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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
WARNER CHILCOTT PUBLIC LIMITED COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
WARNER CHILCOTT PUBLIC LIMITED COMPANY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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[WARNER CHILCOTT, INC. LOGO]
WARNER CHILCOTT PUBLIC LIMITED COMPANY
LINCOLN HOUSE
LINCOLN PLACE
DUBLIN 2, IRELAND
JAMES G. ANDRESS
Chairman and Chief Executive Officer
April 17, 2000
Dear Shareholder:
On behalf of the Board of Directors, I cordially invite you to attend the
annual meeting of shareholders on Tuesday, May 16, 2000 at 10:00 A.M. The
meeting will be held at Lincoln House, Lincoln Place, Dublin 2, Ireland.
The matters scheduled to be considered at the meeting are the financial
statements for the year ended December 31, 1999, the election of directors, the
amendment of the option plan and the passage of authorizing resolutions. These
matters are more fully explained in the attached proxy statement, which you are
encouraged to read.
The Board of Directors values and encourages shareholder participation. It
is important that your shares be represented, whether or not you plan to attend
the meeting. Please take a moment to sign, date and return your proxy in the
envelope provided even if you plan to attend.
Sincerely,
JAMES G. ANDRESS
Chairman and Chief Executive Officer
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[WARNER CHILCOTT, INC. LOGO]
WARNER CHILCOTT PUBLIC LIMITED COMPANY
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual General Meeting of shareholders of
Warner Chilcott Public Limited Company (the "Company") will be held at Lincoln
House, Lincoln Place, Dublin 2, Ireland on Tuesday, May 16, 2000, at 10:00 A.M.,
for the following purposes:
AS ORDINARY BUSINESS
1. To receive and consider the Financial Statements for the year ended
December 31, 1999 together with the reports of the directors and auditors
thereon.
2. To re-elect James G. Andress who retires from the board by rotation as a
director of the Company.
3. To re-elect Paul S. Herendeen who retires from the board by rotation as
a director of the Company.
4. To elect Dr. Arthur F. Haney, M.D. as a director of the Company,
replacing Donald E. Panoz who retires from the board.
5. To authorize the directors to fix the remuneration of the auditors.
SPECIAL BUSINESS
6. To consider and act upon a proposal to amend the Company's 1997
Incentive Share Option Scheme, as amended, to increase the number of authorized
shares available for awards thereunder by 1,500,000 shares.
AS AN ORDINARY RESOLUTION
7. To approve an ordinary resolution conferring upon the Board of Directors
the power to allot shares, grant share subscription rights and rights to convert
loans and other obligations into stock. The text of the resolution is as
follows:
"That the directors be and are hereby generally and unconditionally
authorized in substitution for all existing authorities to exercise all
powers of the Company to allot and issue all relevant securities (as
defined by Section 20 of the Companies (Amendment) Act, 1983) up to an
aggregate nominal amount equal to the authorized but unissued share capital
of the Company at the conclusion of this meeting, and the authority hereby
conferred shall expire at the close of business on May 15, 2005) unless
previously renewed, varied or revoked by the Company in general meeting.
Provided however, that the Company may make an offer or agreement before
the expiry of this authority which would or might require any such
securities to be allotted or issued after this authority has expired and
the directors may allot and issue any such securities in pursuance of any
such offer or agreement as if the authority conferred hereby had not
expired."
AS A SPECIAL RESOLUTION
8. To approve a special resolution eliminating pre-emptive rights of
existing shareholders for a five-year period. The text of the resolution is as
follows:
"That, subject to the passing of Resolution 7, in the notice of the
Meeting, the directors be and are hereby empowered pursuant to Section 24
of the Companies (Amendment) Act 1983, to allot equity securities (as
defined in Section 23 of that Act) pursuant to the authority conferred by
the said Resolution 7 as if sub-section (1) of the said Section 23 did not
apply to any such allotment provided that the power conferred by this
Resolution shall expire at the close of business on the earlier of the date
of the next Annual General Meeting of the Company or August 15, 2001,
unless previously renewed, varied or
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revoked, and the Company may before such expiry 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 in pursuance of any
such offer or agreement as if the power conferred hereby had not expired."
9. To transact such other business as may be transacted at an Annual
General Meeting.
By order of the Board of Directors
DAVID G. KELLY
Secretary
Dublin, Ireland
April 17, 2000
NOTES
(a) A shareholder entitled to attend and vote is entitled to appoint a proxy to
attend, speak and vote on his/ her behalf. A proxy need not be a shareholder
of the Company.
(b) Forms of proxy, to be valid, must reach the secretary of the Company at
Lincoln House, Lincoln Place, Dublin 2, Ireland not later than 48 hours
before the time appointed for the holding of the meeting.
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WARNER CHILCOTT PUBLIC LIMITED COMPANY
LINCOLN HOUSE
LINCOLN PLACE
DUBLIN 2, IRELAND
PROXY STATEMENT
ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD
MAY 16, 2000
April 17, 2000
The Board of Directors of Warner Chilcott Public Limited Company (the
"Company") is soliciting your proxy for use at the annual general meeting of
shareholders to be held on May 16, 2000 at 10:00 A.M., at Lincoln House, Lincoln
Place, Dublin 2, Ireland. Solicitation of the proxy may be made through officers
and regular employees of the Company by telephone or by oral communications with
some shareholders. We will not pay any additional compensation to officers and
regular employees for any of these proxy solicitations. Expenses incurred in the
solicitation of proxies will be borne by the Company.
VOTING MATTERS
The representation in person or by proxy of not less than three persons
being holders of not less than one-third of the ordinary shares of the Company,
par value $.05 per share (including those ordinary shares represented by
American Depositary Shares ("ADSs"), is necessary to provide a quorum for the
transaction of business at the meeting. Shares can only be voted if the
shareholder is present in person (which would include a body corporate
represented by a corporate representative) or is represented by a properly
signed proxy. Each shareholder's vote is very important. Whether or not you plan
to attend the meeting in person, please sign and promptly return the enclosed
proxy card, which requires no postage if mailed in the United States. All signed
and returned proxies will be counted towards establishing a quorum for the
meeting, regardless of how the shares are voted.
Shares represented by proxy will be voted in accordance with your
instructions. You may specify your choice by marking the appropriate box on the
proxy card. If your proxy card is signed and returned without specifying
choices, your shares will be voted for the board of director's proposals, and as
the individuals named as proxy holders on the proxy deem advisable on all other
matters as may properly come before the meeting.
For all matters to be voted upon at the meeting, the affirmative vote of a
majority (or, in the case of a special resolution, 75%) of persons present in
person or represented by proxy and voting on the matter (but so that no
individual has more than one vote), or, on request for a poll, the affirmative
vote of a majority of the shares voting on the matter, is necessary for
approval.
Any shareholder giving the enclosed proxy has the power to revoke such
proxy prior to its exercise either by voting at the meeting, by executing a
later-dated proxy or by delivering a signed written notice of the revocation to
the office of the secretary of the Company not less than one hour before the
meeting begins.
On April 6, 2000, the record date with respect to the ADSs, there were
outstanding and entitled to vote at the meeting 12,140,727 ordinary shares,
including ordinary shares represented by the ADSs. Each outstanding ordinary
share is entitled to one vote on a poll. This proxy statement is first being
sent to the shareholders on or about April 17, 2000. A list of the shareholders
entitled to vote at the meeting will be available for inspection at the meeting
for purposes relating to the meeting.
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MATTERS TO BE ACTED UPON
1. FINANCIAL STATEMENTS
The financial statements for the year ended December 31, 1999, together
with the reports of the directors and auditors on the financial statements, will
be presented for consideration by the meeting.
2.-4. ELECTION OF DIRECTORS
Pursuant to the memorandum and articles of association of the Company, the
Board of Directors has determined that the number of directors constituting the
full Board of Directors shall be ten. At each annual meeting, one-third of the
directors, or if their number is not three or a multiple of three, then the
number nearest to one-third, shall retire from office but may be reelected. The
Board of Directors recommends that the shareholders vote FOR each nominee set
forth below. We are soliciting proxies in favor of the nominees named on the
following pages, and we intend to vote your proxies for those three nominees. In
the event that any of the nominees is unable or unwilling to serve as a
director, we intend to vote your proxy for the election of any other person as
shall be designated by the Board of Directors. We do not anticipate that any of
the nominees will be unable or unwilling to serve as a director.
Information Regarding Nominees for Election of Directors
A brief statement of the business experience and positions with the
Company, a listing of other directorships and the ages (as of March 31, 2000) of
each person nominated to become a director of the Company are described on the
following pages. There are no family relationships between any of the directors,
nominees and executive officers of the Company nor any arrangement or
understanding between any director or nominee and any other person pursuant to
which he or she was or is to be selected as a director or nominee.
James G. Andress has served as the Chief Executive Officer and as a
director of the Company since 1996. He became Chairman of the Board in 1998.
From 1989 to 1995 he was President and Co-Chief Executive of Information
Resources, Inc., a publicly traded company, which is the world's largest
provider of scanner-based point of sale movement and promotion data for the
consumer packaged goods industry. From 1988 to 1989 he served as Chairman,
Global Pharmaceuticals of Beecham and Chairman, Health Care Products and
Services of SmithKline Beecham plc. From 1984 to 1988, Mr. Andress was President
and Chief Operating Officer of Sterling Drug, a publicly traded pharmaceutical
and consumer products company. From 1974 to 1984, he held various positions with
Abbott Laboratories, Inc., including President, Abbott Canada, Vice President,
Pacific Far East, Corporate Vice President, Planning & Development and Corporate
Vice President, Abbott Home Health Care Division. Mr. Andress earned his B.S. in
Engineering from the United States Military Academy and his M.B.A. from the
Wharton School of Finance and Commerce. Mr. Andress also serves on the Board of
Directors of Allstate Insurance Company, Information Resources, Inc., Xoma
Corporation, Inc., The Liposome Company, Inc., Sepracor, Inc. and Optioncare,
Inc.
Paul S. Herendeen has served as Executive Vice President and Chief
Financial Officer since 1998. He has served as a Director of the Company since
1996. From 1995 to 1998, Mr. Herendeen served as a Principal of Dominion
Management Corp. Prior to joining Dominion, Mr. Herendeen was an investment
professional with Prudential Equity Investors and held various investment
banking positions with Oppenheimer & Co., Inc. and Continental Bank. Mr.
Herendeen has a B.S. in Management from Boston College and an M.B.A. from the
Darden School at the University of Virginia. Mr. Herendeen has served on the
Board of Directors of several private companies.
Arthur F. Haney is the Roy T. Parker Professor of Obstetrics and Gynecology
at Duke University Medical Center and Director of Duke's Division of
Reproductive Endocrynology and Infertility since 1981. Dr. Haney received a
B.S.E.E. from the University of Pennsylvania and an M.D. from the University of
Arizona College of Medicine.
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5. ELECTION OF AUDITORS
Under Irish law, the firm of KPMG Peat Marwick LLP is automatically
re-elected as the auditors to audit the financial statements of the Company and
its subsidiaries for the fiscal year ending December 31, 2000. In accordance
with usual practice, the directors are seeking authority to determine the
remuneration of our auditors. We intend to vote your proxy for this resolution
unless you specify to the contrary in your proxy or specifically abstain from
voting on this matter.
Representatives of KPMG Peat Marwick LLP will be present at the annual
meeting. They will have the opportunity to make statements if they desire to do
so and will be available to respond to appropriate questions.
6. AMENDMENT OF INCENTIVE SHARE OPTION SCHEME
The Incentive Share Option Scheme of the Company was originally adopted on
April 3, 1997 and has been amended in various respects on February 23, 1998 and
June 3, 1999. The Scheme provides for the granting of options to purchase
ordinary shares of the Company to officers, directors, employees, consultants
and members of the Company's medical advisory board. The Scheme currently
provides that no more than 1,500,000 shares are available for grant. As of March
31, 2000, there were no remaining shares available for grant under the Scheme as
1,486,304 shares have been reserved for issuance pursuant to outstanding options
and 13,696 shares have been issued pursuant to exercised options.
The purpose of the Scheme is to enhance the Company's ability to attract,
retain and provide incentive to present and future executive, directorial,
managerial, marketing, sales and other employees of the Company and its
subsidiaries by affording such grantees the opportunity to acquire or increase
their proprietary interest in the Company through the acquisition of shares. The
Company's Board of Directors believes that the Scheme has been successful to
date in accomplishing its purpose, and on February 28, 2000, they approved an
amendment of Section 5e of the Scheme to increase the maximum number of shares
available for grant under the Scheme to 3.0 million shares. At the Annual
Meeting a resolution will be submitted seeking approval of the stockholders for
this amendment.
Accordingly, the Board of Directors recommends that the stockholders vote
FOR the proposal to amend section 5e of the Company's Incentive Share Option
Scheme to increase the number of authorized shares available for awards
thereunder by 1,500,000 shares. We intend to vote your proxy in favor of this
amendment unless you specify to the contrary in your proxy or specifically
abstain from voting on this matter.
7. AUTHORITY TO ALLOT SHARES
Irish company law restricts the power of the Board of Directors to allot
shares and to grant share subscription rights and rights to convert loans and
other obligations of a company into shares unless the shareholders pass a
resolution conferring such powers on the Board of Directors for periods of up to
five years. The Board of Directors recommend that the stockholders vote FOR the
proposal. We intend to vote your proxy in favor of this resolution unless you
specify to the contrary in your proxy or specifically abstain from voting on
this matter.
8. ELIMINATION OF PRE-EMPTIVE RIGHTS
Irish law provides that issuances of equity shares for cash (and rights to
subscribe for or convert into equity shares for cash) must be offered, pro rata,
to the existing shareholders of equity shares. The shareholders may by special
resolution eliminate this requirement for periods up to five years. The Board of
Directors recommends that the stockholders vote FOR the proposal. We intend to
vote your proxy in favor of this resolution unless you specify to the contrary
in your proxy or specifically abstain from voting on this matter.
9. OTHER BUSINESS
The Board of Directors does not know of any other business to be presented
at the annual meeting. If any other matters properly come before the meeting,
however, we intend that the persons named in the enclosed for of proxy will vote
your proxy in accordance with their best judgment.
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EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES
The following is a list of the names and ages of the Company's executive
officers, directors and certain key employees, indicating all positions and
offices with the Company held by each such person and each such person's
principal occupations or employments during the past five years.
NAME AGE PRINCIPAL BUSINESS EXPERIENCE WITHIN LAST FIVE YEARS
---- --- ----------------------------------------------------
James G. Andress........... 61 Chief Executive Officer and a Director since 1996. Chairman
of the Board since 1998. President and Co-Chief Executive
Officer of Information Resources, Inc. from 1989 to 1995.
Roger M. Boissonneault..... 51 President and Chief Operating Officer since 1996. Director
since 1998. From 1976 to 1996 served in various capacities
with Warner Lambert Company, including Vice-President,
Female Health Care.
Paul S. Herendeen.......... 44 Executive Vice President and Chief Financial Officer since
1998. Director since 1996. From 1995 to 1998 served as a
Principal of Dominion Management Corp. Investment
professional with Prudential Equity Investors, 1990 to
1995.
Diane M. Cady.............. 45 Senior Vice President, Investor Relations and Corporate
Communications since 1999. From 1996 to 1999 served as Vice
President, Investor Relations, Alpharma, Inc. Vice
President, PLYGEM Industries, Inc. from 1986 to 1996.
Norma A. Enders............ 37 Senior Vice President of Regulatory Affairs since 1996.
From 1985 to 1996 served with Warner Lambert Company with
responsibility for Warner Chilcott Division Regulatory
Affairs.
Beth P. Hecht.............. 36 Senior Vice President and General Counsel since 1999. From
1997 to 1999 served as General Counsel, Vice President and
Secretary, ChiRex Inc., Corporate Counsel and Secretary,
Alpharma Inc. from 1993 to 1997.
David G. Kelly............. 38 Group Vice President, Finance since 1995. Corporate
Secretary since 1997. Prior to 1995 served in various
capacities with Elan Corporation, plc.
Christopher J. Gabanski.... 47 Vice President, Dermatology Sales since 1998. From 1997 to
1998 served as Vice President, Sales, of Genderm Corp. From
1992 to 1996 served as Regional Sales Director of
Neutrogena Dermatologics, a Johnson and Johnson Company.
Elizabeth Greenberg........ 42 Vice President, Human Resources since 1999. From 1988 to
1999 served as Vice President, Human Resources, Vital
Signs, Inc.
A. Dominick Musacchio...... 56 Vice President, New Business Development since 1996. From
1973 to 1996 served in various capacities with Warner
Lambert Company, including Director, Marketing and Sales.
Robert K. Pallas........... 59 Vice President, Sales since 1998. Consultant to Warner
Chilcott, Inc. from 1997 to 1998. Consultant in Sales and
Marketing to Schering Plough Corporation from 1994 to 1997.
William J. Poll............ 48 Vice President, Finance and Trade Relations since 1996.
From 1977 to 1996 served in various capacities with Warner
Lambert Company, including Director of Financial
Information Services.
Kathleen A. Wickman........ 48 Vice President, Marketing since 1999. Strategic Business
Director for Berlex Laboratories, a unit of Schering AG,
from 1996 to 1999. Group Product Director for Berlex
Laboratories from 1994 to 1996.
Tina M. deVries, Ph.D. .... 39 Senior Director of Research and Development since 1996.
From 1989 to 1996 served with Warner Lambert Company in
Research and Development.
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NAME AGE PRINCIPAL BUSINESS EXPERIENCE WITHIN LAST FIVE YEARS
---- --- ----------------------------------------------------
James H. Bloem............. 49 Director since 1997. Independent business and financial
consultant since 1999. Executive Vice President of Perrigo
Company from 1995 to 1999.
Harold N. Chefitz.......... 65 Director since 1995. Partner in the investment firm of
Boles Knop & Company, LLC.
Bruce L. Downey............ 52 Director since 1997. Chairman, Chief Executive Officer and
President of Barr Laboratories, Inc. since 1994.
Arthur F. Haney, M.D. ..... 54 Director since 2000. Roy T. Parker Professor of Obstetrics
and Gynecology at Duke University Medical Center and
Director of Duke's Division of Reproductive Endocrinology
and Infertility since 1981.
Thomas G. Lynch............ 43 Director since 1992. Executive Vice President and Chief
Financial Officer of Elan since 1993.
David B. Pinkerton......... 39 Director since 1996. Managing Director Alternative
Investments for AIG Global Investment Corp. ('AIG') since
1984.
Didier Voydeville.......... 48 Director since 1999. Chairman and Chief Executive Officer,
La Financiere de Dion since 1994. Advisor to Halisol S.A.
and Madame Nicole Bru.
DIRECTORS MEETINGS AND COMPENSATION
DIRECTORS MEETINGS
The Board of Directors held six regular meetings and five special
telephonic meetings during the year ended December 31, 1999 ("fiscal 1999"). The
Audit Committee, which currently consists of James H. Bloem (Chairman), Thomas
G. Lynch and David B. Pinkerton, oversees actions taken by the Company's
independent auditors, recommends the engagement of auditors and reviews the
Company's internal audits. The Compensation Committee approves the compensation
of executives of the Company, makes recommendations to the Board of Directors
with respect to standards for setting compensation levels and administers the
Company's incentive plans. The Compensation Committee currently consists of
Thomas G. Lynch (Chairman), Harold N. Chefitz and James H. Bloem. There is no
standing nominating committee. During fiscal 1999, each of the Company's
incumbent directors participated either in person or by alternative in excess of
75% of the aggregate of the meetings of the Board of Directors and the meetings
of committees of the Board of Directors of which such director was a member.
During fiscal 1999, the Compensation Committee met, either in person or by
telephonic meeting, one time and the Audit Committee met, either in person or by
telephonic meeting, two times.
COMPENSATION OF DIRECTORS
As of 1999, directors who are also officers of the Company do not receive
compensation from the Company for their services as directors. Those directors
who are not officers of the Company (the "Outside Directors") (currently James
H. Bloem, Harold N. Chefitz, Bruce L. Downey, Arthur F. Haney, Thomas G. Lynch,
David B. Pinkerton and Didier Voydeville) currently receive $10,000 annually
(paid in equal quarterly installments) for their services as directors. In
addition, the Outside Directors receive 5,000 options on the date of the Annual
Meeting, plus, for new directors only, an initial grant of 10,000 options. The
Outside Directors are also paid $1,000 for each board meeting attended in
person, $500 for each board meeting attended by phone, $1,000 for each committee
meeting attended in person and $500 for each committee meeting attended via
telephone.
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MANAGEMENT COMPENSATION AND CERTAIN TRANSACTIONS
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table discloses, for the fiscal years
indicated, individual compensation information for Mr. Andress and the four
other most highly compensated executive officers who were serving as executive
officers at the end of fiscal 1999 (collectively, the "named executives").
ANNUAL COMPENSATION
----------------------------------------- SECURITIES OTHER
OTHER UNDERLYING BENEFITS/
FISCAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
- --------------------------- ------ ------- ------- ------------ ---------- ------------
James G. Andress........... 1999 326,161 225,000 -- 50,000 15,212(1)
Chief Executive Officer
and 1998 313,750 -- 10,000(3) 50,000 20,254(1)
Chairman 1997 300,000 175,000 1,907,500(3)(5) 500,000 19,691(1)
Roger M. Boissonneault..... 1999 254,260 200,000 -- 100,000 15,492(1)
President and Chief 1998 222,917 100,000 10,000(3) 25,000 20,254(1)
Operating Officer 1997 207,061 120,000 570,000(5) 150,000 19,920(1)
Paul S. Herendeen.......... 1999 241,760 200,000 -- 30,000 15,492(1)
Executive Vice President 1998 206,250 100,000 189,500(2) 200,000 19,400(1)
and Chief Financial
Officer
Norma A. Enders............ 1999 140,058 60,000 -- 15,000 14,382(1)
Senior Vice President, 1998 118,333 50,000 -- 10,000 14,929(1)
Regulatory Affairs
Beth P. Hecht.............. 1999 165,625 75,000 25,000(4) 75,000 12,530(1)
Senior Vice President 1998 -- -- -- -- --
and General Counsel
- ---------------
(1) Represents amounts contributed for the benefit of the named executive under
the Company's 401(k) Plan, and Group Life and Health Insurance Plans.
(2) Represents reimbursement of relocation expenses in the amount of $104,500, a
signing bonus of $75,000 and director fees of $10,000 as described in (3).
(3) Represents fees paid to serve as a director on the Company's board which
were $10,000 annually for 1998 and $7,500 annually for 1997. Beginning in
1999, directors who are also officers of the Company do not receive
compensation from the Company for their services as directors.
(4) Represents signing bonus.
(5) Represents the difference between estimated fair value and exercise price of
the Ordinary Shares underlying warrants awarded.
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OPTION GRANTS IN FISCAL YEAR 1999
The following table discloses, for the named executives (a) the number of
shares as to which options and/or warrants were granted during 1999 and (b) the
option exercise price (which was in all cases, not less than the market price on
the date of the grant).
INDIVIDUAL GRANTS
---------------------------------------------------------- POTENTIAL REALIZED
PERCENT OF VALUE AT ASSUMED
TOTAL ANNUAL RATES
NUMBER OF OPTIONS OF STOCK PRICE
SECURITIES GRANTED TO EXERCISE APPRECIATION FOR
UNDERLYING EMPLOYEES OF BASE OPTION TERM,(2)
OPTIONS IN FISCAL PRICE -------------------
NAME (#)(1) YEAR ($/SH) EXPIRATION DATE 5%($) 10%($)
- ---- ------------- ---------- --------- ----------------- ------- ---------
James G. Andress......... 50,000 7.95% 8.13 2/11/09 255,824 643,022
Roger M. Boissonneault... 40,000/60,000 15.91% 8.13/7.06 2/11/09 & 8/14/09 477,357 1,172,862
Paul S. Herendeen........ 30,000 4.77% 8.13 2/11/09 153,494 385,813
Norma A. Enders.......... 15,000 2.39% 8.13 2/11/09 76,747 192,906
Beth P. Hecht............ 75,000 11.93% 6.75 1/1/09 359,609 938,140
- ---------------
(1) Compensatory options granted by the Company generally vest over four years
and expire on the earlier of ten years from the date of grant or after a
specified period following the participant's separation from the Company.
The options granted to the named executives in 1999 were issued in this
manner, with the exception of options granted to Ms. Hecht of which 25,000
vested immediately. The exercise price is the fair market value at the date
of grant.
(2) Amounts represent hypothetical gains that could be achieved for options if
exercised at the end of the option term. These gains are based on assumed
rates of stock price appreciation of 5% and 10% compounded annually from the
date options are granted. Actual gains, if any, on share option exercises
will depend on the future performance of the Ordinary Shares on the date on
which the options are exercised.
OPTION EXERCISES AND YEAR END VALUES FOR FISCAL YEAR 1999
The following table shows information regarding the exercise of stock
options during fiscal 1999 by the named executives and the number and value of
any unexercised stock options held by them as of December 31, 1999:
SHARES NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED ON VALUE OPTIONS/WARRANTS AT IN THE MONEY OPTION/WARRANTS
EXERCISE REALIZED FY-END(#) AT FY-END
NAME (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
- ---- ----------- -------- ------------------------- ----------------------------
James G. Andress........ -- -- 437,500/162,500 $774,953/$267,797
Roger M.
Boissonneault......... -- -- 144,063/130,937 $255,699/$300,363
Paul S. Herendeen....... -- -- 115,625/124,375 $ 53,352/$ 92,023
Norma A. Enders......... -- -- 37,813/ 22,187 $ 7,366/$ 27,746
Beth P. Hecht........... -- -- 37,500/ 37,500 $128,906/$128,906
- ---------------
(1) Based on the closing price of $10.19 for the ADSs as reported by the Nasdaq
National Market on December 31, 1999, less the applicable option exercise
price.
EMPLOYMENT AGREEMENTS
Messrs. Andress, Boissonneault, Herendeen, Cady, Enders and Hecht have
signed employment agreements with the Company. Each employment agreement is
terminable by either party without notice, subject to certain termination
provisions which include the payment of a severance amount consisting of the
executive officer's then current salary for a period of twelve or eighteen
months plus all other amounts and benefits to which the executive is entitled if
the Company terminates the executive officer's employment without cause.
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These contracts contain non-compete provisions which restrict the executive
officers from being involved in, for the period of their employment and for any
period for which the executive officer receives payment, including any severance
amount, from the Company, any business which is in competition with the business
of the Company. In addition, each employment agreement contains an express
obligation of confidentiality in respect of the Company's technological and
commercial secrets and agreement to assign all intellectual property rights to
the Company.
CERTAIN TRANSACTIONS
In March 1999 the Company reached a binding agreement with Elan
Corporation, plc. ("Elan") under which Elan re-acquired the marketing rights to
an isosorbide-5-mononitrate product ("IS5MN-PM") that Elan had been developing
for the Company. Under terms of the agreement, as of March 31, 1999, Elan was
obligated to make a payment to the Company in an amount equal to the Company 's
remaining contractual obligation relating to the development of IS5MN-PM. On
June 24, 1999, the Company executed the definitive agreement licensing the
IS5MN-PM to Elan. Under the agreement, additional license fees would be due to
the Company upon the completion of certain milestones including FDA approval of
the pending ANDA for the product. The Company would also be entitled to receive
royalties based upon revenues derived from the product.
On January 8, 1999, the Company announced that an entity formed by selected
members of senior management, including the named executives, acquired 600,000
shares of the Company's stock from Elan. Under the terms of the transaction,
Elan retained the right to proceeds from the sale of the shares at prices up to
$11.50. Thereafter, Elan would be entitled to receive 50% of any realized gains.
On October 17, 1994, the Company and Elan entered into a Shareholder's
Agreement, pursuant to which Elan is entitled to appoint one director to the
Board of Directors of the Company. In addition, on August 13, 1997, the Company
and Barr Laboratories, Inc. entered into a shareholder's agreement granting Barr
the right to appoint one director to the Board of Directors of the Company.
The Company and Elan entered into an Administrative Support Agreement dated
as of October 17, 1994, pursuant to which Elan is obligated to provide certain
routine management and administrative services to the Company. Thomas G. Lynch,
who is a director of the Company, is an executive officer and director of Elan.
REPORT OF THE COMPENSATION COMMITTEE
The executive compensation program of the Company is administered by the
Compensation Committee which in 1999 was composed of Mr. Lynch, who served as
Chairman, and Messrs. Bloem and Chefitz.
The Company's executive compensation program is designed to retain and
reward executives who are capable of leading the Company in achieving its
business objectives in the competitive and rapidly changing industries in which
the Company competes. The Compensation Committee has the authority of the Board
of Directors with respect to the compensation, benefit and employment policies
and arrangements for executive officers and other highly paid personnel of the
Company, except the chief executive officer, chief operating officer and
president and chief financial officer, as to whom the committee makes
compensation recommendations to the Board of Directors. The committee also has
authority with respect to the compensation and benefit plans generally
applicable to the company's employees.
This report is submitted by the Compensation Committee and addresses the
Company's compensation policies for 1999 as they affected the named executives.
Compensation Philosophy
The objectives of the executive compensation program are to align
compensation with business objectives and individual performance and to enable
the Company to attract, retain and reward executive officers who are
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committed to the long-term success of the Company. The Company's executive
compensation philosophy is based on the following principles:
-- Competitive and Fair Compensation
The Company is committed to providing an executive compensation
program that helps attract and retain highly qualified executives. To
ensure that compensation is competitive, the Company regularly compares
compensation practices with those of other companies in the industry and
sets its compensation guidelines based on this review. The Company also
seeks to achieve a balance of the compensation paid to a particular
individual and the compensation paid to other executives at the Company.
-- Sustained Performance
Executive officers are rewarded based upon corporate performance,
business group performance and individual performance. Corporate
performance and business group performance are evaluated by reviewing the
extent to which strategic and business plan goals are met, including such
factors as achievement of operating budgets, establishment of strategic
licensing and development alliances with third parties, timely development,
introduction of new processes and products, and performance relative to
competitors. Individual performance is evaluated by reviewing attainment of
specified individual objectives and the degree to which teamwork and
Company values are fostered.
In evaluating each named executive's performance, the Company generally
conforms to the following process:
- Company and individual goals and objectives are set at or prior to the
beginning of the performance cycle.
- At the end of the performance cycle, the accomplishment of the
executive's goals and objectives and his contributions to the Company are
evaluated.
- The executive's performance is then compared with peers within the
Company and the results are communicated to the executive.
- The comparative results, combined with comparative compensation practices
of other companies in the industry, are then used to determine salary
stock compensation levels.
Annual compensation for the Company's executives generally consists of
three elements: salary, bonus and stock options. Bonuses totaling $760,000 were
paid to the named executives for 1999.
The salaries for executives are generally set by reviewing compensation for
competitive positions in the market and the historical compensation levels of
the executives. Increases in annual salaries are based on actual corporate and
individual performance against targeted performance and various subjective
performance criteria. Targeted performance criteria vary for each executive
based on his business group or area of responsibility, and may include
achievement of the operating budget for the Company as a whole or of a business
group of the Company, timely development and introduction of new products,
implementation of financing strategies and establishment of strategic licensing
and development alliances with third parties. Subjective performance criteria
include an executive's ability to motivate others, develop the skills necessary
to grow as the Company matures, recognize and pursue new business opportunities
and initiate programs to enhance the Company's growth and success.
Compensation for the named executives also includes the long-term
incentives afforded by stock options. The stock option program is designed to
provide the identity of long-term interests between the Company's employees and
its shareholders and assist in the retention of executives. The size of option
grants is generally intended to reflect the executive's position with the
Company and his contributions to the Company, including his success in achieving
the individual performance criteria described above. From time to time, the
Compensation Committee chooses to align more closely the vesting of stock
options with the achievement by a named executive of corporate, business group
or individual performance goals. On December 31, 1998 the Company granted stock
options to purchase an aggregate of 75,000 ordinary shares to a named executive
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officer at an exercise price of $6.75 per share. On February 10, 1999 the
Company granted stock options to purchase an aggregate of 135,000 ordinary
shares to the named executives at an exercise price of $8.125 per share. On June
3, 1999 the Company granted stock options to purchase an aggregate of 40,000
ordinary shares to directors at an exercise price of $7.875 per share. On August
13, 1999 the Company granted stock options to purchase an aggregate of 60,000
ordinary shares to a named executive at an exercise price of $7.0625 per share.
Mr. Andress' 1999 Compensation
Mr. Andress is eligible to participate in the same executive compensation
available to the other named executives. The Compensation Committee believes
that Mr. Andress' annual compensation, including the portion of his compensation
based upon the Company's stock option program, has been set at a level
competitive with other companies in the industry.
PERFORMANCE GRAPH
The following graph compares the cumulative total return on $100 invested
on August 13, 1997 (the first day of public trading of the ADSs) through
December 31, 1999 (the last day of public trading of the ADSs in fiscal 1999) in
the ADSs of the Company, the Nasdaq National Market Index and an index of
comparable companies consisting of Forest Laboratories, Inc., KOS
Pharmaceuticals, Inc., Dura Pharmaceuticals, Inc., Jones Pharmaceutical, Inc.,
K-V Pharmaceutical Company and Medicis Pharmaceutical Corporation. The mix of
companies used for the comparable companies index was modified from the previous
performance graph included in the Company's 1999 Proxy Statement due to changes
in ownership of two companies. The return of the indices is calculated assuming
reinvestment of dividends during the period presented. The Company has not paid
any dividends since its initial public offering. The stock price performance
shown on the graph below is not necessarily indicative of future price
performance.
[LINE GRAPH]
WARNER CHILCOTT PUBLIC NASDAQ NATIONAL MARKET COMPARABLE COMPANIES
LIMITED COMPANY INDEX INDEX
---------------------- ---------------------- --------------------
8/13/97 100 100 100
12/31/97 69.72 99.18 117.36
12/31/98 38.02 138.48 136.33
12/31/99 57.41 252.78 164.9
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth below certain information regarding
beneficial ownership of the Company's ordinary shares (including the ADSs) at
February 29, 2000 (i) by each person who is known to own beneficially more than
five percent of the ordinary shares (including the ADSs) (ii) by the Company's
directors, (iii) by the Company's executive officers and (iv) by all directors
and executive officers as a group. Except as indicated in the footnotes to the
table, the persons named therein have sole voting power and investment power
with respect to all ordinary shares shown as beneficially owned by them, subject
to community property laws where applicable. Except as otherwise indicated, the
address of each person is the Company's headquarters, located at Lincoln House,
Lincoln Place, Dublin 2, Ireland.
NUMBER OF PERCENTAGE OF OUTSTANDING
BENEFICIAL OWNER ORDINARY SHARES ORDINARY SHARES(1)
- ---------------- --------------- -------------------------
Elan Corporation, plc(2)................................ 2,631,290 20.91%
Lincoln House, Lincoln Place
Dublin 2, Ireland
William H. Gates III(3)................................. 1,518,039 12.23%
2365 Carillon Point
Kirkland, WA 98033
Warner-Lambert Company(4)............................... 1,130,158 8.37%
201 Tabor Road
Morris Plains, NJ 07950
State of Wisconsin Investment Board..................... 1,075,000 8.68%
121 East Wilson Street
Madison, WI 53703
Wellington Management Company, LLP...................... 816,900 6.60%
75 State Street
Boston, MA 02109
Halisol S.A.(5)......................................... 801,343 6.46%
112 Avenue Kleber
75116 Paris
France
James G. Andress(6)(7).................................. 607,500 4.73%
Roger M. Boissonneault(6)(8)............................ 285,750 2.28%
Paul S. Herendeen(6)(9)................................. 252,500 2.02%
Norma A. Enders(10)..................................... 86,563 *
Beth P. Hecht(6)(11).................................... 71,125 *
James H. Bloem(12)...................................... 6,938 *
Harold N. Chefitz(13)................................... 23,556 *
Bruce L. Downey(14)..................................... 6,938 *
Arthur F. Haney(15)..................................... 3,750 *
Thomas G. Lynch(16)..................................... 72,881 *
David B. Pinkerton(17)(19).............................. 15,970 *
Didier Voydeville(18)................................... 1,875 *
All directors and executive officers as a group (21
persons).............................................. 1,884,021 13.89%
- ---------------
* less than 1%.
(1) Figures are based upon 12,380,344 shares outstanding as of February 29,
2000. The figures assume exercise by only the shareholder or group named in
each row of all warrants and/or options for the purchase of ordinary shares
held by such shareholder or group which are exercisable within 60 days of
February 29, 2000.
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(2) Amount shown represents the aggregate number of: (a) 2,426,768 ADSs, and
(b) 204,522 ordinary shares subject to warrants which are currently
exercisable; both (a) and (b) held by Elan International Services, Ltd.
(3) Amount shown represents the aggregate number of: (a) 1,484,441 ADSs, and
(b) 33,598 ordinary shares subject to warrants which are currently
exercisable; both (a) and (b) held by Mr. Gates and Castle Gate, LLC.
(4) Based on 1,130,158 ordinary shares subject to warrants which are currently
exercisable, held by Warner-Lambert Company.
(5) Amount shown represents the aggregate number of (a) 773,825 ADSs, (b)
15,018 ordinary shares subject to warrants which are currently exercisable,
and (c) 12,500 options and warrants which are currently exercisable: (a)
and (b) held by Halisol, S.A. and its Chairwoman Madam Nicole Bru, who was
a director of WCplc until 1999, and (c) held by Ms. Bru personally.
(6) Amounts shown include ordinary shares held by an entity formed by selected
members of senior management, including the named executives. The amount
shown for each named shareholder includes the number of shares held by such
entity in which such named shareholder has a pecuniary interest. Such
ordinary shares were acquired from Elan Corporation as announced on January
8, 1999. The entity, and not the named persons, has the sole power to vote
such shares.
(7) Amount shown includes 475,000 ordinary shares issuable upon exercise of
currently exercisable options and warrants.
(8) Amount shown includes 161,500 ordinary shares issuable upon exercise of
currently exercisable options and warrants.
(9) Amount shown includes 130,000 ordinary shares issuable upon exercise of
currently exercisable options and warrants.
(10) Amount shown includes 41,563 ordinary shares issuable upon exercise of
currently exercisable options.
(11) Amount shown includes 40,625 ordinary shares issuable upon exercise of
currently exercisable options.
(12) Amount shown represents 5,938 ordinary shares issuable upon exercise of
currently exercisable options.
(13) Amount shown includes 13,556 ordinary shares issuable upon exercise of
currently exercisable options and warrants.
(14) Amount shown includes 5,938 ordinary shares issuable upon exercise of
currently exercisable options. Excludes (1) 250,000 ADSs; and (b) 62,500
ordinary shares subject to warrants which are currently exercisable, both
(a) and (b) held by Barr Laboratories of which Mr. Downey serves as
Chairman, Chief Executive Officer and President. Mr. Downey disclaims
beneficial ownership of ADSs and shares in (a) and (b).
(15) Amount shown represents 3,750 ordinary shares issuable upon exercise of
currently exercisable options and warrants.
(16) Amount shown includes 14,050 ordinary shares issuable upon exercise of
currently exercisable warrants and options. Excludes 2,631,290 ordinary
shares, including warrants, owned by Elan (see footnote 2 above). Mr.
Lynch, who serves as a director of WCplc. Is Executive Vice President and
Chief Financial Officer of Elan. Accordingly, Mr. Lynch may be deemed to
share voting and dispositive power as to the shares held by Elan. Mr. Lynch
disclaims beneficial ownership of such shares.
(17) Amount shown includes 13,508 ordinary shares issuable upon exercise of
currently exercisable options.
(18) Amount shown represents 1,875 ordinary shares issuable upon exercise of
currently options.
(19) Excludes (a) 496,120 ADSs; and (b) 7,056 ordinary shares subject to
warrants which are currently exercisable: both (a) and (b) held by National
Union Fire Insurance Company of Pittsburgh of which Mr. Pinkerton serves as
Vice President. Mr. Pinkerton disclaims beneficial ownership of these
shares.
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DIRECTOR AND OFFICER AND TEN PERCENT SHAREHOLDER SECURITIES REPORTS
The federal securities laws require the Company's directors and officers,
and persons who own more than ten percent of the ordinary shares, to file with
the Securities and Exchange Commission, the Nasdaq National Market and the
secretary of the Company initial reports of ownership and reports of changes in
ownership of the ordinary shares of the Company.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and representations that no other reports were
required, during the fiscal year ended December 31, 1999, all of the Company's
officers, directors and greater-than-ten-percent beneficial owners made all
required filings.
SHAREHOLDER PROPOSALS
Proposals of stockholders to be presented at the 2001 annual meeting of
shareholders must be received by the secretary of the Company by January 1, 2001
to be considered for inclusion in the Company's proxy statement and form of
proxy relating to that meeting. It is anticipated that the 2001 annual meeting
will be scheduled for June 2, 2001.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors does not
know of any business to come before the annual meeting other than the matter
described in the notice. If other business is properly presented for
consideration at the annual meeting, the enclosed proxy authorizes the persons
named therein to vote the shares in their discretion.
SOLICITATION OF PROXIES
Solicitation of proxies may be made through officers and regular employees
of the Company by telephone or by oral communications with some stockholders
following the original solicitation period. We will not pay any additional
compensation to officers and regular employees for proxy solicitation. Expenses
incurred in the solicitation of proxies will be borne by the Company, including
the charges and expenses of brokerage firms and others of forwarding
solicitation material to beneficial owners of ordinary shares. In addition to
use of the mails, proxies may be solicited by officers and employees of the
Company in person or by telephone.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's annual report for the fiscal year ended December 31, 1999,
including the financial information included therein, has been filed with the
Securities and Exchange Commission and is incorporated in this proxy statement
by reference.
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WARNER CHILCOTT, PLC
INSTRUCTIONS TO THE BANK OF NEW YORK, AS DEPOSITARY
(MUST BE RECEIVED PRIOR TO THE CLOSE OF BUSINESS ON MAY 8, 2000
The undersigned registered holder of American Depositary Receipts hereby
requests and instructs The Bank of New York, as Depositary, to endeavor, in so
far as practicable, to vote or cause to be voted the amount of Shares or other
Deposited Securities represented by such Receipt of WARNER CHILCOTT, plc
registered in the name of the undersigned on the books of the Depositary as of
the close of business on April 6, 2000 at the Annual General Shareholder's
Meeting of WARNER CHILCOTT, plc to be held on May 16, 2000 in respect of the
resolutions specified on the reverse hereof.
NOTES:
1. Instructions as to voting on the specified resolutions should be indicated
by an "X" in the appropriate box.
2. In the absence of such Instructions on the specified resolutions, the
Depositary will treat the return of this form duly signed by the due date
as an express Instruction to give discretionary proxy to a person
designated by the Company. In such event, the Proxy appointed by the
Depositary will vote (or abstain from voting) as he or she thinks fit on
the specified resolution.
WARNER CHILCOTT, plc
P.O. BOX 11230
NEW YORK, N.Y. 10203-0230
(Continued and to be signed and dated on the reverse side)
19
AS ORDINARY BUSINESS
FOR AGAINST
1. To receive and consider the Financial Statements for the [ ] [ ]
year ended December 31, 1999 together with the reports of
the directors and auditors thereon.
2. To re-elect James G. Andress who retires from the board by [ ] [ ]
rotation as a director of the Company.
3. To re-elect Paul S. Herendeen who retires from the board by [ ] [ ]
rotation as a director of the Company.
4. To elect Dr. Arthur F. Haney, M.D. as a director of the [ ] [ ]
Company, replacing Donald E. Panoz who retires from the
board.
5. To authorize the directors to fix the remuneration of [ ] [ ]
the auditors.
SPECIAL BUSINESS
6. To consider and act upon a proposal to amend the Company's [ ] [ ]
1997 Incentive Share Option Scheme, as amended, to increase
the number of authorized shares available for awards
thereunder by 1,500,000 shares.
AS AN ORDINARY RESOLUTION
7. To approve an ordinary resolution conferring upon the Board [ ] [ ]
of Directors the power to allot shares, grant share
subscription rights and rights to convert loans and other
obligations into stock.
AS A SPECIAL RESOLUTION
8. To approve a special resolution eliminating pre-emptive [ ] [ ]
rights of existing shareholders for a five-year period.
9. To transact such other business as may be transacted at [ ] [ ]
an Annual General Meeting.