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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:
[_]CONFIDENTIAL, FOR USE OF THE
[X]Preliminary Proxy Statement COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(e)(2))
[_]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
CBT GROUP PUBLIC LIMITED COMPANY
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(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:
Notes:
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PRELIMINARY COPY
CBT GROUP PUBLIC LIMITED COMPANY
NOTICE OF ANNUAL GENERAL MEETING
Notice is Hereby Given that the ANNUAL GENERAL MEETING of Shareholders of
CBT Group Public Limited Company, a corporation organized under the laws of
the Republic of Ireland (the "Company"), will be held at The Shelbourne Hotel,
St. Stephens Green, Dublin 2, Ireland on , , 1998 at (the
"Meeting") for the purpose of transacting the following business:
ORDINARY BUSINESS
1. By separate resolutions to re-elect as Directors the following persons
who retire by rotation and, being eligible, offer themselves for re-
election in accordance with the Company's Articles of Association.
(A) Mr. John M. Grillos; and
(B) Mr. Patrick J. McDonagh.
2. To receive and consider the Report of the Directors and the Consolidated
Financial Statements of the Company for the year ended December 31, 1997
and the Auditors' Report to the Members.
3. To authorize the Directors to fix the remuneration of the Company's
auditors for the year ending December 31, 1998.
SPECIAL BUSINESS
To consider and, if thought fit, to pass the following resolutions, of which
Resolution 4 will be proposed as an ordinary resolution and Resolution 5 will
be proposed as a special resolution:
4. THAT the 1994 Share Option Plan (the "1994 Plan") be and it is hereby
amended to increase the total number of shares reserved for issuance
thereunder by 250,000 Ordinary Shares and that the directors of the
Company be and they are hereby authorized to do such acts and things as
they may consider necessary or expedient to establish and carry into
effect the increase in the number of shares available for issuance under
the 1994 Plan.
5. THAT each of the issued and unissued Ordinary Shares of IR37.5p in the
capital of the Company be and each is hereby subdivided into four
Ordinary Shares of IR9.375p each, giving the Company an authorized share
capital of IR(Pounds)11,250,000, divided into 120,000,000 Ordinary
Shares of IR9.375p each, and that the Memorandum and Articles of
Association of the Company be amended accordingly.
To conduct any other ordinary business of the Company as may properly come
before the Meeting.
By Order of the Board
Jennifer M. Caldwell
Secretary
1st April, 1998
Registered Office:
Beech Hill
Clonskeagh
Dublin 4, Ireland
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NOTES:
1. The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. You are urged to read the Proxy
Statement carefully. Proposal Five asks you to consider and approve a
subdivision of each of the Company's Ordinary Shares of IR37.5p into four
Ordinary Shares of IR9.375p each (the "Ordinary Share Split").
Currently, each of the Company's American Depositary Shares ("ADSs")
represents and is exchangeable for one-fourth of one Ordinary Share of
IR37.5p par value. THE ORDINARY SHARE SPLIT WILL HAVE NO EFFECT ON THE ADSs
except that, following the Ordinary Share Split, each ADS will represent
and be exchangeable for one Ordinary Share of IR9.375p par value. AS A
RESULT, THE ORDINARY SHARE SPLIT WILL HAVE NO EFFECT ON THE NUMBER OF ADSs
OUTSTANDING AND, IN AND OF ITSELF, IS NOT EXPECTED TO HAVE AN EFFECT ON THE
MARKET PRICE OF THE ADSs.
The Company is required to amend its Memorandum and Articles of
Association to reflect the subdivision of each of its Ordinary Shares of
IR37.5p into four Ordinary Shares of IR9.375p each.
2. Those persons whose names appear in the Register of Members of the Company
("Members") on the date materials are dispatched to shareholders are
entitled to receive notice of the Meeting or any adjournment or
postponement thereof. In addition, Members on the date of the Meeting are
entitled to attend and vote at the Meeting.
3. The Company, at the request of The Bank of New York, as Depositary for the
Ordinary Shares underlying and represented by the ADSs, has set , ,
1998 as the Record Date for the determination of those holders of American
Depositary Receipts representing such ADSs (collectively, the "ADS
Holders") entitled to give instructions for the exercise of voting rights
at the Meeting or any adjournment or postponement thereof. ADS Holders may
not vote at the Meeting; however, the Depositary has the right to vote all
of the Ordinary Shares represented by ADSs, subject to certain limitations.
Voting of the ADSs is more fully described in the Proxy Statement
accompanying this Notice.
4. A Member entitled to attend and vote at the Meeting may appoint a proxy or
proxies to attend, speak and vote in his or her place. A proxy need not be
a Member of the Company. To be valid, proxy forms must be deposited with
the Company's Registrars, AIB Bank, Registrars' & New Issue Department,
Bankcentre, P.O. Box 954, Ballsbridge, Dublin 4, Ireland not later than
on , , 1998. Completion of the proxy form does not preclude a
Member from attending the Meeting and from speaking and voting thereat.
5. The Register of Directors' Interests and particulars of directors'
transactions in the share capital of the Company and its subsidiary
companies required to be kept under section 59 of the Companies Act, 1990
will be available for inspection at the Meeting from until the
conclusion of the Meeting. Otherwise they will be open for inspection at
the Registered Office of the Company during normal business hours on any
weekday (Saturdays, Sundays and Irish Public holidays excluded) from the
date of this Notice until the date of the Meeting.
YOUR VOTE IS IMPORTANT
TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY FORM AS PROMPTLY AS POSSIBLE AND
RETURN IT IN THE POSTAGE-PREPAID ENVELOPE ENCLOSED FOR THAT
PURPOSE. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN
PERSON EVEN IF YOU HAVE RETURNED A PROXY.
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CBT GROUP PUBLIC LIMITED COMPANY
BEECH HILL
CLONSKEAGH
DUBLIN 4, IRELAND
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PROXY STATEMENT
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INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of CBT Group Public Limited
Company (referred to herein as "CBT" or the "Company") for use at its Annual
General Meeting of Shareholders to be held on , , 1998 at , local
time (the "Annual General Meeting"), or at any adjournment thereof, for the
purposes set forth in the accompanying Notice of Annual General Meeting. The
Annual General Meeting will be held at The Shelbourne Hotel, St. Stephens
Green, Dublin 2, Ireland.
These proxy solicitation materials (the "Proxy Statement") and the Report of
the Directors and the Consolidated Financial Statements of the Company for the
year ended December 31, 1997 and the Auditors' Report to the Members, were
first mailed on or about , 1998 to all Ordinary Shareholders entitled to
attend and vote at the Annual General Meeting.
AMERICAN DEPOSITARY SHARE SPLIT
On January 20, 1998, the Company announced a two-for-one split of its
outstanding American Depositary Shares ("ADSs") whereby each issued and
outstanding ADS would thereafter represent one-fourth of one Ordinary Share
("the 1998 ADS Split"). As a result, each issued and outstanding Ordinary
Share of the Company that is deposited with the Depositary (as defined below)
is currently represented by four ADSs. The 1998 ADS Split was effected on
March 9, 1998.
UNLESS INDICATED OTHERWISE, ORDINARY SHARE AND ADS FIGURES SET FORTH IN THIS
PROXY STATEMENT GIVE EFFECT TO THE 1998 ADS SPLIT.
RECORD DATE FOR VOTING OF AMERICAN DEPOSITARY SHARES
The Bank of New York, as the Registrar and Transfer Agent for the ADSs, as
well as the Depositary for the Ordinary Shares represented by the ADSs (the
"Depositary"), has fixed the close of business on , , 1998 (which date
has been established as the record date by the Company) as the record date
(the "Record Date") for the determination of ADS Holders entitled to give
instructions for the exercise of voting rights at the Annual General Meeting
and any adjournment or postponement thereof.
As of the Record Date, a total of Ordinary Shares, par value
IR37.5p per share, were issued and outstanding (or, equivalent
ADSs). As a result of two two-for-one splits of the ADSs, each Ordinary Share
of the Company that is deposited with the Depositary is now represented by
four ADSs. The ADSs are quoted on the Nasdaq National Market under the symbol
"CBTSY." As of the Record Date there were approximately registered
holders of ADSs. The Ordinary Shares represented by the ADSs are owned of
record by AIB Custodial Nominees Limited on behalf of the Depositary.
The Depositary has the right, subject to certain limitations set forth in
the Deposit Agreements, each as amended and restated as of March 9, 1998,
among the Company, the Depositary and the owners and beneficial owners of
American Depositary Receipts representing ADSs (the "Deposit Agreements"), to
vote all of the Ordinary Shares represented by ADSs. Under the terms of the
Deposit Agreements, however, the Depositary is
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required to cast its votes with respect to those Ordinary Shares for which it
receives instructions from the holders of the ADSs representing such Ordinary
Shares in accordance with the instructions received. Holders of ADSs may not
vote at the Annual General Meeting. See "Voting of ADSs."
QUORUM; VOTING OF ORDINARY SHARES
Holders of Ordinary Shares of the Company whose names appear in the Register
of Members ("Members") maintained by the Company's Registrars, AIB Bank,
Registrars' & New Issue Department, Bankcentre, P.O. Box 954, Ballsbridge,
Dublin 4, Ireland, on the date materials are dispatched to Members are
entitled to receive notice of the Annual General Meeting or any adjournment or
postponement thereof. In addition, Members on the date of the Annual General
Meeting are entitled to attend and vote at the Annual General Meeting.
The presence at the Annual General Meeting, either in person or by proxy, of
three (3) persons entitled to vote at the Annual General Meeting, and who
together hold not less than one-third of the voting share capital of the
Company in issue, each being a Member or a proxy for a Member or a duly
authorized representative of a corporate Member, constitutes a quorum for the
transaction of business. Abstentions will be counted for the purposes of
determining the presence or absence of a quorum for the transaction of
business. However, abstentions will have no effect on the outcome of the
voting as they will not be considered as votes cast with respect to any
matter.
Votes may be given at the Annual General Meeting either personally or by
proxy. Voting at the Annual General Meeting will be by a show of hands unless
a poll (a count of the number of shares voted) is duly demanded. On a show of
hands, each shareholder present in person and every proxy shall have one vote,
provided, that no individual shall have more than one vote and, on a poll,
each shareholder shall have one vote for each share of which he or she is the
holder. Where there is an equality of votes, whether on a show of hands or on
a poll, the chairman of the meeting is entitled to a casting vote in addition
to any other vote he may have. A proxy has the right to demand or join in
demanding a poll. On a poll, a person entitled to more than one vote need not
use all his or her votes or cast all the votes he or she uses in the same way.
If a choice is specified in the proxy as to the manner in which it is to be
voted, the persons acting under the proxy will vote the Ordinary Shares
represented thereby in accordance with such choice. If no choice is specified,
the shares will be voted for each proposal set forth in the accompanying
Notice of Annual General Meeting, as more fully described in this Proxy
Statement, and in the discretion of the proxyholders as to any other matter to
properly come before the Annual General Meeting.
VOTING OF ADSs
Under the terms of the Deposit Agreements, whenever the Depositary receives
notice of any meeting of holders of Ordinary Shares, the Depositary is
required to fix a record date, which shall be the record date, if any,
established by the Company for such purpose or, if different, as close thereto
as practicable, for the determination of the owners of ADSs who will be
entitled to give instructions for the exercise of voting rights at any such
meeting, subject to the provisions of the Deposit Agreements.
Upon receipt of notice of any meeting of the Company or the solicitation for
consents or proxies from the holders of Ordinary Shares, the Depositary is
required, if so requested in writing by the Company, as soon as practicable
thereafter, to mail to all owners of ADSs a notice, the form of which shall be
in the sole discretion of the Depositary, containing (a) the information
contained in the notice of meeting received by the Depositary from the
Company; (b) a statement that the owners of ADSs as at the close of business
on a specified record date are entitled (subject to any applicable provisions
of Irish law and of the Company's Articles of Association, as amended (the
"Articles") to instruct the Depositary as to the exercise by the Depositary of
the voting rights, if any, pertaining to the number of Ordinary Shares
represented by their respective ADSs; (c) a statement that owners of ADSs who
instruct the Depositary as to the exercise of their voting rights will be
deemed to have instructed the Depositary or its authorized representative to
call for a poll with respect to each matter for which instructions are given,
(subject to any applicable provisions of Irish law and of the Articles); and
(d) a statement as to the manner in which such instructions may be given
(including an express indication that instructions may
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be given or deemed to be given in accordance with the next paragraph if no
instruction is received) to the Depositary to give a discretionary proxy to a
person designated by the Company. Upon the written request of an owner of ADSs
on such record date, received on or before the date established by the
Depositary for such purpose, the Depositary will endeavor, insofar as
practicable, to vote or cause to be voted the number of Ordinary Shares
represented by such ADSs in accordance with the instructions set forth in such
request. Accordingly, pursuant to the Articles and applicable Irish law, the
Depositary will cause its authorized representative to attend each meeting of
holders of Ordinary Shares and call for a poll as instructed in accordance
with clause (c) above for the purpose of effecting such vote. The Depositary
will not vote or attempt to exercise the rights to vote that attach to the
Ordinary Shares other than in accordance with such instructions or deemed
instructions.
The Deposit Agreements provide that if no instructions are received by the
Depositary from any owner of ADSs with respect to any of the Ordinary Shares
represented by the ADSs on or before the date established by the Depositary
for such purpose, the Depositary will deem such owner of ADSs to have
instructed the Depositary to give a discretionary proxy to a person designated
by the Company with respect to such Ordinary Shares and the Depositary will
give a discretionary proxy to a person designated by the Company to vote such
Ordinary Shares, under circumstances and according to the terms as set forth
in the Deposit Agreements; provided, that no such instructions will be deemed
given and no such discretionary proxy will be given when the Company notifies
the Depositary (and the Company agrees to provide such notice as promptly as
practicable in writing) that the matter to be voted upon is one of the
following:
(1) a matter not submitted to shareholders by means of a proxy statement
comparable to that specified in Schedule 14A promulgated by the U.S.
Securities and Exchange Commission (the "SEC") pursuant to the U.S.
Securities Exchange Act of 1934, as amended (the "Exchange Act");
(2) the subject of a counter-solicitation, or is part of a proposal made
by a shareholder which is being opposed by management (i.e. a
contest);
(3) relates to a merger or consolidation (except when the Company's
proposal is to merge with its own wholly-owned subsidiary, provided
its shareholders, dissenting thereto, do not have rights of
appraisal);
(4) involves rights of appraisal;
(5) authorizes mortgaging of property;
(6) authorizes or creates indebtedness or increases the authorized amount
of indebtedness;
(7) authorizes or creates preferred shares or increases the authorized
amount of existing preferred shares;
(8) alters the terms or conditions of any shares then outstanding or
existing indebtedness;
(9) involves the waiver or modification of preemptive rights (except when
the Company's proposal is to waive such rights with respect to shares
being offered pursuant to share option or purchase plans involving the
additional issuance of not more than 5% of the outstanding Ordinary
Shares) (see Item (12) below);
(10) alters voting provisions or the proportionate voting power of a class
of shares, or the number of its votes per share (except where
cumulative voting provisions govern the number of votes per share for
election of directors and the Company's proposal involves a change in
the number of its directors by not more than 10% or not more than
one);
(11) changes the existing quorum requirements with respect to shareholder
meetings;
(12) authorizes the issuance of Ordinary Shares, or options to purchase
Ordinary Shares, to directors, officers, or employees in an amount
which exceeds 5% of the total amount of the class outstanding (when no
plan is amended to extend its duration, the Company shall factor into
the calculation the number of Ordinary Shares that remain available
for issuance, the number of Ordinary Shares subject to outstanding
options and any Ordinary Shares being added; should there be more than
one plan being considered at the same meeting, all Ordinary Shares are
aggregated);
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(13) authorizes (a) a new profit-sharing or special remuneration plan, or a
new retirement plan, the annual cost of which will amount to more than
10% of the average annual income of the Company before taxes for the
preceding five years, or (b) the amendment of an existing plan which
would bring its costs above 10% of such average annual income before
taxes (should there be more than one plan being considered at the same
meeting, all costs are aggregated; exceptions may be made in cases of:
(i) retirement plans based on agreement or negotiations with labor
unions (or which have been or are to be approved by such unions), and
(ii) any related retirement plan for the benefit of non-union
employees having terms substantially equivalent to the terms of such
union-negotiated plan, which is submitted for action of shareholders
concurrently with such union-negotiated plan);
(14) changes the purposes or powers of the Company to an extent which would
permit it to change to a materially different line of business and it
is the Company's stated intention to make such a change;
(15) authorizes the acquisition of property, assets or a company, where the
consideration to be given has a fair value of 20% or more of the
market value of the previously outstanding shares of the Company;
(16) authorizes the sale or other disposition of assets or earning power of
20% or more of those existing prior to the transactions;
(17) authorizes a transaction not in the ordinary course of business in
which an officer, director or substantial security holder has a direct
or indirect interest; or
(18) reduces earned surplus by 51% or more or reduces earned surplus to an
amount less than the aggregate of three years' Ordinary Share
dividends computed at the current dividend rate.
Since each proposal to be acted upon at the Annual General Meeting is a
matter for which the Depositary may deem that instruction has been given for
the Depositary to give a discretionary proxy to a person designated by the
Company where no instruction is received, the Depositary will give a
discretionary proxy to a person designated by the Company to vote such
Ordinary Shares for which no instruction has been given.
The Depositary will make available for inspection by the owners of ADSs at
its Corporate Trust Office any reports and communications, including any proxy
soliciting material, received from the Company, which are both (a) received by
the Depositary as the holder of the Ordinary Shares and (b) generally made
available to the holders of Ordinary Shares by the Company. The Depositary
will also send to the owners of ADSs copies of such reports when furnished by
the Company pursuant to the Deposit Agreements.
SOLICITATION OF PROXIES
The cost of preparing, assembling, printing and mailing the Proxy Statement,
the Notice of Annual General Meeting of Shareholders and the enclosed form of
proxy, as well as the cost of soliciting proxies relating to the Annual
General Meeting, will be borne by the Company. The Company will request banks,
brokers, dealers and voting trustees or other nominees, including the
Depositary in the case of the ADSs, to solicit their customers who are owners
of shares listed of record and names of nominees, and will reimburse them for
reasonable out-of-pocket expenses of such solicitation. The original
solicitation of proxies by mail may be supplemented by telephone, telegram and
personal solicitation by officers and other regular employees of the Company.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the Annual General Meeting and voting in person.
SHAREHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL GENERAL MEETING
Subject to applicable laws, shareholder proposals of shareholders of the
Company that are intended to be presented by such shareholders at the
Company's 1999 Annual General Meeting of Shareholders must be
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received by the Company at its offices located at 1005 Hamilton Court, Menlo
Park, California 94025 no later than and satisfy the conditions
established by the SEC for proposals to be considered for possible inclusion
in the Proxy Statement and form of proxy relating to that meeting.
PROPOSAL ONE(A) AND ONE(B)
RE-ELECTION OF DIRECTORS
The Articles provide that the Company may have up to a maximum number of ten
(10) directors, which number may be changed by resolution of the shareholders.
There are currently six (6) directors of the Company. As is customary for many
Irish companies, the Company's Board of Directors (the "Board") typically
consists of fewer than the maximum number of authorized directors. The Company
believes that benefits are derived from having vacancies on the Board,
particularly in the areas of attracting qualified directors and responding to
shareholder concerns.
Proxies cannot be voted for a greater number of persons than the number of
nominees named in Proposals One (A) and One (B). At each Annual General
Meeting of Shareholders, approximately one-third (1/3) of the existing
directors must retire by rotation; however, such director(s) are eligible for
re-election and, if re-elected, shall serve until the next rotation and until
his successor is elected and qualified or until such director's resignation,
death or removal. Any director elected by the Board during the year, whether
to fill a vacancy (including a vacancy created by an increase in the Board) or
otherwise, must stand for re-election at the next Annual General Meeting of
Shareholders. In accordance with the Articles, Mr. John M. Grillos and Mr.
Patrick J. McDonagh, as the longest serving directors, must retire by
rotation.
Mr. Grillos, being eligible, offers himself for re-election.
PROPOSAL ONE(A) VOTE REQUIRED
The affirmative vote of the holders of a majority of the Ordinary Shares
represented and voting at the Annual General Meeting is required to approve
the re-election of Mr. Grillos. Unless otherwise instructed, the proxies will
vote "FOR" the re-election of Mr. Grillos to the Board.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL ONE(A).
Mr. McDonagh, being eligible, offers himself for re-election.
PROPOSAL ONE(B) VOTE REQUIRED
The affirmative vote of the holders of a majority of the Ordinary Shares
represented and voting at the Annual General Meeting is required to approve
the re-election of Mr. McDonagh. Unless otherwise instructed, the proxies will
vote "FOR" the re-election of Mr. McDonagh to the Board.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL ONE(B).
PROPOSAL TWO
CONSIDERATION OF THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND THE
REPORTS OF THE DIRECTORS AND THE AUDITORS FOR THE YEAR ENDED DECEMBER 31, 1997
A copy of the report of the directors and the consolidated financial
statements of the Company (prepared in accordance with Irish GAAP) for the
Last Fiscal Year and the auditors' report to the Members thereon have been
circulated to all of the shareholders of the Company. Shareholders are now
being requested to consider the Company's consolidated financial statements
and the directors' and auditors' report for the financial year ended December
31, 1997 (the "Last Fiscal Year").
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VOTE REQUIRED
The affirmative vote of the holders of a majority of the Ordinary Shares
represented and voting at the Annual General Meeting is required to approve
the resolution to receive and consider the Company's consolidated financial
statements and the report of the directors and the auditors for the Last
Fiscal Year. Unless otherwise instructed, the proxies will vote the proxies
"FOR" the resolution to receive and consider the Company's consolidated
financial statements and the report of the directors and the auditors for the
Last Fiscal Year. A vote "FOR" Proposal Two will not constitute an approval or
ratification of the report of the directors or the consolidated financial
statements of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL TWO.
PROPOSAL THREE
AUTHORIZATION OF DIRECTORS TO FIX AUDITORS' REMUNERATION
Ernst & Young, Chartered Accountants, have been the Company's independent
auditors since September 10, 1993. The shareholders are now being requested to
authorize the Board to fix the remuneration of the Company's auditors for the
year ending December 31, 1998.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the Ordinary Shares
represented and voting at the Annual General Meeting is required to authorize
the directors to fix the remuneration of the Company's auditors. Unless
otherwise instructed, the proxies will vote "FOR" the authorization of the
directors to fix the remuneration of the Company's auditors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL THREE.
PROPOSAL FOUR
INCREASE IN NUMBER OF SHARES UNDER THE 1994 SHARE OPTION PLAN
In November 1994, the Board and its shareholders adopted and approved the
1994 Share Option Plan (the "1994 Plan"). The 1994 Plan currently provides for
the issuance of up to 1,560,751 Ordinary Shares (before giving effect to the
Ordinary Share Split proposed in Proposal Five). In March 1998, the Board
approved, subject to shareholder approval at the Annual General Meeting, an
amendment to the 1994 Plan increasing the total number of Ordinary Shares
reserved for issuance thereunder by 250,000 Ordinary Shares. At the Annual
General Meeting, the shareholders will be requested to approve an amendment to
the 1994 Plan to increase the number of Ordinary Shares reserved for issuance
thereunder by 250,000 Ordinary Shares (before giving effect to the Ordinary
Share Split proposed in Proposal Five).
VOTE REQUIRED
The affirmative vote of the holders of a majority of the Ordinary Shares
represented and voting at the Annual General Meeting is required to approve
the amendment to the 1994 Plan. Unless otherwise instructed, the proxies will
vote "FOR" the amendment to the 1994 Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL FOUR.
As of the Record Date, options to purchase a total of Ordinary
Shares were outstanding and options to purchase Ordinary Shares
remained available for future grant (without giving effect to the increase in
shares being presented to the shareholders for approval at the Annual General
Meeting) under the 1994 Plan.
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The Company relies heavily on its 1994 Plan to attract and retain high
quality executives and key personnel. Accordingly, the Board believes that it
is in the Company's best interests to increase the number of shares reserved
for issuance under the 1994 Plan so that the Company may continue to provide
ongoing incentives to the Company's employees in the form of options to
purchase the Ordinary Shares in amounts consistent with past practices.
SUMMARY OF THE 1994 PLAN
A description of the principal features of the 1994 Plan, as amended to
date, is set forth below.
General. The 1994 Plan permits the granting of options to purchase Ordinary
Shares. Options granted under the 1994 Plan may be either "incentive stock
options," as defined in Section 422 of the U.S. Internal Revenue Code of 1986,
as amended (the "Code"), or nonstatutory share options. The purposes of the
1994 Plan are to attract and retain the best available personnel for the
Company, provide additional incentive to current employees, consultants and
directors of the Company and promote the success of the Company's business.
Administration of the 1994 Plan. The 1994 Plan must be administered by
either the Board or a committee appointed by the Board (the "Administrator").
The 1994 Plan is currently being administered by the Stock Option Committee of
the Board and by a Non-Officer Stock Option Committee for certain smaller
grants to non-officers. The interpretation and construction of any provision
of the 1994 Plan by the Administrator are final and binding.
Eligibility. The 1994 Plan provides that options may be granted to employees
(including officers and directors who are also employees), consultants of the
Company and its subsidiaries, and directors of the Company. Incentive stock
options may be granted only to employees. The Administrator selects the
participants and determines the number of shares to be subject to each option.
As of December 31, 1997, there were approximately 701 full-time employees and
22 consultants eligible to receive share options under the 1994 Plan.
Terms of Options. The terms of options granted under the 1994 Plan are
determined by the Administrator. Each option is evidenced by a written
agreement between the Company and the person to whom such option is granted,
and is subject to additional terms and conditions set forth in the 1994 Plan.
The exercise price of options granted under the 1994 Plan is determined by
the Administrator and must not be less than 100% of the fair market value of
the ADSs (which the option to purchase Ordinary Shares may be exchanged into
at the election of the optionee), in the case of incentive stock options, and
may be determined by the Administrator subject to applicable laws, in the case
of nonstatutory share options, on the date the option is granted. Fair market
value per share is based on the closing sales price of the ADSs as reported on
the Nasdaq National Market on the last trading day prior to the date of grant.
Incentive stock options granted to shareholders owning more than 10% of the
Company's outstanding shares are subject to the additional restriction that
the exercise price must be at least 110% of the fair market value on the date
of grant. The method of payment of the exercise price of the shares purchased
upon exercise of an option is determined by the Administrator and may include
cash, check, promissory note or such other consideration and method of payment
for the issuance of shares to the extent permitted under applicable laws.
The Administrator determines when options become exercisable, provided that
the optionee must generally earn the right to exercise the option by
continuing to perform services for the Company. Options granted under the 1994
Plan expire ten years from the date of grant, unless a shorter period is
provided in the notice of grant. No option may be exercised by any person
after such expiration. In addition, incentive stock options granted to
shareholders owning more than 10% of the Company's outstanding shares may not
have a term of more than five years. An option is non-transferable by the
holder otherwise than by will or the laws of descent or distribution, and is
exercisable during the holder's lifetime only by the optionee, or in the event
of the optionee's death, by a person who acquires the right to exercise the
option by bequest or inheritance or by reason of the death of the holder.
7
<PAGE>
Adjustment and Change in Control. In the event any change is made in the
Company's capitalization, such as a share split, combination or
reclassification, appropriate adjustments shall be made to the purchase price
and to the number of shares subject to the option. In the event of the
proposed dissolution or liquidation of the Company, all options will terminate
immediately prior to the consummation of such actions, unless otherwise
provided by the Board. In the event of a proposed sale of all or substantially
all of the assets of the Company, or the merger of the Company with or into
another corporation, the successor corporation shall assume all outstanding
options or substitute new options therefor, unless the Board determines in its
discretion to accelerate the exercisability of such options.
Amendment and Termination of the 1994 Plan. The Board may amend or terminate
the 1994 Plan from time to time in such respects as it may deem advisable,
provided that, to the extent necessary and desirable to comply with Section
422 of the Code or any other applicable law, rule or regulation, the Company
shall obtain shareholder approval of any 1994 Plan amendment in such a manner
and to such a degree as is required by the applicable law, rule or regulation.
Any amendment or termination of the 1994 Plan shall not affect options already
granted and such options shall remain in full force and effect as if the 1994
Plan had not been amended or terminated, unless mutually agreed otherwise
between the optionee and the Board, which agreement must be in writing and
signed by the optionee and the Company. The 1994 Plan will terminate in
November 2004. Any options outstanding under the 1994 Plan at the time of its
termination will remain outstanding until they expire by their terms.
TAX INFORMATION
Options granted under the 1994 Plan may be either "incentive stock options,"
as defined in Section 422 of the Code, or nonstatutory share options.
If an option granted under the 1994 Plan is an incentive stock option, an
optionee who is subject to taxation under the Code with respect to the option
will recognize no income upon grant of the incentive stock option and incur no
tax liability due to the exercise unless the optionee is subject to the
alternative minimum tax. The Company will not be allowed a deduction for
federal income tax purposes as a result of the exercise of an incentive stock
option regardless of the applicability of the alternative minimum tax. Upon
the sale or exchange of the shares at least two years after grant of the
option and one year after receipt of the shares by the optionee, any gain or
loss will be treated as long-term capital gain or loss. If these holding
periods are not satisfied, the optionee will recognize ordinary income equal
to the difference between the exercise price and the lower of (i) the fair
market value of the shares at the date of the option exercise or (ii) the sale
price of the shares. Different rules for measuring ordinary income upon such a
premature disposition may apply if the optionee is also an officer, director
or 10% shareholder of the Company. The Company will be entitled to a deduction
in the same amount as the ordinary income recognized by the optionee. Any
additional gain or any loss recognized on such a premature disposition of the
shares will be characterized as long-term or short-term capital gain or loss.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory share options. An optionee will not recognize any
taxable income at the time the optionee is granted a nonstatutory share
option. However, upon its exercise, the optionee will recognize ordinary
income for tax purposes generally measured as the excess of the then fair
market value of the shares purchased over the purchase price. The income
recognized by an optionee who is also an employee of the Company will be
subject to tax withholding by the Company by payment in cash or out of the
current earnings paid to the optionee. Upon resale of such shares by the
optionee, any difference between the sale price and the exercise price, to the
extent not recognized as ordinary income as provided above, will be treated as
long-term or short-term capital gain or loss.
THE FOREGOING BRIEF SUMMARY OF THE AFFECT OF FEDERAL INCOME TAXATION UPON
THE PARTICIPANT AND THE COMPANY WITH RESPECT TO SHARES PURCHASED UNDER THE
1994 PLAN DOES NOT PURPORT TO BE COMPLETE, AND REFERENCE SHOULD BE MADE TO THE
APPLICABLE PROVISIONS OF THE CODE. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS
THE TAX CONSEQUENCES OF A PARTICIPANT'S DEATH OR THE PROVISIONS OF THE INCOME
TAX
8
<PAGE>
LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY OTHER THAN THE UNITED
STATES IN WHICH THE PARTICIPANT MAY RESIDE.
PARTICIPATION IN THE 1994 PLAN
The grant of share options under the 1994 Plan to executive officers,
including the officers named in the Summary Compensation Table contained in
this Proxy Statement, is subject to the discretion of the Administrator. As of
the date of this Proxy Statement, there has been no determination by the
Administrator with respect to future grants under the 1994 Plan. Accordingly,
future grants are not determinable.
PROPOSAL FIVE
SUBDIVISION OF ORDINARY SHARES OF IR37.5P EACH
In March 1998, the Board of Directors approved a proposal, subject to
shareholder approval at the Annual General Meeting, to subdivide each of the
Company's Ordinary Shares of IR37.5p into four Ordinary Shares of IR9.375p
each (the "Ordinary Share Split").
Currently, each ADS represents and is exchangeable for one-fourth of one
Ordinary Share of IR37.5p par value. THE ORDINARY SHARE SPLIT WILL HAVE NO
EFFECT ON THE ADSS except that, following the Ordinary Share Split, each ADS
will represent and be exchangeable for one Ordinary Share of IR9.375p par
value. AS A RESULT, THE ORDINARY SHARE SPLIT WILL HAVE NO EFFECT ON THE NUMBER
OF ADSS OUTSTANDING AND, IN AND OF ITSELF, IS NOT EXPECTED TO HAVE AN EFFECT
ON THE MARKET PRICE OF THE ADSS.
If shareholders approve the Ordinary Share Split, the Company will also be
required to amend certain provisions of the Articles to reflect the change in
the authorized share capital of the Company from IR(Pounds)11,250,000 divided
into 30,000,000 Ordinary Shares of IR37.5p each to IR(Pounds)11,250,000
divided into 120,000,000 Ordinary Shares of IR9.375p each. The text of the
proposed amendments to the Articles is set forth in Appendix A to this Proxy
Statement.
As of the Record Date, there were Ordinary Shares of IR37.5p each
outstanding and 2,985,751 Ordinary Shares of IR37.5p each reserved for
issuance under the Company's stock option plans (without giving effect to the
increase of the 1994 Plan of 250,000 Ordinary Shares proposed in Proposal
Four). Following the Ordinary Share Split, there will be Ordinary Shares
of IR9.375p each outstanding and 11,947,036 Ordinary Shares of IR9.375p each
reserved for issuance under the Company's stock option plans.
The Board believes that the Ordinary Share Split is advisable to reduce
potential investor confusion about the relationship between the Ordinary
Shares and the ADSs. At the time the Company effected its initial public
offering in April 1995, each ADS represented one Ordinary Share. Since that
time, the Company has completed two 2-for-1 splits of the ADSs, which were not
accompanied by corresponding splits of the Ordinary Shares because the timing
of such splits would not have been possible if they had to await shareholder
approval of a corresponding Ordinary Share split. Accordingly, each ADS now
represents one-fourth of one Ordinary Share. The Board of Directors believes
that the current 1 to 1/4 relationship is unnecessary and potentially
confusing to investors, and therefore has proposed the Ordinary Share Split as
a means to have each ADS represent one Ordinary Share, as was previously the
case.
VOTE REQUIRED
The affirmative vote of the holders of not less than seventy-five percent
(75%) of the Ordinary Shares represented and voting at the Annual General
Meeting is required to approve the Ordinary Share Split. Unless otherwise
instructed, the proxies will vote "FOR" the Ordinary Share Split.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL FIVE.
9
<PAGE>
INFORMATION REGARDING DIRECTORS
The following table sets forth certain information as of the Record Date for
the current directors of the Company, including the nominees to be re-elected
at the Annual General Meeting:
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY
---- --- --------------------------
<S> <C> <C>
William G. McCabe................ 41 Chairman of the Board
James J. Buckley................. 47 Chief Executive Officer, President and Director
John P. Hayes.................... 44 Group Financial Controller and Director
Gregory M. Priest................ 34 Director
Patrick J. McDonagh.............. 46 Director
John M. Grillos.................. 56 Director
</TABLE>
William G. McCabe has been Chairman of the Board of the Company since
September 1991. From September 1991 to December 1996, Mr. McCabe also served
as Chief Executive Officer of the Company.
James J. Buckley has been President and Chief Operating Officer of the
Company since September 1996. In October 1996, Mr. Buckley was elected to
serve as a director of the Company, and in December 1996 he was elected Chief
Executive Officer of the Company. Prior to joining the Company, Mr. Buckley
served as President, Apple Americas and Senior Vice President of Apple
Computer, Inc. from November 1995 to April 1996; President, Apple USA from
October 1993 to November 1995 and Vice President and General Manager for Apple
USA's Higher Education Division from April 1992 to October 1993. Mr. Buckley
also served in various sales, marketing and managerial positions at Apple
Computer during his tenure there.
John P. Hayes has been Group Financial Controller and a director of the
Company since 1991. From 1987 to 1991, Mr. Hayes served as Financial
Controller of the Company.
Gregory M. Priest has been a director of the Company since June 1996. Since
February 1998, Mr. Priest has been President and Chief Executive Officer of
Knowledge Well, Limited, ("Knowledge Well"), a developer and marketer of
interactive education software for business and professional areas other than
information technology . From December 1995 to January 1998, Mr. Priest served
as Vice President, Finance, Chief Financial Officer and Assistant Secretary of
the Company. Prior to joining the Company, Mr. Priest was an attorney with
Wilson Sonsini Goodrich & Rosati, Professional Corporation, a private law firm
representing technology companies, where he was elected to the partnership in
1995. From June 1989 to July 1990, Mr. Priest served as a law clerk to Justice
Thurgood Marshall of the United States Supreme Court.
Patrick J. McDonagh was a founding member of the Company and has been a
director of the Company since September 1989. He has not taken an active role
in the Company's management since 1991 and is currently a private investor.
John M. Grillos has been a director of the Company since February 1994. Mr.
Grillos is a Partner of ITech Partners, L.P., a venture capital partnership
focused on very early stage information technology companies. Mr. Grillos has
been employed by BancAmerica Robertson Stephens, an investment banking firm,
in its venture capital group, since 1988.
There are no family relationships among any of the directors or executive
officers of the Company.
BOARD MEETINGS AND COMMITTEES
The Board, which has an Audit Committee, Compensation Committee, Stock
Option Committee and Non-Officer Stock Option Committee, held a total of four
meetings during the Last Fiscal Year. No incumbent director attended fewer
than seventy-five percent (75%) of the meetings of the Board of Directors and
committees thereof on which such director served during the Last Fiscal Year.
10
<PAGE>
The Audit Committee currently consists of Messrs. McDonagh and Grillos.
During the Last Fiscal Year, the Audit Committee held two meetings. The Audit
Committee oversees actions taken by the Company's independent auditors, and
recommends the engagement of auditors.
The Stock Option Committee currently consists of Messrs. McDonagh and
Grillos. During the Last Fiscal Year, the Stock Option Committee did not hold
any formal meetings but took several actions by unanimous written consent. The
Stock Option Committee administers the Company's employee share option plans,
grants share options to officers of the Company and grants share options to
non-officers of the Company in excess of 10,000 shares per grant. See "Board
Compensation Committee and Stock Option Committee Report on Executive
Compensation" in this Proxy Statement.
In January 1996, the Board established the Non-Officer Stock Option
Committee which consists of Messrs. McCabe and Hayes. During the Last Fiscal
Year, the Non-Officer Stock Option Committee did not hold any formal meetings
but took several actions by unanimous written consent. The Non-Officer Stock
Option Committee grants share options which are less than 10,000 shares per
grant to non-officers of the Company.
The Compensation Committee currently consists of Messrs. McCabe, Grillos and
McDonagh. During the Last Fiscal Year, the Compensation Committee did not hold
any formal meetings but took several actions by unanimous written consent. The
Compensation Committee reviews and approves the compensation of executives of
the Company and makes recommendations to the Board with respect to standards
for setting compensation levels. See "Board Compensation Committee and Stock
Option Committee Report on Executive Compensation" in this Proxy Statement.
The Board does not have a Nominating Committee or any committee performing
similar functions.
COMPENSATION OF DIRECTORS
No director receives any cash compensation for his services as a member of
the Board, although each director is reimbursed for his expenses in attending
Board and related committee meetings. Directors who serve on committees of the
Board receive no additional compensation.
11
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's equivalent ADSs as of February 19, 1998 by (a) each
director and nominee for director, (b) each Named Executive Officer (as
defined below in "EXECUTIVE COMPENSATION AND OTHER MATTERS--Summary
Compensation Table"); (c) each person who is known by the Company to be the
beneficial owner of more than five percent (5%) of the Company's ADSs; and (d)
all current directors and executive officers as a group. The number and
percentage of ADSs beneficially owned is determined under the rules of the
SEC, and the information is not necessarily indicative of beneficial ownership
for any other purpose. Under such rules, beneficial ownership includes any
equivalent ADSs as to which the individual has sole or shared voting power or
investment power and also any equivalent ADSs that the individual has the
right to acquire within sixty (60) days of the Record Date through the
exercise of share options or other rights. Unless otherwise indicated, each
person has sole voting and investment power (or shares such powers with his
spouse) with respect to the shares shown as beneficially owned.
<TABLE>
<CAPTION>
APPROXIMATE
EQUIVALENT ADSS PERCENTAGE
NAME OF PERSON OR IDENTITY OF GROUP BENEFICIALLY OWNED (1) OWNED
----------------------------------- ---------------------- -----------
<S> <C> <C>
Putnam Investments, Inc. (2)................ 4,578,160 11.3%
One Post Office Square
Boston, MA 02109
Jeffrey N. Newton (3)....................... 272,506 *
James J. Buckley (4)........................ 216,240 *
William G. McCabe (5)....................... 179,996 *
William B. Lewis (6)........................ 52,896 *
Gregory M. Priest (7)....................... 43,356 *
John P. Hayes (8)........................... 8,314 *
John M. Grillos (9)......................... 5,000 *
Patrick J. McDonagh......................... -- --
All current directors and executive officers
as a group (13 persons) (10)............... 805,602 2.0
</TABLE>
- --------
* Less than 1%.
(1) Based on 40,389,488 equivalent ADSs of the Company issued and outstanding
as of February 19, 1998 (after giving effect to the two-for-one split of
the ADSs effective March 9, 1998).
(2) All of such shares are represented by ADSs. Based on information
contained in the Schedule 13G/A filed with the SEC for the fiscal year
ended December 31, 1997 by Putnam Investment Management, Inc. ("PIM") and
Putnam Advisory Company, Inc. ("PAC"), investment managers (together with
their parent corporations, Putnam Investments, Inc. ("PI") and Marsh &
McLennan Companies, Inc. ("MMC")). MMC does not have any voting or
dispositive power with respect to the ADSs. PI and PIM do not have any
voting power with respect to the ADSs and each has shared dispositive
power with respect to the ADSs. PAC does not have any voting or
dispositive with respect to the ADSs. The ADSs were acquired for
investment purposes by such investment managers for certain of their
advisory clients.
(3) Includes 34,170 equivalent ADSs issuable upon the exercise of share
options held by Mr. Newton, which options are exercisable within sixty
(60) days of March 20, 1998.
(4) Includes 214,372 equivalent ADSs issuable upon the exercise of share
options held by Mr. Buckley, which options are exercisable within sixty
(60) days of March 20, 1998.
(5) Includes 154,996 equivalent ADSs issuable upon the exercise of share
options held by Mr. McCabe, which options are exercisable within sixty
(60) days of March 20, 1998.
(6) Includes 47,382 equivalent ADSs issuable upon the exercise of share
options held by Mr. Lewis, which options are exercisable within sixty
(60) days of March 20, 1998.
(7) Includes 43,332 equivalent ADSs issuable upon the exercise of share
options held by Mr. Priest, which options are exercisable within sixty
(60) days of March 20, 1998.
(8) Includes 8,314 equivalent ADSs issuable upon the exercise of share
options held by Mr. Hayes, which options are exercisable within sixty
(60) days of March 20, 1998.
(9) Includes 5,000 equivalent ADSs issuable upon the exercise of share
options held by Mr. Grillos, which options are exercisable within sixty
(60) days of March 20, 1998.
(10) Includes 534,860 equivalent ADSs issuable upon the exercise of options
held by current officers and directors of the Company as a group, which
options are exercisable within sixty (60) days of March 20, 1998.
12
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
EXECUTIVE OFFICERS
In addition to Messrs. McCabe, Buckley and Hayes, the executive officers of
the Company, and their respective ages and positions as of the Record Date,
are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Richard Y. Okumoto.......... 45 Vice President, Finance and Chief Financial
Officer
William B. Lewis............ 42 Vice President, North American Sales
Jeffrey N. Newton........... 43 Vice President, Business Development
Gregory G. Olson............ 44 Vice President, Marketing
Barry D. Stockwell.......... 49 Vice President, Strategic Partners
William A. Beamish.......... 43 Vice President, Product Strategy and Development
Elizabeth K. Roemer......... 45 Vice President and General Counsel
</TABLE>
Richard Y. Okumoto has been Vice President, Finance and Chief Financial
Officer of the Company since February 1, 1998. From February 1993 to January
1998, Mr. Okumoto served as Executive Vice President and Chief Financial
Officer for Credence Systems Corporation.
William B. Lewis has been Vice President, North American Sales of the
Company since March 1997. From January 1996 until March 1997, Mr. Lewis served
as the Company's Area Vice President of Sales for the southern region and
served as Regional Vice President of Sales for the southern region from
January 1994 to January 1996. Mr. Lewis joined the Company as a sales manager
for the southern region in April 1992 and served in that capacity until
January 1994.
Jeffrey N. Newton has been Vice President, Business Development of the
Company since March 1997. From January 1996 until March 1997, Mr. Newton
served as the Company's Area Vice President of Sales for the northern region
and served as Regional Vice President of Sales for the northern region from
January 1994 to January 1996. Mr. Newton joined the Company as a sales manager
for the northern region in April 1992 and served in that capacity until
January 1994.
Gregory G. Olson has been Vice President, Marketing of the Company since
December 1996. Prior to joining the Company, Mr. Olson served as Manager,
Direct Marketing and Advertising for Apple Computer, Inc.'s America's Division
from December 1995 to December 1996. Mr. Olson also served as Manager, Direct
Marketing and Advertising for Apple Computer, Inc. in the United States from
June 1994 to December 1995 and held various marketing and advertising
managerial positions with Apple Computer, Inc. from July 1989 to June 1994.
Barry D. Stockwell has been Vice President, Strategic Partners of the
Company since November 1997. From June 1993 to October 1997, Mr. Stockwell
held various positions with Silicon Graphics, Inc., including Director of OEM
Marketing and Director of Strategic Partner Management. From October 1991 to
June 1993, Mr. Stockwell was Manager of Strategic Business Development for
NEXT Software, Inc.
William A. Beamish has been Vice President, Product Strategy and Development
of the Company since 1993. Mr. Beamish joined CBT Systems Ltd. ("CBT Ireland")
in 1985 as a design consultant. He became head of product development in 1988
and Development Center Manager in 1990.
Elizabeth K. Roemer has been Vice President and General Counsel of the
Company since January 1998. From 1983 until January 1998, Ms. Roemer held
various legal positions with Pacific Telesis Group, including Senior Counsel
and Assistant Secretary.
Executive officers of the Company are elected by the Board on an annual
basis and serve until their successors have been duly elected. There are no
family relationships among the executive officers of the Company.
13
<PAGE>
IMPORTANT NOTE ABOUT SHARE NUMBERS AND DOLLAR VALUES
Effective May 15, 1996 and March 9, 1998, the Company effected two-for-one
splits of its ADSs, such that each ADS is now represented by one-fourth of one
Ordinary Share. The figures in this section give effect to such ADS splits
unless otherwise noted, but do not give effect to the Ordinary Share Split,
which is to be proposed for shareholder approval at the Annual General
Meeting. All references to "dollars" or "$" are to U.S. dollars unless
otherwise noted.
SUMMARY COMPENSATION TABLE
The following table discloses, for the Last Fiscal Year, compensation earned
by each individual serving as the Company's Chief Executive Officer and each
of the four other most highly compensated executive officers for the Last
Fiscal Year (collectively, the "Named Executive Officers") and compensation
earned by the Named Executive Officers for the fiscal years ended December 31,
1996 and 1995:
ANNUAL COMPENSATION AND LONG-TERM COMPENSATION
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ------------
OPTIONS TO
NAME AND PRINCIPAL OTHER ANNUAL PURCHASE ADS ALL OTHER
POSITION YEAR SALARY(1) BONUS COMPENSATION(2) EQUIVALENTS COMPENSATION(3)
------------------ ---- --------- ------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
James J. Buckley(4)...... 1997 $385,000 $ -- $ -- -- $ --
President, Chief
Executive 1996 125,618 50,000 -- 970,000 --
Officer and Director
William B. Lewis(5)...... 1997 215,000 75,000 139,047 70,000 --
Vice President, North 1996 72,000 118,000 -- 72,000 --
American Sales
Jeffrey N. Newton(6)..... 1997 223,000 57,000 86,086 70,000 --
Vice President, 1996 72,000 116,000 -- 80,000 --
Business Development
Gregory M. Priest(7)..... 1997 180,000 177,200 -- 90,000 --
Vice President, Finance, 1996 125,000 89,250 -- 10,000 --
Chief Financial Officer 1995 5,208 -- -- 320,000 --
and Director
William G. McCabe(8)..... 1997 250,000 -- -- -- 30,362
Chairman of the Board 1996 120,000 380,000 -- 200,000 31,800
1995 120,000 410,000 -- 250,000 32,080
</TABLE>
- --------
(1) Salary includes amount deferred pursuant to the Company's 401(k) plan.
(2) Includes $139,047 and $86,086 paid in 1997 to Messrs. Lewis and Newton,
respectively, for relocation expenses.
(3) Includes $32,080 paid to Mr. McCabe in 1995, $31,800 paid to Mr. McCabe in
1996 and $30,362 paid to Mr. McCabe in 1997 pursuant to a defined
contribution pension scheme.
(4) Mr. Buckley joined the Company in September 1996 as President and Chief
Operating Officer. In December 1996, Mr. Buckley became the Chief
Executive Officer of the Company. Consequently, Mr. Buckley's 1996
compensation information is from September 1996 through December 1996.
(5) Mr. Lewis became Area Vice President of Sales for the southern region in
January 1996 and Vice President, North American Sales in March 1997.
(6) Mr. Newton became Area Vice President of Sales for the northern region in
January 1996 and Vice President, Business Development in March 1997.
(7) Mr. Priest was elected an executive officer of the Company in December
1995, and resigned as an executive officer of the Company effective
January 31, 1998.
(8) Mr. McCabe was the Chairman of the Board, Chief Executive Officer and
President until September 1996, when he resigned as President. Mr. McCabe
is compensated for his management services pursuant to a consulting
agreement (the "Consulting Agreement") with a third-party consulting firm.
Amounts are paid by CBT Systems Limited to the consulting firm, which
separately compensates its employees, including Mr. McCabe. The Company
has not reviewed any agreement between the consulting firm and its
employees with respect to compensation amounts. See "Certain Relationships
and Related Transactions."
14
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information with respect to options granted
during the Last Fiscal Year to the Named Executive Officers:
<TABLE>
<CAPTION>
PERCENT OF
TOTAL POTENTIAL REALIZABLE
OPTIONS VALUE AT ASSUMED
NUMBER OF GRANTED TO ANNUAL RATES OF STOCK
EQUIVALENT ADSS EMPLOYEES EXERCISE PRICE APPRECIATION
OVER WHICH IN LAST PRICE PER FOR OPTION TERM (1)
OPTIONS WERE FISCAL EQUIVALENT EXPIRATION ---------------------
NAME GRANTED (2)(3) YEAR ADS (4) DATE 5% 10%
----------------------- --------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
James J. Buckley........ -- -- $ -- -- -- --
William B. Lewis........ 70,000 4.7% $20.25 3/18/07 891,458 2,259,130
Jeffrey N. Newton....... 70,000 4.7% $20.25 3/18/07 891,458 2,259,130
Gregory M. Priest....... 90,000 6.1% $20.25 3/18/07 1,146,160 2,904,595
William G. McCabe....... -- -- $ -- -- -- --
</TABLE>
- --------
(1) Potential realizable value assumes that the share price (based on the fair
market value of the ADSs) increases from the date of grant until the end
of the option term (10 years) at the annual rate specified (5% and 10%).
If the price of the ADSs were to increase at such rates from the price at
December 31, 1997, the last trading day of the Last Fiscal Year ($41.06
per ADS) over the next ten years, the resulting ADS price at 5% and 10%
appreciation would be approximately $67 and $107, respectively. The
assumed annual rates of appreciation are specified in Commission rules and
do not represent the Company's estimate or projection of future share
price. The Company does not necessarily agree that this method can
properly determine the value of an option.
(2) All options in this table were granted under the 1994 Plan or 1990 Share
Option Scheme (the "1990 Plan"). The options expire ten years from the
date of grant, subject to earlier termination in the event of the
optionee's cessation of service with the Company. The 1994 Plan and the
1990 Plan are currently administered by the Stock Option Committee of the
Board, which has broad discretion and authority to amend outstanding
options and to reprice options, whether through an exchange of options or
an amendment thereto.
(3) Unless otherwise indicated, options generally vest over four years such
that 1/4th of the equivalent ADSs subject to the option vest on each of
the first and second anniversary of the respective date of grant and
1/48th vest each month thereafter.
(4) Options were granted at an exercise price equal to the fair market value
of the Company's ADSs, as determined by reference to the closing price of
the ADSs as reported on the Nasdaq National Market on the last trading day
prior to the date of grant.
15
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table provides information with respect to option exercises in
the Last Fiscal Year by the Named Executive Officers and the value of such
officers' unexercised options at December 31, 1997:
<TABLE>
<CAPTION>
NUMBER OF EQUIVALENT ADSS
SUBJECT TO UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS AT
EQUIVALENT END FISCAL YEAR END (3)
ADSS ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE (1) REALIZED (2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James J. Buckley........ 140,000 $ 2,234,856 101,770 313,230 $ 4,363,397 $13,431,302
William B. Lewis........ 272,716 $ 6,755,555 6,332 95,820 $ 442,769 $ 5,486,329
Jeffrey N. Newton....... 253,108 $ 6,036,687 6,664 103,738 $ 434,087 $ 5,559,365
Gregory M. Priest....... 84,876 $ 1,711,995 3,546 124,586 $ 208,839 $ 6,580,523
William G. McCabe....... 1,145,000 $36,276,113 277,498 0 $17,645,926 0
</TABLE>
- --------
(1) Employees of the Company, including the Named Executive Officers, have a
choice of acquiring either Ordinary Shares or ADSs representing such
Ordinary Shares upon exercise of options.
(2) Market value of underlying shares based on the closing price of the ADSs
on the Nasdaq National Market on the date of exercise, minus the exercise
price.
(3) Market value of shares underlying in-the-money share options based on the
closing price of $41.06 per ADS on the Nasdaq National Market on December
31, 1997 (the last trading day of the Last Fiscal Year), minus the
exercise price.
EMPLOYMENT CONTRACTS AND ARRANGEMENTS
On July 24, 1996, the Company entered into an agreement with James J.
Buckley pursuant to which Mr. Buckley became the President and Chief Operating
Officer of the Company, effective as of September 1, 1996. In accordance with
the terms of Mr. Buckley's agreement, Mr. Buckley receives an annual base
salary of $385,000 and a targeted bonus of approximately $150,000, subject to
the achievement of certain performance objectives. In addition, Mr. Buckley
received an option to purchase an aggregate of 970,000 equivalent ADSs at an
exercise price equal to the fair market value of the ADSs on such date. The
ADSs subject to the option vest over four years, with the initial 25% vesting
after one year and remainder on a monthly basis thereafter.
On January 2, 1996, the Company entered into an Employment Agreement with
Gregory M. Priest, pursuant to which Mr. Priest became Vice President, Finance
and Chief Financial Officer of the Company and also agreed that Mr. Priest
would be nominated to serve as a director of the Company. Under the terms of
the agreement, Mr. Priest received during the Last Fiscal Year an annual
minimum base salary of $180,000. Mr. Priest also received a bonus of $177,200
in the Last Fiscal Year, based upon the satisfaction of certain performance
goals for the Company. Mr. Priest resigned his position as an executive
officer of the Company effective January 31, 1998.
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During the Last Fiscal Year, the Compensation Committee of the Board
consisted of Messrs. McCabe, McDonagh and Grillos, and the Stock Option
Committee consisted of Messrs. McDonagh and Grillos. Messrs. McDonagh and
Grillos, who have served as members of each of the Compensation Committee and
the Stock Option Committee since they were established in February 1995, were
not executive officers or employees of the Company during the Last Fiscal
Year.
16
<PAGE>
Mr. McCabe has served on the Compensation Committee since February 1995 and
is the Chairman of the Board of the Company. Mr. McCabe also served as the
Chief Executive Officer of the Company through December 1996 and President of
the Company through September 1996.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Approximately 9% of the CBT (Technology) Limited ("CBT T") outstanding share
capital, representing a special non-voting class, is owned by Stargazer
Productions ("Stargazer"), an unlimited company which is wholly owned by
certain officers and key employees of the Company. CBT T has in the past and
may in the future declare and pay dividends to Stargazer, and Stargazer may
pay dividends to its shareholders out of such amounts. Any such dividends
would be treated as compensation expense by the Company and would be included
in the Company's operating expenses under U.S. generally accepted accounting
principles.
In February 1996, Gregory M. Priest, Vice President, Finance and Chief
Financial Officer and a director of the Company, received an interest-free
loan from the Company in the amount of $125,000 with principal payable in four
annual installments, commencing in February 1997. As of the date hereof,
$62,500 remains outstanding under the loan. The largest amount outstanding
under the loan during the Fiscal Year was $125,000.
The Company and Mr. Priest entered into a Consulting Agreement effective
February 1, 1998, pursuant to which Mr. Priest has agreed to provide certain
consulting services to the Company, initially including the transition to Mr.
Priest's successor as Chief Financial Officer. Mr. Priest resigned his
position as Chief Financial Officer effective January 31, 1998. Pursuant to
the Consulting Agreement, Mr. Priest is paid on an hourly basis in accordance
with a schedule of hourly rates, and previously granted stock options continue
to vest. Mr. Priest's agreement contains customary provisions regarding
confidentiality and assignment of intellectual property. Mr. Priest continues
to serve as a director of the Company.
CBT Systems Limited ("CBT Ireland") has entered into a consulting agreement
(the "Consulting Agreement") with a third-party consulting firm pursuant to
which the consulting firm provides certain management services to CBT Ireland,
including those of Messrs. McCabe, Beamish and Hayes. Messrs. McCabe, Beamish
and Hayes were employees of the consulting firm during 1997. Amounts paid by
CBT Ireland under the Consulting Agreement are paid to the consulting firm and
Messrs. McCabe, Beamish and Hayes are separately compensated by the consulting
firm. During 1997, CBT Ireland accrued amounts in the aggregate of $1.4
million due to the consulting firm.
The Company and Knowledge Well entered into a Software License Agreement
(the "License Agreement") in October 1997, pursuant to which the Company
granted KnowledgeWell a non-exclusive license to use certain of its technology
in the development of interactive education software. The License Agreement
explicitly forbids any use by Knowledge Well of CBT's technology within CBT's
information technology market area. In exchange, Knowledge Well has agreed to
maintain functional compatibility of Knowledge Well's products with CBT's
products. Knowledge Well is also required to pay the Company an annual
licensing fee. The License Agreement also contains customary provisions
involving the provision of product updates and the protection of confidential
information. Messrs. McCabe and Priest are Chairman of the Board, and
President, Chief Executive Officer, and director, respectively, of Knowledge
Well and Chairman of the Board and director, respectively, of the Company. The
License Agreement was unanimously approved by the disinterested directors of
the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers (as
defined in the rules under Section 16) and directors, and persons who own more
than ten percent of a registered class of the Company's equity securities, to
file certain reports with the SEC and the NASD regarding ownership of, and
transactions in, the Company's securities. Such officers, directors and ten
percent holders are also required by the SEC's rules to furnish to the Company
copies of all Section 16(a) forms that they file.
17
<PAGE>
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that its executive officers, directors and ten percent holders complied with
all applicable Section 16(a) filing requirements during the Company's Last
Fiscal Year.
BOARD COMPENSATION COMMITTEE AND STOCK OPTION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Portions of the following report are presented by each of the Company's
Compensation Committee (the "Compensation Committee") and Stock Option
Committee (the "Stock Option Committee") of the Board of Directors with
respect to the compensation of the Company's executive management.
Actual compensation earned during the Last Fiscal Year for the Named
Executive Officers is shown in the Summary Compensation Table contained in
this Proxy Statement.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee reviews and approves the compensation of
executives of the Company and makes recommendations to the Board with respect
to standards for setting compensation levels.
Compensation Philosophy. At the direction of the Board and pursuant to the
charter of the Compensation Committee, the Compensation Committee endeavors to
ensure that the compensation programs for executive officers of the Company
and its subsidiaries are effective in attracting and retaining key executives
responsible for the success of the Company. These programs are administered in
a manner that seeks to meet the long-term interests of the Company and its
shareholders and are designed to align total compensation for senior
management with corporate performance.
The Compensation Committee believes that the Company's overall financial
performance should be an important factor in the total compensation of the
Company's executive officers. At the executive officer level, the Compensation
Committee has a policy that a significant proportion of total compensation
should consist of variable, performance-based components, such as bonuses and
share option grants, which can increase or decrease to reflect changes in
corporate and individual performance. These incentive compensation programs
are intended to reinforce management's commitment to enhancement of
profitability and shareholder value.
The Compensation Committee takes into account various qualitative and
quantitative indicators of corporate and individual performance in determining
the level and composition of compensation for the chief executive officer and
other executive officers. The Compensation Committee considers such corporate
performance measures as revenues, net income and earnings per share in setting
executive compensation levels. The specific factors used, and the weights
given to various factors, varies between each executive based on his or her
responsibilities. The Compensation Committee also appreciates the importance
of achievements that may be difficult to quantify, and accordingly recognizes
qualitative factors, such as successful supervision of major corporate
projects and demonstrated leadership ability.
Base salary for the chief executive officer and other executive officers are
established at levels considered appropriate in light of the duties and scope
of responsibilities of each officer's position. Salaries are reviewed
periodically and adjusted as warranted to reflect sustained individual officer
performance. The Compensation Committee focuses primarily on total annual
compensation, including incentive awards, rather than base salary alone, as
the appropriate measure of executive officer performance and contribution.
Chief Executive Officer Compensation. Generally, the criteria used in
determining the compensation of the Company's Chief Executive Officer is the
same as that which is used for executive management. In 1997, Mr. Buckley
received a salary of $385,000. This has not changed from the level established
in the fiscal year ended December 31, 1996.
18
<PAGE>
The Compensation Committee also approved the compensation of the Company's
other executive officers for 1997, following the principles and procedures
outlined in this report.
Section 162(m). To the extent readily determinable and as one of the factors
in its consideration of compensation matters, the Compensation Committee
considers the anticipated tax treatment to the Company and to the executives
of various payments and benefits. Section 162(m) of the Code generally limits
the federal income tax deductibility of compensation paid to certain executive
officers. For this purpose, compensation can include, in addition to cash
compensation, the difference between the exercise price of stock options and
the value of the underlying stock on the date of exercise. Under this
legislation, the Company may deduct compensation with respect to any of these
individuals only to the extent that during any fiscal year such compensation
does not exceed $1 million or meets certain other conditions (such as
stockholder approval). Further, interpretations of and changes in the tax laws
and other factors beyond the Compensation Committee's control also affect the
deductibility of compensation. For these and other reasons, the Compensation
Committee will not necessarily limit executive compensation to that deductible
under Section 162(m). The Compensation Committee will consider various
alternatives to preserving the deductibility of compensation payments and
benefits to the extent reasonably practicable and to the extent consistent
with its other compensation objectives.
REPORT OF THE STOCK OPTION COMMITTEE
The Stock Option Committee oversees provision of long-term incentives for
executives and other key employees through share option grants under the 1990
Plan, 1994 Plan and 1996 Plan. Grants under the 1990 Plan or 1994 Plan are
made to executives at the time they join the Company and are made periodically
to executive management for individual performance. Grants under the 1996 Plan
are made to employees and consultants at the time they join the Company and
are made periodically for individual performance. Grants are not made to
executive officers or directors under the Company's 1996 Plan. The purpose of
share option grants is to provide incentives to perform at a level which will
enhance the overall financial performance of the Company's business and
maximize long-term shareholder value and to reward prior performance.
For grants to executives, the Stock Option Committee is responsible for
determining, subject to the terms and conditions of the plans, the timing of
such grants, the exercise price per share, the vesting provisions and the
number of shares subject to each option grant. The Stock Option Committee
primarily grants share options to executive officers under the 1994 Plan.
In 1997, based upon recommendations from executive management, the Stock
Option Committee granted share options to certain executive officers of the
Company under the Company's share option plans. In approving grants under the
1990 Plan, 1994 Plan and 1996 Plan, including grants to non-executive officers
of the Company, the Stock Option Committee considers quantitative and
qualitative factors.
In addition to the 1990 Plan, 1994 Plan and 1996 Plan, executives are
eligible to participate in the Company's 1995 Employee Share Purchase Plan
which permits the purchase of shares at a discount through payroll deductions.
Share Option Grants to the Chief Executive Officer. Mr. Buckley did not
receive any options in connection with his services as the Company's Chief
Executive Officer in 1997.
Respectfully Submitted by:
<TABLE>
<S> <C>
The Members of the Compensation
Committee The Members of the Stock Option Committee
William G. McCabe John M. Grillos
John M. Grillos Patrick J. McDonagh
Patrick J. McDonagh
</TABLE>
19
<PAGE>
PERFORMANCE GRAPH
The ADSs are quoted on the Nasdaq National Market. Set forth below is a
graph comparing the value of an investment of $100 in (i) the ADSs at the
initial public offering price on April 13, 1995 of $4.00 per ADS (as adjusted
for the two ADS splits in May 1996 and March 1998); (ii) the Nasdaq National
Market; and (iii) the Hambrecht & Quist Technology Index, as if all such
investments were made on April 13, 1995 and assuming dividend reinvestment
through December 31, 1997.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG CBTSY,
H&Q TECHNOLOGY INDEX AND NASDAQ NATIONAL MARKET
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
H&Q NASDAQ
MEASUREMENT PERIOD TECHNOLOGY NATIONAL
(FISCAL YEAR COVERED) CBTSY INDEX MARKET - US
--------------------- ------- ---------- ------------
<S> <C> <C> <C>
Measurement Pt- 04/13/95....................... $100 $100 $100
FYE 12/29/95................................... $165.63 $130.43 $126.36
FYE 12/31/96................................... $339.06 $156.31 $155.05
FYE 12/31/97................................... $513.28 $208.49 $188.60
</TABLE>
20
<PAGE>
OTHER MATTERS
The Report of the Directors and the Consolidated Financial Statements of the
Company and Auditors' Report to the Members for the Last Fiscal Year were
approved by the Board on , 1998. Irish law requires the Company
to provide its Members for receipt and consideration such Report of the
Directors and the Consolidated Financial Statements of the Company and
Auditors' Report to the Members for the Last Fiscal Year at the Annual General
Meeting of Shareholders. In this regard, included as part of the proxy
materials dispatched to Members is a copy of the Report of the Directors and
the Consolidated Financial Statements of the Company and Auditors' Report to
the Members for the Last Fiscal Year.
Representatives of Ernst & Young, Chartered Accountants, are expected to be
present at the Annual General Meeting with the opportunity to make a statement
if they desire to do so and are expected to be available to respond to
appropriate questions.
The Company knows of no other matters to be submitted at the Annual General
Meeting. If any other matters properly come before the Meeting, it is the
intention of the persons named in the enclosed form of proxy to vote the
shares they represent as the Board may recommend.
By Order of the Board of Directors
Dated: , 1998
21
<PAGE>
APPENDIX A
PROPOSED AMENDMENTS TO THE COMPANY'S MEMORANDUM AND ARTICLES OF ASSOCIATION
Approval of the Ordinary Share Split will necessitate:
1. Amending paragraph 5 of the Company's Memorandum of Association to read in
its entirety as follows:
5. The share capital of the Company is IR(Pounds)11,250,000 divided into
120,000,000 ordinary shares of 9.375p each. The share
capital of the Company whether the original or any increased capital of
the Company may be divided into different classes of shares with any
special, qualified, preferred, deferred or other rights or privileges or
conditions as to capital, dividends, rights of voting or other matters
attached thereto, and from time to time the Company's regulations may be
varied so far as may be necessary to give effect to any such rights,
privileges or conditions.
2. Amending the definition of "the Ordinary Shares" in paragraph 1(b) of the
Company's Articles of Association to read:
"the Ordinary Shares" ordinary shares of 9.375p each in the
capital of the Company
3. Amending paragraph 2 of the Company's Articles of Association to read in its
entirety as follows:
2. Share Capital
The share capital of the Company is IR(Pounds)11,250,000 divided into
120,000,000 Ordinary Shares.
<PAGE>
CBT GROUP PUBLIC LIMITED COMPANY
THIS PROXY FOR THE ANNUAL GENERAL MEETING IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned Member of CBT Group PLC, a public limited company organized
under the laws of the Republic of Ireland (the "Company"), hereby acknowledges
receipt of the Notice of Annual General Meeting of Shareholders and Proxy
Statement, each dated ______, 1998, and hereby appoints James J. Buckley,
William G. McCabe and Jennifer M. Caldwell, and each of them, proxies and
attorneys-in-fact, each with full power of substitution, or _________________ of
____________________ as proxy and attorney in fact (see Note 2 below), on behalf
and in the name of the undersigned, to represent the undersigned at the
Company's Annual General Meeting to be held at ________ on __________, ________,
1998 at The Shelbourne Hotel, St. Stephens Green, Dublin 2, Ireland, and at any
adjournments thereof, and to vote all shares which the undersigned would be
entitled to vote if then and there personally present, on all matters set forth
on the reverse side hereof and in their discretion upon such other matters as
may properly come before the Annual General Meeting.
NOTES:
1. A proxy may (i) vote on a show of hands or on a poll, (ii) demand or join in
demanding a poll and (iii) speak at the Annual General Meeting.
2. If it is desired to appoint as proxy any person other than those set forth
above, please delete the names set forth above and insert the name and
address of your own proxy in the space provided. The alteration should be
initialled. A proxy need not be a shareholder of the Company.
3. In the case of a corporation, this form must be executed either under its
Common Seal or under the hand of an officer or attorney duly authorized.
4. In the case of joint holders, the signature of any one of them will suffice,
but the names of all joint holders should be shown. The vote of the senior
joint holder 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 shall be determined by the order in which the names
stand in the Register of Members in respect of the joint holding.
5. To be effective, the proxy form and the power of attorney or other authority,
if any, under which it is signed, or a notarially certified copy of such
power or authority must be deposited with the Company's Registrars, AIB Bank,
Registrars' & New Issue Department, Bankcentre, P.O. Box 954, Ballsbridge,
Dublin 4, Ireland not less than 48 hours before the time appointed for the
holding of the Annual General Meeting or adjourned Annual General Meeting.
6. Any alterations made to this proxy form should be initialled.
7. On a poll a person entitled to more than one vote need not use all his or her
votes or cast all the votes he or she uses in the same way.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY
IN THE ENVELOPE PROVIDED.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED,
WILL BE VOTED "FOR" EACH OF THE PROPOSALS SET FORTH BELOW AND AS SAID PROXIES
DEEM APPROPRIATE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL
<PAGE>
GENERAL MEETING, INCLUDING, AMONG OTHER THINGS, CONSIDERATION FOR ANY MOTION
MADE FOR ADJOURNMENT OF THE ANNUAL GENERAL MEETING (INCLUDING, WITHOUT
LIMITATION, FOR PURPOSES OF SOLICITING ADDITIONAL VOTES FOR APPROVAL OF THE
PROPOSALS SET FORTH BELOW).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING PROPOSALS:
<TABLE>
<CAPTION>
ORDINARY BUSINESS
For Against Abstain
--- ------- -------
<S> <C> <C> <C> <C>
1A. Proposal to re-elect John M. Grillos as a director of the Company. [_] [_] [_]
1B. Proposal to re-elect Patrick J. McDonagh as a director of the Company. [_] [_] [_]
2. To consider the Company's consolidated financial statements and the
reports of the directors and auditors for the year ended December 31,
1997. [_] [_] [_]
3. Proposal to authorize the directors of the Company to fix the
remuneration of the Company's auditors for the year ending December 31,
1998. [_] [_] [_]
4. Proposal to amend the Company's 1994 Share Option Plan to increase the
total number of shares reserved for issuance thereunder by 250,000
Ordinary Shares. [_] [_] [_]
</TABLE>
<TABLE>
<CAPTION>
SPECIAL BUSINESS
<S> <C> <C> <C> <C>
5. Proposal to subdivide each of the Company's issued and unissued
Ordinary Shares of IR37.5p into four Ordinary Shares of IR9.375p each
and amend the Memorandum and Articles of Association of the Company
accordingly. [_] [_] [_]
</TABLE>
Mark here if you plan [_] Mark here, and indicate [_]
to attend the Annual below, for a change of
General Meeting. address.
Please sign exactly as name appears below. When shares are held by joint
tenants, the signature of any one of them will suffice, but the names of all
joint holders should be shown. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, this form must be executed either under its Common Seal or under
the hand of an officer or attorney duly authorized. If a partnership, please
sign in partnership name by authorized person.
Date: ____________________, 1998
Signature:_____________________________ Signature:____________________________
_____________________________ ____________________________
(Print Name) (Print Name)
