Shire Pharmaceuticals Group plc
(Registered in England and Wales with registered number 2883758)
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of Shire Pharmaceuticals
Group plc (the "Company") will be held at the offices of WestLB Panmure Limited
at Woolgate Exchange, 25 Basinghall Street, London EC2V 5HA on 12 June 2003 at
11am for the purposes of considering and, if thought fit, passing the following
resolutions, of which the resolutions numbered 1 to 7 and 9 to 11 will be
proposed as ordinary resolutions and resolution number 8 as a special
resolution:
Ordinary business
Annual report and accounts
1 To receive and consider the report of the directors and accounts for the
year ended 31 December 2002.
Directors
Including:
2 That The Hon James Andrews Grant, retiring in accordance with the Company's
Articles of Association, be and is hereby re-appointed as a director of the
Company.
3 That Dr Joseph Wilson Totten, retiring in accordance with the Company's
Articles of Association, be and is hereby re-appointed as a director of the
Company.
4 That Angus Charles Russell, retiring in accordance with the Company's
Articles of Association, be and is hereby re-appointed as a director of the
Company.
5 That Matthew William Emmens, in accordance with the Company's Articles of
Association, be and is hereby appointed as a director of the Company.
Auditors
6 To re-appoint Deloitte & Touche as auditors and authorise the directors to
fix their remuneration.
Remuneration report
7 To approve the directors' remuneration report for the financial year ended
31 December 2002.
Special business
Market purchases
8 That the directors be and they are hereby generally and unconditionally
authorised to make market purchases (within the meaning of Section 163(3)
of the Companies Act 1985) of not more than 48,452,304 ordinary shares of
5p each in the Company's share capital at not less than 5p per share and
not more than 5% above the average of the middle market quotations for the
ordinary shares in the Company taken from the London Stock Exchange Daily
Official List for the five business days immediately preceding the day on
which such shares are contracted to be purchased (in each case exclusive of
any expenses) provided that the authority hereby conferred shall expire at
the conclusion of the next Annual General Meeting of the Company to be held
after the date hereof (except that the Company may make a contract to
purchase its own shares under the authority hereby conferred prior to the
expiry of such authority, which will or may be executed wholly or partly
after the expiry of such authority and may make a purchase of its own
shares in pursuance of any such contract).
Deferred Bonus Plan
9 That:
(a) the Shire Pharmaceuticals Group plc 2003 Deferred Bonus Plan
("Deferred Bonus Plan") a summary of which is contained at Appendix 1
to this notice, be and is hereby approved;
(b) the directors be and are hereby authorised to establish further plans
based on the Deferred Bonus Plan, but modified to take account of
local tax, exchange control or securities laws in overseas
territories, provided that any shares made available under such
further plans are treated as counting against any limits on individual
or overall participation in the Deferred Bonus Plan.
Employee Benefit Trust
10 That the Shire Pharmaceuticals Group plc Employee Benefit Trust, a summary
of which is contained at Appendix 2 to this notice, be and is hereby
approved.
Borrowing limits
11 That the limit on the aggregate principal amount outstanding in respect of
monies borrowed by the Group of a sum equal to US$400,000,000 currently
provided for in Article 102 (B) of the Company's Articles of Association be
increased to a sum equal to US$1,200,000,000.
By Order of the Board
Tatjana May
Secretary
Hampshire International Business Park
Chineham
Basingstoke
Hampshire RG24 8EP
9 May 2003
Notes
1 A member entitled to attend and vote at the Meeting may appoint one or more
proxies to attend and, on a poll, vote instead of him/her. A proxy need not
also be a member. The appointment of a proxy will not preclude a member of
the Company from attending and voting in person at the Meeting if he or she
so desires.
2 A form of proxy is enclosed for holders of ordinary shares in the Company.
To be valid the form of proxy (and the power of attorney or other
authority, if any, under which it is signed or a notarially certified copy
of such authority) must reach the Registrar, Lloyds TSB Registrars, at The
Causeway, Worthing, West Sussex BN99 6EE, not later than 11am on 10 June
2003 (or 48 hours before any adjournment of the Meeting). Separate
instruction cards for holders of American Depository Receipts and Special
Voting Shares of the Company to give instructions to respectively the
depository for the American Depository Receipts and the Trustee for the
Special Voting Shares, is being provided to such holders.
3 The Company, pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, specifies that only those shareholders registered in the
register of members of the Company as at 6pm on 10 June 2003 (or, in the
case of adjournment, as at 6pm on the date two days preceding the date of
the adjourned Meeting) shall be entitled to attend and vote at the Meeting
in respect of the number of shares registered in their name at the time.
Changes to entries on the register after such time will be disregarded in
determining the right of any person to attend and/or vote at the Meeting.
4 Copies of the service contracts of the directors, the register of
directors' share interests, the draft rules of the Shire Pharmaceuticals
Group plc 2003 Deferred Bonus Plan, the draft trust deed constituting the
Shire Pharmaceuticals Group plc Employment Benefit Trust and of the
Company's Memorandum and Articles of Association will be available for
inspection at the Company's registered office at Hampshire International
Business Park, Chineham, Basingstoke, Hampshire RG24 8EP during normal
business hours on any week day (excluding Saturdays, Sundays and public
holidays) from the date of this notice until the date of the Annual General
Meeting and at the Meeting from 10.45am until the close of the Meeting.
Business of the Annual General Meeting
The purpose of the Annual General Meeting resolutions set out above is as
follows:
Resolution 1 - Annual report and accounts
The first item of business is the requirement for shareholders to receive the
annual report and accounts for the financial year which ended on 31 December
2002.
Resolutions 2, 3 and 4 - Retirement and re-appointment of directors
In accordance with the Company's Articles of Association The Hon James Grant, Dr
Wilson Totten and Angus Russell are required to retire and, pursuant to
Resolutions 2, 3 and 4 respectively, offer themselves for re-appointment. Dr
Totten and Angus Russell are both members of the Executive Committee and James
Grant is a member of the Nomination Committee.
Resolution 5 - Retirement and appointment of directors
In accordance with the Company's Articles of Association, Matthew Emmens, having
been appointed a director of the Company during the year, is required to retire,
which he does, and offers himself for appointment. Mr Emmens was appointed to
the Board on 12 March 2003 and is the Company's Chief Executive and Chairman of
the Company's Executive Committee.
Resolution 6 - Re-appointment of auditors
This resolution is to approve the re-appointment of Deloitte & Touche as
auditors to the Company and to authorise the directors to fix their
remuneration. Deloitte & Touche were appointed on 1 August 2002 to fill a casual
vacancy following the resignation of Arthur Andersen.
Resolution 7 - Directors' Remuneration Report
This resolution is to approve the policy set out in the directors' remuneration
report, which is included in the Company's annual report and financial
statements for the financial year, which ended on 31 December 2002. This report
is prepared in accordance with the new requirements introduced by the Directors'
Remuneration Report Regulations 2002.
Resolution 8 - Authority to make market purchases
This resolution is intended to confer authority on the directors to make market
purchases of shares within a 10% limit, and in accordance with Article 39 of the
Company's Articles of Association. The authority will give the Company
flexibility in managing its balance sheet. The intention of the Board is that
purchases will only be made if they would result in an expected increase in
earnings per share, will take into account other available investment
opportunities and will be in the best interests of shareholders generally. Any
shares purchased in accordance with this authority will subsequently be
cancelled.
Options were outstanding as at 31 March 2003 to subscribe for a total number of
28,104,009 ordinary shares, or 5.8% of the Company's issued share capital. If
the authority to purchase shares is ever used in full, the proportion of issued
share capital represented by this figure would be 6.4%.
Resolution 9 - Deferred Bonus Plan
This resolution is to approve the Shire Pharmaceuticals Group plc 2003 Deferred
Bonus Plan, a summary of which is included at Appendix 1, and which allows
selected employees to invest up to 50% of their bonus or to apply such bonus in
the acquisition of ordinary shares, such shares to be matched, on a basis not
exceeding one for one, by the Company if the relevant employee remains employed
within the Group for a further three years.
Resolution 10 - Employee Benefit Trust
This resolution is to approve the Shire Pharmaceuticals Group plc Employee
Benefit Trust, ("EBT"), a summary of which is included at Appendix 2. The EBT
will be a non-UK resident trust with independent trustees, which will hold
shares on behalf of employees and ex-employees of the Group and their
dependants. The EBT will operate in conjunction with employee share plans of the
Company, including in particular the Deferred Bonus Plan.
Resolution 11 - Increase in borrowing limits
The current provision in the Company's Articles of Association allows the Board
to authorise borrowings by the Group, net, inter alia of cash, up to a ceiling
of US$400,000,000. This limit was agreed by shareholders at the AGM in July
2000. Since that time the Group has grown considerably and has become a member
of the FTSE 100. The proposed ceiling of US$1,200,000,000 is about three times
2002 EBITDA, which contrasts with the current limit which was 4.6 times 1999
EBITDA (before exceptional merger related charges). The directors consider that
the proposed limit is reasonable and is consistent with the Company's stated
strategy of growing both by acquisition and organically.
Biographical details of directors standing for re-appointment or appointment
Biographical details of the directors standing for re-appointment or appointment
are set out below:
The Hon James Grant, 65, joined the Board on 11 May 2001 as a non-executive
director. He was formerly a director of BioChem Pharma Inc. since 1986 and is a
partner with the law firm Stikeman Elliott in Montreal. He sits on the boards of
two Canadian corporations and various foundations and councils that are
not-for-profit organisations. He received a BA in Arts from McGill University in
1958 and a BCL in Law in 1961.
Dr Wilson Totten, 47, joined the Company as Group Research and Development
Director on 17 January 1998. Dr Totten is a medical doctor and has wide
experience in the pharmaceutical industry covering all phases of drug
development. Prior to joining Shire, Dr Totten was Vice President of Clinical
Research and Development with Astra Charnwood where he worked from 1995 to 1997.
Angus Russell, 46, joined the Company on 13 December 1999 as Group Finance
Director. He previously worked for Zeneca Group PLC as Group Treasurer from 1995
until April 1999 and as Vice President of Corporate Finance of AstraZeneca PLC
from April 1999 until December 1999. Mr Russell is a chartered accountant,
having qualified with Coopers & Lybrand, and is a fellow of the Association of
Corporate Treasurers.
Matthew Emmens, 51, joined the Board as Chief Executive on 12 March 2003. He
began his career in international pharmaceuticals in 1974 when he joined Merck &
Co where he held a wide range of sales, marketing and training positions before
moving to help establish Astra Merck Inc. where he later became its President
and Chief Executive. In 1999 he joined Merck KGaA and established EMD
Pharmaceuticals, the company's prescription pharmaceutical business. Prior to
joining Shire, Mr Emmens was based in Germany as President of Merck's global
prescription pharmaceuticals business. Mr Emmens graduated from Fairleigh
Dickenson University in Rutherford, New Jersey, US with a degree in Business
Administration.
APPENDIX 1
Shire Pharmaceuticals Group plc 2003 Deferred Bonus Plan (the "Deferred Bonus
Plan")
Introduction
The Company proposes to establish the Deferred Bonus Plan in order to encourage
investment in ordinary shares by executive directors and selected senior
managers of the Group. The principal terms of the Deferred Bonus Plan may be
summarised as follows:
Employees
1 All employees within the Group will be eligible to participate in the
Deferred Bonus Plan. In practice, however, the intention of the
Remuneration Committee (the "Committee") is to restrict participation to
executive directors and senior managers.
Operation of Deferred Bonus Plan
2 The Committee may invite eligible employees to participate by agreeing to
apply up to 50% of their annual bonus in the acquisition of ordinary shares
in the Company. Alternatively, participants may be invited to waive up to
50% of their bonus and an equivalent amount will be invested into ordinary
shares in the Company and held on the participant's behalf. In either case,
the participant will receive a further award ("Matching Award") over a
number of shares equivalent to the value of the gross bonus waived or
applied in the purchase of shares ("Deferred Shares"). Selected employees
who received a bonus in March 2003 will be invited to participate in the
Deferred Bonus Plan in June 2003 by applying up to 50% of that bonus in the
purchase of shares.
Matching Awards
3 Matching Awards shall vest and the shares subject to them shall be
transferred to the relevant participant, provided that:
(a) he or she remains in employment with the Group on the third
anniversary of the grant of the Matching Award; the participant will
be required to agree to accept liability for employers' national
insurance contributions arising on the vesting of the Matching Awards.
The Deferred Shares will be transferred to the participant at the same
time as the shares subject to Matching Awards; and
(b) the performance criteria relating to that Award are fulfilled. The
current intention of the Committee is to set criteria relating to the
Company's EPS growth over the three year period exceeding the RPI.
Matching Awards to executive directors will vest if the Company's EPS
growth exceeds the RPI by 5%. For other participants the target will
be 3%.
Early vesting of matching awards
4 Matching Awards shall vest if the participant ceases to be employed within
the Group by reason of death, disability, retirement (at normal retirement
age), or the business or company by which he is employed being sold out of
the Group, or in any other circumstances at the discretion of the
Committee. However, the total number of shares that will be transferred
following vesting will be reduced pro-rata to reflect the proportion of the
vesting period that has expired and the extent to which performance
criteria have been fulfilled over that period. In the event of a change of
the control in the Control, whether by takeover, reconstruction or
voluntary winding-up, Matching Awards will vest but be similarly pro-rated.
Lapse of awards
5 Awards shall lapse if a participant ceases employment in circumstances
other than those set out above, or if the participant purports to deal in
or transfer the Deferred Shares without the permission of the Committee
prior to the date of vesting of a Matching Award. Participants will be
entitled to their Deferred Shares notwithstanding the lapse of Matching
Awards.
Individual and overall limits on Deferred Bonus Plan
6 No share shall be issued pursuant to the Deferred Bonus Plan on any date
if, as a result, the total number of ordinary shares issued or remaining
issuable pursuant to options granted in the previous ten years under all
employee share option schemes, when added to the number of ordinary shares
issued in the previous ten years pursuant to rights granted under the
Deferred Bonus Plan and under other employee share schemes not involving
the grant of options, would exceed 10% of the issued ordinary share capital
of the Company on that date.
Employee Benefit Trust
7 The Deferred Bonus Plan may be operated in conjunction with the EBT, which
may hold Deferred Shares and shares subject to Matching Awards. The EBT may
subscribe for shares, subject to the limits set out above, or purchase
shares in the market in order to satisfy awards.
Voting dividend and other rights
8 Awards shall not be transferable or assignable. Shares issued pursuant to
the Deferred Bonus Plan shall rank pari passu with the other ordinary
shares then in issue save in respect of dividends or other rights declared
by reference to a record date prior to the date of issue. Participants
shall have no voting or dividend rights in respect of shares subject to
Matching Awards, but the Committee may request the EBT to make a cash
payment following the vesting of a Matching Award equivalent to dividends
paid on the shares while subject to Matching Awards. Benefits received
under the Deferred Bonus Plan shall not be pensionable.
Administration of Deferred Bonus Plan
9 The administration of the Deferred Bonus Plan shall be the responsibility
of the Committee. The Board of directors may amend the Deferred Bonus Plan
as it sees fit, provided that:
(a) no amendment to the detriment of holders of existing awards may be
made without the consent of the majority of affected participants; and
(b) no amendment shall be made to the material advantage of participants
without the prior approval of the Company in general meeting, except
for amendments that are minor and to benefit the administration of the
Deferred Bonus Plan, to take account of any changes in legislation, or
to obtain or maintain favourable taxation, exchange control or
regulatory treatment for the Company or any member of the Group.
APPENDIX 2
Shire Pharmaceuticals Group plc Employee Benefit Trust ("EBT")
1 Trustee
The initial trustee of the EBT will be Towers Share Plan Services
(Guernsey) Limited, an independent trustee company based in Guernsey.
2 Beneficiaries
The beneficiaries of the EBT will include employees and ex-employees of the
Group and their dependants.
3 Duration of Trust
The duration of the trust will be 79 years, in accordance with Guernsey
law.
4 Operation of EBT
The EBT will hold shares on behalf of beneficiaries, and may agree with the
Company to provide shares to participants in any of the Company's employee
share plans, including in particular the Deferred Bonus Plan.
5 Limit on holding
The EBT shall not acquire any shares, by subscription or otherwise, if as a
result the total number of shares held pursuant to the terms of the EBT
would exceed 5% of the issued ordinary share capital of the Company at that
date.