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DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
you are in any doubt as to the action to be taken, you should consult with your
independent financial adviser who, if you are taking advice in Ireland, is
authorised or exempted under the European Communities (Markets in Financial
Instruments) Regulations 2007 or the Investment Intermediaries Act,
you have sold or transferred your entire holding of ordinary shares in ICON plc
("ICON" or "the Company"), please pass this document, together with the attached
proxy form, to the purchaser or transferee, or to the stockbroker, bank or other
agent through whom the sale was effected, for transmission to the purchaser or
transferee as soon as possible.
has a secondary listing on The Irish Stock Exchange. For this reason, ICON is
not subject to the same ongoing regulatory requirements as those which would
apply to an Irish company with a primary listing on the Irish Stock Exchange
including the requirement that certain transactions require the approval of
shareholders. For further information, shareholders should consult their own
in Ireland with limited liability under the Companies Acts, 1963 to 1986.
Registered No. 145835)
(Chief Executive Officer),
County Business Park,
OF ANNUAL GENERAL MEETING
writing to you to outline the background to the Resolutions to be proposed at
the forthcoming Annual General Meeting of ICON plc ("AGM"), each of which the
Board of Directors ("Board" or the "Directors") is recommending you
attention is drawn to the notice of AGM set out on page 8 of this document,
which will be held at The Conference Centre, ICON plc Headquarters, South County
Business Park, Leopardstown, Dublin 18, Ireland on the 21st
day of July, 2008 at 10.00 a.m.
1-5 in the enclosed notice set out the usual business to be transacted at the
AGM. Resolution 4 pertains to the proposed re-election of Professor
Dermot Kelleher to the Board and I include some background information regarding
Professor Kelleher's appointment in the following paragraph. In
addition, your Board proposes, as special business, Resolutions 6-14 which are
summarised below. In Resolution 10, the Directors are recommending
that you authorise a two for one bonus issue of ordinary shares which will
effectively serve as a stock split. In Resolutions 6, 7 and 8 the
Board is looking for the authority to establish new share compensation plans for
employees and consultants of the Company which will replenish the pool of shares
available for equity awards and provide greater flexibility in its compensation
programs. The Board believes that the Company's ability to encourage
employee participation in the ownership of the Company through its share
compensation plans has been and will continue to be instrumental in driving the
growth and success of the Company.
4 - Background information regarding proposed re-election of Professor Dermot
2008, Professor Dermot Kelleher was appointed to the Board of ICON plc as a
non-executive director. Professor Kelleher was appointed unanimously by ICON's
Board of Directors and, in accordance with the Company's Articles of
Association, stands for re-election by ICON's shareholders at the AGM. Professor
Kelleher is currently Head of the School of Medicine at Trinity College, Dublin,
Ireland and Director of the Institute of Molecular Medicine in
Dublin. His research interests are broad ranging in the fields of
Gastroenterology, Immunology and Molecular Biology and over a distinguished
thirty year career he has led significant research projects in this
field. Alongside his notable academic appointments he has served as a
visiting research scientist with Lilly Research Laboratories and has been a
founder of a number of biotechnology companies.
6, 7 and 8 - Authority to establish a new 2008 Employees Restricted Share Unit
Plan and authority to establish new share option plans for employees and
consultants/non-executive directors: the Employee Share Option Plan 2008 and the
Consultants Share Option Plan 2008
with the experience of many public companies a key component of the compensation
package the Company has offered to its employees and directors in the past has
been the ability to participate in the success of the Company through the
granting of share options. In previous years the Company has granted
options to employees and directors of the Company under the 1998 Long Term
Incentive Plan, the 1998 Consultant Option Plan and the Share Option Plan
2003. In 2008 the 1998 option plans expired and the Company is
approaching the limit on options available to grant under the Share Option Plan
2003. Therefore we are requesting approval from the shareholders for
new plans, which are detailed below, to facilitate the granting of share awards
to the Company's employees and directors. The Company's Board
considers it appropriate to establish these plans for the following
considering the significance of the proposed plans to the attraction, motivation
and retention of the Company's employees whom we consider critical to its
continuing success, the lack of capacity under the existing share option plans
approved by shareholders in 1998 and 2003 to facilitate the granting of new
share options, and our belief that the proposed plans adhere to best practices
in the US market, the Board has no hesitation in recommending that the
shareholders approve the establishment of the 2008 Employees Restricted Share
Unit Plan, the Employee Share Plan 2008 and the Consultants Share Option Plan
2008. Further detail regarding the specifics of these individual
share compensation plans is contained in the following paragraphs.
Resolution 6 shareholders are asked to approve the establishment of a new share
plan for selected employees, the ICON plc 2008 Employees Restricted Share Unit
Plan (the "2008 RSU Plan"). Its introduction will enable the
Compensation Committee of the Board of Directors, at their discretion, to grant
conditional awards of Restricted Share Units (RSUs) to selected key employees
which give the holder a right to receive Ordinary Shares, American Depository
Receipts or cash at the end of a specified period.
purpose of the 2008 RSU Plan is to promote the long-term success of the Company
and the creation of shareholder value by (a) encouraging employees to focus on
critical long-range objectives, (b) encouraging the attraction and retention of
employees, and (c) linking employees directly to shareholder interests through
increased share ownership.
principal features of the proposed 2008 RSU Plan are set out in Appendix 1 to
this letter at pages 12 to 13.
Resolutions 7 and 8 shareholders are asked to approve the establishment of two
new share option plans, to be known as the ICON plc Employee Share Option Plan
2008 (the "2008 Employee Plan") and the ICON plc Consultants Share Option Plan
2008 (the "2008 Consultants Plan"). The introduction of these plans
will enable the Compensation Committee of the Board of Directors, at their