As filed with the Securities and Exchange Commission on January 31, 2002
Registration No. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
AMGEN INC.
(Exact name of registrant as specified in its charter)
-----------------
Delaware 2836 95-3540776
(State or other (Primary Standard (I.R.S.
jurisdiction IndustrialClassification EmployerIdentification
ofincorporation or Code Number) No.)
organization)
-----------------
One Amgen Center Drive
Thousand Oaks, California 91320-1799
(805) 447-1000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-----------------
Steven M. Odre, Esq.
Senior Vice President, General Counsel and Secretary
One Amgen Center Drive
Thousand Oaks, California 91320-1799
(805) 447-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------
Copies to:
Gary Olson, Esq. Barry G. Pea, Esq. Stephen F. Arcano, Esq.
Charles K. Ruck, Esq. Executive Vice President, Skadden, Arps, Slate,
Latham & Watkins General Counsel and Secretary Meagher & Flom LLP
633 West Fifth Street, Suite 4000 Immunex Corporation Four Times Square
Los Angeles, California 90071 51 University Street New York, NY 10036
(213) 485-1234 Seattle, Washington 98101 (212) 735-3000
(206) 587-0430
-----------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effectiveness of this registration statement and the
satisfaction or waiver of all other conditions under the merger agreement
described herein.
If the securities being registered on this form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Aggregate Offering Amount of
Securities to be Registered Registered (1) Per Share Price (2) Registration Fee
-----------------------------------------------------------------------------------------------
Common Stock, par value
$0.0001 per share, and
associated preferred share
purchase rights (3) 254,517,108 N/A $15,751,138,305 $1,449,105
-----------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(1) Based upon the maximum number of shares of Amgen common stock that may be
issued in connection with the merger described within this registration
statement.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rules 457(f) and 457(c) under the Securities Act of 1933, based on (i)
$27.23, the average of the high and low prices of Immunex common stock, as
reported on the Nasdaq National Market on January 30, 2002, and (ii) the
maximum number of shares of Immunex to be cancelled in connection with the
merger described in this registration statement.
(3) The preferred share purchase rights, which are attached to the shares of
Amgen common stock being registered hereunder, will be issued for no
additional consideration. Accordingly, no additional registration fee is
payable.
-----------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment that specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The information in this joint proxy statement/prospectus is not complete and
may be changed. Amgen may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
joint proxy statement/prospectus is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
Subject to completion, dated January 31, 2002
[LOGO] Logo of Amgen
[LOGO] Logo of Immunex
MERGER PROPOSED--YOUR VOTE IS VERY IMPORTANT
Amgen Inc. and Immunex Corporation have agreed to the acquisition of Immunex
by Amgen under the terms of a merger agreement. We are proposing the merger
because we believe it will benefit the stockholders of both companies by
creating more stockholder value than either company could create individually
and allowing stockholders to participate in a larger, more diversified company.
We also believe that the merger will enhance Amgen's position as a
biotechnology leader with a diverse portfolio of therapeutic drugs.
When the merger is completed, Immunex shareholders will receive 0.44 of a
share of Amgen common stock and $4.50 in cash for each share of Immunex common
stock that they own. We estimate that Amgen will issue approximately
million shares of common stock in the merger and that immediately after the
merger Immunex shareholders will hold approximately ___% of the
then-outstanding shares of Amgen common stock, based on the number of shares of
Amgen and Immunex common stock outstanding on , 2002. Amgen common
stock is traded on the Nasdaq National Market under the trading symbol "AMGN."
On , 2002, Amgen common stock closed at $ per share as
reported on the Nasdaq National Market. Amgen stockholders will continue to own
their existing shares which will not be affected by the merger. After the
merger, Immunex will be a wholly-owned subsidiary of Amgen.
The merger cannot be completed unless the Amgen stockholders approve the
issuance of shares of Amgen common stock in the merger and the Immunex
shareholders approve the merger agreement. The obligations of Amgen and Immunex
to complete the merger are also subject to the satisfaction or waiver of
several conditions, including receiving clearance from regulatory agencies.
More information about Amgen, Immunex and the merger is contained in this joint
proxy statement/prospectus. We encourage you to read this joint proxy
statement/prospectus, including the section entitled "Risk Factors" beginning
on page 16 before voting.
The board of directors of Amgen has unanimously approved the merger
agreement and the issuance of shares of Amgen common stock in the merger, and
the board of directors of Immunex has unanimously adopted the merger agreement.
The Amgen board of directors unanimously recommends that Amgen stockholders
vote " FOR " the proposal to approve the issuance of shares of Amgen common
stock in the merger. The Immunex board of directors unanimously recommends that
Immunex shareholders vote " FOR " the proposal to approve the merger agreement.
Amgen and Immunex have each scheduled special meetings in connection with
the respective votes required. The dates, times and places of the meetings are
as follows:
For Amgen stockholders: For Immunex shareholders:
Your vote is very important. Whether or not you plan to attend your
respective company's special meeting, please take the time to vote by
completing and mailing to us the enclosed proxy card or by submitting your
voting instructions over the Internet or by telephone if that option is
available to you.
Sincerely,
Kevin W.
Sharer Edward V. Fritzky
Chairman of Chairman of the
the Board, Board,
Chief
Executive Chief Executive
Officer and Officer and
President President
Amgen Inc. Immunex
Corporation
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities to be issued under
this joint proxy statement/prospectus or determined if this joint proxy
statement/prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
This joint proxy statement/prospectus is dated , 2002, and is first
being mailed to Amgen and Immunex stockholders on or about , 2002.
[LOGO] Logo of Amgen
AMGEN INC.
-----------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON , 2002
-----------------
To the stockholders of Amgen Inc.:
We will hold a special meeting of stockholders of Amgen Inc. at
, on , 2002, at : .m., local time, for the
following purposes:
1. To consider and vote upon a proposal to approve the issuance of shares
of Amgen common stock, par value $0.0001 per share, pursuant to the
Agreement and Plan of Merger, dated as of December 16, 2001, by and
among Amgen, AMS Acquisition Inc., which is a wholly-owned subsidiary of
Amgen, and Immunex Corporation.
2. To transact any other business as may properly come before the special
meeting or any adjournments or postponements of the special meeting.
These items of business are described in the attached joint proxy
statement/prospectus. Only Amgen stockholders of record at the close of
business on , 2002, the record date for the special meeting, are
entitled to notice of and to vote at the special meeting and any adjournments
or postponements of the special meeting.
The board of directors of Amgen unanimously recommends that you vote "FOR"
approval of the issuance of Amgen common stock pursuant to the merger
agreement. The affirmative vote of the holders of a majority of the shares of
Amgen common stock present or represented by proxy and voting at the Amgen
special meeting is required to approve the issuance of Amgen common stock in
the merger.
Your vote is important. It is important that your shares be represented and
voted whether or not you plan to attend the special meeting in person. You may
vote by submitting your proxy over the Internet, by telephone or by completing
and mailing the enclosed proxy card. Submitting a proxy over the Internet, by
telephone or by mailing a proxy card will ensure your shares are represented at
the special meeting. Please review the instructions in this joint proxy
statement/prospectus and the proxy card or the information forwarded by your
bank, broker or other holder of record regarding each of these options.
By Order of the Board of Directors,
Steven M. Odre
Secretary
______ ______ , 2002
Please note that attendance at the special meeting will be limited to
stockholders as of the record date, or their authorized representatives, and
guests of Amgen.
[LOGO] Logo of Immunex
IMMUNEX CORPORATION
-----------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON , 2002
-----------------
To the shareholders of Immunex Corporation:
We will hold a special meeting of shareholders of Immunex Corporation on
, 2002, at .m., local time, at
, for the following purposes:
1. To consider and vote upon a proposal to approve the Agreement and Plan of
Merger, dated as of December 16, 2001, by and among Amgen Inc., AMS
Acquisition Inc., which is a wholly-owned subsidiary of Amgen, and
Immunex. In the merger contemplated by the merger agreement:
. AMS Acquisition will merge with and into Immunex, with Immunex
surviving the merger as a wholly-owned subsidiary of Amgen; and
. each outstanding share of Immunex common stock will be converted into
0.44 of a share of Amgen common stock and $4.50 in cash, except that
shares held by any Immunex shareholders who validly exercise
dissenters' rights will be subject to appraisal in accordance with
Washington law.
2. To transact any other business as may properly come before the special
meeting or any adjournments or postponements of the special meeting.
These items of business are described in the attached joint proxy
statement/prospectus. Only Immunex shareholders of record at the close of
business on , 2002, the record date for the special meeting, are
entitled to notice of and to vote at the special meeting and any adjournments
or postponements of the special meeting.
The board of directors of Immunex unanimously recommends that you vote "FOR"
approval of the merger agreement. The affirmative vote of the holders of a
majority of the outstanding shares of Immunex common stock entitled to vote is
required to approve the merger agreement.
Your vote is important. It is important that your shares be represented and
voted whether or not you plan to attend the special meeting in person. You may
vote by completing and mailing the enclosed proxy card. If your shares are held
in "street name," which means shares held of record by a broker, bank or other
nominee, you may be entitled to vote over the Internet or by telephone. Please
see the specific voting instructions in the section of this joint proxy
statement/prospectus entitled "The Immunex Special Meeting--Voting; Proxies;
Revocation--Voting by Proxy." Submitting a proxy over the Internet, by
telephone or by mailing a proxy card will ensure your shares are represented at
the special meeting. Please review the instructions in this joint proxy
statement/prospectus, the proxy card or the information forwarded by your bank,
broker or other holder of record regarding each of these options.
Under Washington law, Immunex shareholders will have the opportunity to
assert dissenters' rights of appraisal in connection with the merger. These
rights are described in greater detail within the attached joint proxy
statement/prospectus.
Please do not send any certificates representing your Immunex common stock
at this time.
By Order of the Board of Directors,
Barry G. Pea
Secretary
____________, 2002
Please note that attendance at the special meeting will be limited to
shareholders as of the record date, or their authorized representatives, and
guests of Immunex.
ADDITIONAL INFORMATION
This joint proxy statement/prospectus incorporates important business and
financial information about Amgen and Immunex from other documents that are not
included in or delivered with this joint proxy statement/prospectus. For a
listing of the documents incorporated by reference into this joint proxy
statement/prospectus, please see the section entitled "Where You Can Find More
Information" beginning on page 118.
Amgen will provide you with copies of this information relating to Amgen,
without charge, upon written or oral request to:
Amgen Inc.
Mail stop 27-5-C
One Amgen Center Drive
Thousand Oaks, California 91320-1799
(800) 842-6436
Attn: Investor Relations
In addition, you may obtain copies of the information relating to Amgen,
without charge, by sending an e-mail to investor.relations@Amgen.com.
Furthermore, you may obtain copies of some of this information by making a
request through the Amgen investor relations Web site,
http://www.Amgen.com/investor/litRequest.html.
Immunex will provide you with copies of this information relating to
Immunex, without charge, upon written or oral request to:
Immunex Corporation
51 University Street
Seattle, Washington 98101
(206) 389-4363
Attn: Investor Relations
In addition, you may obtain copies of the information relating to Immunex,
without charge, by sending an e-mail to ImmunexIR@immunex.com. Furthermore, you
may obtain copies of some of this information by making a request through the
Immunex investor relations Web site, http://www.Immunex.com/investor_fs2.html.
In order for you to receive timely delivery of the documents in advance of
the Amgen and Immunex special meetings, Amgen or Immunex, respectively, should
receive your request no later than , 2002.
TABLE OF CONTENTS
Page
----
QUESTIONS AND ANSWERS ABOUT THE MERGER................................... 1
SUMMARY.................................................................. 4
The Companies........................................................... 4
The Merger.............................................................. 4
Recommendations of the Amgen and Immunex Boards of Directors............ 4
Stockholders and Shareholders Entitled to Vote; Vote Required........... 5
Shareholder Voting Agreement............................................ 5
Opinions of Financial Advisors.......................................... 5
Ownership of Amgen after the Merger..................................... 6
Share Ownership of Directors and Executive Officers of Amgen and Immunex 6
Interests of Directors and Executive Officers of Immunex in the Merger.. 6
Listing of Amgen Common Stock and Delisting of Immunex Common Stock..... 6
Dissenters' Rights of Appraisal......................................... 6
Conditions to Completion of the Merger.................................. 7
No Solicitation by Immunex.............................................. 7
Termination of the Merger Agreement..................................... 7
Termination Fee and Expenses............................................ 8
Immunex Stock Options and Employee Stock Purchase Plan.................. 8
Material United States Federal Income Tax Consequences of the Merger.... 8
Accounting Treatment.................................................... 8
Regulatory Approvals.................................................... 9
Litigation Related to the Merger........................................ 9
Summary Selected Historical Financial Data.............................. 10
Recent Developments..................................................... 12
Summary Unaudited Pro Forma Condensed Combining Financial Data.......... 13
Comparative Per Share Information....................................... 14
Comparative Per Share Market Price Data................................. 15
RISK FACTORS............................................................. 16
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS............... 18
THE AMGEN SPECIAL MEETING................................................ 19
Date, Time, Place and Purpose of the Amgen Special Meeting.............. 19
Recommendation of the Amgen Board of Directors.......................... 19
Record Date; Outstanding Shares; Shares Entitled to Vote................ 19
Quorum and Vote Required................................................ 19
Voting; Proxies; Revocation............................................. 19
Abstentions and Broker Non-Votes........................................ 21
Proxy Solicitation...................................................... 21
Other Business; Adjournments............................................ 21
Assistance.............................................................. 22
THE IMMUNEX SPECIAL MEETING.............................................. 23
Date, Time, Place and Purpose of the Immunex Special Meeting............ 23
Recommendation of the Immunex Board of Directors........................ 23
Record Date; Outstanding Shares; Shares Entitled to Vote................ 23
Quorum and Vote Required................................................ 23
Voting; Proxies; Revocation............................................. 24
Abstentions and Broker Non-Votes........................................ 25
Proxy Solicitation...................................................... 25
Other Business; Adjournments............................................ 25
i
Page
----
Assistance.......................................................................... 25
THE MERGER........................................................................... 26
General............................................................................. 26
Background of the Merger............................................................ 26
Reasons for the Merger--Amgen....................................................... 30
Reasons for the Merger--Immunex..................................................... 32
Opinion of Financial Advisor--Amgen................................................. 36
Opinion of Financial Advisor--Immunex............................................... 45
Regulatory Approvals Required for the Merger........................................ 52
Material United States Federal Income Tax Consequences.............................. 52
Accounting Treatment................................................................ 55
Listing of Amgen Common Stock....................................................... 56
Delisting and Deregistration of Immunex Common Stock................................ 56
Restrictions on Sales of Shares of Amgen Common Stock Received in the Merger........ 56
Interests of Directors, Executive Officers and Shareholders of Immunex in the Merger 57
Management and Operations Following the Merger...................................... 63
Litigation Related to the Merger.................................................... 64
THE MERGER AGREEMENT................................................................. 65
Structure of the Merger............................................................. 65
Completion and Effectiveness of the Merger.......................................... 65
Merger Consideration................................................................ 65
Fractional Shares................................................................... 65
Exchange of Immunex Stock Certificates for Amgen Stock Certificates................. 66
Distributions with Respect to Unexchanged Shares.................................... 66
Transfers of Ownership and Lost Stock Certificates.................................. 66
Conditions to Completion of the Merger.............................................. 66
Representations and Warranties...................................................... 68
Immunex Prohibited from Soliciting Other Offers..................................... 69
Conduct of Business Before Completion of the Merger................................. 71
Restructure of Transaction.......................................................... 74
Regulatory Filings; Antitrust Matters; Obtaining Regulatory Approvals............... 74
Employee Benefit Matters............................................................ 75
Indemnification and Insurance....................................................... 76
Termination of the Merger Agreement................................................. 76
Termination Fee..................................................................... 77
Expenses............................................................................ 78
Amendments, Extensions and Waivers.................................................. 79
SHAREHOLDER VOTING AGREEMENT......................................................... 80
STOCKHOLDERS' RIGHTS AGREEMENT....................................................... 82
Standstill Provisions............................................................... 82
Voting of Amgen Common Stock........................................................ 82
Lock-Up of Shares of Amgen Common Stock Acquired in the Merger...................... 83
Volume Limitations on Sales of Amgen Common Stock................................... 83
Registration Rights................................................................. 83
OTHER AGREEMENTS WITH AMERICAN HOME PRODUCTS......................................... 86
Amended and Restated Promotion Agreement............................................ 86
Agreement Regarding Governance and Commercial Matters............................... 87
UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS......................... 89
ii
Page
----
DESCRIPTION OF AMGEN CAPITAL STOCK......................................... 97
General................................................................... 97
Preferred Stock........................................................... 97
Common Stock.............................................................. 97
Transfer Agent............................................................ 97
COMPARISON OF STOCKHOLDER RIGHTS AND CORPORATE GOVERNANCE MATTERS.......... 98
DISSENTERS' RIGHTS......................................................... 114
LEGAL MATTERS.............................................................. 117
EXPERTS.................................................................... 117
STOCKHOLDER PROPOSALS...................................................... 117
WHERE YOU CAN FIND MORE INFORMATION........................................ 118
ANNEX A AGREEMENT AND PLAN OF MERGER...................................... A-1
ANNEX B SHAREHOLDER VOTING AGREEMENT...................................... B-1
ANNEX C STOCKHOLDERS' RIGHTS AGREEMENT.................................... C-1
ANNEX D OPINION OF GOLDMAN, SACHS & CO.................................... D-1
ANNEX E OPINION OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED..... E-1
ANNEX F DISSENTERS' RIGHTS UNDER CHAPTER 23B.13 OF THE WASHINGTON BUSINESS
CORPORATION ACT................................................... F-1
iii
QUESTIONS AND ANSWERS ABOUT THE MERGER
Q: Why am I receiving this joint proxy statement/prospectus?
A: Amgen and Immunex have agreed to the acquisition of Immunex by Amgen under
the terms of a merger agreement that is described in this joint proxy
statement/prospectus. A copy of the merger agreement is attached to this
joint proxy statement/prospectus as Annex A.
In order to complete the merger, Amgen stockholders must vote to approve the
issuance of shares of Amgen common stock in the merger and Immunex
shareholders must vote to approve the merger agreement.
Amgen and Immunex will hold separate meetings of their respective
stockholders to obtain these approvals. This joint proxy
statement/prospectus contains important information about the merger and the
special meetings of the respective stockholders of Amgen and Immunex, and
you should read it carefully. The enclosed voting materials allow you to
vote your shares without attending your respective special meeting.
Your vote is important. We encourage you to vote as soon as possible.
Q: Why are Amgen and Immunex proposing the merger?
A: We believe that the merger will provide substantial strategic and financial
benefits to the stockholders of both companies. We believe that the
combination will create a stronger and more competitive biotechnology
company that is capable of creating more stockholder value than either Amgen
or Immunex could on its own. We believe that the merger will allow
stockholders of both companies to participate in a larger, more diversified
company. We also believe the merger will enhance Amgen's position as a
biotechnology leader with a diverse portfolio of therapeutic drugs. To
review the reasons for the merger in greater detail, see pages 30 and 32.
Q: What will happen in the merger?
A: A wholly-owned subsidiary of Amgen will merge with and into Immunex. As a
result of the merger, Immunex will become a wholly-owned subsidiary of
Amgen, and Immunex shareholders will receive 0.44 of a share of Amgen common
stock and $4.50 in cash for each share of Immunex common stock they own,
except that shares held by Immunex shareholders who validly exercise
dissenters' rights will be subject to appraisal in accordance with
Washington law. Based on the number of shares of Amgen and Immunex common
stock outstanding on , 2002, we estimate that Amgen will issue
approximately million shares of common stock in the merger and that
immediately after the merger the former Immunex shareholders, in the
aggregate, will own approximately % of the then-outstanding shares of
Amgen common stock.
Example: If you currently own 100 shares of Immunex common stock, then as a
result of the merger you will receive 44 shares of Amgen common stock and
$450 in cash.
Q: Where and when are the special meetings?
A: The Amgen special meeting will take place at ,
California, on , 2002, at .m., local time.
The Immunex special meeting will take place at
Seattle, Washington, on , 2002 at
.m., local time.
1
Q: What vote of Amgen stockholders is required to approve the issuance of Amgen
common stock in the merger?
A: The affirmative vote of the holders of a majority of the shares of Amgen
common stock present or represented by proxy and voting at the Amgen special
meeting is required to approve the issuance of Amgen common stock to the
Immunex shareholders in the merger.
Q: What vote of Immunex shareholders is required to approve the merger
agreement?
A: The affirmative vote of the holders of a majority of the outstanding shares
of Immunex common stock entitled to vote is required to approve the merger
agreement. As of , 2002, the record date for the special meeting of
Immunex shareholders, American Home Products Corporation beneficially owned
shares of Immunex common stock, representing approximately % of
the outstanding shares of Immunex common stock. American Home Products has
agreed to vote all of these shares in favor of approval of the merger
agreement.
Q: How does my company's board of directors recommend that I vote?
A: The Amgen board of directors unanimously recommends that Amgen stockholders
vote "FOR" the proposal to approve the issuance of shares of Amgen common
stock to the Immunex shareholders in the merger. For a more complete
description of the recommendation of the Amgen board of directors, see page
19.
The Immunex board of directors unanimously recommends that Immunex
shareholders vote "FOR" the proposal to approve the merger agreement. For a
more complete description of the recommendation of the Immunex board of
directors, see page 23.
Q: How do I cast my vote?
A: If you are a holder of record, you may vote in person at your special
meeting or by submitting a proxy for your special meeting. You can submit
your proxy by completing, signing, dating and returning the enclosed proxy
card in the accompanying pre-addressed postage paid envelope. Amgen
stockholders who own their shares of record can also submit a proxy over the
Internet or by telephone. For specific instructions on how to use the
telephone or the Internet to submit a proxy please refer to the instructions
on your proxy card. In the case of Immunex shareholders, the failure to cast
your vote will have the same effect as voting against the merger agreement.
If you hold your shares in "street name," which means your shares are held
of record by a broker, bank or nominee, you must provide the record holder
of your shares with instructions on how to vote your shares. Please refer to
the voting instruction card used by your broker, bank or nominee to see if
you may submit voting instructions using the Internet or telephone.
Q: Can I change my vote after I have delivered my proxy?
A: Yes. If you are a record holder, you can change your vote at any time before
your proxy is voted at your stockholders meeting by:
. delivering to the respective Secretary of Amgen or Immunex, as
appropriate, a signed notice of revocation;
. granting a new, later-dated proxy, and if it is a written proxy, it must
be signed and delivered to the respective Secretary of Amgen or Immunex,
as appropriate; or
. attending your special meeting and voting in person, however, your
attendance alone will not revoke your proxy.
If you are an Amgen stockholder, you can also change your vote by submitting
a proxy at a later date by telephone or over the Internet, in which case
your later submitted proxy will be recorded and your earlier proxy revoked.
However, whether you are an Amgen stockholder or an Immunex shareholder, if
your shares are held in a street name account at a brokerage firm or bank,
you must contact your broker, bank or other nominee to change your vote.
2
Q: Should I send in my Immunex stock certificates now?
A: No. After the merger is completed, you will receive written instructions
from the exchange agent on how to exchange your Immunex stock certificates
for the merger consideration. Please do not send in your Immunex stock
certificates with your proxy.
Q: What should I do if I receive more than one set of voting materials?
A: You may receive more than one set of voting materials, including multiple
copies of this joint proxy statement/prospectus and multiple proxy cards or
voting instruction cards. For example, if you hold your shares in more than
one brokerage account, you will receive a separate voting instruction card
for each brokerage account in which you hold shares. If you are a holder of
record and your shares are registered in more than one name, you will
receive more than one proxy card. In addition, if you are a stockholder of
Amgen and a shareholder of Immunex, you will receive one or more separate
proxy cards or voting instruction cards for each company. Please complete,
sign, date and return each proxy card and voting instruction card that you
receive.
Q: When do you expect the merger to be completed?
A: We are working to complete the merger as quickly as practicable. We
currently expect to complete the merger in the second half of 2002. However,
we cannot predict the exact timing of the completion of the merger because
the merger is subject to United States and foreign regulatory approvals and
other conditions. There may be a substantial period of time between the
approval of the respective merger proposals by stockholders at the special
meetings and the effectiveness of the merger.
Q: What rights do I have to seek a valuation of my shares:
A: If you are an Amgen stockholder, under applicable Delaware law, you will not
have dissenters' rights of appraisal in connection with the issuance of
Amgen common stock in the merger.
If you are an Immunex shareholder, under applicable Washington law, you may
assert dissenters' rights and receive a cash payment for the fair value of
your shares, but only if you comply with all requirements of Washington law
as set forth in Annex F of this joint proxy statement/prospectus. Pursuant
to your dissenters' rights under Washington law, you may seek a
determination by a Washington court of the fair value of your shares. The
fair value determined by the court may be more than, less than or equal to
the value of the consideration to be paid in the merger.
Q: Who can help answer my questions?
A: If you have any questions about the merger or how to submit your proxy, or
if you need additional copies of this joint proxy statement/prospectus or
the enclosed proxy card or voting instructions, you should contact:
. if you are an Amgen stockholder:
Georgeson Shareholder Communications, Inc.
17 State Street
10th Floor
New York, NY 10004
(800) 223-2064
. if you are an Immunex shareholder:
MacKenzie Partners, Inc.
105 Madison Avenue
14th Floor
New York, NY 10016
(800) 322-2885 or (212) 929-5500
3
SUMMARY
The following is a summary of information contained in this joint proxy
statement/prospectus. This summary may not contain all of the information about
the merger that is important to you. For a more complete description of the
merger, we encourage you to read carefully this entire joint proxy
statement/prospectus, including the attached annexes. In addition, we encourage
you to read the information incorporated by reference into this joint proxy
statement/prospectus, which includes important business and financial
information about Amgen and Immunex which we have filed with the Securities and
Exchange Commission, or the SEC. You may obtain the information incorporated by
reference into this joint proxy statement/prospectus without charge by
following the instructions in the section entitled "Where You Can Find More
Information."
The Companies
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, California 91320-1799
(805) 447-1000
Amgen is a global biotechnology company that discovers, develops,
manufactures and markets human therapeutics based on advances in cellular and
molecular biology.
AMS Acquisition Inc. is a newly-formed, wholly-owned subsidiary of Amgen
that was formed solely for the purpose of effecting the merger. AMS Acquisition
has not conducted and will not conduct any business during any period of its
existence.
Immunex Corporation
51 University Street
Seattle, Washington 98101-2936
(206) 587-0430
Immunex is a biopharmaceutical company dedicated to developing immune system
science to protect human health. Applying its scientific expertise in the
fields of immunology, cytokine biology, vascular biology, antibody-based
therapeutics and small molecule research, Immunex works to discover new targets
and new therapeutics for treating rheumatoid arthritis, asthma and other
inflammatory diseases, as well as cancer and cardiovascular diseases. The
products of Immunex include ENBREL(R) (etanercept), LEUKINE(R) (sargramostim,
GM-CSF) and NOVANTRONE(R) (mitoxantrone for injection concentrate), which had
sales of $761.9 million, $108.4 million and $71.2 million, respectively, for
Immunex in 2001. Immunex employs approximately 1,600 people.
The Merger (see page 26)
Amgen and Immunex have agreed to the acquisition of Immunex by Amgen under
the terms of the merger agreement that is described in this joint proxy
statement/prospectus. We have attached the merger agreement as Annex A to this
joint proxy statement/prospectus. We encourage you to read the merger agreement
in its entirety.
Under the terms of the merger agreement, AMS Acquisition will merge with and
into Immunex, with Immunex surviving the merger as a wholly-owned subsidiary of
Amgen. If you are an Immunex shareholder and do not validly exercise
dissenters' rights under Washington law, then, upon completion of the merger,
each of your shares of Immunex common stock will be converted into 0.44 of a
share of Amgen common stock and $4.50 in cash. We refer to the share and cash
consideration to be paid to the Immunex shareholders by Amgen as the merger
consideration. Amgen stockholders will continue to own their existing shares
which will not be affected by the merger.
Recommendations of the Amgen and Immunex Boards of Directors (see pages 19 and
23)
Amgen
The Amgen board of directors believes that the merger is fair to and in the
best interests of Amgen and its stockholders, and unanimously recommends that
Amgen stockholders vote "FOR" approval of the issuance of Amgen common stock in
the merger.
4
Immunex
The Immunex board of directors believes that the merger agreement and the
transactions contemplated by the merger agreement, including the merger, are
fair to and in the best interests of Immunex and its shareholders, and
unanimously recommends that Immunex shareholders vote "FOR" approval of the
merger agreement.
Stockholders and Shareholders Entitled to Vote; Vote Required (see pages 19 and
23)
Amgen Stockholders
You can vote at the Amgen special meeting if you owned Amgen common stock at
the close of business on , 2002, the record date for the Amgen special
meeting. On that date, there were shares of Amgen common stock
outstanding and entitled to vote. You can cast one vote for each share of Amgen
common stock that you owned on that date. Approval of the issuance of shares of
Amgen common stock in connection with the merger requires the affirmative vote
of the holders of a majority of the shares of Amgen common stock present or
represented by proxy and voted at the Amgen special meeting.
Immunex Shareholders
You can vote at the Immunex special meeting if you owned Immunex common
stock at the close of business on , 2002, the record date for the Immunex
special meeting. On that date, there were shares of Immunex common stock
outstanding and entitled to vote. You can cast one vote for each share of
Immunex common stock that you owned on that date. Approval of the merger
agreement requires the affirmative vote of the holders of a majority of the
outstanding shares of Immunex common stock entitled to vote.
Shareholder Voting Agreement (see page 80)
Amgen has entered into a shareholder voting agreement with American Home
Products Corporation and two of its subsidiaries, MDP Holdings, Inc. and
Lederle Parenterals, Inc., pursuant to which these companies agreed, among
other things, to vote all of the shares of Immunex common stock beneficially
owned by them in favor of the approval of the merger agreement. As of the
record date, these companies beneficially owned shares of Immunex common
stock, representing approximately % of the outstanding shares of Immunex
common stock on that date.
Opinions of Financial Advisors (see pages 36 and 45)
Amgen
On December 16, 2001, Goldman, Sachs & Co., financial advisor to Amgen,
delivered to the Amgen board of directors its oral opinion, which was
subsequently confirmed by delivery of a written opinion dated December 16,
2001, that, as of that date, and based upon and subject to the considerations
described in its opinion and based upon such other matters as Goldman Sachs
considered relevant, the merger consideration to be paid by Amgen for each
outstanding share of Immunex common stock pursuant to the merger agreement was
fair from a financial point of view to Amgen. The full text of Goldman Sachs'
written opinion is attached to this joint proxy statement/prospectus as Annex
D. We encourage you to read this opinion carefully in its entirety for a
description of the procedures followed, assumptions made, matters considered
and limitations on the review undertaken. Goldman Sachs' opinion is directed to
the Amgen board of directors and does not constitute a recommendation to any
stockholder as to any matters relating to the merger.
Immunex
On December 16, 2001, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
financial advisor to Immunex, delivered to the Immunex board of directors its
oral opinion, which was subsequently confirmed by delivery of a written opinion
dated December 16, 2001, that, as of that date, and based upon and subject to
the factors and assumptions set forth in the opinion, the merger consideration
to be received by the holders of the shares of Immunex common stock pursuant to
the merger was fair to these holders, from a financial point of view. The full
text of Merrill Lynch's
5
written opinion is attached to this joint proxy statement/prospectus as Annex
E. We encourage you to read this opinion carefully in its entirety for a
description of the procedures followed, assumptions made, matters considered
and limitations on the review undertaken. Merrill Lynch's opinion is directed
to the Immunex board of directors and does not constitute a recommendation to
any shareholder as to any matters relating to the merger.
Ownership of Amgen after the Merger
Amgen expects to issue approximately million shares of Amgen common
stock in the merger. Based on the number of shares of Amgen and Immunex common
stock outstanding on , 2002, after completion of the merger,
former Immunex shareholders will own approximately % of the
then-outstanding shares of Amgen common stock.
Share Ownership of Directors and Executive Officers of Amgen and Immunex
At the close of business on the record date for the Amgen special meeting,
directors and executive officers of Amgen and their affiliates beneficially
owned and were entitled to vote approximately shares of Amgen common
stock, collectively representing approximately % of the shares of
Amgen common stock outstanding on that date.
At the close of business on the record date for the Immunex special meeting,
directors and executive officers of Immunex and their affiliates beneficially
owned and were entitled to vote approximately shares of Immunex common
stock (excluding shares owned by American Home Products or its affiliates),
collectively representing approximately % percent of the shares of
Immunex common stock outstanding on that date. As of the record date for the
Immunex special meeting, American Home Products, which has designated two
directors of Immunex in accordance with the terms of a governance agreement
with Immunex, beneficially owned a total of shares of Immunex common
stock, or approximately % of the shares of Immunex common stock outstanding
on that date.
Interests of Directors and Executive Officers of Immunex in the Merger (see
page 57)
When considering the Immunex board of directors' recommendation that the
Immunex shareholders vote in favor of the approval of the merger agreement,
Immunex shareholders should be aware that some directors and executive officers
of Immunex have interests in the merger that may be different from, or in
addition to, the interests of Immunex shareholders.
The Immunex board of directors knew about these additional interests, and
considered them, among other matters, when it adopted the merger agreement.
Listing of Amgen Common Stock and Delisting of Immunex Common Stock (see page
56)
Application will be made to have the shares of Amgen common stock issued in
the merger approved for listing on the Nasdaq National Market, where Amgen
common stock currently is traded under the symbol "AMGN." If the merger is
completed, Immunex common stock will no longer be listed on the Nasdaq National
Market and will be deregistered under the Securities Exchange Act of 1934, and
Immunex will no longer file periodic reports with the SEC.
Dissenters' Rights of Appraisal (see page 114)
Amgen Stockholders
Under applicable Delaware law, Amgen stockholders will not have dissenters'
rights of appraisal in connection with the issuance of Amgen common stock in
the merger.
Immunex Shareholders
Under applicable Washington law, Immunex shareholders have the right to
dissent from the merger and to receive payment in cash for the appraised fair
value of their shares of Immunex common stock. The appraised value of their
shares
6
of Immunex common stock may be more than, less than or equal to the value of
the merger consideration. Each Immunex shareholder seeking to preserve
statutory dissenters' rights must:
. deliver to Immunex before the special meeting written notice of such
shareholder's intent to exercise its dissenters' rights with respect to
its shares of Immunex common stock if the merger is completed;
. not vote such shareholder's shares in favor of approval of the merger
agreement; and
. follow the statutory procedures for perfecting dissenters' rights under
Washington law, which are described in the section entitled "Dissenters'
Rights--Appraisal Procedures."
Merely voting against the merger agreement will not preserve your
dissenters' rights. Chapter 23B.13 of the Washington Business Corporation Act
is reprinted in its entirety and attached to this joint proxy
statement/prospectus as Annex F. Failure by an Immunex shareholder to precisely
comply with all procedures required by Washington law may result in the loss of
dissenters' rights for that shareholder.
Conditions to Completion of the Merger (see page 66)
Completion of the merger depends on a number of conditions being met,
including:
. receipt of the required approvals from Amgen and Immunex stockholders;
. absence of breaches of the representations and warranties in the merger
agreement which result in a material adverse effect on the representing
party;
. material performance of each party's obligations under the merger
agreement;
. absence of certain types of governmental orders or proceedings;
. receipt of opinions by Amgen and Immunex from their respective tax
counsel that the merger will qualify as a reorganization under the
Internal Revenue Code;
. receipt of material regulatory approvals, including the expiration or
termination of the waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976; and
. effectiveness of specific agreements between Amgen and American Home
Products.
Where legally permissible, a party may elect to waive a condition to its
obligation to complete the merger even though that condition has not been
satisfied.
No Solicitation by Immunex (see page 69)
The merger agreement contains restrictions on the ability of Immunex to
solicit or engage in discussions or negotiations with a third party with
respect to a proposal to acquire a significant interest in Immunex.
Notwithstanding these restrictions, the merger agreement provides that under
specified circumstances, if Immunex receives an acquisition proposal from a
third party that is superior to the merger, Immunex may furnish nonpublic
information to that third party and engage in negotiations regarding an
acquisition proposal with that third party. Even if Immunex receives a proposal
from a third party that is superior to the merger, it is obligated to hold a
shareholders meeting to consider the merger.
Termination of the Merger Agreement (see page 76)
Immunex and Amgen, by action of their respective boards of directors, may
mutually agree to terminate the merger agreement and abandon the merger at any
time prior to completion of the merger, whether before or after Immunex
shareholders have approved the merger agreement and Amgen stockholders have
approved the issuance of shares of Amgen common stock in the merger.
In addition, either company could decide, without the consent of the other,
to terminate the
7
merger agreement in a number of situations, including:
. the merger is not completed by September 30, 2002 (which date may be
extended to December 31, 2002 under some circumstances);
. a court or governmental authority permanently prohibits completion of
the merger;
. the required approval of Amgen or Immunex stockholders is not obtained
at the special meetings;
. the board of directors of the other party withdraws or adversely
modifies its recommendation of the merger; or
. the other party breaches its representations, warranties or covenants in
the merger agreement, which results in a failure of one of the
conditions to the completion of the merger being satisfied.
Termination Fee and Expenses (see pages 77 and 78)
If the merger agreement is terminated, either Amgen or Immunex, in specified
circumstances, may be required to pay a termination fee of $475 million to the
other party or reimburse up to $15 million of the other party's expenses.
Immunex Stock Options and Employee Stock Purchase Plan (see page 61)
In general, upon completion of the merger, options to purchase shares of
Immunex common stock will be converted into options to purchase shares of Amgen
common stock and assumed by Amgen. The conversion ratios and exercise prices
will be determined pursuant to the merger agreement. In addition, some
converted options will become fully vested and exercisable at the effective
time of the merger. Amgen has agreed to assume the Immunex stock option plans
at the effective time of the merger.
Each outstanding purchase right under the Immunex employee stock purchase
plan will be assumed by Amgen and converted into a right to purchase Amgen
common stock in accordance with the merger agreement and the employee stock
purchase plan. Amgen has agreed to assume the Immunex employee stock purchase
plan at the effective time of the merger.
Material United States Federal Income Tax Consequences of the Merger (see page
52)
It is expected that the merger will qualify as a reorganization under
Section 368(a) of the Internal Revenue Code, and Amgen and Immunex are required
to receive opinions from their respective counsel to the effect that the merger
will so qualify. If these opinions are not rendered, Amgen and Immunex will not
consummate the merger unless approvals from Amgen stockholders and Immunex
shareholders are obtained with appropriate disclosure. If the merger qualifies
as a reorganization under Section 368(a) of the Internal Revenue Code, then, in
general, Immunex shareholders will recognize gain, but not loss, equal to the
lesser of:
. the amount of cash they receive in the merger; or
. the amount equal to the excess, if any, of the sum of the amount of cash
and the fair market value of Amgen common stock they receive in the
merger over the adjusted tax basis of their Immunex common stock.
No gain or loss will be recognized by Amgen, AMS Acquisition, Immunex or
stockholders of Amgen as a result of the merger.
Tax matters are very complicated and the tax consequences of the merger to
you will depend on the facts of your own situation. We encourage you to consult
your tax advisor for a full understanding of the tax consequences of the merger
to you.
Accounting Treatment (see page 55)
Amgen will account for the merger under the purchase method of accounting
for business combinations under United States generally accepted accounting
principles.
8
Regulatory Approvals (see page 52)
Under the Hart-Scott-Rodino Antitrust Improvements Act, we cannot complete
the merger until we have notified the Antitrust Division of the U.S. Department
of Justice and the U.S. Federal Trade Commission of the merger and filed the
necessary report forms and until the required waiting periods have ended. Amgen
and Immunex submitted the required filings on January 7, 2002. Amgen and
Immunex will make a joint filing relating to the merger with the German Federal
Cartel Office.
We also may be required to obtain additional regulatory approvals from
various state and foreign authorities. While we expect to obtain all required
regulatory approvals, we cannot assure you that these regulatory approvals will
be obtained or that the granting of these regulatory approvals will not involve
the imposition of conditions on the completion of the merger or require changes
to the terms of the merger. These conditions or changes could result in the
conditions to the merger not being satisfied.
Litigation Related to the Merger (see page 64)
As of the date of this joint proxy statement/prospectus, Immunex is aware of
three purported class action lawsuits that have been filed against Immunex and
its officers and/or directors in connection with the merger. American Home
Products is also a defendant in one of these lawsuits. Among other things,
these lawsuits seek to prevent the closing of the merger.
While these cases are in their early stages, Immunex believes that these
cases are without merit and intends to contest them vigorously. American Home
Products has advised Immunex that it also believes the lawsuit in which it is a
defendant is without merit and it intends to contest the lawsuit vigorously.
9
Summary Selected Historical Financial Data
We are providing the following information to aid you in your analysis of
the financial aspects of the merger. We derived this information from the
audited financial statements of Amgen and Immunex for the years 1996 through
2000 and the unaudited financial statements of Amgen and Immunex for the nine
months ended September 30, 2000 and 2001. This information is only a summary,
and you should read it together with our historical financial statements and
related notes contained in the annual reports and other information that we
have filed with the SEC and incorporated by reference into this joint proxy
statement/prospectus. See "Where You Can Find More Information."
Amgen Inc.
Summary Selected Historical Consolidated Financial Data
(In millions, except per share data)
Nine Months Ended
September 30, Year Ended December 31,
----------------- -----------------------------------------------
2001 2000 2000 1999 1998 1997 1996
-------- -------- -------- -------- -------- -------- --------
Consolidated Statement of
Operations Data:
Revenues:
Product sales (1).......... $2,536.9 $2,355.4 $3,202.2 $3,042.8 $2,514.4 $2,219.8 $2,088.2
Other revenues............. 354.5 322.6 427.2 297.3 203.8 181.2 151.6
Total revenues (1)..... 2,891.4 2,678.0 3,629.4 3,340.1 2,718.2 2,401.0 2,239.8
Research and development
expenses.................... 632.4 595.5 845.0 822.8 663.3 630.8 528.3
Selling, general and
administrative expenses..... 644.5 577.7 826.9 654.3 515.4 483.8 470.6
Other items, net (2).......... -- (73.9) (18.8) (49.0) (23.0) 157.0 --
Net income.................... 956.7 927.7 1,138.5 1,096.4 863.2 644.3 679.8
Diluted earnings
per share (1)(2)............ 0.88 0.86 1.05 1.02 0.82 0.59 0.61
Cash dividends per share...... -- -- -- -- -- -- --
At December 31,
At September 30, --------------------------------------------
2001 2000 1999 1998 1997 1996
---------------- -------- -------- -------- -------- --------
Consolidated Balance Sheet Data:
Total assets........ $6,053.7 $5,399.6 $4,077.6 $3,672.2 $3,110.2 $2,765.6
Long-term debt...... 223.0 223.0 223.0 223.0 229.0 59.0
Stockholders' equity 5,108.2 4,314.5 3,023.5 2,562.2 2,139.3 1,906.3
--------
(1) Due to Year 2000 contingency planning in the fourth quarter of 1999, Amgen
offered extended payment terms on limited shipments of EPOGEN(R) (Epoetin
alfa) and NEUPOGEN(R) (Filgrastim) to certain wholesalers. These Year 2000
related sales totaled $45 million, or $0.02 per share, in 1999.
(2) During the nine months ended September 30, 2000, Amgen recorded a net legal
award of $73.9 million, which primarily represents an award for certain
costs and expenses, including attorneys' fees, associated with the
spillover arbitration with Johnson & Johnson. The amount for the year ended
December 31, 2000 includes: (a) the legal award described in the previous
sentence, (b) a write-off of acquired in-process research and development
of $30.1 million related to the acquisition of Kinetix Pharmaceuticals,
Inc., and (c) a contribution of $25 million to the Amgen Foundation (see
Note 4 to the Consolidated Financial Statements in Amgen's Annual Report on
Form 10-K for the year ended December 31, 2000, which is incorporated by
reference into this joint proxy statement/prospectus). The amounts for
1999, 1998 and 1997 are comprised of benefits and expenses related to
various legal proceedings with Johnson & Johnson. Other items, net
increased/(decreased) earnings per share by ($0.05) in the nine-months
ended September 2000, $0.00 in 2000, $0.03 in 1999, $0.01 in 1998, and
($0.09) in 1997.
10
Immunex Corporation
Summary Selected Historical Consolidated Financial Data
(In millions, except per share data)
Nine Months Ended
September 30, Year Ended December 31,
----------------- -----------------------------------
2001 2000 2000 1999 1998 1997 1996
------ ------ ------ ------ ------ ------ ------
Consolidated Statement of
Operations Data:
Revenues:
Product sales............................ $685.9 $580.1 $828.8 $519.3 $169.9 $149.7 $129.5
Other revenues........................... 23.2 31.1 33.0 22.4 73.6 35.6 21.7
Total revenues....................... 709.1 611.2 861.8 541.7 243.5 185.3 151.2
Research and development expenses........... 151.4 120.1 166.7 126.7 120.0 109.3 96.6
Selling, general and administrative expenses 304.8 243.1 344.4 216.7 93.8 71.3 70.0
Other items, net............................ -- -- -- -- -- -- --
Net income (loss)........................... 128.3 105.2 154.4 44.3 1.0 (15.8) (53.6)
Diluted earnings (loss) per share........... 0.23 0.19 0.28 0.08 0.00 (0.03) (0.11)
Cash dividends per share.................... -- -- -- -- -- -- --
At December 31,
At September 30, ------------------------------------
2001 2000 1999 1998 1997 1996
---------------- -------- ------ ------ ------ ------
Consolidated Balance Sheet Data:
Total assets....................... $2,220.0 $2,039.4 $941.2 $325.3 $227.3 $177.8
Long-term obligations.............. 0.8 0.8 450.8 2.3 5.6 8.6
Shareholders' equity............... 2,023.2 1,838.1 355.3 247.5 176.2 137.7
11
Recent Developments
Results of Operations--Amgen
On January 23, 2002, Amgen announced its unaudited operating results for the
three months and year ended December 31, 2001. The table below summarizes these
unaudited results along with results for the comparative prior year periods (in
millions, except for per share data):
Three Months Ended Year Ended
December 31, December 31,
------------------ -----------------
2001 2000 2001 2000
-------- -------- -------- --------
Total revenues......................... $1,124.3 $ 951.4 $4,015.7 $3,629.4
Total operating expenses (1)........... 915.2 663.1 2,484.5 2,085.4
Net income (1)......................... 163.0 210.8 1,119.7 1,138.5
Diluted earnings per share............. $ 0.15 $ 0.19 $ 1.03 $ 1.05
Shares used in calculation of diluted
earnings per share................... 1,080.9 1,083.5 1,084.4 1,084.7
--------
(1) During the three months ended December 31, 2001, Amgen recorded a $203.1
million charge in other operating expenses, primarily related to the costs
of terminating collaboration agreements with various third parties,
including Praecis Pharmaceuticals and certain academic institutions. These
costs include $102.4 million with respect to amounts previously capitalized
primarily related to these agreements and $100.7 million with respect to
amounts to be paid to third parties in connection with the termination of
these relationships. In addition, during the three months ended December
31, 2001, Amgen recorded a $39.5 million charge for the write-off of
certain inventory, which is included in cost of sales.
Results of Operations--Immunex
On January 23, 2002, Immunex announced its unaudited operating results for
the three months and year ended December 31, 2001. The table below summarizes
these unaudited results along with results for the comparative prior year
periods (in millions, except for per share data):
Three Months Ended Year Ended
December 31, December 31,
------------------ -------------
2001 2000 2001 2000
------ ------ ------ ------
Total revenues.......................................... $277.7 $250.7 $986.8 $861.8
Total operating expenses................................ 246.4 220.9 889.4 754.2
Net income.............................................. 41.6 49.2 170.0 154.4
Diluted earnings per share.............................. $ 0.07 $ 0.09 $ 0.30 $ 0.28
Shares used in calculation of diluted earnings per share 569.1 565.3 569.1 549.3
12
Summary Unaudited Pro Forma Condensed Combining Financial Data
The table below presents selected financial data from the Amgen and Immunex
unaudited pro forma condensed combining statements of operations for the year
ended December 31, 2000 and for the nine months ended September 30, 2001 and
from the unaudited pro forma condensed combining balance sheet as of September
30, 2001 included in this joint proxy statement/prospectus. The unaudited pro
forma condensed combining statements of operations give effect to the merger as
if it had occurred on January 1, 2000. The unaudited pro forma condensed
combining balance sheet presents the combined financial position of Amgen and
Immunex as of September 30, 2001 assuming that the acquisition had occurred as
of that date. The unaudited pro forma condensed combining financial data are
based on the estimates and assumptions set forth in the notes to such
statements, which are preliminary and have been made solely for the purposes of
developing such pro forma information. The unaudited pro forma condensed
combining financial data are not necessarily indicative of the financial
position or operating results that would have been achieved had the transaction
been consummated as of the dates indicated, nor are they necessarily indicative
of future financial position or operating results. This information should be
read in conjunction with the unaudited pro forma condensed combining financial
statements and related notes and the historical financial statements and
related notes of Amgen and Immunex included in or incorporated by reference
into this joint proxy statement/prospectus.
Pro Forma Pro Forma
Year Ended Nine Months Ended
December 31, 2000 September 30, 2001
----------------- ------------------
(In millions, except per share data)
Statements of Operations Data:
Total revenues.................................... $4,491.2 $3,600.5
Net income........................................ $ 881.0 $ 782.6
Earnings per share:
Basic......................................... $ 0.69 $ 0.61
Diluted....................................... $ 0.66 $ 0.59
Shares used in calculation of earnings per share:
Basic......................................... 1,269.5 1,284.8
Diluted....................................... 1,335.9 1,336.4
Pro Forma as of
September 30, 2001
------------------
Balance Sheet Data:
Total assets......... $24,234.6
Long-term debt....... 223.8
Stockholders' equity. $17,822.9
13
Comparative Per Share Information
The following tables present (a) the unaudited basic and diluted earnings
per share and book value per share data for each of Amgen and Immunex on a
historical basis, (b) the unaudited basic and diluted earnings per share and
book value per share data for the combined company on a pro forma basis and (c)
the unaudited basic and diluted earnings per share and book value per share
data for Immunex on an equivalent pro forma basis. The unaudited pro forma
combined financial data are not necessarily indicative of the financial
position had the transaction occurred on September 30, 2001 or operating
results that would have been achieved had the transaction been in effect as of
the beginning of the periods presented and should not be construed as
representative of future financial position or operating results. Neither Amgen
nor Immunex declared any cash dividends for the periods presented below. The
pro forma combined net income, pro forma stockholders' equity and the pro forma
number of shares of Amgen common stock outstanding used in determining the
amounts presented below have been derived from unaudited pro forma financial
statements included in this joint proxy statement/prospectus.
This information is only a summary and should be read in conjunction with
the selected historical financial data of Amgen and Immunex, the Amgen and
Immunex Unaudited Pro Forma Condensed Combining Financial Statements, and the
separate historical financial statements of Amgen and Immunex and related notes
included in or incorporated by reference into this joint proxy
statement/prospectus.
Year Ended Nine Months Ended
December 31, 2000 September 30, 2001
----------------- ------------------
Historical--Amgen:
Earnings per share:
Basic.......................... $1.11 $ 0.92
Diluted........................ 1.05 0.88
Book value per share (1)........... 4.16 4.89
Historical--Immunex:
Earnings per share:
Basic.......................... $0.30 $ 0.24
Diluted........................ 0.28 0.23
Book value per share (1)........... 3.40 3.72
Pro forma combined--Amgen and Immunex:
Earnings per share:
Basic.......................... $0.69 $ 0.61
Diluted........................ 0.66 0.59
Book value per share (2)........... N/A 13.87
Equivalent pro forma--Immunex:
Earnings per share: (3)
Basic.......................... $0.30 $ 0.27
Diluted........................ 0.29 0.26
Book value per share (3)........... N/A 6.10
--------
(1) The historical book value per share is calculated by dividing stockholders'
equity by the number of shares outstanding at the end of each period
presented.
(2) The pro forma combined book value per share is computed by dividing pro
forma stockholders' equity by the pro forma number of Amgen shares that
would have been outstanding as of September 30, 2001.
(3) The equivalent pro forma Immunex amounts are calculated by multiplying the
pro forma combined per share amounts by the exchange ratio of 0.44 of a
share of Amgen common stock for each share of Immunex common stock.
14
Comparative Per Share Market Price Data
Amgen common stock trades on the Nasdaq National Market under the symbol
"AMGN." Immunex common stock trades on the Nasdaq National Market under the
symbol "IMNX." The table below sets forth, for the periods indicated, the range
of high and low per share sales prices for Amgen common stock and Immunex
common stock as reported on the Nasdaq National Market.
Amgen Immunex
Common Stock Common Stock
------------- -------------
High Low High Low
------ ------ ------ ------
Fiscal Year 2000
First quarter............................ $76.50 $51.06 $83.60 $27.75
Second quarter........................... 70.88 50.00 69.88 24.19
Third quarter............................ 80.44 64.13 67.13 39.50
Fourth quarter........................... 72.63 51.39 49.88 33.06
Fiscal Year 2001
First quarter............................ $75.06 $45.44 $46.37 $10.75
Second quarter........................... 70.60 50.31 18.99 11.81
Third quarter............................ 66.25 53.46 19.67 13.85
Fourth quarter........................... 69.00 55.15 29.58 18.62
Fiscal Year 2002
First quarter (through January 30, 2002). $58.85 $53.28 $29.15 $26.65
On December 14, 2001, the last trading day before we announced the merger,
the closing price of Amgen common stock on the Nasdaq National Market was
$56.03 per share and the closing price of Immunex common stock on the Nasdaq
National Market was $25.62 per share. Based on the exchange ratio (i.e., 0.44
of a share of Amgen common stock for each outstanding share of Immunex common
stock), the closing price of Amgen common stock on December 14, 2001, and the
cash consideration of $4.50 per share, the pro forma equivalent per share value
of Immunex common stock on December 14, 2001 was approximately $29.15 per
share. On , 2002, the last trading day prior to the date of this joint
proxy statement/prospectus, the closing price of Amgen common stock on the
Nasdaq National Market was $ , the closing price of Immunex common stock
on the Nasdaq National Market was $ and the pro forma equivalent per
share value of Immunex common stock, based on the merger consideration, was
approximately $ per share. Neither Amgen nor Immunex has ever declared or
paid cash dividends on its common stock. The policies of Amgen and Immunex are
to retain earnings for use in their respective businesses.
The market value of the shares of Amgen common stock that will be issued in
exchange for shares of Immunex common stock upon the completion of the merger
will not be known at the time Immunex shareholders vote on the approval of the
merger agreement, or at the time Amgen stockholders vote on the approval of the
issuance of shares of Amgen common stock in the merger, because the merger will
not be completed by then.
The above table shows only historical comparisons. Because the market prices
of Amgen common stock and Immunex common stock will likely fluctuate prior to
the merger, these comparisons may not provide meaningful information to Amgen
stockholders in determining whether to approve the issuance of shares of Amgen
common stock in the merger or to Immunex shareholders in determining whether to
approve the merger agreement. Amgen and Immunex stockholders are encouraged to
obtain current market quotations for Amgen and Immunex common stock and to
review carefully the other information contained in this joint proxy
statement/prospectus or incorporated by reference into this joint proxy
statement/prospectus in considering whether to approve their respective
proposal. See the section entitled "Where You Can Find More Information."
15
RISK FACTORS
In addition to the other information included in this joint proxy
statement/prospectus, including the matters addressed in "Cautionary Statement
Concerning Forward-Looking Statements," you should carefully consider the
following risks before deciding whether to vote for approval of the merger
agreement, in the case of Immunex shareholders, or for approval of the issuance
of shares of Amgen common stock in the merger, in the case of Amgen
stockholders. In addition, you should read and consider the risks associated
with each of the businesses of Amgen and Immunex because these risks will also
affect the combined company. These risks can be found in our respective Annual
Reports on Form 10-K for the year ended December 31, 2000 and in our respective
Quarterly Reports for the quarters ended March 31, 2001, June 30, 2001 and
September 30, 2001, which are filed with the SEC and incorporated by reference
into this joint proxy statement/prospectus. Additional risks and uncertainties
not presently known to Amgen and Immunex or that are not currently believed to
be important to you also may adversely affect the merger and Amgen following
the merger.
The value of Amgen common stock to be received in the merger will fluctuate.
In the merger, Immunex shareholders will receive 0.44 of a share of Amgen
common stock and $4.50 in cash for each share of Immunex common stock they own.
As a result of Immunex shareholders receiving a portion of the merger
consideration in shares of Amgen common stock, the value of the merger
consideration to be received by Immunex shareholders will depend on the market
price of Amgen common stock at the time the merger is completed. The market
price of Amgen common stock at the closing of the merger will likely vary from
its market prices at the date of this joint proxy statement/prospectus and at
the date of the Amgen and Immunex special meetings. These variations may be
caused by a number of factors, including changes in the businesses, operations
or prospects of Amgen or Immunex, the timing of the merger, regulatory
considerations and general market and economic conditions. The merger
consideration will not be adjusted for any increase or decrease in the market
price of Amgen common stock or Immunex common stock. Accordingly, if the market
value of Amgen common stock declines prior to the time the merger is completed,
the value of the merger consideration to be received by Immunex shareholders
will decline. In addition, because the date that the merger is completed may be
later than the date of the special meetings, Amgen and Immunex stockholders
will not know the exact value of the Amgen common stock that will be issued in
the merger at the time they vote on the merger proposals. We encourage you to
obtain current market quotations for Amgen and Immunex shares before you vote
your shares.
Amgen may not realize all of the anticipated benefits of the merger.
The success of the merger will depend, in part, on the ability of Amgen to
realize the anticipated synergies, cost savings and growth opportunities from
integrating the businesses of Immunex with the businesses of Amgen. Amgen's
success in realizing these benefits and the timing of this realization depend
upon the successful integration of the operations of Immunex. The integration
of two independent companies is a complex, costly and time-consuming process.
The difficulties of combining the operations of the companies include, among
others:
. consolidating research and development and manufacturing operations;
. retaining key employees;
. consolidating corporate and administrative infrastructures;
. coordinating sales and marketing functions;
. preserving the research and development, distribution, marketing,
promotion and other important relationships of Amgen and Immunex;
. minimizing the diversion of management's attention from ongoing business
concerns; and
. coordinating geographically separate organizations.
16
We cannot assure you that the integration of Immunex with Amgen will result in
the realization of the full benefits anticipated by us to result from the
merger.
Amgen and Immunex may be required to comply with material restrictions or
conditions in order to obtain the regulatory approvals required to complete the
merger.
The merger is subject to review by the Antitrust Division of the U.S.
Department of Justice and the U.S. Federal Trade Commission under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. Under this statute, Amgen
and Immunex are required to make pre-merger notification filings and to await
the expiration or early termination of statutory waiting periods prior to
completing the merger. The merger is also subject to review by the German
Federal Cartel Office under the Act against Restraints of Competition (Gesetz
gegen Wettbewerbsbeschrankungen). The merger may also be subject to review by
the governmental authorities of various other jurisdictions. The governmental
entities from whom approvals are required may attempt to condition their
approval of the merger, or of the transfer to Amgen of licenses and other
entitlements, on the satisfaction of certain regulatory conditions that may
have the effect of imposing additional costs on Amgen or otherwise
substantially reducing the benefits to Amgen if the merger is completed. These
conditions could include a complete or partial license, divestiture, spin-off
or the holding separate of assets or businesses. In order to facilitate
clearance from the U.S. Federal Trade Commission, Immunex intends to divest the
product LEUKINE, which had sales for Immunex of $108.4 million in 2001. Amgen
and Immunex have not yet obtained any of the regulatory approvals required to
complete the merger.
Amgen's marketing of ENBREL will be dependent in part upon American Home
Products.
Under the amended and restated promotion agreement, Amgen and American Home
Products will jointly market and sell ENBREL in the United States and Canada.
An ENBREL management committee comprised of an equal number of representatives
from Amgen and American Home Products will be responsible for overseeing the
marketing and sales of ENBREL including strategic planning, approval of an
annual marketing plan, product pricing and establishing an ENBREL brand team.
The ENBREL brand team, with equal representation from each of Amgen and
American Home Products, will prepare and implement the annual marketing plan
and will be responsible for all sales activities. If American Home Products
fails to market ENBREL effectively or Amgen and American Home Products fail to
coordinate their efforts effectively, Amgen's sales of ENBREL may not reach
their full potential or may decline.
17
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This joint proxy statement/prospectus and the other documents incorporated
by reference into this joint proxy statement/prospectus may contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 with respect to the financial condition, results
of operations, business strategies, operating efficiencies or synergies,
competitive positions, growth opportunities for existing products, plans and
objectives of management, and markets for the stock of Amgen and Immunex and
other matters. Statements in this joint proxy statement/prospectus and the
other documents incorporated by reference that are not historical facts are
hereby identified as "forward-looking statements" for the purpose of the safe
harbor provided by Section 21E of the Securities Exchange Act of 1934 and
Section 27A of the Securities Act of 1933. These forward-looking statements,
including, without limitation, those relating to future business prospects,
revenues and income, in each case relating to Amgen or Immunex, respectively,
wherever they occur in this joint proxy statement/prospectus or the other
documents incorporated by reference, are necessarily estimates reflecting the
best judgment of the respective management of Amgen and Immunex and involve a
number of risks and uncertainties that could cause actual results to differ
materially from those suggested by the forward-looking statements. These
forward-looking statements should, therefore, be considered in light of various
important factors, including those set forth in this joint proxy
statement/prospectus and incorporated by reference into this joint proxy
statement/prospectus. In addition to the risk factors identified elsewhere,
important factors that could cause actual results to differ materially from
estimates or projections contained in the forward-looking statements include
without limitation:
. the ability to integrate the operations of Amgen and Immunex, including
their respective research and development operations, personnel, product
lines and technology;
. the ability to achieve the anticipated synergies and cost savings;
. timing and success of product development and market acceptance of
developed products;
. regulatory approvals and restrictions;
. reimbursement from third party payors;
. guidelines and recommendations in the health care and patient
communities;
. intellectual property positions and litigation;
. competition in the pharmaceutical and biotechnology industries and in
the specific markets in which Amgen and Immunex, respectively, operate;
. unanticipated manufacturing disruptions, delays in regulatory approvals
of new manufacturing facilities or the inability to meet demand for
products;
. fluctuations in operating results; and
. management of rapid growth.
Words such as "estimate," "project," "plan," "intend," "expect,"
"anticipate," "believe" and similar expressions are intended to identify
forward-looking statements. These forward-looking statements are found at
various places throughout this joint proxy statement/prospectus and the other
documents incorporated by reference. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
of this joint proxy statement/prospectus, or in the case of documents
incorporated by reference, as of the date of those documents. Neither Amgen nor
Immunex undertakes any obligation to publicly update or release any revisions
to these forward-looking statements to reflect events or circumstances after
the date of this joint proxy statement/prospectus or to reflect the occurrence
of unanticipated events, except as required by law.
18
THE AMGEN SPECIAL MEETING
Date, Time, Place and Purpose of the Amgen Special Meeting
The special meeting of Amgen stockholders will be held at ______.m. local
time on __________, 2002 at ______________, ______________, California. The
purpose of the Amgen special meeting is to consider and vote on a proposal to
approve the issuance of Amgen common stock in the merger, and to consider any
other matters that may properly come before the special meeting.
Recommendation of the Amgen Board of Directors
The Amgen board of directors has unanimously approved the merger agreement,
and unanimously recommends that Amgen stockholders vote "FOR" approval of the
issuance of Amgen common stock to Immunex shareholders in the merger. See "The
Merger--Reasons for the Merger--Amgen."
Record Date; Outstanding Shares; Shares Entitled to Vote
Only holders of record of Amgen common stock at the close of business on the
record date, ______________ , 2002, are entitled to notice of and to vote at
the special meeting. As of the record date, there were ______ shares of Amgen
common stock outstanding and entitled to vote at the special meeting, held by
approximately ______ holders of record. A list of Amgen stockholders will be
available for review at Amgen's executive offices during regular business hours
for a period of ten days before the special meeting. Each holder of Amgen
common stock is entitled to one vote for each share of Amgen common stock he or
she owned as of the record date.
Quorum and Vote Required
A quorum of stockholders is necessary to hold a valid special meeting. The
presence, in person or by proxy, of shares of Amgen common stock representing a
majority of shares of Amgen common stock outstanding and entitled to vote on
the Amgen record date is necessary to constitute a quorum at the Amgen special
meeting. Abstentions and broker "non-votes," discussed below, count as present
for establishing a quorum.
The issuance of the Amgen common stock in the merger requires the
affirmative vote of a majority of the shares of Amgen common stock present or
represented by proxy and voting at the Amgen special meeting. Each share of
Amgen common stock outstanding on the record date for the special meeting
entitles its holder to one vote.
As of the record date for the special meeting, the directors and executive
officers of Amgen as a group beneficially owned approximately __________shares
of Amgen common stock, including exercisable options, or approximately ______%
of the outstanding shares of Amgen on that date. As of the record date, there
were shares of Amgen common stock held by employees of Amgen through the
Amgen Inc. Retirement and Savings Plan and the Retirement and Savings Plan for
Amgen Manufacturing, Ltd., and each of these shares will be voted by the
trustee of the plan in accordance with the instructions it receives from the
respective plan participant. The trustee will vote any shares of Amgen common
stock for which it has not received instructions in the same proportion as the
trustee votes the shares for which it has received instructions from plan
participants.
Voting; Proxies; Revocation
You may vote by proxy or in person at the special meeting.
19
Voting in Person
If you plan to attend the special meeting and wish to vote in person, you
will be given a ballot at the special meeting. Please note, however, that if
your shares are held in "street name," which means your shares are held of
record by a broker, bank or other nominee, and you wish to vote at the special
meeting, you must bring to the special meeting a proxy from the record holder
of the shares authorizing you to vote at the special meeting.
Voting by Proxy
You should vote your proxy even if you plan to attend the special meeting.
You can always change your vote at the special meeting. Voting instructions are
included on your proxy card. If you properly grant your proxy and submit it to
Amgen in time to vote, one of the individuals named as your proxy will vote
your shares as you have directed. If no instructions are indicated on a
properly executed proxy card or voting instruction, the shares will be voted
"FOR" approval of the issuance of the shares of Amgen common stock in the
merger.
If other matters properly come before the Amgen special meeting, the shares
represented by proxies will be voted, or not voted, by the individuals named in
the proxies in their discretion. No proxy that is voted against approval of the
issuance of shares of Amgen common stock in the merger will be voted in favor
of any adjournment or postponement of the Amgen special meeting for the purpose
of soliciting additional proxies.
How to vote by proxy:
. In Writing: Amgen stockholders of record may submit their proxies
through the mail by completing their proxy card, and signing, dating and
returning it in the enclosed, pre-addressed postage-paid envelope. To be
valid, a returned proxy card must be signed and dated.
. By Telephone: Amgen stockholders of record will be able to use the
telephone to submit their proxies. In order to submit your proxy by
telephone, you must dial the toll-free number 1-___-___-____, enter the
Control Number located on your proxy card and follow the recorded
instructions.
. Over the Internet: Amgen stockholders of record also may use the
Internet to submit their proxies. In order to submit your proxy over the
Internet, you must go to the Web site established for that purpose at
http://www._________.com, enter the Control Number located on your proxy
card and follow the instructions.
The laws of the state of Delaware, where Amgen is incorporated, permit a
stockholder to grant a proxy in each of these ways. However, if you are not the
record holder of your shares, you must provide the record holder of your shares
with instructions on how to vote your shares. The bank, broker or other nominee
holding your shares may not offer telephone or Internet voting. Amgen
stockholders whose shares are held by a bank, broker or other nominee should
refer to their voting instruction card forwarded by the bank, broker or other
nominee holding their shares. If your voting instruction card does not include
telephone or Internet voting instructions, please complete and return your
voting instruction card by mail.
Revocation of Proxy
You may revoke your proxy at any time before they are voted at the Amgen
special meeting by:
. delivering to the Secretary of Amgen a signed notice of revocation,
bearing a date later than the date of the proxy, stating that the proxy
is revoked;
. granting a new proxy, relating to the same shares and bearing a later
date; or
. attending the special meeting and voting in person, however, attendance
at the special meeting will not, by itself, revoke a proxy.
20
You can also change your vote by submitting a proxy at a later date by
telephone or over the Internet, in which case your later submitted proxy will
be recorded and your earlier proxy revoked. If your shares are held in the name
of a broker, bank or other nominee, you may change your vote by submitting new
voting instructions to your broker, bank or other nominee. You must contact
your broker, bank or other nominee to find out how to do so.
Written notices of revocation and other communications with respect to the
revocation of Amgen proxies should be addressed to:
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, California 91320-1799
Attention: Corporate Secretary, Mail Stop 27-4-A
Abstentions and Broker Non-Votes
Shares of Amgen common stock held by persons attending the Amgen special
meeting but not voting, and shares of Amgen common stock for which Amgen has
received proxies but with respect to which holders of those shares have
abstained from voting, will be counted as present at the Amgen special meeting
for purposes of determining the presence or absence of a quorum for the
transaction of business at the Amgen special meeting, but will not be counted
as votes cast at the Amgen special meeting for purposes of determining whether
stockholder approval of the issuance of shares of Amgen common stock in the
merger has been obtained.
Brokers that hold shares of Amgen common stock in nominee or street name for
customers who are the beneficial owners of those shares are prohibited from
giving a proxy to vote shares held for those customers on the matters to be
considered and voted upon at the Amgen special meeting without specific
instructions from those customers. Accordingly, if your broker holds your Amgen
common stock in nominee or street name, your broker will vote your shares only
if you provide instructions on how to vote by filling out the voting
instruction form sent to you by your broker with this joint proxy
statement/prospectus. If you do not provide your broker with voting
instructions, your unvoted shares, so-called "broker non-votes," will be
counted for purposes of determining whether a quorum exists, but will not be
counted as votes cast at the Amgen special meeting for purposes of determining
whether stockholder approval of the issuance of shares of Amgen common stock in
the merger has been obtained.
Proxy Solicitation
Amgen is soliciting proxies for the Amgen special meeting from Amgen
stockholders. Amgen will bear the entire cost of soliciting proxies from Amgen
stockholders, except that Amgen and Immunex have each agreed to pay one-half of
the costs of filing, printing and mailing this joint proxy statement/prospectus
and related proxy materials. In addition to the solicitation of proxies by
mail, Amgen will request that banks, brokers and other record holders send
proxies and proxy materials to the beneficial owners of Amgen common stock held
by them and secure their voting instructions if necessary. Amgen will reimburse
those record holders for their reasonable expenses in so doing. Amgen has also
made arrangements with Georgeson Shareholder Communications, Inc. to assist it
in soliciting proxies, and has agreed to pay a fee of approximately $20,000
plus expenses for those services. Amgen also may use several of its regular
employees, who will not be specially compensated, to solicit proxies from Amgen
stockholders, either personally or by telephone, Internet, telegram, facsimile
or special delivery letter.
Other Business; Adjournments
Amgen does not expect that any matter other than approval of the issuance of
the shares will be brought before the special meeting. However, if other
matters are properly presented at the special meeting or any adjournment or
postponement of the special meeting, the persons named as proxies will vote in
accordance with
21
their best judgment with respect to those matters. Under the laws of the state
of Delaware, no business may be raised at the Amgen special meeting unless
proper notice to the Amgen stockholders has been given.
Adjournments may be made for the purpose of, among other things, soliciting
additional proxies. An adjournment may be made from time to time by approval of
the holders of shares representing a majority of the votes present in person or
by proxy at the special meeting, whether or not a quorum exists, without
further notice other than by an announcement made at the special meeting. If
the adjournment is for more than 30 days, a notice of the adjourned meeting
will be given to each stockholder entitled to vote at the meeting. Amgen does
not currently intend to seek an adjournment of the special meeting.
Assistance
If you need assistance in completing your proxy card or have questions
regarding the special meeting, please contact Georgeson Shareholder
Communications, Inc. at (800) 223-2064 or write to the following address:
Georgeson Shareholder Communications, Inc.
17 State Street
10th Floor
New York, New York 10004
22
THE IMMUNEX SPECIAL MEETING
Date, Time, Place and Purpose of the Immunex Special Meeting
The special meeting of Immunex shareholders will be held at ______.m. local
time on __________, 2002 at ______________, Seattle, Washington. The purpose of
the Immunex special meeting is to consider and vote on a proposal to approve
the merger agreement and to consider and vote on any other proposal that may
properly come before the special meeting.
Recommendation of the Immunex Board of Directors
The Immunex board of directors has unanimously adopted the merger agreement
and unanimously recommends that Immunex shareholders vote "FOR" approval of the
merger agreement. See "The Merger--Reasons for the Merger--Immunex."
Record Date; Outstanding Shares; Shares Entitled to Vote
Only holders of record of Immunex common stock at the close of business on
the record date, __________ , 2002, are entitled to notice of and to vote at
the special meeting. As of the record date, there were ______ shares of Immunex
common stock outstanding and entitled to vote at the special meeting, held by
approximately __________ holders of record. A list of Immunex shareholders will
be available for review at the executive offices of Immunex during regular
business hours for a period of ten days before the special meeting. Each holder
of Immunex common stock is entitled to one vote for each share of Immunex
common stock he or she owned as of the record date. If you do not vote, either
in person or by proxy, it will have the same effect as voting against the
merger agreement.
Quorum and Vote Required
A quorum of shareholders is necessary to hold a valid special meeting. The
required quorum for the transaction of business at the special meeting is a
majority of the shares of Immunex common stock outstanding on the record date,
represented in person or by proxy. Abstentions and broker "non-votes,"
discussed below, count as present for establishing a quorum.
The affirmative vote of the holders of a majority of the outstanding shares
of Immunex common stock entitled to vote at the special meeting is required to
approve the merger agreement.
American Home Products and certain of its subsidiaries, which held
approximately ______% of the outstanding shares of Immunex common stock as of
the record date for the special meeting, have executed a shareholder voting
agreement whereby they have agreed to vote in favor of the approval of the
merger agreement and have executed a proxy in favor of Amgen to this effect.
See "Shareholder Voting Agreement."
As of the record date for the special meeting, the directors and executive
officers of Immunex and their affiliates (excluding American Home Products or
its affiliates) as a group beneficially owned approximately ________ shares of
Immunex common stock, including exercisable options, or approximately ______%
of the outstanding shares of Immunex on that date. American Home Products,
which has designated two directors to the Immunex board of directors in
accordance with the terms of a governace agreement with Immunex, beneficially
owned, as of the record date, approximately ______ shares, or approximately
______% of the outstanding shares of Immunex common stock. As of the record
date, there were ______ shares of Immunex common stock held by employees of
Immunex through the Immunex Corporation Profit Sharing 401(k) Plan and Trust
and each of these shares will be voted by the trustee of the plan in accordance
with the instructions it receives from the respective plan participant.
23
Voting; Proxies; Revocation
You may vote by proxy or in person at the special meeting.
Voting in Person
If you plan to attend the special meeting and wish to vote in person, you
will be given a ballot at the special meeting. Please note, however, that if
your shares are held in "street name," which means your shares are held of
record by a broker, bank or other nominee, and you wish to vote at the special
meeting, you must bring to the special meeting a proxy from the record holder
of the shares authorizing you to vote at the special meeting.
Voting by Proxy
You should vote your proxy even if you plan to attend the special meeting.
You can always change your vote at the special meeting. Voting instructions are
included on your proxy card. If you properly give your proxy and submit it to
Immunex in time to vote, one of the individuals named as your proxy will vote
your shares as you have directed.
The method of voting by proxy differs for shares held as a record holder and
shares held in street name. If you hold your shares of Immunex common stock as
a record holder you will receive a proxy card. You should complete, date and
sign the proxy card and promptly return it in the enclosed, pre-addressed,
postage-paid envelope or otherwise mail it to Immunex. If you hold your shares
of Immunex common stock in street name, you will receive instructions from your
broker, bank or other nominee that you must follow in order to vote your
shares. Your broker or bank may allow you to deliver your voting instructions
by the telephone or over the Internet. Please see the intructions that
accompany this joint proxy statement/prospectus.
All properly signed proxies that are received prior to the special meeting
and that are not revoked will be voted at the special meeting according to the
instructions indicated on the proxies or, if no direction is indicated, to
approve the merger agreement and the transactions contemplated by the merger
agreement.
You should not send in any certificates representing Immunex common stock at
this time. Following the completion of the merger, you will receive
instructions for the surrender and exchange of your Immunex stock certificates.
Revocation of Proxy
You may revoke your proxy at any time before it is exercised at the special
meeting by taking any of the following actions:
. delivering to the Secretary of Immunex a signed notice of revocation,
bearing a date later than the date of the proxy, stating that the proxy
is revoked;
. signing and delivering a new proxy, relating to the same shares and
bearing a later date; or
. attending the special meeting and voting in person, however, attendance
at the special meeting will not, by itself, revoke a proxy.
If your shares are held in street name, you may change your vote by
submitting new voting instructions to your brokers, bank or other nominee. You
must contact your broker, bank or other nominee to find out how to do so.
Written notices of revocation and other communications with respect to the
revocation of Immunex proxies should be addressed to:
Immunex Corporation
51 University Street
Seattle, Washington 98101
Attention: Corporate Secretary
24
Abstentions and Broker Non-Votes
Brokers who hold shares of Immunex common stock in street name for a
beneficial owner of those shares typically have the authority to vote on
"routine" proposals when they have not received instructions from beneficial
owners. However, brokers are not allowed to exercise their voting discretion
with respect to the approval of non-routine matters, such as approval of the
merger agreement, without specific instructions from the beneficial owner.
These non-voted shares are referred to as broker non-votes. If your broker
holds your Immunex common stock in street name, your broker will vote your
shares only if you provide instructions on how to vote by filling out the voter
instruction form sent to you by your broker with this joint proxy
statement/prospectus.
Abstentions and broker non-votes will have the same effect as voting against
the merger agreement.
Proxy Solicitation
Immunex is soliciting proxies for the special meeting from shareholders of
Immunex. Immunex will bear the entire cost of soliciting proxies from Immunex
shareholders, except that Immunex and Amgen have each agreed to pay one-half of
the costs of filing, printing and mailing this joint proxy statement/prospectus
and related proxy materials. In addition to the solicitation of proxies by
mail, Immunex will request that banks, brokers and other record holders send
proxies and proxy materials to the beneficial owners of Immunex common stock
held by them and secure their voting instructions if necessary. Immunex will
reimburse those record holders for their reasonable expenses in so doing.
Immunex has also made arrangements with MacKenzie Partners, Inc. to assist it
in soliciting proxies, and has agreed to pay a fee of approximately $6,500 plus
expenses for those services. Immunex also may use several of its regular
employees, who will not be specially compensated, to solicit proxies from
Immunex shareholders, either personally or by telephone, Internet, telegram,
facsimile or special delivery letter.
Other Business; Adjournments
Immunex does not expect that any matter other than approval of the merger
agreement will be brought before the special meeting. However, if other matters
incident to the conduct of the special meeting are properly presented at the
special meeting or any adjournment or postponement of the special meeting, the
persons named as proxies will vote in accordance with their best judgment with
respect to those matters. Under the laws of the state of Washington, where
Immunex is incorporated, only business for which proper notice to the Immunex
shareholders has been given may be conducted at the Immunex special meeting.
Adjournments may be made for the purpose of, among other things, soliciting
additional proxies. An adjournment may be made from time to time by approval of
the holders of shares representing a majority of the votes present in person or
by proxy at the special meeting, whether or not a quorum exists, without
further notice other than by an announcement made at the special meeting.
Immunex does not currently intend to seek an adjournment of the special meeting.
Assistance
If you need assistance in completing your proxy card or have questions
regarding the special meeting, please contact MacKenzie Partners, Inc. at (800)
322-2885 or (212) 929-5500 or write to the following address:
MacKenzie Partners, Inc.
105 Madison Avenue
14th Floor
New York, New York 10016
25
THE MERGER
The following is a description of the material aspects of the merger. While
we believe that the following description covers the material terms of the
merger, the description may not contain all of the information that is
important to you. We encourage you to read carefully this entire joint proxy
statement/prospectus, including the merger agreement attached to this joint
proxy statement/prospectus as Annex A, for a more complete understanding of the
merger.
General
Each of the Amgen board of directors and the Immunex board of directors has
unanimously approved the merger agreement. At the effective time of the merger,
AMS Acquisition will be merged with and into Immunex, and Immunex will become a
wholly-owned subsidiary of Amgen. Immunex shareholders will receive 0.44 of a
share of Amgen common stock and $4.50 in cash for each share of Immunex common
stock they own. The cash portion of the merger consideration is expected to be
paid out of Amgen's existing funds, cash provided by operating activities,
additional borrowings or a combination of these sources.
Background of the Merger
The management of each of Amgen and Immunex continually reviews its
company's respective position in light of the changing competitive environment
of the biotechnology industry with the objective of determining what strategic
alternatives are available to enhance stockholder value. While each of the
companies believes that it has positive future prospects on a stand-alone
basis, from time to time the management of each of Amgen and Immunex has had
conversations with other companies to explore opportunities to improve the
competitive position of Amgen or Immunex, respectively, including potential
acquisitions or dispositions of assets, joint ventures or other strategic
transactions.
In early 2000, Kevin W. Sharer, Chairman, Chief Executive Officer and
President of Amgen, and Edward V. Fritzky, Chairman, Chief Executive Officer
and President of Immunex, met during a biotechnology industry conference in San
Francisco, California and discussed their general interest in exploring
possible strategic or other transactions involving their two companies. The
discussions were followed by telephone calls later in 2000 and early 2001, but
they did not lead to substantive negotiations at that time.
In February 2001, Immunex engaged Merrill Lynch to assist Immunex in
reviewing strategic alternatives that might be available to it to enhance
shareholder value, including possible business combination transactions.
Merrill Lynch's engagement was later memorialized in writing pursuant to a
letter dated August 1, 2001.
In June 2001, Mr. Sharer contacted Mr. Fritzky to raise the possibility of a
combination of Amgen and Immunex. On several occasions between June and
September 2001, Messrs. Sharer and Fritzky discussed the possibility of a
transaction between their two companies.
In connection with the initial discussions, Amgen began consulting with
financial and legal advisors about issues relating to a possible transaction
with Immunex. Amgen retained Goldman, Sachs & Co., Bear, Stearns & Co. and,
later, Salomon Smith Barney as its financial advisors. Consultations with these
advisors continued throughout the remaining acquisition discussions.
In mid-year 2001, Immunex began preliminary discussions with a third party
regarding a potential business combination transaction. These preliminary
discussions continued during the summer of 2001, but were suspended in the fall
of 2001.
Between early October 2001 and mid-November 2001, executives of Amgen and
Immunex had several communications relating to a possible transaction. Mr.
Fritzky discussed these communications from time to time with Robert Essner,
Chief Executive Officer and President of American Home Products. On October 29,
2001, Amgen sent Immunex a letter proposing that Amgen would be willing to
pursue a transaction based on an exchange ratio of between 0.47 to 0.50 of a
share of Amgen common stock for each share of Immunex common stock, subject to
Amgen's satisfactory completion of due diligence.
26
Mr. Sharer also contacted Mr. Essner to ascertain whether American Home
Products would consider a disposition of its interest in Immunex. Mr. Essner
indicated that American Home Products would be supportive if the Immunex board
of directors determined to pursue a transaction with Amgen at a satisfactory
valuation and if other necessary commercial matters could be agreed upon by the
parties. Mr. Sharer indicated that, as a condition to Amgen entering into an
acquisition agreement with Immunex, Amgen would require American Home Products
to agree to vote in favor of the transaction. Over the next several weeks,
Messrs. Sharer and Essner had periodic conversations to discuss a possible
transaction, as did Mr. Fritzky and Mr. Essner.
On November 1, 2001, during a telephone conversation between Messrs. Fritzky
and Sharer, Mr. Fritzky indicated that Immunex would not be interested in
pursuing a transaction with Amgen unless the value of the consideration were at
a level above that proposed by Amgen in the October 29, 2001 letter, with a
meaningful portion of the consideration paid in cash.
In order to understand better the position of American Home Products on
various matters relating to a possible transaction, in early November 2001,
representatives of Amgen and American Home Products had initial discussions
relating to the existing commercial relationship between Immunex and American
Home Products and the need for changes to such relationship in connection with
a possible transaction. The parties also discussed the need for an agreement
defining various rights and obligations of American Home Products upon its
becoming a stockholder of Amgen following a possible transaction. In
mid-November 2001, Amgen delivered to American Home Products a term sheet
outlining proposed terms for various agreements to be entered into between
Amgen and American Home Products in connection with a possible transaction.
American Home Products delivered to Amgen a counterproposal to this term sheet
in late November. At that time, Amgen and American Home Products did not reach
agreement on significant issues, including their respective co-promotion rights
with respect to ENBREL upon completion of a possible transaction.
In order to further explore a possible transaction, Amgen and Immunex
executed a confidentiality and standstill agreement relating to a possible
transaction on November 14, 2001. On November 28, 2001, Amgen and American Home
Products executed a similar agreement relating to a possible transaction.
On November 15, 2001, in response to the issues raised by Mr. Fritzky on
November 1, 2001, Amgen sent a letter to Immunex outlining the terms upon which
Amgen proposed to acquire Immunex. This letter proposed, subject to customary
conditions including satisfactory completion of due diligence review,
consideration equal to the value of 0.52 of a share of Amgen common stock for
each share of Immunex common stock. The letter also stated that Amgen was
willing to pay up to 15% of the total consideration in cash, with the remainder
of the consideration payable by means of an exchange of shares of Amgen common
stock for shares of Immunex common stock.
Between November 15, 2001 and November 26, 2001, representatives of Amgen
and Immunex met or spoke on several occasions to discuss Amgen's November 15,
2001 letter. However, during this time, the parties did not reach agreement on
several significant terms raised in the letter, including the amount and form
of consideration.
Despite lack of agreement regarding significant terms of a possible
transaction, Amgen's legal counsel delivered to Immunex and its legal advisors
a proposed form of merger agreement between Amgen and Immunex on November 26,
2001 in order to begin negotiating more ancillary terms of a possible
transaction. Thereafter, Amgen's legal counsel delivered to American Home
Products and its legal counsel proposed forms of a voting agreement between
Amgen and American Home Products, which provided for an agreement by American
Home Products to vote in favor of the proposed transaction and against
alternative transactions, a stockholders' rights agreement, which provided for
various rights and restrictions of American Home Products upon its becoming a
stockholder of Amgen following the merger, and an agreement relating to certain
governance and commercial matters. See "Shareholder Voting Agreement,"
"Stockholders' Rights Agreement" and "Other Agreements with American Home
Products."
From November 26, 2001 through December 16, 2001, representatives and legal
advisors of Amgen, Immunex and American Home Products engaged in extensive
negotiations both in person and by telephone
27
regarding each of these agreements. During this period, representatives of
Amgen and Immunex also engaged in extensive discussions related to retention
and severance arrangements for employees of Immunex. In addition, Amgen and
American Home Products negotiated the terms of amendments to various existing
commercial arrangements between Immunex and American Home Products, including
the terms of an amended and restated promotion agreement. See "Other Agreements
with American Home Products."
Notwithstanding that the parties had not yet reached agreement on
significant issues related to a proposed transaction, including the amount and
form of merger consideration and the roles of executive management following a
proposed transaction, Amgen and Immunex each made available to the other party
data rooms containing legal and business due diligence materials beginning on
December 1, 2001. From December 1, 2001 through December 15, 2001, the parties
reviewed these materials and conducted their on-site due diligence. During this
period, representatives of Amgen and Immunex also met to discuss business
integration issues and employee retention matters.
On December 5, 2001, the Immunex board of directors held a special meeting
at which it was briefed on the status of discussions between Amgen and Immunex
and reviewed the possible transaction. Prior to the meeting, Immunex directors
were provided with draft agreements and other materials regarding the possible
transaction. At the meeting:
. Representatives of Merrill Lynch made a preliminary financial
presentation setting forth Merrill Lynch's financial analyses relating
to the possible transaction, which was similar to the final presentation
made at the December 16, 2001 special meeting of the Immunex board of
directors;
. Representatives of Skadden, Arps, Slate, Meagher & Flom LLP reviewed
matters including the proposed terms of the merger agreement and the
voting agreement and other agreements to be entered into among Amgen,
American Home Products and certain subsidiaries of American Home
Products, and the status of open issues; and
. Immunex management discussed with the board of directors the strategic
rationale for the possible transaction and the challenges in trying to
manage Immunex during the pendency of a transaction, as well as employee
retention and severance arrangements intended to retain and to give
incentives to Immunex employees during the pendency of the merger
agreement and following the merger.
At the conclusion of the December 5, 2001 meeting, the Immunex board of
directors authorized Immunex management to continue discussions with Amgen
regarding a possible transaction.
At a regular meeting of the Amgen board of directors on December 11, 2001,
the Amgen board extensively reviewed the proposed transaction. Prior to the
meeting, the Amgen board was provided with summaries of each of the transaction
documents between Amgen and Immunex and American Home Products. At the meeting:
. Amgen management reviewed the status of the negotiations of the proposed
transaction, indicating that the parties had not reached agreement on
significant issues, including the amount and form of consideration to be
paid to Immunex shareholders and the commercial arrangements with
American Home Products;
. Representatives of Goldman Sachs discussed financial analyses relating
to the proposed transaction;
. Representatives of Latham & Watkins reviewed legal matters including the
proposed terms of, and open issues under, the merger agreement, the
voting agreement, the stockholders' rights agreement, the amended and
restated promotion agreement and other agreements to be entered into
among Amgen, American Home Products and certain subsidiaries of American
Home Products;
. Amgen management reviewed with the board the strategic rationale for,
and the potential benefits and risks of, the proposed transaction, as
well as possible alternative transactions; and
. Amgen management reported on the status and results of Amgen's due
diligence review of Immunex.
On December 13, 2001, several national news organizations, including CNBC,
began reporting rumors of a possible transaction between Amgen and Immunex.
These market rumors continued until the announcement of the transaction on
December 17, 2001.
On December 13, 2001 and December 14, 2001, Mr. Sharer and senior officers
of Amgen met with Mr. Essner and senior officers of American Home Products at
American Home Products' headquarters in New Jersey to attempt to reach
agreement on the outstanding issues related to the commercial arrangements
between Amgen and American Home Products.
28
On December 14, 2001, the Immunex board of directors held a special
telephonic meeting to discuss the status of discussions with Amgen and the
market rumors regarding a possible transaction. At this meeting, Mr. Fritzky
updated the Immunex board of directors regarding developments since the
December 5, 2001 meeting of the Immunex board of directors. Representatives of
Skadden, Arps reviewed significant open issues in the merger agreement,
including the amount of cash consideration and the exchange ratio for the stock
portion of the consideration, termination rights and termination fees, as well
as issues relating to the voting agreement proposed by Amgen and the other
agreements proposed to be entered into among Amgen, American Home Products and
certain subsidiaries of American Home Products. The Immunex board of directors
also discussed the status of employee retention and severance arrangements.
A special telephonic meeting of the Amgen board of directors was held on the
morning of December 16, 2001 to consider approval of the merger agreement, the
agreements with American Home Products and the transactions contemplated by
these agreements. Prior to the meeting, the Amgen board was provided with
substantially final drafts of all of the transaction documents as well as a
summary of the revisions of these documents since the December 11, 2001
meeting. At the meeting:
. Amgen's senior management updated the Amgen board of directors on the
final results of Amgen's due diligence review;
. Representatives of Latham & Watkins updated the Amgen board of directors
on the significant revisions to the merger agreement and other
transaction documents since the December 11, 2001 board meeting; and
. Representatives of Goldman Sachs made a financial presentation to the
Amgen board of directors and delivered Goldman Sachs' oral opinion that,
as of that date, and based upon and subject to the considerations to be
described in its written opinion and based upon such other matters as
Goldman Sachs considered relevant, the merger consideration to be paid
by Amgen for each outstanding share of Immunex common stock pursuant to
the merger agreement was fair to Amgen from a financial point of view.
Following a lengthy discussion, the Amgen board of directors unanimously
approved the merger agreement, the proposed merger, the issuance of shares in
the merger and each of the transaction documents to be executed by Amgen in
connection with the proposed transaction and unanimously resolved to recommend
that the Amgen stockholders vote to approve the issuance of shares of Amgen
common stock in the merger.
A special meeting of the Immunex board of directors was held on December 16,
2001 to consider adoption of the merger agreement and approval of the
transactions contemplated by the merger agreement. Prior to the meeting, the
Immunex board of directors was provided with materials, including substantially
final drafts of the merger agreement and related documents. At this meeting:
. Mr. Fritzky updated the Immunex board of directors on developments since
the December 14, 2001 meeting of the Immunex board of directors, and
reviewed strategic considerations in connection with the proposed
transaction;
. Representatives of Merrill Lynch made a financial presentation and
presented the fairness opinion of Merrill Lynch discussed in "Opinion of
Financial Advisor--Immunex";
. Representatives of Skadden, Arps reviewed legal matters, including the
terms of the proposed merger agreement and voting agreement, including
changes negotiated since the December 5, 2001 meeting of the Immunex
board of directors, and the principal terms of the other agreements to
be entered into among Amgen, American Home Products and certain of
subsidiaries of American Home Products; and
. Management of Immunex reviewed the due diligence that had been conducted
on Amgen.
During a recess in the Immunex board of directors meeting, representatives
of management and Skadden, Arps reviewed for the compensation committee of the
Immunex board of directors the severance and retention arrangements and
amendments to stock option plans that management recommended be considered in
connection with the proposed transaction, as well as the proposed employment
arrangement between Mr. Fritzky and
29
Amgen. Following discussion, the severance and retention and option plan
amendments were approved by the compensation committee and recommended to the
Immunex board of directors for approval. When the board of directors meeting
resumed, following lengthy discussion, the Immunex board of directors
unanimously adopted the merger agreement and approved the transactions
contemplated thereby, including the merger and unanimously resolved to
recommend that Immunex shareholders vote in favor of approval of the merger
agreement. The Immunex board of directors also approved the severance and
retention arrangements and amendments to the stock option plans of Immunex
described under "The Merger--Interests of Directors, Executive Officers and
Shareholders of Immunex in the Merger," which had been approved by the
compensation committee of the Immunex board of directors earlier that day.
The merger agreement, the shareholder voting agreement, the stockholders'
rights agreement, the amended and restated promotion agreement and the
agreement regarding governance and commercial matters were executed by the
parties on the evening of December 16, 2001.
On December 17, 2001, Amgen and Immunex issued a joint press release
announcing the execution of the merger agreement.
Reasons for the Merger--Amgen
The Amgen board of directors believes that the acquisition of Immunex will
enhance Amgen's position as a biotechnology leader with a diverse portfolio of
therapeutic drugs. The Amgen board of directors has unanimously approved the
merger agreement and the transactions contemplated by the merger agreement and
recommends that Amgen stockholders vote "FOR" approval of the issuance of Amgen
common stock in the merger.
In reaching its decision to approve the merger agreement, the Amgen board of
directors consulted with senior members of Amgen's management team regarding
the strategic and operational aspects of the merger and the results of the due
diligence efforts undertaken by management and Amgen's legal advisors. In
addition, the Amgen board of directors held discussions with representatives of
Goldman Sachs and Amgen's other financial advisors regarding the past and
current business operations, financial condition and future prospects of
Immunex. The Amgen board of directors also consulted with Goldman Sachs as to
the fairness, from a financial point of view to Amgen, of the merger
consideration to be paid by Amgen. The Amgen board of directors also consulted
with Amgen's internal counsel and with representatives of Latham & Watkins
regarding legal due diligence matters and the terms of the merger agreement and
related agreements. Amgen management and the Amgen board of directors also
retained L.E.K. Consulting LLC to provide consulting services to Amgen. In
reaching its decision to approve the merger agreement, the Amgen board of
directors considered a variety of factors, a number of which are summarized
below:
. Strengthened Strategic Position. The Amgen board of directors
considered that the merger would further enhance Amgen's role as a
global biotechnology leader with the benefits of increased size, product
base, product pipeline and employees. The Amgen board of directors
determined that the combination of the leading Immunex product, ENBREL,
with Amgen's existing drug portfolio, will enhance Amgen's position in
the inflammation therapeutic area, which will complement Amgen's
nephrology and oncology businesses. The Amgen board of directors
concluded that the acquisition of Immunex would strengthen and diversify
Amgen's product base and product pipeline in key therapeutic areas and
enhance Amgen's strategic position within the biotechnology market.
. Synergies. The Amgen board of directors reviewed the potential
strategic and other benefits of the merger, including the complementary
nature of the businesses of Immunex and Amgen and the opportunity for
significant cost savings. The Amgen board of directors noted that,
although no assurances can be given that any particular level of
synergies will be achieved, Amgen's management anticipates cost
synergies of more than $200 million in 2003, and more than $250 million
in 2004. Amgen's ability to achieve these goals is subject to various
factors, a number of which will be beyond its control, including
economic conditions and unanticipated changes in business conditions,
and, therefore, there can be no assurance that these results will be
achieved. See "Cautionary Statement Concerning Forward-Looking
Statements."
30
. ENBREL and Complementary Technology Base. The Amgen board of directors
considered the performance and future prospects of ENBREL and
management's belief that the acquisition will accelerate ENBREL
achieving its full market potential. The Amgen board of directors also
considered the scientific expertise of the research, development and
manufacturing personnel of Immunex and the proven ability of Immunex to
develop successful drugs, and concluded that the merger will
substantially enhance Amgen's discovery research capabilities in
proteins and antibodies.
. Positioned for Long-Term Growth. The Amgen board of directors
considered the fact that the acquisition of Immunex would likely
accelerate Amgen's future revenue and earnings growth, which would add
stockholder value. The Amgen board of directors concluded that the
acquisition of Immunex would improve Amgen's prospects for long-term
growth by creating a larger biotechnology company with increased revenue
and improved future earnings.
. Strategic Alternatives. The Amgen board of directors reviewed other
possible acquisition candidates and determined that the acquisition of
Immunex was a strategic fit and presented a unique opportunity to
enhance and expand Amgen's business, product line and position for
future growth.
. Integration of Immunex. The Amgen board of directors considered the
fact that the combination of the businesses of Amgen and Immunex would
be challenging. However, after consultation with Amgen management, the
Amgen board of directors determined that the operations of Immunex could
be integrated with those of Amgen in an efficient manner.
. Terms of the Merger Agreement. The Amgen board of directors, with the
assistance of counsel, considered the general terms of the merger
agreement, including:
-- Fixed Exchange Ratio. The Amgen board of directors considered the
fact that the fixed exchange ratio provides certainty as to the
number of shares of Amgen common stock to be issued to Immunex
shareholders and the percentage of the total shares of Amgen common
stock that current Immunex shareholders will own after the merger.
The Amgen board of directors also considered the premium that the
merger consideration implied.
-- No Solicitation; Termination Fee. The Amgen board of directors
reviewed the provisions of the merger agreement that limit the
ability of Immunex to solicit other acquisition offers. The Amgen
board of directors also considered the provisions that require the
payment of a $475 million termination fee by Amgen or Immunex if the
merger agreement is terminated due to specified reasons. The Amgen
board of directors believed that these provisions were reasonable
under the circumstances.
-- Conditions to Consummation. The Amgen board of directors reviewed
with counsel the conditions to consummation of the merger, in
particular the likelihood of obtaining the necessary regulatory
approvals and stockholder approvals, and the likelihood that the
merger would be completed. While the Amgen board of directors
believes that these approvals will be obtained in a timely fashion,
the Amgen board of directors also noted that Amgen is not required to
agree to any divestitures or other actions that would reasonably be
expected to have a material adverse effect on Amgen after giving
effect to the merger.
. Opinion of Financial Advisor. The Amgen board of directors considered
the opinion of Goldman Sachs that, as of the date of its opinion, and
based upon and subject to the considerations described in the opinion
and based on such other matters as Goldman Sachs considered relevant,
the merger consideration to be paid by Amgen for each outstanding share
of Immunex common stock pursuant to the merger agreement was fair from a
financial point of view to Amgen. See "Opinion of Financial
Advisor--Amgen."
. Tax Treatment. The Amgen board of directors also considered the
expected qualification of the merger as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code resulting in the
common stock portion of the merger consideration being received by
Immunex shareholders free of federal income tax.
31
. Voting Agreement. The Amgen board of directors also discussed the terms
of the shareholder voting agreement between Amgen and American Home
Products and two of its subsidiaries. The Amgen board of directors noted
that these companies, which as of the record date for the Immunex
special meeting, beneficially owned approximately ___% of the
outstanding shares of Immunex common stock, have agreed to vote for
approval of the merger agreement.
. American Home Products Agreements. The Amgen board of directors also
considered the terms and conditions of the stockholders' rights
agreement, the agreement regarding governance and commercial matters and
the amended and restated promotion agreement with American Home Products
and certain of its subsidiaries. After consultation with senior
management, the Amgen board of directors concluded that these agreements
would increase the likelihood of a continued commercial relationship
between American Home Products and Immunex after the merger and enable
Amgen to obtain the benefits of these relationships.
In addition, the Amgen board of directors also identified and considered a
variety of potentially negative factors in its deliberations concerning the
merger, including:
. the risk that the potential benefits sought in the merger might not be
fully realized;
. the possibility that the merger might not be completed, or that
completion might be unduly delayed;
. the effect of public announcement of the merger on Amgen's stock price;
. the projected dilution of Amgen's earnings per share as a result of the
issuance of the shares in the merger, and the estimated time period for
the merger to be accretive to Amgen's earnings per share;
. the risk that management's efforts to integrate Immunex will disrupt
Amgen's operations;
. the substantial charges to be incurred in connection with the merger,
including costs of integrating the businesses of Amgen and Immunex and
transaction expenses arising from the merger;
. the risk that despite the efforts of the combined company, key
management and research and development personnel might not remain
employed by Amgen; and
. various other risks associated with the merger and the businesses of
Amgen, Immunex and the combined company described in the section
entitled "Risk Factors" and in the documents incorporated by reference
into this joint proxy statement/prospectus.
The Amgen board of directors concluded, however, that these negative factors
could be managed or mitigated by Amgen or were unlikely to have a material
impact on the merger or Amgen, and that, overall, the potentially negative
factors associated with the merger were outweighed by the potential benefits of
the merger.
The above discussion of the factors considered by the Amgen board of
directors is not intended to be exhaustive, but does set forth the principal
factors considered by the Amgen board of directors. The Amgen board of
directors collectively reached the unanimous conclusion to approve the merger
agreement in light of the various factors described above and other factors
that each member of the Amgen board of directors felt were appropriate. In view
of the wide variety of factors considered by the Amgen board of directors in
connection with its evaluation of the merger and the complexity of these
matters, the Amgen board of directors did not consider it practical, and did
not attempt, to quantify, rank or otherwise assign relative weights to the
specific factors it considered in reaching its decision. Rather, the Amgen
board of directors made its recommendation based on the totality of information
presented to and the investigation conducted by it. In considering the factors
discussed above, individual directors may have given different weights to
different factors.
The Amgen board of directors unanimously recommends that Amgen stockholders
vote "FOR" approval of the issuance of Amgen common stock in the merger.
Reasons for the Merger--Immunex
While Immunex has excellent growth potential and prospects for its future as
a stand-alone entity, Immunex believes that there are substantial benefits to
Immunex shareholders that can be obtained as a result of the
32
merger. A combination with Amgen will permit shareholders to receive a
substantial equity interest in a leading biotechnology company, with greater
product and revenue diversity, technological resources and financial strength
than Immunex has on its own. At the same time, Immunex shareholders will
receive a fixed cash component of the merger consideration. At a meeting held
on December 16, 2001, the Immunex board of directors adopted the merger
agreement and resolved to recommend that Immunex shareholders vote "FOR" the
approval of the merger agreement.
In making its determination to adopt the merger agreement, the Immunex board
of directors consulted with senior members of the Immunex management team
regarding various matters, including the strategic and operational aspects of
the merger and the results of the due diligence efforts undertaken by
management and advisors of Immunex. In addition, the Immunex board of directors
consulted with representatives of Merrill Lynch regarding financial matters,
and with internal counsel and representatives of Skadden, Arps regarding legal
matters. In the course of reaching its determination, the Immunex board of
directors considered a variety of factors, including the following material
factors:
. Strategic Benefits of the Merger. The Immunex board of directors
considered the strategic benefits of the merger, including the following:
- Greater Revenue Diversification. After the merger, Amgen will have a
significantly larger revenue base than Immunex, with revenues driven
not only by sales of ENBREL, but also by sales of Amgen's current
product offerings of EPOGEN(R) (Epoetin alfa), NEUPOGEN(R)
(Filgrastim) and ARANESP(R) (darbepoetin alfa). Following the merger,
Amgen will also have a portfolio of leading products and a strong
pipeline of new products in development which the Immunex board of
directors believes should allow the combined company to pursue
multiple new products to maintain revenue diversity. The Immunex
board of directors concluded that the financial risk of dependence on
fewer products will be diminished as a result of the combined
company's greater revenue diversification.
- Enhanced Research and Development Capabilities. The Immunex board of
directors believes that following the merger, Amgen will be at the
forefront of biotechnology research and development. The research and
development budget of the combined company will increase
significantly from the research and development budgets of either
Immunex or Amgen on a stand-alone basis. The Immunex board of
directors believes that by efficiently organizing key research and
development functions and pooling both companies' expertise, and
having access to a broader array of research and development
possibilities, the combined company should be in a position to commit
substantial resources to the most promising product opportunities.
- Enhanced Biologics Manufacturing. The Immunex board of directors
considered that after the merger Amgen would have greater biologics
manufacturing capabilities than either Amgen or Immunex alone and
believes that the manufacturing expertise of Amgen will assist in the
scale-up of ENBREL production.
- Synergies and Cost Savings. The Immunex board of directors reviewed
the opportunity for cost savings and operation synergies that would
result from the merger. Cost savings are expected from avoiding
hiring and other costs that Immunex and Amgen would otherwise need to
incur in the future and eliminating redundant functions which would
exist in Amgen following the merger. Operating synergies are expected
from enhanced marketing efforts by the combined sales force and the
opportunity to accelerate research and development and product
commercialization. The Immunex board of directors considered that
these operational synergies could also be expected to make the
combined company more attractive to other companies in the industry
seeking a partner with development, production and marketing
capabilities.
. Attractive Financial Terms. The Immunex board of directors believes
that the merger consideration values Immunex common stock at a
financially attractive level and appropriately compensates Immunex
shareholders in light of the current position and prospects of Immunex.
In reaching this
33
determination, the Immunex board of directors considered, among other
things, various facts and analyses with respect to the financial terms
of the proposed merger including the following:
- information concerning the financial performance and financial
condition, business and prospects of Immunex and Amgen, as well as
conditions in the biotechnology industry generally;
- information concerning the recent and historical stock price
performance of Immunex common stock and Amgen common stock, as well
as the views articulated by Wall Street equity analysts regarding
such stocks;
- that the value implied by the merger consideration as of the date the
merger agreement was entered into was at a premium to the one-week,
one-month, six-month and twelve-month average trading prices for
Immunex common stock;
- the value of the exchange ratio provided for in the merger agreement
relative to the then-current market prices and historical trading
prices of Immunex and Amgen shares over the past year. In this
regard, the Immunex board of directors noted that at then-current
market prices, the merger consideration represents a premium of (a)
14% to the price of Immunex common stock on December 14, 2001, the
last trading day prior to the execution of the merger agreement, (b)
34% to the price of Immunex common stock on December 12, 2001, the
last trading day before rumors of a possible business combination
transaction between Immunex and Amgen were reported, (c) 68% to the
six-month average trading price, and (d) 47% to the 12-month average
trading price, of Immunex common stock from December 12, 2001;
- comparisons of historical financial and operational measures for
Immunex and Amgen including revenues and earnings, and the fact that
Immunex shareholders would hold a percentage of the outstanding stock
of Amgen in excess of the percentage of Amgen's earnings contributed
by Immunex in the near term; and
- the fixed nature of the exchange ratio for the stock portion of the
merger consideration and that, therefore, an increase or decrease in
the market value of Amgen common stock will increase or decrease from
current levels the market value of the stock portion of the merger
consideration to be received by the Immunex shareholders at the time
of the closing of the merger.
. Alternatives to the Merger. The Immunex board of directors considered,
as possible alternatives to the merger, continuing to pursue execution
of the business strategy of Immunex as an independent entity or the
possibility of pursuing a business combination with a company other than
Amgen.
- The Immunex board of directors considered the risks and potential
rewards associated with continuing to execute the strategic plan of
Immunex as an independent entity, including, the risks associated
with the dependence on one product as the primary source for revenues
and the reward of existing Immunex shareholders obtaining all of the
increase in the value of Immunex from increased sales of ENBREL in
the United Sates and Canada, and concluded that the likelihood of
increasing shareholder value was greater pursuant to the merger than
the likelihood of doing so on a stand-alone basis.
- The Immunex board of directors also considered the possibility of
seeking to engage in a business combination or other strategic
transaction with a company other than Amgen, and concluded that a
transaction with Amgen is more feasible and expected to yield greater
benefits to shareholders than other likely alternatives.
. Larger Capitalization and Greater Liquidity. The Immunex board of
directors considered that the market capitalization of Amgen following
the merger would be approximately $73 billion, based on market prices of
Amgen and Immunex common stock as of December 14, 2001. The Immunex
board of directors also considered that only approximately 59% of the
market capitalization of Immunex at the time the merger was announced
was held by shareholders other than American Home Products. The
34
Immunex board of directors determined that the larger market
capitalization and public float of Amgen following the merger and
resultant increases in liquidity should be beneficial to Immunex
shareholders.
. Opinion of Financial Advisor. The Immunex board of directors reviewed
the analyses and presentations prepared by Merrill Lynch, and Merrill
Lynch's opinion to the effect that the consideration to be received by
the Immunex shareholders in the merger was fair to the Immunex
shareholders from a financial point of view. See "Opinion of Financial
Advisor--Immunex."
. Tax Treatment. The Immunex board of directors considered the expected
qualification of the merger as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code resulting in the common
stock portion of the merger consideration being received by Immunex
shareholders free of federal income tax.
. Terms of the Merger Agreement. The Immunex board of directors, with the
assistance of counsel, considered the terms and conditions of the merger
agreement, including:
- restrictions on the conduct of business by Immunex between signing of
the merger agreement and the effective time of the merger;
- the potential effect of the terms of the merger agreement on possible
third-party proposals to acquire Immunex after execution of the
merger agreement, including that if any third party made a superior
proposal, the Immunex board of directors could provide information to
and engage in negotiations with such third party, subject to the
terms and conditions of the merger agreement;
- that Immunex must hold its shareholders meeting and allow
shareholders to vote on the merger agreement even if a third party
makes a superior proposal; and
- that the termination payment provisions of the merger agreement could
have the effect of discouraging alternative proposals for a business
combination with Immunex, but would not preclude bona fide
alternative proposals, and that the size of the termination fee was
reasonable in light of the size and benefits of the transaction.
. Voting Agreement. The Immunex board of directors also reviewed the
terms of the shareholder voting agreement among Amgen, American Home
Products and certain American Home Products subsidiaries providing for,
among other things, American Home Products and its subsidiaries to vote
their shares of Immunex common stock, representing approximately 41% of
the outstanding Immunex shares, in favor of the merger proposal at the
Immunex shareholders meeting.
. Employee Matters. The Immunex board of directors considered the terms
of the merger agreement and other arrangements with respect to Immunex
management and employees intended to maintain the organization of
Immunex and preserve the value of Immunex prior to and following the
merger, including:
- the role that the senior operating management of Immunex is expected
to play in Amgen and the fact that Mr. Fritzky will be appointed to
the Amgen board of directors;
- confirmation of Amgen's current intention to operate and grow the
Seattle facility owned by Immunex as a major research and development
center, base the team responsible for ENBREL in Seattle and continue
the new Rhode Island facility of Immunex as a major manufacturing
location;
- provision of Immunex employees with benefits that in the aggregate
are no less favorable than those provided to these employees prior to
the merger for a period of at least two years after completion of the
merger; and
- the existence of severance and retention arrangements of Immunex.
In its review of the proposed merger, the Immunex board of directors
identified and considered a variety of potentially negative factors or risks,
including:
. the risks described under the section entitled "Risk Factors";
. that, while the merger is expected to be completed, there can be no
assurance that all conditions to the parties' obligations to complete
the merger, such as obtaining necessary regulatory approvals, will be
35
satisfied, and as a result, it is possible that the merger may not be
completed even if approved by shareholders (see "The Merger
Agreement--Conditions to the Completion of the Merger");
. the possibility that if the market price of Amgen common stock declines,
as a result of the fixed nature of the exchange ratio for the stock
portion of the merger consideration, the value of the merger
consideration to be received by the Immunex shareholders at the time of
the closing of the merger would decline;
. the possibility of disruption to the operations of Immunex and a loss of
key employees as a result of the merger; and
. the possibility that the benefits anticipated in connection with the
merger might not be realized by Amgen.
In addition to the factors considered that are described above, in coming to
its determination, the Immunex board of directors was aware of the interests
that some executive officers and directors of Immunex may have with respect to
the merger in addition to their interests as shareholders of Immunex generally.
See "Interests of Directors, Executive Officers and Shareholders of Immunex in
the Merger." The Immunex board of directors was also aware of the agreement
regarding governance and commercial matters, the stockholders' rights
agreement, and the amended and restated promotion agreement, each between
Amgen, American Home Products and subsidiaries of American Home Products. See
"Stockholders' Rights Agreement" and "Other Agreements with American Home
Products."
In view of the wide variety of factors considered in connection with its
evaluation of the merger and the complexity of these matters, the Immunex board
of directors did not find it useful to and did not attempt to quantify, rank or
otherwise assign relative weights to these factors. The Immunex board of
directors conducted an overall analysis of the factors described above, and
overall considered the factors to be favorable to and to support its
determination. In considering the factors described above, individual members
of the Immunex board of directors may have given different weight to different
factors.
The Immunex board of directors unanimously recommends that Immunex
shareholders vote "FOR" approval of the merger agreement.
Opinion of Financial Advisor--Amgen
On December 16, 2001, Goldman, Sachs & Co., financial advisor to Amgen,
delivered to the Amgen board of directors its oral opinion, subsequently
confirmed by delivery of a written opinion dated December 16, 2001, that, as of
that date, and based upon and subject to the considerations described in its
opinion and based upon such other matters as Goldman Sachs considered relevant,
the merger consideration to be paid by Amgen for each outstanding share of
Immunex common stock pursuant to the merger agreement was fair from a financial
point of view to Amgen.
For purposes of the opinion and this description of the opinion, merger
consideration means the right to receive, with respect to each outstanding
share of Immunex common stock:
. 0.44 shares of Amgen common stock; and
. $4.50 in cash.
The full text of the written opinion of Goldman Sachs, which sets forth the
assumptions made, procedures followed, matters considered, and limitations on
the review undertaken in connection with the opinion, is contained in Annex D.
Goldman Sachs provided its opinion for the information and assistance of
Amgen's board of directors in connection with its consideration of the
transaction contemplated by the merger agreement. Goldman Sachs' opinion is not
a recommendation as to how any holder of Amgen common stock should vote with
respect to the transaction. We encourage you to read the opinion in its
entirety.
In connection with its opinion, Goldman Sachs reviewed, among other things:
. the merger agreement;
36
. the shareholder voting agreement, dated as of December 16, 2001, by and
among Amgen, American Home Products Corporation, MDP Holdings, Inc. and
Lederle Parenterals, Inc.;
. annual reports to stockholders and annual reports on Form 10-K of Amgen
and Immunex for the five years ended December 31, 2000;
. selected interim reports to stockholders and quarterly reports on Form
10-Q of Amgen and Immunex;
. other communications from Amgen and Immunex to their respective
stockholders; and
. financial analyses and forecasts for Amgen, Immunex and the combined
company on a pro forma basis prepared by the management of Amgen,
including certain cost savings and operating synergies projected by the
management of Amgen to result from the transaction contemplated by the
merger agreement.
Goldman Sachs also held discussions with members of the senior management of
Amgen regarding their assessment of the strategic rationale for, and the
potential benefits of, the transaction contemplated by the merger agreement and
the past and current business operations, financial condition and future
prospects of Amgen, including the future prospects of the combined companies.
Goldman Sachs also held discussions with senior management of Amgen and with
L.E.K. Consulting LLC regarding discussions they had with the senior management
of Immunex regarding the past and current business operations, financial
condition and future prospects of Immunex.
In addition, Goldman Sachs:
. reviewed the reported price and trading activity for Amgen common stock
and Immunex common stock;
. compared financial and stock market information for Amgen and Immunex
with similar information for other selected companies, the securities of
which are publicly traded;
. reviewed the financial terms of selected recent business combinations in
the biotechnology industry specifically and other industries generally;
and
. performed such other studies and analyses as Goldman Sachs considered
appropriate.
Goldman Sachs relied upon the accuracy and completeness of all of the
financial, accounting and other information discussed with or reviewed by it
and assumed the accuracy and completeness of this information for purposes of
rendering its opinion. In that regard, Goldman Sachs assumed, with the consent
of Amgen's board of directors, that the financial forecasts prepared by the
management of Amgen, including the forecasts relating to the cost savings and
operating synergies referred to above, were reasonably prepared on a basis
reflecting the best currently available estimates and judgments of Amgen, and
that the cost savings and operating synergies would be realized in the amounts
and time periods contemplated thereby. In addition, Goldman Sachs did not make
an independent evaluation or appraisal of the assets and liabilities of Amgen
or Immunex or any of their respective subsidiaries, and Goldman Sachs was not
furnished with any such evaluations or appraisals. Goldman Sachs also assumed
that all material governmental, regulatory or other consents and approvals
necessary for the consummation of the transaction contemplated by the merger
agreement would be obtained without any adverse effect on Amgen or Immunex or
on the contemplated benefits of the transaction contemplated by the merger
agreement.
The following is a summary of the material financial analyses presented by
Goldman Sachs to the Amgen board of directors in connection with providing its
opinion to the Amgen board. In order to more fully understand the financial
analyses used by Goldman Sachs, the tables must be read together with the full
text of each summary. The tables alone are not a complete description of
Goldman Sachs' financial analysis.
Except as otherwise noted, the following quantitative information, to the
extent that it is based on market data, is based on market data as it existed
on or before December 16, 2001, and is not necessarily indicative of current
market conditions.
37
This summary includes information presented in tabular format. These tables
should be read together with the text of each summary.
Analysis of Transaction Premium and Multiples
Goldman Sachs reviewed the premiums, multiples and other information derived
from the 0.52 exchange ratio implied by the merger consideration provided in
the merger agreement on the date of its opinion. The 0.52 exchange ratio
represents the sum of (1) the 0.44 shares of Amgen common stock that each
outstanding share of Immunex common stock will be exchanged for under the
merger agreement and (2) the 0.08 shares of Amgen common stock that $4.50 would
buy based on the closing price of Amgen common stock of $56.03 on December 14,
2001. Based on the closing price of Immunex common stock of $25.62 and the
closing price of Amgen common stock of $56.03 on December 14, 2001, Goldman
Sachs calculated an implied offer price of $29.15 per share, representing an
implied premium of 13.8% over the closing price of Immunex common stock on
December 14, 2001. Goldman Sachs then calculated the implied premium based on
the implied offer price of $29.15 using the closing prices of Immunex common
stock on December 14, 2001, and on other selected dates and over selected
periods.
The results of these calculations are as follows:
Closing Immunex Price Implied Premium Based on $29.15
Trading Period ($/Share) Implied Offer Price (%)
-------------- --------------------- -------------------------------
December 14, 2001......... $25.62 13.8%
1 Week Average (a)........ 25.19 15.7
1 Month Average (b)....... 26.11 11.7
2 Month Average (c)....... 25.17 15.8
3 Month Average (d)....... 23.27 25.3
6 Month Average (e)....... 19.72 47.8
9 Month Average (f)....... 18.39 58.5
1 Year Average (g)........ 22.23 31.1
52-Week High.............. 49.88 (41.5)
52-Week Low............... 10.75 171.2
--------
(a) 1 week represents trading days from 12/10/2001 through 12/14/2001.
(b) 1 month represents trading days from 11/14/2001 through 12/14/2001.
(c) 2 months represents trading days from 10/14/2001 through 12/14/2001.
(d) 3 months represents trading days from 9/14/2001 through 12/14/2001.
(e) 6 months represents trading days from 6/14/2001 through 12/14/2001.
(f) 9 months represents trading days from 3/14/2001 through 12/14/2001.
(g) 1 year represents trading days from 12/14/2000 through 12/14/2001.
38
Goldman Sachs also reviewed the historical trading prices of Immunex common
stock and Amgen common stock in order to compare prices for Immunex common
stock implied by those historical trading prices, using the 0.52 exchange ratio
implied by the merger consideration provided in the merger agreement and based
on the closing price of Amgen common stock on December 14, 2001. Specifically,
Goldman Sachs multiplied the implied 0.52 exchange ratio by the daily closing
prices of Amgen common stock on December 14, 2001 and on other selected dates
and over selected periods to determine the implied price for Immunex common
stock on such dates and over such periods. Goldman Sachs then compared the
implied price for Immunex common stock to the historical trading price of
Immunex common stock for the corresponding period and derived an implied
premium. These analyses indicated the following implied prices for Immunex
common stock and implied premiums for these dates or periods:
Implied Immunex Price
Based on 0.52x
Trading Period Exchange Ratio Implied Premium (%)
-------------- --------------------- -------------------
December 14, 2001..................... $29.15 13.8%
1 Week Average (a).................... 32.24 28.0
1 Month Average (b)................... 32.84 25.8
2 Month Average (c)................... 31.65 25.7
3 Month Average (d)................... 31.29 34.4
6 Month Average (e)................... 31.67 60.6
9 Month Average (f)................... 31.77 72.7
1 Year Average (g).................... 32.56 46.5
52-Week High.......................... 39.06 (21.7)
52-Week Low........................... 23.64 119.9
--------
(a) 1 week represents trading days from 12/10/2001 through 12/14/2001.
(b) 1 month represents trading days from 11/14/2001 through 12/14/2001.
(c) 2 months represents trading days from 10/14/2001 through 12/14/2001.
(d) 3 months represents trading days from 9/14/2001 through 12/14/2001.
(e) 6 months represents trading days from 6/14/2001 through 12/14/2001.
(f) 9 months represents trading days from 3/14/2001 through 12/14/2001.
(g) 1 year represents trading days from 12/14/2000 through 12/14/2001.
Based on an Amgen closing price of $56.03 on December 14, 2001 and using the
implied Immunex price per share of $29.15, Goldman Sachs calculated that the
fully diluted equity consideration in the merger would be $16.90 billion,
assuming exercise of outstanding options that are in-the-money, based on the
implied offer price. Goldman Sachs also determined that the enterprise value
would be $15.88 billion, based on the implied offer price and approximately
$1.02 billion of non-restricted cash and no debt as of September 30, 2001.
Using Amgen management estimates for fiscal years 2001 through 2003, Goldman
Sachs derived the following transaction multiples:
. enterprise value as a multiple of estimated 2001, 2002 and 2003 sales;
. enterprise value as a multiple of estimated 2001, 2002 and 2003 earnings
before interest and taxes, or EBIT; and
. equity consideration on a fully-diluted basis as a multiple of estimated
2001, 2002 and 2003 net income.
39
The results of these analyses are as follows:
Implied Transaction
Multiple at Implied Offer
Enterprise Value/Sales Price of $29.15 per Share
---------------------- -------------------------
2001 (estimated)...................................... 15.6x
2002 (estimated)...................................... 12.9x
2003 (estimated)...................................... 8.0x
Enterprise Value/EBIT
---------------------
2001 (estimated)...................................... 140.5x
2002 (estimated)...................................... 139.7x
2003 (estimated)...................................... 42.7x
Diluted Equity Consideration/Net Income
---------------------------------------
2001 (estimated)...................................... 92.1x
2002 (estimated)...................................... 168.7x
2003 (estimated)...................................... 60.3x
Historical Stock Trading Analysis
Goldman Sachs reviewed and compared the historical daily trading prices of
Immunex common stock during the period from December 14, 1999 to December 14,
2001 with the following: (1) a Profitable Biotech Index, comprised of the
common stock of Amgen, Biogen Inc., Chiron Corporation, Genentech Inc., Genzyme
Corporation, IDEC Pharmaceuticals Corp., MedImmune, Inc. and QLT, Inc., and (2)
a Near-Profitable Biotech Index, comprised of the common stock of Cell
Therapeutics, Inc., Cephalon, Inc., Corixa Corporation, Gilead Sciences, Inc.,
ImClone Systems Incorporated, Intermune Inc., Supergen Inc., Tanox Inc., Titan
Pharmaceuticals Inc. and Vertex Pharmaceuticals, Inc.
The analysis indicated that for the period from December 14, 1999 to March
1, 2001, the Immunex common stock initially performed comparably to the above
indices; but, since early April 2000, Immunex common stock has been
underperforming the Near-Profitable Index and since early January 2001, Immunex
common stock has been underperforming both the Profitable Biotech Index and the
Near-Profitable Index.
Goldman Sachs also reviewed and compared the historical daily trading prices
of Amgen common stock during the period from December 14, 1999 to December 14,
2001 with the following: (1) a Profitable Biotech Index, comprised of the
common stock of Immunex, Biogen Inc., Chiron Corporation, Genentech Inc.,
Genzyme Corporation, IDEC Pharmaceuticals Corp., MedImmune, Inc. and QLT, Inc.,
and (2) the Near-Profitable Biotech Index. The analysis indicated that, for the
period from December 14, 1999 to December 14, 2001, Amgen common stock
underperformed the Near-Profitable Biotech Index, but performed comparably to
the Profitable Biotech Index.
Selected Public Companies Analysis
Goldman Sachs reviewed and compared selected financial information relating
to Amgen and Immunex to corresponding financial information, ratios and public
market multiples for comparable companies whose securities are publicly traded.
Goldman Sachs calculated various financial multiples and ratios for Amgen and
Immunex based on the closing price of Amgen and Immunex common stock on
December 10, 2001. These financial multiples and ratios were compared with
those of the companies included the Profitable Biotech Index (including both
Amgen and Immunex) and Near-Profitable Biotech Index used in the historical
stock trading analyses. Where applicable, the financial multiples and ratios
for Amgen and Immunex and the selected companies were calculated using (1) the
closing prices of their common stock on December 10, 2001 and (2) their
respective equity market capitalizations.
40
Goldman Sachs' analyses of the selected companies compared, among other
things, the following to the results for Amgen and Immunex:
. market price on December 10, 2001 as a percentage of the 52-week high;
. cash balance as of latest public filings;
. ratio of market price as of December 10, 2001 to 2002 and 2003 estimated
earnings; and
. ratio of market price as of December 10, 2001 to 2002 and 2003 estimated
earnings, relative to Institutional Broker Estimate System's, or IBES,
estimates of long-term growth rates.
The results of these analyses are summarized as follows:
Near-Profitable Biotech
Profitable Biotech Index Index (a)
------------------------ ----------------------- Amgen Immunex
Range Median Range Median Actual Actual
---------- ------ --------- ------ ------ ---------
Market Price as a % of
52-Week High 47.7-94.9% 76.2% 18.3-100% 61.3% 87.4% 49.4%
----------------------------------------------------------------------------------------
Cash (in millions) $154-2,523 $632 $42-441 $242 $2,429 $1,016(b)
----------------------------------------------------------------------------------------
Market Price to
Estimated 2002
Earnings 28.7-81.0x 42.7x * * 45.4x 81.0x
----------------------------------------------------------------------------------------
Market Price to
Estimated 2003
Earnings 16.5-60.0x 34.3x * * 37.5x 59.3x
----------------------------------------------------------------------------------------
Estimated 2002 Market
Price to Earnings/
IBES Growth Rates 0.6-2.4x 1.8x * * 2.4x 2.0x
--------
(a) Also includes COR Therapeutics, Inc. and Ilex Oncology, Inc. statistics.
(b) Excludes restricted cash.
* Data not meaningful.
Discounted Cash Flow Analysis
Goldman Sachs performed an analysis to compare the present value per share
of Immunex common stock, using discounted cash flow methodologies, to the value
per share implied by the merger consideration provided in the merger agreement
on the date of its opinion. Using Amgen management's projections for Immunex,
Goldman Sachs performed this analysis on a stand-alone basis. Goldman Sachs
analyzed the business of Immunex based on the following models: (1) the Immunex
base case scenario, which involved Amgen management's projections of future
revenue growth and earnings for the fiscal years 2002 through 2011, without any
cost savings or operating synergies; and (2) the Immunex synergies scenario,
which was based on the projections of future revenue growth and earnings used
in the Immunex base case scenario, but took into account certain cost savings
and operating synergies projected by the management of Amgen to result from the
transactions contemplated by the merger agreement.
In its analysis of both the Immunex base case and synergies scenarios,
Goldman Sachs applied discount rates ranging from 10.0% to 14.0% and terminal
value multiples of estimated 2011 price to earnings ranging from 20.0x to
40.0x. The range for discount rates and terminal value multiples were chosen by
Goldman Sachs based upon its prior experience in analyzing cost of capital
ranges that could be applicable. Based on these discount rates and terminal
value multiples, Goldman Sachs derived theoretical equity reference ranges per
share ranging from $13.27 to $32.64 for the Immunex base case scenario and
$17.96 to $42.82 for the Immunex synergies scenario.
41
Goldman Sachs noted that the implied value of $29.15 per share derived on
the date of its opinion from the merger consideration provided in the merger
agreement was within the range of share valuations for Immunex on a stand-alone
basis implied by the range of values derived from the discounted cash flow
analysis of the Immunex base case scenario and the Immunex synergies scenario.
Goldman Sachs also performed an analysis of the present value per share of
Amgen common stock using discounted cash flow methodologies. Using Amgen
management projections as provided by Amgen management for the fiscal years
2002 through 2011, Goldman Sachs performed this analysis for Amgen on a
stand-alone basis. Goldman Sachs analyzed three elements of the business based
on the following models: (1) the Amgen base case scenario, which involved Amgen
management's projections of future revenue growth and earnings for the fiscal
years 2002 through 2011; (2) the Amgen marketed products scenario, which was
based on projections for revenues and growth from approved products and
products currently being marketed by Amgen, and no contribution from Amgen's
pipeline scenario; and (3) the Amgen pipeline products scenario, which was
based on projections for revenues and growth for new compounds in development,
excluding any products currently being marketed.
In its analysis of the Amgen base case scenario and the Amgen marketed
products scenario, Goldman Sachs applied discount rates ranging from 10.0% to
12.0% and terminal value multiples of estimated 2011 price to earnings ranging
from 15.0x to 25.0x. In its analysis of the Amgen pipeline products scenario,
Goldman Sachs applied discount rates ranging from 12.0% to 14.0% and terminal
value multiples of estimated 2011 price to earnings ranging from 20.0x to
40.0x. The various ranges for discount rates and terminal value multiples were
chosen by Goldman Sachs based upon its prior experience in analyzing cost of
capital ranges that could be applicable. Based on these discount rates and
terminal value multiples, Goldman Sachs derived theoretical equity reference
ranges per share ranging from $37.22 to $58.32 for the Amgen base case
scenario, $30.30 to $46.78 for the Amgen marketed products scenario and $4.87
to $8.45 for the pipeline products scenario.
Pro Forma Merger Analysis
Goldman Sachs prepared pro forma analyses of the financial impact of the
merger on Amgen and Immunex on a stand-alone basis for the six fiscal years
ending December 31, 2006 using projections for fiscal years 2001 through 2006
prepared by Amgen's management. For the fiscal years 2001 through 2006, Goldman
Sachs compared, among other financial items, fully diluted earnings per share
for the combined company on a pro forma basis, both with and without taking
into account certain cost savings and operating synergies projected by the
management of Amgen to result from the transaction contemplated by the merger
agreement. The pro forma analysis was calculated based on pro forma cash
earnings per share, which excludes the impact of non-cash charges associated
with identifiable intangible asset amortization. Goldman Sachs' analysis
indicated that the proposed merger, when taking the cost savings and operating
synergies into account but excluding identifiable intangible asset
amortization, would be dilutive to the combined company's fully diluted
earnings per share in estimated years 2002 and 2003 and accretive to the
combined company's fully diluted earnings per share in estimated years 2004,
2005 and 2006 assuming a closing date for the merger in June 2002. Further,
Goldman Sachs' analysis indicated that if none of the cost savings and
operating synergies projected by the management of Amgen to result from the
transaction were realized and all identifiable intangible asset amortization is
excluded, the proposed merger would be dilutive to the combined company's fully
diluted earnings per share in each of the estimated years 2002, 2003, 2004,
2005 and 2006 assuming a closing date for the merger in June 2002.
Contribution Analysis
Goldman Sachs conducted a contribution analysis of Immunex relative to the
pro forma combined entity resulting from the merger using discounted cash flow
methodologies. Using management projections provided by Amgen's management and
assuming all cost savings and operating synergies included in the discounted
cash flow analysis of Immunex, Goldman Sachs derived theoretical equity value
contribution percentages for Immunex assuming a discount rate of 11.0% and
terminal value multiples of 2011 price to earnings for Immunex ranging from
20.0x to 40.0x and for Amgen ranging from 15.0x to 25.0x. Based on this
discount rate and these
42
terminal value multiples, Goldman Sachs calculated theoretical equity reference
range contribution percentages ranging from 22.9% to 27.6%.
Goldman Sachs also reviewed the historical and estimated future operating
and financial information, including, among other things, revenue and net
income, for Amgen, Immunex and the pro forma combined entity resulting from the
merger based on Amgen's management projections. A contribution analysis
demonstrates the parties' respective historical and projected contributions, on
a percentage basis, to certain income statement items of the combined company
and compares those contributions to the parties' stockholders' relative equity
interests in the combined company following the merger. Goldman Sachs analyzed
the relative income statement contribution of (1) Immunex, (2) Amgen and (3)
the synergies projected to result from the transaction contemplated by the
merger agreement, to the combined company on a pro forma basis based on
financial data and on the assumptions provided to Goldman Sachs by Amgen's
management for estimated years 2001 through 2006. Goldman Sachs calculated the
relative contributions of Immunex, Amgen and the projected synergies to the
combined company in terms of, among other things, (1) sales, (2) earnings
before interest and taxes, or EBIT, (3) net income, (4) enterprise value, based
on the closing price of Immunex common stock of $25.62 and the closing price of
Amgen common stock of $56.03 on December 14, 2001, Immunex non-restricted cash
of approximately $1.02 billion and no debt as of September 30, 2001 and net
cash of Amgen of approximately $2.11 billion as of September 30, 2001, (5)
fully diluted equity market capitalization, based on the closing market price
of Immunex common stock of $25.62 and Amgen's closing market price of $56.03 on
December 14, 2001, and (6) implied pro forma ownership, based on Amgen's
closing market price of $56.03 and the implied offer price for Immunex common
stock of $29.15 on December 14, 2001. The results of these analyses for 2001
and 2006 are as follows:
% Contribution
-------- -------------- ------------
Sales (a) Amgen(a) Immunex(a)(b) Synergies(a)
--------- -------- -------------- ------------
FY2001 (estimated)........................ 79.6% 20.4% 0.0%
FY2006 (estimated)........................ 69.1% 30.9% 0.0%
EBIT
----
FY2001 (estimated)........................ 93.8% 6.2% 0.0%
FY2006 (estimated)........................ 74.4% 17.9% 7.7%
Net Income (b)
--------------
FY2001 (estimated)........................ 87.3% 12.7% 0.0%
FY2006 (estimated)........................ 76.3% 16.4% 7.3%
Enterprise Value
----------------
81.2% 18.8%
Equity Market Capitalization
----------------------------
80.6% 19.4%
Implied Pro Forma Ownership (c)
-------------------------------
78.3% 21.7%
--------
(a) Includes all sales of ENBREL in the United States and Canada.
(b) Assumes divestiture of LEUKINE in June 2002.
(c) Implied ownership based on total transaction value. Actual pro forma
ownership of Immunex shareholders would be 19.0% based on 15% cash
consideration and 85% stock consideration.
Selected Transactions Analysis
Using the implied value of $29.15 per share for Immunex common stock derived
from the merger consideration provided in the merger agreement and the closing
price of Amgen common stock on December 14, 2001, Goldman Sachs calculated (1)
the premium represented by the implied offer price in relation to the closing
43
price of Immunex common stock on December 14, 2001, the last trading day prior
to the announcement of the execution of the merger agreement, and (2) the 2001
estimated sales multiple. The premium was calculated to be 13.8% and the 2001
estimated sales multiple was 15.6x.
Goldman Sachs compared the results with publicly available information for
42 pending and completed merger and acquisition transactions involving
consideration greater than $100 million during 1990 through 2001 in the
biotechnology industry. In addition, Goldman Sachs compared the results with
publicly available information for 18 biotechnology product-driven transactions
for the same time period. The results of the analyses are as follows:
Biotechnology M&A Transactions of Greater Than $100mm,
January 1990 to December 14, 2001 Mean Median
--------------------------------- ---- ------
Premium One Trading Day Prior to Announcement..... 36.6% 32.7%
Premium Four Weeks Prior to Announcement.......... 52.5% 50.9%
LTM Sales Multiple................................ 32.7x 14.9x
Selected Biotechnology Product Transactions,
January 1990 to December 14, 2001
---------------------------------
Premium One Trading Day Prior to Announcement..... 35.4% 28.0%
Premium to Four Weeks Prior to Announcement....... 44.2% 39.9%
LTM Sales Multiple................................ 19.3x 12.4x
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary described above, without considering
the analyses as a whole, could create an incomplete view of the processes
underlying Goldman Sachs' opinion. In arriving at its fairness determination,
Goldman Sachs considered the results of all the analyses and did not attribute
any particular weight to any factor or analysis considered by it; rather,
Goldman Sachs made its determination as to fairness on the basis of its
experience and professional judgment after considering the results of all the
analyses. No company used in the above analyses as a comparison is directly
comparable to Amgen or Immunex, and no transaction used is directly comparable
to the proposed transaction contemplated by the merger agreement.
Goldman Sachs prepared these analyses solely for purposes of providing an
opinion to the Amgen board of directors as to the fairness of the merger
consideration to Amgen from a financial point of view. The analyses do not
purport to be appraisals or to necessarily reflect the prices at which the
business or securities actually may be sold. Analyses based upon forecasts of
future results are not necessarily indicative of actual future results, which
may be significantly more or less favorable than suggested by these analyses.
Because these analyses are inherently subject to uncertainty and are based upon
numerous factors or events beyond the control of the parties or their
respective advisors, none of Amgen, Immunex or Goldman Sachs assumes
responsibility if future results are materially different from those forecast.
As described above, the opinion of Goldman Sachs to the Amgen board of
directors was one of many factors taken into consideration by the Amgen board
in making its determination to approve the merger agreement. The foregoing
summary does not purport to be a complete description of the analyses performed
by Goldman Sachs.
Goldman Sachs, as part of its investment banking business, is continually
engaged in performing financial analyses with respect to businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities as private placements as well as for estate, corporate and
other purposes. Goldman Sachs is familiar with Amgen having provided investment
banking services to Amgen from time to time, including having acted as its
financial advisor in connection with its stock repurchase program and having
acted as its financial advisor in connection with, and having participated in
certain of the negotiations leading to, the merger agreement.
Amgen selected Goldman Sachs as its financial advisor because Goldman Sachs
is an internationally recognized investment banking firm that has substantial
experience in transactions similar to the transaction
44
contemplated by the merger agreement. In addition, Goldman Sachs provides a
full range of financial advisory and securities services and, in the course of
its normal trading activities, may from time to time effect transactions and
hold positions in securities, including derivative securities, of Amgen and
Immunex for its own account and for the accounts of customers.
Pursuant to a letter agreement, dated August 6, 2001, Amgen engaged Goldman
Sachs to act as its financial advisor in connection with a potential
transaction involving Immunex. Pursuant to this letter agreement, Amgen agreed
to pay Goldman Sachs a customary transaction fee, the principal portion of
which is payable upon completion of the merger. Amgen has also agreed to
reimburse Goldman Sachs for its reasonable out-of-pocket expenses, including
attorneys' fees and disbursements, and to indemnify Goldman Sachs against
certain liabilities, including certain liabilities under the federal securities
laws.
Opinion of Financial Advisor--Immunex
Immunex retained Merrill Lynch, Pierce, Fenner & Smith Incorporated to act
as its financial advisor in connection with the proposed merger. On December
16, 2001, Merrill Lynch delivered to the Immunex board of directors its oral
opinion, subsequently confirmed by delivery of a written opinion dated December
16, 2001, that, as of that date, and based upon and subject to the factors and
assumptions set forth in the opinion, the merger consideration to be received
by the holders of the shares of Immunex common stock pursuant to the merger was
fair to such holders, from a financial point of view.
The full text of Merrill Lynch's opinion, dated December 16, 2001, which
sets forth the assumptions made, matters considered, and qualifications and
limitations on the review undertaken by Merrill Lynch, is attached as Appendix
E to this document and is incorporated into this document by reference. The
summary of Merrill Lynch's opinion set forth below is qualified in its entirety
by reference to the full text of the opinion. Immunex shareholders are
encouraged to read the opinion carefully in its entirety.
Merrill Lynch's opinion was prepared for, and addressed to, the Immunex
board of directors for the information of such directors, and is directed only
to the fairness, from a financial point of view, of the merger consideration to
the Immunex shareholders. The opinion does not address any other aspect of the
merger, including the merits of the underlying decision by Immunex to engage in
the merger. Furthermore, the opinion does not constitute, nor should it be
construed as constituting, a recommendation to Immunex shareholders as to how
such shareholders should vote as to any matter relating to the merger.
In preparing its opinion for the Immunex board of directors, Merrill Lynch
performed a variety of financial and comparative analyses, including, but not
limited to, those described below. The summary set forth below does not purport
to be a complete description of the analyses underlying Merrill Lynch's opinion
or the presentation made by Merrill Lynch to the Immunex board of directors.
The preparation of a fairness opinion is a complex analytical process involving
various determinations as to the most appropriate and relevant methods of
financial analysis and the application of those methods to particular
circumstances and, therefore, a fairness opinion is not readily susceptible to
partial analysis or summary description. In arriving at its opinion, Merrill
Lynch did not attribute any particular weight to any analysis or factor
considered by it, but rather made qualitative judgments as to the significance
and relevance of each analysis and factor. Accordingly, Merrill Lynch believes
that its analyses must be considered as a whole and that selecting portions of
its analyses and factors, or focusing on information presented in tabular
format, without considering all of the analyses and factors or the narrative
description of the analyses, would create a misleading or incomplete view of
the process underlying its opinion.
In performing its analyses, Merrill Lynch made numerous assumptions with
respect to industry performance, general business, economic, market and
financial conditions and other matters, many of which are beyond the control of
Merrill Lynch, Immunex or Amgen. Any estimates contained in the analyses
performed by Merrill Lynch are not necessarily indicative of actual values or
future results, which may be significantly more or
45
less favorable than results suggested by such analyses. Additionally, estimates
of the value of businesses or securities do not purport to be appraisals or to
reflect the prices at which such businesses or securities might actually be
sold. Accordingly, such analyses and estimates are inherently subject to
substantial uncertainty. In addition, as described above, Merrill Lynch's
opinion was among several factors taken into consideration by the Immunex board
of directors in making its determination to approve the merger agreement.
Consequently, Merrill Lynch's analyses should not be viewed as determinative of
the decision of the Immunex board of directors or the management of Immunex
with respect to the fairness of the merger consideration set forth in the
merger agreement.
In arriving at its opinion, Merrill Lynch, among other things, did the
following:
. reviewed certain publicly available business and financial information
relating to Immunex and Amgen;
. reviewed certain information with respect to Amgen, including financial
forecasts, relating to the business, earnings, cash flow, assets and
prospects of Amgen, furnished to Merrill Lynch by Amgen;
. reviewed certain information with respect to Immunex, including
financial forecasts, relating to the business, earnings, cash flow,
assets and prospects of Immunex, furnished to Merrill Lynch by Immunex;
. conducted discussions with members of senior management of Immunex and
Amgen concerning their respective businesses and prospects before and
after giving effect to the merger and the potential synergies expected
to result from the merger;
. reviewed the historical market prices, trading activity and valuation
multiples for Immunex common stock and Amgen common stock and compared
them with those of certain publicly traded companies which Merrill Lynch
deemed to be reasonably similar to Immunex and Amgen, respectively;
. compared the results of operations of Immunex and Amgen with those of
certain companies which Merrill Lynch deemed to be reasonably similar to
Immunex and Amgen, respectively;
. compared the proposed financial terms of the transactions contemplated
by the merger agreement with the financial terms of certain other
mergers and acquisitions which Merrill Lynch deemed to be relevant;
. reviewed the potential pro forma impact of the merger;
. reviewed the merger agreement, the shareholder voting agreement, the
stockholders' rights agreement and the agreement regarding governance
and commercial matters; and
. reviewed such other financial studies and analyses and performed such
other investigations and took into account such other matters as Merrill
Lynch deemed necessary, including Merrill Lynch's assessment of general
economic, market and monetary conditions.
In preparing its opinion, Merrill Lynch assumed and relied on the accuracy
and completeness of all information supplied or otherwise made available to
Merrill Lynch by Immunex and Amgen, and did not assume any responsibility for
independently verifying such information. Merrill Lynch did not undertake an
independent appraisal of any of the assets and liabilities of Immunex or Amgen,
and was not furnished with any such evaluation or appraisal. In addition,
Merrill Lynch did not assume any obligation to conduct any physical inspection
of the properties or facilities of Immunex or Amgen. With respect to the
financial forecasts furnished to or discussed with Merrill Lynch by Immunex and
Amgen, Merrill Lynch assumed that they have been reasonably prepared and
reflect the best currently available estimates and judgments of Immunex or
Amgen's management as to the expected future financial performance of Immunex
or Amgen, as the case may be. Merrill Lynch further assumes that the merger
will qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986 and that all conditions to the merger will be
satisfied.
46
Merrill Lynch's opinion is necessarily based upon market, economic and other
conditions as they existed on, and on the information made available to Merrill
Lynch as of, the date of the opinion. Merrill Lynch assumed that in the course
of obtaining the necessary regulatory or other consents or approvals
(contractual or otherwise) for the consummation of the merger, no restrictions,
including divestiture requirements or amendments or modifications, will be
imposed that will have a material adverse effect on the contemplated benefits
of the merger.
In connection with the preparation of its fairness opinion, Merrill Lynch
was not authorized by Immunex or the Immunex board of directors to solicit, and
did not solicit, third party indications of interest for acquisition of all or
any part of Immunex.
The following is a summary of the material analyses performed by Merrill
Lynch in connection with its opinion to the Immunex board of directors dated
December 16, 2001. Some of the financial analyses summarized below include
information presented in tabular format. In order to understand fully Merrill
Lynch's financial analyses, the tables must be read together with the text of
the summary. The tables alone do not constitute a complete description of the
financial analyses. Considering the data set forth below without considering
the full narrative description of the financial analyses, including the
methodologies and assumptions underlying the analyses, could create a
misleading or incomplete view of Merrill Lynch's financial analyses.
Immunex Financial Analysis
The per share prices set forth in this "Immunex Financial Analysis" section
compare to the merger's implied offer price of $32.83, based on 0.44 shares of
Amgen common stock and $4.50 in cash for each share of Immunex common stock,
and based on the per share closing price of Amgen common stock on December 12,
2001 (the day prior to the appearance of media reports of a possible
transaction between Immunex and Amgen). The per share prices also compare to
the merger's implied offer price of $29.15, based on the per share closing
price of Amgen common stock on December 14, 2001 (the day after reports of the
merger became public and the last trading day prior to the announcement of the
merger).
Historical Trading. Merrill Lynch reviewed the historical closing prices of
Immunex common stock for the six-month and twelve-month periods prior to
December 12, 2001. Merrill Lynch focused on the six-month trading range because
unlike the twelve-month range, the six-month trading range was not influenced
by stock prices of Immunex that were prior to the announcement by Immunex of
disappointing clinical studies of ENBREL for congestive heart failure and
NUVANCE(TM) (IL-4 receptor) for asthma. The ranges of closing prices for both
periods are set forth below:
Historical
Common Stock
Prices
-------------
Low High
------ ------
Last Six Months.................................. $14.02 $27.69
Last Twelve Months............................... $11.63 $46.25
Securities Research Analysts' Future Price Targets. Merrill Lynch reviewed
and analyzed projected twelve-month price targets for Immunex common stock
based on publicly available research analysts' estimates. These targets were
then discounted to present value at eighteen percent (18%), which is the
midpoint of the range of the cost of capital of Immunex estimated by Merrill
Lynch:
Present Value
Range
-------------
Low High
------ ------
Twelve-Month Price Target...................... $16.10 $25.42
47
Selected Comparable Companies. Merrill Lynch compared financial and stock
market data of Immunex to corresponding data of the following selected publicly
traded companies, which are referred to in this summary as the Large-Cap
Biotech Group:
. Amgen . Genzyme General Corporation
. Biogen, Inc. . IDEC Pharmaceuticals Corporation
. Chiron Corporation . MedImmune, Inc.
. Genentech, Inc. . Serono S.A.
These comparable companies were chosen because they are publicly traded
companies with operations that for purposes of this analysis may be considered
reasonably similar to the operations of Immunex. For each of these comparable
companies, Merrill Lynch compared the price per share of Immunex common stock
as a multiple of the estimated earnings per share, or the PE Ratio, and the PE
Ratio as a multiple of the five year projected growth rate of earnings, or the
PEG Ratio, of Immunex to corresponding projected PE Ratios and PEG Ratios of
the Large-Cap Biotech Group. All multiples were based on closing stock prices
on December 14, 2001, with the exception of Immunex and Amgen, which were based
on stock prices on December 12, 2001. Estimated financial data for the selected
companies were based on publicly available research analysts' estimates.
Merrill Lynch then applied a range of multiples, with 2003 PE Ratios of 40.0x
to 55.0x and 2002 PEG Ratios of 1.7x to 2.1x, to a range of financial forecasts
for Immunex based on estimates of the management of Immunex and based on
publicly available research analysts' estimates. The results of such comparison
are presented below:
2003 PE Ratio 2002 PEG
------------- -------------
Low High Low High
------ ------ ------ ------
Implied Valuation Range........................ $14.40 $30.25 $13.60 $25.20
None of the selected companies is identical to Immunex. Accordingly, an
analysis of the results of the foregoing necessarily involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the selected companies and other factors that could affect
the public trading value of Immunex and the selected companies.
Selected Transactions. Using publicly available information, Merrill Lynch
reviewed the multiples implied by the purchase prices paid, or proposed to be
paid at the time of announcement, of the following twelve healthcare industry
acquisitions, including proposed acquisitions, that Merrill Lynch deemed
relevant in its evaluation of the fairness of the merger consideration to the
Immunex shareholders:
Target Acquiror
------ --------
Aviron MedImmune, Inc.
DuPont Pharmaceuticals Company Bristol-Myers Squibb Company
ALZA Corporation Johnson & Johnson
Knoll, Inc. Abbott Laboratories
BioChem Pharma Inc. Shire Pharmaceuticals Group plc
Dura Pharmaceuticals, Inc. Elan Corp. plc
Jones Pharma Incorporated King Pharmaceuticals, Inc.
Roberts Pharmaceutical Corporation Shire Pharmaceuticals Group plc
Centocor, Inc. Johnson & Johnson
ALZA Corporation Abbott Laboratories
Agouron Pharmaceuticals, Inc. Warner-Lambert Company
R.P. Scherer Corporation Cardinal Health, Inc.
For each of these selected transactions, Merrill Lynch compared the price
per share as a multiple of corresponding projected one-year and two-year
forward earnings per share and the offer value as a multiple of projected net
income, where appropriate, of the respective targets. Estimated financial data
for the respective
48
targets were based on publicly available research analysts' estimates. Merrill
Lynch then applied a range of multiples, with two-year forward PE Ratios of
40.0x to 45.0x, to a range of financial forecasts for Immunex, based on
estimates of the management of Immunex and based on publicly available research
analysts' estimates. The results of such comparison are presented below:
Two-Year
Forward PE
-------------
Low High
------ ------
Implied Valuation Range............................... $14.40 $24.75
No company or transaction used in the Selected Transactions analysis is
identical to Immunex or the proposed merger. Accordingly, an analysis of the
results of the Selected Transactions analysis involved complex considerations
of the companies and transactions involved and other factors that could affect
acquisition value of the companies and Immunex.
Discounted Cash Flow. Merrill Lynch performed a discounted cash flow
analysis of the projected after-tax unlevered free cash flows that Immunex
could produce over the fiscal years 2002 through 2004 based on estimates of the
management of Immunex and based on publicly available research analysts'
estimates. Merrill Lynch calculated implied equity values per share of Immunex
common stock, by utilizing discount rates between 16.0%-20.0%, and between
27.5%-32.5% to assess the more aggressive of the internal forecasts, and
terminal value multiples of estimated 2005 after-tax EBIT ranging from 35.0x to
45.0x:
Discounted Cash
Flow
---------------
Low High
------ ------
Implied Valuation Range............................... $18.80 $43.98
Amgen Financial Analysis
Shares of Amgen common stock closed at a price per share of $64.39 on
December 12, 2001, and at a price of $56.03 on December 14, 2001.
Historical Trading. Merrill Lynch reviewed the historical closing prices of
Amgen common stock for the six-month and twelve-month periods prior to December
12, 2001. The ranges of closing prices for both periods are set forth below:
Historical
Common Stock
Prices
-------------
Low High
------ ------
Last Six Months......................................... $54.01 $68.49
Last Twelve Months...................................... $51.51 $74.19
Securities Research Analysts' Future Price Targets. Merrill Lynch reviewed
and analyzed projected twelve-month price targets for Amgen common stock based
on publicly available research analysts' estimates. These targets were then
discounted to present value at thirteen percent (13%), which is the cost of
capital of Amgen estimated by Merrill Lynch:
Present Value
Range
-------------
Low High
------ ------
Twelve Month Price Target.............................. $60.18 $79.65
49
Selected Comparable Companies. Based on comparisons with selected multiples
for the Large-Cap Biotech Group (see discussion under "--Immunex Financial
Analysis--Selected Comparable Companies," for the purposes of this analysis,
substitute "Amgen" for "Immunex," and "Immunex" for "Amgen," where
appropriate), Merrill Lynch calculated the implied equity reference range for
Amgen to be approximately $53.50 to $65.00 per share, based on 2002 PE Ratios
ranging from 38.0x to 46.0x and 2002 PEG Ratios ranging from 1.9x to 2.3x.
Discounted Cash Flow. Merrill Lynch performed a discounted cash flow
analysis of the projected after-tax unlevered free cash flows that Amgen could
produce over the fiscal years 2002 through 2004 based on estimates of the
management of Amgen. Merrill Lynch calculated implied equity values per share
of Amgen common stock, by utilizing discount rates ranging from 12.0% to 14.0%
and terminal value multiples of estimated 2005 after-tax EBIT ranging from
30.0x to 40.0x. This analysis indicated an implied equity reference range for
Amgen of approximately $54.00 to $73.00 per share.
Relative Valuation Analysis
The implied exchange ratios set forth in this "Relative Valuation Analysis"
section compare to an imputed 100% stock exchange ratio of approximately 0.52x.
Implied Historical Exchange Ratio. Merrill Lynch compared the exchange
ratio to the relative daily closing stock prices of Immunex and Amgen for the
six-month and twelve-month periods prior to December 12, 2001. The following
table presents the ranges of the implied exchange ratios resulting from this
analysis:
Implied Historical
Exchange Ratio
------------------
Low High
----- -----
Last Six Months....................................... 0.22x 0.48x
Last Twelve Months.................................... 0.21x 0.73x
Relative Comparable Companies. Merrill Lynch compared the implied per share
equity reference ranges for Immunex and Amgen (see "--Immunex Financial
Analysis--Selected Comparable Companies" and "--Amgen Financial
Analysis--Selected Comparable Companies") in order to derive an implied
exchange ratio reference range for Immunex and Amgen. The results of this
analysis are set forth below:
PE Ratio PEG
----------- -----------
Low High Low High
----- ----- ----- -----
Implied Exchange Ratio........................... 0.22x 0.56x 0.21x 0.47x
Relative Discounted Cash Flow. After performing the respective discounted
cash flow analysis calculations with respect to Immunex and Amgen, Merrill
Lynch compared the implied per share equity reference ranges for Immunex and
Amgen in order to derive an implied exchange ratio reference range for Immunex
and Amgen. This analysis indicated the following implied exchange ratio
reference range:
Discounted
Cash Flow
-----------
Low High
----- -----
Implied Exchange Ratio................................ 0.26x 0.81x
Relative Contribution. Merrill Lynch performed an analysis of the relative
contributions by each of Immunex and Amgen to the net income of the pro forma
combined company (assuming a 100% stock transaction). In doing so, Merrill
Lynch reviewed the estimated 2002, 2003, 2004 and 2005 contribution to net
income of Immunex and Amgen, based on, in the case of Amgen, forecasts provided
by the management of Amgen, and, in the case of Immunex, a range of forecasts
based on estimates of the management of Immunex
50
and based on publicly available research analysts' estimates, and compared the
results to the implied ownership of Amgen in the pro forma combined company.
Summarized below are the results of Merrill Lynch's calculations of the implied
exchange ratios based upon these estimated contributions of each of Immunex and
Amgen to the pro forma combined company for each of the years indicated:
Relative Contribution
-----------------------------------------------
Year 2002 Year 2003 Year 2004 Year 2005
----------- ----------- ----------- -----------
Implied Exchange Ratio....... 0.15x-0.22x 0.22x-0.34x 0.33x-0.54x 0.37x-0.79x
Pro Forma Analysis
Merrill Lynch performed an analysis of the potential pro forma financial
impact of the merger on the earnings per share of Amgen for the years 2002,
2003, 2004 and 2005, based on, in the case of Amgen, forecasts provided by the
management of Amgen, and, in the case of Immunex, a range of forecasts based on
estimates of the management of Immunex and based on publicly available research
analysts' estimates. In performing this analysis, Merrill Lynch assumed, among
other things:
. receipt by the Immunex shareholders of 0.44 shares of Amgen common stock
and $4.50 cash for each share of Immunex common stock held;
. completion of the merger on or before June 30, 2002;
. realization of the pre-tax synergies of approximately $200 to $300
million, phased in over time, expected by the management of Amgen to
result from cost-reduction initiatives; and
. calculation of pro forma earnings per share before amortization of
identifiable intangibles.
The results of this analysis indicate that, including the impact of the cost
savings and related expenses and synergies expected to result from the merger,
the merger would be highly accretive to Immunex shareholders out to 2004 in all
cases and out to 2005 in most cases. In terms of the pro forma impact to the
per share earnings of Amgen, the merger would be dilutive to Amgen stockholders
in the first two years, and in most cases accretive or modestly dilutive in
2004 and 2005.
Merrill Lynch also analyzed the potential pro forma financial impact of the
merger on the compound annual growth rates for revenues and earnings per share
of Amgen from 2002 to 2005, based on, in the case of Amgen, forecasts provided
by the management of Amgen, and, in the case of Immunex, a range of forecasts
based on estimates of the management of Immunex and based on publicly available
research analysts' estimates. Subject to the assumptions set forth in the first
paragraph of this section, the results of this analysis indicate that the
merger would be substantially additive to the growth rate of Amgen's projected
revenue and earnings per share over the next several years.
Miscellaneous
Pursuant to the terms of Merrill Lynch's engagement, Immunex has agreed to
pay Merrill Lynch for its financial advisory services in connection with the
merger a fee of $30 million, a significant portion of which is contingent upon
the closing of the merger. Immunex also has agreed to reimburse Merrill Lynch
for reasonable out-of-pocket expenses incurred by Merrill Lynch in performing
its services and to indemnify Merrill Lynch and related persons and entities
against liabilities, including liabilities under the federal securities laws,
arising out of Merrill Lynch's engagement.
Immunex retained Merrill Lynch based upon Merrill Lynch's experience and
expertise. Merrill Lynch is an internationally recognized investment banking
and advisory firm. Merrill Lynch, as part of its investment banking business,
is regularly engaged in the valuation of businesses and securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements and valuations for corporate and other purposes.
51
Merrill Lynch has, in the past, provided financial advisory and financing
services to Immunex and Amgen and has received fees for the rendering of such
services. Merrill Lynch is currently providing financial advisory services in
connection with the intended divestiture of LEUKINE. In addition, in the
ordinary course of its business, Merrill Lynch and its affiliates may actively
trade shares of Immunex common stock and other securities of Immunex, as well
as shares of Amgen common stock and other securities of Amgen, for their own
account and for the account of customers and, accordingly, may at any time hold
a long or short position in these securities.
Regulatory Approvals Required for the Merger
The merger is subject to review by the Antitrust Division of the U.S.
Department of Justice and the U.S. Federal Trade Commission under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. Under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, Amgen and Immunex are
required to make pre-merger notification filings and to await the expiration or
early termination of statutory waiting periods prior to completing the merger.
On January 7, 2002, Amgen and Immunex each filed a Premerger Notification and
Report Form with the Antitrust Division of the U.S. Department of Justice and
the U.S. Federal Trade Commission. The merger is subject to review by the
German Federal Cartel Office under the Act against Restraints of Competition
(Gesetz gegen Wettbewerbsbeschrankungen). Amgen and Immunex will make a joint
filing relating to the merger with the German Federal Cartel Office. The merger
may also be subject to review by the governmental authorities of various other
jurisdictions. Amgen and Immunex have not yet obtained any of the governmental
or regulatory approvals required to complete the merger.
There can be no assurance that the governmental reviewing authorities will
terminate the applicable statutory waiting periods or clear the merger at all
or without restrictions or conditions that would have a materially adverse
effect on the combined company if the merger is completed. These restrictions
and conditions could include the grant of a complete or partial license,
divestiture, spin-off or the holding separate of assets or businesses. Under
the terms of the merger agreement, neither Amgen nor Immunex is required to
commit to any divestitures, licenses or hold separate or similar arrangements
with respect to its assets or conduct of business arrangements if such
divestiture, license, holding separate or arrangement is not conditioned upon
the consummation of the merger or would have a material adverse effect on Amgen
after giving effect to the merger. Either Amgen or Immunex may refuse to
complete the merger if any such restrictions or conditions are required by
governmental authorities as a condition to approving the merger. No additional
stockholder approval is expected to be required or sought for any decision by
Amgen or Immunex, after the special meetings, to agree to any terms and
conditions necessary to resolve any regulatory objections to the merger, and
stockholder approval will not be sought unless additional stockholder approval
is required to approve the terms and conditions under applicable law. In
connection with the transaction, Immunex intends to divest the product LEUKINE
in order to facilitate clearance from the U.S. Federal Trade Commission.
In addition, during or after the statutory waiting periods and clearance of
the merger, and even after completion of the merger, either the Antitrust
Division of the U.S. Department of Justice, the U.S. Federal Trade Commission
or the German Federal Cartel Office could challenge, seek to block or block the
merger under the antitrust laws, as it deems necessary or desirable in the
public interest. Other competition agencies with jurisdiction over the merger
could also initiate action to challenge or block the merger. In addition, in
some jurisdictions, a competitor, customer or other third party could initiate
a private action under the antitrust laws challenging or seeking to enjoin the
merger, before or after it is completed. Amgen and Immunex cannot be sure that
a challenge to the merger will not be made or that, if a challenge is made,
Amgen and Immunex will prevail.
Material United States Federal Income Tax Consequences
The following general discussion summarizes the material United States
federal income tax consequences of the merger to Amgen, Amgen stockholders,
Immunex and to United States holders of Immunex common stock who hold their
Immunex common stock as a capital asset. It does not address all of the United
States federal income tax consequences that may be relevant to particular
shareholders in light of their individual circumstances or to shareholders who
are subject to special rules, including, without limitation:
. financial institutions;
52
. tax-exempt organizations;
. insurance companies;
. dealers in securities or foreign currencies;
. foreign holders;
. persons who hold such shares as a hedge against currency risk, or as
part of a constructive sale or conversion transaction; or
. holders who acquired their shares upon the exercise of employee stock
options or otherwise as compensation.
No ruling has been or will be sought from the Internal Revenue Service as to
the United States federal income tax consequences of the merger, and the
following summary is not binding on the Internal Revenue Service or the courts.
It is based upon the Internal Revenue Code, laws, regulations, rulings and
decisions in effect as of the date of this proxy statement/prospectus, all of
which are subject to change, possibly with retroactive effect. This summary
does not address tax consequences under state, local and foreign laws.
For purposes of this discussion, we use the term "United States holder" to
mean:
. a citizen or resident of the United States;
. a corporation, partnership or other entity created or organized under
the laws of the United States or any of its political subdivisions;
. a trust that (x) is subject to the supervision of a court within the
United States and the control of one or more United States persons or
(y) has a valid election in effect under applicable United States
Treasury regulations to be treated as a United States person; or
. an estate that is subject to United States federal income tax on its
income regardless of its source.
Holders of Immunex common stock are strongly encouraged to consult their tax
advisors as to the specific tax consequences to them of the merger, including
the applicability and effect of federal, state, local and foreign income and
other tax laws.
Exchange of Immunex Common Stock for a Combination of Amgen Common Stock and
Cash.
The consummation of the merger is conditioned on (i) the receipt by Amgen of
an opinion from Latham & Watkins, counsel to Amgen, dated the date of the
effective time of the merger, to the effect that the merger will be treated as
a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code and (ii) the receipt by Immunex of an opinion from Skadden, Arps, Slate,
Meagher & Flom LLP, counsel to Immunex, dated the date of the effective time of
the merger, to the effect that the merger will be treated as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code. Neither
Amgen nor Immunex may waive these conditions to the merger after Amgen
stockholders and Immunex shareholders have approved the merger unless further
Amgen stockholder and Immunex shareholder approvals are obtained with
appropriate disclosure. The opinions will be based on representations contained
in representation letters provided by Amgen and Immunex, all of which must
continue to be true and accurate in all respects as of the effective time of
the merger, and on certain customary factual assumptions. The opinions will not
be binding on the Internal Revenue Service or the courts.
Assuming that the merger is treated as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code:
. An Immunex shareholder will recognize gain equal to the lesser of (A)
the cash received by the shareholder in the merger or (B) an amount
equal to the excess, if any, of (i) the sum of the amount of cash and
the fair market value of the Amgen common stock received by the
shareholder in the merger
53
over (ii) the shareholder's adjusted tax basis in the Immunex common
stock exchanged by the shareholder in the merger. For this purpose, an
Immunex shareholder must calculate gain or loss separately for each
identifiable block of Immunex common stock exchanged by the shareholder
in the merger and cannot utilize a loss realized on one block of Immunex
common stock to offset a gain realized on another block of Immunex
common stock;
. Except as discussed below under "Tax Character of Cash Consideration,"
the gain recognized by an Immunex shareholder in the merger will be
treated as capital gain;
. An Immunex shareholder will not recognize any loss in the merger
(except, possibly, in connection with cash received instead of a
fractional share, as discussed below);
. The aggregate tax basis of the shares of Amgen common stock received by
an Immunex shareholder (before reduction for the basis in any fractional
share of Amgen common stock for which cash is received) in exchange for
Immunex common stock in the merger will be the same as the aggregate tax
basis of the shareholder's Immunex common stock, decreased by the amount
of cash received by the shareholder in the merger (excluding any cash
received instead of a fractional share) and increased by the amount of
gain recognized by the shareholder in the merger (including any portion
of the gain that is treated as a dividend but excluding any gain
recognized as a result of cash received instead of a fractional share);
. An Immunex shareholder's holding period with respect to the shares of
Amgen common stock received in the merger will include the holding
period of the Immunex common stock exchanged for Amgen common stock;
. Amgen will not recognize gain or loss in the merger; and
. Amgen stockholders will not recognize gain or loss in the merger.
Tax Character of Cash Consideration
In the case of most Immunex shareholders having no direct or indirect
control over Amgen's corporate affairs, any gain will be treated as capital
gain for United States federal income tax purposes. However, there are
circumstances under which all or a part of any gain that an Immunex shareholder
recognizes in the merger could be treated as a distribution of a dividend
instead of capital gain to the extent of the shareholder's ratable share of the
undistributed accumulated earnings and profits of the corporation. Due to the
inherently factual nature of this determination, Immunex shareholders are
encouraged to consult their tax advisors to determine whether any cash received
in exchange for their Immunex stock in the merger will be treated as a
distribution of a dividend.
Cash Received Instead of a Fractional Share
An Immunex shareholder who receives cash instead of a fractional share of
Amgen common stock will generally recognize capital gain or loss based on the
difference between the amount of the cash received instead of a fractional
share and the shareholder's tax basis in such fractional share.
Tax Consequences of Dissenter's Rights
An Immunex shareholder who dissents to the merger will generally recognize
capital gain or loss in an aggregate amount equal to the difference between the
amount of cash received and the shareholder's tax basis in the dissenting
shares. Although there is no authority directly on point, it is possible that a
shareholder will be required to recognize gain or loss at the effective time of
the merger, and in advance of the receipt of any cash payment, in an amount
generally equal to the trading price of Immunex common stock at the effective
time of the merger. In this event, capital gain or loss would also be
recognized by the shareholder at the time the appraised fair cash value is
received, to the extent that such payment exceeds or is less than the amount
realized at the effective time of the merger, and a portion of such payment may
be characterized as interest income.
54
Capital Gain
Any capital gain recognized by an individual holder of Immunex common stock
in connection with the transfer of his or her Immunex common stock in the
merger will be subject to a maximum United States federal income tax rate of
20% if the individual's holding period for his or her Immunex common stock is
more than 12 months at the effective time of the merger.
Restructure of Transaction
Each of Amgen and Immunex has agreed that it will not take any action that
would disqualify the merger, and to use its reasonable best efforts to take any
action to qualify the merger, as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code. If tax counsel to either Amgen or Immunex
is unable to render its opinion that the merger qualifies as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, the parties
have agreed to restructure the transaction such that tax counsel to Amgen and
Immunex are able to render their opinions. No such restructuring of the
transaction shall (A) result in any change in the merger consideration, (B) be
materially adverse to the interests of Amgen, Immunex, AMS Acquisition, Amgen
stockholders, or Immunex shareholders, or (C) unreasonably impede or delay
consummation of the merger. If the transaction is restructured in such a
manner, the material tax consequences of the merger would be the same as those
described in this summary.
Backup Withholding
Noncorporate holders of Immunex common stock may be subject to backup
withholding on any cash payments received in the merger. An Immunex shareholder
will not be subject to backup withholding, however, if the holder (a) furnishes
a correct taxpayer identification number and certifies that such holder is not
subject to backup withholding on the substitute Internal Revenue Service Form
W-9 or successor form included in the letter of transmittal to be delivered to
such holder following the completion of the merger; (b) provides a
certification of foreign status on Internal Revenue Service Form W-8BEN or a
successor form; or (c) is otherwise exempt from backup withholding.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or credit against a holder's United States federal income tax liability,
provided the holder furnishes the required information to the Internal Revenue
Service.
Tax matters are very complicated, and the tax consequences of the merger to
an Immunex shareholder will depend on such holder's particular tax situation.
Immunex shareholders are encouraged to consult their tax advisors regarding the
specific tax consequences of the merger, including tax return reporting
requirements, the applicability of federal, state, local and foreign tax laws
and the effect of any proposed change in the tax laws.
Accounting Treatment
In accordance with accounting principles generally accepted in the United
States, Amgen will account for the merger using the purchase method of
accounting. Under this method of accounting, Amgen will record the cash
consideration, the market value (based on an average of the closing prices of
Amgen common stock for a range of trading days from two days before and after
December 17, 2001, the announcement date) of its common stock issued in the
merger, the fair value of Amgen options issued in exchange for the options to
purchase shares of Immunex common stock and the amount of direct transaction
costs associated with the merger as the estimated purchase price of acquiring
Immunex. Amgen will allocate the estimated purchase price to the net tangible
and amortizable intangible assets acquired (primarily developed technology,
core technology and in-process research and development), based on their
respective fair values at the date of the completion of the merger. Any excess
of the estimated purchase price over the fair value of net assets acquired will
be accounted for as goodwill.
55
Amortizable intangible assets, currently estimated at $6,570,700,000, will
generally be amortized over useful lives of 15 years. In-process research and
development, which is currently estimated at $2,389,200,000, will be expensed
during the fiscal quarter in which the merger is completed. In accordance with
the Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets," goodwill resulting from the business combination of
$9,390,100,000, will not be amortized but instead will be tested for impairment
at least annually (more frequently if certain indicators are present).
In the event that Amgen's management determines that the value of goodwill
has become impaired, the combined company will incur an accounting charge for
the amount of impairment during the fiscal quarter in which the determination
is made. The amounts listed in the above paragraph are only preliminary
estimates, however, actual amounts may differ from these estimates.
Listing of Amgen Common Stock
Amgen will use reasonable best efforts to:
. cause the shares of Amgen common stock to be issued in the merger to be
approved for listing on the Nasdaq National Market upon the completion
of the merger; and
. cause the shares of Amgen common stock to be issued upon the exercise of
converted Immunex stock options to be approved for listing on the Nasdaq
National Market.
Delisting and Deregistration of Immunex Common Stock
If the merger is completed, Immunex common stock will be delisted from the
Nasdaq National Market and deregistered under the Securities Exchange Act of
1934, and Immunex will no longer file periodic reports with the SEC.
Restrictions on Sales of Shares of Amgen Common Stock Received in the Merger
The shares of Amgen common stock to be issued in the merger will be
registered under the Securities Act of 1933 and will be freely transferable,
except for shares of Amgen common stock issued to any person who is deemed to
be an "affiliate" of Immunex under the Securities Act of 1933 prior to the
merger. Persons who may be deemed to be "affiliates" of Immunex prior to the
merger include individuals or entities that control, are controlled by, or are
under common control with Immunex prior to the merger, and may include officers
and directors, as well as significant shareholders of Immunex prior to the
merger. Affiliates of Immunex prior to the merger may not sell any of the
shares of Amgen common stock received by them in the merger except pursuant to:
. an effective registration statement under the Securities Act of 1933
covering the resale of those shares;
. an exemption under paragraph (d) of Rule 145 under the Securities Act of
1933; or
. any other applicable exemption under the Securities Act of 1933.
Amgen's registration statement on Form S-4, of which this joint proxy
statement/prospectus is a part, does not cover the resale of shares of Amgen
common stock to be received by affiliates of Immunex in the merger.
56
Interests of Directors, Executive Officers and Shareholders of Immunex in the
Merger
In considering the recommendation of the Immunex board of directors that
Immunex shareholders vote in favor of approval of the merger agreement, Immunex
shareholders should be aware that some Immunex executive officers and directors
may have interests in the merger that may be different from, or in addition to,
their interests as shareholders of Immunex.
These interests relate to or arise from, among other things:
. the continued indemnification of current directors and officers of
Immunex under the merger agreement and providing these individuals with
directors' and officers' insurance;
. the retention of some of the officers and directors of Immunex as
officers of Amgen or, in the case of Mr. Fritzky, as a director of, and
special advisor to, Amgen;
. the execution of an employment agreement between Amgen and Mr. Fritzky;
. the potential receipt of severance and retention payments; and
. the conversion, acceleration, and cancellation and reissuance of stock
options.
Amgen has also entered into four agreements with American Home Products and
some of its subsidiaries. The Immunex board of directors was aware of these
interests and considered them, among other matters, in making its
recommendation.
Indemnification; Directors' and Officers' Insurance
Under the merger agreement, Amgen has agreed to indemnify all directors,
officers and employees of Immunex and its subsidiaries to the fullest extent
permitted by law for all acts or omissions prior to the merger by such
individuals in such capacities. Amgen has also agreed to provide, for six years
after the merger, directors' and officers' liability insurance in respect of
acts or omissions occurring prior to the merger covering each person currently
covered by the directors' and officers' liability insurance policy of Immunex
on terms and in amounts no less favorable than those of the policies of
Immunex, provided that Amgen will not be required to pay an annual premium for
the insurance in excess of 200% of the estimated premium for the 2002 fiscal
year. Amgen has agreed to cause to be maintained charter and bylaw provisions
with respect to indemnification and advancement of expenses that are at least
as favorable to the intended beneficiaries as those contained in charter and
bylaws of Immunex as in effect on the date the merger agreement was signed.
Amgen has also agreed to honor all indemnification agreements entered into by
Immunex or any of its subsidiaries.
Management Positions
Amgen expects that Edward V. Fritzky, Chairman of the Board, Chief Executive
Officer and President of Immunex, Peggy V. Phillips, a director, Executive Vice
President and Chief Operating Officer of Immunex, and Douglas E. Williams, a
director, Executive Vice President and Chief Technology Officer of Immunex,
will play significant roles in Amgen following the merger. Mr. Fritzky has
entered into an employment agreement with Amgen described below, and under the
merger agreement, Amgen has agreed to take all action necessary so that
following the merger, Mr. Fritzky will be appointed to the Amgen board of
directors. If Amgen has multiple classes of directors at the time of the
merger, Mr. Fritzky will be appointed to the class of directors with the
longest remaining term, provided that Amgen will not be required to request
that an incumbent director switch classes. Ms. Phillips is expected to be
appointed as an Executive Vice President of Amgen, reporting directly to Kevin
W. Sharer, Chairman of the Board, Chief Executive Officer and President of
Amgen. Mr. Williams is expected to be appointed as a Senior Vice President of
Amgen, reporting to Roger Perlmutter, Executive Vice President, Research &
Development of Amgen. It is expected that Ms. Phillips and Mr. Williams will
also be appointed to the executive committee of Amgen.
57
Employment Agreement with Chief Executive Officer
Because Mr. Fritzky possesses intimate knowledge of the business and affairs
of Immunex, Amgen determined that it was important to retain his services
following the merger to assist in the integration of Amgen and Immunex. As a
result, Mr. Fritzky and Amgen have entered into a part-time employment
agreement with Amgen which will become effective upon the consummation of the
merger. Pursuant to the agreement, Mr. Fritzky will serve as a special advisor
to Amgen for a period of two years following the merger, and will report
directly to Amgen's Chief Executive Officer. Additionally, Amgen has agreed
that, following the merger it will take all action necessary to cause Mr.
Fritzky to be elected to the Amgen board of directors. Mr. Fritzky will not be
required to provide services to Amgen for more than twenty hours a month.
During the term of his employment agreement, Mr. Fritzky will be entitled to:
. receive a base salary of $500,000 per year;
. participate in all of the employee benefit plans and arrangements
(including any life, death, disability, accident, health, employee stock
purchase and qualified or non-qualified retirement and savings plan)
made available to senior executives of Amgen, except that Mr. Fritzky
will not be eligible to participate in Amgen's performance based
Management Incentive Plan;
. receive perquisites, including financial counseling and tax planning
services, that are the same as or substantially equal to the perquisites
received by Mr. Fritzky prior to the merger; and
. reimbursement for office space and office support services up to
$250,000 per year.
Amgen will contribute, at the effective time of the merger, a retention
bonus of $1,000,000 to a deferred compensation account established for Mr.
Fritzky under Amgen's deferred compensation plan. Mr. Fritzky's retention bonus
account will vest with respect to $500,000 on the first anniversary of the
merger and $250,000 on each of the eighteen month anniversary of the merger and
the second anniversary of the merger. In addition, at the time of the merger,
Amgen will grant Mr. Fritzky an option to purchase 450,000 shares of Amgen
common stock, one-third of which will be vested on the date of grant and an
additional one-third of which will vest on each of the first and second
anniversaries of the date of grant. Amgen has also agreed to issue Mr. Fritzky
100,000 shares of restricted Amgen common stock upon the closing of the merger,
34,000 shares of which will be vested on the date of issuance and the remainder
of which will vest in equal installments on the first and second anniversaries
of the date of issuance.
In consideration of Mr. Fritzky's waiver of any right to payment pursuant to
the Immunex Corporation Leadership Continuity Policy, Amgen has agreed to make
a lump sum payment to Mr. Fritzky at the time of the merger in an amount equal
to three times the sum of:
. Mr. Fritzky's base salary immediately prior to the consummation of the
merger;
. Mr. Fritzky's target annual incentive compensation in effect immediately
prior to the consummation of the merger; and
. the value of contributions made on Mr. Fritzky's behalf to the qualified
and non-qualified defined contribution plans of Immunex in the year
prior to the year in which the merger occurs.
Assuming current salary and bonus levels remain in effect, if the merger is
consummated on June 30, 2002, the approximate value of this payment due to Mr.
Fritzky, not including any payments that may be made with respect to any excise
tax, would be $5.4 million.
In the event that Mr. Fritzky's employment is terminated for any reason
during the term of his employment agreement, Mr. Fritzky will be entitled to:
. continued participation in Amgen's employee benefit plans and
arrangements and continued receipt of perquisites for three years
following termination, except in the event of a termination by Amgen for
"cause" or by Mr. Fritzky without "good reason";
58
. outplacement services for twelve months, except in the event of Mr.
Fritzky's death; and
. all accrued salary and incurred expenses and amounts due under benefit
plans and arrangements.
In the event that Mr. Fritzky's employment is terminated by Amgen without
"cause" or by Mr. Fritzky for "good reason," Mr. Fritzky will be entitled to
all of the benefits described above, plus:
. Mr. Fritzky will receive a lump sum payment in an amount equal to all
base salary due through the remainder of the term of the employment
agreement;
. Mr. Fritzky's retention bonus account will fully vest and be paid out;
. Mr. Fritzky's restricted stock will fully vest; and
. all of Mr. Fritzky's options for Amgen stock will fully vest and become
immediately exercisable.
Mr. Fritzky must execute a release in favor of Amgen as a condition to the
receipt of these severance benefits.
Pursuant to the employment agreement, Amgen is required, if necessary, to
make an additional "gross-up payment" to Mr. Fritzky to offset fully the effect
of any excise tax imposed by Section 4999 of the Internal Revenue Code on any
excess parachute payment, whether made to Mr. Fritzky pursuant to the
employment agreement or otherwise. In general, Section 4999 imposes an excise
tax on the recipient of any excess parachute payment equal to 20% of such
payment. A "parachute payment" is any payment that is contingent on a change in
control. Excess parachute payments consist of the excess of parachute payments
over an individual's average taxable compensation received by him from the
employer during the five taxable years (or if less, the entire period of
employment) preceding the year in which the change in control occurs. The
merger will constitute a change of control of Immunex under the employment
agreement and Section 4999.
Mr. Fritzky has agreed to be bound by Amgen's standard proprietary
information agreement and arbitration agreement.
Severance Agreements
Each of the executive officers of Immunex, other than Mr. Fritzky, and two
non-executive officer employees of Immunex, is party to a severance agreement
with Immunex which provides for certain benefits in the event that the
executive or employee experiences a qualifying termination. A qualifying
termination is a termination of employment during the two-year period following
a change in control either by Immunex or its successor for reasons other than
"cause" or by the executive or employee for "good reason." In the event of a
qualifying termination, the executive officers and non-executive officer
employees will be entitled to receive:
. a lump sum cash payment equal to three times the sum of (a) the higher
of the executive's or employee's base salary in effect on the date of
termination of employment or in effect prior to an event constituting
"good reason," (b) the higher of the executive's or employee's target
annual incentive compensation in effect on the date of termination of
employment or in effect prior to an event constituting "good reason" and
(c) the higher of the value of contributions made to the qualified and
non-qualified defined contribution plans of Immunex on the executive's
or employee's behalf for the year prior to the year in which the date of
termination occurs or for the year prior to the year in which an event
constituting "good reason" occurs;
. continued life, dental, accident and health insurance benefits and
continued perquisites (including financial counseling) for three years
following termination; and
. outplacement services for twelve months.
In addition, a "gross-up" payment to compensate these executive officers and
non-executive officer employees for any "golden parachute" excise tax under
Section 4999 of the Internal Revenue Code is also provided. In consideration
for the right to payments as described above, each of these persons waived any
right to
59
payment pursuant to the leadership continuity policy referred to on page 62. In
addition, each executive officer and non-executive officer employee must
execute a release as a condition to the receipt of these benefits.
For purposes of the severance agreements, "good reason" includes:
. the assignment of inconsistent duties or a reduction in the nature or
status of the executive's or employee's responsibilities (including, for
executive officers, the failure to be an executive officer of a public
company immediately following a change in control);
. a reduction in the executive's or employee's annual base pay, annual
incentive opportunity or long term incentive opportunity;
. relocation of the executive's or employee's principal place of
employment or principal place of performance of duties by more than 50
miles; or
. a termination of employment by the executive or employee for any reason
within 60 days after the first anniversary of the change in control.
For purposes of the severance agreements, "cause" means the executive's or
employee's willful and continued failure to substantially perform his or her
duties or his or her willful engaging in conduct which is demonstrably and
materially injurious to Immunex.
The merger will constitute a change in control under the severance
agreements and Section 4999. Assuming current salary and bonus information
remains in effect, that the merger is consummated on June 30, 2002 and a
qualifying termination occurs immediately thereafter, the approximate value of
the cash severance payments due under the severance agreements to each of the
executive officers, not including any payments that may be made with respect to
any excise tax, would be: Ms. Phillips, $2.6 million; Mr. Williams, $1.9
million; David A. Mann (Executive Vice President, Chief Financial Officer,
Treasurer), $1.7 million; and Barry G. Pea (Executive Vice President, General
Counsel, Secretary), $1.7 million.
Immunex Retention Plan
The Immunex Corporation Retention Plan provides for conditional retention
awards to all employees of Immunex who regularly work at least 20 hours per
week, including the executive officers other than Mr. Fritzky. Each executive
officer of Immunex who remains employed by Immunex through the effective time
of the merger will receive a lump sum cash payment in an amount equal to the
executive's base salary and target annual bonus. On the first anniversary of
the effective time of the merger, each executive officer who is still employed
by Amgen will receive a lump sum cash payment on such first anniversary equal
to 1.5 times the executive's annual base salary and target annual bonus. If the
executive's employment is terminated by the acquiring company without "cause"
or by the executive for "good reason" (each, as defined in the executive
severance agreement, except with respect to ceasing to be an executive officer
of a public company), after the first month following the effective time but
prior to the first anniversary of the effective time of the merger, the
executive will be entitled to a pro rata portion of the retention payment the
executive would have received on the first anniversary of the effective time,
prorated based on the amount of time the executive was employed during the
year. Amounts payable under an individual severance agreement to any executive
officer who terminates his or her employment during the 60-day period following
the first anniversary of the closing of the merger for reasons that would not
otherwise constitute "good reason," will be offset by the amount of the
retention payment paid to the executive officer on the first anniversary of the
closing.
Assuming current salary and bonus information remains in effect, that the
merger is consummated on June 30, 2002 and each of the executive officers
becomes entitled to all payments under the retention plan, the approximate
value of the cash payments due to each of the executive officers, not including
any payments that may be made with respect to any excise tax, would be: Ms.
Phillips, $2.0 million; Mr. Williams, $1.5 million; Mr. Mann, $1.4 million; and
Mr. Pea, $1.4 million.
60
Cash payments made to employees other than executive officers may be made
under the retention plan immediately following the merger, on one or more of
the nine-month anniversary of the merger, the first anniversary of the merger,
the 18-month anniversary of the merger or the second anniversary of the merger,
provided that the employee remains employed on the respective payment date, and
the amount of each payment, if any, may vary from three months to 18 months of
base salary, wages and incentive bonus. Each eligible employee must execute an
arbitration agreement as a condition to the receipt of these benefits.
Stock Option Plans
Amgen has agreed to assume the Immunex stock option plans at the effective
time of the merger. Under the merger agreement, each outstanding option to
purchase shares of Immunex common stock will be assumed by Amgen at the
effective time of the merger and (except for converted options and Mr.
Fritzky's incentive stock options, described in the next two paragraphs) will
thereafter constitute an option to acquire the number (rounded down to the
nearest whole number) of shares of Amgen common stock determined by multiplying
the number of shares of Immunex common stock subject to the option immediately
prior to the merger by 0.52. The per share exercise price for the Amgen common
stock issuable upon conversion of these Immunex options will be equal to the
quotient determined by dividing the exercise price per share of Immunex common
stock that otherwise could have been purchased under the Immunex stock option
by 0.52 (rounded up to the nearest whole cent). Each of these options will be
subject to the same terms and conditions as were in effect for the related
option immediately prior to the merger, except that each option, other than the
options discussed below, that was outstanding on the date of the merger
agreement will fully vest and become exercisable as to all shares of Amgen
common stock subject thereto. At the effective time of the merger, the number
and kind of shares of stock issuable under the Immunex stock option plans will
be adjusted and converted into shares of Amgen common stock.
At the effective time of the merger, in order to increase the retention of
Immunex employees, each option to purchase shares of Immunex common stock with
an exercise price greater than the higher of $40 or the closing price of a
share of Immunex common stock on the last trading day prior to the merger will
be converted into an option to purchase that number of whole shares of Amgen
common stock equal to 40% of the number of shares subject to the related
converted option (rounded down to the nearest whole number of shares) at an
exercise price per share equal to the fair market value of a share of Amgen
common stock on the date on which the converted option is granted (which shall
be as of the close of market on the date of the effective time of the merger).
The options for Amgen common stock granted with respect to these converted
options will be subject to the same terms and conditions (including vesting
schedule) as were in effect for the related converted option immediately prior
to the merger.
Mr. Fritzky currently holds an option for 140,000 shares of Immunex common
stock which is intended to qualify as an incentive stock option under Section
422 of the Internal Revenue Code. This option will be converted into an option
to purchase shares of Amgen common stock in a manner which preserves the
option's status as an incentive stock option.
If an Immunex executive's or employee's employment is terminated by the
acquiring company without "cause" or by the executive or employee for "good
reason" (each as defined in the Immunex stock option plans) within fifteen
months following the merger, converted option discussed above and each option
which was granted after the date of the merger agreement will fully vest and
the post-termination exercise period for such option will be extended from
three months to one year.
Options held by non-employee directors of Immunex as of the merger will be
treated in the same manner as other options, except that in the event that the
non-employee director's service as a director of Immunex or Amgen is terminated
immediately prior to, on or in the fifteen months following the merger, the
options held by the director, to the extent not then vested, will fully vest
and the post-termination exercise period for the options will be extended from
three months to one year.
61
Amgen has agreed to assume the Immunex Corporation 1999 Employee Stock
Purchase Plan at the effective time of the merger. Under the merger agreement,
each outstanding purchase right under the Immunex employee stock purchase plan
will be assumed by Amgen and will be converted into a right to purchase shares
of Amgen common stock at the effective time of the merger. Each purchase right
so assumed and converted will continue to have the same terms and conditions as
in effect immediately prior to the merger, except that the purchase price of
shares of Amgen common stock and the number of shares of Amgen common stock to
be issued upon the exercise of such purchase rights will be adjusted in a
manner which preserves the tax treatment of such purchase rights as an option
to which Section 421(a) of the Internal Revenue Code applies.
Deferred Compensation Plan
The Immunex Non-Qualified Deferred Compensation Plan will permit continued
deferral of account balances following the consummation of the merger.
Leadership Continuity Policy
Certain non-executive officer employees of Immunex are eligible to receive
severance benefits under the leadership continuity policy in the event of a
qualifying termination of their employment on or within two years following a
change in control of Immunex. Mr. Fritzky and the other executive officers of
Immunex have waived their rights to receive benefits under the leadership
continuity policy. A qualifying termination under the leadership continuity
policy is substantially similar to a qualifying termination under the severance
agreements, except that covered employees may not terminate their employment
for any reason during the 60-day period following a change in control and have
such termination deemed to be for "good reason."
The leadership continuity policy provides that in the event of a qualifying
termination, a covered employee will be entitled to receive:
. a lump sum cash severance payment equal to (a) the sum of (i) the
covered employee's annual base salary immediately prior to termination
without regard to any reduction which constitutes good reason, (ii) the
covered employee's target annual incentive compensation with respect to
the year in which a change in control occurs and (iii) contributions
made on the covered employee's behalf to the defined contribution plan
of Immunex with respect to the year immediately preceding the year in
which the change in control occurs, (b) multiplied by one or two,
depending on the covered employee's position;
. continued life, disability, dental, accident and health insurance
benefits and continued perquisites (including financial counseling) for
one or two years; and
. outplacement services for twelve months.
Each eligible employee must execute a release as a condition to the receipt of
benefits under the leadership continuity policy. The merger will constitute a
change in control under the leadership continuity policy.
Employee Severance Plan
The Immunex Corporation Employee Severance Plan provides severance benefits
to employees of Immunex who are not entitled to benefits under the leadership
continuity policy or individual severance agreements. None of the executive
officers of Immunex is entitled to benefits under the employee severance plan.
In the event that an employee experiences a qualifying termination in the two
years following a change in control of Immunex, the employee will be entitled
to certain severance benefits the amount of which is based on job position and
years of service. A qualifying termination is deemed to occur if the employee
is terminated for reasons other than "cause" (as defined in the employee
severance plan) or terminates employment for "good reason." With respect to the
employee severance plan, "good reason" means a reduction in the employee's
annual base salary or wages, other than as part of a general reduction
applicable to substantially all employees of Immunex, or the relocation of the
employee's principal place of employment by more than 50 miles. Each eligible
employee must execute a release as a condition to the receipt of these
benefits. The merger will constitute a change in control of Immunex under the
employee severance plan.
62
Agreements with American Home Products
Two directors on the Immunex board of directors have been designated by
American Home Products under the term of the governance agreement among
Immunex, American Home Products and American Cyanamid Company, a wholly-owned
subsidiary of American Home Products. In connection with the merger agreement,
Amgen has entered into agreements with American Home Products and some of its
subsidiaries. The agreements include:
. a shareholder voting agreement which provides for American Home Products
and two of its subsidiaries to vote in favor of the merger and against
any alternative transaction;
. a stockholders' rights agreement which relates to the status of American
Home Products and two of its subsidiaries as significant stockholders of
Amgen following the merger and provides American Home Products with
certain registration rights;
. an amended and restated promotion agreement relating to the promotion of
ENBREL in the United States and Canada; and
. an agreement regarding governance and commercial matters which relates
to, among other things:
- the rights of American Home Products to complete the development of
and sell identified products under development by Immunex and the
rights to market and promote those products developed by Immunex
under an existing product rights agreement;
- Amgen's agreement to make a specified payment to American Home
Products for the termination of the product rights described above;
- Amgen's agreement not to sue American Home Products for patent
infringement under any of Amgen's patents or any patents that come
under its control for activities related to ENBREL anywhere in the
world outside of the United States and Canada; and
- Amgen's grant to American Home Products of an option to acquire an
exclusive sublicense under a license agreement between Amgen and a
third party.
Each of these agreements is further described in this joint proxy
statement/prospectus under the following headings "Shareholder Voting
Agreement," "Stockholders' Rights Agreement," "Other Agreements with American
Home Products--Amended and Restated Promotion Agreement" and "Other Agreements
with American Home Products--Agreement Regarding Governance and Commercial
Matters." These descriptions may not contain all of the information about these
agreements that is important to you. We encourage you to read each agreement
carefully in its entirety. The shareholder voting agreement and stockholders'
rights agreement are attached to this joint proxy statement/prospectus as
Annexes B and C, respectively. The amended and restated promotion agreement and
the agreement regarding governance and commercial matters are exhibits to the
registration statement of which this joint proxy statement/prospectus is a part
and have been filed with the SEC.
Management and Operations Following the Merger
Amgen expects that, initially following completion of the merger, the
businesses and operations of Immunex will, except as described in this joint
proxy statement/prospectus, be continued substantially as they are currently
being conducted. Amgen intends to undertake a comprehensive review of the
business, operations, capitalization and management of Immunex with a view to
optimizing development of its potential in conjunction with Amgen's business.
Amgen's current directors and officers are expected to retain their
positions with Amgen following the merger, including Kevin W. Sharer retaining
the positions of Chairman of the Board, Chief Executive Officer and President.
As described above, at the time the merger is completed, Mr. Fritzky will be
appointed to serve as a director of Amgen and serve as a special advisor to
Amgen. Ms. Phillips is expected to be appointed as an Executive Vice President
and officer of Amgen and Mr. Williams is expected to be appointed as a Senior
Vice President and officer of Amgen.
63
Litigation Related to the Merger
On December 14, 2001, a lawsuit was filed by David Osher against Immunex,
all members of the Immunex board of directors (Edward V. Fritzky, Kirby L.
Cramer, Robert J. Herbold, John E. Lyons, Joseph M. Mahady, Edith W. Martin,
Peggy V. Phillips, Lawrence V. Stein and Douglas E. Williams) and American Home
Products in the King County Superior Court of Washington. The suit is
denominated as a class action purportedly on behalf of a class of Immunex
shareholders. The complaint alleges that American Home Products and the Immunex
board of directors breached their fiduciary duties owed to Immunex shareholders
by stalling the merger discussions as a result of positions taken by American
Home Products in the negotiations relating to its control of Immunex and its
marketing rights in future Immunex products. The complaint further alleges that
American Home Products and the Immunex board of directors are favoring their
own interests and not acting in good faith toward the plaintiff and other
members of the purported class. The plaintiff seeks relief:
. ordering the action to be maintained as a class action and certifying
plaintiff as the Class representative;
. enjoining, preliminarily and permanently, defendants from proceeding
with, or closing, the merger or any transaction that improperly favors
the interests of American Home Products;
. rescinding and setting aside the merger in the event that it is
consummated;
. awarding plaintiff the costs of the action including attorneys' and
experts' fees; and
. granting such other and further relief as the Court may deem just and
proper.
On December 18, 2001, a lawsuit was filed by Adele Brody against Immunex,
Messrs. Fritzky, Williams, Mann and Pea, Ms. Phillips, and the marital
community of each named individual in the King County Superior Court of
Washington. The suit is denominated as a class action purportedly on behalf of
a class of Immunex shareholders. The complaint alleges, among other things,
that the defendants breached their fiduciary duty to the purported class by
failing to take all reasonable steps to assure the maximization of shareholder
value, including the implementation of a bidding mechanism to foster a fair
auction of Immunex to the highest bidder, or the exploration of strategic
alternatives which would return a greater value to plaintiff and the other
members of the purported class. The complaint further alleges that defendants
are continuing to breach their fiduciary duties in order to entrench themselves
in office and to receive the benefits of negotiating only with Amgen. The
plaintiff seeks relief:
. ordering the action to be maintained as a class action and certifying
plaintiff as the Class representative;
. enjoining, preliminarily and permanently, Amgen's offer for the
acquisition of Immunex stock owned by plaintiff and the other members of
the purported class;
. rescinding the transaction and granting rescissionary damages in the
event that the merger is consummated;
. directing defendants to pay plaintiff and the other members of the
purported class damages and to account for all profits and any special
benefits obtained by defendants;
. awarding plaintiff the costs of the action including attorneys' and
experts' fees; and
. granting such other and further relief as the Court may deem just and
proper.
On December 20, 2001 a lawsuit was filed by Edwin Weiner against Immunex,
Messrs. Fritzky, Williams, Mann and Pea, Ms. Phillips, and the marital
community of each named individual in the King County Superior Court of
Washington. The allegations and the relief requested in the Weiner complaint
are substantially identical to those in the Brody complaint described above.
While these cases are in their early stages, Immunex believes that the cases
are without merit and intends to contest them vigorously. American Home
Products has advised Immunex that it also believes the lawsuit to which it is a
defendant is without merit and it intends to contest it vigorously.
64
THE MERGER AGREEMENT
The following summary describes certain material provisions of the merger
agreement, which is included in this joint proxy statement/prospectus as Annex
A and is incorporated by reference into this joint proxy statement/prospectus.
This summary may not contain all of the information about the merger agreement
that is important to you. We encourage you to read the merger agreement
carefully in its entirety.
Structure of the Merger
The merger agreement provides for the merger of AMS Acquisition Inc., a
newly-formed, wholly-owned subsidiary of Amgen, with and into Immunex. As a
result of the merger, Immunex will become a wholly-owned subsidiary of Amgen.
Completion and Effectiveness of the Merger
The closing of the merger will occur on the first business day after all of
the conditions to completion of the merger contained in the merger agreement
are satisfied or waived unless the parties agree otherwise in writing (see the
section entitled "Conditions to Completion of the Merger" below). The merger
will become effective upon the filing of articles of merger with the Secretary
of State of the State of Washington.
We are working to complete the merger quickly. We currently expect to
complete the merger in the second half of 2002. However, because completion of
the merger is subject to regulatory approvals and other conditions, we cannot
predict the actual timing.
Merger Consideration
Upon completion of the merger, each share of Immunex common stock
outstanding immediately prior to the effective time of the merger will be
cancelled and extinguished and automatically converted into 0.44 of a share of
Amgen common stock and $4.50 in cash upon surrender of the certificate
representing that share of Immunex common stock in the manner provided in the
merger agreement. However, shares held by Immunex shareholders who validly
exercise dissenters' rights will be subject to appraisal in accordance with
Washington law. Upon completion of the merger, each outstanding option to
purchase Immunex common stock will be converted into an option to purchase
Amgen common stock, as described further in the section entitled "Employee
Benefit Matters--Immunex Stock Options."
The exchange ratio in the merger (0.44 of a share of Amgen common stock for
each share of Immunex common stock) and the cash consideration will be adjusted
to reflect the effect of any stock split, reverse stock split, stock dividend,
reorganization, recapitalization, reclassification or other like change with
respect to Amgen common stock or Immunex common stock having a record date on
or after the date of the merger agreement and prior to completion of the merger.
Upon completion of the merger, each share of Immunex common stock held by
Amgen or any direct or indirect wholly-owned subsidiaries of Amgen immediately
prior to the merger will be automatically cancelled and extinguished, and none
of Amgen or any of its direct or indirect subsidiaries will receive any
securities of Amgen or other consideration in exchange for those shares.
Fractional Shares
Amgen will not issue any fractional shares of Amgen common stock in the
merger. Instead, each holder of Immunex common stock exchanged in the merger
who would otherwise be entitled to receive a fraction of a share of Amgen
common stock will receive cash, without interest, in lieu of a fractional share.
65
Exchange of Immunex Stock Certificates for Amgen Stock Certificates
Promptly following completion of the merger,
, the exchange agent for the merger, will
mail to each record holder of Immunex common stock a letter of transmittal and
instructions for surrendering the record holder's stock certificates in
exchange for a statement indicating book-entry ownership of Amgen common stock
or, if requested, a certificate representing Amgen common stock. Only those
holders of Immunex common stock who properly surrender their Immunex stock
certificates in accordance with the exchange agent's instructions will receive
(a) a statement indicating book-entry ownership of Amgen common stock or, if
requested, a certificate representing Amgen common stock, (b) the cash
consideration, (c) cash in lieu of any fractional share of Amgen common stock,
and (d) dividends or other distributions, if any, on Amgen common stock to
which they are entitled under the terms of the merger agreement. After the
effective time of the merger, each certificate representing shares of Immunex
common stock that has not been surrendered will represent only the right to
receive upon surrender of that certificate each of the items listed in the
preceding sentence. The surrendered certificates representing Immunex common
stock will be cancelled. Following completion of the merger, Immunex will not
register any transfers of Immunex common stock outstanding on its stock
transfer books prior to the merger.
Holders of Immunex common stock should not send in their Immunex stock
certificates until they receive a letter of transmittal from the exchange
agent, with instructions for the surrender of Immunex stock certificates.
Distributions with Respect to Unexchanged Shares
Holders of Immunex common stock are not entitled to receive any dividends or
other distributions on Amgen common stock until the merger is completed. After
the merger is completed, holders of Immunex common stock certificates will be
entitled to dividends and other distributions declared or made after completion
of the merger with respect to the number of whole shares of Amgen common stock
which they are entitled to receive upon exchange of their Immunex stock
certificates, but they will not be paid any dividends or other distributions on
the Amgen common stock until they surrender their Immunex stock certificates to
the exchange agent in accordance with the exchange agent instructions.
Transfers of Ownership and Lost Stock Certificates
Amgen only will issue (a) a statement indicating book-entry ownership of
Amgen common stock or, if requested, an Amgen stock certificate, (b) the cash
consideration, (c) cash in lieu of a fractional share and (d) any dividends or
distributions on Amgen common stock that may be applicable in a name other than
the name in which a surrendered Immunex stock certificate is registered if the
person requesting such exchange presents to the exchange agent all documents
required by the exchange agent to show and effect the unrecorded transfer of
ownership and to show that such person paid any applicable stock transfer
taxes. If an Immunex stock certificate is lost, stolen or destroyed, the holder
of such certificate may need to execute an affidavit or post a bond prior to
receiving each of the items listed in the preceding sentence.
Conditions to Completion of the Merger
The obligations of Amgen and Immunex to complete the merger are subject to
the satisfaction or waiver, if legally permissible, of the following conditions:
. the registration statement of which this joint proxy
statement/prospectus is a part must be declared effective by the SEC and
no stop order suspending its effectiveness may be issued by the SEC and
no proceedings for that purpose may be initiated or threatened by the
SEC;
. the approval of the merger agreement by Immunex shareholders and the
approval of the issuance of shares of Amgen common stock in the merger
by Amgen stockholders;
. the absence of any legal prohibition having the effect of preventing or
prohibiting completion of the merger;
66
. the expiration or termination of the applicable waiting periods under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976;
. the receipt of all other governmental and regulatory consents, approvals
and authorizations required to complete the merger, unless not obtaining
those consents or approvals would not reasonably be expected to have a
material adverse effect, as described below, on the combined company;
. the approval for listing on the Nasdaq National Market of the shares of
Amgen common stock to be issued in the merger;
. the absence of any litigation by any governmental entity (a) seeking to
prohibit or interfere with the merger or the ownership or operation by
Amgen of any portion of the business or assets of Amgen or Immunex or to
compel Amgen to dispose of or hold separate any portion of the business
or assets of Immunex or Amgen, or (b) seeking divestiture of any shares
of Immunex common stock or seeking to impose limitations on the ability
of Amgen to exercise effectively full rights of ownership of the shares
of Immunex common stock, including the right to vote any securities on
any matters properly presented to shareholders, in each case, which
would, or would reasonably be expected to, have a material adverse
effect on the combined company;
. the representations and warranties of the other party, disregarding all
qualifications and exceptions relating to materiality or material
adverse effect, being accurate on the date of the merger agreement and
the date the merger is completed as if they were made on that date
(except to the extent that the representations and warranties speak as
of another date), except where the failure of such representations and
warranties to be accurate would not reasonably be expected to have a
material adverse effect on the representing party, and the receipt of a
certificate of an executive officer of the other party to that effect;
. the other party having performed or complied with its agreements and
covenants in the merger agreement in all material respects, and the
receipt of a certificate of an executive officer of the other party to
that effect; and
. the receipt of an opinion from the party's counsel that the merger will
qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code.
Amgen's obligations to complete the merger are also subject to each of the
stockholders' rights agreement, the amended and restated promotion agreement
and the agreement regarding governance and commercial matters by and among
Amgen and the various other parties to each agreement, being in full force and
effect, and the absence of any written notice from an authorized officer of
American Home Products of, and the absence of any public announcement by
American Home Products of, American Home Products' intention to repudiate any
of these agreements. These agreements are further described in this joint proxy
statement/prospectus under the headings "Stockholders' Rights Agreement,"
"Other Agreements with American Home Products--Amended and Restated Promotion
Agreement" and "Other Agreements with American Home Products--Agreement
Regarding Governance and Commercial Matters."
"Material adverse effect," when used in reference to Amgen or Immunex, means
any change affecting, or condition having an effect on, the referenced company
that is, or would reasonably be expected to be, materially adverse to the
business, financial condition or results of operations of the referenced
company and its subsidiaries, taken as a whole. However, any change or
condition will not be deemed to have a material adverse effect if it results
from or arises out of:
. changes or developments in the biotechnology industry generally, which
changes or developments do not disproportionately affect the referenced
company relative to other participants in the biotechnology industry in
any material respect;
. changes or developments in financial or securities markets or the
economy in general, which changes do not disproportionately affect the
referenced company in any material respect;
67
. any change in the referenced company's stock price or trading volume, in
and of itself; or
. the announcement of the transactions contemplated by the merger
agreement.
Representations and Warranties
The merger agreement contains customary representations and warranties of
Amgen and Immunex relating to, among other things:
. corporate organization and qualification;
. subsidiaries;
. charter documents and corporate books and records;
. capital structure;
. absence of conflicts and required filings and consents;
. corporate authority and board approval;
. required permits and compliance with laws;
. SEC filings and the financial statements contained in those filings;
. absence of certain changes or events since December 31, 2000;
. tax treatment of the merger;
. litigation;
. environmental matters;
. intellectual property;
. compliance with regulatory laws;
. opinions of financial advisors;
. stockholder vote required to complete the merger; and
. brokers.
The merger agreement also contains the following additional representations
and warranties of Immunex:
. applicability of state takeover laws;
. employee benefit plans;
. taxes;
. validity and absence of breaches of material contracts;
. labor and other employment matters;
. insurance; and
. properties.
The merger agreement also contains additional representations and warranties
of Amgen relating to the ownership and activities of AMS Acquisition Inc. and
the funds necessary to pay the merger consideration upon completion of the
merger.
The representations and warranties contained in the merger agreement are
subject to materiality and knowledge qualifications in many respects, and
expire at the completion of the merger.
68
Immunex Prohibited from Soliciting Other Offers
Under the terms of the merger agreement, subject to specific exceptions
described below, Immunex has agreed that neither it nor any of its subsidiaries
will, and that it will use its reasonable best efforts to cause its and their
representatives not to, directly or indirectly:
. solicit, initiate, encourage, knowingly facilitate or induce any inquiry
with respect to, or the making, submission or announcement of, any
acquisition proposal;
. participate in any discussions or negotiations regarding, or furnish to
any person any nonpublic information with respect to, or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes or may reasonably be expected to lead to, any acquisition
proposal;
. engage in discussions with any person with respect to any acquisition
proposal, except to notify such person as to the existence of the no
solicitation provisions of the merger agreement;
. approve, endorse or recommend any acquisition proposal; or
. enter into any letter of intent or similar document or any agreement,
commitment or understanding contemplating or otherwise relating to any
acquisition proposal or a transaction contemplated thereby.
Under the merger agreement, Immunex agreed to cease all existing discussions
or negotiations as of December 16, 2001 with any parties with respect to any
acquisition proposal.
Immunex is obligated to notify Amgen promptly in writing upon receipt of any
type of acquisition proposal or any request for nonpublic information or
inquiry it reasonably believes could lead to an acquisition proposal. The
notice must include the material terms and conditions of the acquisition
proposal, request or inquiry, the identity of the person or group making the
acquisition proposal, request or inquiry and all related written materials
provided in connection with the acquisition proposal, request or inquiry.
Immunex also must provide Amgen with all information as is reasonably necessary
to keep Amgen informed in all material respects of the status and details of
any acquisition proposal, request or inquiry.
Notwithstanding the prohibitions contained in the merger agreement, if
Immunex receives an acquisition proposal which constitutes a superior proposal
or which the Immunex board of directors in good faith concludes proposes
consideration that is more favorable to the Immunex shareholders than the
transactions contemplated by the merger agreement and which could reasonably be
expected to result in a superior proposal in all other respects, Immunex may,
after notifying Amgen, take the following actions:
. furnish nonpublic information to the third party making the acquisition
proposal, provided it:
(a) supplies to Amgen a copy of the information furnished concurrently
with its delivery of the information to the third party; and
(b) enters into a confidentiality agreement with the third party
containing customary limitations on the use and disclosure of the
non-public information furnished to the third party and customary
standstill provisions; and
. engage in negotiations with the third party with respect to the
acquisition proposal.
For a period of not less than five business days after Amgen's receipt from
Immunex of notice of a superior proposal, Immunex is required, if requested by
Amgen, to negotiate in good faith with Amgen to revise the merger agreement so
that the acquisition proposal that constituted a superior proposal no longer
constitutes a superior proposal.
Amgen and Immunex have agreed to call, hold and convene a meeting of their
respective stockholders promptly after the registration statement of which this
joint proxy statement/prospectus forms a part is declared
69
effective by the SEC. The Amgen board of directors also agreed to recommend to
Amgen stockholders the approval of the issuance of shares of Amgen common stock
in the merger and to use its reasonable best efforts to obtain the required
stockholder approval for the issuance of shares. The Immunex board of directors
agreed to recommend the approval of the merger agreement to its shareholders
and to use its reasonable best efforts to obtain the required shareholder
approval for the merger agreement. However, in response to the receipt of a
superior proposal that has not been withdrawn and continues to constitute a
superior proposal, the Immunex board of directors may withhold or withdraw its
recommendation and, in the case of a superior proposal that is a tender or
exchange offer made directly to the Immunex shareholders, may recommend that
the Immunex shareholders accept the tender or exchange offer, if both of the
following conditions are met:
. the Immunex shareholders meeting has not occurred; and
. the Immunex board of directors has concluded in good faith, following
the receipt of advice of its outside legal counsel, that, in light of
the superior proposal, the failure of the Immunex board of directors to
change its recommendation would result in a breach of its fiduciary
obligations to its shareholders under applicable law.
Regardless of whether Immunex has received an acquisition proposal or
changed its recommendation, Immunex is obligated under the terms of the merger
agreement to call, give notice of, convene and hold a meeting of its
shareholders to consider and vote upon the merger agreement. However, if
Immunex changes its recommendation of the merger agreement to the Immunex
shareholders as discussed in the previous paragraph, Immunex must submit the
merger agreement to a vote of Immunex shareholders with no recommendation as
permitted by Washington law. Immunex may not submit to the vote of its
shareholders any acquisition proposal (whether or not a superior proposal) or
propose to do so.
No provision of the merger agreement restricts Immunex from complying with
Rules 14d-9 or 14e-2 under the Securities Exchange Act of 1934 or restricts
Immunex or Amgen from making such other disclosures as may be required by
federal securities laws or applicable State of Washington fiduciary duties laws.
An "acquisition proposal" means any offer or proposal made by a person other
than Amgen concerning any:
. merger, consolidation, business combination, or similar transaction
involving Immunex or any significant subsidiary of Immunex pursuant to
which the shareholders of Immunex immediately prior to such transaction
would own less than 80% of any class of equity securities of the entity
surviving or resulting from such transaction (or the ultimate parent
entity thereof);
. sale or other disposition directly or indirectly of assets of Immunex or
its subsidiaries representing 20% or more of the consolidated assets of
Immunex and its subsidiaries;
. issuance, sale or other disposition of securities (or options, rights or
warrants to purchase, or securities convertible into or exchangeable
for, such securities) in each case by Immunex representing 20% or more
of the voting power of Immunex; or
. transaction in which any person would acquire beneficial ownership, or
the right to acquire beneficial ownership or any group would have been
formed which beneficially owns or has the right to acquire beneficial
ownership of, 20% or more of the outstanding voting capital stock of
Immunex.
A "superior proposal" means any bona fide offer or proposal (on its most
recently amended or modified terms, if amended or modified) made by a person
other than Amgen that:
. concerns any:
(a) merger, tender offer, exchange offer, business combination or similar
transaction involving Immunex or any of its subsidiaries pursuant to
which:
- shareholders of Immunex immediately prior to the transaction
would own less than 50% of the voting power of the entity
surviving or resulting from the transaction (or the ultimate
parent entity thereof); and
70
- shareholders of Immunex other than American Home Products would
own less than 30% of the voting power of the entity surviving or
resulting from the transaction (or the ultimate parent entity
thereof); or
(b) sale or other disposition directly or indirectly of assets of Immunex
or any of its subsidiaries representing 67% or more of the
consolidated assets of Immunex and its subsidiaries;
. is on terms which the Immunex board of directors in good faith concludes
(following receipt of the advice of its financial advisors and outside
counsel) are more favorable to the Immunex shareholders (in their
capacities as shareholders) than the transactions contemplated by the
merger agreement (including any revisions thereto); and
. is, in the good faith judgment of Immunex, reasonably likely to be
completed and financed.
Conduct of Business Before Completion of the Merger
General Restrictions on Operations
Amgen and Immunex have agreed to restrictions on their respective activities
until either the completion of the merger or the termination of the merger
agreement. In general, Amgen is required to conduct its business such that its
primary business will involve biotechnology or pharmaceuticals. Immunex is
required to conduct its businesses in the usual and ordinary course consistent
with past practice and to use its reasonable best efforts to keep available the
services of the current officers, key employees and consultants of Immunex and
its subsidiaries and to preserve the current relationships of Immunex and its
subsidiaries with their customers, suppliers and other persons with which
Immunex and its subsidiaries have significant business relations as is
reasonably necessary in order to preserve substantially intact its business
organization.
Additional Restrictions on Amgen's Interim Operations
In addition, Amgen has also agreed that, without the written consent of
Immunex, it will not and not permit any of its subsidiaries to:
. amend or otherwise change its certificate of incorporation in a manner
that adversely affects the rights of holders of Amgen common stock
(including holders of the Amgen common stock issuable in the merger),
except to increase the authorized number of shares of Amgen capital
stock;
. issue any shares of Amgen common stock if, following such issuance,
there would be an insufficient number of shares of Amgen common stock to
pay the merger consideration and to be reserved for issuance in
connection with the transactions contemplated by the merger agreement;
. declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock property or otherwise, with respect to any Amgen
capital stock;
. take any action (including any acquisition or entering into any business
combination) that is intended or could reasonably be expected to result
in any of the conditions to the merger not being satisfied; and
. authorize or enter into any agreement or otherwise make any commitment
to do any of the foregoing.
Additional Restrictions on the Interim Operations of Immunex
Subject to specified exceptions, Immunex has also agreed that, without the
written consent of Amgen, it will not and will not permit any of its
subsidiaries to:
. amend or otherwise change its articles or certificate of incorporation
or bylaws or equivalent organizational documents;
71
. issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize
the issuance, sale, pledge, disposition, grant, transfer or encumbrance
of any shares of capital stock, or securities convertible into its
capital stock, other than:
(a) issuances of Immunex common stock under its employee stock purchase
plan or upon exercise of stock options outstanding on December 16,
2001 or granted in accordance with (b) below;
(b) subject to specified conditions, grants of stock options (1) up to an
aggregate of 1,100,000 shares of Immunex common stock to newly-hired
employees and up to an aggregate of 4,400,000 shares of Immunex
common stock to existing employees and non-employee directors, (2)
that are replacement options, as described below in the section
entitled "Employee Benefit Matters--Immunex Stock Options," and (3)
under existing contractual relationships;
(c) issuances of equity securities under the governance agreement between
Immunex and American Home Products; and
(d) issuances by subsidiaries of Immunex of shares of their capital stock
to Immunex or any wholly-owned subsidiary of Immunex;
. sell, pledge, dispose of, transfer, lease, license, or encumber, or
authorize the sale, pledge, disposition, transfer, lease, license, or
encumbrance of, any material property or assets (other than intellectual
property), other than:
(a) sales, pledges, dispositions, transfers, leases, licenses or
encumbrances pursuant to existing contracts;
(b) sales, pledges, dispositions, transfers, leases, licenses or
encumbrances of property or assets in the ordinary course of business
but not to exceed an aggregate value of $100 million;
(c) sales or dispositions of inventory and other tangible current assets;
and
(d) dispositions in connection with obtaining regulatory approval as
contemplated by the merger agreement;
. sell, pledge, dispose of, transfer, lease, license, abandon, fail to
maintain or encumber, or authorize the sale, pledge, disposition,
transfer, lease, license, abandonment, failure to maintain or
encumbrance of,
(a) any intellectual property (other than intellectual property that
protects or enhances the value of ENBREL), except sales, pledges,
dispositions, transfers, leases, licenses or abandonments in the
ordinary course of business which will not materially impair the
conduct of the business of Immunex and in connection with obtaining
regulatory approval as contemplated by the merger agreement;
(b) any intellectual property which protects ENBREL, except pursuant to
agreements entered into for clinical studies involving ENBREL in the
ordinary course of business and material transfer agreements relating
to ENBREL entered into in the ordinary course of business;
. enter into any material commitment or transaction outside the ordinary
course of business consistent with past practice other than transactions
between a wholly-owned subsidiary of Immunex and Immunex or another
wholly-owned subsidiary of Immunex;
. declare or pay dividends (other than dividends paid by wholly-owned
subsidiaries of Immunex to Immunex or to other wholly-owned subsidiaries
of Immunex) or enter into any agreement with respect to the voting of
Immunex capital stock;
. reclassify, combine, split or subdivide any of its capital stock or
issue or authorize the issuance of any other securities in respect of,
in lieu of, or in substitution for, shares of Immunex capital stock;
. redeem or purchase any shares of its capital stock or other securities;
72
. incur any indebtedness, except for indebtedness under the existing
credit facilities of Immunex or replacement credit facilities in an
aggregate amount not materially larger than the existing credit
facilities;
. terminate, cancel, or agree to any material and adverse change in, any
material contract of Immunex other than in the ordinary course of
business consistent with past practice;
. make or authorize any capital expenditure materially in excess of the
budget of Immunex as disclosed to Amgen prior to December 16, 2001;
. make or authorize any material loan to any person (other than a
subsidiary of Immunex) outside the ordinary course of business;
. except as may be required by contractual commitments or corporate
policies with respect to severance or termination pay in existence on
the date of the merger agreement:
(a) increase the compensation or benefits of directors, officers or
employees (except for increases in accordance with past practices and
methodologies in salaries or wages of officers and/or employees of
Immunex and its subsidiaries);
(b) grant any severance or termination pay to, or enter into any
employment or severance agreement with, any director, officer or
other employee of Immunex or any of its subsidiaries (other than with
respect to newly appointed directors and newly hired employees in
accordance with past practices);
(c) establish, adopt, enter into or amend any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director, officer, consultant
or employee, except to the extent required by applicable law; or
(d) take any affirmative action to amend or waive any performance or
vesting criteria or accelerate vesting, exercisability or funding
under any Immunex benefit plan or stock option;
. make any material change in accounting policies or procedures, other
than in the ordinary course of business consistent with past practice or
except as required by generally accepted accounting principles or by a
governmental entity;
. except in the ordinary course of business consistent with past practice,
make any material tax election or settle or compromise any material
liability for taxes, change any annual tax accounting period, change any
method of tax accounting, file any amended material tax return, enter
into any closing agreement relating to any material tax, surrender any
right to claim a material tax refund, or consent to any extension or
waiver of the statute of limitations period applicable to any material
tax claim or assessment;
. subject to specified exceptions, modify or terminate, or waive, release
or assign any material rights or claims with respect to any
confidentiality or standstill agreement to which Immunex is a party and
which relates to a business combination involving Immunex;
. write up, write down or write off the book value of any assets, other
than in the ordinary course of business or otherwise not in excess of
$50 million;
. subject to specified exceptions, take any action to render inapplicable,
or to exempt any third party from, the provisions of Chapter 23B.19 of
the Washington Business Corporation Act or any other state takeover law
or state law that purports to limit or restrict business combinations or
the ability to acquire or vote shares;
73
. acquire any assets (not including intellectual property), operations,
business or securities or engage in, or agree to engage in, any merger,
consolidation or other business combination, except:
(a) in connection with capital expenditures permitted under the merger
agreement and except for acquisitions of inventory and other assets
(not including intellectual property) in the ordinary course of
business; or
(b) for acquisitions of businesses or assets (not including intellectual
property) or business combinations having or involving aggregate
consideration not in excess of $50 million, which, in the case of
clauses (a) and (b), would not be reasonably expected to result in
any of the conditions to the merger not being satisfied;
. take any action that is intended or would reasonably be expected to
result in any of the conditions to the merger not being satisfied;
. adopt a shareholder rights agreement, or "poison pill";
. acquire any intellectual property, except in the ordinary course of
business consistent with past practice (including in size and nature); or
. authorize or enter into any agreement or otherwise make any commitment
to do any of the foregoing.
Restructure of Transaction
Each of Amgen and Immunex has agreed that it will not take any action that
would disqualify the merger, and to use its reasonable best efforts to take any
action to qualify the merger, as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code. If tax counsel to either Amgen or Immunex
is unable to render its opinion that the merger qualifies as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, the parties
have agreed to restructure the transaction such that tax counsel to Amgen and
Immunex are able to render their opinions. No such restructuring of the
transaction shall (A) result in any change in the merger consideration, (B) be
materially adverse to the interests of Amgen, Immunex, AMS Acquisition, Amgen
stockholders, or Immunex shareholders, or (C) unreasonably impede or delay
consummation of the merger. If the transaction is restructured in such a
manner, the material tax consequences of the merger would be the same as those
described in section entitled "The Merger--Material United States Federal
Income Tax Consequences."
Regulatory Filings; Antitrust Matters; Obtaining Regulatory Approvals
Amgen and Immunex have agreed to use their reasonable best efforts to:
. take all appropriate action and do all things necessary under applicable
law or otherwise to consummate the merger as promptly as practicable;
. obtain from any governmental entities any consents, licenses, permits,
waivers, approvals, authorizations or orders required to be obtained or
made by either party, to avoid any action or proceeding by any
governmental entity related to the merger agreement and to prevent a
material adverse effect on Immunex from occurring prior to or after the
closing or a material adverse effect on Amgen from occurring after the
effective time of the merger;
. make all necessary filings with respect to the merger agreement required
under applicable federal and state securities laws, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and antitrust and
competition laws of any other applicable jurisdiction and any other
applicable law; and
. avoid the entry of, or have terminated, any decree, order or judgment
that would restrain, prevent or delay the merger, including defending
through litigation any claim asserted in any court.
In furtherance of the foregoing, Amgen and Immunex have agreed to use their
reasonable best efforts to avoid or eliminate each and every impediment under
any antitrust, competition or trade regulation law that may
74
be asserted by any governmental entity with respect to the merger so as to
enable the closing to occur as soon as reasonably possible, including
implementing, contesting or resisting any litigation before any court or
quasi-judicial administrative tribunal seeking to restrain or enjoin the
merger. However, neither Amgen nor Immunex is required to commit to any
divestitures, licenses or hold separate or similar arrangements with respect to
its assets or conduct of business arrangements, whether as a condition to
obtaining any approval from a governmental entity or any other person or for
any other reason, if such divestiture, license, holding separate or arrangement
is not conditioned upon the consummation of the merger or would have a material
adverse effect on Amgen after giving effect to the merger.
Employee Benefit Matters
Immunex Stock Options
Under the merger agreement, each outstanding option to purchase shares of
Immunex common stock will be assumed by Amgen at the effective time of the
merger and (except for converted options described in the next paragraph and
Mr. Fritzky's incentive stock option described in the section "The
Merger--Interests of Directors, Executive Officers and Shareholders of Immunex
in the Merger") will thereafter constitute an option to acquire the number
(rounded down to the nearest whole number) of shares of Amgen common stock
determined by multiplying the number of shares of Immunex common stock subject
to the option immediately prior to the merger by 0.52. The per share exercise
price for the Amgen common stock issuable upon conversion of these Immunex
options will be equal to the quotient determined by dividing the exercise price
per share of Immunex common stock that otherwise could have been purchased
under the Immunex stock option by 0.52. Each of these options will be subject
to the same terms and conditions as were in effect for the related option
immediately prior to the merger, except that each option, other than the
options discussed below, that was outstanding on the date of the merger
agreement will fully vest and become exercisable as to all shares of Amgen
common stock subject thereto.
At the effective time of the merger, each option to purchase shares of
Immunex common stock with an exercise price greater than the higher of $40 or
the closing price of a share of Immunex common stock on the last trading day
prior to the merger will be converted into an option to purchase that number of
whole shares of Amgen common stock equal to 40% of the number of shares subject
to the related converted option (rounded down to the nearest whole number of
shares) at an exercise price per share equal to the fair market value of a
share of Amgen common stock on the date on which the converted option is
granted (which shall be as of the close of market on the date of the effective
time of the merger). The options for Amgen common stock granted with respect to
these converted options will be subject to the same terms and conditions
(including vesting schedule) as were in effect for the related converted option
immediately prior to the merger.
Immunex Employee Stock Purchase Plan
Each outstanding purchase right under the employee stock purchase plan of
Immunex will be assumed by Amgen and converted into a right to purchase Amgen
common stock. Each purchase right so assumed and converted by Amgen will
continue to have the same terms and conditions set forth in the employee stock
purchase plan of Immunex and the other documents governing the outstanding
purchase rights under the plan, except that the purchase price of shares of
Amgen common stock and the number of shares of Amgen common stock to be issued
upon the exercise of the purchase rights will be adjusted in a manner which
preserves the tax treatment of such purchase rights as an option to which
Section 421(a) of the Internal Revenue Code applies.
Immunex Employees
For a period of at least two years following the effective time of the
merger, Amgen has agreed to provide employee benefits (excluding equity based
benefits) to employees and former employees of Immunex that are no less
favorable in the aggregate than those provided to employees of Immunex as of
December 16, 2001. Amgen
75
also agreed to give continuing Immunex employees credit for prior service with
Immunex for purposes of (a) determining vesting and entitlement to certain
benefits under Amgen's benefit plans and (b) satisfying any waiting periods,
evidence of insurability requirements or the application of any pre-existing
condition limitations. However, service credit will not be given where such
crediting would result in a duplication of benefits. Amgen has also agreed to
waive pre-existing condition limitations to the same extent waived under the
applicable Immunex benefit plan. Continuing Immunex employees will also be
given credit for amounts paid under a corresponding benefit plan during the
same period for purposes of applying deductibles, co-payments and out-of-pocket
maximums.
Indemnification and Insurance
Amgen has agreed to cause to be maintained in effect provisions of the
articles of incorporation and bylaws of Immunex with respect to indemnification
and advancement of expenses that are at least as favorable to the intended
beneficiaries as those contained in the existing articles of incorporation and
bylaws of Immunex. Amgen has also agreed to indemnify, and provide advancement
of expenses to, all past and present directors, officers and employees of
Immunex and its subsidiaries to the fullest extent permitted by law for acts or
omissions occurring at or prior to the effective time of the merger in their
capacities as such. Amgen will honor all indemnification agreements entered
into by Immunex or any of its subsidiaries.
For six years from the effective time of the merger, Amgen will maintain for
the benefit of the current directors and officers of Immunex an insurance and
indemnification policy that provides coverage for acts or omissions occurring
prior to the effective time of the merger covering each person currently
covered by the officers' and directors' liability insurance policies of Immunex
on terms with respect to coverage and in amounts no less favorable than those
of the policies of Immunex in effect as of December 16, 2001. However, Amgen is
not required to pay an annual premium for the insurance in excess of 200% of
the estimated premium for the 2002 fiscal year.
Termination of the Merger Agreement
Termination by Amgen or Immunex
Either Immunex or Amgen, by action of their respective boards of directors,
may terminate the merger agreement and abandon the merger at any time prior to
completion of the merger, whether before or after approval of the merger
agreement by Immunex shareholders or the approval of the issuance of shares of
Amgen common stock to Immunex shareholders by Amgen stockholders:
. by mutual written consent of Amgen and Immunex;
. if the merger is not completed by September 30, 2002 (which may, from
time to time, be extended by either party up to and including December
31, 2002 in the event all conditions to effect the merger other than one
or more of the regulatory conditions have been or are capable of being
satisfied at the time of each such extension and the regulatory
conditions have been or are reasonably capable of being satisfied on or
prior to December 31, 2002), except that this right to terminate the
merger agreement is not available to any party whose failure to fulfill
any obligation under the merger agreement has been the cause of the
failure of the merger to close;
. if any governmental entity issues an order, decree or ruling or taken
any other action permanently restraining, enjoining or otherwise
prohibiting the merger, and such order, decree, ruling or other action
has become final and nonappealable; or
. if (a) the Immunex shareholders do not approve the merger agreement at a
duly convened shareholders meeting at which the vote to approve the
merger agreement was taken, or (b) the Amgen stockholders do not approve
the issuance of Amgen common stock to Immunex shareholders in the merger
at a duly convened stockholders meeting at which the vote to approve the
share issuance was taken.
76
Termination by Amgen
Amgen, by action of the Amgen board of directors, may terminate the merger
agreement and abandon the merger at any time prior to completion of the merger,
whether before or after approval of the merger agreement by Immunex
shareholders or the approval of the issuance of shares of Amgen common stock to
Immunex shareholders by Amgen stockholders:
. if (a) the Immunex board of directors withdraws or adversely modifies
its recommendation (or resolves to do so) of the merger agreement; (b)
the Immunex board of directors approves or recommends (or resolves to do
so) to the Immunex shareholders an acquisition proposal other than the
merger agreement; or (c) Immunex fails to call or hold its special
meeting of shareholders by September 25, 2002; or
. if there has been a breach by Immunex of any representation, warranty,
covenant or agreement contained in the merger agreement which (a) would
result in a failure of a closing condition relating to the accuracy of
the representations and warranties of Immunex or the performance by
Immunex of its obligations under the merger agreement and (b) cannot be
cured prior to September 30, 2002 (as that date may be extended).
However, Amgen is required to give Immunex written notice, delivered at
least twenty days prior to such termination, stating Amgen's intention
to terminate the merger agreement and the basis for the termination.
Termination by Immunex
Immunex, by action of the Immunex board of directors, may terminate the
merger agreement and abandon the merger at any time prior to completion of the
merger, whether before or after approval of the merger agreement by Immunex
shareholders or the approval of the issuance of shares of Amgen common stock to
Immunex shareholders by Amgen stockholders:
. if (a) the Amgen board of directors withdraws or adversely modifies its
recommendation (or resolves to do so) of the issuance of shares of Amgen
common stock to Immunex shareholders in the merger; or (b) Amgen fails
to call or hold its special meeting of stockholders by September 25,
2002; or
. if there has been a breach by Amgen of any representation, warranty,
covenant or agreement contained in the merger agreement which (a) would
result in a failure of a closing condition relating to the accuracy of
the representations and warranties of Amgen or the performance by Amgen
of its obligations under the merger agreement and (b) cannot be cured
prior to September 30, 2002 (as that date may be extended). However,
Immunex is required to give Amgen written notice, delivered at least
twenty days prior to such termination, stating the intention of Immunex
to terminate the merger agreement and the basis for the termination.
Termination Fee
Each of Amgen and Immunex have agreed to pay to the other a termination fee
of $475 million within two business days of the occurrence of a triggering
event in relation to it as described below.
Termination Fee to be Paid by Amgen
Amgen has agreed to pay Immunex a termination fee of $475 million if:
. the Amgen board of directors withdraws or adversely modifies its
recommendation of the issuance of Amgen common stock to Immunex
shareholders in the merger and, thereafter, the merger agreement is
terminated by Amgen or Immunex because the Amgen stockholders did not
approve the issuance of Amgen common stock to Immunex shareholders in
the merger; or
. the merger agreement is terminated by Immunex because Amgen failed to
call or hold its special meeting of stockholders by September 25, 2002.
77
Termination Fee to be Paid by Immunex
Immunex has agreed to pay Amgen a termination fee of $475 million if:
. the merger agreement is terminated by Amgen because the Immunex board of
directors withdraws or adversely modifies its recommendation (or
resolves to do so) of the merger agreement and has done so in such a
manner that Immunex cannot submit the merger agreement to a vote of the
Immunex shareholders pursuant to Chapter 23B.11.030(2) of the Washington
Business Corporation Act;
. the merger agreement is terminated by Amgen because the Immunex board of
directors approved or recommended (or resolves to do so) to the Immunex
shareholders an acquisition proposal other than the merger agreement;
. the merger agreement is terminated by Amgen because Immunex failed to
call or hold its special meeting of shareholders by September 25, 2002;
. the Immunex board of directors has withdrawn or adversely modified its
recommendation of the merger agreement prior to the special meeting of
Immunex shareholders and the merger agreement is terminated by Amgen
because Immunex shareholders did not approve the merger agreement; or
. the merger agreement is terminated by Amgen or Immunex because the
Immunex shareholders did not approve the merger agreement and, at any
time after December 16, 2001 and before the vote at the Immunex
shareholders meeting, an acquisition proposal has been publicly
announced and not bona fide withdrawn and Immunex enters into a
definitive agreement with respect to a competing transaction or
completes a competing transaction, in either case, within twelve months
following the termination of the merger agreement.
A "competing transaction" means any (a) merger, consolidation, business
combination or similar transaction involving Immunex or any significant
subsidiary of Immunex pursuant to which the Immunex shareholders immediately
prior to such transaction would own less than 70% of any class of equity
securities of the entity surviving or resulting from such transaction (or the
ultimate parent entity thereof), (b) sale or other disposition directly or
indirectly of assets of Immunex or its subsidiaries representing 30% or more of
the consolidated assets of Immunex and its subsidiaries, (c) issuance, sale, or
other disposition of securities (or options, rights or warrants to purchase, or
securities convertible into or exchangeable for, such securities) in each case
by Immunex to any person or "group" (as defined in Rule 13d-5(b)(1) under the
Securities Exchange Act of 1934) representing 30% or more of the voting power
of Immunex or (d) transaction in which any person would acquire beneficial
ownership, or the right to acquire beneficial ownership or any group would have
been formed which beneficially owns or has the right to acquire beneficial
ownership of, 30% or more of the outstanding voting capital stock of Immunex
(other than any shares beneficially owned by American Home Products or its
subsidiaries).
Except as described in the sections entitled "Termination Fees" and
"Expenses," neither party will have any liability to the other upon termination
of the merger agreement, unless it breaches its obligations with respect to
confidentiality under the merger agreement or willfully and materially breaches
its representations, warranties, covenants or agreements under the merger
agreement.
Expenses
If the merger agreement is terminated by either Amgen or Immunex because of
a breach by the other party of any of its representations, warranties,
covenants or agreements contained in the merger agreement, the breaching party
will pay the other party's reasonable out-of-pocket expenses up to an amount
equal to $15 million. Amgen and Immunex have agreed to each pay one-half of the
expenses related to printing, filing and mailing this joint proxy
statement/prospectus and all SEC and other regulatory filing fees incurred in
connection with the registration statement of which this joint proxy
statement/prospectus is a part. Except as described in the previous two
sentences, all expenses incurred by Amgen and Immunex in connection with the
merger will be borne solely and entirely by the party which has incurred the
expense.
78
Amendments, Extensions and Waivers
Amendments
The merger agreement may be amended by action of the Amgen board of
directors and the Immunex board of directors at any time prior to the effective
time of the merger. However, after approval of the merger agreement by the
Immunex shareholders, no amendment may be made without further shareholder
approval which, by law or in accordance with the rules of the Nasdaq National
Market, requires further approval by the Immunex shareholders. All amendments
to the merger agreement must be in writing signed by each party.
Extensions and Waivers
At any time prior to the effective time of the merger, any party to the
merger agreement may:
. extend the time for the performance of any of the obligations or other
acts of any other party to the merger agreement;
. waive any inaccuracies in the representations and warranties of any
other party contained in the merger agreement or in any document
delivered pursuant the merger agreement; and
. waive compliance by any other party with any of the agreements or
conditions contained in the merger agreement.
However, after any approval of the transactions contemplated by the merger
agreement by the Immunex shareholders, there may not be, without further
approval of the Immunex shareholders, any extension or waiver of the merger
agreement or any portion of the merger agreement which, by law or in accordance
with the rules of the Nasdaq National Market, requires further approval by the
Immunex shareholders. All extensions and waivers must be in writing and signed
by the party against whom the extension or waiver is to be effective.
79
SHAREHOLDER VOTING AGREEMENT
The following summary describes certain material provisions of the
shareholder voting agreement, which is attached to this joint proxy
statement/prospectus as Annex B and is incorporated by reference into this
joint proxy statement/prospectus. This summary may not contain all of the
information about the shareholder voting agreement that is important to you. We
encourage you to read the shareholder voting agreement carefully in its
entirety.
Concurrently with the execution and delivery of the merger agreement, Amgen
entered into a shareholder voting agreement with American Home Products
Corporation, and two of its wholly-owned subsidiaries, MDP Holdings, Inc. and
Lederle Parenterals, Inc. These Immunex shareholders are referred to as the
"AHP shareholders" in this summary of the shareholder voting agreement and in
the summary of the stockholders' rights agreement below. As of the record date
for the Immunex special meeting, the AHP shareholders beneficially owned
shares of Immunex common stock, representing approximately % of the
outstanding shares of Immunex common stock.
Under the shareholder voting agreement, the AHP shareholders agreed to vote
their shares of Immunex common stock:
. in favor of the approval of the terms of the merger agreement;
. against any action, proposal, transaction or agreement that would result
in a breach in any respect of any covenant, representation or warranty
or any other obligation or agreement of Immunex contained in the merger
agreement or of any of the AHP shareholders contained in the shareholder
voting agreement; and
. except with the written consent of Amgen, against the following actions
or proposals (other than the merger with Amgen):
(a) any acquisition proposal;
(b) any change in the persons who constitute the Immunex board of
directors that is not approved in advance by at least a majority of
the persons who were directors of the Immunex on December 16, 2001
(or their successors who were so approved);
(c) any material change in the present capitalization of Immunex or any
amendment of the articles of incorporation or bylaws of Immunex;
(d) any other material change in the corporate structure or business of
Immunex; or
(e) any other action or proposal involving Immunex or any of its
subsidiaries that is intended, or could reasonably be expected, to
prevent, delay or adversely affect the transactions contemplated by
the merger agreement.
However, the shareholder voting agreement does not limit or affect any
actions taken by any member of the Immunex board of directors nominated by, or
appointed at the request of, American Home Products solely in his or her
capacity as a director of Immunex. The AHP shareholders have given Amgen an
irrevocable proxy to vote their shares of Immunex common stock on the matters
set forth above.
The shareholder voting agreement prohibits any AHP shareholders from
transferring any shares of Immunex common stock, except to other AHP
shareholders or to any wholly-owned subsidiary of American Home Products that
agrees in writing to be bound by the terms of the shareholder voting agreement.
However, with the consent of Amgen (which consent will not be unreasonably
withheld), the AHP shareholders may pledge or encumber any of their shares of
Immunex common stock so long as the pledge or encumbrance would not impair
their ability to perform their obligations under the shareholder voting
agreement.
80
Each AHP shareholder also agreed:
. it will not participate in a solicitation of proxies or powers of
attorney or similar rights to vote, or seek to advise or influence any
person with respect to the voting of, any shares of Immunex common stock
in connection with any vote or other action on any matter, other than to
recommend that the Immunex shareholders vote in favor of the merger
agreement;
. it will not act in concert with any person to, deposit any shares of
Immunex common stock in a voting trust or subject any shares of Immunex
common stock to any arrangement with any person with respect to the
voting of such shares of Immunex common stock, except as permitted by
the shareholder voting agreement; and
. it will not enter into or conduct any discussions or negotiations with,
or encourage or respond to any inquiries by, or provide any information
to, any person, other than Amgen, relating to any acquisition proposal;
however, in connection with superior proposals as to which Amgen has
received written notice from Immunex, American Home Products may provide
information and engage in discussions to the same extent as Immunex is
permitted under the merger agreement.
Amgen agreed to take all actions necessary to ensure that each AHP
shareholder will receive the cash portion of the merger consideration payable
to such AHP shareholder immediately after the effective time of the merger.
The shareholder voting agreement terminates upon the earliest to occur of:
. the mutual consent of Amgen and American Home Products;
. the completion of the merger;
. the date the merger agreement is terminated;
. the date of any modification, waiver or amendment to the merger
agreement in a manner that reduces either the merger exchange ratio or
the cash consideration payable in the merger; and
. December 31, 2002.
81
STOCKHOLDERS' RIGHTS AGREEMENT
The following summary describes certain material provisions of the
stockholders' rights agreement, which is attached to this joint proxy
statement/prospectus as Annex C and is incorporated by reference into this
joint proxy statement/prospectus. This summary may not contain all of the
information about the stockholders' rights agreement that is important to you.
We encourage you to read the stockholders' rights agreement carefully in its
entirety.
In connection with the execution and delivery of the merger agreement, Amgen
entered into a stockholders' rights agreement with the AHP shareholders dated
as of the date of the merger agreement.
Standstill Provisions
Under the stockholders' rights agreement, the AHP shareholders agreed that
until December 16, 2006, the AHP shareholders may not:
. acquire or propose to acquire any securities of Amgen or its
subsidiaries or any assets of Amgen or its subsidiaries or make any
public announcement with respect to any of the foregoing;
. participate in any way in any solicitation of proxies to vote, or seek
to advise or influence any person with respect to the voting of, any
securities of Amgen or make any public announcement with respect to any
of the foregoing;
. form or in any way participate in a group in connection with any of the
foregoing;
. otherwise act to seek to control or influence Amgen's management, board
of directors or policies;
. request Amgen to amend or waive the standstill provisions of the
stockholders' rights agreement or take any action which would reasonably
be expected to require Amgen to make a public announcement regarding the
possibility of a business combination or merger or make any public
announcement with respect to any of the restrictions in this clause; or
. advise, assist or encourage, or direct any person to advise, assist or
encourage any other persons, in connection with any of the foregoing.
The above restrictions do not apply to:
. purchases by American Home Products of Amgen common stock for employee
benefit or other plans not to exceed 1% of the outstanding shares of
Amgen common stock; or
. securities held by a company that American Home Products acquires in the
future, if the fair market value of the securities represents less than
20% of the assets of that company. However, American Home Products must
use commercially reasonable efforts to divest those securities within 18
months of the consummation of the acquisition.
Voting of Amgen Common Stock
Under the stockholders' rights agreement, the AHP shareholders agreed that,
until the AHP shareholders beneficially own in the aggregate less than 2% of
the outstanding shares of Amgen common stock, the AHP shareholders must cause
all shares of Amgen common stock beneficially owned by them to be voted:
. with respect to the election of directors, in favor of those individuals
nominated by the Amgen board of directors or a nominating committee of
the Amgen board of directors;
. on all proposals of any other Amgen stockholder, in accordance with the
recommendation of the Amgen board of directors; and
82
. on all other matters that come before Amgen stockholders for a vote, in
proportion to the votes cast by the other Amgen stockholders.
Lock-Up of Shares of Amgen Common Stock Acquired in the Merger
Under the stockholders' rights agreement, the AHP shareholders and Amgen
agreed that for 90 days following the closing of the merger, none of the AHP
shareholders may transfer any shares of Amgen common stock other than transfers:
. to a wholly-owned subsidiary of American Home Products;
. pursuant to a third party tender offer or exchange offer which was not
induced by an AHP shareholder and (a) which is approved by the Amgen
board of directors or (b) in circumstances in which it is reasonably
likely that AHP shareholders would be, as a result of not tendering or
exchanging, forced to receive consideration that is different than the
consideration available to those stockholders who did tender or exchange;
. arising as a result of a merger or similar transaction involving Amgen;
or
. in the form of a pledge in connection with bona fide financings (other
than derivative transactions) with a financial institution, provided the
pledgee agrees to the applicable restrictions set forth in stockholders'
rights agreement.
Volume Limitations on Sales of Amgen Common Stock
The AHP shareholders and their affiliates may not transfer more than 20
million shares of Amgen common stock (including common stock underlying
derivative transactions) in any calendar quarter, excluding shares of Amgen
common stock transferred pursuant to underwritten syndicated offerings.
In addition, the aggregate number of shares of Amgen common stock underlying
derivative transactions effected in any calendar week by the AHP shareholders
may not exceed 20% of the aggregate trading volume of Amgen common stock on the
Nasdaq National Market in the immediately preceding calendar week.
Registration Rights
Shelf Registration
Amgen will prepare and file with the SEC immediately after the closing of
the merger a registration statement registering the resale of Amgen common
stock from time to time by the AHP shareholders or any other permitted holders
of the Amgen common stock received by the AHP shareholders in the merger. Amgen
has agreed to use its commercially reasonable efforts to:
. cause the shelf registration statement to be declared effective within
90 days after the closing of the merger; and
. keep the shelf registration statement continuously effective until the
earlier of (a) the first anniversary of the closing of the merger and
(b) the sale of all of the securities included in the shelf registration
statement.
The AHP shareholders, or any other permitted holders of the Amgen common
stock received by the AHP shareholders in the merger, may request Amgen to
effect an underwritten syndicated offering by supplement or amendment to the
shelf registration statement. In this case, Amgen and the requesting party or
parties will enter into an underwriting agreement in customary form with the
underwriters for the offering which will be underwritten by two co-managing
underwriters with the requesting holders selecting one co-managing underwriter
and Amgen selecting the second co-managing underwriter. In some circumstances,
Amgen may delay an offering for a limited period of time.
83
Amgen is only obligated to effect two offerings under the shelf registration
statement and each of these offerings must include at least 5 million shares of
Amgen common stock. Inaddition, these underwritten offerings will be subject to
cutback if either of the co-managing underwriters reasonably advises Amgen that
the number of shares of Amgen common stock requested to be included in the
offering exceeds the number that can be sold in the offering at a price
reasonably related to the then current market value of Amgen common stock.
Demand Registration Rights
Beginning on the first anniversary of the closing of the merger, and until
the fourth anniversary of the closing of the merger, the AHP shareholders, or
any other permitted holders of the Amgen common stock received by the AHP
shareholders in the merger, may request that Amgen file a registration
statement covering the registration of a minimum of 5 million shares of Amgen
common stock held by these holders in an underwritten offering. Amgen has
agreed to use its commercially reasonable efforts to cause to be registered all
the shares that the requesting party or parties have requested to be registered.
Offerings pursuant to demand registrations will be underwritten by two
co-managing underwriters with the requesting holders selecting one co-managing
underwriter and Amgen selecting the second co-managing underwriter. Amgen is
obligated to effect up to four demand registrations, less the number of
underwritten offerings effected under the shelf registration statement. These
offerings will be subject to customary cutbacks if either of the co-managing
underwriters reasonably advises Amgen that the shares of Amgen common stock
requested to be included in the offering exceeds the number that can be sold in
the offering at a price reasonably related to the then current market value of
Amgen common stock. In certain circumstances, Amgen may delay an offering for a
limited period of time. Furthermore, the Amgen board of directors may delay the
filing of a demand registration statement if the filing would likely materially
interfere with a potential contemplated material financing, acquisition,
corporation reorganization, corporate development or merger or other
transaction involving Amgen.
If Amgen files a demand registration statement registering an underwritten
offering of Amgen common stock on behalf of any AHP shareholder, or any other
permitted holders of the Amgen common stock received by the AHP shareholders in
the merger, Amgen may include in the registration statement shares of Amgen
common stock for its own account. Amgen's right to so include shares for its
own account is subject to cutback if either of the co-managing underwriters
reasonably advises American Home Products that the number of shares of Amgen
common stock requested to be included in the offering exceeds the number that
can be sold in the offering at a price reasonably related to the then current
market value of Amgen common stock.
Piggy Back Registration Rights
If Amgen files a registration statement registering an underwritten offering
of Amgen common stock on its behalf or on behalf of other holders of Amgen
common stock, the AHP shareholders, or any other permitted holders of the Amgen
common stock received by the AHP shareholders in the merger, have the right to
request that Amgen include their Amgen common stock in the registration
statement. This right to include Amgen common stock is subject to customary
cutbacks if the managing underwriter, to be selected by Amgen, advises Amgen
that the number securities requested to be included in the offering exceeds the
number that can be sold in the offering at a price reasonably related to the
then current market value of Amgen common stock. Furthermore, Amgen may decide
for any reason not to proceed with the proposed registration and may, at its
election, give written notice of the determination to the parties requesting
inclusion in the registration, and, thereupon, Amgen will be relieved of its
obligation to register any shares of Amgen common stock in connection with that
registration statement.
Expenses of Registration; Indemnification
All expenses incurred in connection with each shelf registration and demand
registration will be borne by the AHP shareholders or any other permitted
holders participating in the registration. The AHP shareholders and
84
other permitted holders will also bear the underwriting commissions and
discounts applicable to the securities offered for their account. In connection
with the exercise of the AHP shareholders of their piggy-back registration
rights, the AHP shareholders will bear the underwriting commissions and
discounts applicable to the securities offered for their account and Amgen will
pay all other expenses.
Amgen and the AHP shareholders have agreed to indemnify each other for third
party claims arising out of securities law violations under customary
circumstances.
Termination
Except with respect to the standstill provisions and the voting provisions,
which will terminate as described above, the stockholders' rights agreement and
the obligations of the parties under it will terminate on the first date on
which the AHP shareholders, and any of their subsidiaries or affiliates,
beneficially own, in the aggregate, less than 5 million shares of Amgen common
stock.
85
OTHER AGREEMENTS WITH AMERICAN HOME PRODUCTS
The following summaries describe certain material provisions of the amended
and restated promotion agreement and the agreement regarding governance and
commercial matters, which were filed as exhibits to the registration statement
of which this joint proxy statement/prospectus forms a part and which are
incorporated by reference into this joint proxy statement/prospectus. These
summaries may not contain all of the information about these agreements that is
important to you. We encourage you to read each agreement carefully in its
entirety.
Amended and Restated Promotion Agreement
Concurrently with the execution of the merger agreement, Amgen entered into
an agreement with American Home Products to amend and restate an existing
long-term promotion agreement between American Home Products and Immunex. The
principal operative terms of the amendment and restatement of the promotion
agreement will become effective at the effective time of the merger.
Under the amended and restated promotion agreement, American Home Products
and Immunex will jointly market and sell ENBREL to all appropriate customer
segments in the United States and Canada for all approved indications other
than oncology. The rights to promote ENBREL in the United States and Canada for
oncology indications are reserved to Immunex.
Under the amended and restated promotion agreement, an ENBREL management
committee comprised of an equal number of representatives from Immunex and from
American Home Products will be responsible for overseeing the marketing and
sales of ENBREL including strategic planning, approval of an annual marketing
plan, product pricing and establishing an ENBREL brand team. The ENBREL brand
team, with equal representation from each party, will prepare and implement the
annual marketing plan and will be responsible for all sales activities. The
agreement provides that each of Immunex and American Home Products will:
. have primary tactical execution responsibility for specific activities
identified within the agreement or as directed by the management
committee;
. be required to maintain a minimum level of financial commitment to
promotion and marketing and a minimum number of sales personnel for
ENBREL as established from time to time by the management committee; and
. pay a defined percentage of all marketing and sales expenses approved by
the management committee.
The amended and restated promotion agreement further provides that Immunex
will:
. record all product sales of ENBREL in the United States and Canada made
under the agreement;
. pay American Home Products a percentage of the annual gross profits of
ENBREL in the United States and Canada attributable to all indications
for ENBREL, other than oncology indications, on a scale that increases
as gross profits increase;
. retain a majority percentage of these nononcology gross profits in the
United States and Canada on an annual basis;
. be entitled to keep all of the gross profits attributable to any future
United States or Canadian oncology indications for ENBREL; and
. pay American Home Products specified residual royalties on a declining
scale based on net sales of ENBREL in the United States and Canada in
the three years following the expiration or termination of American Home
Products' detailing and promotion of ENBREL.
If American Home Products sells or distributes a biologic product in the
United States and Canada that is directly competitive with ENBREL, as defined
in the amended and restated promotion agreement, and subject to
86
several exclusions, American Home Products will give Immunex prior written
notice and, upon the request of Immunex, the parties will attempt in good faith
to either establish mutually acceptable terms under which Immunex will
co-promote this competitive biologic product or establish other terms for a
commercial relationship with American Home Products, or negotiate an adjustment
to the gross profits allocated to American Home Products under the amended and
restated promotion agreement. If Immunex is unable to establish acceptable
terms with American Home Products within 90 days of the request of Immunex,
Immunex will have the option to reacquire from American Home Products all
marketing rights to ENBREL in the United States and Canada and terminate the
amended and restated promotion agreement, subject to the payment by Immunex of
a substantial amount to American Home Products over a defined period. If
American Home Products obtains a biologic product that is directly competitive
with ENBREL through the acquisition of another company and Immunex reacquires
the marketing rights to ENBREL in the United States and Canada, American Home
Products' primary field sales force that had detailed ENBREL in the relevant
territory within the United States and Canada for a specified period will not
sell, detail or otherwise distribute the competitive biologic product for a
specified period in the United States and Canada.
American Home Products has agreed to reimburse Immunex for a defined
percentage of the clinical and regulatory expenses it incurs in connection with
the filing and approval of any new indications for ENBREL in the United States
and Canada, excluding oncology and rheumatoid arthritis indications. American
Home Products' reimbursement of these clinical and regulatory expenses is in
addition to another existing cost-sharing arrangement between Immunex and
American Home Products for development costs related to ENBREL. The additional
American Home Products reimbursement for clinical and regulatory expenses under
this agreement, a portion of which is payable upon regulatory filing of any new
indication and the remainder of which will be payable upon regulatory approval
of any new indication, if any, applies for that part of the United States and
Canadian clinical and regulatory expenses for ENBREL for which Immunex would
otherwise be financially responsible under the cost-sharing provisions in the
other cost-sharing agreement. American Home Products has also agreed to
reimburse Immunex under this agreement for a defined percentage of specified
patent expenses related to ENBREL, including any up-front license fees and
milestones, as well as patent litigation and interference expenses.
Subject to specified limitations, American Home Products will also be
responsible for a defined percentage of the liabilities, costs and expenses
associated with the manufacture, use or sale of ENBREL in the United States or
Canada.
Agreement Regarding Governance and Commercial Matters
Amgen has also entered into an agreement regarding governance and commercial
matters with American Home Products and its wholly-owned subsidiary, American
Cyanamid Company, that provides, among other things, that:
. if American Home Products exercises its rights under an existing product
rights agreement between American Home Products and Immunex to acquire
all of the rights of Immunex to one or more specified products under
development by Immunex, or the rights to market or promote those
products, American Home Products' rights will terminate at the effective
time of the merger. Upon such a termination, Amgen must reimburse
American Home Products for any amounts paid to Immunex in conjunction
with its exercise of those rights;
. the product rights agreement will be amended as of the effective time of
the merger to terminate the rights described above in exchange for a
specified payment to American Home Products;
. Amgen has agreed not to sue American Home Products or its affiliates
under any of Amgen's patents or any patents that come under Amgen's
control for infringement for developing, making, using, marketing,
distributing, importing or selling ENBREL anywhere in the world outside
of the United States and Canada; and
87
. Amgen granted to American Home Products an exclusive option to acquire,
subject to the approval of a third party, an exclusive sublicense under
a license agreement between Amgen and a third party. American Home
Products may exercise this option at any time on or before December 31,
2002. If exercised, in addition to all upfront payments, milestone
payments, and royalties payable under the sublicense agreement, American
Home Products will pay to Amgen reimbursement in an amount not to exceed
a defined cap for amounts paid to the third party in 2002 to maintain
the license agreement.
88
UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS
The following unaudited pro forma condensed combining balance sheet as of
September 30, 2001 and the unaudited pro forma condensed combining statements
of operations for the year ended December 31, 2000 and the nine months ended
September 30, 2001 have been prepared to illustrate the effect of the merger as
though the merger had occurred on September 30, 2001 in the pro forma balance
sheet and as of January 1, 2000 in the pro forma statements of operations. The
pro forma information is based upon the historical consolidated financial
statements of Amgen and the historical consolidated financial statements of
Immunex, giving effect to the merger under the purchase method of accounting
and the assumptions, estimates and adjustments described in the notes to the
unaudited pro forma condensed combining financial statements. The assumptions,
estimates and adjustments are preliminary and have been made solely for
purposes of developing such pro forma information. All interim financial data
used to develop the Amgen and Immunex unaudited pro forma condensed combining
balance sheet and statements of operations are unaudited, but in the opinion of
Amgen management and Immunex management, respectively, reflect all adjustments
necessary (consisting only of normal recurring accruals) for a fair
presentation thereof. However, results for interim periods may not be
indicative of results that may be achieved in a full fiscal year.
The unaudited pro forma condensed combining financial statements are
presented for illustrative purposes only and are not necessarily indicative of
the consolidated financial position or consolidated results of operations that
would have been reported had the merger occurred on the dates indicated, nor do
they represent a forecast of the consolidated financial position at any future
date or the consolidated results of operations for any future period.
Furthermore, no effect has been given in the unaudited pro forma condensed
combining statements of operations for synergistic benefits that may be
realized through the combination of the two companies or costs that may be
incurred in integrating their operations. The unaudited pro forma condensed
combining financial statements should be read in conjunction with the
historical consolidated financial statements and management's discussion and
analysis of financial condition and results of operations of Amgen and Immunex
covering those periods incorporated by reference into this joint proxy
statement/prospectus.
89
Pro Forma Condensed Combining Statement of Operations for the Year Ended
December 31, 2000
(In millions, except per share data)
(Unaudited)
Pro forma Pro forma
Amgen Immunex Adjustments Combined
-------- --------- ----------- ---------
Revenues:
Product sales........................................... $3,202.2 $ 828.8 $ -- $4,031.0
Corporate partner revenues.............................. 246.2 25.0 -- 271.2
Royalty income.......................................... 181.0 8.0 -- 189.0
-------- --------- ------- --------
Total revenues...................................... 3,629.4 861.8 -- 4,491.2
-------- --------- ------- --------
Operating expenses:
Cost of sales........................................... 408.4 243.1 25.2 (3) 676.7
Research and development................................ 845.0 166.7 31.5 (3) 1,043.2
Selling, general and administrative..................... 826.9 344.4 25.4 (3) 1,196.7
Amortization of acquired identifiable intangible assets. -- -- 438.0 (1) 438.0
Loss of affiliates, net................................. 23.9 -- -- 23.9
Other items, net........................................ (18.8) -- -- (18.8)
-------- --------- ------- --------
Total operating expenses............................ 2,085.4 754.2 520.1 3,359.7
-------- --------- ------- --------
Operating income........................................... 1,544.0 107.6 (520.1) 1,131.5
Other income (expense):
Interest and other income............................... 146.2 59.8 -- 206.0
Interest expense, net................................... (15.9) (10.7) (62.3)(2) (88.9)
-------- --------- ------- --------
Total other income.................................. 130.3 49.1 (62.3) 117.1
-------- --------- ------- --------
Income before income taxes................................. 1,674.3 156.7 (582.4) 1,248.6
Provision for income taxes................................. 535.8 2.3 (170.5)(4) 367.6
-------- --------- ------- --------
Net income................................................. $1,138.5 $ 154.4 $(411.9) $ 881.0
======== ========= ======= ========
Earnings per share:
Basic................................................... $ 1.11 $ 0.30 $ 0.69
Diluted................................................. $ 1.05 $ 0.28 $ 0.66
Shares used in calculation of earnings per share (5):
Basic................................................... 1,029.6 506.8 1,269.5
Diluted................................................. 1,084.7 549.3 1,335.9
90
Pro Forma Condensed Combining Statement of Operations
for the Nine Months Ended September 30, 2001
(In millions, except per share data)
(Unaudited)
Pro forma Pro forma
Amgen Immunex Adjustments Combined
-------- ------- ----------- ---------
Revenues:
Product sales........................................... $2,536.9 $685.9 $ -- $3,222.8
Corporate partner revenues.............................. 182.0 0.3 -- 182.3
Royalty income.......................................... 172.5 22.9 -- 195.4
-------- ------ ------- --------
Total revenues...................................... 2,891.4 709.1 -- 3,600.5
-------- ------ ------- --------
Operating expenses:
Cost of sales........................................... 290.5 186.8 22.4 (3) 499.7
Research and development................................ 632.4 151.4 28.0 (3) 811.8
Selling, general and administrative..................... 644.5 304.8 22.6 (3) 971.9
Amortization of acquired identifiable intangible assets. -- -- 328.5 (1) 328.5
Loss of affiliates, net................................. 1.9 -- -- 1.9
-------- ------ ------- --------
Total operating expenses............................ 1,569.3 643.0 401.5 2,613.8
-------- ------ ------- --------
Operating income........................................... 1,322.1 66.1 (401.5) 986.7
Other income (expense):
Interest and other income............................... 133.2 94.4 -- 227.6
Interest expense, net................................... (10.2) (0.1) (46.7)(2) (57.0)
-------- ------ ------- --------
Total other income.................................. 123.0 94.3 (46.7) 170.6
-------- ------ ------- --------
Income before income taxes................................. 1,445.1 160.4 (448.2) 1,157.3
Provision for income taxes................................. 488.4 32.1 (145.8)(4) 374.7
-------- ------ ------- --------
Net income................................................. $ 956.7 $128.3 $(302.4) $ 782.6
======== ====== ======= ========
Earnings per share:
Basic................................................... $ 0.92 $ 0.24 $ 0.61
Diluted................................................. $ 0.88 $ 0.23 $ 0.59
Shares used in calculation of earnings per share (5):
Basic................................................... 1,044.9 542.3 1,284.8
Diluted................................................. 1,085.4 569.1 1,336.4
91
Pro Forma Condensed Combining Balance Sheet as of September 30, 2001
(In millions)
(Unaudited)
Pro forma Pro forma
Amgen Immunex Adjustments Combined
-------- -------- ----------- ---------
Assets
Current assets:
Cash and cash equivalents................... $ 284.0 $ 215.4 $ 2,478.9 (3) $ 499.4
(2,478.9)(3)
Marketable securities....................... 2,145.2 800.7 -- 2,945.9
Trade receivables, net...................... 481.5 78.5 -- 560.0
Inventories................................. 384.4 20.4 -- 404.8
Other current assets........................ 187.2 56.6 -- 243.8
-------- -------- --------- ---------
Total current assets.................... 3,482.3 1,171.6 -- 4,653.9
Property, plant and equipment at cost, net..... 1,909.2 186.1 -- 2,095.3
Acquired identifiable intangible assets........ -- -- 6,570.7 (1) 6,570.7
Acquired in-process research and development... -- -- 2,389.2 (2) --
(2,389.2)(2)
Goodwill....................................... -- -- 9,390.1 (1) 9,390.1
Restricted cash and investments................ -- 765.0 -- 765.0
Other assets................................... 662.2 97.4 -- 759.6
-------- -------- --------- ---------
$6,053.7 $2,220.1 $15,960.8 $24,234.6
======== ======== ========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable............................ $ 70.3 $ 83.3 $ -- $ 153.6
Accounts payable--American Home Products.... -- 76.1 -- 76.1
Commercial paper............................ 100.0 -- 2,478.9 (3) 2,578.9
Accrued liabilities......................... 552.2 36.7 195.0 (5) 783.9
-------- -------- --------- ---------
Total current liabilities............... 722.5 196.1 2,673.9 3,592.5
Deferred tax liability......................... -- -- 2,595.4 (4) 2,595.4
Long-term debt................................. 223.0 0.8 -- 223.8
Stockholders' equity:
Common stock and additional paid-in capital. 3,298.2 2,137.3 (2,137.3)(6) 18,402.1
15,103.9 (6)
Retained earnings/(accumulated deficit)..... 1,773.7 (156.5) 156.5 (6) (615.5)
(2,389.2)(2)
Accumulated other comprehensive income...... 36.3 42.4 (42.4)(6) 36.3
-------- -------- --------- ---------
Total stockholders' equity.............. 5,108.2 2,023.2 10,691.5 17,822.9
-------- -------- --------- ---------
$6,053.7 $2,220.1 $15,960.8 $24,234.6
======== ======== ========= =========
Pro forma common shares outstanding (7).......................................... 1,285.4
92
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINING FINANCIAL STATEMENTS
Note 1--Basis of Presentation
On December 16, 2001, Amgen signed a definitive agreement to acquire Immunex
in a transaction to be accounted for as a purchase under accounting principles
generally accepted in the United States. The transaction is expected to qualify
as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code. Under the terms of the merger agreement, each share of Immunex
common stock outstanding at the closing of the merger, other than shares as to
which dissenters' rights have been validly exercised, will be converted into
0.44 of a share of Amgen common stock and $4.50 cash. In addition, at the
closing of the merger each option outstanding to purchase a share of Immunex
common stock will be assumed by Amgen, except for "converted options" described
below, and will thereafter constitute an option to acquire the number of shares
of Amgen common stock determined by multiplying the number of shares of Immunex
common stock subject to the option immediately prior to the merger by 0.52,
with an exercise price equal to the exercise price of the assumed Immunex
option divided by 0.52. Each of these options will be subject to the same terms
and conditions that were in effect for the related Immunex options, except that
each option that was outstanding on the date of the merger agreement, December
16, 2001, will fully vest and become immediately exercisable for shares of
Amgen common stock. Options granted subsequent to the date of the merger
agreement will retain their original vesting provisions. Each option
outstanding at the close with an exercise price greater than the higher of $40
or the closing price of a share of Immunex common stock on the last trading day
prior to the merger (the "converted options") will be cancelled and converted
into an option to purchase that number of shares of Amgen common stock equal to
40% of the number of shares subject to the related converted option at an
exercise price per share equal to the fair market value of a share of Amgen
common stock on the date which the converted option is granted (which shall be
as of the close of market on the date of the effective time of the merger) and
otherwise subject to the terms and conditions, including the vesting schedule,
that were applicable to the related converted option.
As of December 31, 2001, there were approximately 545,300,000 shares of
Immunex common stock outstanding and approximately 50,800,000 Immunex shares
issuable upon exercise of outstanding options. Based upon these amounts and the
terms outlined above, Immunex shareholders will receive a total of
approximately 239,900,000 shares of Amgen common stock; holders of Immunex
options will receive options to purchase approximately 26,300,000 shares of
Amgen common stock, under which the right to purchase approximately 24,100,000
shares of Amgen common stock will be fully vested and immediately exercisable.
The exact number of shares to be issued and options assumed will depend upon
the number of related Immunex shares and options, respectively, outstanding at
the closing of the merger. In addition, Amgen will pay American Home Products a
payment specified in the agreement regarding governance and commercial matters,
at the closing of the merger, for the termination of certain Immunex product
rights in favor of American Home Products.
The purchase price of the acquisition is approximately $17.6 billion
estimated as follows (in millions):
Value of Amgen shares issued....................................... $14,041.9
Cash consideration (including payment to American Home Products)... 2,478.9
Value of Amgen options issued...................................... 1,062.0
Transaction costs.................................................. 30.0
---------
Total.............................................................. $17,612.8
=========
The value of the Amgen shares used in determining the purchase price was
$58.525 per share based on the average of the closing prices of Amgen common
stock for a range of four trading days, two days prior to and two days
subsequent to the announcement of the merger. The fair values of the options
issued were determined based on the closing price of Amgen common stock as of
December 31, 2001 using the Black-Scholes method assuming an expected weighted
average life of 2.4 years, weighted average risk-free rate of 3.2%, volatility
of 50%, and no expected dividends.
93
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINING FINANCIAL STATEMENTS--(Continued)
The allocation of the purchase price as of September 30, 2001 is summarized
below (in millions):
Current assets............................................. $ 1,171.6
Property plant and equipment............................... 186.1
In-process research and development........................ 2,389.2
Identifiable intangible assets (including developed
technology and core technology of $4,778.2 and $1,598.3,
respectively)............................................ 6,570.7
Goodwill................................................... 9,390.1
Other assets............................................... 862.4
Current liabilities........................................ (361.1)
Deferred tax liability..................................... (2,595.4)
Other long-term liabilities................................ (0.8)
---------
Net assets................................................. $17,612.8
=========
The allocation of the purchase price is preliminary. The final determination
of the purchase price allocation will be based on the fair values of assets
acquired, including the fair values of in-process research and development and
other identifiable intangibles, and the fair values of liabilities assumed as
of the date that the acquisition is consummated. The excess of the purchase
price over the fair values of assets and liabilities acquired is allocated to
goodwill. The purchase price allocation will remain preliminary until Amgen
completes a third party valuation of significant identifiable intangible assets
acquired (including in-process research and development), evaluates
restructuring plans to be undertaken following the consummation of the merger,
and determines the fair values of other assets and liabilities acquired. The
final determination of the purchase price allocation is expected to be
completed as soon as practicable after the consummation of the merger. The
final amounts allocated to assets and liabilities acquired could differ
significantly from the amounts presented in the unaudited pro forma condensed
combining financial statements.
The amount allocated to in-process research and development represents an
estimate of the fair value of purchased in-process technology for research
projects that, as of the date of the expected closing date of the merger, will
not have reached technological feasibility and have no alternative future use.
The values of these research projects will be determined based on analyses
using cash flows to be generated by the products that result from the
in-process projects. These cash flows will be estimated by forecasting total
revenues expected from these products and then deducting appropriate operating
expenses, cash flow adjustments and contributory asset returns to establish a
forecast of net cash flows arising from the in-process technology. These cash
flows will be substantially reduced to take into account the time value of
money and the risks associated with the inherent difficulties and uncertainties
given the projected stage of development of these projects at closing. For
purposes of the pro forma balance sheet as of September 30, 2001,
$2,389,200,000 of the total purchase price has been allocated to in-process
research and development--including the estimated value of projected new
indications of ENBREL ($985,100,000) and approximately 10 additional research
and development programs that are in various stages of development but are not
expected to have reached technological feasibility as of the closing date and
have no alternative future use. The amounts allocated to in-process research
and development will be charged to the statement of operations in the period
the acquisition is consummated.
The total estimated amounts of goodwill and identifiable intangible assets
are approximately $9,390,100,000 and $6,570,700,000, respectively. The useful
life of identifiable intangible assets, primarily ENBREL, is approximately 15
years. The values of identifiable intangible assets will be determined using a
discounted cash flow model with appropriate discount rates. The amount of
identifiable intangible assets, the estimated useful lives and acquired
in-process research and development will be determined upon completion of a
third party valuation, and therefore, may differ significantly from the amounts
presented in these unaudited pro forma condensed combining financial
statements. To the extent the amounts and estimated useful lives are different
than those presented above, the unaudited pro forma condensed combining
financial statements could change significantly.
94
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINING FINANCIAL STATEMENTS--(Continued)
In connection with this transaction, Immunex intends to divest the product
LEUKINE, which had annual revenues for Immunex of $88,300,000 and $75,800,000
for the year ended December 31, 2000 and the nine-months ended September 30,
2001, respectively. Information regarding the results of operations and
financial position attributable to LEUKINE is not reviewable by Amgen due to
applicable antitrust laws, and therefore, has not been excluded from the pro
forma condensed combining financial statements presented.
Note 2--Pro Forma Adjustments
Pro Forma Condensed Combining Statements of Operations
1) Reflects amortization of identifiable intangible assets based on the
estimated fair values assigned to these assets at the date of acquisition.
2) Reflects higher interest expense due to additional assumed borrowings of
$2,478,900,000 at 2.5% to finance the cash portion of the merger
consideration. Including cash and investments of Immunex, Amgen has adequate
cash and marketable securities on hand to finance the cash portion of the
merger consideration. However, it is reviewing all its financing options,
including the issuance of debt. Therefore, solely for the purposes of
presenting the pro forma condensed combining financial statements, it has
assumed additional debt issuance to finance the cash portion of the merger
consideration.
3) Reflects compensation expense payable to Immunex employees under the Immunex
Corporation Retention Plan. Because these expenses will have a continuing
impact over a two year period subsequent to the acquisition date, they are
reflected in the pro forma condensed combining statements of operations.
4) Reflects the tax effect of the pro forma adjustments, including amortization
of identifiable intangible assets. The Immunex historical pre-tax income and
the pro forma adjustments have been tax effected at Amgen's marginal tax
rate of 39.5%.
5) Pro forma basic earnings per share is calculated by dividing the pro forma
net income by the pro forma weighted average shares outstanding. Pro forma
diluted earnings per share is calculated by dividing the pro forma net
income by the pro forma weighted average shares outstanding and dilutive
potential weighted shares outstanding. A reconciliation of the shares used
to calculate Amgen's historical basic and diluted earnings per share to
shares used to calculate the pro forma basic and diluted earnings per share
follows (in millions):
Year ended Nine months ended
December 31, 2000 September 30, 2001
----------------- ------------------
Shares used to calculate Amgen's historical basic earnings per share.. 1,029.6 1,044.9
Shares issued in acquisition of Immunex............................... 239.9 239.9
----------------- ------------------
Shares used to calculate pro forma basic earnings per share........... 1,269.5 1,284.8
================= ==================
Year ended Nine months ended
December 31, 2000 September 30, 2001
----------------- ------------------
Shares used to calculate Amgen's historical diluted earnings per share 1,084.7 1,085.4
Shares issued in acquisition of Immunex............................... 239.9 239.9
Impact of dilutive Amgen options issued in acquisition of Immunex..... 11.3 11.1
----------------- ------------------
Shares used to calculate pro forma diluted earnings per share......... 1,335.9 1,336.4
================= ==================
95
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINING FINANCIAL STATEMENTS--(Continued)
Pro forma Condensed Combining Balance Sheet
1) To record the estimated fair values of identifiable intangible assets and
goodwill arising from the acquisition.
2) To reflect the estimated fair value of in-process research and development.
Because this expense is directly attributable to the acquisition and will
not have a continuing impact, it is not reflected in the pro forma condensed
combining statements of operations. However, this item will be recorded as
an expense in the period that the acquisition is completed.
3) To reflect additional assumed borrowings to finance the cash portion of the
merger consideration. Including cash and investments of Immunex, Amgen has
adequate cash and marketable securities on hand to finance the cash portion
of the merger consideration. However, it is reviewing all its financing
options, including the issuance of debt. Therefore, solely for the purposes
of presenting the pro forma condensed combining financial statements, it has
assumed additional debt issuance to finance the cash portion of the merger
consideration.
4) To provide deferred taxes arising from the differences between the bases of
identifiable intangible assets for financial statement and income tax
purposes.
5) To record the estimated transaction costs of $30,000,000 and to adjust
liabilities for estimated costs of $165,000,000 in accordance with EITF 95-3.
6) To eliminate historical shareholders' equity accounts of Immunex, and to
record the issuance of Amgen common stock and options as part of the
purchase price.
7) The pro forma common shares outstanding as of September 30, 2001 is
calculated as follows (in millions):
Historical Amgen common shares outstanding as of September 30, 2001 1,045.5
Shares issued in acquisition of Immunex............................ 239.9
-------
Pro forma common shares outstanding as of September 30, 2001....... 1,285.4
=======
96
DESCRIPTION OF AMGEN CAPITAL STOCK
The following is a summary of the material terms of Amgen's capital stock.
Because it is only a summary, it does not contain all the information that may
be important to you. Accordingly, you should read carefully the more detailed
provisions of the restated certificate of incorporation of Amgen, as amended,
the amended and restated bylaws of Amgen and the Amended and Restated Rights
Agreement between Amgen and American Stock Transfer & Trust Company, each of
which has been filed with the SEC, as well as applicable Delaware law. See
"Comparison of Stockholder Rights and Corporate Governance Matters."
General
As of the date of this joint proxy statement/prospectus, Amgen's authorized
capital stock consists of:
. 2,750,000,000 shares of common stock, par value $0.0001 per share, and
. 5,000,000 shares of preferred stock, par value $0.0001 per share.
As of the record date for the Amgen special meeting, shares of
Amgen common stock were issued and outstanding and no shares of Amgen preferred
stock were issued and outstanding.
Preferred Stock
The Amgen board of directors is authorized to determine the dividend rights,
dividend rate, conversion rights, voting rights, rights and terms of
redemption, liquidation preferences and sinking fund terms on any series of
preferred stock, the number of shares constituting any series of preferred
stock, and the designation of any series of preferred stock. In connection with
Amgen's stockholder rights agreement, the Amgen board of directors has
designated 687,500 shares of preferred stock as "Series A Junior Participating
Preferred Stock." See "Comparison of Stockholder Rights and Corporate
Governance Matters--Shareholder or Stockholder Rights Plan."
Common Stock
Holders of Amgen common stock are entitled to one vote for each share held
of record on all matters submitted to a vote of holders of Amgen common stock.
Subject to preferences that may be applicable to any outstanding preferred
stock, holders of Amgen common stock are entitled to dividends as may be
declared from time to time by the Amgen board of directors out of funds legally
available for that purpose. Amgen has not paid any dividends on the Amgen
common stock since its inception. Holders of Amgen common stock have no
preemptive, redemption, conversion or sinking fund rights. Upon a liquidation,
dissolution or winding up of Amgen, the holders of Amgen common stock are
entitled to share equally and ratably in the assets of Amgen, if any, remaining
after the payment of all debts and liabilities of Amgen and the liquidation
preference of any outstanding Amgen preferred stock. All issued and outstanding
shares of Amgen common stock are validly issued, fully paid and nonassessable.
Transfer Agent
The transfer agent and registrar of the Amgen common stock is American Stock
Transfer & Trust Company.
97
COMPARISON OF STOCKHOLDER RIGHTS AND CORPORATE GOVERNANCE MATTERS
Amgen is incorporated under the laws of the State of Delaware, while Immunex
is incorporated under the laws of the State of Washington. Before the
completion of the merger, the rights of holders of Immunex common stock are
governed by the Washington Business Corporation Act, or the WBCA, the restated
articles of incorporation of Immunex and the amended and restated bylaws of
Immunex. After the completion of the merger, Immunex shareholders will become
stockholders of Amgen, and their rights will be governed by the Delaware
General Corporation Law, or the DGCL, the restated certificate of incorporation
of Amgen, as amended, the amended and restated bylaws of Amgen and the Amended
and Restated Rights Agreement between Amgen and American Stock Transfer & Trust
Company.
While there are substantial similarities between the WBCA and the DGCL as
well as between the charters and bylaws of Amgen and Immunex, a number of
differences do exist. The following is a summary of the material differences
between the rights of Amgen stockholders and the rights of Immunex
shareholders. While we believe that this summary covers the material
differences between the two, this summary may not contain all of the
information that is important to you. This summary is not intended to be a
complete discussion of the respective rights of Amgen and Immunex stockholders
and it is qualified in its entirety by reference to the DGCL, the WBCA, and the
various documents of Amgen and Immunex we refer to in this summary. You should
carefully read this entire joint proxy statement/prospectus and the other
documents we refer to in this joint proxy statement/prospectus for a more
complete understanding of the differences between being a stockholder of Amgen
and being a shareholder of Immunex. Amgen and Immunex have filed with the SEC
their respective documents referred to herein and will send copies of these
documents to you upon your request. See the section entitled "Where You Can
Find More Information."
--------------------------------------------------------------------------------------------
Immunex Amgen
--------------------------------------------------------------------------------------------
Authorized The authorized capital stock of Immunex The total authorized capital stock of
Capital Stock consists of 1,200,000,000 shares of common Amgen consists of 2,750,000,000 shares
stock, par value of $.01 per share and of common stock, par value $0.0001 per
30,000,000 shares of preferred stock, par value share and 5,000,000 shares of preferred
of $.01 per share. No shares of preferred stock stock, par value $0.0001 per share. No
are outstanding. shares of preferred stock are outstanding.
Number of Washington law provides that the board of Delaware law provides that the board of
Directors directors of a Washington corporation must directors of a Delaware corporation must
consist of one or more directors with the consist of one or more directors as fixed
number specified in or fixed in accordance with by the corporation's certificate of
the articles of incorporation or bylaws. The incorporation or bylaws. Amgen's bylaws
Immunex bylaws provide that the number of provide that the number of directors of
directors will be fixed from time to time by the Amgen will be fixed from time to time by
Immunex board of directors subject to the Amgen's board of directors. The number
governance agreement among Immunex of directors of Amgen currently is fixed at
Corporation, American Home Products and thirteen.
American Cyanamid Company, a wholly-
owned subsidiary of American Home Products.
The Immunex board of directors currently
consists of nine directors.
Cumulative Under Washington law, unless a corporation's Delaware law allows for a corporation's
Voting articles of incorporation provide otherwise, certificate of incorporation to permit
shareholders are permitted to cumulate their stockholders to cumulate their votes for
votes for directors. The articles of directors. However, the certificate of
incorporation of Immunex provide that there is incorporation of Amgen does not so
to be no cumulative voting. provide, and accordingly, holders of
98
------------------------------------------------------------------------------------------------
Immunex Amgen
------------------------------------------------------------------------------------------------
Amgen common stock have no cumulative
voting rights in connection with the election
of directors.
Election of Pursuant to the governance agreement, Amgen stockholders' rights with respect to
Directors by American Home Products has the right to the election of directors are not subject to the
American Home designate directors based on the percentage provisions of any governance agreement.
Products of outstanding voting stock or common stock
Corporation controlled by American Home Products and
its affiliates. If American Home Products
controls:
. less than 20% of Immunex outstanding
common stock, American Home
Products will have no right to designate
any directors, Immunex will have the
right to designate six directors and at
least four directors will be independent;
. 20% or above but less than 35%,
American Home Products will have the
right to designate one director,
Immunex will have the right to
designate three directors and at least
four directors will be independent;
. 35% or above but less than 45%,
American Home Products will have the
right to designate two directors,
Immunex will have the right to
designate three directors (currently,
American Home Products has the right
to elect two directors) and at least four
directors will be independent;
. 45% or above but less than 65%,
American Home Products will have the
right to designate three directors, and
Immunex will have the right to
designate three directors and at least
four directors will be independent; and
. 65% or above, American Home
Products will have the right to designate
four directors, and Immunex will have
the right to designate three directors and
at least four directors will be
independent.
99
------------------------------------------------------------------------------------------------
Immunex Amgen
------------------------------------------------------------------------------------------------
Classification of Immunex does not have a classified board. Delaware law permits, but does not require,
Board of The Immunex bylaws provide that directors a Delaware corporation to provide in its
Directors will be elected at the annual meeting of certificate of incorporation for the board of
shareholders. Under Washington law, all directors to be classified into up to three
directors hold office until the next annual classes of directors with staggered terms of
meeting of shareholders following their office, with only one class of directors to be
election. elected each year for a maximum term of
three years. Amgen's certificate of
incorporation classifies the board of directors
into three separate classes, as nearly equal in
size as possible, with staggered three-year
terms.
Removal of Under Washington law, a director may be Delaware law provides that stockholders
Directors removed with or without cause unless a holding a majority of shares entitled to vote
company's articles of incorporation provide may remove any director or the entire board
that directors may be removed only for of directors; provided, however, that in the
cause. The articles of incorporation of case of a Delaware corporation with a
Immunex do not so provide. Under classified board, unless otherwise provided
Washington law, a director may be removed in the certificate of incorporation,
by the shareholders only at a special stockholders may only remove a director for
meeting called for the purpose of removing cause. Amgen's certificate of incorporation
such director and such director will be does not provide otherwise. Amgen's bylaws
removed if the number of votes cast to provide that at a special meeting called for
remove the director exceeds the number of such purpose, the board of directors, or an
votes cast not to remove the director. individual director, may be removed, with
Pursuant to the governance agreement, at cause, by a vote of the stockholders holding
any meeting of shareholders called a majority of the shares entitled to vote at an
expressly for the removal of directors, election of directors.
American Home Products must vote its
shares of Immunex common stock for all
nominees in proportion to the votes cast by
the other holders of shares of Immunex
common stock. American Home Products
may, however, cast any or all of its votes, in
its sole discretion, in favor of any nominee
designated by American Home Products
pursuant to the terms of the governance
agreement or in connection with any
election contest to which Rule 14a-11 of the
Securities Exchange Act of 1934 applies.
Vacancies on the Under Washington law, unless a Delaware law provides that, unless the
Board of corporation's articles of incorporation governing documents of a Delaware
Directors provide otherwise, a vacancy on the board corporation provide otherwise, vacancies and
of directors, including a vacancy resulting newly created directorships resulting from a
from an increase in the number of directors, resignation or an increase in the authorized
may be filled by the shareholders, by the number of directors may be filled by a
board of directors or if the directors in office majority of the directors then in office,
constitute fewer than a quorum, by the although less than a quorum. Amgen's
affirmative vote of a majority of all the certificate of incorporation and bylaws
100
----------------------------------------------------------------------------------------------
Immunex Amgen
----------------------------------------------------------------------------------------------
directors in office. If the corporation has provide that vacancies and newly created
allocated the right to select certain directors directorships may only be filled by a
to a class or classes of shares, only the majority of the remaining directors then in
shareholders of that class or classes may fill office, even if less than a quorum. Any
the vacant board seat. The articles of newly created directorships would be
incorporation of Immunex provide that a apportioned among the three classes of
vacancy may be filled, subject to the directors to keep the size of each class as
governance agreement, by the affirmative nearly equal as possible. Any director
vote of a majority of the remaining directors, elected by a majority of the remaining
though less than a quorum. Any vacancy directors then in office would hold office for
created by an increase in the number of the remainder of the term of his class.
directors may be filled, subject to the
governance agreement, by the Immunex
board of directors for a term of office
continuing only until the next election of
directors by the shareholders. The
governance agreement provides that
American Home Products has the right to
designate replacements for directors
originally designated to the Immunex board
of directors by American Home Products.
Shareholder or Under Washington law, action by the As permitted under Delaware law, Amgen's
Stockholder shareholders of a public company may be certificate of incorporation and bylaws
Action by Written taken without a meeting only if written prohibit action by the written consent of
Consent consents approving the action are signed by Amgen stockholders and any stockholder
all shareholders entitled to vote on the action action must be effected at a duly called
and delivered to the corporation. The articles annual or special meeting of the
of incorporation of Immunex eliminate the stockholders.
ability of shareholders to act by written
consent.
Amendment of Under Washington law, a board of directors Under Delaware law, Amgen's certificate of
Articles of may adopt one or more amendments to the incorporation may be amended only if the
Incorporation or articles of incorporation to make certain proposed amendment is approved by the
Certificate of ministerial changes without shareholder board of directors and thereafter approved by
Incorporation action, including changes to the corporate holders of a majority of the outstanding
name and, if the corporation has only one stock entitled to vote thereon. An
class of shares outstanding, changes to the amendment of the provisions of Amgen's
number of outstanding shares in order to certificate of incorporation described under
effectuate a stock split or stock dividend, or the subsection entitled "Vote on Certain
changes to, or the elimination of, provisions Fundamental Issues" below requires the
with respect to the par value of a affirmative vote of at least 66 2/3% of the
corporation's stock. Other amendments to voting power of all outstanding shares of
the articles of incorporation must be Amgen not held by an interested
recommended to the shareholders by the stockholder.
board of directors and the holders of a
majority of the outstanding shares of
stockentitled to vote on the amendment must
approve the amendment unless another
percentage is specified (i) in the articles of
101
--------------------------------------------------------------------------------------------
Immunex Amgen
--------------------------------------------------------------------------------------------
incorporation, (ii) by the board of directors
as a condition to its recommendation or
(iii) by the provisions of the WBCA. The
articles of incorporation of Immunex require
the affirmative vote of the holders of not less
than 80% of the outstanding shares of stock
entitled to vote generally in the election of
directors to amend or repeal the provisions in
the articles of incorporation of Immunex
limiting director liability. The articles of
incorporation of Immunex require the
affirmative vote of the holders of not less
than 70% of the common stock of Immunex
on a fully diluted basis to amend the
provisions in the articles of incorporation
providing that conflicts between the articles
of incorporation or bylaws, on the one hand,
and the governance agreement, on the other
hand, must be resolved in favor of the
governance agreement.
Amendment of Under Washington law, a corporation's In accordance with Delaware law, Amgen's
Bylaws board of directors can amend or repeal the bylaws may be repealed, altered or amended
bylaws, or adopt new bylaws, unless the or new bylaws adopted by (a) the affirmative
articles of incorporation or the WBCA vote of not less than two-thirds of the
reserve this power exclusively to the outstanding shares of stock entitled to vote
shareholders in whole or in part (the articles upon the election of directors or (b) the
of incorporation of Immunex do not do so) board of directors; provided, however, that
or if the shareholders, in amending or any bylaws made by the directors may be
repealing a particular bylaw, provide amended, altered or repealed by the
expressly that the board of directors may not stockholders.
amend or repeal that bylaw. A corporation's
shareholders may amend or repeal the
bylaws, or adopt new bylaws.
Special Meeting Under Washington law, a special meeting of Under the DGCL, a special meeting of the
of Shareholders the shareholders may be called by a stockholders may be called by the board of
or Stockholders corporation's board of directors, the persons directors of the corporation or by any other
authorized to do so in the corporation's person authorized to do so in the certificate
articles of incorporation or bylaws or, unless of incorporation or bylaws. Amgen's bylaws
limited or denied by a corporation's articles provide that a special meeting of the
of incorporation, by the holders of at least stockholders may be called by the chairman
10% of all the votes entitled to be cast on of the board, the chief executive officer, the
any issue proposed to be considered at the president or a majority of the directors.
special meeting. The articles of
incorporation of Immunex provide that
special meetings of shareholders can only be
called by (i) the board of directors; (ii) the
Chairman of the board of directors; (iii) the
President; or (iv) written demand of holders
of not less than 40% of all votes entitled to
be cast on an action proposed to be
considered at such special meeting.
102
------------------------------------------------------------------------------------------------
Immunex Amgen
------------------------------------------------------------------------------------------------
Notice of In accordance with Washington law, the In accordance with Delaware law, Amgen's
Shareholder or Immunex bylaws provide that written notice bylaws provide that written notice of any
Stockholder of any shareholders meeting must be given stockholders meeting must be given to each
Meetings to each shareholder entitled to vote not less stockholder entitled to vote not less than 10
than 10 or more than 60 days before the nor more than 60 days before the date of the
meeting, except that notice of not less than meeting.
20 or more than 60 days before the meeting
must be given in the case of a meeting to act
on an amendment to the articles of
incorporation, a plan of merger or share
exchange, the sale, lease exchange or other
disposition of all or substantially all of the
corporation's assets or the dissolution of the
corporation.
Delivery and The Immunex bylaws provide that in order for Amgen's bylaws provide that in order for a
Notice a shareholder to make a nomination for the stockholder to make a nomination for the
Requirements of elections of directors or propose business at an elections of directors or propose business at
Shareholder or annual meeting of the shareholders, the any stockholder meeting, the stockholder
Stockholder Secretary of Immunex must receive the must give timely notice in proper written
Nominations and shareholder's written notice of nomination or form of his intent to make the nomination or
Proposals proposed business: the business proposal. To be timely, the
stockholder's notice must be delivered to, or
. not fewer than 60 or more than 90 days mailed and received by the Secretary of
prior to the date of the annual meeting; Amgen not later than 90 days prior to the
meeting; provided, however, that if less than
. if less than 60 days' notice or prior 100 days' notice or prior public disclosure of
public disclosure of the date of the the date of meeting is given or made to the
annual meeting is given or made to the stockholders, notice by the stockholder to be
shareholders, not later than the close of timely must be received not later than the
business on the 10th day following the close of business on the 10th day following
day on which the notice of the date of the date on which the notice of the date of
the annual meeting was mailed or the meeting was mailed or the public
public disclosure was made; or disclosure was made. To be in proper written
form, the notice must set forth:
. with respect to an election to be held at
a special meeting of the shareholders, . the name and address of the stockholder
the close of business on the seventh who intends to make the nomination or
business day following the date on proposal, and as the case may be, of the
which notice of the special meeting is person or person to be nominated or of
first given to shareholders. the business to be proposed;
The shareholder's written notice of nomination . a representation that the stockholder is a
or proposed business must set forth: holder of record of Amgen stock entitled
to vote at the meeting and, if applicable,
. the name and address of the shareholder intends to appear in person or by proxy
proposing the business or intending to at the meeting to nominate the person or
make the nomination; persons specified in the notice;
. a representation that the shareholder is . if applicable, a description of all
entitled to vote at the meeting and a arrangements or understandings
statement of the number of shares of the between the stockholder and each
corporation that are beneficially owned nominee and any other person or
by the shareholder;
103
--------------------------------------------------------------------------------------------
Immunex Amgen
--------------------------------------------------------------------------------------------
. a representation that the shareholder persons (naming the person or persons)
intends to appear in person or by proxy pursuant to which the nomination or
at the meeting to propose the business nominations are to be made by the
or to nominate the person or persons stockholder;
specified in the notice;
. other information regarding each
. with respect to each matter the nominee or each business proposal as
shareholder proposes to bring before the would be required to be included in a
meeting, a brief description of the proxy statement filed pursuant to the
business desired to be brought before proxy rules of the SEC had the nominee
the meeting, the reasons for conducting been nominated, or intended to be
the business at the meeting, the nominated, or the business proposal
language of the proposal (if been proposed, or intended to be
appropriate), and any material interest proposed by the Amgen board of
of the shareholder in such business; directors; and
. with respect to each person the . if applicable, the consent of each
shareholder proposes to nominate for nominee to serve as director of Amgen
election or re-election as a director, the if so elected.
name and address of the person and
other information regarding the The chairman of the meeting may refuse to
nomineee as would be required in a acknowledge the nomination of any person
proxy statement filed pursuant to the or the proposal of any business not made in
proxy rules of the SEC had the nominee compliance with the foregoing procedure.
been nominated by the board, and a
description of any arrangements or
understandings, between the
shareholder and the nominee and any
other persons (including their names),
pursuant to which the nomination is to
be made; and
. in the case of a nomination, the consent
of each nominee to serve as a director if
elected.
With respect to a notice regarding proposed
business, if the facts warrant, the board of
directors, or the chairman of the shareholders
meeting, may determine and declare that
(a) a proposal does not constitute proper
business to be transacted at the meeting or
(b) business was not properly brought before
the meeting in accordance with the foregoing
procedures, and, if, in either case, it is so
determined, then that business will not be
transacted. With respect to an intended
nomination, if the facts warrant, the board of
directors, or the chairman of a shareholders
meeting, shall determine and declare that an
intended nomination was not made in
accordance with the foregoing procedures
and, if it is so determined, the defective
nomination will be disregarded.
104
----------------------------------------------------------------------------------------------
Immunex Amgen
----------------------------------------------------------------------------------------------
Proxy Under Washington law, a proxy is valid for Under Delaware law, each stockholder
eleven months after receipt of the entitled to vote at a meeting of stockholders
appointment form, unless the form provides or to express consent or dissent to corporate
for a longer period. The proxy is revocable action in writing without a meeting may
unless it states that it is irrevocable and is grant a proxy, but no such proxy may be
coupled with an interest. voted or acted upon after 3 years from its
date, unless the proxy provides for a longer
period. A duly executed proxy will be
irrevocable if it states that it is irrevocable
and if, and only as long as, it is coupled with
an interest.
Preemptive Under Washington law, shareholders have The DGCL provides that no stockholder will
Rights preemptive rights unless the corporation's have any preemptive rights to purchase
articles of incorporation provide otherwise. additional securities of the corporation
The articles of incorporation of Immunex unless the certificate of incorporation
provide that no statutory preemptive rights expressly grants these rights. Amgen's
will exist with respect to the shares of capital certificate of incorporation does not grant
stock of Immunex. Notwithstanding the any preemptive rights.
absence of statutory preemptive rights,
American Home Products has certain
contractual rights to purchase additional
shares of Immunex common stock pursuant
to the governance agreement.
Dividends Under Washington law, a board of directors Under the DGCL, the board of directors may
may approve, and a corporation may make, a declare and pay dividends out of its surplus
distribution to shareholders only to the or, if it has no surplus, out of any net profits
extent that (1) such distribution does not for the fiscal year in which the dividend was
leave the corporation unable to pay its debts declared or for the fiscal year preceding the
as they become due in the usual course of fiscal year in which the dividend was
business and (2) after the distribution, the declared, provided that the payment will not
corporation's total assets would not be less reduce capital below the amount of capital
than the sum of its total liabilities plus, represented by all classes of shares having a
unless the articles of incorporation provide preference upon the distribution of assets.
otherwise, the amount that would be needed,
if the corporation were to be dissolved at the
time of the distribution, to satisfy the
preferential rights upon dissolution of
shareholders whose preferential rights are
superior to those receiving the distribution.
Limitation of The Immunex articles of incorporation In accordance with Delaware law, Amgen's
Personal provide that to the full extent permitted by certificate of incorporation provides that a
Liability of the WBCA a director of Immunex will not director of Amgen will not be personally
Directors be liable to Immunex or the Immunex liable to Amgen or Amgen's stockholders for
shareholders for monetary damages for monetary damages for breach of fiduciary
conduct as a director. Washington law duties, except for liability for:
provides that liability cannot be limited or
eliminated for: . any breach of the director's duty of
loyalty to Amgen or Amgen's
. intentional misconduct; stockholders;
105
-------------------------------------------------------------------------------------------
Immunex Amgen
-------------------------------------------------------------------------------------------
. knowing violations of law; . acts or omissions not in good faith or
which involve intentional misconduct or
. actions that result in a personal benefit a knowing violation of law;
in money, property or services to which
the director was not legally entitled; or . payment of a dividend or the repurchase
or redemption of stock in violation of
. unlawful distributions. Delaware law; or
. any transaction from which the director
derived an improper personal benefit.
Indemnification Under Washington law, the standards for Amgen's bylaws require Amgen to
of Officers and allowing indemnification of officers and indemnify its directors and officers to the
Directors directors are substantially the same as those full extent permitted by the DGCL. In
under Delaware law. The Immunex articles addition, Amgen must advance to any person
of incorporation require Immunex to who was or is a party or is threatened to be
indemnify its directors and officers to the made a party to any threatened, pending or
full extent not prohibited by applicable law completed action, suit or proceeding because
against liability arising out of a proceeding he is or was a director or officer of Amgen,
to which such individual was made a party or is or was serving at the request of Amgen
because the individual is or was a director or as a director or officer of another
an officer of Immunex. The Immunex corporation, partnership, joint venture, trust
bylaws provide that each person who was, is or other enterprise, prior to the final
or is threatened to be made a named party to disposition of any such proceeding, promptly
or is otherwise involved (including, without following a request for advance, all expenses
limitation, as a witness) in any threatened, incurred by any director or officer in
pending or completed action, suit or connection with such proceeding if the
proceeding, by reason of the fact that he or individual provides an undertaking to repay
she is or was a director or officer of all amounts if it is ultimately determined that
Immunex or, that being or having been a the person is not entitled to be indemnified
director or officer of Immunex, he or she is under the bylaws or otherwise.
or was serving at the request of Immunex, as Notwithstanding the foregoing, Amgen is not
a director, officer, partner, trustee, employee required to indemnify a director or officer in
or agent of another corporation or of a connection with any proceeding initiated by
partnership, joint venture, trust, employee that person or any proceedings by that
benefit plan or other enterprise, whether the person against Amgen or Amgen's directors,
basis of a proceeding is alleged action (or officers or other agents unless:
inaction) in an official capacity as a director,
officer, partner, trustee, employee or agent or . the indemnification is expressly
in any other capacity while serving as a required by law;
director, officer, partner, trustee, employee
or agent, will be indemnified and held . the proceeding was authorized by the
harmless by Immunex against all losses, board of directors;
claims, damages, liabilities or expenses
actually and reasonably incurred or suffered . the indemnification is provided by
by the individual in connection therewith, Amgen in its sole discretion; or
and the indemnification will continue as to
an individual who has ceased to be a . a court of competent jurisdiction holds
director, officer, partner, trustee, employee that Amgen is required to provide the
or agent and will inure to the benefit of the indemnification.
individual's heirs, executors and
The right to indemnification is not exclusive
of any other right which that individual may
have or hereafter acquire under any statute,
106
--------------------------------------------------------------------------------------------
Immunex Amgen
--------------------------------------------------------------------------------------------
administrators. Notwithstanding the provision of Amgen's certificate of
foregoing, Immunex is only required to incorporation or bylaws, agreement, vote of
indemnify an individual in connection with a stockholders or disinterested directors or
proceeding initiated by that individual if the otherwise.
proceeding was authorized or ratified by the
board of directors. Amgen is authorized to enter into individual
contracts with any or all of its directors,
Immunex must advance expenses incurred officers, employees or agents respecting
by an individual in defending any proceeding indemnification and advances, and purchase
in advance of its final disposition if the insurance on behalf of any person required
individual undertakes to repay all amounts so or permitted to be indemnified.
advanced if it is ultimately determined by
final judicial decision from which there is no
further right to appeal that the individual is
not entitled to be indemnified under the
bylaws. An individual's right to
advancement of expenses is conditioned
upon the individual:
. delivering the undertaking;
. cooperating in providing Immunex with
information requested by Immunex that
is within the individual's power to
provide; and
. providing to Immunex a written
affirmation of the individual's good
faith belief that any applicable
standards of conduct have been met by
the individual.
The articles of incorporation of Immunex
provide that directors and officers will not be
indemnified on account of:
. acts or omissions finally adjudged to be
intentional misconduct or a knowing
violation of law;
. conduct relating to distributions by the
corporation finally adjudged to be in
violation of the provisions of the
WBCA; or
. any transaction with respect to which it
was finally adjudged that such director
or officer personally derived a benefit in
money, property or services to which he
or she was not legally entitled.
107
-------------------------------------------------------------------------------------------
Immunex Amgen
-------------------------------------------------------------------------------------------
Immunex is authorized to enter into
individual contracts with any or all of its
directors, officers, employees or agents
respecting indemnification and advances,
and purchase insurance on behalf of any
person required or permitted to be
indemnified.
Shareholder or Immunex does not have a shareholder rights On February 18, 1997, Amgen adopted a
Stockholder plan. stockholder rights plan pursuant to a rights
Rights Plan agreement. The following description of the
rights agreement is subject in its entirety to
the terms and conditions of the rights
agreement. You should read the rights
agreement carefully. See "Where You Can
Find More Information" below.
Exercisability of Rights. Pursuant to
Amgen's rights agreement, one whole right
attaches to each share of Amgen common
stock outstanding. Each right entitles the
registered holder to purchase from Amgen
one four-thousandth (1/4000) of a share of
Amgen Series A Junior Participating
Preferred Stock at an initial purchase price of
$350.00, subject to customary antidilution
adjustments. A holder of rights will not have
any rights as a stockholder of Amgen by
virtue of holding the rights.
The rights currently are attached to and trade
only together with outstanding certificates of
Amgen common stock. The rights will
separate from the common stock and become
exercisable following the earlier of:
. ten days following a public
announcement that a person or group
has become the beneficial owner of
10% or more of the outstanding shares
of Amgen common stock; and
. ten business days, or a later date as may
be determined by the Amgen board of
directors, following the commencement
of, or the announcement of an intention
to commence, a tender offer or
exchange offer that would result in a
person becoming the beneficial owner
of 10% or more of the outstanding
shares of Amgen common stock.
108
------------------------------------------------------
Immunex Amgen
------------------------------------------------------
"Flip-In" Feature. If a person or group
becomes the beneficial owner of 10% or
more of the outstanding shares of Amgen
common stock, then each registered holder
of an Amgen right, except for such person or
group, will be entitled to purchase, upon
exercise, shares of Amgen common stock
having a then current market value equal
to two times the exercise price of the right.
Prior to March 12, 2004, in limited
circumstances approved by the outside
directors of the board of directors, a
stockholder who enters into an acceptable
standstill agreement may acquire up to 20%
of the outstanding shares of Amgen common
stock before being subject to the foregoing
provision.
"Flip-Over" Feature. Each right will
entitle the holder, except for a person or
group that is the beneficial owner of 10% or
more of the outstanding shares of Amgen
common stock, to purchase, upon exercise, a
number of shares of common stock of an
acquiring company having a then current
market value of two times the exercise price
of the right if an acquiring company obtains
10% or more of the outstanding shares of
Amgen common stock and then one of the
following occurs:
. Amgen merges into the acquiring
company;
. the acquiring company merges into
Amgen; or
. Amgen sells more than 50% of its
assets or earning power to an acquiring
company.
"Exchange" Feature. After a person or
group obtains 10% or more of the
outstanding shares of Amgen common stock,
but less than 50%, the Amgen board of
directors may, at its option, exchange all or
some of the then outstanding and exercisable
rights (other than rights owned by such
person or group) for Amgen common stock
at an exchange ratio of one share of common
stock per right, adjusted to reflect any stock
split, stock dividend or similar transaction.
109
-------------------------------------------------------
Immunex Amgen
-------------------------------------------------------
Redemption of Rights. Prior to the time a
person or group becomes the beneficial
owner of 10% or more of the outstanding
shares of Amgen common stock, the Amgen
board of directors may redeem the rights in
whole, but not in part, at a redemption price
of $0.00025 per right, subject to adjustment.
Amendment of Rights. Amgen may amend
the rights agreement for so long as the rights
are then redeemable. After the rights are no
longer redeemable, Amgen may amend or
supplement the rights agreement only:
. to cure an ambiguity or correct a
defective or inconsistent provision;
. to shorten or lengthen any time period
under the rights agreement; or
. in any manner that does not adversely
affect the interests of the holders of the
rights.
Once the rights are no longer redeemable,
the Amgen board may not adopt any
amendment that would lengthen the time
period during which the rights are
redeemable. Until March 12, 2004, any
supplement or amendment to the rights
agreement requires approval of a majority of
the outside directors, and any extension of
the final expiration date requires approval of
three-quarters of the outside directors.
Final Expiration Date. If not previously
exercised, the rights will expire on
December 12, 2010, unless Amgen earlier
redeems or exchanges the rights or extends
the final expiration date.
Series A Junior Participating Preferred
Stock. In connection with the creation of
the rights, the Amgen board of directors has
authorized the issuance of 687,500 shares of
Amgen preferred stock designated as "Series
A Junior Participating Preferred Stock."
Anti-takeover Effects. Amgen's rights
agreement is designed to maximize the value
of Amgen's outstanding common stock in
the event of an unsolicited attempt to take
over Amgen in a manner or on terms that are
not approved by the Amgen board of
110
----------------------------------------------------------------------------------------------
Immunex Amgen
----------------------------------------------------------------------------------------------
directors. Once the Amgen rights have
become exercisable, the rights will cause
substantial dilution to a person or group that
attempts to acquire or merge with Amgen in
most cases. The rights could discourage,
delay or prevent certain types of transactions
involving an actual or potential change in
control of Amgen, including transactions in
which stockholders might otherwise receive
a premium for their shares over current
market prices. The rights should not interfere
with any merger or other business
combination approved by the Amgen board
of directors since Amgen may redeem the
rights prior to the time that a person becomes
the beneficial owner of 10% or more of
outstanding shares of Amgen common stock.
The Amgen rights agreement does not apply
to the merger with Immunex.
Dissenters' Under Washington law, a shareholder is Delaware law provides stockholders of a
Rights entitled to dissent from, and obtain the fair Delaware corporation involved in a merger
value in cash of his or her shares in the right to demand and receive payment of
connection with, certain corporate actions the fair value of their stock in specific
including some mergers, share exchanges, mergers. However, except in limited
and sales or exchanges of all or substantially circumstances, appraisal rights are not
all of the corporation's property other than in available to holders of shares:
the usual and regular course of business.
. listed on a national securities exchange;
For more information regarding dissenters'
rights please see Chapter 23B.13 of the . designated as a national market system
WBCA, a copy of which is attached to this security on an interdealer quotation
joint proxy statement/prospectus as Annex F. system operated by the National
A summary of Chapter 23B.13 is set forth in Association of Securities Dealers, Inc.;
the section entitled "Dissenters' Rights." or
. held of record by more than 2,000
stockholders.
Dissenters' appraisal rights are not available
to Amgen stockholders with respect to the
merger.
Certain Business Under Washington law, public companies The DGCL contains a business combination
Combination based in Washington (or that have significant statute that protects publicly-traded
Restrictions business contacts with the state) are Delaware corporations, such as Amgen, from
prohibited, with specific exceptions, from hostile takeovers, and from actions following
engaging in significant business transactions the takeover, by prohibiting some
with any person or group of persons who transactions once an acquiror has gained a
beneficially own 10% or more of the voting significant holding in the corporation.
shares of the target corporation for a period Section 203 of the DGCL prohibits
of five years after such share acquisition, ''business combinations,'' including
111
--------------------------------------------------------------------------------------------------
Immunex Amgen
--------------------------------------------------------------------------------------------------
unless the transaction or acquisition of mergers, sales and leases of assets, issuances
shares is approved by a majority of the of securities and similar transactions by a
members of the board of directors of the corporation or a subsidiary with an interested
target corporation prior to the time of the stockholder that beneficially owns 15% or
initial acquisition of shares by the acquiring more of a corporation's voting stock, within
person. These significant business three years after the person becomes an
transactions include: interested stockholder, unless:
. a merger, share exchange or . prior to the time the person becomes an
consolidation with, dispositions of interested stockholder, the board of
assets with an aggregate market value directors of the target corporation
over 5% of the total market value of all approved either the business
of the target's assets or all of the target's combination or the transaction which
outstanding shares to, or issuance or will result in the person becoming an
redemption of shares to or from, the interested stockholder;
acquiring person or its affiliates or
associates; . after the completion of the transaction
in which the person becomes an
. termination of 5% or more of the interested stockholder, the interested
Washington-based employees of the stockholder holds at least 85% of the
target corporation over the course of the voting stock of the corporation
five-year period following the acquiring excluding for purposes of determining
person's acquisition of 10% or more of the number of shares outstanding, those
the shares of the target corporation, if shares owned (a) by persons who are
such termination is the result of the both officers and directors, and
acquiring person's acquisition; (b) specific employee benefit plans; or
. the liquidation or dissolution of the . after the person becomes an interested
target corporation pursuant to an stockholder, the business combination
arrangement with an acquiring person; is approved by the target corporation's
board of directors and holders of at least
. a reclassification of securities of the 66 2/3% of the outstanding voting stock,
target corporation pursuant to an excluding shares held by the interested
arrangement with the acquiring person stockholder.
that has the effect of increasing the
proportionate share of voting securities A corporation can elect not to be governed
owned by the acquiring person; or by Section 203, however, Amgen has not
made this election and is therefore governed
. an issuance to the acquiring person, or a by Section 203.
transfer or redemption in favor of the
acquiring person, by the target
corporation of shares, options, warrants
or other rights to acquire shares of the
target corporation if the issuance,
transfer or redemption is not made to all
shareholders of the target corporation
on the same proportional basis.
After the five-year period, certain significant
business transactions may still not occur
unless they comply with certain fair price
provisions of the statute or if it is approved
by disinterested shareholders. The Immunex
board of directors has expressly approved the
112
-----------------------------------------------------------------------------------------------
Immunex Amgen
-----------------------------------------------------------------------------------------------
merger agreement and the voting agreement
so that the restrictions set forth above with
respect to business combinations do not
apply to the merger agreement or the voting
agreement or the transactions contemplated
thereby.
Vote on Certain Under Washington law, the following must Amgen's certificate of incorporation requires
Fundamental be approved by two-thirds of all votes that in the case of "business combinations,"
Issues entitled to be cast by each voting group including mergers, sales and leases of assets,
entitled to vote as a separate group: issuances of securities and similar
(i) merger, (ii) a share exchange, (iii) sale of transactions by Amgen or a subsidiary of
all, or substantially all, of a corporation's Amgen with an interested stockholder that
assets, other than in the ordinary course of beneficially owns 20% or more of Amgen's
business and (iv) a dissolution. A voting stock, the transaction must be
corporation may provide for lower voting approved by 66 2/3% of the outstanding
requirements for these fundamental actions, voting stock, excluding shares held by the
provided that the minimum vote requirement interested stockholder. This requirement
may not be below a majority of all votes must be met at all times and not just during
entitled to be cast. The articles of the first three years after the person becomes
incorporation of Immunex provide that, and interested stockholder. Notwithstanding
subject to the governance agreement, a the foregoing, 66 2/3% approval by the
merger, share exchange, sale of all or Amgen stockholder is not required if:
substantially all of the corporation's assets,
or dissolution must be approved by the . a majority of the directors who are
affirmative vote of a majority of the unaffiliated with the interested
outstanding shares of Immunex entitled to stockholder approve the transaction; or
vote or, if separate voting by voting groups
is required, the transaction must be approved . the transaction complies with specific
by not less than a majority of all the votes pricing and procedural conditions set
entitled to be cast by each voting group. forth in Amgen's certificate of
incorporation.
113
DISSENTERS' RIGHTS
The following is a brief summary of the rights of holders of Immunex common
stock under Chapter 23B.13 of the WBCA to dissent from the merger, receive an
appraisal as to the fair value of their shares of Immunex common stock and to
receive cash equal to the appraised value of their Immunex common stock instead
of receiving the merger consideration. This summary is not exhaustive, and you
should read the applicable sections of Chapter 23B.13, a copy of which is
attached to this joint proxy statement/prospectus as Annex F.
Under Chapter 23B.13, where a proposed merger is to be submitted for
approval at a meeting of shareholders, as in the case of the Immunex special
meeting, the corporation in the notice of the meeting must state that
shareholders are or may be entitled to assert dissenters' rights and include in
the notice a copy of the dissenters' rights statute. This joint proxy
statement/prospectus constitutes notice to the holders of common stock and a
copy of the dissenters' rights statute is attached as Annex F.
If you are contemplating the possibility of exercising your dissenters'
rights of appraisal in connection with the merger, you should carefully review
the text of Annex F, particularly the procedural steps required to perfect
dissenters' rights, which are complex. We also encourage you to consult your
legal counsel, at your expense, before attempting to exercise your dissenters'
rights. If you do not fully and precisely satisfy the procedural requirements
of Washington law, you may lose your dissenters' rights. Immunex will not give
you any notice other than as described in this joint proxy statement/prospectus
as required by Washington law.
Requirements for Exercising Dissenters' Rights
To preserve your right if you wish to exercise your statutory dissenters'
rights, you must:
. deliver to Immunex before the special meeting written notice of your
intent to exercise your dissenters' rights of appraisal and demand
payment for your shares of Immunex common stock if the merger is
completed, which notice must be separate from your proxy. Your vote
against the merger agreement alone will not constitute written notice of
your intent to exercise your dissenters' rights;
. not vote your shares in favor of the merger agreement; and
. follow the statutory procedures for perfecting dissenters' rights under
Washington law, which are described below under "--Appraisal Procedures."
If you do not satisfy each of the requirements, you cannot exercise
dissenters' rights and, if the merger agreement is approved by Immunex
shareholders and the merger occurs, your shares of Immunex common stock will be
converted into the right to receive the merger consideration pursuant to the
terms of the merger agreement.
Vote
Your shares must either not be voted at the Immunex special meeting or must
be voted against the approval of the merger agreement. Submitting a properly
signed proxy card that is received prior to the vote at the special meeting
that does not direct how the shares of Immunex common stock represented by that
proxy are to be voted will constitute a vote in favor of the merger and a
waiver of your statutory dissenters' rights.
Notice
Your written notice of your intent to exercise dissenters' rights must be
filed with Immunex at: Immunex Corporation, 51 University Street, Seattle, WA
98101-2936 Attn: Corporate Secretary.
It is important that Immunex receive all written notices before the special
meeting. Your written notice to demand payment should specify your name and
mailing address, the number of shares of Immunex common stock you own, and that
you intend to demand cash payment for your Immunex shares if the merger
agreement is approved.
114
Appraisal Procedures
If the merger agreement is approved by Immunex shareholders, within ten days
after the approval, Immunex will send written notice regarding the proper
appraisal procedures to all shareholders who have given written notice under
the dissenters' rights provisions and have not voted in favor of the merger as
described above. The notice will contain:
. the address where the demand for payment and certificates representing
shares of Immunex common stock must be sent and the date by which
certificates must be deposited;
. the date on which your payment demand must be received by Immunex, which
date will not be fewer than 30 nor more than 60 days after the date the
written notice is delivered to you;
. a form for demanding payment that states the date of the first
announcement to the news media or to shareholders of the proposed merger
(December 17, 2001) and requires certification from the person asserting
dissenters' rights of whether or not the date the person acquired
beneficial ownership of Immunex common stock was before the date of the
first announcement; and
. a copy of Chapter 23B.13 of the WBCA.
If you wish to assert dissenters' rights, you must demand payment, certify
that you acquired beneficial ownership of your shares before December 17, 2001,
and deposit your Immunex certificates within the specified number of days after
the notice is given. If you fail to make demand for payment and deposit your
Immunex certificates within the time period set forth in the written notice,
you will lose the right to demand appraisal for your shares under the
dissenters' rights provisions, even if you filed a timely notice of intent to
demand payment.
If Immunex does not consummate the merger within 60 days after the date set
for demanding payment, Immunex will return all deposited certificates. If
Immunex does not return the deposited certificates within 60 days after the
date set, you may notify Immunex in writing of your estimate of the fair value
of your Immunex common stock plus the amount of interest due and demand payment
of your estimated amount.
Except as provided below, within 30 days after the later of the effective
time of the merger or the receipt by Immunex of a valid demand for payment,
Immunex will remit to each dissenting shareholder who complied with the
requirements of Washington law the amount Immunex estimates to be the fair
value of the shareholder's Immunex common stock, plus accrued interest. Immunex
will include the following information with the payment:
. financial data relating to Immunex, including: a balance sheet, an
income statement, and a statement of changes in shareholders' equity as
of and for a fiscal year not more than sixteen months before the date of
payment, and the latest available interim financial statements, if any;
. an estimate by Immunex of the fair value of the shares and a brief
description of the method used to reach that estimate;
. an explanation by Immunex of how the interest was calculated;
. a brief description of the procedures to be followed by shareholders in
demanding supplemental payment if such shareholders are dissatisfied
with the estimate of the fair value of the shares determined by Immunex;
and
. a copy of Chapter 23B.13 of the WBCA.
For dissenting shareholders who were not the beneficial owners of their
shares of Immunex common stock before December 17, 2001, Immunex may withhold
payment and instead send a statement setting forth its estimate of the fair
value of their shares and offering to pay such amount, with interest, as a
final settlement of the dissenting shareholder's demand for payment. Payment of
the fair value of these after-acquired shares may be conditional upon the
dissenting shareholder's waiver of other rights under Chapter 23B.13 of the
WBCA.
115
Immunex will also include in such statement an explanation of how it estimated
the fair value of the shares and of how the interest was calculated and a
notice of the dissenter's right to proceed with a judicial determination of the
fair value of the shares if such dissenting shareholder is dissatisfied with
the estimate of the fair value of the shares determined by Immunex.
If you are dissatisfied with the payment of Immunex or offer or believe that
the interest due is incorrectly calculated, you may, within 30 days of the
payment or offer for payment, notify Immunex in writing, and demand payment of,
your estimate of the fair value of your shares and the amount of interest due.
If any dissenting shareholder's demand for payment is not settled within 60
days after receipt by Immunex of his or her payment demand, Washington law
requires that Immunex commence a proceeding in King County Superior Court and
petition the court to determine the fair value of the shares and accrued
interest, naming all the dissenting shareholders whose demands remain unsettled
as parties to the proceeding. If Immunex does not commence the proceeding
within the 60-day period, it will pay each dissenter whose demand remains
unsettled the amount demanded.
The court may appoint one or more appraisers to receive evidence and make
recommendations to the court as to the amount of the fair value of the shares.
The fair value of the shares as determined by the court is binding on all
dissenting shareholders and may be less than, equal to or greater than the
value of the merger consideration to be issued to non-dissenting shareholders
for their Immunex common stock under the terms of the merger agreement if the
merger is consummated. If the court determines that the fair value of the
shares plus interest is in excess of any amount remitted by Immunex, then the
court will enter a judgment for cash in favor of the dissenting shareholders in
an amount by which the value determined by the court, plus interest, exceeds
the amount previously remitted. For dissenting shareholders who were not the
beneficial owners of their shares of Immunex common stock before December 17,
2001 and for which Immunex withheld payment pursuant to Chapter 23B.13.270 of
the WBCA, the court may enter judgment for the fair value, plus accrued
interest, of the dissenting shareholders after-acquired shares.
The court will also determine the costs and expenses of the court proceeding
and assess them against Immunex, except that the court may assess part or all
of the costs against any dissenting shareholders whose actions in demanding
payment are found by the court to be arbitrary, vexatious or not in good faith.
If the court finds that Immunex did not substantially comply with the relevant
provisions of Chapters 23B.13.200 through 23B.13.280 of the WBCA, the court may
also assess against Immunex any fees and expenses of attorneys or experts that
the court deems equitable. The court may also assess those fees and expenses
against any party if the court finds that the party has acted arbitrarily,
vexatiously or not in good faith in bringing the proceedings. If the court
finds that the services of counsel for any dissenter were of substantial
benefit to other dissenters similarly situated, and that the fees for those
services should not be assessed against the corporation, the court may award to
these counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefited.
A shareholder of record may assert dissenters' rights as to fewer than all
of the shares registered in the shareholder's name only if he or she dissents
with respect to all shares beneficially owned by any one person and notifies
Immunex in writing of the name and address of each person on whose behalf he or
she asserts dissenters' rights. The rights of the partially dissenting
shareholder are determined as if the shares as to which he or she dissents and
his or her other shares were registered in the names of different shareholders.
Beneficial owners of Immunex common stock who desire to exercise dissenters'
rights themselves must obtain and submit the registered owner's written consent
at or before the time they file the notice of intent to demand fair value, and
the beneficial owner must do so with respect to all shares of which such
shareholder is the beneficial shareholder or over which such shareholder has
power to direct the vote.
For purposes of Washington law, "fair value" means the value of Immunex
common stock immediately before the effective time of the merger, excluding any
appreciation or depreciation in anticipation of the merger, unless that
exclusion would be inequitable. Under Chapter 23B.13.020 of the WBCA, an
Immunex shareholder has no right, at law or in equity, to set aside the
approval of the merger or the consummation of the merger except if the approval
or consummation fails to comply with the procedural requirements of Chapter
23B.13 of the WBCA, the articles of incorporation or bylaws of Immunex or was
fraudulent with respect to that shareholder or Immunex.
116
LEGAL MATTERS
The legality of Amgen common stock offered by this joint proxy
statement/prospectus will be passed upon for Amgen by its counsel, Latham &
Watkins. Certain United States federal income tax consequences of the merger
will be passed upon for Amgen by Latham & Watkins and for Immunex by Skadden,
Arps, Slate, Meagher & Flom LLP. Certain attorneys of Latham & Watkins and
their families own beneficial interests in less than 0.1% of the outstanding
shares of Amgen common stock and an attorney of Latham & Watkins receives
certain contractual payments based on certain geographic product sales.
EXPERTS
The consolidated financial statements and schedule of Amgen Inc. appearing
in Amgen's Annual Report (Form 10-K) for the year ended December 31, 2000, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements and schedule are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
The consolidated financial statements and schedule of Immunex Corporation
appearing in the Immunex Annual Report (Form 10-K) for the year ended December
31, 2000, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements and schedule are incorporated
herein by reference in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
Representatives of Ernst & Young LLP, independent auditors, are expected to
be present at the Amgen special meeting and the Immunex special meeting, where
they will have the opportunity to make a statement if they desire to do so and
are expected to be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
The time for Amgen stockholders to submit proposals for inclusion in Amgen's
proxy statement for Amgen's 2002 annual meeting of stockholders in accordance
with Rule 14a-8 under the Securities Exchange Act of 1934 has passed.
Accordingly, no new stockholder proposals may be submitted to Amgen for
inclusion in Amgen's proxy statement for Amgen's 2002 annual meeting of
stockholders. Amgen's bylaws contain an advance notice provision with respect
to matters to be brought at an annual meeting of stockholders, and not included
in Amgen's proxy statement. If you would like to nominate a director or bring
any other business before the stockholders at the 2002 annual meeting, you must
comply with the procedures contained in Amgen's bylaws and you must notify
Amgen in writing and such notice must be delivered to or received by Amgen's
Secretary no later than February 14, 2002.
Immunex will hold an annual meeting in the year 2002 only if the merger has
not already been completed. The time for Immunex shareholders to submit
proposals for inclusion in the proxy statement for the Immunex 2002 meeting of
shareholders in accordance with Rule 14a-8 under the Securities Exchange Act of
1934 has passed. Accordingly, no new shareholder proposals may be submitted to
Immunex for inclusion in the Immunex proxy statement for the Immunex 2002
annual meeting of shareholders. The bylaws of Immunex contain an advance notice
provision with respect to matters to be brought at an annual meeting of
shareholders and not included in the Immunex proxy statement. If you would like
to nominate a director or bring any other business before the shareholders at
the 2002 annual meeting, you must comply with the procedures contained in the
Immunex bylaws and you must notify Immunex in writing and such notice must be
delivered to or received by the Secretary of Immunex no later than March 18,
2002.
117
WHERE YOU CAN FIND MORE INFORMATION
Amgen and Immunex file annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy these
reports, statements or other information filed by either Amgen or Immunex at
the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. The SEC filings of Amgen and Immunex are also available
to the public from commercial document retrieval services and at the Web site
maintained by the SEC at http://www.sec.gov.
Amgen has filed a registration statement on Form S-4 to register with the
SEC the Amgen common stock to be issued to Immunex shareholders in the merger.
This joint proxy statement/prospectus is a part of that registration statement
and constitutes a proxy statement and a prospectus of Amgen, in addition to
being a proxy statement of Immunex for the Immunex special meeting. The
registration statement, including the attached exhibits and schedules, contains
additional relevant information about Amgen and Immunex and Amgen common stock.
As allowed by SEC rules, this joint proxy statement/prospectus does not contain
all the information you can find in the registration statement or the exhibits
to the registration statement.
The SEC allows Amgen and Immunex to "incorporate by reference" information
into this joint proxy statement/prospectus. This means that Amgen and Immunex
can disclose important information to you by referring you to another document
filed separately with the SEC. The information incorporated by reference is
considered to be a part of this joint proxy statement/prospectus, except for
any information that is superseded by information that is included directly in
this joint proxy statement/prospectus or incorporated by reference subsequent
to the date of this joint proxy statement/prospectus.
This joint proxy statement/prospectus incorporates by reference the
documents listed below that Amgen and Immunex have previously filed with the
SEC. They contain important information about Amgen and Immunex and their
financial condition. The following documents, which were filed by Amgen with
the SEC, are incorporated by reference into this joint proxy
statement/prospectus:
. annual report of Amgen on Form 10-K for the fiscal year ended December
31, 2000, filed with the SEC on March 7, 2001;
. quarterly report of Amgen on Form 10-Q for the fiscal quarter ended
March 31, 2001, filed with the SEC on May 14, 2001;
. quarterly report of Amgen on Form 10-Q for the fiscal quarter ended June
30, 2001, filed with the SEC on July 27, 2001;
. quarterly report of Amgen on Form 10-Q for the fiscal quarter ended
September 30, 2001, filed with the SEC on October 26, 2001;
. current report of Amgen on Form 8-K dated December 16, 2001, filed with
the SEC on December 17, 2001; and
. the description of Amgen's preferred share purchase rights, contained in
the Forms 8-K filed with the SEC on February 28, 1997 and December 18,
2000, and any amendment or report filed with the SEC for the purpose of
updating the description.
The following documents, which were filed by Immunex with the SEC, are
incorporated by reference into this joint proxy statement/prospectus:
. annual report of Immunex on Form 10-K for the fiscal year ended December
31, 2000, filed with the SEC on March 16, 2001;
. quarterly report of Immunex on Form 10-Q for the fiscal quarter ended
March 31, 2001, filed with the SEC on May 11, 2001;
118
. quarterly report of Immunex on Form 10-Q for the fiscal quarter ended
June 30, 2001, filed with the SEC on August 14, 2001;
. quarterly report of Immunex on Form 10-Q for the fiscal quarter ended
September 30, 2001, filed with the SEC on November 13, 2001;
. current report of Immunex on Form 8-K dated March 2, 2001, filed with
the SEC on March 5, 2001;
. current report of Immunex on Form 8-K dated November 6, 2001, filed with
the SEC on November 13, 2001;
. current report of Immunex on Form 8-K dated December 17, 2001, filed
with the SEC on December 17, 2001;
. current report of Immunex on Form 8-K dated January 1, 2002, filed with
the SEC on January 18, 2002; and
. the description of the common stock of Immunex contained in its
registration statement on Form 8-A/A filed with the SEC on August 1,
1993, and any amendment or report filed with the SEC for the purpose of
updating the description.
In addition, Amgen and Immunex incorporate by reference additional documents
that either may file with the SEC pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act between the date of this joint proxy
statement/prospectus and the dates of the Amgen special meeting and the Immunex
special meeting, respectively. These documents include periodic reports, such
as annual reports on Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K, as well as proxy statements.
Amgen and Immunex also incorporate by reference the following additional
documents:
. the merger agreement attached to this joint proxy statement/prospectus
as Annex A;
. the shareholder voting agreement attached to this joint proxy
statement/prospectus as Annex B;
. the stockholders' rights agreement attached to this joint proxy
statement/prospectus as Annex C;
. the amended and restated promotion agreement, which was filed as an
exhibit to the registration statement of which this joint proxy
statement/prospectus is a part; and
. the agreement regarding governance and commercial matters, which was
filed as an exhibit to the registration statement of which this joint
proxy statement/prospectus is a part.
Amgen has supplied all information contained or incorporated by reference
into this joint proxy statement/prospectus relating to Amgen, and Immunex has
supplied all the information relating to Immunex.
You can obtain any of the documents incorporated by reference into this
joint proxy statement/prospectus through Amgen or Immunex, as the case may be,
or from the SEC through the SEC's Internet Web site at the address described
above. Documents incorporated by reference are available from Amgen and Immunex
without charge, excluding any exhibits to those documents, unless the exhibit
is specifically incorporated by reference as an exhibit in this joint proxy
statement/prospectus.
Amgen stockholders and Immunex shareholders may request a copy of
information incorporated by reference into this joint proxy
statement/prospectus by contacting the investor relations department for each
of Amgen and Immunex at:
Amgen Inc. Immunex Corporation
Mail stop 27-5-C 51 University Street
One Amgen Center Drive Seattle, Washington 98101
Thousand Oaks, CA (206) 389-4363
91320-1799 Attn: Investor Relations
(800) 842-6436
Attn: Investor Relations
119
In addition, you may obtain copies of the information relating to Amgen,
without charge, by sending an e-mail to investor.relations@Amgen.com.
Furthermore, you may obtain copies of some of this information by making a
request through the Amgen investor relations Web site,
http://www.Amgen.com/investor/litRequest.html.
In addition, you may obtain copies of the information relating to Immunex,
without charge, by sending an e-mailto ImmunexIR@immunex.com. Furthermore, you
may obtain copies of some of this information by making a request through the
Immunex investor relations Web site, http://www.Immunex.com/investor_fs2.html.
In order for you to receive timely delivery of the documents in advance of
the Amgen and Immunex special meetings, Amgen or Immunex, respectively, should
receive your request no later than , 2002.
We have not authorized anyone to give any information or make any
representation about the merger or our companies that is different from, or in
addition to, that contained in this joint proxy statement/prospectus or in any
of the materials that we have incorporated into this joint proxy
statement/prospectus. Therefore, if anyone does give you information of this
sort, you should not rely on it. If you are in a jurisdiction where offers to
exchange or sell, or solicitations of offers to exchange or purchase, the
securities offered by this joint proxy statement/prospectus or the solicitation
of proxies is unlawful, or if you are a person to whom it is unlawful to direct
these types of activities, then the offer presented in this joint proxy
statement/prospectus does not extend to you. The information contained in this
joint proxy statement/prospectus is accurate only as of the date of this
document unless the information specifically indicates that another date
applies.
120
ANNEX A
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
AMGEN INC.,
AMS ACQUISITION INC.
AND
IMMUNEX CORPORATION
Dated as of December 16, 2001
TABLE OF CONTENTS
ARTICLE 1. The Merger................................................................. A-1
Section 1.1 The Merger.......................................................... A-1
Section 1.2 Closing............................................................. A-1
Section 1.3 Effect of the Merger................................................ A-1
Section 1.4 Articles of Incorporation; Bylaws................................... A-2
Section 1.5 Directors and Officers of the Surviving Corporation................. A-2
Section 1.6 Directors of Parent................................................. A-2
ARTICLE 2. Conversion of Securities; Exchange of Certificates........................ A-2
Section 2.1 Conversion of Securities............................................ A-2
Section 2.2 Exchange of Certificates............................................ A-3
Section 2.3 Stock Transfer Books................................................ A-6
Section 2.4 Stock Options....................................................... A-6
Section 2.5 Employee Stock Purchase Plan........................................ A-6
Section 2.6 Employment Agreement................................................ A-7
Section 2.7 AHP Agreements...................................................... A-7
Section 2.8 Role of Seattle and Rhode Island Following the Merger............... A-7
ARTICLE 3. Conversion of Securities; Exchange of Certificates......................... A-7
Section 3.1 Organization and Qualification; Subsidiaries........................ A-7
Section 3.2 Articles of Incorporation and Bylaws; Corporate Books and Records... A-8
Section 3.3 Capitalization...................................................... A-8
Section 3.4 Authority........................................................... A-9
Section 3.5 No Conflict; Required Filings and Consents.......................... A-9
Section 3.6 Permits; Compliance With Law........................................ A-10
Section 3.7 SEC Filings; Financial Statements................................... A-10
Section 3.8 Absence of Certain Changes or Events................................ A-11
Section 3.9 Employee Benefit Plans.............................................. A-11
Section 3.10 Labor and Other Employment Matters.................................. A-13
Section 3.11 Tax Treatment....................................................... A-13
Section 3.12 Contracts........................................................... A-14
Section 3.13 Litigation.......................................................... A-14
Section 3.14 Environmental Matters............................................... A-14
Section 3.15 Intellectual Property............................................... A-15
Section 3.16 Taxes............................................................... A-15
Section 3.17 Insurance........................................................... A-16
Section 3.18 Properties.......................................................... A-16
Section 3.19 Regulatory Compliance............................................... A-16
Section 3.20 Opinion of Financial Advisor........................................ A-17
Section 3.21 Vote Required....................................................... A-17
Section 3.22 Brokers............................................................. A-17
ARTICLE 4. Representations and Warranties of Parent and Merger Sub.................... A-17
Section 4.1 Organization and Qualification; Subsidiaries........................ A-17
Section 4.2 Certificate of Incorporation and Bylaws; Corporate Books and Records A-18
Section 4.3 Capitalization...................................................... A-18
Section 4.4 Authority Relative to This Agreement................................ A-19
Section 4.5 No Conflict; Required Filings and Consents.......................... A-19
Section 4.6 Permits; Compliance With Law........................................ A-20
Section 4.7 SEC Filings; Financial Statements................................... A-20
Section 4.8 Absence of Certain Changes or Events................................ A-20
A-i
Section 4.9 Litigation................................................... A-21
Section 4.10 Environmental Matters........................................ A-21
Section 4.11 Intellectual Property........................................ A-21
Section 4.12 Regulatory Compliance........................................ A-21
Section 4.13 Tax Treatment................................................ A-21
Section 4.14 Ownership of Merger Sub; No Prior Activities................. A-22
Section 4.15 Opinion of Financial Advisor................................. A-22
Section 4.16 Vote Required................................................ A-22
Section 4.17 Brokers...................................................... A-22
Section 4.18 Sufficient Funds............................................. A-22
ARTICLE 5. Covenants........................................................... A-22
Section 5.1 Conduct of Business by the Company Pending the Closing....... A-22
Section 5.2 Conduct of Business by Parent Pending the Closing............ A-25
Section 5.3 Cooperation.................................................. A-25
Section 5.4 Tax-Free Reorganization Treatment............................ A-26
Section 5.5 Control of Other Party's Business............................ A-26
ARTICLE 6. Additional Agreements............................................... A-26
Section 6.1 Registration Statement; Proxy Statement...................... A-26
Section 6.2 Shareholders' Meetings....................................... A-27
Section 6.3 Access to Information; Confidentiality....................... A-28
Section 6.4 No Solicitation of Transactions.............................. A-28
Section 6.5 Appropriate Action; Consents; Filings........................ A-30
Section 6.6 Certain Notices.............................................. A-31
Section 6.7 Public Announcements......................................... A-32
Section 6.8 Nasdaq Listing............................................... A-32
Section 6.9 Employee Benefit Matters..................................... A-32
Section 6.10 Indemnification of Directors and Officers.................... A-32
Section 6.11 Plan of Reorganization....................................... A-33
Section 6.12 Affiliate Letters............................................ A-33
Section 6.13 Section 16 Matters........................................... A-33
Section 6.14 Stock Award Matters.......................................... A-34
Section 6.15 Restructure of Transaction................................... A-34
ARTICLE 7. Closing Conditions.................................................. A-34
Section 7.1 Conditions to Obligations of Each Party Under This Agreement. A-34
Section 7.2 Additional Conditions to Obligations of Parent and Merger Sub A-35
Section 7.3 Additional Conditions to Obligations of the Company.......... A-36
ARTICLE 8. Termination, Amendment and Waiver................................... A-36
Section 8.1 Termination.................................................. A-36
Section 8.2 Effect of Termination........................................ A-37
Section 8.3 Amendment.................................................... A-38
Section 8.4 Waiver....................................................... A-39
Section 8.5 Fees and Expenses............................................ A-39
ARTICLE 9. General Provisions.................................................. A-39
Section 9.1 Non-Survival of Representations and Warranties............... A-39
Section 9.2 Notices...................................................... A-39
Section 9.3 Certain Definitions.......................................... A-40
Section 9.4 Terms Defined Elsewhere...................................... A-45
Section 9.5 Headings..................................................... A-47
Section 9.6 Severability................................................. A-47
A-ii
Section 9.7 Entire Agreement............................................... A-47
Section 9.8 Assignment..................................................... A-47
Section 9.9 Parties in Interest............................................ A-47
Section 9.10 Mutual Drafting................................................ A-47
Section 9.11 Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury A-47
Section 9.12 Specific Performance........................................... A-48
Section 9.13 Disclosure..................................................... A-48
Section 9.14 Counterparts................................................... A-48
Exhibit 6.12 Form of Affiliate Letter
Exhibit 7.2(c)(i) Parent Tax Matters Certificate
Exhibit 7.2(c)(ii) Company Tax Matters Certificate
A-iii
AGREEMENT AND PLAN OF MERGER, dated as of December 16, 2001 (this
"Agreement"), by and among Amgen Inc., a Delaware corporation ("Parent"), AMS
Acquisition Inc., a Washington corporation and a wholly-owned subsidiary of
Parent ("Merger Sub"), and Immunex Corporation, a Washington corporation (the
"Company").
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the
Company have approved the merger of Merger Sub with and into the Company (the
"Merger") upon the terms and subject to the conditions of this Agreement and in
accordance with the Business Corporation Act of the State of Washington (the
"WBCA");
WHEREAS, the respective Boards of Directors of Parent and the Company have
determined that the Merger is in furtherance of and consistent with their
respective business strategies and is in the best interest of their respective
shareholders, and Parent has approved this Agreement and the Merger as the sole
shareholder of Merger Sub;
WHEREAS, as a condition to and inducement to Parent's and Merger Sub's
willingness to enter into this Agreement, simultaneously with the execution of
this Agreement, American Home Products Corporation, a Delaware corporation and
shareholder of the Company ("AHP"), is entering into a Shareholder Voting
Agreement with Parent and Merger Sub (the "Voting Agreement");
WHEREAS, for federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, certain capitalized terms used herein are defined in Section 9.3;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE 1.
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to satisfaction or
waiver of the conditions set forth in this Agreement, and in accordance with
the WBCA, at the Effective Time, Merger Sub shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence of Merger
Sub shall cease and the Company shall continue as the surviving corporation of
the Merger (the "Surviving Corporation").
Section 1.2 Closing. The closing of the Merger (the "Closing") shall take
place on the first Business Day after the satisfaction or waiver (subject to
applicable Law) of the conditions (excluding conditions that, by their nature,
cannot be satisfied until the Closing Date) set forth in Article 7, unless this
Agreement has been theretofore terminated pursuant to its terms or unless
another time or date is agreed to in writing by the parties hereto (the actual
date of the Closing being referred to herein as the "Closing Date"). The
Closing shall be held at the offices of Latham & Watkins, 633 West Fifth
Street, Suite 4000, Los Angeles, California 90071, unless another place is
agreed to in writing by the parties hereto. As soon as practicable after the
Closing Date, the parties hereto shall cause the Merger to be consummated by
filing articles of merger relating to the Merger (the "Articles of Merger")
with the Secretary of State of the State of Washington, in such form as
required by, and executed in accordance with the relevant provisions of, the
WBCA (the date and time of such filing, or if another date and time is
specified in such filing, such specified date and time, being the "Effective
Time").
Section 1.3 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the WBCA.
Without limiting the generality of the foregoing, at the Effective Time,
A-1
except as otherwise provided herein, all the property, rights, privileges,
powers and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger
Sub shall become the debts, liabilities and duties of the Surviving Corporation.
Section 1.4 Articles of Incorporation; Bylaws.
(a) Articles of Incorporation. At the Effective Time, the Articles of
Incorporation of the Surviving Corporation shall be amended in their entirety
to read as the Articles of Incorporation of Merger Sub, until thereafter
changed or amended as provided therein or by applicable Law, except that
Article I thereof shall be amended to read as follows: "The name of the
Corporation is Immunex Corporation." Such Articles shall not be inconsistent
with Section 6.10.
(b) Bylaws. At the Effective Time, the Bylaws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Bylaws of the Surviving
Corporation, until thereafter changed or amended as provided therein or by
applicable Law. Such Bylaws shall not be inconsistent with Section 6.10.
Section 1.5 Directors and Officers of the Surviving Corporation. The
directors of Merger Sub immediately prior to the Effective Time shall be the
initial directors of the Surviving Corporation, each to hold office in
accordance with the Articles of Incorporation and Bylaws of the Surviving
Corporation. The officers of Merger Sub immediately prior to the Effective Time
shall be the initial officers of the Surviving Corporation, each to hold office
in accordance with the Articles of Incorporation and Bylaws of the Surviving
Corporation.
Section 1.6 Directors of Parent. At or prior to the Effective Time, the
Board of Directors of Parent shall take all action necessary so that, effective
immediately following the Effective Time, Edward V. Fritzky shall be appointed
to the Board of Directors of Parent. If at the Effective Time Parent has
multiple classes of directors, Parent shall take all action reasonably
necessary, subject to applicable Law, to appoint Mr. Fritzky to the class of
directors with the longest remaining term as of the Effective Time, provided,
that Parent shall not be required to request that an incumbent director of
Parent switch classes.
ARTICLE 2.
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.1 Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Merger Sub, the Company or the
holders of any of the following securities:
(a) Conversion Generally. Each share of common stock, par value $0.01 per
share, of the Company ("Company Common Stock") issued and outstanding
immediately prior to the Effective Time (other than any shares of Company
Common Stock to be canceled pursuant to Section 2.1(b) and dissenting shares
referred to in Section 2.1(e)) shall be converted, subject to Section 2.2(e),
into the right to receive (i) 0.440 (the "Exchange Ratio") of a share of common
stock, par value $0.0001 per share ("Parent Common Stock"), of Parent (the
"Common Stock Consideration") and (ii) $4.50 in cash (the "Cash Consideration,"
and together with the Common Stock Consideration, the "Merger Consideration").
All such shares of Company Common Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and each
certificate previously representing any such shares shall thereafter represent
the right to receive the Merger Consideration payable in respect of such shares
of Company Common Stock.
(b) Parent-Owned Shares. All shares of Company Common Stock owned by Parent
or any of its Subsidiaries shall be cancelled and retired and shall cease to
exist and no Merger Consideration or other consideration shall be delivered in
exchange therefor.
A-2
(c) Merger Sub. Each share of common stock of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into and
be exchanged for one newly and validly issued, fully paid and nonassessable
share of common stock of the Surviving Corporation.
(d) Change in Shares. If, between the date of this Agreement and the
Effective Time, the outstanding shares of Parent Common Stock or Company Common
Stock shall have been changed into, or exchanged for, a different number of
shares or a different class, by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares,
the Exchange Ratio and the Option Exchange Ratio shall be correspondingly
adjusted to provide the holders of Company Common Stock and Company Options the
same economic effect as contemplated by this Agreement prior to such event.
(e) Dissenting Shares. Notwithstanding anything in this Agreement to the
contrary, with respect to each share of Company Common Stock as to which the
holder thereof shall have properly complied with the provisions of Chapter
23B.13 of the WBCA as to dissenters' rights (each, a "Dissenting Share"), if
any, such holder shall be entitled to payment, solely from the Surviving
Corporation, of the appraisal value of the Dissenting Shares to the extent
permitted by and in accordance with the provisions of Chapter 23B.13 of the
WBCA; provided, however, that (i) if any holder of Dissenting Shares, under the
circumstances permitted by and in accordance with the WBCA, affirmatively
withdraws such holder's demand for appraisal of such Dissenting Shares, (ii) if
any holder of Dissenting Shares fails to establish such holder's entitlement to
dissenters' rights as provided in the WBCA or (iii) if any holder of Dissenting
Shares takes or fails to take any action the consequence of which is that such
holder is not entitled to payment for such holder's shares under the WBCA, such
holder or holders (as the case may be) shall forfeit the right to appraisal of
such shares of Company Common Stock and such shares of Company Common Stock
shall thereupon be deemed to have been converted, as of the Effective Time,
into and represent the right to receive the Merger Consideration payable in
respect of such shares of Company Common Stock. The Company shall give Parent
prompt notice of any demands received by the Company for appraisal of shares of
Company Common Stock, and Parent shall have the right to participate in all
negotiations and proceedings with respect to such demands. The Company shall
not settle, make any payments with respect to, or offer to settle, any claim
with respect to Dissenting Shares without the written consent of Parent.
(f) Associated Rights. References in this Agreement to Parent Common Stock
shall include, unless the context requires otherwise, the associated Preferred
Share Purchase Rights issued pursuant to the Amended and Restated Rights
Agreement dated as of December 12, 2000 between Parent and American Stock
Transfer and Trust Company, as Rights Agent (the "Rights Plan").
Section 2.2 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, Parent shall deposit, or
shall cause to be deposited, with American Stock Transfer and Trust Company or
another bank or trust company designated by Parent and reasonably satisfactory
to the Company (the "Exchange Agent"), for the benefit of the holders of shares
of Company Common Stock, for exchange, in accordance with this Article 2,
through the Exchange Agent, sufficient cash and certificates representing
shares of Parent Common Stock to make all deliveries pursuant to this Article
2. Parent agrees to make available to the Exchange Agent, from time to time as
needed, cash sufficient to pay any dividends and other distributions pursuant
to Section 2.2(c). The Exchange Agent shall, pursuant to irrevocable
instructions, deliver the Merger Consideration contemplated to be paid for
shares of Company Common Stock pursuant to this Agreement out of the Exchange
Fund. Except as contemplated by Sections 2.2(c) and 2.2(e) hereof, the Exchange
Fund shall not be used for any other purpose. Any cash and certificates
representing Parent Common Stock deposited with the Exchange Agent (including
the proceeds from sales of Excess Shares in accordance with Section 2.2(e))
shall be referred to as the "Exchange Fund."
(b) Exchange Procedures. Promptly after the Effective Time, Parent shall
instruct the Exchange Agent to mail to each holder of record of a certificate
or certificates which immediately prior to the Effective Time
A-3
represented outstanding shares of Company Common Stock (the "Certificates") (i)
a letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon proper
delivery of the Certificates to the Exchange Agent and shall be in customary
form) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration payable in respect of the
shares of Company Common Stock represented by such Certificates. Upon surrender
of a Certificate for cancellation to the Exchange Agent together with such
letter of transmittal, properly completed and duly executed, and such other
documents as may be required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration payable in respect of the shares of Company Common Stock
represented by such Certificate, cash in lieu of fractional shares of Parent
Common Stock to which such holder is entitled pursuant to Section 2.2(e) and
any dividends or other distributions to which such holder is entitled pursuant
to Section 2.2(c), and the Certificate so surrendered shall forthwith be
canceled. No interest shall be paid or accrued on any Cash Consideration, cash
in lieu of fractional shares or on any unpaid dividends and distributions
payable to holders of Certificates. In the event of a transfer of ownership of
shares of Company Common Stock which is not registered in the transfer records
of the Company, the Merger Consideration payable in respect of such shares of
Company Common Stock may be paid to a transferee if the Certificate
representing such shares of Company Common Stock is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer and by evidence that any applicable stock transfer Taxes have been
paid. Until surrendered as contemplated by this Section 2.2, each Certificate
shall be deemed at any time after the Effective Time to represent only the
right to receive upon such surrender the Merger Consideration payable in
respect of the shares of Company Common Stock represented by such Certificate,
cash in lieu of any fractional shares of Parent Common Stock to which such
holder is entitled pursuant to Section 2.2(e) and any dividends or other
distributions to which such holder is entitled pursuant to Section 2.2(c).
(c) Distributions with Respect to Unexchanged Shares of Parent Common
Stock. No dividends or other distributions declared or made with respect to
shares of Parent Common Stock, with a record date after the Effective Time,
shall be paid to the holder of any unsurrendered Certificate, and no cash
payment in lieu of fractional shares of Parent Common Stock shall be paid to
any such holder pursuant to Section 2.2(e), unless and until the holder of such
Certificate shall surrender such Certificate. Subject to the effect of escheat,
Tax or other applicable Laws, following surrender of any such Certificate,
there shall be paid to such holder of the certificates representing whole
shares of Parent Common Stock issuable in exchange therefor, without interest,
(i) promptly, the amount of any cash due pursuant to Section 2.1 and cash
payable in lieu of fractional shares of Parent Common Stock to which such
holder is entitled pursuant to Section 2.2(e) and the amount of dividends or
other distributions with a record date at or after the Effective Time
theretofore paid with respect to such whole shares of Parent Common Stock and
(ii) at the appropriate payment date, the amount of dividends or other
distributions, with a record date at or after the Effective Time but prior to
such surrender and a payment date subsequent to such surrender, payable with
respect to such whole shares of Parent Common Stock.
(d) Further Rights in Company Common Stock. The Merger Consideration issued
upon conversion of a share of Company Common Stock in accordance with the terms
hereof (including any dividends or distributions pursuant to Section 2.2(c) or
Section 2.2(e)) shall be deemed to have been issued in full satisfaction of all
rights pertaining to such share of Company Common Stock.
(e) Fractional Shares. No certificates or scrip representing fractional
shares of Parent Common Stock shall be issued upon the surrender for exchange
of Certificates, no dividend or distribution with respect to Parent Common
Stock shall be payable on or with respect to any fractional share and such
fractional share interests shall not entitle the owner thereof to any rights of
a stockholder of Parent.
(i) As promptly as practicable following the Effective Time, the Exchange
Agent shall determine the closest number of whole shares of Parent Common
Stock represented by the aggregate of the fractional share interests in
Parent Common Stock to which all holders of Company Common Stock are
entitled (the "Excess Shares"). As soon after the Effective Time as
practicable, the Exchange Agent, as agent for such
A-4
holders of Parent Common Stock, shall sell the Excess Shares at then
prevailing prices on Nasdaq, all in the manner provided in this Section
2.2(e).
(ii) The sale of the Excess Shares by the Exchange Agent shall be
executed on Nasdaq through one or more member firms of Nasdaq and shall be
executed in round lots to the extent practicable. Until the net proceeds of
any such sale or sales have been distributed to such holders of Company
Common Stock, the Exchange Agent shall hold such proceeds in trust for such
holders of Company Common Stock as part of the Exchange Fund. All
commissions, transfer Taxes and other out-of-pocket transaction costs of the
Exchange Agent incurred in connection with such sale or sales of Excess
Shares shall be deducted from the Exchange Fund. In addition, the Exchange
Agent's compensation and expenses in connection with such sale or sales
shall be deducted from the Exchange Fund. The Exchange Agent shall determine
the portion of such net proceeds to which each holder of Company Common
Stock shall be entitled, if any, by multiplying the amount of the aggregate
net proceeds by a fraction the numerator of which is the amount of the
fractional share interest to which such holder of Company Common Stock is
entitled (after taking into account all shares of Parent Common Stock to be
issued to such holder) and the denominator of which is the aggregate amount
of fractional share interests to which all holders of Company Common Stock
are entitled.
(iii) As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of Company Common Stock with respect to
any fractional share interests, the Exchange Agent shall promptly pay such
amounts to such holders of Company Common Stock subject to and in accordance
with the terms of this Article 2.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the holders of Company Common Stock for one year after
the Effective Time shall be delivered to Parent, upon demand, and, from and
after such delivery to Parent, any holders of Company Common Stock who have not
theretofore complied with this Article 2 shall thereafter look only to Parent
for the Merger Consideration payable in respect of such shares of Company
Common Stock, any cash in lieu of fractional shares of Parent Common Stock to
which they are entitled pursuant to Section 2.2(e) and any dividends or other
distributions with respect to Parent Common Stock to which they are entitled
pursuant to Section 2.2(c), in each case, without any interest thereon.
(g) No Liability. None of Parent, the Surviving Corporation or the Company
shall be liable to any holder of shares of Company Common Stock for any such
shares of Parent Common Stock (or dividends or distributions with respect
thereto) or cash from the Exchange Fund delivered to a public official pursuant
to any abandoned property, escheat or similar Law.
(h) Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by Parent,
the posting by such person of a bond, in such reasonable amount as Parent may
direct, as indemnity against any claim that may be made against it with respect
to such Certificate, the Exchange Agent shall pay in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration payable in respect of
the shares of Company Common Stock represented by such Certificate, any cash in
lieu of fractional shares of Parent Common Stock to which the holders thereof
are entitled pursuant to Section 2.2(e) and any dividends or other
distributions to which the holders thereof are entitled pursuant to Section
2.2(c), in each case, without any interest thereon.
(i) Withholding. Parent or the Exchange Agent shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of Company Common Stock such amounts as Parent or the
Exchange Agent are required to deduct and withhold under the Code, or any Tax
Law, with respect to the making of such payment. To the extent that amounts are
so withheld by Parent or the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
Company Common Stock in respect of whom such deduction and withholding was made
by Parent or the Exchange Agent.
A-5
(j) Investment of Exchange Fund. The Exchange Agent shall invest any cash
included in the Exchange Fund, as directed by Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Parent upon termination of the Exchange Fund pursuant to Section 2.2(f). In the
event the cash in the Exchange Fund shall be insufficient to fully satisfy all
of the payment obligations to be made by the Exchange Agent hereunder, Parent
shall promptly deposit cash into the Exchange Fund in an amount which is equal
to the deficiency in the amount of cash required to fully satisfy such payment
obligations.
Section 2.3 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and thereafter, there shall be no
further registration of transfers of shares of Company Common Stock theretofore
outstanding on the records of the Company. From and after the Effective Time,
the holders of certificates representing shares of Company Common Stock
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such shares of Company Common Stock except as otherwise
provided herein or by Law. On or after the Effective Time, any Certificates
presented to the Exchange Agent or Parent for any reason shall be converted
into the Merger Consideration payable in respect of the shares of Company
Common Stock represented by such Certificates, any cash in lieu of fractional
shares of Parent Common Stock to which the holders thereof are entitled
pursuant to Section 2.2(e) and any dividends or other distributions to which
the holders thereof are entitled pursuant to Section 2.2(c), without any
interest thereon.
Section 2.4 Stock Options.
(a) At the Effective Time, each Company Option, other than Cancelled Company
Options, then outstanding under any Company Stock Option Plan, whether or not
then exercisable, shall be converted into an option to purchase Parent Common
Stock in accordance with this Section 2.4(a). Each Company Option so converted
shall continue to have, and be subject to, the same terms and conditions
(including vesting schedule) as set forth in the applicable Company Stock
Option Plan and any agreements thereunder immediately prior to the Effective
Time, except that, as of the Effective Time, (i) each Company Option shall be
exercisable (or shall become exercisable in accordance with its terms) for that
number of whole shares of Parent Common Stock equal to the product of the
number of shares that were issuable upon exercise of such Company Option
immediately prior to the Effective Time multiplied by 0.52 (the "Option
Exchange Ratio"), rounded down to the nearest whole number of shares of Parent
Common Stock, (ii) the per share exercise price for the shares of Parent Common
Stock issuable upon exercise of such Company Option so converted shall be equal
to the quotient determined by dividing the exercise price per share of Company
Common Stock at which such Company Option was exercisable immediately prior to
the Effective Time by the Option Exchange Ratio, rounded up to the nearest
whole cent, and (iii) each Company Option which (a) is outstanding as of the
date of this Agreement, (b) remains outstanding at the Effective Time, and (c)
constitutes an Accelerated Company Option immediately prior to the Effective
Time, shall be fully vested and exercisable as to all shares of Parent Common
Stock subject thereto. Notwithstanding the foregoing, the conversion of any
Company Options which are "incentive stock options," within the meaning of
Section 422 of the Code, into options to purchase Parent Common Stock shall be
made so as not to constitute a "modification" of such Company Options within
the meaning of Section 424 of the Code.
(b) At the Effective Time, each Cancelled Company Option then outstanding
under any Company Stock Option Plan shall be cancelled, and in exchange
therefor, shall be converted into an option ("Replacement Option") to purchase
that number of whole shares of Parent Common Stock equal to the product of the
number of shares subject to the related Cancelled Company Option multiplied by
0.4, rounded down to the nearest whole number of shares of Parent Common Stock,
with an exercise price per share equal to the fair market value of a share of
Parent Common Stock as of the date of grant of the Replacement Option (which
shall be as of the close of market on the date of the Effective Time)and
otherwise subject to the terms and conditions (including the vesting schedule)
that were applicable to the related Cancelled Company Option immediately prior
to the Effective Time, and neither the vesting nor exercisability of any
Cancelled Company Option or Replacement Option shall be accelerated except as
provided in the addendums to the Company Stock Option Plans.
Section 2.5 Employee Stock Purchase Plan. At the Effective Time, each
outstanding purchase right under the Immunex Corporation 1999 Employee Stock
Purchase Plan (the "ESPP") shall be assumed by Parent
A-6
in such manner that Parent is a corporation "issuing or assuming a stock option
in a transaction to which Section 424(a) applies" within the meaning of the
Code, and shall be converted into a right to purchase Parent Common Stock in
accordance with this Section 2.5. Each purchase right so assumed and converted
by Parent under this Agreement will continue to have, and be subject to, the
same terms and conditions set forth in the ESPP and the documents governing the
outstanding purchase rights under the ESPP, immediately prior to the Effective
Time, except that the purchase price of shares of Parent Common Stock and the
number of shares of Parent Common Stock to be issued upon the exercise of such
purchase rights shall be adjusted in accordance with the Option Exchange Ratio.
Section 2.6 Employment Agreement. Simultaneously with the execution of
this Agreement, Parent has entered into an employment agreement with Edward V.
Fritzky, which agreement shall become effective upon the Closing.
Section 2.7 AHP Agreements. Simultaneously with the execution of this
Agreement, each of that certain Stockholders' Rights Agreement by and among
Parent, AHP, MDP Holdings, Inc. and Lederle Parenterals, Inc., that certain
Amended and Restated Promotion Agreement by and between Parent and AHP, and
that certain Agreement Regarding Governance and Commercial Matters by and among
Parent, AHP and American Cyanamid Company (collectively, the "AHP Agreements")
has been executed, which agreements shall become effective upon the Closing
(except that the Agreement Regarding Governance and Commercial Matters shall be
effective as of the date hereof).
Section 2.8 Role of Seattle and Rhode Island Following the Merger. Parent
intends to, following the Effective Time, (i) operate and grow the Company's
Seattle, Washington facility as a major research and development center for
Parent, (ii) maintain Seattle, Washington as the primary location for the team
of employees responsible for Enbrel, (iii) complete the Company's Helix Project
research and technology center in Seattle, Washington, in order to consolidate
Parent's Seattle downtown operations to one campus, and (iv) operate and grow
the West Greenwich, Rhode Island biotechnology manufacturing complex as a
large-scale manufacturing complex for biological products.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the corresponding section of the Disclosure Letter
delivered by the Company to Parent prior to the execution of this Agreement
(the "Company Disclosure Letter") (and subject to Section 9.13 hereof), the
Company hereby represents and warrants to Parent as follows:
Section 3.1 Organization and Qualification; Subsidiaries. The Company is a
corporation duly organized and validly existing under the Laws of the State of
Washington and has paid all excise taxes required by the Washington Department
of Revenue. Each Subsidiary of the Company (collectively, the "Company
Subsidiaries") has been duly organized and is validly existing under the Laws
of the State of Washington and has paid all excise taxes required by the
Washington Department of Revenue, except where the failure to be so organized,
existing or to have paid taxes would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. Each of the
Company and the Company Subsidiaries has the requisite power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to have such power, authority and governmental approvals would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Each of the Company and the Company Subsidiaries is
duly qualified or licensed to do business, and is in good standing (but only
with respect to jurisdictions which recognize such concepts) in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing or good
standing necessary, except for such failures to be so qualified or licensed and
in good standing that would not, individually or in the aggregate, reasonably
be expected to have a
A-7
Company Material Adverse Effect. Section 3.1 of the Company Disclosure Letter
sets forth a true and complete list of all of the Company Subsidiaries. Except
with respect to securities of non-affiliates held for investment purposes which
do not constitute more than a 5% percent interest in any such non-affiliate,
neither the Company nor any Company Subsidiary holds an Equity Interest in any
other person.
Section 3.2 Articles of Incorporation and Bylaws; Corporate Books and
Records. The copies of the Company's Articles of Incorporation (the "Company
Articles") and Bylaws (the "Company Bylaws") that are listed as exhibits to the
Company's Form 10-K for the year ended December 31, 2000 are complete and
correct copies thereof as in effect on the date hereof. The Company is not in
violation of any of the provisions of the Company Articles or the Company
Bylaws as of the date hereof and will not, as of the Closing Date, be in
violation of any of the provisions of the Company Articles or Company Bylaws,
as such Company Articles and Company Bylaws may be amended between the date
hereof and the Closing Date. True and complete copies of all minute books of
the Company since January 1, 1999 have been made available by the Company to
Parent.
Section 3.3 Capitalization.
(a) As of the date hereof, the authorized capital stock of the Company
consists of 1,200,000,000 shares of Company Common Stock and 30,000,000 shares
of preferred stock, par value $0.01 per share (the "Company Preferred Stock").
As of December 1, 2001, (i) 544,893,425 shares of Company Common Stock were
issued and outstanding, all of which were validly issued and fully paid,
nonassessable and, except pursuant to Sections 2.01 and 2.02 of the Governance
Agreement, free of preemptive rights, and (ii) 51,062,923 shares of Company
Common Stock were issuable (and such number was reserved for issuance) upon
exercise of Company Options outstanding as of such date. As of the date hereof,
no shares of Company Preferred Stock are issued or outstanding.
(b) Except for outstanding Company Options, outstanding purchase rights
under the ESPP and pursuant to Sections 2.01 and 2.02 of the Governance
Agreement, as of the date hereof, there are no options, warrants or other
rights, agreements, arrangements or commitments of any character to which the
Company or any Company Subsidiary is a party or by which the Company or any
Company Subsidiary is bound relating to the issued or unissued capital stock or
other Equity Interests of the Company or any Company Subsidiary, or obligating
the Company or any Company Subsidiary to issue or sell any shares of its
capital stock or other Equity Interests. From December 1, 2001 to the date of
this Agreement, the Company has not issued any Equity Interests with respect to
Company Common Stock, other than (x) Parent Common Stock issued upon exercise
of Company Stock Options and (y) stock options issued to newly-hired employees
in the ordinary course of business consistent with past practice. The Company
has previously provided Parent with a true and complete list, as of December
15, 2001, of the prices at which outstanding Company Options may be exercised
under the applicable Company Stock Option Plan, the number of Company Options
outstanding at each such price and the vesting schedule of the Company Options.
All shares of Company Common Stock subject to issuance under the Company Stock
Option Plans, upon issuance prior to the Effective Time on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid, nonassessable and, except
pursuant to Sections 2.01 and 2.02 of the Governance Agreement, free of
preemptive rights.
(c) Except as set forth in the Governance Agreement, there are no
outstanding contractual obligations of the Company or any Company Subsidiary
(i) restricting the transfer of, (ii) affecting the voting rights of, (iii)
requiring the repurchase, redemption or disposition of, or containing any right
of first refusal with respect to, (iv) requiring the registration for sale of,
or (v) granting any preemptive or antidilutive right with respect to, any
Company Common Stock or any capital stock of, or other Equity Interests in, any
Company Subsidiary. Each outstanding share of capital stock of each Company
Subsidiary is duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights and is owned, beneficially and of record, by the
Company or another Company Subsidiary free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements,
limitations on the Company's or such other Company Subsidiary's voting rights,
charges and other encumbrances of any nature whatsoever. There are no
outstanding contractual obligations of the Company or any
A-8
Company Subsidiary to make any loan to, or any equity or other investment (in
the form of a capital contribution or otherwise) in, any Company Subsidiary or
any other person, other than guarantees by the Company of any indebtedness or
other obligations of any wholly-owned Company Subsidiary and other than loans
made in the ordinary course consistent with past practice to employees of the
Company and its Subsidiaries. The Company has not adopted a shareholder rights
plan.
Section 3.4 Authority.
(a) The Company has all necessary corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by the Company and the consummation by the Company
of such transactions have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of the Company
and no shareholder votes are necessary to authorize this Agreement or to
consummate such transactions other than, with respect to the Merger, as
provided in Section 3.21. The Board of Directors of the Company, by resolutions
adopted by vote of at least a majority of the Board of Directors of the Company
at a meeting duly called and held at which a quorum was present and acting
throughout, has duly (i) adopted this Agreement and the transactions
contemplated hereby, which adoption has not been rescinded or modified, (ii)
resolved (subject to Section 6.4) to recommend this Agreement and the Merger to
its shareholders for approval and (iii) directed that this Agreement be
submitted to its shareholders for consideration in accordance with this
Agreement. All necessary approvals under the Governance Agreement have been
obtained with respect to the execution and performance by the Company of this
Agreement and the consummation of the Merger. No approval by the Company is
necessary under the Governance Agreement for the execution and performance by
AHP, MDP Holdings, Inc. and Lederle Parenterals, Inc. of the Voting Agreement.
The Company has waived its rights with respect to the Merger under Section
5.1(d) of the Governance Agreement. This Agreement has been duly and validly
executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms.
(b) A majority of the Board of Directors of the Company has approved this
Agreement and the Voting Agreement and the transactions contemplated hereby and
thereby for purposes of Chapter 23B.19 of the WBCA such that the restrictions
set forth in Section 23B.19.040 of the WBCA are not applicable to this
Agreement or the Voting Agreement or the consummation of the transactions
contemplated hereby and thereby, or to the Surviving Corporation or Parent and
their Affiliates or transferees following the Merger. No other State of
Washington takeover statute or similar statute or regulation is applicable to
the Merger.
Section 3.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company do not, and
the performance of this Agreement by the Company will not, (i) conflict with or
violate any provision of the Company Articles, the Company Bylaws, any
equivalent organizational documents of any Company Subsidiary or the Governance
Agreement (assuming the Company Shareholder Approval is obtained), (ii)
assuming that all consents, approvals, authorizations and permits described in
Section 3.5(b) have been obtained and all filings and notifications described
in Section 3.5(b) have been made and any waiting periods thereunder have
terminated or expired, conflict with or violate any Law applicable to the
Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary is bound or affected or (iii) require any
consent or approval under, result in any breach of, any loss of any benefit
under or constitute a change of control or default (or an event which with
notice or lapse of time or both would become a default) under, or give to
others any right of termination, vesting, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on
any property or asset of the Company or any Company Subsidiary pursuant to, any
Contract, Company Permit or other instrument or obligation, except, with
respect to clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults or other occurrences which would not, individually or in the
aggregate, reasonably be expected to (x) have a Company Material Adverse Effect
or (y) prevent or materially delay the performance under this Agreement by the
Company.
A-9
(b) The execution and delivery of this Agreement by the Company do not, and
the performance of this Agreement by the Company will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
domestic or foreign Governmental Entity or any other person, except (i) under
the Exchange Act, the Securities Act, any applicable Blue Sky Law, the rules
and regulations of Nasdaq, the HSR Act, foreign or supranational antitrust and
competition Laws and the filing and recordation of the Articles of Merger as
required by the WBCA and (ii) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications to a person
other than a Governmental Entity, would not, individually or in the aggregate,
reasonably be expected to (x) have a Company Material Adverse Effect or (y)
prevent or materially delay the performance of this Agreement by the Company.
Section 3.6 Permits; Compliance With Law. Each of the Company and the
Company Subsidiaries is in possession of all authorizations, licenses, permits,
certificates, approvals and clearances, and has submitted notices to, all
Governmental Entities (including all authorizations under the Federal Food,
Drug and Cosmetic Act of 1938, as amended (the "FDCA") and the regulations of
the United States Food and Drug Administration (the "FDA") promulgated
thereunder) necessary for the Company or any Company Subsidiary to own, lease
and operate its properties or other assets and to carry on their respective
businesses in the manner described in the Company SEC Filings filed prior to
the date hereof and as it is being conducted as of the date hereof (the
"Company Permits"), and all such Company Permits are valid, and in full force
and effect, except where the failure to have, or the suspension or cancellation
of, or failure to be valid or in full force and effect of, any of the Company
Permits would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect. Neither the Company nor any Company
Subsidiary is in conflict with, or in default or violation of, (i) any Law
applicable to the Company or any Company Subsidiary or by which any property or
asset of the Company or any Company Subsidiary is bound or affected or (ii) any
Company Permits, except, with respect to clauses (i) and (ii), for any such
conflicts, defaults or violations that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Section 3.7 SEC Filings; Financial Statements.
(a) The Company has timely filed all registration statements, prospectuses,
forms, reports, definitive proxy statements, schedules and documents required
to be filed by it under the Securities Act or the Exchange Act, as the case may
be, since January 1, 1998 (collectively, the "Company SEC Filings"). Each
Company SEC Filing (i) as of its date, complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and (ii) did not, at the time it was filed, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. As of the date of
this Agreement, no Company Subsidiary is subject to the periodic reporting
requirements of the Exchange Act.
(b) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in the Company SEC Filings was prepared in all
material respects in accordance with GAAP applied (except as may be indicated
in the notes thereto and, in the case of unaudited quarterly financial
statements, as permitted by Form 10-Q under the Exchange Act) on a consistent
basis throughout the periods indicated (except as may be indicated in the notes
thereto), and each presented fairly the consolidated financial position,
results of operations and cash flows of the Company and the consolidated
Company Subsidiaries as of the respective dates thereof and for the respective
periods indicated therein (subject, in the case of unaudited statements, to
normal and recurring year-end adjustments which did not and would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect). The books and records of the Company and the Company
Subsidiaries have been, and are being, maintained in all material respects in
accordance with GAAP and any other applicable legal and accounting requirements.
(c) Except as and to the extent set forth on the consolidated balance sheet
of the Company and the consolidated Company Subsidiaries as of December 31,
2000 included in the Company's Form 10-K for the year ended December 31, 2000,
including the notes thereto (the "Company Form 10-K"), neither the Company nor
any consolidated Company Subsidiary has any liabilities or obligations of any
nature (whether accrued, absolute,
A-10
contingent or otherwise) that would be required to be reflected on a balance
sheet or in notes thereto prepared in accordance with GAAP, except for (i)
liabilities or obligations incurred in the ordinary course of business
consistent with past practice since December 31, 2000 and (ii) liabilities and
obligations incurred in connection with this Agreement and the transactions
contemplated hereby that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
(d) As of the date hereof, no "material contract" (as such term is defined
in Item 601(b)(10) of Regulation S-K of the SEC) filed as an exhibit to the
Company Form 10-K has been amended or modified, except for such amendments or
modifications which have been filed as an exhibit to a subsequently dated
Company SEC Filing or are not required to be filed with the SEC.
Section 3.8 Absence of Certain Changes or Events. Since December 31, 2000,
except as disclosed in the Company Form 10-K or in Company SEC Filings since
December 31, 2000 through to the date of this Agreement, including the notes
thereto, and except as specifically contemplated by, or as disclosed in, this
Agreement, the Company and the Company Subsidiaries have conducted their
businesses in the ordinary course consistent with past practice and, since such
date, there has not been (a) an event or development that would, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect or (b) any event or development that would, individually or in the
aggregate, reasonably be expected to prevent or materially delay the
performance of this Agreement by the Company.
Section 3.9 Employee Benefit Plans.
(a) Section 3.9(a) of the Company Disclosure Letter sets forth a true and
complete list of each "employee benefit plan" as defined in Section 3(3) of
ERISA and any other material plan, policy, program, practice, agreement,
understanding or arrangement providing compensation or other benefits to any
current or former director, officer, employee or consultant (or to any
dependent or beneficiary thereof) of the Company or any ERISA Affiliate, which
are now, or with respect to any plan intended to be qualified under 401(a) of
the Code, were within the past 6 years, maintained, sponsored or contributed to
by the Company or any ERISA Affiliate, or under which the Company or any ERISA
Affiliate has any obligation or liability, whether actual or contingent,
including, without limitation, all material incentive, bonus, deferred
compensation, vacation, holiday, cafeteria, medical, disability, stock
purchase, stock option, stock appreciation, phantom stock, restricted stock or
other stock-based compensation plans, policies, programs, practices or
arrangements. Each "employee benefit plan" as defined in Section 3(3) of ERISA
and each other material plan, policy, program, practice, agreement,
understanding or arrangement providing compensation or other benefits to any
current or former director, officer, employee or consultant (or to any
dependent or beneficiary thereof) of the Company or any ERISA Affiliate, which
are now, or were within the past 6 years, maintained, sponsored or contributed
to by the Company or any ERISA Affiliate, or under which the Company or any
ERISA Affiliate has any obligation or liability, whether actual or contingent,
including, without limitation, all material incentive, bonus, deferred
compensation, vacation, holiday, cafeteria, medical, disability, stock
purchase, stock option, stock appreciation, phantom stock, restricted stock or
other stock-based compensation plans, policies, programs, practices or
arrangements is hereinafter referred to as a "Company Benefit Plan". Neither
the Company, nor to the Knowledge of the Company, any other person, has any
express or implied commitment, whether legally enforceable or not, to modify,
change or terminate any Company Benefit Plan, other than with respect to a
modification, change or termination required by ERISA or the Code. The Company
has delivered or made available to Parent true, correct and complete copies of
all Company Benefit Plans (or, if not so delivered, has delivered or made
available to Parent a written summary of their material terms), and, with
respect thereto, all amendments, trust agreements, insurance Contracts, other
funding vehicles, determination letters issued by the United States Internal
Revenue Service (the "IRS"), the most recent annual reports (Form 5500 series)
filed with the IRS, and the most recent actuarial report or other financial
statement relating to such Company Benefit Plan.
(b) Each Company Benefit Plan has been administered in all material respects
in accordance with its terms and all applicable Laws, including ERISA and the
Code, and contributions required to be made under the terms of any of the
Company Benefit Plans as of the date of this Agreement have been timely made.
Except as would
A-11
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, (i) with respect to the Company Benefit Plans, no
event has occurred and, to the Knowledge of the Company, there exists no
condition or set of circumstances in connection with which the Company could be
subject to any material liability (other than for routine benefit liabilities)
under the terms of, or with respect to, such Company Benefit Plans, ERISA, the
Code or any other applicable Law, and (ii) neither the Company nor any ERISA
Affiliate has any liability under ERISA Section 502.
(c) Each Company Benefit Plan that is intended to be qualified under Section
401(a) of the Code has obtained a favorable determination letter from the IRS
that the Company Benefit Plan is so qualified and all related trusts are exempt
from U.S. federal income taxation under Section 501(a) of the Code, and, to the
Knowledge of the Company, nothing has occurred, whether by action or by failure
to act, which would cause the loss of such qualification or exemption. Except
as would not reasonably be expected to result in material liability to the
Company or a Company ERISA Affiliate, (i) to the knowledge of the Company there
has been no prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code and other than a transaction that is exempt under a
statutory or administrative exemption) with respect to any Company Benefit
Plan, (ii) no suit, administrative proceeding, action or other litigation has
been brought, or to the Knowledge of the Company is threatened, against or with
respect to any such Company Benefit Plan, including any audit or inquiry by the
IRS or United States Department of Labor (other than routine benefits claims),
(iii) none of the assets of the Company or any Company ERISA Affiliate is, or
may reasonably be expected to become, the subject of any lien arising under
ERISA or Section 412(n) of the Code, (iv) all Tax, annual reporting and other
governmental filings required by ERISA and the Code have been timely filed with
the appropriate Governmental Entity and all notices and disclosures have been
timely provided to participants, (v) all contributions and payments to each
Company Benefit Plan are deductible under Code Sections 162 or 404, and (vi) no
excise Tax could be imposed upon the Company under Chapter 43 of the Code.
(d) Neither the Company nor any of its ERISA Affiliates sponsors, maintains,
contributes to or has an obligation to contribute to, or has sponsored,
maintained, contributed to or had an obligation to contribute to, any "employee
pension benefit plan" (as defined in Section 3(2) of ERISA) that is subject to
Title IV of ERISA or Section 412 of the Code, or any "multiemployer plan" as
defined in Section 3(37) of ERISA.
(e) No amount that could be received (whether in cash or property or the
vesting of property), in connection with the consummation of the transactions
contemplated by this Agreement, by any employee, officer or director of the
Company or any of its Subsidiaries who is a "disqualified individual" (as such
term is defined in proposed Treasury Regulation Section 1.280G-1) under any
Company Benefit Plan or otherwise are reasonably likely to be characterized as
an "excess parachute payment" (as defined in Section 280G(b)(1) of the Code).
(f) Except as required by Law, no Company Benefit Plan provides any of the
following retiree or post-employment benefits to any person: medical,
disability or life insurance benefits. The Company and each ERISA Affiliate are
in compliance with (i) the requirements of the applicable health care
continuation and notice provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, and the regulations (including proposed
regulations) thereunder and any similar state Law and (ii) the applicable
requirements of the Health Insurance Portability and Accountability Act of
1996, as amended, and the regulations (including the proposed regulations)
thereunder, except as would not be reasonably expected to result in material
liability to the Company or a Company ERISA Affiliate.
(g) Neither the Company nor any of its Subsidiaries, sponsors, contributes
to or has any liability with respect to any employee benefit plan, program or
arrangement that provides benefits to non-resident aliens with no United States
source income outside of the United States.
(h) The Company has delivered to Parent accurate W-2 information for the
executive officers of the Company for the 1997, 1998, 1999 and 2000 calendar
years.
A-12
Section 3.10 Labor and Other Employment Matters.
(a) Except as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, (i) no work stoppage or
labor strike against the Company or any Company Subsidiary by employees is
pending or threatened, (ii) neither the Company nor any Company Subsidiary is
delinquent in payments to any of its employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed
for it or amounts required to be reimbursed to such employees, (iii) the
Company and each of the Company Subsidiaries are in compliance with all
applicable Laws respecting labor, employment, fair employment practices, terms
and conditions of employment, workers' compensation, occupational safety, plant
closings, and wage and hours, (iv) the Company and each Company Subsidiary has
withheld all amounts required by Law or by agreement to be withheld from the
wages, salaries, and other payments to employees; and is not liable for any
arrears of wages or any Taxes or any penalty for failure to comply with any of
the foregoing, (v) neither the Company nor any Company Subsidiary is liable for
any payment to any trust or other fund or to any Governmental Entity, with
respect to unemployment compensation benefits, social security or other
benefits or obligations for employees (other than routine payments to be made
in the ordinary course of business consistent with past practice), (vi) there
are no material pending claims against the Company or any Company Subsidiary
under any workers' compensation plan or policy or for long term disability and
(vii) there are no material controversies pending or, to the Knowledge of the
Company, threatened, between the Company or any Company Subsidiary and any of
their respective current or former employees, which controversies have or could
reasonably be expected to result in an action, suit, proceeding, claim,
arbitration or investigation before any Governmental Entity. To the Company's
Knowledge, as of the date hereof, no employees of the Company or any Company
Subsidiary are in any material respect in violation of any term of any
employment Contract, non-disclosure agreement, noncompetition agreement, or any
restrictive covenant to a former employer relating to the right of any such
employee to be employed by the Company or any Company Subsidiary because of the
nature of the business conducted or presently proposed to be conducted by the
Company or such Company Subsidiary or to the use of trade secrets or
proprietary information of others. As of the date hereof, no employee of the
Company or any Company Subsidiary, at the officer level or above, has given
notice to the Company or any Company Subsidiary that any such employee intends
to terminate his or her employment with the Company or any Company Subsidiary.
(b) Neither the Company nor any Company Subsidiary is a party to or
otherwise bound by any collective bargaining Contract with a labor union or
labor organization, nor is any such Contract presently being negotiated. As of
the date hereof, there has not been since January 1, 1998 a representation
question respecting any of the employees of the Company or any Company
Subsidiary and, to the Knowledge of the Company, there are no campaigns being
conducted to solicit cards from employees of the Company or any Company
Subsidiary to authorize representation by any labor organization.
(c) The Company has identified in Section 3.10(c) of the Company Disclosure
Letter and has made available to Parent true and complete copies of (i) all
severance and employment agreements with directors, officers or employees of or
consultants to the Company or any Company Subsidiary, (ii) all severance
programs and policies of each of the Company and each Company Subsidiary with
or relating to its employees, and (iii) all plans, programs, agreements and
other arrangements of each of the Company and each Company Subsidiary with or
relating to its directors, officers, employees or consultants which contain
change in control provisions. Neither the execution and delivery of this
Agreement or other related agreements, nor the consummation of the transactions
contemplated hereby or thereby will (either alone or in conjunction with any
other event, such as termination of employment) (i) result in any payment
(including, without limitation, severance, unemployment compensation, parachute
or otherwise) becoming due to any director or any employee of the Company or
any Company Subsidiary or Affiliate from the Company or any Company Subsidiary
or Affiliate under any Company Benefit Plan or otherwise, (ii) significantly
increase any benefits otherwise payable under any Company Benefit Plan or (iii)
result in any acceleration of the time of payment or vesting of any benefits.
Section 3.11 Tax Treatment. None of the Company, any Company Subsidiary
nor any of the Company's Affiliates has taken or agreed to take any action that
would prevent the Merger from qualifying as a
A-13
reorganization within the meaning of Section 368(a) of the Code. The Company is
not aware of any agreement, plan or other circumstance that would prevent the
Merger from qualifying as a reorganization within the meaning of Section 368(a)
of the Code.
Section 3.12 Contracts. Except as filed as exhibits to the Company SEC
Filings filed prior to the date of this Agreement, or as disclosed in Section
3.12 of the Company Disclosure Letter, neither the Company nor any Company
Subsidiary is a party to or bound by any Contract that (i) is a "material
contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC), (ii) relates to the co-promotion or distribution of Enbrel, the
manufacturing and supply by third parties of Enbrel, the out-license of Company
Intellectual Property relating to Enbrel to third parties pursuant to which the
Company currently receives royalties, or the in-license of intellectual
property relating to Enbrel from third parties pursuant to which the Company
currently pays royalties or (iii) limits or otherwise restricts the Company or
any Company Subsidiary or that would, after the Effective Time, limit or
restrict Parent or any of its Subsidiaries (including the Surviving Corporation
and its Subsidiaries) or any successor thereto, from engaging or competing in
any line of business or in any geographic area, which Contracts would be
material to Parent and its Subsidiaries (determined after giving effect to the
Merger). Each Contract of the type described in this Section 3.12, whether or
not set forth in Section 3.12 of the Company Disclosure Letter, is referred to
herein as a "Company Material Contract." Each Company Material Contract is
valid and binding on the Company or a Company Subsidiary party thereto and, to
the Company's Knowledge, each other party thereto, and is in full force and
effect, and the Company and each of the Company Subsidiaries have performed in
all material respects all obligations required to be performed by them to the
date hereof under each Company Material Contract and, to the Company's
Knowledge, each other party to each Company Material Contract has performed in
all material respects all obligations required to be performed by it under such
Company Material Contract, except, in each case, as would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect. Neither the Company nor any Company Subsidiary knows of, or has
received notice of, any violation or default under (or any condition which with
the passage of time or the giving of notice would cause such a violation of or
default under) any Company Material Contract or any other Contract to which it
is a party or by which it or any of its properties or assets is bound, except
for violations or defaults that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
Section 3.13 Litigation. Except as and to the extent disclosed in the
Company SEC Filings, including the notes thereto, filed prior to the date of
this Agreement or would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, (i) there is no suit,
claim, action, proceeding or investigation pending or, to the Knowledge of the
Company, threatened in writing against the Company or any Company Subsidiary or
for which the Company or any Company Subsidiary is obligated to indemnify a
third party that, as of the date hereof, relates to Enbrel, and (ii) neither
the Company nor any Company Subsidiary is subject to any outstanding and
unsatisfied order, writ, injunction, decree or arbitration ruling, award or
other finding. There is no suit, claim, action, proceeding or investigation
pending or, to the Knowledge of the Company, threatened in writing against the
Company or any Company Subsidiary that, as of the date hereof, challenges the
validity or propriety, or seeks to prevent consummation of, the Merger or any
other transaction contemplated by this Agreement.
Section 3.14 Environmental Matters. Except as disclosed in the Company
Form 10-K or in Company SEC Filings, including the notes thereto, since
December 31, 2000 through to the date of this Agreement or would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect:
(a) The Company and the Company Subsidiaries (i) are in compliance with all,
and are not subject to any liability, in each case with respect to any,
applicable Environmental Laws, (ii) hold or have applied for all Environmental
Permits necessary to conduct their current operations and (iii) are in
compliance with their respective Environmental Permits.
(b) Neither the Company nor any Company Subsidiary has received any written
notice, demand, letter, claim or request for information alleging that the
Company or any Company Subsidiary may be in violation of, or liable under, any
Environmental Law.
A-14
(c) Neither the Company nor any Company Subsidiary (i) has entered into or
agreed to any consent decree or order or is subject to any judgment, decree or
judicial order relating to compliance with Environmental Laws, Environmental
Permits or the investigation, sampling, monitoring, treatment, remediation,
removal or cleanup of Hazardous Materials and, to the Knowledge of the Company,
no investigation, litigation or other proceeding is pending or threatened in
writing with respect thereto or (ii) is an indemnitor in connection with any
claim threatened or asserted in writing by any third-party indemnitee for any
liability under any Environmental Law or relating to any Hazardous Materials.
(d) None of the real property owned or leased by the Company or any Company
Subsidiary is listed or, to the Knowledge of the Company, proposed for listing
on the "National Priorities List" under CERCLA, as updated through the date
hereof, or any similar state or foreign list of sites requiring investigation
or cleanup.
Section 3.15 Intellectual Property. Except as would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect, (i) the Company (or one of its Subsidiaries) owns or has the right to
use, whether through ownership, licensing or otherwise, all Company
Intellectual Property, (ii) no written claim of invalidity or conflicting
ownership rights with respect to any Company Intellectual Property has been
received by the Company or any Company Subsidiary from a third party, (iii) no
Company Intellectual Property owned by the Company or any Company Subsidiary is
the subject of any pending or, to the Company's Knowledge, threatened action,
suit, claim, investigation, arbitration, validity or enforceability challenge
or other proceeding, (iv) to the Company's Knowledge, no Company Intellectual
Property that is not owned by the Company or any Company Subsidiary is the
subject of any pending or threatened action, suit, claim, investigation,
arbitration, validity or enforceability challenge or other proceeding, (v) no
person has given written notice to the Company or any Company Subsidiary that
the use of any Company Intellectual Property by the Company, any Company
Subsidiary or any licensee is infringing or has infringed any patent,
trademark, service mark, trade name, or copyright or design right or other
intellectual property right of any third party, or that the Company, any
Company Subsidiary or any licensee has misappropriated or improperly used or
disclosed any trade secret, confidential information or know-how, (vi) to the
Company's knowledge after due inquiry, the making, having made, using, selling,
offering for sale, importing, exporting, manufacturing, marketing, licensing,
reproduction, distribution or publishing by the Company of any process,
machine, manufacture or product does not, because of and to the extent that
such process, manufacture or product incorporates Company Intellectual
Property, infringe any valid claim of any patent, trademark, service mark,
trade name, copyright, design right, or other intellectual property right of
any third party in the jurisdictions in which such making, using, selling,
offering for sale, importing, exporting, manufacturing, marketing, licensing,
reproduction, distribution, or publishing occurs, and does not involve the
misappropriation or improper use or disclosure of any trade secrets,
confidential information or know-how of any third party, and (vii) there exists
no prior act or current conduct or use by the Company, any Company Subsidiary
or, to the Knowledge of the Company, any third party that would void or
invalidate any Company Intellectual Property. As of the date hereof, AHP has
not made any Product Calls (as such term is defined in the Product Rights
Agreement by and among the Wyeth-Ayerst Research division of AHP, the Lederle
Pharmaceutical division of American Cyanamid Company and the Company dated as
of July 1, 1998, as amended (the "Product Rights Agreement")) under the Product
Rights Agreement.
Section 3.16 Taxes.
(a) Each of the Company and each Company Subsidiary has duly and timely
filed with the appropriate Tax authorities or other Governmental Entities all
material Tax Returns that it was required to file. All such Tax Returns are
complete and accurate in all material respects. All Taxes shown as due on such
Tax Returns have been paid, and the Company and the Company Subsidiaries have
provided adequate reserves in accordance with GAAP in the most recent financial
statements contained in the Company SEC Filings for any material Taxes that
have not been paid, whether or not shown as being due on any Tax Returns. None
of the Company nor any Company Subsidiary currently is the beneficiary of any
extension of time within which to file any material Tax Return.
A-15
(b) No claim for unpaid material Taxes has been asserted in writing by a Tax
authority or other Governmental Entity or has become a lien against the
property of the Company or any Company Subsidiary (other than with respect to
Permitted Liens for Taxes). No audit or other proceeding with respect to any
material Taxes due from or with respect to the Company or any Company
Subsidiary or any material Tax Return filed by the Company or any Company
Subsidiary is being conducted by any Tax authority or Governmental Entity, and
the Company and the Company Subsidiaries have not received notification in
writing that any such audit or other proceeding with respect to material Taxes
or any material Tax Return is pending. No extension of the statute of
limitations on the assessment of any material Taxes has been granted by the
Company or any Company Subsidiary.
(c) All material Taxes required to be withheld, collected or deposited by or
with respect to the Company and each Company Subsidiary have been timely
withheld, collected or deposited as the case may be, and to the extent
required, have been paid to the relevant Tax authority or other Governmental
Entity.
(d) Neither the Company nor any Company Subsidiary is responsible for the
Taxes of any person other than members of the affiliated group of which the
Company is the common parent under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local, or foreign Law), as a transferee, by
Contract, or otherwise. Neither the Company nor any Company Subsidiary is a
party to, is bound by or has any obligation under any Tax sharing or Tax
indemnity agreement or similar Contract or arrangement.
(e) Neither the Company nor any Company Subsidiary has been a party to any
distribution occurring during the two years preceding the date of this
Agreement in which the parties to such distribution treated the distribution as
one to which Section 355 of the Code is applicable.
Section 3.17 Insurance. Copies of all material insurance policies
maintained by the Company, including fire and casualty, general liability,
product liability, business interruption and professional liability policies,
have been made available to Parent.
Section 3.18 Properties. Each of the Company and the Company Subsidiaries
has good and valid title to or a valid leasehold interest in all its properties
and assets reflected on the most recent balance sheet contained in the
Company's quarterly report on Form 10-Q that is part of the Company SEC Filings
or acquired after the date thereof, except for (i) properties and assets sold
or otherwise disposed of in the ordinary course of business since the date of
such balance sheet and (ii) properties and assets the loss of which would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
Section 3.19 Regulatory Compliance.
(a) All biological and drug products being manufactured, distributed, or
developed by the Company and its Subsidiaries ("Company Pharmaceutical
Products") that are subject to the jurisdiction of the FDA are being
manufactured, labeled, stored, tested, distributed, and marketed in compliance
with all applicable requirements under the FDCA, the Public Health Service Act,
and their applicable implementing regulations, except for noncompliances which
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
(b) All preclinical trials and clinical trials conducted by or on behalf of
the Company and its Subsidiaries have been, and are being conducted in material
compliance with the applicable requirements of Good Clinical Practice, Informed
Consent, and all applicable requirements relating to protection of human
subjects contained in 21 C.F.R. Parts 50, 54, and 56, except for noncompliances
which, individually or in the aggregate, would reasonably not be expected to
have a Company Material Adverse Effect.
(c) All manufacturing operations conducted by or for the benefit of the
Company and its Subsidiaries have been and are being conducted in compliance
with the FDA's applicable current Good Manufacturing Practice regulations for
drug and biological products, except for noncompliances which, individually or
in the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect. In addition, the Company and its Subsidiaries are in compliance
with all applicable registration and listing requirements set forth in 21
U.S.C. Section 360 and 21 C.F.R. Part 207 and all similar applicable laws,
except for noncompliances which, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect.
A-16
(d) No Company Pharmaceutical Product has been recalled, suspended or
discontinued as a result of any action by the FDA or any other similar foreign
Governmental Entity by the Company or any of its Subsidiaries or, to the
Knowledge of the Company, any licensee, distributor or marketer of any Company
Pharmaceutical Product, in the United States or outside of the United States
since January 1, 1999.
(e) Neither the Company nor any of its Subsidiaries have received any notice
since January 1, 1999 that the FDA or any other Governmental Entity has
commenced, or threatened to initiate, any action to withdraw approval, place
marketing or sale restrictions, or request the recall of any Company
Pharmaceutical Product, or commenced, or threatened to initiate, any action to
enjoin or place restrictions on the production, sale, marketing or
reimbursement of any Company Pharmaceutical Products.
(f) Neither the Company, nor any of its Subsidiaries, have committed any
act, made any statement or failed to make any statement that would reasonably
be expected to provide a basis for the FDA to invoke its policy with respect to
"Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities"
set forth in 56 Fed. Reg. 46191 (September 10, 1991) and any amendments
thereto. Additionally, neither the Company, the Company Subsidiaries, nor to
the Knowledge of the Company, any officer, key employee or agent of the Company
has been convicted of any crime or engaged in any conduct that would reasonably
be expected to result in (i) debarment under 21 U.S.C. Section 335a or any
similar state law or regulation or (ii) exclusion under 42 U.S.C. Section
1320a-7 or any similar state law or regulation.
Section 3.20 Opinion of Financial Advisor. Merrill Lynch & Co. (the
"Company Financial Advisor") has delivered to the Board of Directors of the
Company its opinion that, as of the date of such opinion, the Merger
Consideration to be received by the holders of the shares of Company Common
Stock pursuant to the Merger is fair to such holders from a financial point of
view.
Section 3.21 Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock is the only vote of
the holders of any class or series of capital stock or other Equity Interests
of the Company necessary to approve this Agreement, the Merger and the
transactions contemplated hereby (the "Company Shareholder Approval").
Section 3.22 Brokers. No broker, finder or investment banker (other than
the Company Financial Advisor) is entitled to any brokerage, finder's or other
fee or commission in connection with the Merger based upon arrangements made by
or on behalf of the Company or any Company Subsidiary. Prior to the date
hereof, the Company has accurately described to Parent the Company's
arrangements with, and the fees that may be paid by the Company to, the Company
Financial Advisor relating to the Merger.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in the corresponding section of the Disclosure Letter
delivered by Parent and Merger Sub to the Company prior to the execution of
this Agreement (the "Parent Disclosure Letter") (and subject to Section 9.13
hereof), Parent and Merger Sub hereby jointly and severally represent and
warrant to the Company as follows:
Section 4.1 Organization and Qualification; Subsidiaries. Parent is a
corporation duly organized, validly existing and in good standing under the
Laws of Delaware. Merger Sub is a corporation duly organized and validly
existing under the laws of the State of Washington and has paid all excise
taxes required by the Washington Department of Revenue. Each Significant
Subsidiary of Parent (together with Merger Sub, the "Parent Subsidiaries") has
been duly organized and is validly existing and in good standing under the Laws
of the jurisdiction of its incorporation, except where the failure to be so
organized, existing or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect.
Each of Parent and the Parent Subsidiaries has the requisite power and
authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted,
A-17
except where the failure have such power, authority and governmental approvals
would not, individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect. Each of Parent and the Parent Subsidiaries is
duly qualified or licensed to do business, and is in good standing (but only
with respect to jurisdictions which recognize such concepts) in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing or good
standing
necessary, except for such failures to be so qualified or licensed and in good
standing that would not, individually or in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect.
Section 4.2 Certificate of Incorporation and Bylaws; Corporate Books and
Records. The copies of the Parent Certificate and Parent's Amended and
Restated Bylaws (the "Parent Bylaws") that are listed as exhibits to Parent's
Form 10-K for the year ended December 31, 2000 are complete and correct copies
thereof as in effect on the date hereof. The Parent is not in violation of any
of the provisions of the Parent Certificate or the Parent Bylaws as of the date
hereof and will not, as of the Closing Date, be in violation of any of the
provisions of the Parent Certificate or Parent Bylaws, as such Parent
Certificate and Parent Bylaws may be amended between the date hereof and the
Closing Date. True and complete copies of all minute books of Parent since
January 1, 1999 have been made available by Parent to the Company.
Section 4.3 Capitalization.
(a) As of the date hereof, the authorized capital stock of Parent consists
of (a) 2,750,000,000 shares of Parent Common Stock and (b) 5,000,000 shares of
preferred stock, par value $0.0001 per share (the "Parent Preferred Stock"). As
of November 30, 2001, (a) 1,048,325,488 shares of Parent Common Stock were
issued and outstanding, all of which were validly issued and fully paid,
nonassessable and free of preemptive rights and (b) 8,659,960 shares of Parent
Common Stock were held in the treasury of Parent or by Parent's Subsidiaries.
As of the date hereof, 687,500 shares of Parent Preferred Stock are designated
as Series A Junior Participating Preferred Stock, and no shares of Parent
Preferred Stock are issued or outstanding. As of November 30, 2001, 95,657,177
shares of Parent Common Stock were reserved for issuance upon exercise of stock
options, rights and warrants outstanding as of such date. Except for stock
options and agreements or arrangements described in the Parent SEC Filings,
including the notes or exhibits thereto, filed prior to the date of this
Agreement and pursuant to the rights outstanding under the Rights Plan, as of
the date hereof, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character to which Parent or any Parent
Subsidiary is a party or by which Parent or any Parent Subsidiary is bound
relating to the issued or unissued capital stock or other Equity Interests, or
obligating Parent or any Parent Subsidiary to issue or sell any shares of its
capital stock or other Equity Interests. From November 30, 2001 to the date of
this Agreement, Parent has not issued any Equity Interests with respect to
Parent Common Stock, other than (x) Parent Common Stock issued upon exercise of
stock options and (y) Equity Interests granted or issued under existing
stock-based incentive compensation plans. The shares of Parent Common Stock to
be issued in connection with the Merger, when issued as contemplated herein,
will be duly authorized, validly issued, fully paid and nonassessable and will
not be issued in violation of any preemptive rights. Except as disclosed in the
Parent SEC Filings, including the notes and exhibits thereto, as of the date
hereof, there are no outstanding contractual obligations of Parent or any
Parent Subsidiary (a) restricting the transfer of, or (b) requiring the
repurchase, redemption or disposition of, or containing any right of first
refusal with respect to, any Parent Common Stock or any capital stock of, or
other Equity Interests in, any Parent Subsidiary. As of the date hereof, there
are no outstanding contractual obligations of Parent or any Parent Subsidiary
(a) requiring the registration for sale of, (b) granting any preemptive or
antidilutive right with respect to, or (c) affecting the voting rights (except
for the Stockholders' Rights Agreement by and among Parent, AHP, MDP Holdings,
Inc. and Lederle Parenterals, Inc., dated as of the date hereof) of, any Parent
Common Stock. Except as disclosed in the Parent SEC Filings, including the
notes and exhibits thereto, as of the date hereof, there are no outstanding
contractual obligations of Parent or any Parent Subsidiary (a) affecting the
voting rights of, (b) requiring the registration for sale of, or (c) granting
any preemptive or antidilutive right with respect to or any capital stock of,
or other Equity Interests in, any Parent Subsidiary.
(b) Each outstanding share of capital stock of each Parent Subsidiary is
duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights and is owned, beneficially and of record, by Parent free
A-18
and clear of all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on Parent's or any Parent Subsidiary's
voting rights, charges and other encumbrances of any nature whatsoever.
(c) Except as a result of the Voting Agreement, neither Parent nor any
Parent Subsidiary beneficially owns any Equity Interest in the Company.
Section 4.4 Authority Relative to This Agreement. Each of Parent and
Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated by this Agreement. Each of (a) the execution and
delivery of this Agreement by each of Parent and Merger Sub and the
consummation by Parent and Merger Sub of such transactions and (b) the issuance
of shares of Parent Common Stock in accordance with the Merger has been duly
and validly authorized by all necessary corporate action by Parent and Merger
Sub and no other corporate proceedings on the part of Parent and Merger Sub and
no other stockholder votes are necessary to authorize this Agreement or to
consummate such transactions, other than, with respect to the Share Issuance,
as provided in Section 4.16. The Board of Directors of Parent, by resolutions
adopted by unanimous vote of those voting (and not subsequently rescinded or
modified in any way) at a meeting duly called and held at which a quorum was
present and acting throughout, has duly (i) determined that this Agreement and
the Merger are fair to and in the best interests of Parent and its
stockholders, and has declared the Merger to be advisable, (ii) approved and
adopted this Agreement, the Merger, the Share Issuance and the other
transactions contemplated hereby, (iii) resolved to recommend the Share
Issuance to its stockholders for approval and (iv) directed that the Share
Issuance be submitted to its stockholders for consideration. This Agreement has
been duly authorized and validly executed and delivered by Parent and Merger
Sub and constitutes the legal, valid and binding obligations of each of Parent
and Merger Sub, enforceable against Parent and Merger Sub in accordance with
its terms.
Section 4.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent and Merger Sub do
not, and the performance of this Agreement by Parent and Merger Sub will not,
(i) conflict with or violate any provision of the certificate or articles of
incorporation or bylaws of Parent or Merger Sub, (ii) assuming that all
consents, approvals, authorizations and permits described in Section 4.5(b)
have been obtained, that Parent's stockholders have approved the Share Issuance
and that all filings and notifications described in Section 4.5(b) have been
made, and any waiting periods thereunder have terminated or expired, conflict
with or violate any Law applicable to Parent or any Parent Subsidiary or by
which any property or asset of Parent or any Parent Subsidiary is bound or
affected or (iii) require any consent or approval under, result in any breach
of, any loss of any benefit under or constitute a change of control or default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any right of termination, vesting, amendment,
acceleration or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of Parent or any Parent Subsidiary
pursuant to, any Contract, except, with respect to clauses (ii) and (iii), for
any such conflicts, violations, breaches, defaults or other occurrences which
would not, individually or in the aggregate, reasonably be expected to (x) have
a Parent Material Adverse Effect or (y) prevent or materially delay the
performance of this Agreement by Parent or Merger Sub.
(b) The execution and delivery of this Agreement by Parent and Merger Sub do
not, and the performance of this Agreement by Parent and Merger Sub will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any domestic or foreign Governmental Entity or any other
person, except (i) under the Exchange Act, the Securities Act, any applicable
Blue Sky Law, the rules and regulations of Nasdaq, the HSR Act, foreign or
supranational antitrust and competition Laws, and the filing and recordation of
the Articles of Merger as required by the WBCA and (ii) where failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications to a person other than a Governmental Entity, would not,
individually or in the aggregate, reasonably be expected to (x) have a Parent
Material Adverse Effect or (y) prevent or materially delay the performance
under this Agreement by Parent or Merger Sub.
A-19
Section 4.6 Permits; Compliance With Law. Parent and each Parent
Subsidiary is in possession of all authorizations, licenses, permits,
certificates, approvals and clearances necessary to carry on their respective
businesses in the manner described in the Parent SEC Filings filed prior to the
date hereof and as it is being conducted as of the date hereof (the "Parent
Permits"), and all such Parent Permits are valid and in full force and effect,
except where the failure to have, or the suspension or cancellation of, or
failure to be valid or in full force and effect of, any of the Parent Permits
would not, individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect. Neither Parent nor any Parent Subsidiary is in
conflict with any Law applicable to Parent or any Parent Subsidiary that would,
individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect.
Section 4.7 SEC Filings; Financial Statements.
(a) Parent has timely filed all registration statements, prospectuses,
forms, reports, definitive proxy statements, schedules and documents required
to be filed by it under the Securities Act or the Exchange Act, as the case may
be, since January 1, 1998 (collectively, the "Parent SEC Filings"). Each Parent
SEC Filing (i) as of its date, complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be and
(ii) did not at the time it was filed contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. As of the date of
this Agreement, no Subsidiary of Parent is subject to the periodic reporting
requirements of the Exchange Act.
(b) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in the Parent SEC Filings was prepared in all
material respects in accordance with GAAP applied (except as may be indicated
in the notes thereto and, in the case of unaudited quarterly financial
statements, as permitted by Form 10-Q under the Exchange Act) on a consistent
basis throughout the periods indicated (except as may be indicated in the notes
thereto), and each presented fairly the consolidated financial position,
results of operations and cash flows of Parent and its consolidated
Subsidiaries as of the respective dates thereof and for the respective periods
indicated therein (subject, in the case of unaudited statements, to normal and
recurring year-end adjustments which did not and would not, individually or in
the aggregate, reasonably be expected to have a Parent Material Adverse
Effect). The books and records of Parent and its Subsidiaries have been, and
are being, maintained in all material respects in accordance with GAAP and any
other applicable legal and accounting requirements.
(c) Except as and to the extent set forth on the consolidated balance sheet
of Parent and its consolidated Subsidiaries as of December 31, 2000 included in
Parent's Form 10-K for the year ended December 31, 2000, including the notes
thereto (the "Parent Form 10-K"), neither Parent nor any of its consolidated
Subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on a
balance sheet or in notes thereto prepared in accordance with GAAP, except for
liabilities or obligations incurred in the ordinary course of business
consistent with past practice since December 31, 2000 and liabilities incurred
in connection with this Agreement and the transactions contemplated hereby that
would not, individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect.
(d) As of the date hereof, no "material contract" (as such term is defined
in Item 601(b)(10) of Regulation S-K of the SEC) filed as an exhibit to the
Parent Form 10-K has been amended or modified, except for such amendments or
modifications which have been filed as an exhibit to a subsequently dated
Parent SEC Filing or are not required to be filed with the SEC.
Section 4.8 Absence of Certain Changes or Events. Since December 31, 2000,
except as disclosed in the Parent Form 10-K or in Parent SEC Filings since
December 31, 2000 through to the date of this Agreement, including he notes
thereto, and except as specifically contemplated by, or as disclosed in, this
Agreement, Parent and its Subsidiaries have conducted their business in the
ordinary course consistent with past practice and, since such date, there has
not been (a) an event or development that would, individually or in the
aggregate, reasonably
A-20
be expected to have a Parent Material Adverse Effect or (b) any event or
development that would, individually or in the aggregate, reasonably be
expected to prevent or materially delay the performance of this Agreement by
Parent or Merger Sub.
Section 4.9 Litigation. Except as disclosed in the Parent SEC Filings,
including the notes thereto, filed prior to the date of this Agreement or would
not, individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect, (i) there is no suit, claim, action, proceeding or
investigation pending or, to the Knowledge of Parent, threatened in writing
against Parent or any Parent Subsidiary or for which Parent or any Parent
Subsidiary is obligated to indemnify a third party, and (ii) neither Parent nor
any Parent Subsidiary is subject to any outstanding and unsatisfied order,
writ, injunction, decree or arbitration ruling, award or other finding. There
is no suit, claim, action, proceeding or investigation pending or, to the
Knowledge of Parent, threatened in writing against Parent or any Parent
Subsidiary that, as of the date hereof, challenges the validity or propriety,
or seeks to prevent consummation of, the Merger or any other transaction
contemplated by this Agreement.
Section 4.10 Environmental Matters. Except as disclosed in the Parent Form
10-K or in the Parent SEC Filings, including the notes thereto, since December
31, 2000 through the date of this Agreement or would not, individually or in
the aggregate, reasonably be expected to have a Parent Material Adverse Effect,
Parent and the Parent Subsidiaries (i) are in compliance with all, and are not
subject to any liability, in each case with respect to any, applicable
Environmental Laws, (ii) hold or have applied for all Environmental Permits
necessary to conduct their current operations, and (iii) are in compliance with
their respective Environmental Permits.
Section 4.11 Intellectual Property. Except as disclosed in the Parent Form
10-K or in the Parent SEC Filings, including the notes thereto, since December
31, 2000 through the date of this Agreement or would not, individually or in
the aggregate, reasonably be expected to have a Parent Material Adverse Effect:
(i) Parent and its Subsidiaries own or have the right to use, whether through
ownership, licensing or otherwise, all Parent Intellectual Property, (ii) no
Parent Intellectual Property is the subject of any pending or, to Parent's
Knowledge, threatened action, suit, claim, investigation, arbitration or other
proceeding, (iii) there exists no prior act or current conduct or use by Parent
or any Parent Subsidiary or, to the Knowledge of Parent, any third party that
would void or invalidate any Parent Intellectual Property, and (iv) to the
Knowledge of Parent, the making, using, selling, manufacturing, marketing,
licensing, reproduction, distribution or publishing by Parent of any process,
manufacture or product does not, because of and to the extent that such
process, manufacture or product incorporates Parent Intellectual Property,
infringe any valid claim of patent, trademark, service mark, trade name,
copyright or other intellectual property right of any third party in the
jurisdictions in which such making, using, selling, manufacturing, marketing,
licensing, reproduction, distribution, or publishing occurs, and does not
involve the misappropriation or improper use or disclosure of any trade
secrets, confidential information or know-how of any third party.
Section 4.12 Regulatory Compliance.
(a) All biological and drug products being manufactured, distributed or
developed by Parent and its Subsidiaries ("Parent Pharmaceutical Products")
that are subject to the jurisdiction of the FDA are being manufactured,
labeled, stored, tested, distributed and marketed in compliance with all
applicable requirements under the FDCA and the Public Health Service Act,
except for noncompliances which, individually or in the aggregate, would
reasonably not be expected to have a Parent Material Adverse Effect.
(b) Neither Parent nor any of its Subsidiaries have received any notice
since January 1, 1999 that the FDA or any other Governmental Entity has
commenced, or threatened to initiate, any action to withdraw approval or
request the recall of any Parent Pharmaceutical Product, or commenced, or
threatened to initiate, any action to enjoin or place restrictions on the
production of any Parent Pharmaceutical Products.
Section 4.13 Tax Treatment. None of Parent, nor any of its Subsidiaries or
Affiliates has taken or agreed to take any action that would prevent the Merger
from qualifying as a reorganization within the meaning of
A-21
Section 368(a) of the Code. Parent is not aware of any agreement, plan or other
circumstance that would prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
Section 4.14 Ownership of Merger Sub; No Prior Activities.
(a) Merger Sub was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement. All of the outstanding capital
stock of Merger Sub is owned directly by Parent.
(b) Except for obligations or liabilities incurred in connection with its
incorporation or organization and the transactions contemplated by this
Agreement, Merger Sub has not and will not have incurred, directly or
indirectly, through any Subsidiary or Affiliate, any obligations or liabilities
or engaged in any business activities of any type or kind whatsoever or entered
into any agreements or arrangements with any person. Merger Sub has no
Subsidiaries.
Section 4.15 Opinion of Financial Advisor. Goldman, Sachs & Co. (the
"Parent Financial Advisor") has delivered to the Board of Directors of Parent
its opinion that, as of the date of such opinion, the Merger Consideration is
fair from a financial point of view to Parent.
Section 4.16 Vote Required. The affirmative vote of the holders of a
majority of the shares of Parent Common Stock represented at a meeting of the
stockholders of Parent called for such purpose and entitled to vote thereon
(provided that at least a majority of such shares are represented in person or
by proxy at such meeting) is the only vote of the holders of any class or
series of capital stock or other Equity Interests of Parent necessary to
approve the Share Issuance (the "Parent Stockholder Approval").
Section 4.17 Brokers. No broker, finder or investment banker (other than
the Parent Financial Advisor, Bear, Stearns & Co. Inc. and Salomon Smith Barney
Inc.) is entitled to any brokerage, finder's or other fee or commission in
connection with the Merger based upon arrangements made by or on behalf of
Parent or any of its Subsidiaries.
Section 4.18 Sufficient Funds. Parent will have at or prior to the Closing
and at the Effective Time sufficient immediately available funds and sufficient
authorized but unissued shares or treasury shares of Parent Common Stock to pay
the Merger Consideration upon consummation of the Merger.
ARTICLE 5.
COVENANTS
Section 5.1 Conduct of Business by the Company Pending the Closing. The
Company agrees that, between the date of this Agreement and the Effective Time,
except as set forth in Section 5.1 of the Company Disclosure Letter or as
specifically permitted by any other provision of this Agreement, or unless
Parent shall otherwise agree in writing, the Company shall, and shall cause
each Company Subsidiary to, (x) maintain its existence in good standing under
applicable Law, (y) subject to the restrictions set forth in this Section 5.1
and Section 6.5, conduct its operations only in the ordinary and usual course
of business consistent with past practice and (z) use its reasonable best
efforts to keep available the services of the current officers, key employees
and consultants of the Company and each Company Subsidiary and, subject to
Section 6.5, to preserve the current relationships of the Company and the
Company Subsidiaries with their customers, suppliers and other persons with
which the Company or any Company Subsidiary has significant business relations
as is reasonably necessary in order to preserve substantially intact its
business organization. In addition, without limiting the foregoing, except as
set forth in Section 5.1 of the Company Disclosure Letter or as specifically
permitted by any other provision of this Agreement, the Company shall not and
shall not permit any of its Subsidiaries to (unless required by applicable Law
or the regulations or requirements of any stock exchange or regulatory
organization applicable to the Company and its Subsidiaries), between the date
of this Agreement and the Effective Time, directly or indirectly, do, or agree
to do, any of the following without the prior written consent of Parent:
A-22
(a) amend or otherwise change its articles or certificate of incorporation
or bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize
the issuance, sale, pledge, disposition, grant, transfer or encumbrance of any
shares of capital stock of, or other Equity Interests in, the Company or any
Company Subsidiary of any class, or securities convertible or exchangeable or
exercisable for any shares of such capital stock or other Equity Interests, or
any options, warrants or other rights of any kind to acquire any shares of such
capital stock or other Equity Interests or such convertible or exchangeable
securities, or any other ownership interest, of the Company or any Company
Subsidiary, except that (i) the Company may issue shares of Company Common
Stock pursuant to the ESPP or upon exercise of Company Options outstanding on
the date hereof or hereafter granted in accordance with the provisions of
subclause (ii), (iii) or (iv) of this clause (b), (ii) the Company may grant
Company Options up to an aggregate of 1,100,000 shares of Company Common Stock
to newly-hired employees and may grant Company Options up to an aggregate of
4,400,000 shares of Company Common Stock to existing employees and non-employee
directors, in each case, in accordance with the terms of the Company Stock
Option Plans consistent with past practice and with an exercise price per share
of Company Common Stock no less than the fair market value of a share of
Company Common Stock as of the date of grant, provided that in no event shall
the vesting or exercisability of any such Company Options accelerate solely as
a result of the consummation of the transactions contemplated by this
Agreement, (iii) the Company may grant Company Options that are Replacement
Options pursuant to Section 2.4(b), (iv) the Company may grant Company Options
pursuant to existing contractual relationships and as set forth in the Company
Disclosure Letter, (v) the Company may grant Equity Interests in accordance
with Sections 2.01 and 2.02 of the Governance Agreement, and (vi) the Company
Subsidiaries may issue shares of capital stock or other Equity Interests to the
Company or any wholly-owned Company Subsidiary;
(c) (i) sell, pledge, dispose of, transfer, lease, license, or encumber, or
authorize the sale, pledge, disposition, transfer, lease, license, or
encumbrance of, any material property or assets (other than Company
Intellectual Property) of the Company or any Company Subsidiary, except (A)
sales, pledges, dispositions, transfers, leases, licenses or encumbrances
pursuant to existing Contracts, (B) sales, pledges, dispositions, transfers,
leases, licenses or encumbrances of property or assets by the Company or a
Company Subsidiary in the ordinary course of business but not to exceed an
aggregate value for all such sales, pledges, dispositions, transfers, leases,
licenses and encumbrances of $100,000,000, (C) sales or dispositions of
inventory and other tangible current assets, or (D) as may be required pursuant
to Section 6.5(b); (ii) sell, pledge, dispose of, transfer, lease, license,
abandon, fail to maintain or encumber, or authorize the sale, pledge,
disposition, transfer, lease, license, abandonment, failure to maintain or
encumbrance of, any Company Intellectual Property (other than Company
Intellectual Property that protects or enhances the value of Enbrel), except
(A) sales, pledges, dispositions, transfers, leases, licenses, abandonments,
failures to maintain or encumbrances in the ordinary course of business which
will not materially impair the conduct of the Company's business and (B) as may
be required pursuant to Section 6.5(b); (iii) sell, pledge, dispose of,
transfer, lease, license, abandon, fail to maintain or encumber, or authorize
the sale, pledge, disposition, transfer, lease, license, abandonment, failure
to maintain or encumbrance of, any Company Intellectual Property which protects
Enbrel, except (A) agreements entered into for clinical studies involving
Enbrel in the ordinary course of business and (B) material transfer agreements
relating to Enbrel entered into in the ordinary course of business; or (iv)
enter into any material commitment or transaction outside the ordinary course
of business consistent with past practice other than transactions between a
wholly-owned Company Subsidiary and the Company or another wholly-owned Company
Subsidiary;
(d) declare, set aside, make or pay any dividend or other distribution
(whether payable in cash, stock, property or a combination thereof) with
respect to any of the capital stock of the Company (other than dividends or
distributions paid by wholly-owned Company Subsidiaries to the Company or to
other wholly-owned Company Subsidiaries) or enter into any agreement with
respect to the voting of the capital stock of the Company;
(e) (i) reclassify, combine, split or subdivide any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in lieu
of, or in substitution for, shares of its capital stock, or (ii) redeem,
purchase or otherwise acquire, directly or indirectly, any of its capital
stock, other Equity Interests or other securities;
A-23
(f) (i) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an accommodation
become responsible for, the obligations of any person (other than a
wholly-owned Company Subsidiary) for borrowed money, except for indebtedness
for borrowed money under the Company's existing credit facilities or
replacement credit facilities in an aggregate amount not materially larger than
the Company's existing credit facilities, (ii) terminate, cancel, or agree to
any material and adverse change in, any Company Material Contract other than in
the ordinary course of business consistent with past practice, (iii) make or
authorize any capital expenditure materially in excess of the Company's budget
as disclosed to Parent prior to the date hereof or (iv) make or authorize any
material loan to any person (other than a Company Subsidiary) outside the
ordinary course of business;
(g) except as may be required by contractual commitments or corporate
policies with respect to severance or termination pay in existence on the date
of this Agreement as disclosed in Section 3.9 or 6.10(c) of the Company
Disclosure Letter, (i) increase the compensation or benefits payable or to
become payable to its directors, officers or employees (except for increases in
accordance with past practices and methodologies in salaries or wages of
officers and/or employees of the Company or any Company Subsidiary), (ii) grant
any rights to severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or other employee of the
Company or any Company Subsidiary (other than with respect to newly appointed
directors and newly hired employees in accordance with past practices of the
Company or any Company Subsidiary, provided that any such agreements shall not
provide for the payment of any severance or termination pay solely as a result
of the execution of this Agreement or the consummation of the transactions
contemplated hereby), (iii) establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director, officer, consultant or
employee, except to the extent required by applicable Law or (iv) take any
affirmative action to amend or waive any performance or vesting criteria or
accelerate vesting, exercisability or funding under any Company Benefit Plan or
Company Option;
(h) make any material change in accounting policies or procedures, other
than in the ordinary course of business consistent with past practice or except
as required by GAAP or by a Governmental Entity;
(i) except in the ordinary course of business consistent with past practice,
make any material Tax election or settle or compromise any material liability
for Taxes, change any annual Tax accounting period, change any method of Tax
accounting, file any amended material Tax Return, enter into any closing
agreement relating to any material Tax, surrender any right to claim a material
Tax refund, or consent to any extension or waiver of the statute of limitations
period applicable to any material Tax claim or assessment;
(j) subject to Section 6.4(h), modify, amend or terminate, or waive, release
or assign any material rights or claims with respect to any confidentiality or
standstill agreement to which the Company is a party and which relates to a
business combination involving the Company;
(k) write up, write down or write off the book value of any assets,
individually or in the aggregate, for the Company and the Company Subsidiaries
taken as a whole, other than in the ordinary course of business or otherwise
not in excess of $50 million;
(l) subject to Section 6.4(h), take any action to render inapplicable, or to
exempt any third party from, (i) the provisions of Chapter 23B.19 of the WBCA
or (ii) any other state takeover Law or state Law that purports to limit or
restrict business combinations or the ability to acquire or vote shares;
(m) acquire, or agree to acquire, from any Person any assets (not including
Intellectual Property), operations, business or securities or engage in, or
agree to engage in, any merger, consolidation or other business combination
with any Person, except (i) in connection with capital expenditures permitted
hereunder and except for acquisitions of inventory and other assets (not
including Intellectual Property) in the ordinary course of business or (ii) for
acquisitions of businesses or assets (not including Intellectual Property) or
business
A-24
combinations having or involving aggregate consideration not in excess of
$50,000,000, which, in the case of clauses (i) and (ii), individually or in the
aggregate, would not be reasonably expected to result in any of the conditions
to the Merger set forth in Article 7 not being satisfied;
(n) take any action that is intended or would reasonably be expected to
result in any of the conditions to the Merger set forth in Article 7 not being
satisfied;
(o) adopt a shareholder rights agreement, or "poison pill";
(p) acquire, or agree to acquire, from any Person, any Intellectual
Property, except in the ordinary course of business consistent with past
practice (including in size and nature); or
(q) authorize or enter into any agreement or otherwise make any commitment
to do any of the foregoing.
Section 5.2 Conduct of Business by Parent Pending the Closing. Parent
agrees that, between the date of this Agreement and the Effective Time, except
as specifically permitted by any other provision of this Agreement or unless
the Company shall otherwise agree in writing, Parent shall maintain its
existence in good standing under applicable Law and Parent and its Subsidiaries
shall continue to conduct their businesses such that the primary business of
Parent and its Subsidiaries, taken as a whole, shall involve biotechnology or
pharmaceuticals. Without limiting the foregoing, and as an extension thereof,
except as specifically permitted by any other provision of this Agreement,
Parent shall not and shall not permit any of its Subsidiaries to (unless
required by applicable Laws or the regulations or requirements of any stock
exchange or regulatory organization applicable to Parent and its Subsidiaries),
between the date of this Agreement and the Effective Time, directly or
indirectly, do, or agree to do, any of the following, without the prior written
consent of the Company:
(a) amend or otherwise change the Parent Certificate in a manner that
adversely affects the rights of holders of Parent Common Stock (including
holders of the Parent Common Stock issuable in the Merger), except to increase
the authorized number of shares of Parent capital stock (including Parent
Common Stock);
(b) issue any shares of Parent Common Stock if, following such issuance,
there would be an insufficient number of shares of Parent Common Stock to pay
the Merger Consideration and to be reserved for issuance in connection with the
transactions contemplated hereby;
(c) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock property or otherwise, with respect to any of Parent's
capital stock;
(d) take any action (including any acquisition or entering into any business
combination) that is intended or could reasonably be expected to result in any
of the conditions to the Merger set forth in Article 7 not being satisfied; or
(e) authorize or enter into any agreement or otherwise make any commitment
to do any of the foregoing.
Section 5.3 Cooperation.
(a) In addition to their other obligations set forth in this Agreement, the
Company and Parent shall coordinate and cooperate in connection with (a) the
preparation of the Registration Statement and the Proxy Statement, (b)
determining whether any action by or in respect of, or filing with, any
Governmental Entity is required, or any actions, consents, approvals or waivers
are required to be obtained from parties to any Company Material Contracts, in
connection with the consummation of the Merger, and (c) seeking any such
actions, consents, approvals or waivers or making any such filings, furnishing
information required in connection therewith or with the Registration Statement
and the Proxy Statement.
(b) As soon as reasonably practicable after the date hereof, Parent and
Company shall establish an Integration Committee with a consultative function,
which shall be comprised of two senior executives of Parent, designated by the
Chairman, President and Chief Executive Officer of the Parent, and two senior
executives of
A-25
the Company, designated by the Chairman, President and Chief Executive Officer
of the Company. Subject to applicable Law, the Integration Committee will be
concerned with matters relating to the integration of Parent's and Company's
respective businesses and personnel following the Effective Time and will
periodically meet to discuss and review such matters.
Section 5.4 Tax-Free Reorganization Treatment.
(a) Neither Company nor Parent shall, nor shall they permit any of their
respective Subsidiaries to, take or cause to be taken any action that would
disqualify the Merger as a reorganization within the meaning of Section 368(a)
of the Code. Parent and the Company shall use their reasonable best efforts,
and shall cause their respective Subsidiaries to use their reasonable best
efforts, to take or cause to be taken any action that would cause the Merger to
qualify as a reorganization within the meaning of Section 368(a) of the Code.
(b) Each of the Company and Parent shall report the Merger as a
reorganization within the meaning of Section 368 of the Code, unless otherwise
required pursuant to a "determination" within the meaning of Section 1313(a) of
the Code.
Section 5.5 Control of Other Party's Business. Nothing contained in this
Agreement shall give Parent or Merger Sub, directly or indirectly, the right to
control or direct the operations of the Company prior to the consummation of
the Merger. Prior to the consummation of the Merger, the Company shall
exercise, consistent with the terms and conditions of this Agreement, complete
control and supervision over its operations.
ARTICLE 6.
ADDITIONAL AGREEMENTS
Section 6.1 Registration Statement; Proxy Statement.
(a) As promptly as practicable after the execution of this Agreement, Parent
and the Company shall prepare and file with the SEC a joint proxy statement
relating to the Company Shareholders' Meeting and Parent Stockholders' Meeting
(together with any amendments thereof or supplements thereto, the "Proxy
Statement") and Parent shall prepare and file with the SEC a registration
statement on Form S-4 (together with all amendments thereto, the "Registration
Statement"; the prospectus contained in the Registration Statement together
with the Proxy Statement, the "Joint Proxy/Prospectus"), in which the Proxy
Statement shall be included, in connection with the registration under the
Securities Act of the shares of Parent Common Stock to be issued to the
shareholders of the Company as Merger Consideration. Each of Parent and the
Company shall use reasonable best efforts to cause the Registration Statement
to become effective as promptly as practicable, and, prior to the effective
date of the Registration Statement, Parent shall take all or any action
reasonably required under any applicable federal or state securities Laws in
connection with the issuance of shares of Parent Common Stock in the Merger.
Each of Parent and the Company shall furnish all information concerning it and
the holders of its capital stock as the other may reasonably request in
connection with such actions and the preparation of the Registration Statement
and Proxy Statement. As promptly as reasonably practicable after the
Registration Statement shall have become effective and the Proxy Statement
shall have been cleared by the SEC, the Company and Parent shall mail the Joint
Proxy/Prospectus to their respective shareholders; provided, however, that the
parties shall consult and cooperate with each other in determining the
appropriate time for mailing the Joint Proxy/Prospectus in light of the date
set for the Company Shareholders' Meeting and the Parent Stockholders' Meeting.
No filing of, or amendment or supplement to, the Proxy Statement shall be made
by the Company or Parent, and no filing of, or amendment or supplement to, the
Registration Statement shall be made by Parent, in each case, without providing
the other party a reasonable opportunity to review and comment thereon, which
comments shall be considered in good faith. Parent and the Company each shall
advise the other, promptly after it receives notice thereof, of the time when
the Registration Statement has become effective or any supplement or amendment
has been filed, of the issuance of any stop order, the suspension of the
qualification of
A-26
the Parent Common Stock issuable in connection with the Merger for offering or
sale in any jurisdiction, or any request by the SEC for amendment of the Proxy
Statement or the Registration Statement or comments thereon and responses
thereto or requests by the SEC for additional information.
(b) The information supplied by Parent for inclusion in the Registration
Statement and the Proxy Statement shall not, at (i) the time the Registration
Statement is declared effective, (ii) the time the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to the shareholders of
the Company, (iii) the time the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to stockholders of Parent, (iv) the time of
the Company Shareholders' Meeting and (v) the time of the Parent Stockholders'
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. If at any time prior to the Effective Time
any event or circumstance relating to Parent or any of its Subsidiaries, or
their respective officers or directors, should be discovered by Parent which
should be set forth in an amendment or a supplement to the Registration
Statement or Proxy Statement, Parent shall promptly inform the Company. All
documents that Parent is responsible for filing with the SEC in connection with
the transactions contemplated herein will comply as to form and substance in
all material respects with the applicable requirements of the Securities Act
and the rules and regulations thereunder and the Exchange Act and the rules and
regulations thereunder.
(c) The information supplied by the Company for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective, (ii) the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to the
shareholders of the Company, (iii) the time the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to stockholders of
Parent, (iv) the time of the Company Shareholders' Meeting and (v) the time of
the Parent Stockholders' Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. If at any
time prior to the Effective Time any event or circumstance relating to the
Company or any Company Subsidiary, or their respective officers or directors,
should be discovered by the Company which should be set forth in an amendment
or a supplement to the Registration Statement or Proxy Statement, the Company
shall promptly inform Parent. All documents that the Company is responsible for
filing with the SEC in connection with the transactions contemplated herein
will comply as to form and substance in all material respects with the
applicable requirements of the Securities Act and the rules and regulations
thereunder and the Exchange Act and the rules and regulations thereunder.
Section 6.2 Shareholders' Meetings.
(a) The Company shall duly call and hold a meeting of its shareholders (the
"Company Shareholders' Meeting") as promptly as reasonably practicable in
accordance with applicable Law following the date the Registration Statement
becomes effective and the Proxy Statement is cleared by the SEC and after
coordination with Parent, provided that the meeting shall be held not later
than five Business Days prior to the Outside Date (provided that the Company
shall not be required to hold the Company Shareholders' Meeting prior to the
date of the Parent Stockholders' Meeting), for the purpose of voting upon the
adoption and approval of this Agreement. In connection with the Company
Shareholders' Meeting and the transactions contemplated hereby, the Company
will (i) subject to applicable Law, use its reasonable best efforts (including
postponing or adjourning the Company Shareholders' Meeting to obtain a quorum
or to solicit additional proxies) to obtain the necessary approvals by its
shareholders of this Agreement, the Merger and the other transactions
contemplated hereby and (ii) otherwise comply with all legal requirements
applicable to the Company Shareholders' Meeting.
(b) Parent shall duly call and hold a meeting of its stockholders (the
"Parent Stockholders' Meeting") as promptly as reasonably practicable in
accordance with applicable Law following the date the Registration Statement
becomes effective and the Proxy Statement is cleared by the SEC and after
coordination with the Company, provided that the meeting shall be held not
later than five Business Days prior to the Outside Date (provided that the
Parent shall not be required to hold the Parent Stockholders' Meeting prior to
the date of the Company Shareholders' Meeting), for the purpose of voting upon
the approval of the Share Issuance, and Parent
A-27
shall use its reasonable best efforts to hold the Parent Stockholders' Meeting
as soon as practicable after the date on which the Registration Statement
becomes effective. In connection with the Parent Stockholders' Meeting and the
transactions contemplated hereby, Parent will (i) subject to applicable Law,
use its reasonable best efforts (including postponing or adjourning Parent
Stockholders' Meeting to obtain a quorum or to solicit additional proxies) to
obtain the necessary approvals by its stockholders of the Share Issuance and
(ii) otherwise comply with all legal requirements applicable to the Parent
Stockholders' Meeting.
(c) The Board of Directors of the Company shall recommend approval of this
Agreement and the Merger by the shareholders of the Company (the "Company
Recommendation") and, subject to Section 6.4, shall not withdraw or adversely
modify (or propose to withdraw or adversely modify) such recommendation, and
the Joint Proxy Statement/Prospectus shall contain such recommendation.
(d) The Board of Directors of Parent shall recommend the approval of the
Share Issuance by the stockholders of Parent (the "Parent Recommendation") and
shall not withdraw or adversely modify (or propose to withdraw or adversely
modify) such recommendation, and the Joint Proxy Statement/Prospectus shall
contain such recommendation.
Section 6.3 Access to Information; Confidentiality.
(a) Except as required pursuant to any confidentiality agreement or similar
agreement or arrangement to which the Company or Parent or any of their
respective Subsidiaries is a party (which such person shall use reasonable best
efforts to cause the counterparty to waive) from the date of this Agreement to
the Effective Time, the Company and Parent shall, and shall cause each of its
Subsidiaries and each of their respective directors, officers, employees,
accountants, consultants, legal counsel, investment bankers, advisors, and
agents and other representatives (collectively, "Representatives") to (i)
provide to the other party and its respective Representatives access at
reasonable times upon prior notice to the officers, employees, agents,
properties, offices and other facilities of such party and its Subsidiaries and
to the books and records thereof and (ii) subject to applicable Laws relating
to the exchange of information, furnish promptly such information concerning
the business, properties, Contracts, assets, liabilities, personnel and other
aspects of itself and its Subsidiaries as the other party and its
Representatives may reasonably request. No investigation conducted pursuant to
this Section 6.3(a) shall affect or be deemed to modify or limit any
representation or warranty made in this Agreement.
(b) With respect to the information disclosed pursuant to this Section 6.3,
the parties shall comply with, and shall cause their respective Representatives
to comply with, all of their respective obligations under the confidentiality
agreement, dated November 14, 2001, previously executed by the Company and
Parent (the "Confidentiality Agreement"); provided, however, that the
restrictions on Parent and its Subsidiaries, Affiliates and Representatives set
forth in paragraph 8 of the Confidentiality Agreement shall be inapplicable
with respect to any of the transactions set forth in this Agreement.
Section 6.4 No Solicitation of Transactions.
(a) The Company agrees that neither it nor any Company Subsidiary shall, and
that it shall use its reasonable best efforts to cause its and their
Representatives not to, directly or indirectly: (i) solicit, initiate,
encourage, knowingly facilitate or induce any inquiry with respect to, or the
making, submission or announcement of, any Acquisition Proposal, (ii)
participate in any discussions or negotiations regarding, or furnish to any
person any nonpublic information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes or may
reasonably be expected to lead to, any Acquisition Proposal (except to the
extent specifically permitted pursuant to this Section 6.4), (iii) engage in
discussions with any person with respect to any Acquisition Proposal, except to
notify such person as to the existence of these provisions (except to the
extent specifically permitted pursuant to this Section 6.4), (iv) approve,
endorse or recommend any Acquisition Proposal with respect the Company (except
to the extent specifically permitted pursuant to this Section 6.4), or (v)
enter into any letter of intent or similar document or
A-28
any agreement, commitment or understanding contemplating or otherwise relating
to any Acquisition Proposal or a transaction contemplated thereby (except for
confidentiality agreements specifically permitted pursuant to Section 6.4(c)).
The Company shall immediately terminate, and shall cause the Company
subsidiaries and its and their Representatives to immediately terminate, all
discussions or negotiations, if any, with any third party with respect to, or
any that could reasonably be expected to lead to or contemplate the possibility
of, an Acquisition Proposal. The Company shall immediately demand that each
person which has heretofore executed a confidentiality agreement with the
Company or any of its Affiliates or Subsidiaries or any of its or their
Representatives with respect to such person's consideration of a possible
Acquisition Proposal to immediately return or destroy (which destruction shall
be certified in writing by such person to the Company) all confidential
information heretofore furnished by the Company or any of its Affiliates or
Subsidiaries or any of its or their Representatives to such person or any of
its Affiliates or Subsidiaries or any of its or their Representatives.
(b) Promptly after receipt of any Acquisition Proposal or any request for
nonpublic information or inquiry which it reasonably believes could lead to an
Acquisition Proposal, the Company shall provide Parent with written notice of
the material terms and conditions of such Acquisition Proposal, request or
inquiry, and the identity of the person or group making any such Acquisition
Proposal, request or inquiry, and a copy of all written materials provided in
connection with such Acquisition Proposal, request or inquiry. After receipt of
the Acquisition Proposal, request or inquiry, the Company shall promptly keep
Parent informed in all material respects of the status and details (including
material amendments or proposed material amendments) of any such Acquisition
Proposal, request or inquiry and shall promptly provide to Parent a copy of all
written materials subsequently provided in connection with such Acquisition
Proposal, request or inquiry.
(c) If the Company receives an Acquisition Proposal which (i) constitutes a
Superior Proposal or (ii) which the Board of Directors of the Company in good
faith concludes proposes consideration that is more favorable to the Company's
shareholders than the transactions contemplated by this Agreement and which
could reasonably be expected to result in a Superior Proposal in all other
respects, the Company shall promptly provide to Parent written notice that
shall state expressly (A) that it has received an Acquisition Proposal which
constitutes a Superior Proposal or which could reasonably be expected to result
in a Superior Proposal, and (B) the identity of the party making such
Acquisition Proposal and the material terms and conditions of the Acquisition
Proposal (the "Superior Proposal Notice") and may then take the following
actions:
(i) furnish nonpublic information to the third party making such
Acquisition Proposal, provided, that (A) prior to so furnishing, the Company
receives from the third party an executed confidentiality agreement
containing customary limitations on the use and disclosure of all nonpublic
written and oral information furnished to such third party on its behalf and
customary standstill provisions, and (B) contemporaneously with furnishing
any such nonpublic information to such third party, the Company furnishes a
copy of such nonpublic information to Parent (to the extent such nonpublic
information has not been previously so furnished); and
(ii) engage in negotiations with the third party with respect to the
Acquisition Proposal.
(d) For a period of not less than five Business Days after Parent's receipt
from the Company of each Superior Proposal Notice, the Company shall, if
requested by Parent, negotiate in good faith with Parent to revise this
Agreement so that the Acquisition Proposal that constituted a Superior Proposal
no longer constitutes a Superior Proposal.
(e) In response to the receipt of a Superior Proposal that has not been
withdrawn and continues to constitute a Superior Proposal after the Company's
compliance with Section 6.4(d), the Board of Directors of the Company may
withhold or withdraw the Company Recommendation and, in the case of a Superior
Proposal that is a tender or exchange offer made directly to its shareholders,
may recommend that its shareholders accept the tender or exchange offer (any of
the foregoing actions, whether by the Board of Directors or a committee
thereof, a "Change of Recommendation"), if both of the following conditions in
Sections 6.4(e)(i) and 6.4(e)(ii) are met:
A-29
(i) the Company Shareholders' Meeting has not occurred; and
(ii) the Board of Directors of the Company has concluded in good faith,
following the receipt of advice of its outside legal counsel, that, in light
of such Superior Proposal, the failure of the Board of Directors to effect a
Change of Recommendation would result in a breach of its fiduciary
obligations to its shareholders under applicable Law.
(f) Notwithstanding anything to the contrary contained in this Agreement,
(i) the obligation of the Company to call, give notice of, convene and hold the
Company Shareholders' Meeting and to hold a vote of the Company's shareholders
on this Agreement and the Merger at the Company Shareholders' Meeting shall not
be limited or otherwise affected by the commencement, disclosure, announcement
or submission to it of any Acquisition Proposal (whether or not a Superior
Proposal), or by any Change of Recommendation and (ii) in any case in which the
Company withholds or withdraws the Company Recommendation pursuant to Section
6.4(e), recognizing that special circumstances, as provided in Section
23B.11.030 of the WBCA, exist in light of the provisions of this Section 6.4
and/or the provisions of the Voting Agreement, the Company shall submit this
Agreement and the Merger to a vote of its shareholders with no recommendation
as permitted by Section 23B.11.030(2) of the WBCA. The Company agrees that it
shall not submit to the vote of its shareholders any Acquisition Proposal
(whether or not a Superior Proposal) or propose to do so.
(g) Nothing contained in this Agreement shall be deemed to restrict the
Company from complying with Rules 14d-9 or 14e-2 under the Exchange Act or be
deemed to restrict the Company or Parent from making such other disclosures as
may be required by federal securities laws or applicable State of Washington
fiduciary duties laws.
(h) Notwithstanding anything to the contrary contained in this Agreement,
the prohibitions contained in Sections 5.l(j) and 5.1(l) shall not be
applicable with respect to a Person who has submitted a Superior Proposal to
the Company.
Section 6.5 Appropriate Action; Consents; Filings.
(a) Subject to the proviso contained in Section 6.5(b)(ii), the Company and
Parent shall use their reasonable best efforts to (i) take, or cause to be
taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to consummate
and make effective the transactions contemplated by this Agreement as promptly
as practicable, (ii) obtain from any Governmental Entities any consents,
licenses, permits, waivers, approvals, authorizations or orders required (A) to
be obtained or made by Parent or the Company or any of their Subsidiaries, (B)
to avoid any action or proceeding by any Governmental Entity (including,
without limitation, those in connection with the HSR Act and antitrust and
competition Laws of any other applicable jurisdiction), in connection with the
authorization, execution and delivery of this Agreement and the consummation of
the transactions contemplated herein, including, without limitation, the
Merger, and (C) to prevent a Company Material Adverse Effect from occurring
prior to or after the Effective Time or a Parent Material Adverse Effect from
occurring after the Effective Time, and (iii) make all necessary filings, and
thereafter make any other required submissions, with respect to this Agreement
and the Merger required under (A) the Securities Act and the Exchange Act, and
any other applicable federal or state securities Laws, (B) the HSR Act and
antitrust and competition Laws of any other applicable jurisdiction and (C) any
other applicable Law. Parent and the Company shall cooperate with each other in
connection with the making of all filings referenced in the preceding sentence,
including providing copies of all such documents to the non-filing party and
its advisors prior to filing and, if requested, to accept all reasonable
additions, deletions or changes suggested in connection therewith. The Company
and Parent shall have the right to review in advance, and to the extent
practicable each shall consult the other on, all the information relating to
the Company and the Company Subsidiaries or Parent and its Subsidiaries, as the
case may be, that appears in any filing made with, or written materials
submitted to, any third party and/or any Governmental Entity in connection with
the Merger and the other transactions contemplated by this Agreement. Parent
and the Company may, as each deems reasonably advisable and necessary,
designate any competitively sensitive information provided to the other
A-30
under this Section 6.5(a) as "outside counsel only." Such information shall be
given only to outside counsel of the recipient. In addition, Parent and the
Company may redact any information from such documents shared with the other
party or its counsel that is not pertinent to the subject matter of the filing
or submission.
(b) Without limiting Section 6.5(a), Parent and the Company shall:
(i) each use its reasonable best efforts to avoid the entry of, or to
have vacated or terminated, any decree, order, or judgment that would
restrain, prevent or delay the Closing, on or before the Outside Date,
including defending through litigation on the merits any claim asserted in
any court by any person; and
(ii) each use its reasonable best efforts to avoid or eliminate each and
every impediment under any antitrust, competition or trade regulation Law
that may be asserted by any Governmental Entity with respect to the Merger
so as to enable the Closing to occur as soon as reasonably possible (and in
any event no later than the Outside Date), including implementing,
contesting or resisting any litigation before any court or quasi-judicial
administrative tribunal seeking to restrain or enjoin the Merger; provided,
however, that nothing n this Agreement shall require any of Parent and its
Subsidiaries or the Company and its Subsidiaries to commit to any
divestitures, licenses or hold separate or similar arrangements with respect
to its assets or conduct of business arrangements, whether as a condition to
obtaining any approval from a Governmental Entity or any other person or for
any other reason, if, in any such case, such divestiture, license, holding
separate or arrangement (x) is not conditioned upon the consummation of the
Merger or (y) would, individually or in the aggregate, have a Parent
Material Adverse Effect (including, for purposes of this clause, the
Surviving Corporation and its Subsidiaries) after giving effect to the
Merger.
(c) Subject to the proviso contained in Section 6.5(b)(ii) and the proviso
contained in the following sentence of this Section 6.5(c), the Company and
Parent shall give (or shall cause their respective Subsidiaries to give) any
notices to third parties, and use, and cause their respective Subsidiaries to
use, reasonable best efforts to obtain any non-governmental third party
consents, (i) necessary, proper or advisable to consummate the transactions
contemplated in this Agreement, (ii) required to be disclosed in the Company
Disclosure Letter or the Parent Disclosure Letter, as applicable, or (iii)
required to prevent a Company Material Adverse Effect from occurring prior to
or after the Effective Time or a Parent Material Adverse Effect from occurring
after the Effective Time. In the event that either party shall fail to obtain
any third party consent described in the first sentence of this Section 6.5(c),
such party shall use reasonable best efforts, and shall take any such actions
reasonably requested by the other party hereto, to minimize any adverse effect
upon the Company and Parent, their respective Subsidiaries, and their
respective businesses resulting, or which could reasonably be expected to
result after the Effective Time, from the failure to obtain such consent;
provided that no obligation to make a material payment or grant a material
right not conditioned upon the consummation of the Merger shall be imposed by
this Section 6.5(c).
(d) From the date of this Agreement until the Effective Time, each party
shall promptly notify the other party in writing of any pending or, to the
Knowledge of the Company or Parent, as appropriate, threatened action, suit,
arbitration or other proceeding or investigation by any Governmental Entity or
any other person (i) challenging or seeking damages in connection with the
Merger or the conversion of Company Common Stock into Parent Common Stock
pursuant to the Merger or (ii) seeking to restrain or prohibit the consummation
of the Merger or otherwise limit the right of Parent or its Subsidiaries to own
or operate all or any portion of the businesses or assets of the Company or its
Subsidiaries.
Section 6.6 Certain Notices. From and after the date of this Agreement
until the Effective Time, each party hereto shall promptly notify the other
party hereto of (a) the occurrence, or non-occurrence, of any event that would
be likely to cause any condition to the obligations of any party to effect the
Merger and the other transactions contemplated by this Agreement not to be
satisfied or (b) the failure of the Company or Parent, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it pursuant to this Agreement which would reasonably be
expected to result in any condition to the obligations of any party to effect
the Merger and the other transactions contemplated by this Agreement not to be
satisfied;
A-31
provided, however, that the delivery of any notice pursuant to this Section 6.6
shall not cure any breach of any representation or warranty, the failure to
comply with any covenant, the failure to meet any condition or otherwise limit
or affect the remedies available hereunder to the party receiving such notice.
Section 6.7 Public Announcements. Parent and the Company will consult with
each other before issuing, and provide each other the opportunity to review and
make reasonable comment upon, any press release or making any public statement
with respect to this Agreement and the transactions contemplated hereby and,
except as may be required by applicable Law or any listing agreement with
Nasdaq, will not issue any such press release or make any such public statement
prior to such consultation; provided, however, that each of Parent and the
Company may make any public statement in response to specific questions by the
press, analysts, investors or those attending industry conferences or financial
analyst conference calls, so long as any such statements are not inconsistent
with previous press releases, public disclosures or public statements made
jointly by Parent and the Company and do not reveal non-public information
regarding the other party.
Section 6.8 Nasdaq Listing. Parent shall use reasonable best efforts (a)
to cause the Parent Common Stock to be issued in the Merger to be approved for
listing upon the Effective Time on Nasdaq or on such national securities
exchange as the Parent Common Stock is listed and (b) to cause the Parent
Common Stock issued upon the exercise of converted Company Options to be
approved for listing on Nasdaq or on such national securities exchange as
Parent Common Stock is listed.
Section 6.9 Employee Benefit Matters.
(a) For a period of at least two years following the Effective Time, Parent
shall provide employee benefits (excluding any benefits attributable to equity
based plans or grants) to the employees and former employees of the Company and
their respective Subsidiaries ("New Parent Employees") that are no less
favorable in the aggregate than those provided to such persons in effect on the
date hereof. Nothing herein shall require Parent to continue any particular
Company Benefit Plan or prevent the amendment or termination thereof (subject
to the maintenance, in the aggregate, of the benefits as provided in the
preceding sentence); provided, however, that Parent shall not take any action
(by way of amendment, termination or otherwise) which is in violation of the
terms of any Company Benefit Plan or applicable Law.
(b) With respect to each benefit plan of Parent ("Parent Benefit Plan") in
which New Parent Employees subsequently participate, for purposes of
determining vesting and entitlement to benefits, including for severance
benefits and vacation entitlement (but not for accrual of pension benefits),
service with the Company (or predecessor employers to the extent the Company
provides past service credit) shall be treated as service with Parent;
provided, that such service shall not be recognized to the extent that such
recognition would result in a duplication of benefits or to the extent that
such service was not recognized under the applicable Company Benefit Plan. Such
service also shall apply for purposes of satisfying any waiting periods,
evidence of insurability requirements, or the application of any pre-existing
condition limitations. Each Parent Benefit Plan shall waive pre-existing
condition limitations to the same xtent waived under the applicable Company
Benefit Plan. New Parent Employees shall be given credit for amounts paid under
a corresponding benefit plan during the same period for purposes of applying
deductibles, co-payments and out-of-pocket maximums as though such amounts had
been paid in accordance with the terms and conditions of the Parent Benefit
Plan for the plan year in which the Effective Time occurs.
(c) At the request of Parent, the Company shall terminate any and all 401(k)
plans of the Company, effective not later than the day immediately preceding
the Closing Date. In the event that Parent requests that such 401(k) plan(s) be
terminated, the Company shall provide Parent with evidence that such 401(k)
plan(s) have been terminated pursuant to resolution of Company's Board of
Directors (the form and substance of which shall be subject to review and
approval by Parent) not later than the day immediately preceding the Closing
Date.
Section 6.10 Indemnification of Directors and Officers.
(a) Parent shall, and shall cause the Surviving Corporation to, indemnify
and hold harmless, and provide advancement of expenses to, all past and present
directors, officers and employees of the Company or any of its
A-32
Subsidiaries to the fullest extent permitted by Law for acts or omissions
occurring at or prior to the Effective Time (including for acts or omissions
occurring in connection with the approval of this Agreement and the
consummation of the transactions contemplated hereby) in their capacities as
such.
(b) For six years from the Effective Time, Parent shall, or shall cause the
Surviving Corporation to, cause to be maintained in effect for the benefit of
the Company's current directors and officers an insurance and indemnification
policy that provides coverage for acts or omissions occurring prior to the
Effective Time (the "D&O Insurance") covering each such person currently
covered by the officers' and directors' liability insurance policies of the
Company on terms with respect to coverage and in amounts no less favorable than
those of the Company's policies in effect on the date hereof; provided,
however, that the Surviving Corporation shall not be required to pay an annual
premium for the D&O Insurance in excess of 200% of the estimated premium for
the 2002 fiscal year, which premium the Company presently expects to be
approximately $1,850,000.
(c) Parent shall, and shall cause the Surviving Corporation to, cause to be
maintained in effect in the Surviving Corporation's (or any successor's)
Articles of Incorporation and Bylaws provisions with respect to indemnification
and advancement of expenses that are at least as favorable to the intended
beneficiaries as those contained in the Company Articles and the Company Bylaws
as in effect on the date hereof.
(d) Parent agrees to honor (and hereby guarantees the Surviving
Corporation's performance under) all indemnification agreements entered into by
the Company or any Company Subsidiary. In the event that Parent or the
Surviving Corporation or any of their respective successors or assigns (i)
consolidates with or merges into any other person and is not the continuing or
surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all its properties and assets to any
person, then, and in each such case, Parent shall cause proper provisions to be
made so that the successors and assigns of the Parent or the Surviving
Corporation, as the case may be, assume the obligations set forth in this
ection 6.10. The obligations of Parent and the Surviving Corporation under this
Section 6.10 shall not be terminated or modified in such a manner as to
adversely affect any indemnitee to whom this Section 6.10 applies without the
express written consent of such affected indemnitee (it being expressly agreed
that the indemnitees to whom this Section 6.10 applies shall be third party
beneficiaries of this Section 6.10).
Section 6.11 Plan of Reorganization. This Agreement is intended to
constitute a "plan of reorganization" within the meaning of Treasury Regulation
Section 1.368-2(g).
Section 6.12 Affiliate Letters. The Company shall, promptly after the date
hereof and prior to the mailing of the Joint Proxy/Prospectus, deliver to
Parent a list setting forth the names of all persons the Company expects to be,
at the time of the Company Shareholders' Meeting, "affiliates" of the Company
for purposes of Rule 145 under the Securities Act. The Company shall furnish
such information and documents as Parent may reasonably request for the purpose
of reviewing the list. The Company shall use reasonable best efforts to cause
each person who is identified as an affiliate in the list furnished or
supplemented pursuant to this Section 6.12 to execute a written agreement,
promptly following the date hereof, in substantially the form of Exhibit 6.12
hereto.
Section 6.13 Section 16 Matters. Prior to the Effective Time: (a) the
Board of Directors of Parent, or an appropriate committee of non-employee
directors thereof, shall adopt a resolution consistent with the interpretive
guidance of the SEC so that the acquisition by any officer or director of the
Company who may become a covered person of Parent for purposes of Section 16 of
the Exchange Act (together with the rules and regulations thereunder, "Section
16"), of shares of Parent Common Stock or options to purchase shares of Parent
Common Stock pursuant to this Agreement and the Merger shall be an exempt
transaction for purposes of Section 16; and (b) the Board of Directors of the
Company or an appropriate committee of non-employee directors thereof, shall
adopt a resolution consistent with the interpretive guidance of the SEC so that
the disposition by any officer or director of the Company who is a covered
person of the Company for purposes of Section 16 of shares of Company Common
Stock or Company Options pursuant to this Agreement and the Merger shall be an
exempt transaction for purposes of Section 16.
A-33
Section 6.14 Stock Award Matters.
(a) The Company shall, and shall cause the administrator(s) of each of the
Company Stock Option Plans and the ESPP to, take any and all actions necessary
(under the applicable Company Stock Option Plan and otherwise) to (i) cause the
Company Options to be treated in accordance with Section 2.4 hereof, including,
without limitation, amending the Company Stock Option Plans and, if necessary
or desirable, obtaining the consent of the optionholders to such treatment; and
(ii) cause the stock purchase rights outstanding under the ESPP to be assumed
and converted into rights to purchase Parent Common Stock pursuant to ection
2.5 in such manner as will not result in acceleration of the exercise of stock
purchase rights under the ESPP.
(b) Promptly after the Effective Time, Parent shall file one or more
registration statements on Form S-3 or Form S-8, as the case may be (or any
other successor or other appropriate forms), with respect to the shares of
Parent Common Stock subject to options and purchase rights issued pursuant to
Sections 2.4 and 2.5 and shall maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such options
remain outstanding.
Section 6.15 Restructure of Transaction. In the event that either of
Latham & Watkins, counsel to Parent, or Skadden, Arps, Slate, Meagher & Flom
LLP, counsel to the Company, is unable to render its opinion pursuant to
Section 7.2(c) or Section 7.3(c), respectively, the structure of the Merger
shall be revised to provide for the merger of the Company with and into Merger
Sub with Merger Sub being the surviving entity in such Merger (the "Forward
Subsidiary Merger"), subject to the approval of each of the Company and Parent
which approval shall not be unreasonably withheld or delayed; provided, that if
a Forward Subsidiary Merger structure would not result in each of Latham &
Watkins or Skadden, Arps, Slate, Meagher & Flom LLP being able to render such
respective opinions, the Company and Parent shall negotiate in good faith to
revise the structure of the business combination between the Company and Parent
such that each of Latham & Watkins and Skadden, Arps, Slate, Meagher & Flom LLP
will be able to render such opinion; provided, further, that no such revision
to the structure of the Merger shall (a) result in any change in the Merger
Consideration, (b) be materially adverse to the interests of Parent, the
Company, Merger Sub, the holders of shares of Parent Common Stock or the
holders of shares of Company Common Stock or (c) unreasonably impede or delay
consummation of the Merger. If the structure of the Merger is so revised, this
Agreement shall be amended by the parties as appropriate to give effect to the
revised structure of the Merger with each party executing a written amendment
to this Agreement as necessary to reflect the foregoing.
ARTICLE 7.
CLOSING CONDITIONS
Section 7.1 Conditions to Obligations of Each Party Under This
Agreement. The respective obligations of each party to effect the Merger and
the other transactions contemplated herein shall be subject to the satisfaction
at or prior to the Effective Time of the following conditions, any or all of
which may be waived, in whole or in part, to the extent permitted by applicable
Law:
(a) Effectiveness of the Registration Statement. The Registration Statement
shall have been declared effective by the SEC under the Securities Act. No stop
order suspending the effectiveness of the Registration Statement shall have
been issued by the SEC and no proceedings for that purpose shall have been
initiated or, to the Knowledge of Parent or the Company, threatened by the SEC.
(b) Shareholder and Stockholder Approval. The Company Shareholder Approval
and the Parent Stockholder Approval shall have been obtained.
(c) No Order. No Governmental Entity, nor any federal or state court of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, judgment or
injunction or order (whether temporary, preliminary or permanent), in any case
which is in effect and which prevents or prohibits consummation of the Merger.
A-34
(d) Consents and Approvals. Other than the filing provided for under
Section 1.2 and filings pursuant to the HSR Act, all consents, approvals and
authorizations of any Governmental Entity required of Parent, the Company or
any of their Subsidiaries to consummate the Merger, the failure of which to be
obtained or taken, individually or in the aggregate, would have a Parent
Material Adverse Effect (determined, for purposes of this clause, after giving
effect to the Merger), shall have been obtained.
(e) HSR Act. The applicable waiting periods, together with any extensions
thereof, under the HSR Act shall have expired or been terminated.
(f) Nasdaq Listing. The shares of Parent Common Stock issuable to the
Company's shareholders in the Merger and such other shares of Parent Common
Stock to be reserved for issuance in connection with the Merger shall have been
approved for listing on Nasdaq or on such national securities exchange as
Parent Common Stock is then listed, subject to official notice of issuance.
(g) Litigation. There shall not be instituted or pending any action,
litigation or proceeding by any Governmental Entity (i) seeking to prohibit,
restrain or otherwise interfere with the Merger or the ownership or operation
by Parent or any of its Subsidiaries of all or any portion of the business or
assets of the Company or Parent or any of their Subsidiaries or to compel
Parent or any of its Subsidiaries to dispose of or hold separate all or any
portion of the business or assets of the Company or Parent or any of their
respective Subsidiaries, or (ii) seeking divestiture of any shares of Company
Common Stock (or shares of stock of the Surviving Corporation) or seeking to
impose or confirm limitations on the ability of Parent to effectively exercise
full rights of ownership of the shares of Company Common Stock (or shares of
stock of the Surviving Corporation), including the right to vote any securities
on any matters properly presented to shareholders, in the case of clause (i) or
(ii), which would, or would reasonably be expected to, have a Parent Material
Adverse Effect (determined, for purposes of this clause, after giving effect to
the Merger).
Section 7.2 Additional Conditions to Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub to effect the Merger and the
other transactions contemplated herein are also subject to the following
conditions:
(a) Representations and Warranties. The representations and warranties of
the Company contained in this Agreement shall be true and correct (without
giving effect to any limitation as to "materiality" or "Company Material
Adverse Effect" set forth therein) at and as of the Effective Time as if made
at and as of such time (except to the extent expressly made as of an earlier
date, in which case as of such earlier date), except where the failure of such
representations and warranties to be true and correct (without giving effect to
any limitation as to "materiality" or "Company Material Adverse Effect" set
forth therein) would not, individually or in the aggregate, result in a Company
Material Adverse Effect. Parent shall have received a certificate signed by an
executive officer of the Company on its behalf to the foregoing effect.
(b) Agreements and Covenants. The Company shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Effective
Time. Parent shall have received a certificate of an executive officer of the
Company to that effect.
(c) Parent Tax Opinion. Parent shall have received the opinion of Latham &
Watkins, dated the date of the Effective Time, to the effect that the Merger
will be treated for Federal income Tax purposes as a reorganization within the
meaning of Section 368(a) of the Code. In rendering such opinion, Latham &
Watkins shall receive and rely upon representations contained in letters of
Parent and the Company to be delivered as of the Effective Time substantially
in the forms attached hereto as Exhibits 7.2(c)(i) and 7.2(c)(ii),
respectively. The opinion referred to in this Section 7.2(c) shall not be
waivable after receipt of the Company Shareholder Approval or the Parent
Stockholder Approval referred to in Section 7.1(b), unless further stockholder
approval is obtained with appropriate disclosure.
A-35
(d) AHP Agreements. The AHP Agreements shall be in full force and effect,
and no authorized officer of AHP shall have notified Parent in writing of, and
AHP shall not have publicly announced, AHP's intention to repudiate such
agreements.
Section 7.3 Additional Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger and the other transactions
contemplated in this Agreement is also subject to the following conditions:
(a) Representations and Warranties. The representations and warranties of
Parent contained in this Agreement shall be true and correct (without giving
effect to any limitation as to "materiality" or "Parent Material Adverse
Effect" set forth therein) at and as of the Effective Time as if made at and as
of such time (except to the extent expressly made as of an earlier date, in
which case as of such earlier date), except where the failure of such
representations and warranties to be true and correct (without giving effect to
any limitation as to "materiality" or "Parent Material Adverse Effect" set
forth therein) would not, individually or in the aggregate, result in a Parent
Material Adverse Effect. The Company shall have received a certificate signed
by an executive officer of Parent on its behalf to the foregoing effect.
(b) Agreements and Covenants. Parent shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Effective
Time. The Company shall have received a certificate of an executive officer of
Parent to that effect.
(c) Company Tax Opinion. The Company shall have received the opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, dated the date of the Effective Time,
to the effect that the Merger will be treated for federal income Tax purposes
as a reorganization within the meaning of Section 368(a) of the Code. In
rendering such opinion, Skadden, Arps, Slate, Meagher & Flom LLP shall receive
and rely upon representations contained in letters of Parent and the Company to
be delivered as of the Effective Time substantially in the form attached hereto
as Exhibits 7.2(c)(i) and 7.2(c)(ii), respectively. The opinion referred to in
this Section 7.3(c) shall not be waivable after receipt of the Company
Shareholder Approval or the Parent Stockholder Approval referred to in Section
7.1(b), unless further stockholder approval is obtained with appropriate
disclosure.
ARTICLE 8.
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, by action taken or authorized by the Board of
Directors of the terminating party or parties, whether before or after approval
of the matters presented in connection with the Merger by the shareholders of
the Company or the stockholders of Parent:
(a) By mutual written consent of Parent and the Company, which consent shall
have been approved by action of their respective Boards of Directors;
(b) By written notice of either the Company or Parent, if the Merger shall
not have been consummated prior to September 30, 2002 (such date, as it may be
extended as provided below, shall be referred to herein as the "Outside Date");
provided, however, that such date may, from time to time, be extended by either
party (by written notice thereof to the other party) up to and including
December 31, 2002 in the event all conditions to effect the Merger other than
one or more conditions set forth in Sections 7.1(c), 7.1(d), 7.1(e) or 7.1(g)
(the "Regulatory Conditions") have been or are capable of being satisfied at
the time of each such extension and the Regulatory Conditions have been or are
reasonably capable of being satisfied on or prior to December 31, 2002;
provided further that the right to terminate this Agreement under this Section
8.1(b) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or results in, the
failure of the Merger to occur on or before such date;
A-36
(c) By written notice of either the Company or Parent, if any Governmental
Entity shall have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the Merger, and
such order, decree, ruling or other action shall have become final and
nonappealable (which order, decree, ruling or other action the parties shall
have used their reasonable best efforts to resist, resolve or lift, as
applicable, subject to Section 6.5);
(d) By written notice of Parent, if (i) the Board of Directors of the
Company shall have withdrawn or adversely modified, or shall have resolved to
withdraw or adversely modify, the Company Recommendation; (ii) the Board of
Directors of the Company shall have approved or recommended, or shall have
resolved to approve or recommend, to the shareholders of the Company, an
Acquisition Proposal other than that contemplated by this Agreement; or (iii)
the Company fails to call or hold the Company Shareholders' Meeting by the
fifth day prior to the Outside Date;
(e) By written notice of the Company, if (i) the Board of Directors of
Parent shall have withdrawn or adversely modified, or shall have resolved to
withdraw or adversely modify, the Parent Recommendation or (ii) Parent fails to
call or hold the Parent Stockholders' Meeting by the fifth day prior to the
Outside Date;
(f) By written notice of Parent, if there has been a breach by the Company
of any representation, warranty, covenant or agreement contained in this
Agreement which (i) would result in a failure of a condition set forth in
Section 7.2(a) or 7.2(b) and (ii) cannot be cured prior to the Outside Date,
provided that Parent shall have given the Company written notice, delivered at
least twenty days prior to such termination, stating Parent's intention to
terminate this Agreement pursuant to this Section 8.1(f) and the basis for such
termination;
(g) By written notice of the Company, if there has been a breach by Parent
of any representation, warranty, covenant or agreement contained in this
Agreement which (i) would result in a failure of a condition set forth in
Section 7.3(a) or 7.3(b) and (ii) cannot be cured prior to the Outside Date,
provided that the Company shall have given Parent written notice, delivered at
least twenty days prior to such termination, stating the Company's intention to
terminate this Agreement pursuant to this Section 8.1(g) and the basis for such
termination; or
(h) By written notice of either Parent or the Company if (i) the Company
Shareholder Approval shall not have been obtained at the Company Shareholders'
Meeting duly convened therefor (or at any adjournment or postponement thereof)
at which a quorum is present and the vote to adopt and approve this Agreement
and the Merger is taken, or (ii) the Parent Stockholder Approval shall not have
been obtained at the Parent Stockholders' Meeting duly convened therefor (or at
any adjournment or postponement thereof) at which a quorum is present and the
vote to approve the Share Issuance is taken.
Section 8.2 Effect of Termination.
(a) Limitation on Liability. In the event of termination of this Agreement
by either the Company or Parent as provided in Section 8.1, this Agreement
shall forthwith become void and there shall be no liability or obligation on
the part of Parent, Merger Sub or the Company or their respective Subsidiaries,
officers or directors, except with respect to Sections 6.3(b) and 8.2 and
Article 9 and with respect to any liabilities or damages incurred or suffered
by a party as a result of the willful and material breach by the other party of
any of its representations, warranties, covenants or other agreements set forth
in this Agreement.
(b) Parent Expenses. Parent and the Company agree that if this Agreement is
terminated pursuant to Sections 8.1(f), then the Company shall pay Parent an
amount equal to the sum of Parent's Expenses up to an amount equal to $15
million.
(c) Company Expenses. Parent and the Company agree that if this Agreement
is terminated pursuant to Sections 8.1(g), then Parent shall pay to the Company
an amount equal to the sum of the Company's Expenses up to an amount equal to
$15 million.
(d) Payment of Expenses. Payment of Expenses pursuant to Sections 8.2(b) or
8.2(c) shall be made not later than two Business Days after delivery to the
other party of notice of demand for payment and a documented
A-37
itemization setting forth in reasonable detail all Expenses of the party
entitled to receive payment (which itemization may be supplemented and updated
from time to time by such party until the ninetieth day after such party
delivers such notice of demand for payment).
(e) Company Termination Fee.
(i) In the event that this Agreement is terminated pursuant to (A)
Section 8.1(d)(i) and the Board of Directors of the Company has withdrawn or
adversely modified the Company Recommendation in such a manner that the
Company cannot submit this Agreement to a vote of the Company's shareholders
pursuant to Section 23B.11.030(2) of the WBCA, (B) Section 8.1(d)(ii), or
(C) Section 8.1(d)(iii), then the Company shall pay to Parent, within two
Business Days following written notice of such termination, a termination
fee of $475,000,000 in immediately available funds.
(ii) In the event that the Company shall have withdrawn or adversely
modified the Company Recommendation prior to the Company Shareholders'
Meeting and this Agreement is terminated pursuant to Section 8.1(h)(i), then
the Company shall pay to Parent, within two Business Days following written
notice of such termination, a termination fee of $475,000,000 in immediately
available funds.
(iii) In the event that (A) this Agreement is terminated pursuant to
Section 8.1(h)(i) and, at any time after the date of this Agreement and
before the vote on this Agreement at the Company Shareholders' Meeting, an
Acquisition Proposal with respect to the Company shall have been publicly
announced and not bona fide withdrawn and (B) a Competing Transaction with
respect to the Company is consummated or the Company enters into a
definitive agreement with respect to a Competing Transaction, in either
case, within twelve months following the termination of this Agreement, then
the Company shall pay to Parent, within two Business Days after the earlier
of the consummation of such Competing Transaction or execution of a
definitive agreement with respect to such Competing Transaction, a fee of
$475,000,000 in immediately available funds.
(f) Parent Termination Fee.
(i) In the event that the Board of Directors of Parent shall have
withdrawn or adversely modified the Parent Recommendation and, thereafter,
this Agreement is terminated pursuant to Section 8.1(h)(ii), then Parent
shall pay to the Company, within two Business Days following written notice
of such termination, a termination fee of $475,000,000 in immediately
available funds.
(ii) In the event that this Agreement is terminated pursuant to Section
8.1(e)(ii), then Parent shall pay to the Company, within two Business Days
following written notice of such termination, a termination fee of
$475,000,000 in immediately available funds.
(g) All Payments. All payments under Section 8.2 shall be made by wire
transfer of immediately available funds to an account designated by the party
entitled to receive payment. The Company and Parent acknowledge that the
agreements contained in Section 8.2 are an integral part of the transactions
contemplated by this Agreement and that, without these agreements, neither the
Company nor Parent would enter into this Agreement. Accordingly, if either
party fails promptly to pay any amount due pursuant to this Section 8.2 and, in
order to obtain such payment, the Company or Parent, as applicable, commences a
suit which results in a judgment against the other party for the fee set forth
in this Section 8.2, such defaulting party shall pay to the prevailing party
its costs and expenses (including reasonable attorneys' fees and expenses) in
connection with such suit, together with interest on the amount of the fee at
the prime rate of Citibank, N.A. in effect on the date such payment was
required to be made.
Section 8.3 Amendment. This Agreement may be amended by the parties hereto
by action taken by or on behalf of their respective Boards of Directors at any
time prior to the Effective Time; provided, however, that,
A-38
after approval of the Merger by the shareholders of the Company, no amendment
may be made without further shareholder approval which, by Law or in accordance
with the rules of Nasdaq, requires further approval by such shareholders. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
Section 8.4 Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto, and (c) waive compliance by the other party
with any of the agreements or conditions contained herein; provided, however,
that after any approval of the transactions contemplated by this Agreement by
the shareholders of the Company, there may not be, without further approval of
such shareholders, any extension or waiver of this Agreement or any portion
thereof which, by Law or in accordance with the rules of Nasdaq, requires
further approval by such shareholders. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by the party or
parties to be bound thereby, but such extension or waiver or failure to insist
on strict compliance with an obligation, covenant, agreement or condition shall
not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
Section 8.5 Fees and Expenses. Subject to Sections 8.2(a), 8.2(b), 8.2(c)
and 8.2(g), all expenses incurred by the parties hereto shall be borne solely
and entirely by the party which has incurred the same; provided, however, that
each of Parent and the Company shall pay one-half of the expenses related to
printing, filing and mailing the Registration Statement and the Proxy Statement
and all SEC and other regulatory filing fees incurred in connection with the
Registration Statement and the Proxy Statement.
ARTICLE 9.
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time. This Section 9.1
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
Section 9.2 Notices. Any notices or other communications required or
permitted under, or otherwise in connection with this Agreement shall be in
writing and shall be deemed to have been duly given when delivered in person or
upon confirmation of receipt when transmitted by facsimile transmission (but
only if followed by transmittal by national overnight courier or hand for
delivery on the next Business Day) or on receipt after dispatch by registered
or certified mail, postage prepaid, addressed, or on the next Business Day if
transmitted by national overnight courier, in each case as follows:
(a) If to Parent or Merger Sub, addressed to it at:
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, CA 91320
Fax: (805) 499-3540
Attn: Chief Executive Officer
with a copy to:
Latham & Watkins
885 Third Avenue, Suite 1000
New York, NY 10022-4802
Fax: (212) 751-4864
Attn: Charles Nathan
and
A-39
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, CA 90071-2007
Fax: (213) 891-8763
Attn: Gary Olson
Paul D. Tosetti
Charles K. Ruck
(b) If to the Company, addressed to it at:
Immunex Corporation
51 University Street
Seattle, Washington 98101
Fax: (206) 467-0368
Attn: Chief Executive Officer
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
Fax: (212) 735-2000
Attn: Roger Aaron
Stephen Arcano
Section 9.3 Certain Definitions. For purposes of this Agreement, the term:
"Accelerated Company Option" shall mean a Company Option with a per share
exercise price which is equal to or less than the greater of (i) $40.00 or (ii)
the closing sales price for a share of Company Common Stock (or the closing
bid, if no sales were reported) as quoted on Nasdaq for the last market trading
day immediately preceding the Effective Time, as reported in The Wall Street
Journal.
"Acquisition Proposal" means any offer or proposal concerning any (a)
merger, consolidation, business combination, or similar transaction involving
the Company or any Significant Subsidiary of the Company pursuant to which the
shareholders of the Company immediately prior to such transaction would own
less than 80% of any class of equity securities of the entity surviving or
resulting from such transaction (or the ultimate parent entity thereof), (b)
sale or other disposition directly or indirectly of assets of the Company or
the Company Subsidiaries representing 20% or more of the consolidated assets of
the Company and the Company Subsidiaries, (c) issuance, sale, or other
disposition of securities (or options, rights or warrants to purchase, or
securities convertible into or exchangeable for, such securities) in each case
by the Company representing 20% or more of the voting power of the Company or
(d) transaction in which any person shall acquire beneficial ownership, or the
right to acquire beneficial ownership or any group shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of, 20% or
more of the outstanding voting capital stock of the Company (other than the
Merger).
"Affiliate" of a specified person means a person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the person specified.
"beneficial ownership" (and related terms such as "beneficially owned" or
"beneficial owner") has the meaning set forth in Rule 13d-3 under the Exchange
Act.
"Blue Sky Laws" means state securities or "blue sky" Laws.
"Business Day" means any day on which banks are not required or authorized
to close in the City of New York.
"Cancelled Company Option" shall mean a Company Option with a per share
exercise price which exceeds the greater of (i) $40.00 or (ii) the closing
sales price for a share of Company Common Stock (or the closing bid,
A-40
if no sales were reported) as quoted on Nasdaq for the last market trading day
immediately preceding the Effective Time, as reported in The Wall Street
Journal.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended as of the date hereof.
"Company Intellectual Property" means all intellectual property or other
proprietary rights of every kind, foreign or domestic, including all patents,
patent applications, inventions (whether or not patentable), processes,
products, technologies, discoveries, copyrightable and copyrighted works,
apparatus, trade secrets, trademarks, trademark registrations and applications,
domain names, service marks, service mark registrations and applications, trade
names, trade secrets, know-how, trade dress, copyright registrations, customer
lists, confidential marketing and customer information, licenses, confidential
technical information, software, and all documentation thereof, in each case,
used in the business of the Company as of the date of this Agreement or the
Closing Date.
"Company Material Adverse Effect" means any change affecting, or condition
having an effect on, the Company or any Company Subsidiary that is, or would
reasonably be expected to be, materially adverse to the business, financial
condition or results of operations of the Company and the Company Subsidiaries,
taken as a whole, except, in each case, for any such change or condition
resulting from or arising out of (i) changes or developments in the
biotechnology industry generally, which changes or developments do not
disproportionately affect the Company relative to other participants in the
biotechnology industry in any material respect, (ii) changes or developments in
financial or securities markets or the economy in general which changes do not
disproportionately affect the Company in any material respect, (iii) any change
in the Company's stock price or trading volume, in and of itself or (iv) the
announcement of the transactions contemplated by this Agreement.
"Company Option" means any option or warrant to purchase Company Common
Stock.
"Company Stock Option Plan" means the Immunex Corporation 1993 Stock Option
Plan, as Amended and Restated on April 25, 2000, the Immunex Corporation 1999
Stock Option Plan, as Amended and Restated on April 25, 2000, the Stock Option
Grant Program for Nonemployee Directors under the Immunex Corporation Amended
and Restated 1999 Stock Option Plan, the Immunex Corporation Stock Option Plan
for Nonemployee Directors, as Amended and Restated on April 18, 2000, and in
each case, the addendums thereto, or any other plan, agreement or arrangement
pursuant to which Company Options have been issued as of the Effective Time,
other than the ESPP.
"Competing Transaction" means any (a) merger, consolidation, business
combination, or similar transaction involving the Company or any Significant
Subsidiary of the Company pursuant to which the shareholders of the Company
immediately prior to such transaction would own less than 70% of any class of
equity securities of the entity surviving or resulting from such transaction
(or the ultimate parent entity thereof), (b) sale or other disposition directly
or indirectly of assets of the Company or the Company Subsidiaries representing
30% or more of the consolidated assets of the Company and the Company
Subsidiaries, (c) issuance, sale, or other disposition of securities (or
options, rights or warrants to purchase, or securities convertible into or
exchangeable for, such securities) in each case by the Company to any person or
"group" (as defined in Rule 13d-5(b)(1) under the Exchange Act) representing
30% or more of the voting power of the Company or (d) transaction in which any
person shall acquire beneficial ownership, or the right to acquire beneficial
ownership or any group shall have been formed which beneficially owns or has
the right to acquire beneficial ownership of, 30% or more of the outstanding
voting capital stock of the Company (other than any shares beneficially owned
by AHP or its Subsidiaries).
"Contracts" means any of the agreements, contracts, leases, powers of
attorney, notes, loans, evidence of indebtedness, purchase orders, letters of
credit, settlement agreements, franchise agreements, undertakings, covenants
not to compete, employment agreements, licenses, instruments, obligations,
commitments,
A-41
understandings, policies, purchase and sales orders, quotations and other
executory commitments to which any company is a party or to which any of the
assets of the companies are subject, whether oral or written, express or
implied.
"control" (including the terms "controlled by" and "under common control
with") means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the management or policies of
a person, whether through the ownership of securities or as trustee or
executor, by Contract or credit arrangement or otherwise.
"delivered" or "made available" (or words of similar import) shall include,
without limitation, all documents and materials made available in the Company's
data rooms in Los Angeles, California or New York, New York or Parent's data
rooms in Los Angeles, California or New York, New York, as the case may be.
"Environmental Laws" means any federal, state, local or foreign statute,
Law, ordinance, regulation, rule, code, treaty, writ or order and any
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree, judgment, stipulation,
injunction, permit, authorization, policy, opinion, or agency requirement, in
each case having the force and effect of Law, relating to the pollution,
protection, investigation or restoration of the environment, health and safety
as affected by the environment or natural resources, including, without
limitation, those relating to the use, handling, presence, transportation,
treatment, storage, disposal, release, threatened release or discharge of
Hazardous Materials or noise, odor, wetlands, pollution or contamination.
"Environmental Permits" means any permit, approval, identification number,
license and other authorization required under any applicable Environmental Law.
"Equity Interest" means any share, capital stock, partnership, member or
similar interest in any entity, and any option, warrant, right or security
(including debt securities) convertible, exchangeable or exercisable therefor.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.
"ERISA Affiliate" means any entity or trade or business (whether or not
incorporated) other than the Company that together with the Company is
considered under common control and treated as a single employer under Section
4.14(b), (c), (m) or (o) of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Expenses" includes all reasonable out-of-pocket expenses (including,
without limitation, all reasonable fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party hereto and its
Affiliates) incurred by a party or on its behalf in connection with or related
to the authorization, preparation, negotiation, execution and performance of
this Agreement and the transactions contemplated hereby, including the
preparation, printing, filing and mailing of the Registration Statement and
Proxy Statement, as applicable, and the solicitation of shareholder approvals
and all other matters related to the transactions contemplated hereto.
"GAAP" means generally accepted accounting principles as applied in the
United States.
"Governance Agreement" means that certain Amended and Restated Governance
Agreement dated as of December 15, 1992 among American Cyanamid Company,
Lederle Oncology Corporation and the Company, as amended by Amendment No. 1 to
the Amended and Restated Governance Agreement dated May 20, 1999 between
American Cyanamid Company and the Company and Amendment No. 2 to Amended and
Restated Governance Agreement dated August 9, 2000 between American Cyanamid
Company and the Company.
A-42
"Governmental Entity" means domestic or foreign governmental,
administrative, judicial or regulatory authority.
"group" is defined as in the Exchange Act, except where the context
otherwise requires.
"Hazardous Materials" means (A) any petroleum, petroleum products,
byproducts or breakdown products, radioactive materials, asbestos-containing
materials or polychlorinated biphenyls or (B) any chemical, material or other
substance defined or regulated as toxic or hazardous or as a pollutant or
contaminant or waste under any applicable Environmental Law.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder.
"Intellectual Property" means intellectual property or other proprietary
rights of every kind, foreign or domestic, including all patents, patent
applications, inventions (whether or not patentable), processes, products,
technologies, discoveries, copyrightable and copyrighted works, apparatus,
trade secrets, trademarks, trademark registrations and applications, domain
names, service marks, service mark registrations and applications, trade names,
trade secrets, know-how, trade dress, copyright registrations, customer lists,
confidential marketing and customer information, licenses, confidential
technical information, software, and all documentation thereof.
"Knowledge" of any person which is not an individual means, with respect to
any specific matter, the actual knowledge of such person's executive officers
and any other officer having primary responsibility for such matter.
"Law" means foreign or domestic law, statute, code, ordinance, rule,
regulation, order, judgment, writ, stipulation, award, injunction, decree or
arbitration award or finding.
"Liens" means any mortgage, pledge, lien, security interest, conditional or
installment sale agreement, encumbrance, charge or other claims of third
parties of any kind.
"Nasdaq" means the Nasdaq Stock Market.
"Parent Certificate" means Parent's Restated Certificate of Incorporation,
as amended through the date of this Agreement.
"Parent Intellectual Property" means all intellectual property or other
proprietary rights of every kind, foreign or domestic, including all patents,
patent applications, inventions (whether or not patentable), processes,
products, technologies, discoveries, copyrightable and copyrighted works,
apparatus, trade secrets, trademarks, trademark registrations and applications,
domain names, service marks, service mark registrations and applications, trade
names, trade secrets, know-how, trade dress, copyright registrations, customer
lists, confidential marketing and customer information, licenses, confidential
technical information, software, and all documentation thereof, in each case,
used in the business of Parent as of the date of this Agreement or the Closing
Date.
"Parent Material Adverse Effect" means any change affecting, or condition
having an effect on, Parent, Merger Sub or any of Parent's Subsidiaries that
is, or would reasonably be expected to be, materially adverse to the business,
financial condition or results of operations of Parent and its Subsidiaries,
taken as a whole, except, in each case, for any such change or condition
resulting from or arising out of (i) changes or developments in the
biotechnology industry generally, which changes or developments do not
disproportionately affect Parent relative to other participants in the
biotechnology industry in any material respect, (ii) changes or developments in
financial or securities markets or the economy in general which changes do not
disproportionately affect Parent in any material respect, (iii) any change in
Parent's stock price or trading volume, in and of itself or (iv) the
announcement of the transactions contemplated by this Agreement.
A-43
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Liens" means (a) Liens for Taxes, assessments or similar charges
incurred in the ordinary course of business consistent with past practice that
are not yet due and payable or are being contested in good faith; (b) pledges
or deposits made in the ordinary course of business consistent with past
practice; (c) Liens of mechanics, materialmen, warehousemen or other like Liens
securing obligations incurred in the ordinary course of business consistent
with past practice that are not yet due and payable or are being contested in
good faith; and (iv) similar Liens and encumbrances which are incurred in the
ordinary course of business consistent with past practice and which do not in
the aggregate materially detract from the value of such assets or properties or
materially impair the use thereof in the operation of such business.
"person" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
group.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
"Share Issuance" means the issuance of Parent Common Stock pursuant to
Section 2.1(a).
"Significant Subsidiary" has the meaning set forth in Rule 1-02 of
Regulation S-X.
"Subsidiary" or "Subsidiaries" of any person or any other person means any
corporation, partnership, joint venture or other legal entity of which such
person, as the case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, a majority of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the Board of Directors or other governing body of such corporation
or other legal entity.
"Superior Proposal" means any bona fide offer or proposal (on its most
recently amended or modified terms, if amended or modified) made by a person
other than Parent or Merger Sub that (1) concerns any (a) merger, tender offer,
exchange offer, business combination or similar transaction involving the
Company or any Subsidiary of the Company pursuant to which (i) shareholders of
the Company immediately prior to such transaction would own less than 50% of
the voting power of the entity surviving or resulting from such transaction (or
the ultimate parent entity thereof) and (ii) shareholders of the Company other
than AHP would own less than 30% of the voting power of the entity surviving or
resulting from such transaction (or the ultimate parent entity thereof) or (b)
sale or other disposition directly or indirectly of assets of the Company or
the Company Subsidiaries representing 67% or more of the consolidated assets of
the Company and the Company Subsidiaries, (2) is on terms which the Board of
Directors of the Company in good faith concludes (following receipt of the
advice of its financial advisors and outside counsel) are more favorable to the
Company's shareholders (in their capacities as shareholders) than the
transactions contemplated by this Agreement (including any revisions hereto),
and (3) is, in the good faith judgment of the Company, reasonably likely to be
completed and financed.
"Taxes" means all taxes of any kind, including, without limitation, those on
or measured by or referred to as income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, value added, property or windfall
profits taxes, customs, duties or similar fees, assessments or charges of any
kind whatsoever, together with any interest and any penalties, additions to tax
or additional amounts imposed by any Governmental Entity.
"Tax Returns" means any report, return (including information return), claim
for refund, or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendments thereof.
"Treasury Regulations" means the United States Treasury regulations
promulgated under the Code.
A-44
Section 9.4 Terms Defined Elsewhere. The following terms are defined
elsewhere in this Agreement, as indicated below:
"Agreement"...................... Preamble
"AHP"............................ Recitals
"AHP Agreements"................. Section 2.7
"Articles of Merger"............. Section 1.2
"Cash Consideration"............. Section 2.1(a)
"Certificates"................... Section 2.2(b)
"Change of Recommendation"....... Section 6.4(e)
"Closing"........................ Section 1.2
"Closing Date"................... Section 1.2
"Code"........................... Recitals
"Common Stock Consideration"..... Section 2.1(a)
"Company"........................ Preamble
"Company Articles"............... Section 3.2
"Company Benefit Plan"........... Section 3.9(a)
"Company Bylaws"................. Section 3.2
"Company Common Stock"........... Section 2.1(a)
"Company Disclosure Letter"...... Article 3
"Company Financial Advisor"...... Section 3.20
"Company Form 10-K".............. Section 3.7(c)
"Company Material Contract"...... Section 3.12
"Company Pharmaceutical Products" Section 3.19(a)
"Company Permits"................ Section 3.6
"Company Preferred Stock"........ Section 3.3(a)
"Company Recommendation"......... Section 6.2(c)
"Company SEC Filings"............ Section 3.7(a)
"Company Shareholder Approval"... Section 3.21
"Company Shareholders' Meeting".. Section 6.2(a)
"Company Subsidiaries"........... Section 3.1
"Confidentiality Agreement"...... Section 6.3(b)
"D&O Insurance".................. Section 6.10(b)
"Director Plans"................. Section 2.4
"Dissenting Share"............... Section 2.1(e)
"Effective Time"................. Section 1.2
A-45
"employee benefit plan"......... Section 3.9(a)
"ESPP".......................... Section 2.5
"Excess Shares"................. Section 2.2(e)(i)
"Exchange Agent"................ Section 2.2(a)
"Exchange Fund"................. Section 2.2(a)
"Exchange Ratio"................ Section 2.1(a)
"FDA"........................... Section 3.6
"FDCA".......................... Section 3.6
"Forward Subsidiary Merger"..... Section 6.15
"IRS"........................... Section 3.9(a)
"Joint Proxy/Prospectus"........ Section 6.1(a)
"Litigation Conditions"......... Section 8.1(b)
"Merger"........................ Recitals
"Merger Consideration".......... Section 2.1(a)
"Merger Sub".................... Preamble
"multiemployer plan"............ Section 3.9(d)
"New Parent Employees".......... Section 6.9(a)
"Option Exchange Ratio"......... Section 2.4(a)
"Outside Date".................. Section 8.1(b)
"Parent"........................ Preamble
"Parent Benefit Plans".......... Section 6.9(b)
"Parent Bylaws"................. Section 4.2
"Parent Common Stock"........... Section 2.1(a)
"Parent Disclosure Letter"...... Article 4.
"Parent Financial Advisor"...... Section 4.14
"Parent Form 10-K".............. Section 4.7(c)
"Parent Permits"................ Section 4.6
"Parent Pharmaceutical Products" Section 4.12(a)
"Parent Preferred Stock"........ Section 4.3(a)
"Parent Recommendation"......... Section 6.2(d)
"Parent SEC Filings"............ Section 4.7(a)
"Parent Stockholder Approval"... Section 4.15
"Parent Stockholders' Meeting".. Section 6.2(b)
"Parent Subsidiaries"........... Section 4.1
A-46
"Product Rights Agreement" Section 3.15
"Registration Statement".. Section 6.1(a)
"Proxy Statement"......... Section 6.1(a)
"Replacement Option"...... Section 2.4(b)
"Representatives"......... Section 6.3(a)
"Rights Plan"............. Section 2.1(f)
"Section 16".............. Section 6.13
"Superior Proposal Notice" Section 6.4(c)
"Surviving Corporation"... Section 1.1
"Voting Agreement"........ Recitals
"WBCA".................... Recitals
Section 9.5 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 9.6 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of Law or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
Section 9.7 Entire Agreement. This Agreement (together with the Exhibits,
Parent and Company Disclosure Letters and the other documents delivered
pursuant hereto) and the Confidentiality Agreement constitute the entire
agreement of the parties and supersede all prior agreements and undertakings,
both written and oral, between the parties, or any of them, with respect to the
subject matter hereof.
Section 9.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of Law or otherwise), without
the prior written consent of the other parties, and any attempt to make any
such assignment without such consent shall be null and void, except that Merger
Sub may assign, in its sole discretion, any or all of its rights, interests and
obligations under this Agreement to any direct wholly-owned Subsidiary of
Parent without the consent of the Company.
Section 9.9 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective
successors and assigns, and nothing in this Agreement, express or implied,
other than pursuant to Section 6.11, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
Section 9.10 Mutual Drafting. Each party hereto has participated in the
drafting of this Agreement, which each party acknowledges is the result of
extensive negotiations between the parties.
Section 9.11 Governing Law; Consent to Jurisdiction; Waiver of Trial by
Jury.
(a) This Agreement and the transactions contemplated hereby, and all
disputes between the parties under or related to the Agreement or the facts and
circumstances leading to its execution, whether in Contract, tort or
A-47
otherwise, shall be governed by and construed in accordance with the Laws of
the State of Delaware, applicable to contracts executed in and to be performed
entirely within the State, except that the provisions of the WBCA shall govern
the Merger.
(b) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any
Delaware State court, or Federal court of the United States of America, sitting
in Delaware, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the agreements
delivered in connection herewith or the transactions contemplated hereby or
thereby or for recognition or enforcement of any judgment relating thereto, and
each of the parties hereby irrevocably and unconditionally (a) agrees not to
commence any such action or proceeding except in such courts, (b) agrees that
any claim in respect of any such action or proceeding may be heard and
determined in such Delaware State court or, to the extent permitted by Law, in
such Federal court, (c) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such action or proceeding in any such Delaware State or
Federal court, and (d) waives, to the fullest extent permitted by Law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such Delaware State or Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by Law. Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 9.2. Nothing in this Agreement shall affect the right of any party
to this Agreement to serve process in any other manner permitted by Law.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS
OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 9.11(c).
Section 9.12 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not to be performed in accordance with the terms hereof and that
the parties shall be entitled to specific performance of the terms hereof in
addition to any other remedies at Law or in equity.
Section 9.13 Disclosure. Any matter disclosed in any section of a party's
Disclosure Letter shall be considered disclosed for other sections of such
Disclosure Letter, but only to the extent such matter on its face would
reasonably be expected to be pertinent to a particular section of a party's
Disclosure Letter in light of the disclosure made in such section. The
provision of monetary or other quantitative thresholds for disclosure does not
and shall not be deemed to create or imply a standard of materiality hereunder.
Section 9.14 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
[Signature page follows]
A-48
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
AMGEN INC.
a Delaware corporation
/s/ KEVIN W. SHARER
By: _______________________________
Name: Kevin W. Sharer
Title: Chairman of the Board, CEO
and
President
AMS ACQUISITION INC.
a Washington corporation
/s/ KEVIN W. SHARER
By: _______________________________
Name: Kevin W. Sharer
Title: Chairman of the Board, CEO
and
President
IMMUNEX CORPORATION
a Washington corporation
/s/ EDWARD V. FRITZKY
By: _______________________________
Name: Edward V. Fritzky
Title: Chairman, Chief Executive
Officer and
President
[SIGNATURE PAGE--AGREEMENT AND PLAN OF MERGER]
A-49
ANNEX B
SHAREHOLDER VOTING AGREEMENT
BY AND AMONG
AMGEN INC.
AMERICAN HOME PRODUCTS CORPORATION,
MDP HOLDINGS, INC. AND
LEDERLE PARENTERALS, INC.
Dated as of December 16, 2001
SHAREHOLDER VOTING AGREEMENT
This SHAREHOLDER VOTING AGREEMENT (this "Agreement") is entered into as of
December 16, 2001, by and among Amgen Inc., a Delaware corporation ("Parent"),
American Home Products Corporation, a Delaware corporation ("AHP"), MDP
Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of AHP ("Sub
1"), and Lederle Parenterals, Inc., a New Jersey corporation and wholly-owned
subsidiary of AHP ("Sub 2" and, together with AHP and Sub 1, the
"Shareholders").
W I T N E S S E T H:
WHEREAS, as of the date hereof, each Shareholder "beneficially owns" (as
such term is defined in Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended) and is entitled to dispose of (or to direct the
disposition of) and to vote (or to direct the voting of) the number of shares
of common stock, par value $0.01 per share (the "Common Stock"), of Immunex
Corporation, a Washington corporation (the "Company"), set forth opposite such
Shareholder's name on Schedule I hereto (such shares of Common Stock, together
with any other shares of Common Stock the voting power over which is acquired
by any Shareholder during the period from and including the date hereof through
and including the date on which this Agreement is terminated in accordance with
its terms, are collectively referred to herein as the "Subject Shares");
WHEREAS, Parent, AMS Acquisition Inc., a Washington corporation and a
wholly-owned subsidiary of Parent ("Merger Sub"), and the Company propose to
enter into an Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"), pursuant to which Merger Sub will merge with and into the
Company, with the Company surviving as a wholly-owned subsidiary of Parent (the
"Merger"); and
WHEREAS, as a condition to the willingness of Parent to enter into the
Merger Agreement, and as an inducement and in consideration therefor, each
Shareholder is executing this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Capitalized Terms. For purposes of this Agreement, capitalized
terms used and not defined herein shall have the respective meanings ascribed
to them in the Merger Agreement.
Section 1.2 Other Definitions. For purposes of this Agreement:
(a) "Affiliate" means, with respect to any specified Person, any Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person specified. For
purposes of this Agreement, with respect to each Shareholder, the term
"Affiliate" shall not include the Company and the Persons that directly, or
indirectly through one or more intermediaries, are controlled by the Company.
(b) "Governance Agreement" means the Amended and Restated Governance
Agreement by and among the Company, American Cyanamid Company and Lederle
Oncology Corporation, dated as of December 15, 1992, as amended.
B-1
(c) "Person" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
group.
(d) "Representative" means, with respect to any particular Person, any
director, officer, employee, accountant, consultant, legal counsel, investment
banker, advisor, agent or other representatives of such Person.
ARTICLE II
VOTING AGREEMENT AND IRREVOCABLE PROXY
Section 2.1 Agreement to Vote the Subject Shares. Each Shareholder, in its
capacity as such, hereby agrees that, during the period commencing on the date
hereof and continuing until the termination of this Agreement (such period, the
"Voting Period"), at any meeting (or any adjournment or postponement thereof)
of the Company's shareholders, however called, or in connection with any
written consent of the Company's shareholders, such Shareholder shall vote (or
cause to be voted) its Subject Shares (x) in favor of the approval of the terms
of the Merger Agreement, the Merger and the other transactions contemplated by
the Merger Agreement (and any actions required in furtherance thereof), (y)
against any action, proposal, transaction or agreement that would result in a
breach in any respect of any covenant, representation or warranty or any other
obligation or agreement of the Company contained in the Merger Agreement or of
any Shareholder contained in this Agreement, and (z) except with the written
consent of Parent, against the following actions or proposals (other than the
transactions contemplated by the Merger Agreement): (i) any Acquisition
Proposal; and (ii) (A) any change in the persons who constitute the board of
directors of the Company that is not approved in advance by at least a majority
of the persons who were directors of the Company as of the date of this
Agreement (or their successors who were so approved); (B) any material change
in the present capitalization of the Company or any amendment of the Company's
articles of incorporation or bylaws; (C) any other material change in the
Company's corporate structure or business; or (D) any other action or proposal
involving the Company or any of its subsidiaries that is intended, or could
reasonably be expected, to prevent, impede, interfere with, delay, postpone or
adversely affect the transactions contemplated by the Merger Agreement;
provided, however, that nothing in this Agreement shall limit or affect any
actions taken by any member of the board of directors of the Company nominated
by, or appointed at the request of, AHP solely in his or her capacity as a
director of the Company; provided, further, that nothing in this Agreement
shall be interpreted as obligating the Shareholders to exercise any options to
acquire shares of Common Stock. Any such vote shall be cast or consent shall be
given in accordance with such procedures relating thereto so as to ensure that
it is duly counted for purposes of determining that a quorum is present and for
purposes of recording the results of such vote or consent. Each Shareholder
agrees not to enter into any agreement or commitment with any Person the effect
of which would be inconsistent with or violative of the provisions and
agreements contained in this Article II.
Section 2.2 Grant of Irrevocable Proxy. Each Shareholder hereby appoints
Parent and any designee of Parent, and each of them individually, as such
Shareholder's proxy and attorney-in-fact, with full power of substitution and
resubstitution, to vote or act by written consent during the Voting Period with
respect the Subject Shares in accordance with Section 2.1. This proxy is given
to secure the performance of the duties of each Shareholder under this
Agreement. The Shareholders shall promptly cause a copy of this Agreement to be
deposited with the Company at its principal place of business. Each Shareholder
shall take such further action or execute such other instruments as may be
necessary to effectuate the intent of this proxy.
Section 2.3 Nature of Irrevocable Proxy. The proxy and power of attorney
granted pursuant to Section 2.2 by each Shareholder shall be irrevocable during
the term of this Agreement, shall be deemed to be coupled with an interest
sufficient in law to support an irrevocable proxy and shall revoke any and all
prior proxies granted by such Shareholder. The power of attorney granted by
each Shareholder herein is a durable power of attorney and shall survive the
dissolution, bankruptcy, death or incapacity of such Shareholder. The proxy and
power of attorney granted hereunder shall terminate upon the termination of
this Agreement.
B-2
ARTICLE III
COVENANTS
Section 3.1 Generally.
(a) Except for pledges in existence as of the date hereof, each Shareholder
agrees that during the Voting Period, except as contemplated by the terms of
this Agreement, it shall not (i) sell, transfer, tender, pledge, encumber,
assign or otherwise dispose of (collectively, a "Transfer"), or enter into any
contract, option or other agreement with respect to, or consent to, a Transfer
of, any or all of the Subject Shares; provided, however, that any Shareholder
may Transfer any or all of its Subject Shares to any other Shareholder or to
any wholly owned subsidiary of AHP that agrees in writing to be bound by the
terms of this Agreement and, with the consent of Parent (which consent shall
not be unreasonably withheld), may pledge or encumber any Subject Shares so
long as such pledge or encumbrance would not impair any Shareholder's ability
to perform its obligations under this Agreement; or (ii) take any action that
would have the effect of preventing, impeding, interfering with or adversely
affecting its ability to perform its obligations under this Agreement.
(b) In the event of a stock dividend or distribution, or any change in the
Common Stock by reason of any stock dividend or distribution, split-up,
recapitalization, combination, exchange of shares or the like, the term
"Subject Shares" shall be deemed to refer to and include the Subject Shares as
well as all such stock dividends and distributions and any securities into
which or for which any or all of the Subject Shares may be changed or exchanged
or which are received in such transaction.
(c) AHP agrees that it shall not, and it shall cause its controlled
Affiliates not to, (i) directly or indirectly, acquire additional shares of
Common Stock (including through the exercise of subscription rights as set
forth in Section 2.01 of the Governance Agreement or quarterly purchase rights
as set forth in Section 2.02 of the Governance Agreement) or (ii) exercise any
of the registration rights set forth in Article VI of the Governance Agreement.
Section 3.2 Standstill Obligations of Shareholders. Each Shareholder,
jointly and severally, covenants and agrees with Parent that, during the Voting
Period:
(a) Such Shareholder shall not, nor shall such Shareholder permit any
controlled Affiliate of such Shareholder to, nor shall such Shareholder act in
concert with or permit any controlled Affiliate to act in concert with any
Person to make, or in any manner participate in, directly or indirectly, a
"solicitation" of "proxies" (as such terms are used in the rules of the
Securities and Exchange Commission) or powers of attorney or similar rights to
vote, or seek to advise or influence any Person with respect to the voting of,
any shares of Common Stock in connection with any vote or other action on any
matter, other than to recommend that shareholders of the Company vote in favor
of the Merger and the Merger Agreement and otherwise as expressly provided by
Article II of this Agreement.
(b) Such Shareholder shall not, nor shall such Shareholder permit any
controlled Affiliate of such Shareholder to, nor shall such Shareholder act in
concert with or permit any controlled Affiliate to act in concert with any
Person to, deposit any shares of Common Stock in a voting trust or subject any
shares of Common Stock to any arrangement or agreement with any Person with
respect to the voting of such shares of Common Stock, except as provided by
Article II of this Agreement.
(c) Such Shareholder shall not, and shall direct its Representatives not to,
directly or indirectly, through any officer, director, agent or otherwise,
enter into, solicit, initiate, conduct or continue any discussions or
negotiations with, or knowingly encourage or respond to any inquiries or
proposals by, or provide any information to, any Person, other than Parent,
relating to any Acquisition Proposal; provided, however, that, in connection
with Acquisition Proposals as to which Parent has received a Superior Proposal
Notice, AHP may provide information and engage in discussions to the same
extent as the Company is so permitted pursuant to
B-3
Section 6.4(c) of the Merger Agreement. Each Shareholder hereby represents that
it is not now engaged in discussions or negotiations with any party other than
Parent with respect to any Acquisition Proposal. Promptly after receipt of any
Acquisition Proposal or any request for nonpublic information or inquiry which
it reasonably believes could lead to an Acquisition Proposal, AHP shall provide
Parent with written notice of the material terms and conditions of such
Acquisition Proposal, request or inquiry, and the identity of the person or
group making any such Acquisition Proposal, request or inquiry, and a copy of
all written materials provided in connection with such Acquisition Proposal,
request or inquiry. After receipt of the Acquisition Proposal, request or
inquiry, AHP shall promptly keep Parent informed in all material respects of
the status and details (including material amendments or proposed material
amendments) of any such Acquisition Proposal, request or inquiry.
(d) Notwithstanding any of the provisions of this Agreement, AHP has two
representatives on the Company's Board of Directors and such persons will act
in their capacities as directors of the Company in accordance with their
fiduciary duties to the Company and its shareholders.
Section 3.3 Further Agreements of Parent. Parent hereby covenants and
agrees with the Shareholders that it shall take all reasonably necessary
actions to ensure that immediately following the Effective Time, each
Shareholder or its designee shall receive the Cash Consideration in immediately
available funds with respect to such number of Subject Shares for which such
Shareholder is entitled to receive pursuant to the terms of the Merger
Agreement; provided, that such Shareholder or its designee shall have
surrendered to Parent a Certificate or Certificates evidencing such number of
Subject Shares together with a letter or letters of transmittal in accordance
with Section 2.2 of the Merger Agreement, duly executed and completed in
accordance with the instructions thereto. The remainder of the Merger
Consideration that the Shareholders would be entitled to under the Merger
Agreement would be distributed following the Effective Time in the manner set
forth in the Merger Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EACH SHAREHOLDER
Each Shareholder hereby represents and warrants, jointly and severally, to
Parent as follows:
Section 4.1 Due Organization, etc. Each Shareholder is a company duly
organized and validly existing under the laws of the jurisdiction of its
incorporation. Each Shareholder has all necessary corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by each Shareholder have
been duly authorized by all necessary action on the part of such Shareholder.
Section 4.2 Ownership of Shares. Schedule I sets forth, opposite each
Shareholder's name, the number of shares of Common Stock over which such
Shareholder has record and beneficial ownership as of the date hereof. As of
the date hereof, each Shareholder is the lawful owner of the shares of Common
Stock denoted as being owned by such Shareholder on Schedule I and has the sole
power to vote (or cause to be voted) such shares of Common Stock. Except as set
forth on such Schedule I and as provided in the Governance Agreement, no
Shareholder nor any Affiliate of a Shareholder owns or holds any right to
acquire any additional shares of any class of capital stock of the Company or
other securities of the Company or any interest therein or any voting rights
with respect to any securities of the Company. Each Shareholder has good and
valid title to the Common Stock denoted as being owned by such Shareholder on
Schedule I, free and clear of any and all pledges, mortgages, liens, charges,
proxies, voting agreements, encumbrances, adverse claims, options, security
interests and demands of any nature or kind whatsoever, other than those
created by this Agreement or provided in the Governance Agreement or as could
not reasonably be expected to impair any Shareholder's ability to perform its
obligations under this Agreement.
B-4
Section 4.3 No Conflicts. (i) No filing with any governmental authority,
and no authorization, consent or approval of any other Person is necessary for
the execution of this Agreement by any Shareholder and the consummation by any
Shareholder of the transactions contemplated hereby and (ii) none of the
execution and delivery of this Agreement by the Shareholders, the consummation
by any Shareholder of the transactions contemplated hereby or compliance by any
Shareholder with any of the provisions hereof shall (A) conflict with or result
in any breach of the organizational documents of any Shareholder, (B) result
in, or give rise to, a violation or breach of or a default under any of the
terms of any material contract, understanding, agreement or other instrument or
obligation to which any Shareholder is a party or by which any Shareholder or
any of its Subject Shares or assets may be bound, or (C) violate any applicable
order, writ, injunction, decree, judgment, statute, rule or regulation, except
for any of the foregoing as could not reasonably be expected to impair any
Shareholder's ability to perform its obligations under this Agreement.
Section 4.4 Reliance by Parent. Each Shareholder understands and
acknowledges that Parent is entering into the Merger Agreement in reliance upon
the execution and delivery of this Agreement by such Shareholder.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to the Shareholders as follows:
Section 5.1 Due Organization, etc. Parent is a company duly organized and
validly existing under the laws of the jurisdiction of its incorporation.
Parent has all necessary corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Parent have been duly authorized by all
necessary action on the part of Parent.
Section 5.2 Conflicts. (i) No filing with any governmental authority, and
no authorization, consent or approval of any other Person is necessary for the
execution of this Agreement by Parent and the consummation by Parent of the
transactions contemplated hereby and (ii) none of the execution and delivery of
this Agreement by Parent, the consummation by Parent of the transactions
contemplated hereby shall (A) conflict with or result in any breach of the
organizational documents of Parent, (B) result in, or give rise to, a violation
or breach of or a default under any of the terms of any material contract,
understanding, agreement or other instrument or obligation to which Parent is a
party or by which Parent or any of its assets may be bound, or (C) violate any
applicable order, writ, injunction, decree, judgment, statute, rule or
regulation, except for any of the foregoing as could not reasonably be expected
to impair Parent's ability to perform its obligations under this Agreement.
Section 5.3 Reliance by the Shareholders. Parent understands and
acknowledges that the Shareholders are entering into this Agreement in reliance
upon the execution and delivery of the Merger Agreement by Parent.
ARTICLE VI
TERMINATION
Section 6.1 Termination. This Agreement shall terminate, and none of
Parent or any Shareholder shall have any rights or obligations hereunder and
this Agreement shall become null and void and have no effect upon the earliest
to occur of (i) the mutual consent of Parent and AHP, (ii) the Effective Time,
(iii) the date of termination of the Merger Agreement in accordance with its
terms, (iv) the date of any modification, waiver or amendment to the Merger
Agreement in a manner that reduces either the Exchange Ratio or the Cash
Consideration, and (v) December 31, 2002; provided, however, that termination
of this Agreement shall not prevent any party hereunder from seeking any
remedies (at law or in equity) against any other party hereto for such party's
breach of any of the terms of this Agreement. Notwithstanding the foregoing,
Section 7.1 and Sections 7.5 through 7.18, inclusive, of this Agreement shall
survive the termination of this Agreement.
B-5
ARTICLE VII
MISCELLANEOUS
Section 7.1 Appraisal Rights. To the extent permitted by applicable law,
each Shareholder hereby waives any rights of appraisal or rights to dissent
from the Merger that it may have under applicable law.
Section 7.2 Publication. Each Shareholder hereby permits Parent to publish
and disclose in the Proxy Statement/Prospectus (including all documents and
schedules filed with the Securities and Exchange Commission) its identity and
ownership of shares of Common Stock and the nature of its commitments,
arrangements and understandings pursuant to this Agreement; provided, however,
that such publication and disclosure is subject in all cases to the prior
review and comment by AHP and its advisors.
Section 7.3 HSR Requirements. Each Shareholder agrees promptly to make all
necessary filings, if any,and thereafter make any other required submissions,
if any, with respect to the Merger Agreement, the AHP Agreements (as that term
is defined in the Merger Agreement), the Merger and the transactions
contemplated by the Merger Agreement required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, any antitrust and competition
laws of any other applicable jurisdiction and any other applicable law. Each
Shareholder shall cooperate with Parent in connection with the making of any
such filings referenced in the preceding sentence, including providing copies
of all such documents to Parent and its advisors prior to filing and, if
requested, to accept all reasonable additions, deletions or changes suggested
in connection therewith.
Section 7.4 Affiliate Letters. Each Shareholder agrees to execute an
affiliate agreement, as soon as practicable after the date hereof, in
substantially the form attached hereto as Exhibit 7.4.
Section 7.5 Further Actions. Each of the parties hereto agrees that it
will use its reasonable best efforts to do all things necessary to effectuate
this Agreement.
Section 7.6 Fees and Expenses. Except as provided below, each of the
parties shall be responsible for its own fees and expenses (including, without
limitation, the fees and expenses of financial consultants, investment bankers,
accountants and counsel) (collectively, "Fees") in connection with the entering
into of this Agreement and the consummation of the transactions contemplated
hereby and by the Merger Agreement. In the event that the Merger Agreement is
terminated (i) pursuant to Section 8.1(a) or Section 8.1(h)(ii) of the Merger
Agreement, or (ii) by the Company pursuant to Section 8.1(e) or Section 8.1(g)
of the Merger Agreement, then Parent shall promptly reimburse AHP for all of
the Fees of the Shareholders incurred in connection with the transactions
contemplated hereby and by the Merger Agreement; provided, however, that
Parent's liability for Fees payable to AHP pursuant to this Section 7.6 shall
in no event exceed $3 million.
Section 7.7 Amendments, Waivers, etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified, except upon the execution
and delivery of a written agreement executed by each of the parties hereto. The
failure of any party hereto to exercise any right, power or remedy provided
under this Agreement or otherwise available in respect hereof at law or in
equity, or to insist upon compliance by any other party hereto with its
obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.
Section 7.8 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not to be performed in accordance with the terms hereof and that
the parties shall be entitled to specific performance of the terms hereof in
addition to any other remedies at law or in equity.
B-6
Section 7.9 Notices. Any notices or other communications required or
permitted under, or otherwise in connection with this Agreement shall be in
writing and shall be deemed to have been duly given when delivered in person or
upon confirmation of receipt when transmitted by facsimile transmission (with
confirmation) or on receipt after dispatch by registered or certified mail,
postage prepaid, addressed, or on the next Business Day if transmitted by
national overnight courier, in each case as follows:
If to Parent or Merger Sub, addressed to it at:
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, California 91320-1799
Fax: (805) 449-3540
Attn: Chief Executive Officer
with a copy to:
Latham & Watkins
885 Third Avenue, Suite 1000
New York, NY 10022-4802
Fax: (212) 751-4864
Attn: Charles Nathan
and
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, CA 90071-2007
Fax: (213) 891-8763
Attn: Gary Olson
Paul D. Tosetti
Charles Ruck
If to any Shareholder, addressed to:
American Home Products Corporation
Five Giralda Farms
Madison, NJ 07940
Fax: (973) 660-7156
Attn: Louis L. Hoynes, Esq.
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Fax: (212) 455-2502
Attn: Charles I. Cogut
Section 7.10 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 7.11 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
B-7
Section 7.12 Entire Agreement. This Agreement (together with the Merger
Agreement, to the extent referred to herein) constitutes the entire agreement
of the parties and supersedes all prior agreements and undertakings, both
written and oral, between the parties, or any of them, with respect to the
subject matter hereof.
Section 7.13 Assignment. This Agreement shall not be assigned by operation
of law or otherwise without the prior written consent of each of the parties,
except that each of Parent and Merger Sub may assign and transfer its rights
and obligations hereunder to any direct or indirect wholly subsidiary of Parent.
Section 7.14 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective
successors and assigns, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.
Section 7.15 Mutual Drafting. Each party hereto has participated in the
drafting of this Agreement, which each party acknowledges is the result of
extensive negotiations between the parties.
Section 7.16 Governing Law; Consent to Jurisdiction; Waiver of Trial by
Jury.
(a) This Agreement and the transactions contemplated hereby, and all
disputes between the parties under or related to the Agreement or the facts and
circumstances leading to its execution, whether in contract, tort or otherwise,
shall be governed by and construed in accordance with the laws of the State of
Delaware, without regard to the application of Delaware principles of conflicts
of laws.
(b) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any
Delaware State court, or Federal court of the United States of America, sitting
in Delaware, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the agreements
delivered in connection herewith or the transactions contemplated hereby or
thereby or for recognition or enforcement of any judgment relating thereto, and
each of the parties hereby irrevocably and unconditionally (i) agrees not to
commence any such action or proceeding except in such courts, (ii) agrees that
any claim in respect of any such action or proceeding may be heard and
determined in such Delaware State court or, to the extent permitted by law, in
such Federal court, (iii) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such action or proceeding in any such Delaware State or
Federal court, and (iv) waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such Delaware State or Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 7.9. Nothing in this Agreement shall affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
EITHER OF SUCH WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS
OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (IV) IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 7.16(c).
B-8
Section 7.17 Counterparts. This Agreement may be executed in counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
Section 7.18 Acknowledgement. The parties hereto acknowledge and agree
that this Agreement is entered into pursuant to the provisions of Section
23B.07.310 of the Business Corporation Act of the State of Washington.
* * * * *
B-9
IN WITNESS WHEREOF, Parent and each Shareholder have caused this Agreement
to be duly executed as of the day and year first above written.
AMGEN INC.
a Delaware corporation
/s/ KEVIN W. SHARER
By: _______________________________
Name: Kevin W. Sharer
Title: Chairman of the Board,
CEO and President
AMERICAN HOME PRODUCTS CORPORATION
a Delaware corporation
/s/ KENNETH MARTIN
By: _______________________________
Name: Kenneth Martin
Title: Senior Vice President
and Chief Financial Officer
MDP HOLDINGS, INC.
a Delaware corporation
/s/ KENNETH MARTIN
By: _______________________________
Name: Kenneth Martin
Title: Executive Vice President
LEDERLE PARENTERALS, INC.
a New Jersey corporation
/s/ KENNETH MARTIN
By: _______________________________
Name: Kenneth Martin
Title: Vice President
B-10
Schedule I
Ownership of Common Stock
Number of
Name and Address of Shareholder Shares
------------------------------- -----------
American Home Products Corporation(1) 0
Five Giralda Farms
Madison, NJ 07940
MDP Holdings, Inc. 180,153,032
Five Giralda Farms
Madison, NJ 07940
Lederle Parenterals, Inc. 43,225,056
Five Giralda Farms
Madison, NJ 07940
--------
(1) American Home Products Corporation beneficially owns the shares held by MDP
Holdings, Inc. and Lederle Parenterals, Inc.
B-11
ANNEX C
STOCKHOLDERS' RIGHTS AGREEMENT
THIS STOCKHOLDERS' RIGHTS AGREEMENT (this "Agreement") is entered into as of
December 16, 2001, by and among Amgen Inc., a Delaware corporation (the
"Company"), American Home Products Corporation, a Delaware corporation ("AHP"),
MDP Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of AHP
("Sub1"), and Lederle Parenterals, Inc., a New Jersey corporation and
wholly-owned subsidiary of AHP ("Sub2," and together with Sub1, the
"Stockholders," each, a "Stockholder").
RECITALS
WHEREAS, the Stockholders hold shares of common stock of Immunex
Corporation, a Washington corporation ("Immunex");
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger, dated as
of December 16, 2001 (as the same may be amended, the "Merger Agreement"), by
and among the Company, AMS Acquisition Inc., a Washington corporation and
wholly owned subsidiary of the Company ("Merger Sub"), and Immunex, Merger Sub
will merge with and into Immunex (the "Merger"), with the result that each of
outstanding shares of common stock of Immunex will be converted into the right
to receive shares of common stock of the Company together with cash in the
manner set forth in the Merger Agreement; and
WHEREAS, this Agreement shall become effective upon the issuance to AHP of
the common stock of the Company to be issued pursuant to the Merger Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals and for other
good and valuable consideration, the receipt and sufficiency of which hereby
are acknowledged, the parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
"Affiliate" of a specified Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the Person specified.
"AHP Parties" means AHP, the Stockholders and their controlled Affiliates
and Subsidiaries.
"Business Day" means any day on which banks are not required or
authorized to close in the City of New York.
"Closing Date" means the date the Merger is consummated by filing
articles of merger related to the Merger with the Secretary of State of the
State of Washington.
"Common Stock" means the Common Stock, par value $0.0001 per share, of
the Company or any other shares of capital stock or other securities of the
Company into which such shares of Common Stock shall be reclassified or
changed, including, by reason of a merger, consolidation, reorganization or
recapitalization. If the Common Stock has been so reclassified or changed,
or if the Company pays a dividend or makes a distribution on the Common
Stock in shares of capital stock or subdivides (or combines) its outstanding
shares of Common Stock into a greater (or smaller) number of shares of
Common Stock, a share of Common Stock shall be deemed to be such number of
shares of stock and amount of other securities to which a holder of a share
of Common Stock outstanding immediately prior to such change,
reclassification, exchange, dividend, distribution, subdivision or
combination would be entitled.
C-1
"Company Blackout Period" shall have the meaning set forth in Section
5(j) hereof.
"Company Offering" shall have the meaning set forth in Section
5(a)(iv)(C) hereof.
"Company Shares" shall have the meaning set forth in Section 5(b)(viii)
hereof.
"Deferral Notice" shall have the meaning set forth in Section 5(a)(v)
hereof.
"Deferral Period" shall have the meaning set forth in Section 5(a)(v)
hereof.
"Delay Notice" shall have the meaning set forth in Section 5(b)(vii)
hereof.
"Delay Period" shall have the meaning set forth in Section 5(b)(vii)
hereof.
"Demand Underwriters" shall have the meaning set forth in Section
5(b)(iii) hereof.
"Derivative Transaction" means any transaction involving a security
linked to the Common Stock, including any equity swap, put, put equivalent,
collar, sale of exchangeable security or similar transaction.
"Disposition" or "to Dispose of" means any sale, transfer, hypothecation,
pledge, or other transfer of any Common Stock or securities convertible into
or exchangeable or exercisable for, or any rights to purchase or acquire any
Common Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Holder" means any recordholder of Registrable Securities that is a party
to this Agreement, including a Permitted Transferee.
"Material Event" means any event or the existence of any fact as a result
of which the Company shall determine in its reasonable discretion that a
Registration Statement shall contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or any Prospectus
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (including, in any such case, as a result of the
non-availability of financial statements).
"NASD" means the National Association of Securities Dealers, Inc.
"Permitted Transferees" means AHP and any wholly-owned direct or indirect
subsidiary of AHP; provided that in each case such transferee assumes and
agrees to perform and becomes a party to this Agreement by notice and
execution of a counterpart signature page.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Registration Statement
(including a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance
upon Rule 430A), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and all other amendments
and supplements to such prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference in such prospectus.
"Registrable Securities" means shares of Common Stock issued to the
Stockholders in the Merger. Any Registrable Securities shall cease to be
Registrable Securities at such time as they are held of record by a Person
other than AHP or a Subsidiary of AHP.
"Registration Statement" means any registration statement under the
Securities Act of the Company that covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the related
Prospectus, all amendments and supplements to such registration statement,
including pre- and post-
C-2
effective amendments, all exhibits thereto and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
"SEC" means the United States Securities and Exchange Commission.
"Section 5(a)(iv) Reason" shall have the meaning set forth in Section
5(a)(iv)(C).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Securities Act Legend" shall have the meaning set forth in Section 4(e)
hereof.
"Shelf Bookrunning Manager" shall have the meaning set forth in Section
5(a)(iv)(B).
"Shelf Effectiveness Deadline Date" shall have the meaning set forth in
Section 5(a)(i) hereof.
"Shelf Effectiveness Period" shall have the meaning set forth in Section
5(a)(i) hereof.
"Shelf Registration Statement" shall have the meaning set forth in
Section 5(a)(i) hereof.
"Shelf Underwriters" shall have the meaning set forth in Section
5(a)(iv)(B) hereof.
"Standstill Period" means the period beginning on the date of this
Agreement and ending on a date five (5) years from the date of this
Agreement.
"Subject Shares" means shares of Common Stock beneficially owned by AHP,
the Stockholders, any Permitted Transferees or their Affiliates whether
acquired in the Merger, beneficially owned prior thereto or acquired
thereafter.
"Subsequent Shelf Registration Statement" shall have the meaning set
forth in Section 5(a)(ii) hereof.
"Subsidiary" shall have the same meaning as in Rule 12b-2 under the
Exchange Act.
"Transfer Restriction Legend" shall have the meaning set forth in Section
4(e) hereof.
"Transaction Delay Notice" shall have the meaning set forth in Section
5(a)(iv)(C).
"Transaction Delay Period" shall have the meaning set forth in Section
5(a)(iv)(C).
"Valid Business Reason" shall have the meaning set forth in Section
5(b)(vii) hereof.
2. Standstill Agreement. Each Stockholder (so long as it or its
Subsidiaries or controlled Affiliates holds any shares of Common Stock) and AHP
agree that, during the Standstill Period, unless specifically invited in
writing by the Board of Directors of the Company, they shall not and shall not
authorize or permit any of their respective Subsidiaries or controlled
Affiliates or their representatives (other than their financial advisors,
counsel, accountants and similar outside advisors not acting in their capacity
as such for or on behalf of AHP or any of its Subsidiaries or its controlled
Affiliates) to do or agree to do any of the following: (i) acquire, offer,
seek, or propose to acquire (or request permission to do so or agree to do so),
directly or indirectly, by purchase, exchange, merger or otherwise, any
securities or direct or indirect rights to acquire any securities of the
Company or its Subsidiaries or any assets (other than purchases of assets in
the ordinary course of business) of the Company or its Subsidiaries or
divisions, or to make any public announcement with respect to any of the
foregoing; (ii) make, or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" (as such terms are used in the rules of the SEC) to
vote, or seek to advise or influence any Person with respect to the voting of,
any securities of the Company, or make any public announcement with respect to
any of the foregoing; (iii) form, join or in any way participate in a "group"
(as defined in Section 13(d)(3) of the Exchange Act) in connection with any of
the foregoing; (iv) otherwise act, alone or in concert with others, to seek to
control or influence the management or the Board of Directors of the Company or
policies of the Company; (v) request the Company or any of its representatives,
directly or indirectly, to amend or waive any provision of this paragraph, or
make any public announcement with respect to the restrictions of this clause
(v), or take any action which would reasonably be expected to require the
Company to make a public announcement regarding the possibility of a business
combination or merger; or (vi) advise, assist or encourage, or direct any
Person to advise, assist or
C-3
encourage any other Persons, in connection with any of the foregoing. It is
understood and agreed, however, that the restrictions set forth in this
paragraph do not apply to purchases by AHP of Common Stock for employee benefit
or other plans not to exceed 1% of the outstanding Common Stock. In addition,
the restrictions set forth in this paragraph shall not apply to securities held
by a company that AHP may acquire in the future, provided that the fair market
value of such securities represents less than 20% of the assets of such company
as of the date of the most recent available financial statements of such
company; provided that in the event AHP acquires a company that owns equity
securities of the Company, AHP will use its commercially reasonable efforts to
divest such equity securities within eighteen (18) months of the consummation
of such acquisition.
3. Voting. Until such time as the AHP Parties beneficially own in the
aggregate shares of Common Stock representing less than 2% of the outstanding
Common Stock, at each meeting of stockholders of the Company, AHP and the
Stockholders shall cause all shares of Common Stock beneficially owned by the
AHP Parties to be voted: (x) with respect to the election of directors, in
favor of those individuals nominated by the Board of Directors or a nominating
committee thereof, (y) on all proposals of any other stockholder of the
Company, in accordance with the recommendation of the Board of Directors of the
Company, and (z) on all other matters that shall come before the stockholders
of the Company for a vote, in proportion to the votes cast by the other
stockholders of the Company.
4. Lock-Up; Volume Limitations; Legends; Transfer Notice.
(a) Initial Lock-Up. Notwithstanding any other provision of this Agreement,
none of AHP or the Stockholders shall, and they shall cause their Subsidiaries
and controlled Affiliates who have become holders of Common Stock not to,
effect any Disposition at any time prior to the date which is ninety (90) days
following the Closing Date other than:
(i) to any Permitted Transferee;
(ii) pursuant to a third party tender offer or exchange offer which was
not induced directly or indirectly by AHP or any Stockholder and (i) which
is approved by the Board of Directors of the Company or (ii) in
circumstances in which it is reasonably likely that the Stockholders would
be, as a result of not tendering or exchanging, relegated to different
consideration than would be available to those stockholders who did tender
or exchange, taking into account any provisions thereof (including with
respect to proration and any proposed second-step or back-end transaction
(or the absence of such provisions));
(iii) any Disposition arising as a result of a merger or similar
transaction involving the Company; or
(iv) any pledge of the shares of Common Stock held by AHP or the
Stockholders in connection with bona fide financings (other than Derivative
Transactions) with a financial institution, provided the pledgee agrees to
the restrictions set forth in this Section 4(a).
(b) General Volume Limitations. AHP and the Stockholders shall not, and
they shall not permit their Subsidiaries or Affiliates to, effect Dispositions
of greater than an aggregate of twenty million (20,000,000) shares of Common
Stock (including Common Stock underlying Derivative Transactions) in any
calendar quarter, not including shares of Common Stock Disposed of pursuant to
an underwritten syndicated offering as provided in Section 5(a)(iv) or Section
5(b) in such calendar quarter.
(c) Derivatives Volume Limitation. Notwithstanding any other provision of
this Agreement, the aggregate number of shares of Common Stock underlying
Derivative Transactions (not including any shares of Common Stock underlying
derivative securities sold in underwritten syndicated offerings pursuant to
Section 5(a)(iv) or Section 5(b)) effected in any calendar week by the AHP
Parties shall not exceed twenty percent (20%) of the aggregate trading volume
of the Common Stock on the Nasdaq Stock Market or any national securities
exchange on which the Common Stock is then listed in the immediately preceding
calendar week. AHP and the Stockholders shall, and they shall cause their
Subsidiaries and Affiliates to, within two Business Days of effecting a
Derivative Transaction give written notice to the Company, which notice shall
describe in detail the Derivative Transaction, the number of shares of Common
Stock underlying the transaction and details of all other Derivative
Transactions effected during the calendar week in which the Derivative
Transaction was effected.
C-4
(d) Stop Transfer Acknowledgment. AHP and the Stockholders hereby
acknowledge and agree that the Company may impose stop transfer instructions
with respect to the Common Stock subject to the restrictions contained in
Sections 4(a), 4(b) and 4(c) solely in order to implement the restrictions on
Dispositions.
(e) Restrictive Legends. Each certificate representing Subject Shares shall
be stamped or otherwise imprinted with a legend substantially in the following
form (the "Transfer Restriction Legend"):
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
TRANSFER RESTRICTIONS SET FORTH IN THAT CERTAIN STOCKHOLDERS' RIGHTS
AGREEMENT DATED DECEMBER 16, 2001, A COPY OF WHICH IS AVAILABLE FROM THE
COMPANY UPON REQUEST."
Each certificate representing Registrable Securities shall be stamped or
otherwise imprinted with a legend substantially in the following form (the
"Securities Act Legend"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, APPLIES AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933, AS AMENDED."
The Company agrees that the Securities Act Legend shall promptly be removed by
delivery of substitute certificates without such legend, if (a) one year shall
have elapsed from the Effective Date and, in the judgment of the Company, the
provisions of Rule 145(d)(2) are then available to the Stockholders or (b) the
Company shall have received (i) an opinion of counsel in form and substance
reasonably satisfactory to the Company, or a copy of a "no-action" or
interpretive letter from the SEC, to the effect that the restrictions imposed
by Rule 145 are not applicable to such shares or (ii) evidence or
representations reasonably satisfactory to the Company that (x) the proposed
Disposition of the shares of Common Stock represented by such certificates has
been registered under the Securities Act or (y) the shares of Common Stock
represented by such certificates are being or have been sold, transferred or
disposed in a transaction made in conformity with the provisions of Rule 145
under the Securities Act. The Company further agrees that the Transfer
Restriction Legend shall promptly be removed by delivery of substitute
certificates without such legend, at such time as the Transfer Restriction
Legend is no longer required pursuant to the terms of this Agreement.
(f) Notice of Distribution. Within two Business Days of any Disposition of
Subject Shares (other than pursuant to Sections 5(a), 5(b) or 5(c)), the Person
effecting such Disposition shall give written notice to the Company of such
Disposition. Each such notice shall describe the manner of the proposed
Disposition and the number of Subject Shares involved.
5. Registration Rights.
(a) Shelf Registration.
(i) Shelf Registration Statement. The Company shall prepare and file or
cause to be prepared and filed with the SEC immediately after the Closing
Date a Registration Statement for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 of the Securities Act registering the
resale from time to time by the Holders of all of the Registrable Securities
(the "Shelf Registration Statement"). The Shelf Registration Statement shall
be on Form S-3 or another appropriate form permitting registration of such
Registrable Securities for resale by such Holders in accordance with the
methods of distribution set forth in the Shelf Registration Statement (such
methods of distribution to include underwritten offerings and other methods
designated in writing by the Holders pursuant to Section 5(e)). The Company
shall not permit any securities other than the Registrable Securities to be
included in the Shelf Registration Statement. The Company shall use
commercially reasonable efforts to cause the Shelf Registration Statement to
be declared effective under the Securities Act by the date (the "Shelf
Effectiveness Deadline Date") that is ninety
C-5
(90) days after the Closing Date. The Company shall use commercially
reasonable efforts to keep the Shelf Registration Statement continuously
effective under the Securities Act (subject to Section 5(a)(v)) until the
earlier of (x) the first anniversary of the Closing Date and (y) the sale of
all of the Registrable Securities included in the Shelf Registration
Statement (such period as may be extended in accordance with the proviso in
Section 5(a)(ii), the "Shelf Effectiveness Period"). Each Holder agrees that
if such Holder wishes to sell Registrable Securities pursuant to the Shelf
Registration Statement and related Prospectus, it will do so only in
accordance with this Section 5(a).
(ii) Subsequent Shelf Registrations. If the initial Shelf Registration
Statement or any Subsequent Shelf Registration Statement ceases to be
effective for any reason at any time during the Shelf Effectiveness Period
(other than because of the sale of all of the Registrable Securities), the
Company shall use commercially reasonable efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and in any
event shall within ten (10) days of such cessation of effectiveness (or, if
the cessation of effectiveness occurs during a Deferral Period, within three
Business Days of the end of such Deferral Period) amend the Shelf
Registration Statement in a manner reasonably expected by the Company to
obtain withdrawal of the order suspending the effectiveness thereof, or file
an additional "shelf" Registration Statement pursuant to Rule 415 of the
Securities Act covering all of the Registrable Securities (a "Subsequent
Shelf Registration Statement") to permit registration of the Registrable
Securities. If a Subsequent Shelf Registration Statement is filed, the
Company shall use its commercially reasonable efforts to cause the
Subsequent Shelf Registration Statement to be declared effective under the
Securities Act as soon as reasonably practicable after such filing or, if
filed during a Deferral Period, immediately after completion of the Deferral
Period, and to keep such Registration Statement continuously effective until
the end of the Shelf Effectiveness Period; provided, however, that, unless
all Registrable Securities included on the Shelf Registration Statement have
been sold, the Shelf Effectiveness Period shall be extended by the aggregate
number of days such Registration Statement was not effective as a result of
Deferral Periods or Transaction Delay Periods. As used herein, the term
"Shelf Registration Statement" means the Shelf Registration Statement and
any Subsequent Shelf Registration Statement.
(iii) Amendments to Shelf Registration Statement. The Company shall
promptly supplement and amend the Shelf Registration Statement and any
related Prospectus if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement, if required by the Securities Act or as reasonably
requested by AHP or by the Shelf Bookrunning Manager.
(iv) Underwritten Syndicated Offerings.
(A) If one or more Holders proposes to sell Registrable Securities in
a underwritten syndicated offering pursuant to the Shelf Registration
Statement, such Holder or Holders may request the Company in writing to
effect such underwritten syndicated offering by supplement or amendment
to the Shelf Registration Statement, stating the number of Registrable
Securities proposed to be sold. The Company and all Holders proposing to
distribute Registrable Securities through such underwritten syndicated
offering shall enter into an underwriting agreement in customary form
with the underwriters for the offering.
(B) Any underwritten syndicated offering requested pursuant to this
Section 5(a)(iv) shall be underwritten by two co-managing underwriters.
The Holders shall have the right to select one co-managing underwriter
and the Company shall have the right to select a second co-managing
underwriter (together, the "Shelf Underwriters"). The co-managing
underwriter selected by the Holders (the "Shelf Bookrunning Manager")
shall be the sole bookrunning underwriter and shall be entitled to 55%
of the economics allocated to the two co-managing underwriters.
(C) Notwithstanding any provision of this Agreement to the contrary,
the Company shall not be required to effect an offering pursuant to this
Section 5(a)(iv) during any Transaction Delay Period (as defined below)
if, immediately following the Company's receipt of a request from a
Holder to effect an offering pursuant to this Section 5(a)(iv), the
Company furnishes such Holder with a certificate signed by an executive
officer of the Company (a "Transaction Delay Notice") to the effect that
the Company
C-6
(i) prior to the Company's receipt of such request, had commenced
preparations for the filing of a registration statement pertaining to a
public offering of securities of the Company for the account of the
Company or any selling security holder (collectively, a "Company
Offering") or (ii) has determined in good faith that an offering
pursuant to Section 5(a)(iv) would likely materially interfere with a
potential contemplated material financing, acquisition, corporation,
reorganization, corporate development or merger or other transaction
involving the Company (a "Section 5(a)(iv) Reason"). Any "Transaction
Delay Period" shall be the period commencing on the day the Company
furnishes a Transaction Delay Notice and continuing until (i) in the
case of a Company Offering, the earliest of (A) sixty (60) days
following the effectiveness of the registration statement relating to
the applicable Company Offering, (B) promptly after the abandonment of
the applicable Company Offering or (C) one hundred twenty (120) days
after the date of the Transaction Delay Notice or (ii) in the case of a
Section 5(a)(iv) Reason, until the earlier of (A) such time as the
Company reasonably determines that the delay is no longer appropriate or
(B) one hundred and twenty (120) days. The Company may deliver no more
than two (2) Transaction Delay Notices in any twelve-month period, and
the aggregate duration of all Transaction Delay Periods shall not exceed
one hundred and eighty (180) days in any twelve-month period. The
Company shall use commercially reasonable efforts to cause any such
registration statement relating to any such Company Offering to become
effective as soon as possible.
(D) The Company shall not be obligated to (i) effect more than two
offerings pursuant to this Section 5(a)(iv), or (ii) effect any offering
pursuant to this Section 5(a)(iv) involving less than Five Million
(5,000,000) Registrable Securities. An offering requested pursuant to
this Section 5(a)(iv) shall not be deemed to have been effected for
purposes of this Section 5(a)(iv)(D), unless (1) the Shelf Registration
Statement remains effective for a period of at least forty-five (45)
days after commencement of the offering, and (2) the offering is not
subject to any stop order or requirement of the SEC during the period
specified in clause (1) above (other than any such stop order,
injunction, or other requirement of the SEC prompted by any act or
omission of Holders of Registrable Securities).
(E) If in an underwritten syndicated offering requested pursuant to
this Section 5(a)(iv), either Shelf Underwriter (after consultation with
the other Shelf Underwriter) reasonably advises the Company in writing
that, in its opinion, the number of Registrable Securities requested to
be included in such offering exceeds the number that can be sold in such
offering at a price reasonably related to the then current market value
of such securities, there shall be included in such offering only the
Registrable Securities that such Shelf Underwriter so advises may be
sold at a price reasonably related to the then current market value of
such securities.
(v) Suspension of Shelf Registration Statement. Upon (A) the issuance by
the SEC of a stop order suspending the effectiveness of the Shelf
Registration Statement or the initiation of proceedings with respect to the
Shelf Registration Statement under Section 8(d) or 8(e) of the Securities
Act or (B) the occurrence of a Material Event or the non-availability of
financial statements required in the Shelf Registration Statement, the
Company shall (i) in the case of clause (B) above, subject to the next to
last sentence of this Section 5(a)(v), as promptly as practicable prepare
and file a post-effective amendment to the Shelf Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document that would be incorporated by
reference into the Shelf Registration Statement and Prospectus so that such
Shelf Registration Statement does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
related Prospectus does not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, as thereafter delivered to the
purchasers of the Registrable Securities being sold thereunder, and, in the
case of a post-effective amendment to the Shelf Registration Statement,
subject to the next to last sentence of this Section 5(a)(v), use
commercially reasonable efforts to cause it to be declared effective as
promptly as is reasonably practicable, and (ii) give notice to the Holders
named as selling security holders in the Prospectus that the availability of
the Shelf Registration Statement is suspended (a "Deferral Notice"). Upon
C-7
receipt of any Deferral Notice, each Holder agrees not to sell any
Registrable Securities pursuant to the Registration Statement until such
Holder's receipt of copies of the supplemented or amended Prospectus
provided for in clause (i) above, or until it is advised in writing by the
Company that the Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed
incorporated by reference in such Prospectus. The Company will use
reasonable best efforts to ensure that the use of the Prospectus may be
resumed (x) in the case of clause (A) above, as promptly as is practicable,
but in no event later than fifteen (15) days after the Deferral Notice is
given to the Holders, (y) in the case of clause (B) above, as soon as in the
reasonable judgment of the Company the public disclosure of such Material
Event would not be prejudicial to or contrary to the interests of the
Company, but in no event later than forty-five (45) days after the Deferral
Notice is given to the Holders. The period during which the availability of
the Shelf Registration Statement and any related Prospectus is suspended
pursuant to Section 5(a)(v) (the "Deferral Period") shall not exceed
forty-five (45) days in any three (3) month period and ninety (90) days
during the Shelf Effectiveness Period.
(b) Request for Registration of Underwritten Offering.
(i) Demand Registration Statement. Beginning on the first anniversary of
the Closing Date, and until the fourth anniversary of the Closing Date, one
or more Holders may request in a written notice that the Company file a
Registration Statement under the Securities Act covering the registration of
a minimum of Five Million (5,000,000) Registrable Securities held by such
Holders in an underwritten offering. Following receipt of any notice under
this Section 5(b), the Company shall use commercially reasonable efforts to
cause to be registered under the Securities Act all Registrable Securities
that the Holders have requested be registered, subject to Section 5(b)(vi)
hereof.
(ii) Underwritten Offering. Any distribution of Registrable Securities
pursuant to any registration filed pursuant to this Section 5(b) shall be by
means of an underwritten syndicated offering. The Company and all Holders
proposing to distribute Registrable Securities through such underwritten
offering shall enter into an underwriting agreement in customary form with
the underwriters for the offering.
(iii) Co-Bookrunning Managing Underwriters. Any offering requested
pursuant to this Section 5(b) shall be underwritten by two co-managing
underwriters. The Holders shall have the right to select one co-managing
underwriter and the Company shall have the right to select a second
co-managing underwriter (together, the "Demand Underwriters"). The
co-managing underwriter selected by the Holders shall be the sole
bookrunning underwriter and shall be entitled to 55% of the economics
allocated to the two co-managing underwriters.
(iv) Blackout. Notwithstanding any provision of this Agreement to the
contrary, the Company shall not be required to effect a registration
pursuant to this Section 5(b) during any Transaction Delay Period. The
Company may deliver no more than two (2) such Transaction Delay Notices in
any twelve-month period, and the aggregate duration of all such Transaction
Delay Periods shall not exceed one hundred and eighty (180) days in any
twelve-month period. The Company shall use commercially reasonable efforts
to cause any registration statement relating to any Company Offering causing
the Transaction Delay Period to become effective as soon as possible.
(v) Limitation on Number of Demand Registrations. The Company shall not
be obligated to effect more than four registrations pursuant to Section
5(b), less the number of offerings effected pursuant to Section 5(a)(iv);
provided that a registration requested pursuant to this Section 5(b) shall
not be deemed to have been effected for purposes of this Section 5(b)(v)
unless (1) it has been declared effective by the SEC, (2) it has remained
effective for the period required for the underwriters of the registration
to complete their distribution of the securities purchased by them in the
offering pursuant to such registration not to exceed forty-five (45) days,
and (3) the offering of Registrable Securities pursuant to such registration
is not subject to any stop order or requirement of the SEC during the period
specified in Section 5(b)(v)(2) (other than any such stop order, injunction,
or other requirement of the SEC prompted by any act or omission of Holders
of Registrable Securities).
C-8
(vi) Underwriter Holdback. If in a registration requested pursuant to
this Section 5(b) either Demand Underwriter (after consultation with the
other Demand Underwriter) reasonably advises the Company in writing that, in
its opinion, the number of Registrable Securities requested to be included
in such registration exceeds the number that can be sold in such offering at
a price reasonably related to the then current market value of such
securities, the Company will include in such registration only the
Registrable Securities that such Demand Underwriter so advises may be sold
at a price reasonably related to the then current market value of such
securities.
(vii) Delay for Valid Business Reason. If the Board of Directors of the
Company, in its good faith judgment, determines that the effectiveness of a
Registration Statement would likely materially interfere with a potential
contemplated material financing, acquisition, corporation reorganization,
corporate development or merger or other transaction involving the Company
(collectively, "Valid Business Reason"), the Company may postpone filing a
Registration Statement relating to a request for registration under this
Section 5(b) until such Valid Business Reason no longer exists or such
financial statements become available, but in no event for more than
forty-five (45) days from the date of the notice referred to below (such
period of postponement, the "Delay Period"), and, in case any such
Registration Statement has been filed the Company may cause such
Registration Statement to be withdrawn and its effectiveness terminated or
may postpone amending or supplementing such Registration Statement; and the
Company shall give written notice of its determination to postpone or
withdraw a Registration Statement (a "Delay Notice") and written notice of
the fact that the Valid Business Reason for such postponement or withdrawal
no longer exists or that the required financial statements are available, in
each case, promptly after the occurrence thereof. Each Holder agrees that,
upon receipt of a Delay Notice from the Company such Holder will forthwith
discontinue Disposition of Registrable Securities until the conclusion of
the Delay Period, and, if so directed by the Company, such Holder will
deliver to the Company all copies, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of Delay Notice. Notwithstanding
the foregoing provisions of this Section 5(b)(vii), no Registration
Statement filed and subsequently withdrawn by reason of any existing or
anticipated Valid Business Reason or non-availability of financial
statements as hereinabove provided shall count as one of the four
Registration Statements referred to in the limitation in Section 5(b)(v) and
the aggregate duration of all Delay Periods and Deferral Periods shall not
exceed forty-five (45) days in any three month period or one hundred and
twenty (120) days in any twelve month period.
(viii) Parent Piggyback. If upon the written request of any Holder
pursuant to Section 5(b)(i) the Company files a Registration Statement
registering an underwritten offering of Common Stock on behalf of one or
more Holders, the Company may, upon written notice to such Holder or Holders
(which notice shall be delivered no later than ten (10) days after the date
of the Company's receipt of the Holder's notice of demand), include in such
Registration Statement shares of Common Stock for its own account (the
"Company Shares"). If either Demand Underwriter (after consultation with the
other Demand Underwriter) reasonably advises AHP in writing that, in its
opinion, the aggregate number of shares of Common Stock proposed to be sold
for the account of the Holders and the Company Shares exceeds the maximum
amount of the Company's securities that can be marketed either (a) at a
price reasonably related to the then current market value of such
securities, or (b) without otherwise materially and adversely affecting the
entire offering, then the Company shall include in such registration (1)
first, all Registrable Securities requested to be included in such
Registration Statement by the Holders pursuant to this Section 5(b), and (2)
second, all of the Company Shares, up to the number which AHP has been
advised can be sold in such offering.
(c) Holders Incidental Registration. Subject to Section 5(g), if at any
time after the initial lock-up period referenced in Section 4(a), the Company
determines, in its sole discretion, that it shall file a registration statement
under the Securities Act (other than (i) a registration statement providing for
an offering on a delayed or continuous basis pursuant to Rule 415 of the
Securities Act or (ii) a registration statement on Form S-4 or S-8 or any
successor or similar forms) registering an underwritten offering of Common
Stock for cash consideration on any form that also would permit the
registration of the Registrable Securities and such filing is to be on its
behalf and/or on behalf of selling holders of the Company's securities, the
Company shall each such time
C-9
promptly give each Holder written notice of such determination setting forth
the date on which the Company proposes to file such registration statement, and
advising each Holder of its right to have Registrable Securities included in
such registration. The Company will select the managing underwriter and all
other underwriters in any underwritten offering pursuant to this Section 5(c).
Upon the written request of any Holder received by the Company no later than
ten (10) days after the date of the Company's notice, the Company shall use
commercially reasonable efforts to cause to be registered under the Securities
Act all of the Registrable Securities that each such Holder has so requested to
be registered subject to the limitations of Section 4(b) and (c); provided that
if, at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any
reason not to proceed with the proposed registration of the securities to be
sold by it, the Company may, at its election, give written notice of such
determination to each Holder of Registrable Securities and, thereupon, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay the registration
expenses pursuant to Section 5(f) in connection therewith), without prejudice,
however, to the rights of any Holder to request such registration to be
effected as a registration under Section 5(b). If, in the written opinion of
the managing underwriter, the total amount of such securities to be so
registered, including such Registrable Securities, will exceed the maximum
amount of the Company's securities that can be marketed either (a) at a price
reasonably related to the then current market value of such securities, or (b)
without otherwise materially and adversely affecting the entire offering, then
the Company shall include in such registration (1) first, all the securities
the Company proposes to sell for its own account or is required to register on
behalf of any third party exercising rights similar to those granted in Section
5(b)(i) and without having the adverse effect referred to above, and (2)
second, all Registrable Securities requested to be included in such
registration by the Holders pursuant to this Section 5(c) and all shares of
Common Stock requested to be included by third parties exercising the rights
similar to those granted in this Section 5(c) up to the number which the
Company has been advised can be sold in such offering without having either of
the adverse effects referred to above. The number of such Registrable
Securities requested to be included in such registration by the Holders
pursuant to this Section 5(c) shall be limited to such extent and shall be
allocated pro rata among all such requesting Holders and third parties
exercising rights similar to those granted in this Section 5(c) on the basis of
the relative number of Registrable Securities each such Holder has requested to
be included in such registration and the number of shares of Common Stock
requested to be included in such registration by such third parties.
(d) Obligations of the Company. Whenever required under Section 5(a) or
Section 5(b) to use commercially reasonable efforts to effect the registration
of any Registrable Securities, the Company shall, as expeditiously as possible:
(i) prepare and file with the SEC a Registration Statement with respect
to such Registrable Securities and use commercially reasonable efforts to
cause such Registration Statement to become and remain effective for the
period of the distribution contemplated thereby;
(ii) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith
as may be necessary to keep such Registration Statement effective for the
Shelf Effectiveness Period in the case of the Shelf Registration Statement
or for a period not in excess of sixty (60) days (or such shorter period
during which the distribution of securities thereunder continues) in the
case of all other Registration Statements contemplated by this Agreement,
cause the related Prospectus to be supplemented by any Prospectus supplement
required by applicable law, and as so supplemented to be filed pursuant to
the Securities Act and to comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered by
such Registration Statement in accordance with the intended methods of
disposition by the seller or sellers thereof, and furnish to the Holders of
the Registrable Securities copies of any such amendments and supplements
prior to their being used or filed with the SEC, which amendments and
supplements will be subject to the review of the Holders and their counsel;
(iii) furnish to the Holders such reasonable numbers of copies of the
Registration Statement and any Prosectus included therein (including each
preliminary Prospectus and any amendments or supplements thereto (including
all exhibits and documents incorporated by reference) in conformity with the
C-10
requirements of the Securities Act) and such other documents and information
as they may reasonably request and make available for inspection by the
parties referred to in Section 5(d)(iv) below such financial and other
information and books and records of the Company, and cause the officers,
directors, employees, counsel and independent certified public accountants
of the Company to respond to such inquiries, as shall be reasonably
necessary, in the judgment of the respective counsel referred to in such
Section 5(d)(iv);
(iv) provide (1) the Holders of the Registrable Securities to be included
in such Registration Statement, (2) the Shelf Underwriters or Demand
Underwriters, as applicable, (3) the sales or placement agent, if any,
therefor, (4) counsel for the Shelf Underwriters or Demand Underwriters or
agent, as applicable, and (5) not more than one counsel for all the Holders
of such Registrable Securities the opportunity to participate in the
preparation of such Registration Statement, each Prospectus included therein
or filed with the SEC, and each amendment or supplement thereto, and (a)
promptly incorporate in a Prospectus supplement or post-effective amendment
such information as the Bookrunning Manager, its counsel, or such Holders'
counsel reasonably determine is necessary and appropriate to be included
therein, (b) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in such Prospectus
supplement or post-effective amendment, and (c) supplement or make
amendments to such Registration Statement;
(v) use commercially reasonable efforts to register or qualify the
Registrable Securities covered by such Registration Statement under such
other securities or Blue Sky laws of such jurisdictions within the United
States as the Holders shall reasonably request for the distribution of the
Registrable Securities covered by the Registration Statement; provided,
however, that the Company shall not be required in connection therewith or
as a condition thereto to qualify to do business in or to file a general
consent to service of process in any jurisdiction wherein it would not but
for the requirements of this paragraph (v) be obligated to do so; and
provided further that the Company shall not be required to qualify such
Registrable Securities in any jurisdiction in which the securities
regulatory authority requires that any Holder submit its Registrable
Securities to the terms, provisions and restrictions of any escrow, lockup
or similar agreement(s) for consent to sell Registrable Securities in such
jurisdiction unless such Holder agrees to do so;
(vi) promptly notify the selling Holders, the sales or placement agent,
if any, and the Shelf Underwriters or Demand Underwriters, as applicable,
(1) when such Registration Statement, amendment, supplement or
post-effective amendment has been filed, and, with respect to such
Registration Statement or any post-effective amendment, when the same has
become effective, (2) of any comments by the SEC or by any Blue Sky or
securities commissioner or regulator of any state with respect thereto, (3)
of the issuance by the SEC of any stop order suspending the effectiveness of
such Registration Statement or the initiation or threatening of any
proceedings for that purpose, or (4) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(vii) subject to Sections 5(a)(v) and 5(b)(viii) use commercially
reasonable efforts to obtain the withdrawal of any order suspending the
effectiveness of such Registration Statement and use its commercially
reasonable efforts to cause such Registrable Securities covered by any such
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
Holders to consummate the disposition of such Registrable Securities;
(viii) furnish on the date that the Registrable Securities are delivered
to the Shelf Underwriters or Demand Underwriters, as applicable, for sale
pursuant to such registration, (1) a signed opinion, dated such date, of the
legal counsel representing the Company (which may be the general counsel or
any other attorney employed by the Company) for the purpose of such
registration, addressed to the Shelf Underwriters or Demand Underwriters, as
applicable, as to such matters as such underwriters may reasonably request
and as would be customary in such a transaction; and (2) letters dated such
date and the date the offering is priced from the independent certified
public accountants of the Company, addressed to the Shelf Underwriters or
Demand Underwriters, as applicable, (i) stating that they are independent
certified
C-11
public accountants within the meaning of the Securities Act and that, in the
opinion of such accountants, the financial statements and other financial
data of the Company included in the Registration Statement or the
Prospectus, or any amendment or supplement thereto, comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act and (ii) covering such other financial matters with respect
to the registration in respect of which such letter is being given as the
Shelf Underwriters or Demand Underwriters, as applicable, may reasonably
request and as would be customary in such a transaction;
(ix) enter into customary agreements (including, without limitation, an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of
the Registrable Securities to be so included in the Registration Statement;
(x) cooperate with the Holders of the Registrable Securities and the
Shelf Underwriters or Demand Underwriters, as applicable, to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold, and enable such Registrable Securities to be in such
denominations and registered in such names as the Shelf Underwriters or
Demand Underwriters, as applicable, may request at least five Business Days
prior to any sale of the Registrable Securities;
(xi) otherwise comply with all applicable rules and regulations of the
SEC, and make available to its security holders, as soon as reasonably
practicable, but not later than eighteen months after the effective date of
the Registration Statement, an earnings statement covering the period of at
least twelve months beginning with the first full month after the effective
date of such Registration Statement, which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act;
(xii) use commercially reasonable efforts to list the Registrable
Securities covered by such Registration Statement with any securities
exchange on which the Common Stock of the Company is then listed; and
(xiii) use commercially reasonable efforts to make available appropriate
senior executive officers of the Company to participate in customary "road
show" presentations that may be reasonably requested by the Holders in any
underwritten syndicated offering; provided that the participation of such
senior executive officers shall not interfere with the conduct of their
duties to the Company.
With respect to registration required pursuant to Section 5(a) or Section
5(b), the period of distribution of Registrable Securities in a firm
commitment underwritten public offering shall be deemed to extend until each
underwriter has completed the distribution of all securities purchased by it
but in no event longer than forty-five (45) days from the effective date.
(e) Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the Holders shall furnish to the Company such information regarding themselves,
the Registrable Securities held by them, and the intended method of disposition
of such securities as the Company shall reasonably request in writing and as
shall be required in connection with the action to be taken by the Company.
(f) Expenses of Registration.
(i) Shelf and Requested Registration. All expenses incurred in
connection with each registration pursuant to Section 5(a) and 5(b),
including without limitation all registration, filing and qualification
fees, word processing, duplicating, printers' and accounting fees (including
the expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance), fees of the NASD or listing
fees, messenger and delivery expenses, all fees and expenses of complying
with state securities or Blue Sky laws, and reasonable fees and
disbursements of counsel for the Company, shall be borne by the Holders
participating in the registration. The Holders shall also bear and pay the
underwriting commissions and discounts applicable to the Registrable
Securities offered for their account in connection with any regulations,
filings and qualifications made pursuant to this Agreement, as well as
related fees and disbursements of counsel or other advisors to Holders.
(ii) Incidental Registration. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings
or qualifications of Registrable Securities pursuant to
C-12
Section 5(c) for each Holder, including without limitation all registration,
filing and qualification fees, word processing, duplicating, printers' and
accounting fees (including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and
compliance), fees of the NASD or listing fees, messenger and delivery
expenses, all fees and expenses of complying with state securities or Blue
Sky laws, and fees and disbursements of counsel for the Company, shall be
paid by the Company. The Holders shall bear and pay the underwriting
commissions and discounts applicable to the Registrable Securities offered
for their account in connection with any regulations, filings and
qualifications made pursuant to this Agreement, as well as related fees and
disbursements of counsel or other advisors to Holders.
(g) Underwriting Requirements. In connection with any underwritten
offering, the Company shall not be required under Section 5(c) to include
Registrable Securities in such underwritten offering unless the Holder of such
Registrable Securities accepts the terms of the underwriting of such offering
that have been reasonably agreed upon between the Company and the underwriters
selected by the Company in accordance with the terms of this Agreement.
(h) Rule 144 and Rule 145 Information. With a view to making available the
benefits of certain rules and regulations of the SEC which may at any time
permit the sale of the Registrable Securities to the public without
registration at all times, the Company agrees to:
(i) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(ii) use commercially reasonable efforts to file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(iii) furnish to each Holder of Registrable Securities forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirementsof such Rule 144 under the Securities Act and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed by the Company as such Holder may reasonably request in availing
itself of any rule or regulation of the SEC allowing such Holder to sell any
Registrable Securities without registration.
Notwithstanding anything contained in this Section 5(h), the Company may cease
to file reports with the SEC under Section 12 of the Exchange Act if it then is
permitted to do so pursuant to the Exchange Act and the rules and regulations
thereunder.
(i) Indemnification. In the event any Registrable Securities are included
in a Registration Statement under this Agreement:
(i) The Company shall indemnify and hold harmless each Holder, such
Holder's directors and officers, each Person who participates in the
offering of such Registrable Securities, including underwriters (as defined
in the Securities Act), and each Person, if any, who controls such Holder or
participating Person within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending
or investigating any such action or claim) to which they may become subject
under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or proceedings in respect thereof) arise out of or
are based on any untrue or alleged untrue statement of a material fact
contained in such Registration Statement, preliminary Prospectus, final
Prospectus or amendments or supplements thereto or arise out of or are based
upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the indemnity agreement in this
Section 5(i)(i) shall not apply to any loss, claim, damage or liability
resulting from a Holder's failure to deliver at or prior to written
confirmation of sale, the most recent Prospectus, as amended or
supplemented, if such Prospectus, as amended or supplemented, would have
corrected such untrue statement or omission of a material fact or alleged
untrue statement or omission of a material fact, but only if copies of such
Prospectus have previously been furnished to such Holder; provided, further,
that the indemnity agreement contained in this
C-13
Section 5(i)(i) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld); provided further that the Company shall not be liable to any
Holder, such Holder's directors and officers, participating Person or
controlling Person in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon (A)
an untrue statement or alleged untrue statement or omission or alleged
omission made in connection with such Registration Statement, preliminary
Prospectus, final Prospectus or amendments or supplements thereto, in
reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Holder, such
Holder's directors and officers, participating Person or controlling Person
or (B) an offer or sale of Registrable Securities during a Deferral Period
or Delay Period or a violation of the Holder's obligations under Section
5(a)(v) or 5(d)(viii). Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any such Holder,
such Holder's directors and officers, participating Person or controlling
Person, and shall survive the transfer of such securities by such Holder.
(ii) Each Holder requesting or joining in a registration jointly and
severally shall indemnify and hold harmless the Company, each of its
directors and officers, each Person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, and each agent and any underwriter for the Company (within the
meaning of the Securities Act) to the same extent as the foregoing indemnity
from the Company to the Holders but only with reference to written
information relating to such Holder furnished to the Company expressly for
use in connection with such registration, including without limitation
information contained in the Holder's Notice and Questionnaire; provided,
however, that the indemnity agreement contained in this Section 5(i)(ii)
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the
consent of such Holder (which consent shall not be unreasonably withheld);
and provided further that the liability of Holders hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or
expense that is equal to the proportion that the net proceeds from the sale
of the shares sold by Holders under such Registration Statement bears to the
total net proceeds from the sale of all securities sold thereunder.
(iii) In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may
be sought pursuant to either of the two preceding paragraphs, such Person
(the "indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (1)
the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel or (2) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such
fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by the Holders, in the case of parties indemnified
pursuant to the second preceding paragraph, and by the Company, in the case
of parties indemnified pursuant to the first preceding paragraph. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees
C-14
and expenses of counsel as contemplated by the second and third sentences of
this paragraph, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than thirty (30) days after receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with
such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which
any indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(iv) Indemnification similar to that specified in the preceding
subdivision of this subclause 5(i) (with appropriate modifications) shall be
given by the Company and each Holder of Registrable Securities with respect
to any required registration or other qualification of securities under any
federal or state law or regulation or governmental authority other than the
Securities Act.
(j) Company Blackout. The Company agrees that during the period beginning
on the day of a valid request by one or more Holders for (x) an underwritten
syndicated offering pursuant to Section 5(a)(iv) or (y) a registration of an
underwritten syndicated offering pursuant to Section 5(b), and ending sixty
(60) days after completion of such underwritten syndicated offering (each, a
"Company Blackout Period"), the Company shall not initiate any registration of
its securities with the intention of sales of such securities for cash for its
own benefit or the benefit of any other equity holder of the Company (other
than registrations on Form S-8, registrations of Common Stock issuable upon
exercise of options on Form S-3 and shelf registration statements registering
the resale of securities issued in transactions exempt from the Securities Act
(including pursuant to Rule 144A under the Securities Act)); provided, that the
Company shall not be subject to more than two Company Blackout Periods in any
twelve (12) month period.
(k) Lockup. Each Holder shall, in connection with any underwritten
syndicated offering of the Company's securities, upon the reasonable request of
the underwriters managing any underwritten offering of such securities, agree
in writing not to effect any Disposition or distribution of any Subject Shares
(other than that included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such
period of time (not to exceed ninety (90) days) from the effective date of such
registration as the underwriters may specify.
(l) Transfer of Registration Rights. The registration rights of any Holder
under this Agreement with respect to the Registrable Securities may be
transferred to any Permitted Transferee; provided, however, that (1) the
transferring Holder shall give the Company written notice at or prior to the
time of such transfer stating the name and address of the transferee and
identifying the securities with respect to which the rights under this
Agreement are being transferred and (2) such Permitted Transferee shall agree
in writing in form and substance reasonably satisfactory to the Company, to be
bound as a Holder by the provisions of this Agreement.
6. Miscellaneous.
(a) Termination. Except with respect to Section 2 (which shall terminate at
the conclusion of the Standstill Period) and Section 3 (which shall terminate
in accordance with its terms), this Agreement and the obligations of the
parties hereunder (other than Section 6 hereof) shall terminate on the first
date on which the AHP Parties beneficially own, in the aggregate, less than
Five Million (5,000,000) shares of Common Stock.
(b) Further Actions. Each of the parties hereto agrees that it will use
commercially reasonable efforts to do all things necessary to effectuate this
Agreement.
(c) Amendments, Waivers, Etc. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or terminated, except upon the
execution and delivery of a written agreement executed by each of the parties
hereto. The failure of any party hereto to exercise any right, power or remedy
provided under this Agreement or otherwise available in respect hereof at law
or in equity, or to insist upon compliance by any other party hereto with its
obligations hereunder, and any custom or practice of the parties at variance
with the
C-15
terms hereof shall not constitute a waiver by such party of its right to
exercise any such or other right, power or remedy or to demand such compliance.
(d) Specific Performance. The parties hereto agree that irreparable damage
would occur in the event any of the provisions of this Agreement were not to be
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof in addition to any other
remedies at law or in equity.
(e) Notices. Any notices or other communications required or permitted
under, or otherwise in connection with this Agreement shall be in writing and
shall be deemed to have been duly given when delivered in Person or upon
confirmation of receipt when transmitted by facsimile transmission (but only if
followed by transmittal by national overnight courier or hand for delivery on
the next Business Day) or on receipt after dispatch by registered or certified
mail, postage prepaid, addressed, or on the next Business Day if transmitted by
national overnight courier, in each case as follows:
If to Company, at: Amgen Inc.
One Amgen Center Drive
Thousand Oaks, CA 91320-1797
Facsimile: (805) 449-3540
Attention: Chief Executive Officer
With a copy to: Latham & Watkins
885 Third Avenue, Suite 1000
New York, New York 10022-4802
Facsimile: (212) 751-4864
Attention: Charles Nathan
and Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
Facsimile: (213) 891-8763
Attention: Gary Olson
Charles K. Ruck
If to AHP, a Stockholder or a
Permitted Transferee, at: American Home Products Corporation
Five Giralda Farms
Madison, New Jersey 07940
Facsimile: (973) 660-7156
Attention: Louis L. Hoynes, Esq.
With a copy to: Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Facsimile: (212) 455-2502
Attention: Charles I. Cogut
(f) Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(g) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
C-16
(h) Entire Agreement. This Agreement constitutes the entire agreement of
the parties and supersedes all prior agreements and undertakings, both written
and oral, between the parties, or any of them, with respect to the subject
matter hereof including, without limitation, the eighth paragraph of the
confidentiality agreement dated November 28, 2001 between AHP and the Company.
(i) Assignment. Neither this Agreement nor any of the rights, interests, or
obligations hereunder shall be assigned (whether by operation of law or
otherwise) by AHP or the Stockholders without the consent of the Company, or by
the Company without the consent of holders of at least a majority in number of
the Subject Shares then outstanding, provided, that AHP and the Stockholders
can assign their rights hereunder to a Permitted Transferee without the consent
of the Company. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns. In no event shall any transferee of
Subject Shares be entitled or be subject, solely as a result of such transfer,
to any of the benefits or obligations, respectively, of this Agreement or to
enforce or be subject to the same.
(j) Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and their respective successors and
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
(k) Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury.
(i) This Agreement and the transactions contemplated hereby, and all
disputes between the parties under or related to the Agreement or the facts
and circumstances leading to its execution, whether in contract tort or
otherwise, shall be governed by and construed in accordance with the laws of
the State of Delaware, without regard to the application of Delaware
principles of conflicts of laws.
(ii) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any
Delaware State court, or Federal court of the United States of America,
sitting in Delaware, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement or the agreements
delivered in connection herewith or the transactions contemplated hereby or
thereby or for recognition or enforcement of any judgment relating thereto,
and each of the parties hereby irrevocably and unconditionally (A) agrees
not to commence any such action or proceeding except in such courts, (B)
agrees that any claim in respect of any such action or proceeding may be
heard and determined in such Delaware State court or, to the extent
permitted by law, in such Federal court, (C) waives, to the fullest extent
it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any such action or proceeding in
any such Delaware State or Federal court, and (D) waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such Delaware State or
Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 6(e). Nothing in this
Agreement shall affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
(iii) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE
AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT
C-17
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT
MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 6(k).
(l) Effectiveness of Agreement. Notwithstanding anything in this Agreement
to the contrary, this Agreement shall become effective only upon the issuance
to the Stockholders of the Common Stock to be issued pursuant to the Merger
Agreement.
(m) Counterparts. This Agreement may be executed in counterparts, each of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
(Signature Page Follows)
C-18
IN WITNESS WHEREOF, the parties have executed this Stockholders' Rights
Agreement as of the date first above written.
AMGEN INC.
a Delaware corporation
/s/ KEVIN W. SHARER
By: _______________________________
Name: Kevin W. Sharer
Title: Chairman of the Board, CEO
and
President
AMERICAN HOME PRODUCTS CORPORATION
a Delaware corporation
/s/ KENNETH MARTIN
By: _______________________________
Name: Kenneth Martin
Title: Senior Vice President and
Chief
Financial Officer
MDP HOLDINGS, INC.
a Delaware corporation
/s/ KENNETH MARTIN
By: ____________________________
Name: Kenneth Martin
Title: Executive Vice President
LEDERLE PARENTERALS, INC.
a New Jersey corporation
/s/ KENNETH MARTIN
By: ______________________________
Name: Kenneth Martin
Title: Vice President
C-19
ANNEX D
PERSONAL AND CONFIDENTIAL
-------------------------
December 16, 2001
Board of Directors
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, CA 91320
Ladies and Gentlemen:
You have requested our opinion as to the fairness from a financial point of
view to Amgen Inc. ("Amgen" or the "Company") of the Merger Consideration (as
defined below) to be paid by the Company for each outstanding share of Common
Stock, par value $0.01 per share (the "Shares"), of Immunex Corporation
("Immunex") pursuant to the Agreement and Plan of Merger, dated as of December
16, 2001 (the "Agreement"), by and among the Company, AMS Acquisition Inc., a
wholly-owned subsidiary of the Company ("Merger Sub"), and Immunex. Pursuant to
the Agreement, Merger Sub will be merged with and into Immunex, and each
outstanding Share (other than Shares held by the Company or any of its
subsidiaries) will be converted into (i) 0.440 shares of Common Stock, par
value $0.0001 per share (the "Company Common Stock"), of the Company (the
"Stock Consideration") and (ii) $4.50 in cash (the "Cash Consideration";
together with the Stock Consideration, the "Merger Consideration").
Goldman, Sachs & Co., as part of its investment banking business, is
continually engaged in performing financial analyses with respect to businesses
and their securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities as private placements as well as for estate, corporate and
other purposes. We are familiar with the Company having provided certain
investment banking services to the Company from time to time, including having
acted as its financial advisor in connection with its stock repurchase program
and having acted as its financial advisor in connection with, and having
participated in certain of the negotiations leading to, the Agreement. Goldman,
Sachs & Co. provides a full range of financial advisory and securities services
and, in the course of its normal trading activities, may from time to time
effect transactions and hold positions in securities, including derivative
securities, of the Company or Immunex for its own account and for the accounts
of customers.
In connection with this opinion, we have reviewed, among other things, the
Agreement; the Shareholder Voting Agreement, dated as of December 16, 2001, by
and among the Company, American Home Products Corporation, MDP Holdings, Inc.
and Lederle Parenterals, Inc.; Annual Reports to Stockholders and Annual
Reports on Form 10-K of the Company and Immunex for the five years ended
December 31, 2000; certain interim reports to stockholders and Quarterly
Reports on Form 10-Q of the Company and Immunex; certain other communications
from the Company and Immunex to their respective stockholders; and certain
financial analyses and forecasts for the Company, Immunex and the combined
company on a pro forma basis prepared by the management of the Company (the
"Forecasts"), including certain cost savings and operating synergies projected
by the management of the Company to result from the transaction contemplated by
the Agreement (the "Synergies"). We have held discussions with members of the
senior management of the Company regarding their assessment of the strategic
rationale for, and the potential benefits of, the transaction contemplated by
the Agreement and the past and current business operations, financial condition
and future prospects of the Company, including the future prospects of the
combined companies. We have also held discussions with senior management of the
Company and L.E.K Consulting LLC regarding discussions they had with the senior
management of Immunex regarding the past and current business operations,
financial condition and future prospects of Immunex. In addition, we have
reviewed the reported price and trading activity for the Company Common Stock
and the Shares, compared
D-1
Board of Directors
Amgen Inc.
December 16, 2001
Page Two
certain financial and stock market information for the Company and Immunex with
similar information for certain other companies the securities of which are
publicly traded, reviewed the financial terms of certain recent
business combinations in the biotechnology industry specifically and other
industries generally and performed such other studies and analyses as we
considered appropriate.
We have relied upon the accuracy and completeness of all of the financial,
accounting and other information discussed with or reviewed by us and have
assumed such accuracy and completeness for purposes of rendering this opinion.
In that regard, we have assumed with your consent that the Forecasts (including
the Synergies) have been reasonably prepared on a basis reflecting the best
currently available estimates and judgments of the Company and that such
Synergies will be realized in the amounts and time periods contemplated
thereby. In addition, we have not made an independent evaluation or appraisal
of the assets and liabilities of the Company or Immunex or any of their
respective subsidiaries and we have not been furnished with any such
evaluations or appraisals. We also have assumed that all material governmental,
regulatory or other consents and approvals necessary for the consummation of
the transaction contemplated by the Agreement will be obtained without any
adverse effect on Amgen or Immunex or on the contemplated benefits of the
transaction contemplated by the Agreement. Our advisory services and the
opinion expressed herein are provided for the information and assistance of the
Board of Directors of the Company in connection with its consideration of the
transaction contemplated by the Agreement and such opinion does not constitute
a recommendation as to how any holder of Company Common Stock should vote with
respect to such transaction.
Based upon and subject to the foregoing and based upon such other matters, as
we consider relevant, it is our opinion that as of the date hereof the Merger
Consideration to be paid by the Company for each Share pursuant to the
Agreement is fair from a financial point of view to the Company.
Very truly yours,
D-2
ANNEX E
December 16, 2001
Board of Directors
Immunex Corporation
51 University Street
Seattle, WA 98101
Members of the Board of Directors:
Immunex Corporation (the "Company"), Amgen Inc. (the "Acquiror") and AMS
Acquisition Inc., a wholly owned subsidiary of the Acquiror (the "Acquisition
Sub"), propose to enter into an agreement (the "Agreement") pursuant to which
the Acquisition Sub will be merged with and into the Company (the "Merger").
Upon consummation of the Merger, each outstanding share of common stock, par
value $0.01 per share, of the Company (the "Company Common Stock") will be
converted into the right to receive (i) 0.440 of a share of common stock (the
"Acquiror Common Stock"), par value $0.0001 per share, of the Acquiror (the
"Common Stock Consideration") and (ii) $4.50 in cash (the "Cash Consideration,"
and together with the Common Stock Consideration, the "Merger Consideration").
Simultaneously with the Agreement, (i) American Home Products Corporation, the
Company's principal shareholder ("AHP") and the Acquiror propose to enter into
a voting agreement (the "Voting Agreement") pursuant to which AHP agrees, among
other things, to vote its shares in favor of the Merger, and a stockholders'
rights agreement (the "Stockholders' Rights Agreement") and (ii) the Company,
AHP and the other parties thereto propose to enter into an agreement regarding
certain governance and commercial matters (the "Agreement Regarding Governance
and Commercial Matters").
You have asked us whether, in our opinion, the Merger Consideration to be
received by the holders of the shares of Company Common Stock in the Merger is
fair to such holders from a financial point of view.
In arriving at the opinion set forth below, we have, among other things:
1. Reviewed certain publicly available business and financial information
relating to the Company and the Acquiror;
2. Reviewed certain information with respect to the Acquiror, including
financial forecasts, relating to the business, earnings, cash flow,
assets and prospects of the Acquiror, furnished to us by the Acquiror;
3. Reviewed certain information with respect to the Company, including
financial forecasts, relating to the business, earnings, cash flow,
assets and prospects of the Company, furnished to us by the Company;
4. Conducted discussions with members of senior management of the Company
and the Acquiror concerning their respective businesses and prospects
before and after giving effect to the Merger and the potential synergies
expected to result from the Merger;
5. Reviewed the historical market prices, trading activity and valuation
multiples for the Company Common Stock and the Acquiror Common Stock and
compared them with that of certain publicly traded companies which we
deemed to be reasonably similar to the Company and the Acquiror,
respectively;
6. Compared the results of operations of the Company and the Acquiror with
those of certain companies which we deemed to be reasonably similar to
the Company and the Acquiror, respectively;
7. Compared the proposed financial terms of the transactions contemplated
by the Agreement with the financial terms of certain other mergers and
acquisitions which we deemed to be relevant;
8. Reviewed the potential pro forma impact of the Merger;
9. Reviewed the Agreement, the Voting Agreement, the Stockholders' Rights
Agreement and the Agreement Regarding Governance and Commercial Matters;
and
E-1
10. Reviewed such other financial studies and analyses and performed such
other investigations and took into account such other matters as we
deemed necessary, including our assessment of general economic, market
and monetary conditions.
In preparing our opinion, we have assumed and relied on the accuracy and
completeness of all information supplied or otherwise made available to us by
the Company and the Acquiror, and we have not assumed any responsibility to
independently verify such information or undertaken an independent appraisal of
any of the assets and liabilities of the Company or Acquiror or been furnished
with any such evaluation or appraisal. In addition, we have not assumed any
obligation to conduct any physical inspection of the properties or facilities
of the Company or the Acquiror. With respect to the financial forecasts
furnished to or discussed with us by the Company and the Acquiror, we have
assumed that they have been reasonably prepared and reflect the best currently
available estimates and judgment of the Company's and the Acquiror's management
as to the expected future financial performance of the Company and the
Acquiror, as the case may be. We have further assumed that the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended and that all conditions to the Merger
will be satisfied.
Our opinion is necessarily based upon market, economic and other conditions
as they exist and can be evaluated on, and on the information made available to
us as of, the date hereof. We have assumed that in the course of obtaining the
necessary regulatory or other consents or approvals (contractual or otherwise)
for the consummation of the Merger, no restrictions, including divestiture
requirements or amendments or modifications, will be imposed that will have a
material adverse effect on the contemplated benefits of the Merger.
In connection with the preparation of this opinion, we have not been
authorized by the Company or the Board of Directors to solicit, and have not
solicited, third party indications of interest for acquisition of all or any
part of the Company.
We are acting as financial advisor to the Company in connection with the
Merger and will receive a fee from the Company for our services, a significant
portion of which is contingent upon the consummation of the Merger. In
addition, the Company has agreed to indemnify us for certain liabilities
arising out of our engagement. We have, in the past, provided financial
advisory and financing services to the Company and the Acquiror and may
continue to do so and have received, and may receive, fees for the rendering of
such services. In addition, in the ordinary course of our business, we may
actively trade the Company Common Stock, as well as the Acquiror Common Stock,
for our own account or for the accounts of customers and, accordingly, may at
any time hold a long or short position in such securities.
This opinion is for the use and benefit of the Board of Directors of the
Company. Our opinion does not address the merits of the underlying decision by
Company to engage in the Merger and does not constitute a recommendation to any
shareholder as to how such shareholder should vote on the proposed Merger or
any matter related thereto.
We are not expressing any opinion herein as to the prices at which the
Company Common Stock and the Acquiror Common Stock will trade following the
announcement or consummation of the Merger.
On the basis of, and subject to the foregoing, we are of the opinion that
the Merger Consideration to be received by the holders of the shares of Company
Common Stock pursuant to the Merger is fair to such holders from a financial
point of view.
Very truly yours,
E-2
ANNEX F
TITLE 23B. WASHINGTON BUSINESS CORPORATION ACT
CHAPTER 23B.13. DISSENTERS' RIGHTS
(S) 23B.13.010. Definitions
As used in this chapter:
(1) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring corporation by
merger or share exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under RCW 23B.13.020 and who exercises that right when and
in the manner required by RCW 23B.13.200 through 23B.13.280.
(3) "Fair value," with respect to a dissenter's shares, means the value
of the shares immediately before the effective date of the corporate action
to which the dissenter objects, excluding any appreciation or depreciation
in anticipation of the corporate action unless exclusion would be
inequitable.
(4) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair
and equitable under all the circumstances.
(5) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares
to the extent of the rights granted by a nominee certificate on file with a
corporation.
(6) "Beneficial shareholder" means the person who is a beneficial owner
of shares held in a voting trust or by a nominee as the record shareholder.
(7) "Shareholder" means the record shareholder or the beneficial
shareholder.
(S) 23B.13.020. Right to dissent
(1) A shareholder is entitled to dissent from, and obtain payment of the
fair value of the shareholder's shares in the event of, any of the following
corporate actions:
(a) Consummation of a plan of merger to which the corporation is a party
(1) if shareholder approval is required for the merger by RCW 23B.11.030,
23B.11.080, or the articles of incorporation and the shareholder is entitled
to vote on the merger, or (ii) if the corporation is a subsidiary that is
merged with its parent under RCW 23B.11.040;
(b) Consummation of a plan of share exchange to which the corporation is
a party as the corporation whose shares will be acquired, if the shareholder
is entitled to vote on the plan;
(c) Consummation of a sale or exchange of all, or substantially all, of
the property of the corporation other than in the usual and regular course
of business, if the shareholder is entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a sale pursuant to court
order or a sale for cash pursuant to a plan by which all or substantially
all of the net proceeds of the sale will be distributed to the shareholders
within one year after the date of sale;
(d) An amendment of the articles of incorporation that materially reduces
the number of shares owned by the shareholder to a fraction of a share if
the fractional share so created is to be acquired for cash under RCW
23B.06.040; or
(e) Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws, or a resolution of the board
of directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
F-1
(2) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this chapter may not challenge the corporate action
creating the shareholder's entitlement unless the action fails to comply with
the procedural requirements imposed by this title, RCW 25.10.900 through
25.10.955, the articles of incorporation, or the bylaws, or is fraudulent with
respect to the shareholder or the corporation.
(3) The right of a dissenting shareholder to obtain payment of the fair
value of the shareholder's shares shall terminate upon the occurrence of any
one of the following events:
(a) The proposed corporate action is abandoned or rescinded;
(b) A court having jurisdiction permanently enjoins or sets aside the
corporate action; or
(c) The shareholder's demand for payment is withdrawn with the written
consent of the corporation.
(S) 23B.13.030. Dissent by nominees and beneficial owners
(1) A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in the shareholder's name only if the shareholder
dissents with respect to all shares beneficially owned by any one person and
notifies the corporation in writing of the name and address of each person on
whose behalf the shareholder asserts dissenters' rights. The rights of a
partial dissenter under this subsection are determined as if the shares as to
which the dissenter dissents and the dissenter's other shares were registered
in the names of different shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to shares held
on the beneficial shareholder's behalf only if:
(a) The beneficial shareholder submits to the corporation the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and
(b) The beneficial shareholder does so with respect to all shares of
which such shareholder is the beneficial shareholder or over which such
shareholder has power to direct the vote.
(S) 23B.13.200. Notice of dissenters' rights
(1) If proposed corporate action creating dissenters' rights under RCW 23B.
13.020 is submitted to a vote at a shareholders' meeting, the meeting notice
must state that shareholders are or may be entitled to assert dissenters'
rights under this chapter and be accompanied by a copy of this chapter.
(2) If corporate action creating dissenters' rights under RCW 23B. 13.020 is
taken without a vote of shareholders, the corporation, within ten days after
[the] effective date of such corporate action, shall notify in writing all
shareholders entitled to assert dissenters' rights that the action was taken
and send them the dissenters' notice described in RCW 23B. 13.220.
(S) 23B.13.210. Notice of intent to demand payment
(1) If proposed corporate action creating dissenters' rights under RCW 23B.
13.020 is submitted to a vote at a shareholders' meeting, a shareholder who
wishes to assert dissenters' rights must (a) deliver to the corporation before
the vote is taken written notice of the shareholder's intent to demand payment
for the shareholder's shares if the proposed action is effected, and (b) not
vote such shares in favor of the proposed action.
(2) A shareholder who does not satisfy the requirements of subsection (1) of
this section is not entitled to payment for the shareholder's shares under this
chapter.
F-2
(S) 23B.13.220. Dissenters' notice
(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who satisfied the
requirements of RCW 23B.13.210.
(2) The dissenters' notice must be sent within ten days after the effective
date of the corporate action, and must:
(a) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(b) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting dissenters'
rights certify whether or not the person acquired beneficial ownership of
the shares before that date;
(d) Set a date by which the corporation must receive the payment demand,
which date may not be fewer than thirty nor more than sixty days after the
date the notice in subsection (1) of this section is delivered; and
(e) Be accompanied by a copy of this chapter.
(S) 23B.13.230. Duty to demand payment
(1) A shareholder sent a dissenters' notice described in RCW 23B.13.220 must
demand payment, certify whether the shareholder acquired beneficial ownership
of the shares before the date required to be set forth in the dissenters'
notice pursuant to RCW 23B.13.220(2)(c), and deposit the shareholder's
certificates in accordance with the terms of the notice.
(2) The shareholder who demands payment and deposits the shareholder's share
certificates under subsection (1) of this section retains all other rights of a
shareholder until the proposed corporate action is effected.
(3) A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for the shareholder's shares under this
chapter.
(S) 23B.13.240. Share restrictions
(1) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is effected or the restriction is released under RCW 23B.13.260.
(2) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until the effective date of
the proposed corporate action.
(S) 23B.13.250. Payment
(1) Except as provided in RCW 23B.13.270, within thirty days of the later of
the effective date of the proposed corporate action, or the date the payment
demand is received, the corporation shall pay each dissenter who complied with
RCW 23B.13.230 the amount the corporation estimates to be the fair value of the
shareholder's shares, plus accrued interest.
F-3
(2) The payment must be accompanied by:
(a) The corporation's balance sheet as of the end of a fiscal year ending
not more than sixteen months before the date of payment, an income statement
for that year, a statement of changes in shareholders' equity for that year,
and the latest available interim financial statements, if any;
(b) An explanation of how the corporation estimated the fair value of the
shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under RCW
23B.13.280; and
(e) A copy of this chapter.
(S) 23B.13.260. Failure to take action
(1) If the corporation does not effect the proposed action within sixty days
after the date set for demanding payment and depositing share certificates, the
corporation shall return the deposited certificates and release any transfer
restrictions imposed on uncertificated shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation wishes to undertake the proposed action, it must
send a new dissenters' notice under RCW 23B.13.220 and repeat the payment
demand procedure.
(S) 23B.13.270. After-acquired shares
(1) A corporation may elect to withhold payment required by RCW 23B.13.250
from a dissenter unless the dissenter was the beneficial owner of the shares
before the date set forth in the dissenters' notice as the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action.
(2) To the extent the corporation elects to withhold payment under
subsection (1) of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall
pay this amount to each dissenter who agrees to accept it in full satisfaction
of the dissenter's demand. The corporation shall send with its offer an
explanation of how it estimated the fair value of the shares, an explanation of
how the interest was calculated, and a statement of the dissenter's right to
demand payment under RCW 23B.13.280.
(S) 23B.13.280. Procedure if shareholder dissatisfied with payment or offer
(1) A dissenter may notify the corporation in writing of the dissenter's own
estimate of the fair value of the dissenter's shares and amount of interest
due, and demand payment of the dissenter's estimate, less any payment under RCW
23B.13.250, or reject the corporation's offer under RCW 23B.13.270 and demand
payment of the dissenter's estimate of the fair value of the dissenter's shares
and interest due, if.
(a) The dissenter believes that the amount paid under RCW 23B.13.250 or
offered under RCW 23B.13.270 is less than the fair value of the dissenter's
shares or that the interest due is incorrectly calculated;
(b) The corporation fails to make payment under RCW 23B.13.250 within
sixty days after the date set for demanding payment; or
(c) The corporation does not effect the proposed action and does not
return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty days after the date set for
demanding payment.
(2) A dissenter waives the right to demand payment under this section unless
the dissenter notifies the corporation of the dissenter's demand in writing
under subsection (1) of this section within thirty days after the corporation
made or offered payment for the dissenter's shares.
F-4
(S) 23B.13.300. Court action
(1) If a demand for payment under RCW 23B.13.280 remains unsettled, the
corporation shall commence a proceeding within sixty days after receiving the
payment demand and petition the court to determine the fair value of the shares
and accrued interest. If the corporation does not commence the proceeding
within the sixty-day period, it shall pay each dissenter whose demand remains
unsettled the amount demanded.
(2) The corporation shall commence the proceeding in the superior court of
the county where a corporation's principal office, or, if none in this state,
its registered office, is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic
corporation merged with or whose shares were acquired by the foreign
corporation was located.
(3) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled, parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(4) The corporation may join as a party to the proceeding any shareholder
who claims to be a dissenter but who has not, in the opinion of the
corporation, complied with the provisions of this chapter. If the court
determines that such shareholder has not complied with the provisions of this
chapter, the shareholder shall be dismissed as a party.
(5) The jurisdiction of the court in which the proceeding is commenced under
subsection (2) of this section is plenary and exclusive. The court may appoint
one or more persons as appraisers to receive evidence and recommend decision on
the question of fair value. The appraisers have the powers described in the
order appointing them, or in any amendment to it. The dissenters are entitled
to the same discovery rights as parties in other civil proceedings.
(6) Each dissenter made a party to the proceeding is entitled to judgment
(a) for the amount, if any, by which the court finds the fair value of the
dissenter's shares, plus interest, exceeds the amount paid by the corporation,
or (b) for the fair value, plus accrued interest, of the dissenter's
after-acquired shares for which the corporation elected to withhold payment
under RCW 23B.13.270.
(S) 23B.13.310. Court costs and counsel fees
(1) The court in a proceeding commenced under RCW 23B.13.300 shall determine
all costs of the proceeding, including the reasonable compensation and expenses
of appraisers appointed by the court. The court shall assess the costs against
the corporation, except that the court may assess the costs against all or some
of the dissenters, in amounts the court finds equitable, to the extent the
court finds the dissenters acted arbitrarily, vexatiously, or not in good faith
in demanding payment under RCW 23B.13.280.
(2) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the
requirements of RCW 23B.13.200 through 23B.13.280; or
(b) Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses
are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by chapter 23B.13 RCW.
(3) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these counsel reasonable fees to be paid out of the amounts
awarded the dissenters who were benefited.
F-5
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law, or the DGCL, provides
that, subject to specific limitations in the case of derivative suits brought
by a corporation's stockholders in its name, a corporation may indemnify any
individual who is made a party or threatened to be made a party to any third
party suit or proceeding on account of being a director, officer, employee or
agent of the corporation against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement reasonably incurred by him or
her in connection with the action, through, among other things, a majority vote
of directors who were not parties to the suit or proceeding, if the individual:
. acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation; and
. in the case of a criminal proceeding, had no reasonable cause to believe
his or her conduct was unlawful.
Moreover, to the extent a director, officer, employee or agent is successful in
the defense of the action, suit or proceeding, the DGCL requires a corporation
to indemnify the individual for reasonable expenses incurred thereby.
In accordance with the DGCL, Amgen's certificate of incorporation provides
that a director of Amgen will not be personally liable to Amgen or Amgen's
stockholders for monetary damages for breach of fiduciary duties, except for
liability for:
. any breach of the director's duty of loyalty to Amgen or Amgen's
stockholders;
. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
. payment of a dividend or the repurchase or redemption of stock in
violation of Delaware law; or
. any transaction from which the director derived an improper personal
benefit.
The bylaws of Amgen provide that the officers and directors of Amgen will be
indemnified to the full extent permitted by the DGCL. In addition, Amgen must
advance to any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding because he
is or was a director or officer of Amgen, or is or was serving at the request
of Amgen as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, prior to the final disposition of any such
proceeding, promptly following request for advance, all expenses incurred by
any director or officer in connection with such proceeding if the individual
provides an undertaking to repay all amounts if it is ultimately determined
that the person is not entitled to be indemnified under the bylaws or otherwise.
The right to indemnification is not exclusive of any other right which that
individual may have or hereafter acquire under any statute, provision of
Amgen's certificate of incorporation or bylaws, agreement, vote of stockholders
or disinterested directors or otherwise. Amgen is authorized to enter into
individual contracts with any or all of its directors, officers, employees or
agents respecting indemnification and advances, and, upon approval by the board
of directors of Amgen, to purchase insurance on behalf of any person required
or permitted to be indemnified. Amgen maintains a standard policy of officers'
and directors' liability insurance.
II-1
Item 21. Exhibits and Financial Statement Schedules
(a) See Exhibit Index
(b) Not applicable.
(c) Not applicable.
Item 22. Undertakings
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(b) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(c) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (b) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used
in connection with an offering of securities subject to Rule 415, will be filed
as a part of an amendment to the registration statement and will not be used
until such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offering therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(e) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in the
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
(f) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Thousand Oaks, State of
California, on January 30, 2002.
Amgen Inc.
By:
/s/ KEVIN W. SHARER
-----------------------------------
Name: Kevin W. Sharer
Title: Chairman, Chief Executive
Officer and President
POWER OF ATTORNEY
We, the undersigned officers and directors of Amgen Inc., and each of us, do
hereby constitute and appoint each and any of Kevin W. Sharer, Richard D.
Nanula and Steven M. Odre, our true and lawful attorney and agent, with full
power of substitution and resubstitution, to do any and all acts and things in
our name and behalf in any and all capacities and to execute any and all
instruments for us in our names, in connection with this registration statement
or any registration statement for the same offering that is to be effective
upon filing under the Securities Act of 1933, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, including specifically, but without
limitation, power and authority to sign for us or any of us in our names in the
capacities indicated below, any and all amendments (including post-effective
amendments) hereto; and we hereby ratify and confirm all that said attorney and
agent, or his substitute, shall do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and as of the dates indicated.
Signature Title Date
--------- ----- ----
/s/ KEVIN W. SHARER Chairman of the Board, Chief January 30, 2002
----------------------------- Executive Officer,
Kevin W. Sharer President and Director
/s/ RICHARD D. NANULA Executive Vice President, January 30, 2002
----------------------------- Finance, Strategy and
Richard D. Nanula Communications and Chief
Financial Officer
/s/ BARRY D. SCHEHR Vice President, Financial January 30, 2002
----------------------------- Operations and Chief
Barry D. Schehr Accounting Officer
/s/ DAVID BALTIMORE Director January 30, 2002
-----------------------------
David Baltimore
/s/ FRANK J. BIONDI, JR. Director January 30, 2002
-----------------------------
Frank J. Biondi, Jr.
/s/ WILLIAM K. BOWES, JR. Director January 30, 2002
-----------------------------
William K. Bowes, Jr.
II-3
/s/ JERRY D. CHOATE Director January 30, 2002
-----------------------------
Jerry D. Choate
/s/ FREDERICK W. GLUCK Director January 30, 2002
-----------------------------
Frederick W. Gluck
/s/ FRANKLIN P. JOHNSON, JR. Director January 30, 2002
-----------------------------
Franklin P. Johnson, Jr.
/s/ STEVEN LAZARUS Director January 30, 2002
-----------------------------
Steven Lazarus
/s/ GILBERT S. OMENN Director January 30, 2002
-----------------------------
Gilbert S. Omenn
/s/ JUDITH C. PELHAM Director January 30, 2002
-----------------------------
Judith C. Pelham
/s/ J. PAUL REASON Director January 30, 2002
-----------------------------
J. Paul Reason
/s/ DONALD B. RICE Director January 30, 2002
-----------------------------
Donald B. Rice
/s/ PATRICIA C. SUELTZ Director January 30, 2002
-----------------------------
Patricia C. Sueltz
II-4
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2.1* Agreement and Plan of Merger, dated as of December 16, 2001, by and among Amgen Inc., AMS
Acquisiti on Inc., and Immunex Corporation. (1)
4.1 Form of stock certificate for the common stock, par value $0.0001 of Amgen Inc. (2)
4.2 Amended and Restated Rights Agreement, dated as of December 12, 2000 between Amgen Inc. and
American Stock Transfer & Trust Company, as Rights Agent. (3)
4.3* Stockholders' Rights Agreement dated as of December 16, 2001, by and among Amgen Inc.,
American Home Products Corporation, MDP Holdings, Inc. and Lederle Parenterals, Inc. (4)
5.1+ Legal opinion of Latham & Watkins.
8.1+ Tax opinion of Latham & Watkins.
8.2+ Tax opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
10.1*++ Amended and Restated Promotion Agreement by and between Immunex Corporation, American
Home Products Corporation and Amgen Inc. dated December 16, 2001.
10.2*++ Agreement Regarding Governance and Commercial Matters by and among American Home
Products Corporation, American Cyanamid Company and Amgen Inc. dated December 16, 2001.
23.1+ Consent of Latham & Watkins (included in Exhibits 5.1 and 8.1).
23.2+ Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 8.2).
23.3* Consent of Ernst & Young LLP, independent auditors.
23.4* Consent of Ernst & Young LLP, independent auditors.
23.5* Consent of Goldman, Sachs & Co.
23.6* Consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated.
24.1 Powers of Attorney (included on signature page to registration statement).
99.1* Shareholder Voting Agreement dated as of December 16, 2001, by and among Amgen Inc.,
American Home Products Corporation, MDP Holdings, Inc. and Lederle Parenterals, Inc. (5)
99.2* Opinion of Goldman, Sachs & Co. (6)
99.3* Opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated. (7)
99.4* Form of Proxy of Amgen Inc.
99.5* Form of Proxy of Immunex Corporation.
99.6* Consent of Edward V. Fritzky to be named a director of Amgen Inc. upon completion of the merger.
99.7* Employment Agreement between Amgen Inc. and Edward V. Fritzky.
--------
* Filed herewith.
+ To be filed by amendment.
++ Confidential portions of this document have been omitted and separately
filed with the Securities and Exchange Commission pursuant to an
application for confidential treatment under Rule 406 of the Securities Act
of 1933.
(1) Included as Annex A to the joint proxy statement/prospectus forming a part
of this registration statement.
(2) Filed as an exhibit to Amgen's Form 10-Q for the quarter ended March 31,
1997 on May 13, 1997 and incorporated herein by reference.
(3) Filed as an exhibit to Amgen's Form 8-K Current Report dated December 13,
2000 on December 18, 2000 and incorporated herein by reference.
(4) Included as Annex C to the joint proxy statement/prospectus forming a part
of this registration statement.
II-5
(5) Included as Annex B to the joint proxy statement/prospectus forming a part
of this registration statement.
(6) Included as Annex D to the joint proxy statement/prospectus forming a part
of this registration statement.
(7) Included as Annex E to the joint proxy statement/prospectus forming a part
of this registration statement.
II-6