SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the registrant [X]
Filed by a party other than the registrant [_]
Check the appropriate box:
[_]Preliminary proxy statement
[_]Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Warner Chilcott Public Limited Company
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(Name of Registrant as Specified In Its Charter)
Warner Chilcott Public Limited Company
-----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X]No fee required.
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not applicable
(2) Aggregate number of securities to which transaction applies:
Not applicable
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
Not applicable
(4) Proposed maximum aggregate value of transaction:
Not applicable
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Not applicable
[_]Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
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[LOGO] WARNER CHILCOTT
WARNER CHILCOTT PUBLIC LIMITED COMPANY
Lincoln House James G. Andress
Lincoln Place Chairman and Chief Executive Officer
Dublin 2, Ireland
April 30, 1999
Dear Shareholder:
On behalf of the board of directors, I cordially invite you to attend the
annual meeting of shareholders on Thursday, June 3, 1999 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 re-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
[LOGO] WARNER CHILCOTT
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 Thursday, June 3, 1999, 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, 1998 together with the reports of the directors and
auditors thereon.
2. To re-elect Mr. Harold N. Chefitz who retires from the board by rotation
as a director of the Company.
3. To re-elect Mr. David D. Pinkerton who retires from the board by
rotation as a director of the Company.
4. To elect Mr. Didier Voydeville as a director of the Company, replacing
Madame Nicole Bru who retires from the board by rotation as a director
of the Company.
5. To authorize the directors to fix the remuneration of the auditors.
Special Business
6. That the Company's incentive share option scheme be amended so as to
permit the Company to grant options under the scheme to consultants and
members of its medical advisory board.
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 on the date of passing of this resolution, and
the authority hereby conferred shall expire at the close of business on
June 2, 2004) 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 as 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 on September
2, 2000, unless previously renewed, verified or 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 30, 1999
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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.
WARNER CHILCOTT PUBLIC LIMITED COMPANY
Lincoln House
Lincoln Place
Dublin 2, Ireland
----------------
PROXY STATEMENT
Annual General Meeting of Shareholders to be Held
June 3, 1999
----------------
April 30, 1999
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 June 3, 1999 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 or a body corporate is 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 other than the election of
directors, 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, 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 26, 1999, the record date with respect to the ADSs, there were
outstanding and entitled to vote at the meeting 12,366,808 ordinary shares,
including ordinary shares represented by the ADSs. Each outstanding ordinary
share is entitled to one vote. This proxy statement is first being sent to the
shareholders on or about April 30, 1999. 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.
1
MATTERS TO BE ACTED UPON
1. Financial Statements
The financial statements for the year ended December 31, 1998, 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 or 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, 1999) 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.
Harold N. Chefitz has served as a director of the Company since 1995. He is
a partner in the investment firm of Boles Knop & Company, LLC and general
partner of CK Capital LP. Mr. Chefitz was formerly a Senior Managing Director
of Gerard Klauer Mattison & Co. ("GKM") and the Chairman of Chefitz Health
Care Investments. Before joining GKM, Mr. Chefitz was Managing Director and
Head of the Health Care Group at Prudential Securities. Mr. Chefitz has held
various positions with Furman Selz Incorporated (an international securities
and investment banking firm), Swergold, Chefitz Incorporated (an investment
banking firm co-founded by Mr. Chefitz) and Goldman, Sachs & Co. and has over
25 years of experience in domestic and international health care financings.
Mr. Chefitz has a B.S. degree from Boston University and attended Boston
College Law School. Mr. Chefitz served as the Chairman of the Board of
Columbia University School of Pharmaceutical Sciences. Mr. Chefitz currently
serves as a member of the board of directors of Kensey Nash and Visible
Genetics Inc.
David B. Pinkerton has served as a director of the Company since 1996 and is
Managing Director of Alternative Investments for AIG Global Investment Corp.
("AIG"). Mr. Pinkerton has been with AIG since 1984 and has been responsible
for AIG's domestic portfolio of alternative investments including venture
capital, leverage buyouts and direct placements since 1988. He oversees AIG's
Hedge Fund Composite, which includes managers specializing in risk arbitrage,
distressed debt, convertible bond arbitrage and other market hedging
strategies. From 1984 to 1986, Mr. Pinkerton was a securities analyst with
AIG. Mr. Pinkerton received his B.S. degree in Finance and Economics from the
University of Delaware in 1983 and his J.D. degree from Brooklyn Law School in
1990. He is admitted to the New York and New Jersey bars.
Didier Voydeville is the Chairman and Chief Executive Officer of La
Financiere de Dion ("FDD"), an investment advisory firm located in France. Mr.
Voydeville has been with FDD since 1994 and serves as an advisor to Halisol
S.A. and Madame Nicole Bru, shareholders of the Company. Prior to joining FDD,
Mr. Voydeville was a Project Finance Officer at the Ministry of Industry, a
French government post. He holds a Doctorate in Economics from the University
of Paris. Mr. Voydeville currently serves as a member of the board of
directors of La Lorraine D'Investissement Et De Conseil Eurl and also serves
as a representative of Halisol S.A. to SPEF Pre-IPO European Fund, Association
Docteurs Bru and SA du 12 Rue De La Bourse.
2
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, 1999. 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 provides for the granting
of options to purchase ordinary shares of the Company to officers, directors
and employees. The granting of options serves a number of important purposes,
including providing compensation and aligning the interests of grantees with
those of shareholders.
The incentive share option scheme of the Company does not, however,
currently allow for the granting of options to consultants and members of the
Company's newly created medical advisory board. The medical advisory board,
which will consist of leading medical professionals who will meet periodically
to advise the Company regarding industry trends, is meant to keep the Company
abreast of physicians' observations and concerns. The board of directors
believes, however, that the reasons supporting the granting of options to
officers, directors and employees also apply to the granting of options to
consultants and members of the medical advisory board. It is advantageous for
the Company to have the flexibility to compensate consultants and members of
the medical advisory board with options, as opposed to or in combination with
cash payments, to the extent designed by the Company, the consultants and
members of the medical advisory board. In addition, the board of directors
believes that it is desirable for the Company to more closely align the
interests of the Company's consultants and members of the medical advisory
board with those of shareholders.
The board of directors is not seeking to amend the total number of ordinary
shares which may be granted under the incentive share option scheme.
Accordingly, the board of directors recommends that the stockholders vote
FOR the proposal to amend the Company's incentive share option scheme so as to
permit the granting of options to consultants and members of the medical
advisory board. 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.
3
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.
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.
Principal business experience within last five
Name Age years
---- --- ----------------------------------------------
James G. Andress......... 60 Chief Executive Officer and a director since
November 1996. Became Chairman of the Board in
1998. President and Chief Executive Officer of
Information Resources, Inc. from 1989 to 1995.
Roger M. Boissonneault... 50 President and Chief Operating Officer since
1996. Director since January 1998. From 1976 to
1996 served in various capacities with Warner
Lambert Company, including Vice-President,
Female Health Care.
Paul S. Herendeen........ 43 Senior Vice President and Chief Financial
Officer since February 1998. Director since
1996. From 1995 to 1998 Principal of Dominion
Income Management Corp. Investment professional
with Prudential Equity Investors, 1990 to 1995.
Beth P. Hecht............ 35 Senior Vice President and General Counsel since
January 1999. General Counsel, Vice President
and Secretary, ChiRex Inc., from December 1997
to January 1999. Corporate Counsel and
Secretary, Alpharma Inc., 1993 to 1997.
David G. Kelly........... 37 Group Vice President, Finance since June 1995.
Company Secretary since 1997. Prior to 1995
served in various capacities with Elan
Corporation, plc.
Robert K. Pallas......... 58 Vice President, Sales, since July 1998.
Consultant to Warner Chilcott, Inc. from January
1997 to 1998. Consultant in Sales and Marketing
to Schering Plough Corporation from 1994 to
1997.
Kathleen A. Wickman...... 47 Vice President, Marketing, since February 1999.
Strategic Business Director for Berlex
Laboratories from 1996 to February 1999. Group
Product Director for Berlex Laboratories from
1994 to 1996.
Christopher J. Gabanski.. 46 Vice President, Dermatology Sales, since July
1998. From 1997 to 1998 served as Vice
President, Sales, of Genderm Corp. From 1992 to
1996 Regional Sales Director of Neutrogena
Dermatologics, a Johnson and Johnson Company.
A. Dominick Musacchio.... 55 Vice President, New Business Development since
1996. From 1973 to 1996 served in various
capacities with Warner Lambert Company,
including Director, Marketing and Sales.
William J. Poll.......... 47 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.
4
Principal business experience within last five
Name Age years
---- --- ----------------------------------------------
Norma A. Enders.......... 36 Vice President of Regulatory Affairs since 1996.
From 1985 to 1996 served with Warner Lambert
Company with responsibility for Warner Chilcott
Division Regulatory Affairs.
Tina M. deVries, Ph.D.... 37 Senior Director of Research and Development
since 1996. From 1989 to 1996 served with Warner
Lambert Company in Research and Development.
Donald E. Panoz.......... 63 Director since 1992. Chairman from 1996 to 1998.
Chairman of Elan from 1970 to 1996. Chief
Executive Officer of Elan from 1970 to 1995.
Chairman of Fountainhead Holdings Ltd.,
Fountainhead Development Corp. and Gensia Sicor
Inc.
Thomas G. Lynch.......... 43 Director since 1992. Executive Vice President
and Chief Financial Officer of Elan since 1993.
Madame Nicole Bru, M.D... 59 Director since 1995. Founder of and Chairman of
the Halisol Group since 1994. Founder of The
Pain Institute and the Association de Drs. Bru.
Harold N. Chefitz........ 64 See information in "Matters to be Acted Upon."
David B. Pinkerton....... 38 See information in "Matters to be Acted Upon."
James H. Bloem........... 48 Director since 1997. Executive Vice President of
Perrigo Company since 1995. Previously served as
Chief Financial Officer, Treasurer and General
Counsel of Herman Miller, Inc. and as a partner
of the law firm, Law, Weathers & Richards.
Bruce L. Downey.......... 51 Director since 1997. Chairman, Chief Executive
Officer and President of Barr Laboratories, Inc.
since 1994.
DIRECTORS MEETINGS AND COMPENSATION
Directors Meetings
The board of directors held four regular meetings and three special
telephonic meetings during the year ended December 31, 1998 ("fiscal 1998").
The audit committee, which currently consists of James Bloem, Thomas Lynch and
David 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 Donald
Panoz, Harold Chefitz and Thomas Lynch. There is no standing nominating
committee. During fiscal 1998, each of the Company's incumbent directors
participated 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 either in
person or by alternative of which such director was a member. During fiscal
1998, 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, one time.
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, Madame Nicole Bru, Harold Chefitz, Bruce Downey, Thomas G. Lynch,
Donald E. Panoz and David Pinkerton) 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 $500 for each committee meeting attended via telephone.
5
MANAGEMENT COMPENSATION AND CERTAIN TRANSACTIONS
Summary Compensation Table
The following Summary Compensation Table discloses, for the fiscal years
indicated, individual compensation information for Mr. Andress and the five
other most highly compensated executive officers who were serving as executive
officers at the end of fiscal 1998 (collectively, the "named executives").
Annual Compensation
----------------------------------- Securities
Other Underlying Other Benefits/
Name and Principal Fiscal Salary Bonus Compensation Options Compensation
Position Year ($) ($) ($) (#) ($)
- ------------------------ ------ ------- ------- ------------ ---------- ---------------
James G. Andress........ 1998 313,750 -- 10,000(4) 50,000 20,254(1)
Chief Executive Officer 1997 300,000 175,000 1,907,500(2)(4) 500,000 19,691(1)
and Chairman
Roger M. Boissonneault.. 1998 222,917 100,000 10,000(4) 25,000 20,254(1)
President and Chief 1997 207,061 120,000 570,000(2) 150,000 19,920(1)
Operating
Officer
Paul S. Herendeen....... 1998 206,250 100,000 189,500(3)(4) 200,000 19,400(1)
Executive Vice 1997 -- -- -- -- --
President and Chief
Financial Officer
David G. Kelly.......... 1998 110,250 30,000 -- 10,000 11,250(5)
Group Vice President-- 1997 140,000 50,000 -- 50,000 12,000(5)
Finance and Secretary
A. Dominick Musacchio... 1998 153,272 35,000 -- 10,000 20,501(1)
Vice President, 1997 153,189 50,000 -- 50,000 19,905(1)
Business Development of
WCI
William J. Poll......... 1998 135,679 40,000 -- 10,000 20,413(1)
Group Vice President, 1997 131,434 50,000 -- 50,000 19,798(1)
Finance & Pricing of
WCI
- --------
(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 the difference between estimated fair value and exercise price
of the Ordinary Shares underlying warrants awarded.
(3) Represents reimbursement of relocation expenses in the amount of $104,500
and a signing bonus of $75,000.
(4) Represents fees paid to serve as a director on the Company's board which
were $10,000 annually for 1998 and $7,500 annually for 1997. Beginning in
1999, directors who are also officers of the Company do not receive
compensation from the Company for their services as directors.
(5) Represents amounts contributed for the benefit of the named executive for
medical, savings and pension plan in Ireland.
6
Option Grants in Fiscal Year 1998
The following table discloses, for the named executives (a) the number of
shares as to which options and/or warrants were granted during 1998 and (b)
the option exercise price (which was in all cases, not less than the market
price on the date of the grant).
Individual Grants
- -------------------------------------------------------------------------
Percent of Potential Realized
Total Value
Options/ at Assumed Annual
Number of Warrants Rates of Stock
Securities Granted To Exercise Price Appreciation
Underlying Employees of Base For Option Term (2)
Options/Warrants In Fiscal Price Expiration -------------------
Name (#) (1) Year ($/Sh) Date 5% ($) 10% ($)
- ------------------------ ---------------- ---------- -------- ---------- --------- ---------
James G. Andress........ 50,000 6.68% 9.77 01/24/08 307,544 721,451
Roger M. Boissonneault.. 25,000 3.34% 9.77 01/24/08 153,772 360,725
Paul S. Herendeen....... 200,000 26.72% 9.77 02/03/08 1,230,176 2,885,802
David G. Kelly.......... 10,000 1.34% 9.77 01/24/08 61,509 144,290
A. Dominick Musacchio... 10,000 1.34% 9.77 01/24/08 61,509 144,290
William J. Poll......... 10,000 1.34% 9.77 01/24/08 61,509 144,290
- --------
(1) Compensatory options and warrants 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/warrants granted to the named executives in
1998 were issued in this manner. The exercise price is the fair market
value at the date of grant.
(2) Amounts represent hypothetical gains that could be achieved for
options/warrants 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 1998
The following table shows information regarding the exercise of stock
options during fiscal 1998 by the named executives and the number and value of
any unexercised stock options held by them as of December 31, 1998:
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 ($) Exercisable/
Name (#) ($) Exercisable/Unexercisable Unexercisable(1)
---- ----------- -------- ------------------------- ----------------------------
James G. Andress........ -- -- 290,625/259,375 323,438/251,563
Roger M. Boissonneault.. -- -- 89,063/85,937 97,031/75,469
Paul S. Herendeen....... -- -- 60,000/150,000 --
David G. Kelly.......... -- -- 33,125/26,875 --
A. Dominick Musacchio... -- -- 33,125/26,875 --
William J. Poll......... -- -- 33,125/26,875 --
- --------
(1) Based on the closing price of $6.75 for the ADSs as reported by the Nasdaq
National Market on December 31, 1998, less the applicable option exercise
price.
Employment Agreements
Messrs. Andress, Boissonneault and Herendeen have signed employment
agreements with the Company. Each employment agreement is terminable by either
party without notice, subject to certain termination
7
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.
These contracts provide for, among other things, each of the individuals to
provide services to the Company on a full-time basis. These contracts also
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
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 Corporation, plc. ("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 April 17, 1998, the Company loaned $200,000 to Paul Herendeen in
connection with his relocation. The indebtedness was repaid in full on July
17, 1998.
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 have also entered into the Master Development and
License Agreement, pursuant to which the Company has an exclusive right to
Elan's technology for the formulation of complex generic products for sale in
North America. In addition, the Company and Elan have 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.
The Company and Warner-Lambert entered into a Warrant Purchase Agreement on
March 28, 1996, pursuant to which Warner-Lambert was granted a warrant (the
"Warner-Lambert Warrant") which contains certain piggy-back registration
rights and entitles Warner-Lambert to purchase 1,130,158 ordinary shares
represented by ADSs. The Warner-Lambert Warrant is exercisable until January
31, 2001.
Report of the Compensation Committee
The executive compensation program of the Company is administered by the
compensation committee which in 1998 was composed of Mr. Lynch, who served as
chairman, and Messrs. Bloem and Pinkerton.
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 1998 as they affected Mr. Andress and the
other named executives.
8
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 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 $305,000 were paid
to the named executives for 1998.
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
9
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. In 1998, the
Company granted stock options and warrants to purchase an aggregate of 305,000
ordinary shares to named executives at an exercise price of $9.77 per share.
All stock options and warrants granted to executive officers in 1998 were
granted at fair market value on the date of grant.
Mr. Andress' 1998 Compensation
Mr. Andress is eligible to participate in the same executive compensation
available to the other named executives. At the end of 1998, Mr. Andress asked
the compensation committee to refrain from considering him for any increase in
his base salary for 1999 and for any cash bonus for 1998. The compensation
committee honored Mr. Andress' request. 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.
10
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, 1998 (the last day of public trading of the ADSs in fiscal 1998) 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., Ascent Pediatrics, Inc.,
Roberts Pharmaceutical Corporation and Jones Medical Industries, Inc. 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.
COMPARISON OF CUMULATIVE TOTAL RETURNS AMONG
WARNER CHILCOTT PUBLIC LIMITED COMPANY
CORPORATION, NASDAQ NATIONAL MARKET INDEX AND
COMPARABLE COMPANIES INDEX
[LINE GRAPH]
Comparable
Warner Chilcott Public Nasdaq National Companies
Date Limited Company Market Index Index
- -------------------------------------------------------------------------------
8/13/97 $100.00 $100.00 $100.00
12/31/97 $69.72 $99.18 $100.55
12/31/98 $38.02 $138.48 $98.42
11
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 26, 1999 (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 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 20.93%
Lincoln House, Lincoln Place
Dublin 2, Ireland
William H. Gates III (3)............ 1,518,039 12.24%
2365 Carillon Point
Kirkland, WA 98033
Warner Lambert Company (4).......... 1,130,158 8.37%
201 Tabor Road
Morris Plains, NJ 07950
James G. Andress (5)................ 457,500 3.60%
Roger M. Boissonneault (5).......... 224,500 1.80%
Paul S. Herendeen (5)............... 195,000 1.57%
David G. Kelly (5).................. 85,376 *
A. Dominick Musacchio (5)........... 69,375 *
William J. Poll (5)................. 70,675 *
James H. Bloem...................... 2,500 *
Nicole Bru (6)...................... 856,093 6.88%
Harold N. Chefitz................... 21,784 *
Bruce L. Downey..................... 3,500 *
Thomas G. Lynch..................... 71,733 *
Donald E. Panoz..................... 25,536 *
David B. Pinkerton (7).............. 13,782 *
All directors and executive officers
as a group (19 persons) (5)........ 2,331,719 15.86%
- --------
(1) Figures are based upon 12,366,808 ordinary shares outstanding as of
February 26, 1999. The figures assume exercise by only the shareholder or
group named in each row of all options for the purchase or ordinary
shares held by such shareholder or group which are exercisable within 50
days of February 26, 1999.
(2) Amounts shown represent the aggregate number of shares held by Elan
International Services, Ltd. and Monksland Holdings BV. Mr. Lynch, who
serves as a director of the Company, is Executive Vice President, 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.
(3) Amounts shown represent the aggregate number of shares 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) 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.
(6) Amounts shown represent the aggregate number of shares held by Mme. Bru
and Halisol, S.A.
(7) Excludes 33,056 and 30,000 ordinary shares subject to warrants which are
currently exercisable, held by National Union Fire Insurance Company of
Pittsburgh of which Mr. Pinkerton serves as Vice President and AIG Global
Investment Corporation ("AIG") of which Mr. Pinkerton serves as Managing
Director of Alternative Investments for AIG, respectively. Mr. Pinkerton
disclaims beneficial ownership of these shares.
12
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, 1998, 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 2000 annual meeting of
shareholders must be received by the secretary of the Company by January 1,
2000 to be considered for inclusion in the Company's proxy statement and form
of proxy relating to that meeting. It is anticipated that the 2000 annual
meeting will be scheduled for June 2, 2000.
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, 1998,
including the financial information included therein, has been filed with the
Securities and Exchange Commission and is incorporated in this proxy statement
by reference.
13
ANNEX A
Proposed Amendments to Incentive Share Option Scheme
1. The definition of "Nominated Employee" in Clause 2 will be amended and
restated in its entirety as follows:
" "Nominated Employee' means an employee, officer, director, consultant
or member of the medical advisory board (or similar body) who shall
have been nominated for the purpose of the Scheme pursuant to Clause
3;"
2. Clause 3A will be amended and restated in its entirety as follows:
"Eligibility for Participation
3a. The Scheme is available for employees, officers, directors,
consultants and members of the medical advisory board (or similar body)
of the Company or any Subsidiary Corporation who shall be nominated for
the purpose by the Board and/or the Committee; provided, however, that
no Incentive Stock Option may be granted to any such employee, officer,
director, consultant or member of such board (or similar body) who is
not an employee of the Company or any Subsidiary Corporation or Parent
Corporation at the time that the Option is granted."
14
WARNER CHILCOTT, PLC
INSTRUCTIONS TO THE BANK OF NEWYORK, AS DEPOSITARY
(MUST BE RECEIVED PRIOR TO THE CLOSE OF BUSINESS ON MAY 26, 1999)
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 27, 1999 at the Annual General Shareholder's
Meeting of WARNER CHILCOTT, plc to be held on June 3, 1999 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 instruction 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, 10203-0290
(Continued and to be signed and dated on the reverse side.)
Resolutions FOR AGAINST FOR AGAINST
1. [X] [X] 7. [X] [X]
2. [X] [X] 8. [X] [X]
3. [X] [X] 9. [X] [X]
4. [X] [X]
5. [X] [X]
6. [X] [X]
Change of Address Mark Here [X]
The Voting instructions Card must
be signed by the person in whose
name appears on the Relevant
receipt on the books of the
Depository. In the case of a
Corporation, the Voting instruc-
tion should be executed by a duly
authorized Officer or Attorney.
Dated: _____________________ 1999
_________________________________
Signature of Registered Holder
Sign, Date and Return this Form Vote must be indicated [X] in
Using the Endorsed Envelope. Black or Blue ink. [X]