SEC Info - Shire plc - ‘10-K’ for 12/31/09

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Shire plc – ‘10-K’ for 12/31/09 – ‘XML.R42’

On: Friday, 2/26/10, at 12:40pm ET · For: 12/31/09 · Accession #: 950103-10-520 · File #: 0-29630

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/26/10  Shire plc                         10-K       12/31/09   62:8.1M                                   Davis Polk & … LLP 01/FA

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                       HTML   2.87M 
 2: EX-10.26    Material Contract                                   HTML     37K 
 3: EX-21       Subsidiaries List                                   HTML     47K 
 4: EX-23.1     Consent of Experts or Counsel                       HTML     19K 
 5: EX-23.2     Consent of Experts or Counsel                       HTML     19K 
 6: EX-31.1     Certification -- §302 - SOA'02                      HTML     26K 
 7: EX-31.2     Certification -- §302 - SOA'02                      HTML     26K 
 8: EX-32.1     Certification -- §906 - SOA'02                      HTML     20K 
47: XML         IDEA XML File -- Definitions and References          XML    131K 
55: XML         IDEA XML File -- Filing Summary                      XML     94K 
52: XML.R1      Document And Entity Information                      XML     89K 
53: XML.R2      Consolidated Balance Sheets                          XML    268K 
32: XML.R3      Consolidated Balance Sheets (Parentheticals)         XML     57K 
37: XML.R4      Consolidated Balance Sheets (Parentheticals in       XML     33K 
                GBP)                                                             
45: XML.R5      Consolidated Statements of Operations                XML    365K 
44: XML.R6      Consolidated Statements of Operations                XML     51K 
                (Parentheticals)                                                 
59: XML.R7      Consolidated Statement of Changes in Shareholders'   XML   1.03M 
                Equity                                                           
22: XML.R8      Consolidated Statements of Comprehensive Income      XML    122K 
43: XML.R9      Components of Accumulated Other Comprehensive        XML     51K 
                Income                                                           
20: XML.R10     Consolidated Statements of Comprehensive Income      XML     59K 
                (Parentheticals)                                                 
19: XML.R11     Consolidated Statements of Cash Flows                XML    545K 
31: XML.R12     Description Of Operations                            XML     35K 
49: XML.R13     Summary Of Significant Accounting Policies           XML     80K 
33: XML.R14     Business combinations                                XML     79K 
34: XML.R15     Termination costs                                    XML     38K 
41: XML.R16     Gain on sale of product rights                       XML     35K 
62: XML.R17     Reorganization costs                                 XML     43K 
29: XML.R18     Intergration and Acquisition costs                   XML     35K 
15: XML.R19     Accounts receivable, net                             XML     38K 
36: XML.R20     Inventories                                          XML     37K 
48: XML.R21     Assets held for sale                                 XML     35K 
25: XML.R22     Prepaid expenses and other current assets            XML     37K 
46: XML.R23     Investments                                          XML     40K 
35: XML.R24     Property Plant and Equipment, net                    XML     38K 
58: XML.R25     Goodwill                                             XML     39K 
51: XML.R26     Other intangible assets, net                         XML     43K 
38: XML.R27     Accounts payable and accrued expenses                XML     43K 
42: XML.R28     Other current liabilities                            XML     37K 
18: XML.R29     Long-term debt                                       XML     40K 
21: XML.R30     Other long-term debt                                 XML     36K 
26: XML.R31     Other non-current liabilities                        XML     37K 
30: XML.R32     Derivative instruments                               XML     45K 
40: XML.R33     Fair value measurement                               XML     53K 
50: XML.R34     Commitments and contingencies                        XML     56K 
17: XML.R35     Shareholders Equity                                  XML     41K 
23: XML.R36     Earnings per share                                   XML     52K 
54: XML.R37     Segmental reporting                                  XML     97K 
57: XML.R38     Interest expense                                     XML     36K 
39: XML.R39     Other income (expenses), net                         XML     39K 
60: XML.R40     Retirement benefits                                  XML     34K 
24: XML.R41     Taxation                                             XML     86K 
61: XML.R42     Share-based compensation plans                       XML     71K 
28: XML.R43     Restatement of previously issued financial           XML     35K 
                statements                                                       
16: XML.R44     Income Access Share Trust Financial Statements       XML     62K 
27: XML.R45     Valuation and Qualifying Accounts Schedule           XML     45K 
56: EXCEL       IDEA Workbook of Financial Reports (.xls)            XLS    206K 
 9: EX-101.INS  XBRL Instance -- shpgf-20091231                      XML    826K 
11: EX-101.CAL  XBRL Calculations -- shpgf-20091231_cal              XML    203K 
12: EX-101.DEF  XBRL Definitions -- shpgf-20091231_def               XML     86K 
13: EX-101.LAB  XBRL Labels -- shpgf-20091231_lab                    XML    822K 
14: EX-101.PRE  XBRL Presentations -- shpgf-20091231_pre             XML    468K 
10: EX-101.SCH  XBRL Schema -- shpgf-20091231                        XSD     99K

‘XML.R42’ — Share-based compensation plans

This Financial Report is an XBRL XML File.

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<div style="font-size:12pt">31. Share-based compensation plans The Company measures share-based compensation cost at the grant date, based on the fair value of the award, and recognizes the expense over the employee requisite service period. The following table shows the total share-based compensation expense (see below for types of share-based awards) included in the consolidated statements of operations: <table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="left"> </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">2009 </td><td height="17" width="103" align="right">2008 </td><td height="17" width="103" align="right">2007 </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">$’M</td><td height="17" width="103" align="right">$’M</td><td height="17" width="103" align="right">$’M</td></tr><tr><td height="10" width="414" align="left"> </td><td height="10" width="103" align="right">____________</td><td height="10" width="103" align="right">____________</td><td height="10" width="103" align="right">____________</td></tr><tr><td height="17" width="414" align="left">Cost of product sales</td><td height="17" width="103" align="right">4.4 </td><td height="17" width="103" align="right">3.9 </td><td height="17" width="103" align="right">5.5 </td></tr><tr><td height="17" width="414" align="left">Research and development</td><td height="17" width="103" align="right">20.1 </td><td height="17" width="103" align="right">18.9 </td><td height="17" width="103" align="right">17.0 </td></tr><tr><td height="17" width="414" align="left">Selling, general and administrative</td><td height="17" width="103" align="right">41.2 </td><td height="17" width="103" align="right">42.4 </td><td height="17" width="103" align="right">52.7 </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td></tr><tr><td height="17" width="414" align="left">Total </td><td height="17" width="103" align="right">65.7 </td><td height="17" width="103" align="right">65.2 </td><td height="17" width="103" align="right">75.2 </td></tr><tr><td height="17" width="414" align="left">Less tax</td><td height="17" width="103" align="right">(19.4)</td><td height="17" width="103" align="right">(15.3)</td><td height="17" width="103" align="right">(11.7)</td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">46.3 </td><td height="17" width="103" align="right">49.9 </td><td height="17" width="103" align="right">63.5 </td></tr><tr><td height="14" width="414" align="left"> </td><td height="14" width="103" align="right">____________</td><td height="14" width="103" align="right">____________</td><td height="14" width="103" align="right">____________</td></tr></table>There were no capitalized share-based compensation costs at December 31, 2009 and 2008. At December 31, 2009 $74.3 million (2008: $83.7 million) of total unrecognized compensation cost relating to non-vested awards, is expected to be recognized over a period of 5 years. At December 31, 2009 $52.5 million (2008: $40.7 million) of total unrecognized compensation cost relating to non-vested in the money awards, is expected to be recognized over a weighted average period of 1.9 years (2008: 1.9 years). The total fair value of in the money share and share option awards at December 31, 2009 was $24.9 million (2008: $34.4 million). Share-based compensation plans The Company grants stock-settled share appreciation rights (“SARS”) and performance share awards over ordinary shares and ADSs to directors and employees under the Shire Portfolio Share Plan (Parts A and B). Prior to 2005, awards were made under legacy plans. The Company also operates an Employee Share Purchase Plan and a Sharesave Scheme. The following awards were outstanding as at December 31, 2009:<table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="51" width="246" align="left"> </td><td height="51" width="173" align="right">Compensation type</td><td height="51" width="103" align="right">Number of awards*</td><td height="51" width="103" align="right">Expiration period from date of issue</td><td height="51" width="103" align="right">Vesting period</td></tr><tr><td height="10" width="246" align="left"> </td><td height="10" width="173" align="right">____________</td><td height="10" width="103" align="right">____________</td><td height="10" width="103" align="right">____________</td><td height="10" width="103" align="right">____________</td></tr><tr><td height="85" width="246" align="left">Portfolio Share Plan - Part A</td><td height="85" width="173" align="right">SARs</td><td height="85" width="103" align="right">29,105,047 </td><td height="85" width="103" align="right">5 years</td><td height="85" width="103" align="right">3 years, subject to performance criteria for executive directors only</td></tr><tr><td height="34" width="246" align="left">Sharesave Scheme</td><td height="34" width="173" align="right">Stock options </td><td height="34" width="103" align="right"> 345,614 </td><td height="34" width="103" align="right">6 months after vesting</td><td height="34" width="103" align="right">3 or 5 years</td></tr><tr><td height="17" width="246" align="left">Stock Purchase Plan</td><td height="17" width="173" align="right">Stock options </td><td height="17" width="103" align="right"> 705,469 </td><td height="17" width="103" align="right">On vesting date</td><td height="17" width="103" align="right">1 to 5 months</td></tr><tr><td height="68" width="246" align="left">Legacy Plans</td><td height="68" width="173" align="right">Stock options </td><td height="68" width="103" align="right"> 4,226,803 </td><td height="68" width="103" align="right">7 to 10 years</td><td height="68" width="103" align="right">3-10 years, subject to performance criteria</td></tr><tr><td height="17" width="246" align="left"> </td><td height="17" width="173" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="246" align="left"> </td><td height="17" width="173" align="right"> </td><td height="17" width="103" align="right">__________________</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td width="419" align="left" height="17" colspan="2">Stock-settled SARs and stock options</td><td height="17" width="103" align="right">34,382,933 </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="246" align="left"> </td><td height="17" width="173" align="right"> </td><td height="17" width="103" align="right">__________________</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="89" width="246" align="left">Portfolio Share Plan - Part B</td><td height="89" width="173" align="right">Performance share awards</td><td height="89" width="103" align="right"> 5,209,621 </td><td height="89" width="103" align="right">3 years</td><td height="89" width="103" align="right">3 years, subject to performance criteria for executive directors only </td></tr><tr><td height="17" width="246" align="left"> </td><td height="17" width="173" align="right"> </td><td height="17" width="103" align="right">__________________</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td width="419" align="left" height="17" colspan="2">Performance share awards</td><td height="17" width="103" align="right">5,209,621 </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="246" align="right"> </td><td height="17" width="173" align="right"> </td><td height="17" width="103" align="right">__________________</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr></table>* Number of awards are stated in terms of ordinary share equivalents. Stock settled SARs and stock options (a) Portfolio Share Plan – Part A Stock-settled share appreciation rights granted under the Portfolio Share Plan – Part A are exercisable subject to certain market and service criteria. In respect of any award made to executive directors market conditions will be based on relative total shareholder return. Vesting of awards made to executive directors will depend on relative total shareholder return performance against two comparator groups. For one-third of the award, the comparator group will be the Financial Times Stock Exchange 100 constituents (excluding financial institutions) and for two-thirds of the award the comparator group will be a group of international companies from the pharmaceutical sector. In addition, before awards granted to executive directors will vest, the Remuneration Committee must be satisfied that the underlying performance of the Company is sufficient to justify this. Where median performance is achieved, 33 1/3 per cent of stock-settled share appreciation rights will vest, rising on a straight-line basis to full vesting at upper quartile performance. Awards granted to employees below executive director level are not subject to market conditions, and are only subject to service conditions. Once awards have vested, participants will have until the fifth anniversary of the date of grant to exercise their awards. (b) Shire Sharesave Scheme (Sharesave Scheme) Options granted under the Sharesave Scheme are granted with an exercise price equal to 80% of the mid-market price on the day before invitations are issued to employees. Employees may enter into three or five-year savings contracts. No performance conditions apply. (c) Shire Employee Stock Purchase Plan (Stock Purchase Plan) Under the Stock Purchase Plan, options are granted with an exercise price equal to 85% of the fair market value of a share on the enrolment date (the first day of the offering period) or the exercise date (the last day of the offering period), whichever is the lower. Employees agree to save for a period up to 27 months. No performance conditions apply. (d) Legacy plans – Principally the Shire 2000 Executive Share Option Scheme Options granted under this scheme were subject to certain performance criteria, which were based on the Company’s share price or diluted EPS growth compared to a fixed growth rate. At December 31, 2009 all stock options outstanding under this scheme had met the required conditions and were exercisable. A summary of the status of the Company’s SARs and stock options as at December 31, 2009 and of the related transactions during the periods then ended is presented below:<table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="51" width="414" align="left"> </td><td height="51" width="103" align="right">Weighted average exercise price </td><td height="51" width="103" align="right"> </td><td height="51" width="103" align="right"> </td></tr><tr><td height="17" width="414" align="left">Year to December 31, 2009</td><td height="17" width="103" align="right">£</td><td height="17" width="103" align="right">Number of </td><td height="17" width="103" align="right">Intrinsic Value</td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">shares</td><td height="17" width="103" align="right">£’ M</td></tr><tr><td height="10" width="414" align="left"> </td><td height="10" width="103" align="right">_______________</td><td height="10" width="103" align="right">_______________</td><td height="10" width="103" align="right">_______________</td></tr><tr><td height="17" width="414" align="left">Outstanding as at beginning of period</td><td height="17" width="103" align="right">8.27 </td><td height="17" width="103" align="right">35,462,015 </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="414" align="left">Granted</td><td height="17" width="103" align="right">9.10 </td><td height="17" width="103" align="right">8,385,348 </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="414" align="left">Exercised</td><td height="17" width="103" align="right">6.75 </td><td height="17" width="103" align="right">(6,944,361)</td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="414" align="left">Expired</td><td height="17" width="103" align="right">9.15 </td><td height="17" width="103" align="right">(2,520,069)</td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">_______________</td><td height="17" width="103" align="right">_______________</td><td height="17" width="103" align="right">________________</td></tr><tr><td height="18" width="414" align="left">Outstanding as at end of period</td><td height="18" width="103" align="right">8.72 </td><td height="18" width="103" align="right">34,382,933 </td><td height="18" width="103" align="right">30.7 </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">_______________</td><td height="17" width="103" align="right">_______________</td><td height="17" width="103" align="right">________________</td></tr><tr><td height="17" width="414" align="left">Exercisable as at end of period</td><td height="17" width="103" align="right">7.76 </td><td height="17" width="103" align="right">9,517,341 </td><td height="17" width="103" align="right">19.9 </td></tr><tr><td height="17" width="414" align="right"> </td><td height="17" width="103" align="right">_______________</td><td height="17" width="103" align="right">_______________</td><td height="17" width="103" align="right">________________</td></tr></table>The weighted average grant date fair value of SARs and stock options granted in the year ended December 31, 2009 was £2.35. SARs and stock options outstanding as at December 31, 2009 have the following characteristics:<table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="85" width="122" align="right">Number of options outstanding</td><td height="85" width="122" align="right">Exercise prices</td><td height="85" width="122" align="right">Weighted Average Remaining Contractual term Years</td><td height="85" width="122" align="right">Weighted average exercise price of options outstanding </td><td height="85" width="122" align="right">Number of options exercisable</td><td height="85" width="122" align="right">Weighted average exercise price of options exercisable</td></tr><tr><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right">£</td><td height="17" width="122" align="left"> </td><td height="17" width="122" align="right">£</td><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right">£</td></tr><tr><td height="11" width="122" align="right">________________</td><td height="11" width="122" align="right">______________</td><td height="11" width="122" align="right">__________</td><td height="11" width="122" align="right">_______________</td><td height="11" width="122" align="right">_____________</td><td height="11" width="122" align="right">_____________</td></tr><tr><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right"> </td></tr><tr><td height="17" width="122" align="right">2,670,782 </td><td height="17" width="122" align="right">3.38-6.00</td><td height="17" width="122" align="right">4.6 </td><td height="17" width="122" align="right">5.2 </td><td height="17" width="122" align="right">2,670,782 </td><td height="17" width="122" align="right">5.2 </td></tr><tr><td height="17" width="122" align="right">28,829,467 </td><td height="17" width="122" align="right">6.01-11.00</td><td height="17" width="122" align="right">2.9 </td><td height="17" width="122" align="right">9.4 </td><td height="17" width="122" align="right">6,157,905 </td><td height="17" width="122" align="right">8.3 </td></tr><tr><td height="17" width="122" align="right">2,882,684 </td><td height="17" width="122" align="right">11.01-14.30</td><td height="17" width="122" align="right">2.7 </td><td height="17" width="122" align="right">12.0 </td><td height="17" width="122" align="right">688,654 </td><td height="17" width="122" align="right">12.6 </td></tr><tr><td height="17" width="122" align="right">________________</td><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right">_____________</td><td height="17" width="122" align="right"> </td></tr><tr><td height="19" width="122" align="right">34,382,933 </td><td height="19" width="122" align="right"> </td><td height="19" width="122" align="right"> </td><td height="19" width="122" align="right"> </td><td height="19" width="122" align="right">9,517,341 </td><td height="19" width="122" align="right"> </td></tr><tr><td height="17" width="122" align="right">________________</td><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right"> </td><td height="17" width="122" align="right">_____________</td><td height="17" width="122" align="right"> </td></tr></table>Performance shares Portfolio Share Plan – Part B Performance share awards granted to executive directors under the Portfolio Share Plan – Part B are exercisable subject to certain market and service criteria. In respect of any award made to executive directors market conditions will be based on relative total shareholder return. Vesting will depend on relative total shareholder return performance against two comparator groups. For one-third of an award, the comparator group will be the Financial Times Stock Exchange 100 constituents (excluding financial institutions) and for two-thirds of the award the comparator group will be a group of international companies from the pharmaceutical sector. In addition, before awards granted to executive directors will vest, the Committee must be satisfied that the underlying performance of the Company is sufficient to justify this. Where median performance is achieved, 33 1/3 per cent of performance shares will vest, rising on a straight-line basis to full vesting at upper quartile performance. Awards granted to employees below executive director level are not subject to market conditions, and are only subject to service conditions. A summary of the status of the Company’s performance share awards as at December 31, 2009 and of the related transactions during the periods then ended is presented below: <table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="51" width="391" align="left">Performance share awards </td><td height="51" width="28" align="left"> </td><td height="51" width="103" align="right">Number of shares</td><td height="51" width="103" align="right">Aggregate intrinsic value £’M</td><td height="51" width="103" align="right">Weighted average remaining life</td></tr><tr><td height="10" width="391" align="left"> </td><td height="10" width="28" align="left"> </td><td height="10" width="103" align="right">_______________</td><td height="10" width="103" align="right">_______________</td><td height="10" width="103" align="right">_______________</td></tr><tr><td height="17" width="391" align="left">Outstanding as at beginning of period</td><td height="17" width="28" align="left"> </td><td height="17" width="103" align="right"> 3,232,727 </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="391" align="left">Granted</td><td height="17" width="28" align="left"> </td><td height="17" width="103" align="right"> 2,749,533 </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="391" align="left">Exercised</td><td height="17" width="28" align="left"> </td><td height="17" width="103" align="right">(588,233)</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="391" align="left">Expired</td><td height="17" width="28" align="left"> </td><td height="17" width="103" align="right">(184,406)</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="391" align="left"> </td><td height="17" width="28" align="left"> </td><td height="17" width="103" align="right">_______________</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="23" width="391" align="left">Outstanding as at end of period</td><td height="23" width="28" align="left"> </td><td height="23" width="103" align="right"> 5,209,621 </td><td height="23" width="103" align="right">50.4 </td><td height="23" width="103" align="right">1.6 </td></tr><tr><td height="17" width="391" align="left"> </td><td height="17" width="28" align="left"> </td><td height="17" width="103" align="right">_______________</td><td height="17" width="103" align="right">_______________</td><td height="17" width="103" align="right">________________</td></tr><tr><td height="12" width="391" align="right"> </td><td height="12" width="28" align="left"> </td><td height="12" width="103" align="right">_______________</td><td height="12" width="103" align="right">_______________</td><td height="12" width="103" align="right">_______________</td></tr><tr><td height="17" width="391" align="left"> </td><td height="17" width="28" align="left"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="left"> </td></tr><tr><td width="728" align="left" height="17" colspan="5">The weighted-average grant date fair value of performance share awards granted in the year to December 31, 2009 is £8.83.</td></tr><tr><td height="17" width="391" align="left"> </td><td height="17" width="28" align="left"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="left"> </td></tr></table>Exercises of employee share-based awards The total intrinsic values of share-based awards exercised for the years to December 31, 2009, 2008 and 2007 were $43.8 million, $23.8 million and $67.9 million, respectively. The total cash received from employees as a result of employee share option exercises for the period to December 31, 2009, 2008 and 2007 was approximately $14.6 million, $11.4 million and $30.4 million, respectively. In connection with these exercises, the excess tax benefit/(deficit) credited/(charged) to additional paid-in capital for the period to December 31, 2009, 2008 and 2007 was $16.8 million credit, $3.8 million charge and $nil respectively. The Company will settle future employee share award exercises with either newly listed common shares or with shares held in an ESOT. The number of shares to be purchased by the ESOT during 2010 will be dependent on the number of employee share awards granted and exercised during the year and Shire plc’s share price. At December 31, 2009 the ESOT held 5.8 million ordinary shares and 4.0 million ADSs. Valuation methodologies The Company estimates the fair value of its share-based awards using a Black-Scholes valuation model. Key input assumptions used to estimate the fair value of share–based awards include the grant price of the award, the expected stock-based award term, volatility of the Company’s share, the risk-free rate and the Company’s dividend yield. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in estimating the fair values of Shire’s stock-based awards. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company under guidance issued by the FASB on share based payment transactions. The fair value of share awards granted was estimated using the following assumptions:<table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="414" align="left">Period ended December 31, </td><td height="17" width="103" align="right">2009 </td><td height="17" width="103" align="right">2008 </td><td height="17" width="103" align="right">2007 </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">______________</td><td height="17" width="103" align="right">______________</td><td height="17" width="103" align="right">______________</td></tr><tr><td height="19" width="414" align="left">Risk-free interest rate(1)</td><td height="19" width="103" align="right">0.5-2.7%</td><td height="19" width="103" align="right">1.3-5.3%</td><td height="19" width="103" align="right">3.4-5.35%</td></tr><tr><td height="17" width="414" align="left">Expected dividend yield</td><td height="17" width="103" align="right">0-0.7%</td><td height="17" width="103" align="right">0-0.5%</td><td height="17" width="103" align="right">0-0.5%</td></tr><tr><td height="17" width="414" align="left">Expected life</td><td height="17" width="103" align="right">3-4 years</td><td height="17" width="103" align="right">3-4 years</td><td height="17" width="103" align="right">3-4 years</td></tr><tr><td height="17" width="414" align="left">Weighted average volatility</td><td height="17" width="103" align="right">33% </td><td height="17" width="103" align="right">29% </td><td height="17" width="103" align="right">27% </td></tr><tr><td height="17" width="414" align="left">Forfeiture rate</td><td height="17" width="103" align="right">5% </td><td height="17" width="103" align="right">5% </td><td height="17" width="103" align="right">5% </td></tr></table>(1) Risk free interest rate is for UK and US grants The following assumptions were used to value share-based awards: <ul><li>risk-free interest rate – For awards granted over ADSs, the US Federal Reserve treasury constant maturities rate with a term consistent with the expected life of the award is used. For awards granted over ordinary shares, the yield on UK government bonds with a term consistent with the expected life of the award is used; </li><li>expected dividend yield – measured as the average annualized dividend estimated to be paid by the Company over the expected life of the award as a percentage of the share price at the grant date; </li><li>expected life – estimated based on the contractual term of the awards and the effects of employees’ expected exercise and post-vesting employment termination behaviour; </li><li>weighted average expected volatility – measured using historical daily price changes of the Company’s share price over the respective expected life of the share-based awards at the date of the award; and </li><li>the forfeiture rate is estimated using historical trends of the number of awards forfeited prior to vesting.</li></ul></div>

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2 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 5/25/10  SEC                               UPLOAD¶     9/11/17    1:21K  Shire plc
 4/14/10  SEC                               UPLOAD¶     9/11/17    1:31K  Shire plc

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Filing Submission 0000950103-10-000520 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Shire plc – ‘10-K’ for 12/31/09 – ‘XML.R42’

On: Friday, 2/26/10, at 12:40pm ET · For: 12/31/09 · Accession #: 950103-10-520 · File #: 0-29630

Previous ‘10-K’: ‘10-K’ on 2/27/09 for 12/31/08 · Next: ‘10-K’ on 2/23/11 for 12/31/10 · Latest: ‘10-K’ on 2/20/18 for 12/31/17 · 2 References: By: SEC – ‘UPLOAD’ on 5/25/10 By: SEC – ‘UPLOAD’ on 4/14/10

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34Filing Table of Contents

‘XML.R42’ — Share-based compensation plans

This Financial Report is an XBRL XML File.

2 Subsequent Filings that Reference this Filing

Previous ‘10-K’: ‘10-K’ on 2/27/09 for 12/31/08 · Next: ‘10-K’ on 2/23/11 for 12/31/10 · Latest: ‘10-K’ on 2/20/18 for 12/31/17 · 2 References:

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents