpose, seniority is
determined by the order in which the names of the holders stand in the
register.
(iv) In the case of a corporation this form must be completed under its seal
or under the hand of its duly authorized officer or attorney or other
person authorized to sign.
(v) Completion of this form of proxy will not preclude a member from
attending and voting in person.
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