AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 3, 2002
REGISTRATION NO. 333-74838
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MEDIMMUNE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 2836 52-1555759
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification No.)
incorporation or organization) Classification Code Number)
35 WEST WATKINS MILL ROAD
GAITHERSBURG, MARYLAND 20878
TELEPHONE: (301) 417-0770
(Address, including zip code and telephone number, including area code, of
registrant's principal executive offices)
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DAVID M. MOTT
CHIEF EXECUTIVE OFFICER AND VICE CHAIRMAN
35 WEST WATKINS MILL ROAD
GAITHERSBURG, MARYLAND 20878
TELEPHONE: (301) 417-0770
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
Frederick W. Kanner C. Boyd Clarke Peter F. Kerman
Richard D. Pritz President, Chief Executive Officer and Latham & Watkins
Dewey Ballantine LLP Chairman 135 Commonwealth Drive
1301 Avenue of the Americas Aviron Menlo Park, CA 94025
New York, NY 10019 297 North Bernardo Avenue (650) 328-4600
(212) 259-8000 Mountain View, CA 94043
(650) 919-6500
Approximate date of commencement of proposed sale to public: As soon as
practicable after this Registration Statement is declared effective and upon
completion of the transactions described in the enclosed prospectus.
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If the securities being registered on this Form are being 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 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. / /
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 WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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THE INFORMATION IN THIS PRELIMINARY PROSPECTUS MAY BE CHANGED. WE MAY NOT SELL
THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY PROSPECTUS IS NOT AN OFFER TO
SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
[MEDIMMUNE LOGO]
OFFER TO EXCHANGE
1.075 SHARES OF COMMON STOCK
OF
MEDIMMUNE, INC.
FOR EACH OUTSTANDING SHARE OF COMMON STOCK
OF
AVIRON
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON JANUARY 9, 2002, UNLESS EXTENDED. SHARES TENDERED PURSUANT TO THE OFFER
MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION OF THE OFFER, BUT NOT
DURING ANY SUBSEQUENT OFFERING PERIOD.
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On December 2, 2001, we entered into an Agreement and Plan of Merger with
Aviron. Aviron's board of directors has approved and adopted the merger
agreement, determined that the offer is advisable and is fair to and in the best
interests of the stockholders of Aviron and recommends that Aviron stockholders
accept the offer and tender their shares pursuant to the offer.
Through a wholly-owned subsidiary, we are offering to exchange 1.075 shares
of MedImmune, Inc. common stock for each outstanding share of Aviron common
stock.
Our obligation to exchange MedImmune common stock for Aviron common stock is
subject to the conditions listed under "The Offer--Conditions of Our Offer."
MedImmune common stock is listed on the Nasdaq National Market under the symbol
"MEDI" and Aviron common stock is listed on the Nasdaq National Market under the
symbol "AVIR." You are urged to obtain current market quotations for the shares
of MedImmune common stock and Aviron common stock.
SEE "RISK FACTORS" BEGINNING ON PAGE 13 FOR A DISCUSSION OF FACTORS THAT YOU
SHOULD CONSIDER IN DETERMINING WHETHER TO TENDER YOUR SHARES OF AVIRON.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES TO BE ISSUED UNDER THIS
PRELIMINARY PROSPECTUS OR DETERMINED IF THIS PRELIMINARY PROSPECTUS IS ACCURATE
OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
We are not asking you for a proxy and you are requested not to send us a
proxy. Any solicitation of proxies will be made only pursuant to separate proxy
solicitation materials complying with the requirements of Section 14(a) of the
Securities Exchange Act of 1934.
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The Dealer Manager for Our Offer is:
MERRILL LYNCH & CO.
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The date of this preliminary prospectus is January 3, 2002
TABLE OF CONTENTS
PAGE
--------
QUESTIONS AND ANSWERS ABOUT THE PROPOSED
ACQUISITION........................... 1
SUMMARY................................. 4
Information About MedImmune and
Aviron.............................. 4
The Transaction....................... 4
Reasons for the Offer................. 5
The Offer............................. 5
Vote Required for the Merger.......... 6
No Appraisal or Dissenters' Rights.... 7
MedImmune Will Account for the Offer
and the Merger Using the Purchase
Method.............................. 7
MedImmune Will Be Entitled to Majority
Representation on the Aviron Board
of Directors under the Terms of the
Merger Agreement.................... 7
Market Prices and Dividend
Information......................... 8
Comparative Per Share Information..... 9
MEDIMMUNE SELECTED CONSOLIDATED
HISTORICAL FINANCIAL DATA............. 10
AVIRON SELECTED CONSOLIDATED HISTORICAL
FINANCIAL DATA........................ 11
SELECTED UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL DATA............... 12
RISK FACTORS............................ 13
Risk Factors Relating to the Offer and
the Merger.......................... 13
Risk Factors Relating to MedImmune.... 13
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS............ 19
BACKGROUND OF THE OFFER................. 20
REASONS FOR THE OFFER................... 21
MedImmune's Reasons for the Offer..... 21
Reasons for the Recommendation of
Aviron's Board of Directors......... 21
THE OFFER............................... 22
Timing of Our Offer................... 22
Extension, Termination and Amendment.. 22
Procedure for Tendering............... 23
Withdrawal Rights..................... 25
Exchange of Aviron shares; Delivery of
MedImmune Common Stock.............. 26
Cash Instead of Fractional Shares of
MedImmune Common Stock.............. 27
Material United States Federal Income
Tax Consequences.................... 27
PAGE
--------
Purpose of Our Offer; The Merger;
Appraisal Rights.................... 29
Conditions of Our Offer............... 30
State Takeover Laws and Regulatory
Approvals........................... 32
Certain Effects of the Offer.......... 34
Relationships Between Aviron and
MedImmune........................... 35
Accounting Treatment.................. 35
Fees and Expenses..................... 36
Stock Exchange Listing................ 36
THE MERGER AGREEMENT.................... 36
The Offer............................. 36
The Merger............................ 37
Treatment of Aviron Stock Options,
Warrants and Convertible
Securities.......................... 38
Representations and Warranties........ 38
Covenants............................. 38
Additional Agreements................. 41
Conditions of the Offer............... 41
Conditions to the Merger.............. 41
Termination of the Merger Agreement... 42
Termination Fees...................... 43
Amendments, Extension and Waiver...... 43
The Confidentiality Agreement......... 43
INTERESTS OF CERTAIN PERSONS............ 43
UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL DATA........................ 44
Unaudited Pro Forma Combined Statement
of Operations....................... 45
Unaudited Pro Forma Combined Balance
Sheet............................... 47
INFORMATION ABOUT MEDIMMUNE............. 51
INFORMATION ABOUT AVIRON................ 52
COMPARISON OF RIGHTS OF COMMON
STOCKHOLDERS OF MEDIMMUNE AND
AVIRON................................ 52
LEGAL MATTERS........................... 56
EXPERTS................................. 56
WHERE YOU CAN FIND MORE INFORMATION..... 56
ANNEX A--DIRECTORS AND EXECUTIVE
OFFICERS OF MEDIMMUNE, INC............ A-1
ANNEX B--AGREEMENT AND PLAN OF MERGER
DATED AS OF DECEMBER 2, 2001 AMONG
MEDIMMUNE, INC., APPLE MERGER CORP.
AND AVIRON............................ B-1
i
ADDITIONAL INFORMATION
THIS DOCUMENT INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT MEDIMMUNE, INC. AND AVIRON FROM DOCUMENTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION THAT HAVE NOT BEEN INCLUDED IN OR DELIVERED WITH THIS
DOCUMENT. THIS INFORMATION IS AVAILABLE AT THE INTERNET WEB SITE WHICH THE
SECURITIES AND EXCHANGE COMMISSION MAINTAINS AT HTTP://WWW.SEC.GOV, AS WELL AS
FROM OTHER SOURCES. SEE "WHERE YOU CAN FIND MORE INFORMATION" ON PAGE 56.
YOU ALSO MAY REQUEST COPIES OF THESE DOCUMENTS FROM US, WITHOUT CHARGE, UPON
WRITTEN OR ORAL REQUEST TO OUR INFORMATION AGENT, MACKENZIE PARTNERS, INC., 156
FIFTH AVENUE, NEW YORK, NEW YORK 10010, COLLECT AT (212) 929-5500 OR TOLL-FREE
AT (800) 322-2885. IN ORDER TO RECEIVE TIMELY DELIVERY OF THE DOCUMENTS, YOU
MUST MAKE YOUR REQUESTS NO LATER THAN DECEMBER 28, 2001 (FIVE BUSINESS DAYS
BEFORE THE SCHEDULED EXPIRATION OF THE OFFER).
ii
QUESTIONS AND ANSWERS ABOUT THE PROPOSED ACQUISITION
Q: WHAT ARE MEDIMMUNE AND AVIRON PROPOSING?
A: We have entered into a merger agreement with Aviron pursuant to which we are
offering, through a wholly-owned subsidiary, to exchange 1.075 shares of
MedImmune common stock for each outstanding share of Aviron common stock. We
intend, promptly after the offer is completed, to have our subsidiary merge with
Aviron. As a result of the offer and the merger, Aviron will be owned by
MedImmune. In the merger, each Aviron share not tendered in the offer will be
converted into 1.075 MedImmune shares, the same exchange ratio as in the offer.
Q: WHAT WILL I RECEIVE IN EXCHANGE FOR MY AVIRON SHARES?
A: We are offering to exchange 1.075 MedImmune shares for each of your Aviron
shares that you validly tender in the offer. You will not receive any fractional
shares of MedImmune common stock in the offer. Instead, you will receive cash in
an amount equal to the market value of any fractional shares you would otherwise
have been entitled to receive.
Q: WILL I RECEIVE DIVIDENDS ON MY SHARES OF MEDIMMUNE COMMON STOCK AFTER THE
OFFER?
A: MedImmune has never declared or paid any cash dividends on its common stock
and does not anticipate paying any cash dividends in the foreseeable future.
MedImmune currently intends to retain any earnings to fund future growth,
product development and operations. For a further discussion of dividends, see
"Summary--Market Prices and Dividend Information" on page 8.
Q: HOW LONG WILL IT TAKE TO COMPLETE THE OFFER AND THE MERGER?
A: We hope to complete the offer by January 9, 2002, the initial scheduled
expiration date. We hope to complete the merger promptly after we complete the
offer.
Q: WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?
A: If you are the record owner of your shares, in which case you hold one or
more physical certificates, and you tender your shares directly to the exchange
agent, you will not have to pay brokerage fees or incur similar expenses. If you
own your shares through a broker or other nominee, and your broker tenders the
shares on your behalf, your broker may charge you a fee for doing so. You should
consult your broker or nominee to determine whether any charges will apply.
Q: DOES AVIRON SUPPORT THE OFFER AND THE MERGER?
A: Yes. Aviron's board of directors has determined that the offer is advisable
and is fair to, and in the best interests of, Aviron stockholders and recommends
that Aviron stockholders accept the offer and tender their shares pursuant to
the offer. Aviron's board of directors has approved and adopted the merger
agreement, the offer and the merger. Information about the recommendation of
Aviron's board of directors is more fully set forth in Aviron's
Solicitation/Recommendation Statement on Schedule 14D-9, which is being mailed
to Aviron stockholders with this preliminary prospectus.
Q: WHAT PERCENTAGE OF MEDIMMUNE COMMON STOCK WILL AVIRON STOCKHOLDERS OWN AFTER
THE OFFER AND THE MERGER?
A: After the merger, former stockholders of Aviron would own approximately 14%
of the outstanding shares of MedImmune common stock, based upon the number of
shares of MedImmune common stock and Aviron common stock outstanding on
December 31, 2001.
1
Q: WHAT ARE THE CONDITIONS TO THE OFFER?
A: The offer is subject to several conditions, including:
- the tender of a majority of the fully diluted shares of Aviron common
stock;
- the expiration of the waiting period under applicable antitrust law, the
effectiveness of MedImmune's registration statement on Form S-4 for the
offer, the listing of the MedImmune shares to be issued in the transaction
on Nasdaq and the absence of an injunction or a governmental challenge to
the offer;
- the absence of an Aviron material adverse effect;
- the Aviron Board not having withdrawn or adversely modified its
recommendation of the offer and the merger or having recommended another
offer;
- the accuracy of Aviron's representations and Aviron's performance of its
covenants; and
- the receipt of opinions of tax counsel to the effect that the offer and
the merger, together, will qualify as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code.
These conditions and other conditions to the offer are discussed in this
preliminary prospectus under "The Offer--Conditions of Our Offer" beginning on
page 30.
Q: HOW DO I PARTICIPATE IN YOUR OFFER?
A: To tender your shares, you should do the following:
- if you hold shares in your own name, complete and sign the enclosed letter
of transmittal and return it with your physical share certificates to
American Stock Transfer & Trust Company, the exchange agent for the offer,
at the appropriate address specified on the back cover page of this
preliminary prospectus before the expiration date of the offer; or
- if you hold your shares in "street name" through a broker, instruct your
broker to tender your shares before the expiration date.
For more information on the timing of the offer, extensions of the offer period
and your rights to withdraw your shares from the offer before the expiration
date, please refer to "The Offer" beginning on page 22.
Q: WHEN AND HOW CAN I WITHDRAW TENDERED SHARES?
A: Your tender of Aviron shares pursuant to the offer is irrevocable, except
that Aviron shares tendered pursuant to the offer may be withdrawn at any time
prior to the expiration date.
Q: DO THE STATEMENTS ON THE COVER PAGE REGARDING THIS PRELIMINARY PROSPECTUS
BEING SUBJECT TO CHANGE AND THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION NOT YET BEING EFFECTIVE MEAN THAT THE OFFER HAS NOT
COMMENCED?
A: No. Completion of this preliminary prospectus and effectiveness of the
registration statement are not necessary for the offer to commence. We cannot,
however, accept for exchange any shares tendered in the offer until the
registration statement is declared effective by the Securities and Exchange
Commission and the other conditions to our offer have been satisfied or waived.
The offer commenced on December 10, 2001.
2
Q: IS MEDIMMUNE'S FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER MY
SHARES IN THE OFFER?
A: Yes. Your Aviron shares accepted in the offer will be exchanged for shares of
MedImmune common stock and so you should consider our financial condition before
you decide to become one of our stockholders through the offer. In considering
MedImmune's financial condition, you should review the documents incorporated by
reference in this preliminary prospectus because they contain detailed business,
financial and other information about us.
Q: WILL I BE TAXED ON THE MEDIMMUNE COMMON STOCK THAT I RECEIVE?
A: It is expected that an Aviron stockholder's receipt of MedImmune common
shares in the offer or the merger generally will be tax-free for United States
federal income tax purposes (except for taxes resulting from the receipt of cash
instead of any fraction of a MedImmune common share). You are urged to carefully
read the discussion under "The Offer--Material United States Federal Income Tax
Consequences" beginning on page 27, and to consult your tax advisor on the
consequences of participation in the offer or the merger.
Q: WHERE CAN I FIND OUT MORE INFORMATION ABOUT MEDIMMUNE AND AVIRON?
A: You can find out information about MedImmune and Aviron from various sources
described under "Additional Information" on the page preceding the table of
contents and "Where You Can Find More Information" on page 56.
Q: WHO CAN I CALL WITH QUESTIONS ABOUT THE OFFER?
A: You can contact our information agent, MacKenzie Partners, Inc., collect at
(212) 929-5500 or toll-free at (800) 322-2885. You can also contact our dealer
manager, Merrill Lynch & Co., collect at (609) 274-3066.
3
SUMMARY
THIS BRIEF SUMMARY DOES NOT CONTAIN ALL OF THE INFORMATION THAT MAY BE
IMPORTANT TO YOU. YOU SHOULD CAREFULLY READ THIS ENTIRE DOCUMENT AND THE
DOCUMENTS WHICH WE HAVE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WHICH
WE OFTEN REFER TO AS THE "SEC" IN THIS PRELIMINARY PROSPECTUS. FOR INFORMATION
ON HOW TO OBTAIN THE DOCUMENTS THAT WE HAVE FILED WITH THE SEC, SEE "ADDITIONAL
INFORMATION" ON THE PAGE PRECEDING THE TABLE OF CONTENTS AND "WHERE YOU CAN FIND
MORE INFORMATION" ON PAGE 56.
INFORMATION ABOUT MEDIMMUNE AND AVIRON (See page 51)
MedImmune, Inc.
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
(301) 417-0770
MedImmune, Inc. is a fully integrated biotechnology company focused on
developing and marketing products that address medical needs in areas such as
infectious disease, immune regulation and cancer. MedImmune markets five
products, including: Synagis-Registered Trademark- (palivizumab), which is
marketed for the prevention of serious lower respiratory tract disease caused by
respiratory syncytial virus (RSV) in pediatric patients at high risk of RSV
disease; Ethyol-Registered Trademark- (amfostine), which is marketed for the
reduction of both cumulative renal toxicity associated with repeated
administration of cisplatin in patients with advanced ovarian cancer or
non-small cell lung cancer, and the incidence of moderate to severe xerostomia
in patients undergoing post-operative radiation treatment for head and neck
cancer, where the radiation port includes a substantial portion of the parotid
glands; and CytoGam-Registered Trademark- (cytomegalovirus immune globulin
intravenous (human)) (CMV-IGIV), which is marketed for the prophylaxis against
cytomegalovirus disease associated with transplantation of the kidney, lung,
liver, pancreas and heart. MedImmune also has six products in various stages of
clinical testing for a number of diseases and several more product candidates in
preclinical testing. Headquartered in Gaithersburg, Maryland, MedImmune has
manufacturing facilities in Frederick, Maryland and Nijmegen, the Netherlands.
Aviron
297 North Bernardo Ave.
Mountain View, CA 94043
(650) 919-6500
Aviron is a biopharmaceutical company focused on developing and
commercializing innovative vaccine technologies to prevent infectious disease
and improve quality of life in the general population. Aviron currently is
focusing its efforts on its lead product candidate, FluMist-TM-, an
investigational live attenuated vaccine delivered as a nasal mist for the
prevention of influenza. Aviron's goal is to become a leader in the discovery,
development, manufacture and marketing of innovative vaccines that are safe,
effective and suitable for widespread use. Aviron's vaccine development programs
are based on proprietary, genetic engineering technologies and novel, convenient
delivery systems.
THE TRANSACTION (See page 20)
We are proposing an acquisition of Aviron under which we will acquire all
outstanding shares of Aviron common stock. We are offering to exchange 1.075
shares of MedImmune common stock for each share of Aviron common stock validly
tendered on or prior to the expiration of the offer. The expiration date is
currently January 9, 2002 but we may extend the offer as described in "The
Offer--Extension, Termination and Amendment" on page 22.
We intend, promptly after completion of the offer, to merge Apple Merger
Corp., our wholly-owned subsidiary and the purchaser in the offer, with and into
Aviron. In the merger, each Aviron
4
share not tendered in the offer will be converted into 1.075 MedImmune shares,
the same exchange ratio as in the offer. We are seeking to acquire ownership of
100% of the Aviron shares through the offer and the merger.
REASONS FOR THE OFFER (See page 21)
We believe that our acquisition of Aviron represents a compelling
opportunity to enhance value for both Aviron and MedImmune stockholders. The
MedImmune and Aviron boards of directors have separately approved the offer, the
merger and the merger agreement after careful consideration. Please see "Reasons
for the Offer."
THE OFFER (See page 22)
CONDITIONS OF OUR OFFER
Our obligation to exchange our common shares for Aviron common shares
pursuant to the offer is subject to several conditions referred to under "The
Offer--Conditions of Our Offer," including conditions that would require a
minimum number of Aviron shares to be tendered, receipt of all required
regulatory approvals and satisfaction of other conditions. As of December 31,
2001, there were 31,422,092 Aviron shares outstanding and 9,920,276 shares
issuable upon exercise or conversion of outstanding options, warrants and
convertible securities.
TIMING OF THE OFFER
Our offer is currently scheduled to expire on January 9, 2002; however, we
intend to extend our offer from time to time as necessary until all the
conditions to the offer have been satisfied or waived. See "The
Offer--Extension, Termination and Amendment."
EXTENSION, TERMINATION AND AMENDMENT
We expressly reserve the right, in our sole discretion (subject to the
provisions of the merger agreement), at any time or from time to time, to extend
the period of time during which our offer remains open, and we can do so by
giving oral or written notice of such extension to the exchange agent. If we
decide to extend our offer, we will make a public announcement to that effect no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date. During any such extension, all Aviron
shares previously tendered and not properly withdrawn will remain subject to the
offer and subject to your right to withdraw your Aviron shares.
Subject to the SEC's applicable rules and regulations and the terms of our
merger agreement, we also reserve the right, in our sole discretion, at any time
or from time to time, (a) to delay our acceptance for exchange or our exchange
of any Aviron shares pursuant to our offer, regardless of whether we previously
accepted Aviron shares for exchange, or (b) to terminate our offer and not
accept for exchange or exchange any Aviron shares not previously accepted for
exchange or exchanged, upon the failure of any of the conditions of the offer to
be satisfied and (c) to waive any condition or otherwise to amend the offer in
any respect, by giving oral or written notice of such delay, termination or
amendment to the exchange agent and by making a public announcement. We will
follow any extension, termination, amendment or delay, as promptly as
practicable, with a public announcement. In the case of an extension, any such
announcement will be issued no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled expiration date. Subject to
applicable law (including Rules 14d-4(d) and 14d-6(c) under the Securities
Exchange Act of 1934, which require that any material change in the information
published, sent or given to the stockholders in connection with the offer be
promptly sent to stockholders in a manner reasonably designed to inform
stockholders of such change) and without limiting the manner in which we may
choose to make any public
5
announcement, we assume no obligation to publish, advertise or otherwise
communicate any such public announcement other than by making a release to the
Dow Jones News Service.
EXCHANGE OF SHARES; DELIVERY OF MEDIMMUNE COMMON STOCK
Upon the terms and subject to the conditions of our offer (including, if the
offer is extended or amended, the terms and conditions of any extension or
amendment), we will accept for exchange, and will exchange, shares validly
tendered and not properly withdrawn promptly after the expiration date and
promptly after they are tendered during any subsequent offering period. The
exchange agent will deliver, or cause to be delivered, shares of MedImmune
common stock in exchange for shares of Aviron common stock pursuant to the offer
and cash in lieu of fractional shares of MedImmune common stock as soon as
practicable after it receives notice of our acceptance of the validly tendered
Aviron shares.
WITHDRAWAL RIGHTS
Your tender of Aviron shares pursuant to the offer is irrevocable, except
that Aviron shares tendered pursuant to the offer may be withdrawn at any time
prior to the expiration date.
SUBSEQUENT OFFERING PERIOD
We may elect to provide a subsequent offering period of three to twenty
business days after the acceptance of Aviron shares pursuant to the offer if the
requirements under Rule 14d-11 of the Exchange Act have been met. In contrast to
your rights during the offering period prior to the initial acceptance of Aviron
shares, you will not have the right to withdraw Aviron shares that you tender
during the subsequent offering period, if any.
PROCEDURE FOR TENDERING SHARES
For you to validly tender your Aviron shares pursuant to our offer, (a) a
properly completed and duly executed letter of transmittal (or manually executed
facsimile of that document), along with any required signature guarantees, or an
agent's message, which is explained below, in connection with a book-entry
transfer, and any other required documents, must be transmitted to and received
by the exchange agent at one of its addresses set forth on the back cover of
this preliminary prospectus, and certificates for tendered Aviron shares must be
received by the exchange agent at such address, or those Aviron shares must be
tendered pursuant to the procedures for book-entry tender set forth in "The
Offer" (and a confirmation of receipt of such tender received), in each case
before the expiration date, or (b) you must comply with the guaranteed delivery
procedures set forth in "The Offer--Procedure for Tendering--Guaranteed
Delivery." Any Aviron shares properly withdrawn prior to completion of the offer
will not be considered validly tendered.
VOTE REQUIRED FOR THE MERGER (See page 30)
The merger requires the affirmative vote of at least a majority of the
Aviron shares outstanding on the record date for the meeting to approve the
merger, unless we have acquired 90% or more of these outstanding shares in which
case the merger can be accomplished without a vote under the short-form merger
provisions of Delaware law.
If the minimum tender condition and other conditions are satisfied and we
exchange the tendered Aviron shares, we will own a majority of the Aviron common
stock and approval of the merger by Aviron stockholders will be assured, subject
to the other conditions to the merger, which are described in "The Merger
Agreement--Conditions to the Merger."
6
NO APPRAISAL OR DISSENTERS' RIGHTS (See page 29)
The offer does not entitle you to dissenters' rights with respect to your
Aviron shares.
If at the end of the offer, we have received between a majority and 90% of
the outstanding Aviron shares, we will effect a long form merger as permitted
under Delaware law, which would require notice to and approval by Aviron
stockholders. Aviron stockholders who did not tender their Aviron shares during
the offer would not have appraisal rights in connection with a long form merger.
If at the end of the offer, however, we have received 90% or more of the
outstanding Aviron shares, we will effect a short form merger as permitted under
Delaware law. In the event of a short form merger, stockholders who did not
tender their Aviron shares would have the right under Delaware law to dissent
and demand appraisal rights with respect to their Aviron shares, but only if
they comply with certain statutory requirements. Dissenting stockholders who
comply with the applicable statutory procedures will be entitled to receive a
judicial determination of the fair value of their Aviron shares (exclusive of
any element of value arising from the accomplishment or expectation of the
merger) and to receive payment of this fair value in cash, together with a fair
rate of interest, if any. In the event of a short form merger, information
regarding these requirements will be provided to Aviron stockholders who have
not tendered their Aviron shares.
MEDIMMUNE WILL ACCOUNT FOR THE OFFER AND THE MERGER USING THE PURCHASE METHOD
(See page 44)
MedImmune will account for the offer and the merger as a purchase for
financial reporting purposes.
MEDIMMUNE WILL BE ENTITLED TO MAJORITY REPRESENTATION ON THE AVIRON BOARD OF
DIRECTORS UNDER THE TERMS OF THE MERGER AGREEMENT (See page 37)
Because MedImmune will not purchase any Aviron shares unless a majority of
Aviron's outstanding shares are tendered, after acceptance for exchange of
shares in the offer, MedImmune will be entitled to majority representation on
the Aviron board of directors under the terms of the merger agreement.
For a more detailed discussion of appraisal rights see "The Offer--Purpose
of Our Offer: The Merger; Appraisal Rights" on page 29.
7
MARKET PRICES AND DIVIDEND INFORMATION
MedImmune common stock is listed on the Nasdaq National Market under the
symbol "MEDI" and Aviron common stock is listed on Nasdaq National Market under
the symbol "AVIR." The following table sets forth, for the periods indicated,
the high and low sales prices per share of MedImmune common stock and of Aviron
common stock as reported in published financial sources. Neither MedImmune nor
Aviron has ever declared or paid any cash dividends on its common stock and
neither anticipates paying any cash dividends in the foreseeable future.
MEDIMMUNE(1) AVIRON
------------------- -------------------
HIGH LOW HIGH LOW
-------- -------- -------- --------
1999:
First quarter............................................. $22.00 $14.33 $26.75 $17.50
Second quarter............................................ 24.67 15.00 28.75 17.13
Third quarter............................................. 40.21 22.96 34.06 21.00
Fourth quarter............................................ 58.60 29.67 28.75 14.81
2000:
First quarter............................................. 76.25 43.00 54.38 15.00
Second quarter............................................ 80.69 42.00 35.00 21.00
Third quarter............................................. 86.13 57.75 59.00 27.56
Fourth quarter............................................ 72.63 44.63 70.61 46.00
2001:
First quarter............................................. 54.56 27.63 67.81 26.75
Second quarter............................................ 48.05 29.19 64.36 34.75
Third quarter............................................. 48.08 29.51 56.33 18.95
Fourth quarter............................................ 48.95 33.47 52.34 23.71
2002:
First quarter (through January 2)......................... 46.25 44.78 49.69 48.00
------------------------
(1) The MedImmune high and low stock price up to and including the second
quarter of 2000 is adjusted to reflect a 3-for-1 stock split in June 2000.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS PRIOR TO MAKING
ANY DECISION WITH RESPECT TO THE MERGER.
The following table presents closing prices for MedImmune and Aviron common
shares on November 30, 2001, the last full trading day prior to the public
announcement of the proposed merger, and on January 2, 2002, the last
practicable trading day prior to the date of this preliminary prospectus. The
table also presents equivalent price per Aviron share, based on the exchange
ratio of 1.075 MedImmune shares per Aviron share.
MEDIMMUNE AVIRON AVIRON
DATE COMMON STOCK COMMON STOCK EQUIVALENT
---- ------------ ------------ ----------
November 30, 2001....................................... $44.10 $37.05 $47.41
January 2, 2002......................................... 46.14 49.40 49.60
8
COMPARATIVE PER SHARE INFORMATION
The following table shows historical per share data of MedImmune and Aviron
and also shows similar information reflecting the combination of the two
companies, which is referred to as "pro forma" information. The Aviron
equivalent per share amounts were calculated by multiplying the pro forma
combined amounts by 1.075, the exchange ratio for the offer.
The comparative per share data is derived from, and should be read with, the
historical financial statements of MedImmune and Aviron that are included in the
documents described under "Where You Can Find More Information" on page 56 and
the pro forma financial information included in this preliminary prospectus. See
"Unaudited Pro Forma Condensed Combined Financial Data" on page 44.
PRO FORMA AVIRON
MEDIMMUNE AVIRON COMBINED EQUIVALENT
--------- -------- --------- ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS
PER COMMON SHARE -- BASIC
For the nine months ended September 30, 2001..... $0.24 $(2.97) $(0.05) $(0.05)
For the year ended December 31, 2000............. 0.69 (3.74) 0.29 0.31
PER COMMON SHARE -- DILUTED
For the nine months ended September 30, 2001..... 0.23 (2.97) (0.05) (0.05)
For the year ended December 31, 2000............. 0.66 (3.74) 0.27 0.29
CONSOLIDATED BOOK VALUE PER SHARE
At September 30, 2001.............................. 4.39 9.19 5.61 6.03
9
MEDIMMUNE SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
The following selected financial data for each of the five years in the
period ended December 31, 2000 have been derived from MedImmune's audited
consolidated financial statements. MedImmune's consolidated financial statements
as of December 31, 2000 and 1999 and for the three years ended December 31, 2000
and PricewaterhouseCoopers LLP's audit report with respect thereto have been
incorporated by reference into this preliminary prospectus. The
PricewaterhouseCoopers audit report on the financial statements for the year
ended December 31, 1998 is based, in part, on the report of other auditors. The
report of the other auditors has also been incorporated herein. The financial
data as of September 30, 2001 and 2000, and for each of the nine-month periods
then ended, have been derived from MedImmune's unaudited consolidated financial
statements which include, in management's opinion, all adjustments, consisting
of normal recurring adjustments, necessary for a fair statement of the results
for the interim periods. This data should be read in conjunction with the
respective audited and unaudited consolidated financial statements of MedImmune,
including the notes to the financial statements and the "Risk Factors" beginning
on page 13.
(in thousands, except per share data)
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
---------- -------- ---------- -------- -------- -------- --------
UNAUDITED
STATEMENT OF INCOME DATA:
Total revenues..................... $ 325,976 $302,323 $ 540,495 $383,375 $227,221 $105,748 $ 45,565
Gross profit....................... 227,238 195,593 368,483 266,622 107,988 39,315 23,933
Net earnings (loss)................ 50,454 31,714(4) 111,156(4) 93,371(2) 47,187(1) (44,804) (32,358)
Earnings/(loss) per share (3)
Basic............................ 0.24 0.15(5) 0.53(5) 0.49 0.28 (0.30) (0.24)
Diluted.......................... 0.23 0.14(5) 0.50(5) 0.44 0.24 (0.30) (0.24)
BALANCE SHEET DATA (AT END OF
PERIOD):
Cash and marketable securities..... 655,251 453,663 526,254 270,394 176,860 101,246 74,716
Total assets....................... 1,053,516 859,690 1,006,575 648,424 405,777 232,717 106,443
Long term debt..................... 9,738 10,528 10,302 11,856 87,910 90,276 3,829
Shareholders' equity............... 938,622 785,512 843,582 537,079 248,566 87,560 80,673
NOTES:
(1) Includes deferred income tax benefit of $47,428 related to the reversal of a
valuation allowance.
(2) Includes deferred income tax benefit of $40,973 related to the reversal of a
valuation allowance.
(3) Per share data prior to 2000 has been restated to give effect for the
three-for-one stock split on June 2, 2000.
(4) Includes charge for cumulative effect of change in accounting principle, net
of tax, of $33,821. Net income from continuing operations for the year ended
December 31, 2000 and for the nine months ended September 30, 2000 was
$144,977 and $65,535, respectively.
(5) Includes a charge of $0.16 per share for the cumulative effect of a change
in accounting principle. Net income per share from continuing operations for
the year ended December 31, 2000 and for the nine months ended
September 30, 2000 was $0.69 and $0.31 basic, and $0.66 and $0.30 diluted,
respectively.
10
AVIRON SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
The following selected financial data as of and for each of the five years
in the period ended December 31, 2000 have been derived from Aviron's audited
consolidated financial statements. Aviron's consolidated financial statements as
of December 1, 2000 and 1999 and for the three years ended December 31, 2000,
and the audit report of Ernst & Young LLP with respect thereto, have been
incorporated by reference in this preliminary prospectus. The financial data as
of September 30, 2001 and 2000, and for the nine-month periods then ended, have
been derived from Aviron's unaudited consolidated financial statements which
include, in management's opinion, all adjustments, consisting of normal
recurring adjustments, necessary to present fairly the results of operations and
financial position of Aviron for the periods and dates presented. This data
should be read in conjunction with the respective audited and unaudited
consolidated financial statements of Aviron, including the notes to the
financial statements, incorporated by reference into this document, and the
"Risk Factors" beginning on page 13.
(in thousands, except per share data)
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
---------- -------- ---------- -------- -------- -------- --------
UNAUDITED
STATEMENT OF OPERATIONS DATA:
Total revenues..................... $ 11,665 $ 10,154 $ 32,242 $ 22,232 $ 745 $ 1,477 $ 1,625
Research and development
expenses......................... 91,470 54,036(1) 80,521(1) 68,212 46,583 24,254 14,997
Net loss........................... (89,169) (78,686)(2) (90,261)(2) (61,870) (54,802) (26,502) (17,501)
Basic and diluted net loss per
share............................ (2.97) (3.95)(4) (4.36)(3) (3.90) (3.49) (1.94) (7.27)
BALANCE SHEET DATA (AT END OF
PERIOD):
Cash, cash equivalents and short
term investments................. 409,333 121,089 132,313 52,316 88,856 62,524 17,872
Total assets....................... 555,589 162,470 248,739 91,694 120,985 85,325 21,592
Long-term debt, excluding current
portion.......................... 227,681 110,424 89,947 112,666 100,000 -- --
Accumulated deficit................ (362,536) (251,367) (273,401) (183,279) (121,254) (66,411) (39,935)
Shareholders' equity (deficit)..... 286,325 30,930 120,586 (39,619) 8,966 75,742 17,947
NOTES:
(1) Does not include $10,904, which represents the value of a warrant for 340
shares of Aviron common stock granted to the University of Michigan.
(2) Includes charge for cumulative effect of change in accounting principle of
$12,750. Net loss before cumulative effect of change in accounting principle
for the year ended December 31, 2000 and for the nine months ended
September 30, 2000 was $77,511 and $65,936, respectively.
(3) Includes a charge of $0.62 per share for the cumulative effect of a change
in accounting principle.
(4) Includes a charge of $0.64 per share for the cumulative effect of a change
in accounting principle.
11
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The following selected unaudited pro forma condensed combined financial data
present the effect of the pending acquisition of Aviron by MedImmune, which is
to be accounted for as a purchase. The unaudited pro forma condensed combined
balance sheet presents the combined financial position of MedImmune and Aviron
as of September 30, 2001 assuming that the acquisition had occurred as of that
date. The unaudited combined statements of operations for the year ended
December 31, 2000 and nine month period ended September 30, 2001 give effect to
the acquisition of Aviron by MedImmune as if it had occurred on January 1, 2000.
Such pro forma information is based upon the historical consolidated financial
information of MedImmune and Aviron.
The unaudited pro forma condensed combined 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 combined financial data are not
necessarily an indication of the results that would have been achieved had the
transaction been consummated as of the dates indicated or that may be achieved
in the future.
These selected unaudited pro forma condensed combined financial data should
be read in conjunction with the unaudited pro forma condensed combined financial
data included herein and the historical consolidated financial statements and
notes thereto of MedImmune and Aviron and other financial information pertaining
to MedImmune and Aviron including "Management's Discussion and Analysis of
Financial Condition and Results of Operations" incorporated herein by reference.
See "Unaudited Pro Forma Condensed Combined Financial Data" on page 44.
MEDIMMUNE AND AVIRON
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 31, DECEMBER 31,
2001 2000
----------------- ------------
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF
OPERATIONS:
Total revenues.............................................. $339,966 $558,012
Gross profit................................................ 227,238 368,483
Earnings (loss) before cumulative effect of a change in
accounting principle...................................... (11,739) 69,384
Earnings (loss) before cumulative effect of a change in
accounting principle per common share:
Basic................................................... $(0.05) $0.29
Diluted................................................. $(0.05) $0.27
Weighted-average common shares outstanding:
Basic................................................... 246,854 242,880
Diluted................................................. 246,854 256,062
AS OF
SEPTEMBER 30, 2001
-------------------
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE
SHEET DATA:
Cash, cash equivalents and marketable securities............ $1,102,427
Total assets................................................ 1,825,678
Long-term debt and obligations.............................. 246,678
Shareholders' equity........................................ 1,389,535
12
RISK FACTORS
In addition to the other information included in this preliminary prospectus
(including the matters addressed in "Cautionary Statement Concerning
Forward-Looking Statements" on page 19), you should consider the following in
determining whether to tender your Aviron shares:
RISK FACTORS RELATING TO THE OFFER AND THE MERGER
THE NUMBER OF MEDIMMUNE SHARES THAT YOU WILL RECEIVE IN THE OFFER AND THE
SUBSEQUENT MERGER WILL BE BASED UPON A FIXED EXCHANGE RATIO. THE VALUE OF THE
MEDIMMUNE SHARES AT THE TIME YOU RECEIVE THEM COULD BE LESS THAN THEIR VALUE AT
THE TIME YOU TENDER YOUR AVIRON SHARES:
In the offer and subsequent merger, each Aviron share will be exchanged for
1.075 MedImmune shares. This is a fixed exchange ratio. We will not adjust the
exchange ratio as a result of any decrease in the market price of the MedImmune
common stock between the date of this prospectus and the date you receive
MedImmune shares in exchange for Aviron shares. The market price of the
MedImmune common stock will likely be different on the date you receive
MedImmune shares than it is today because of changes in the business, operations
or prospects of MedImmune, market reactions to our offer, general market and
economic conditions and other factors. You are urged to obtain current market
quotations for the MedImmune common stock and the Aviron common stock. See
"Comparative Per Share Information" on page 9.
THE PRICE OF MEDIMMUNE COMMON STOCK MAY BE AFFECTED BY FACTORS DIFFERENT
FROM THOSE AFFECTING THE PRICE OF AVIRON COMMON STOCK:
Upon completion of the merger, holders of Aviron common stock will become
holders of MedImmune common stock. MedImmune's business differs from that of
Aviron and MedImmune's results of operations, as well as the price of MedImmune
common stock, may be affected by factors different from those affecting Aviron's
results of operations and the price of Aviron common stock. For a discussion of
MedImmune's and Aviron's businesses and certain factors to consider in
connection with such businesses, see the documents which are incorporated by
reference in this prospectus. See "Where You Can Find More Information."
INTEGRATION OF AVIRON INTO MEDIMMUNE MAY BE DIFFICULT AND EXPENSIVE TO
ACHIEVE:
The merger involves the integration of companies that have previously
operated independently. No assurance can be given that MedImmune will integrate
the operations of MedImmune and Aviron without encountering difficulties,
including possible unanticipated costs, failure to retain key Aviron employees
or the diversion of management attention and resources away from other MedImmune
business matters. In addition, following the merger, the combined company may
not realize the results that MedImmune expects to achieve or that would justify
the investment made.
THE ANTICIPATED BENEFITS OF THE TRANSACTION ARE PREMISED ON THE
COMMERCIALIZATION OF FLUMIST:
If FluMist is not approved by the FDA and successfully marketed, the
anticipated benefits of the acquisition of Aviron will not be realized.
RISK FACTORS RELATING TO MEDIMMUNE
PRODUCT SALES MAY VARY:
The amount we receive from sales of our products may vary from period to
period for several reasons, including:
- seasonal demand for our principal product;
- general market demand for our products, which may fluctuate;
13
- availability of other competitive products in the market;
- availability of third-party reimbursement for the cost of treatment with
our products;
- effectiveness and safety of our products;
- rate of adoption and use of our products for approved indications and
possible additional indications; and
- the likelihood and timing of FDA and other regulatory approvals.
OUR BUSINESS IS SEASONAL:
Our principal product, Synagis, accounted for approximately 80% of our total
revenues for the nine months ended September 30, 2001 and for the year 2000.
Synagis is used to protect high-risk infants from serious lower respiratory
tract disease caused by RSV. Because RSV occurs primarily during the winter
months, the major portion of Synagis sales occur during the first and fourth
quarters of the calendar year. If we acquire Aviron and FluMist is subsequently
approved by regulatory authorities for marketing, the seasonal nature of our
business would increase further since most sales of flu vaccine occur during the
fourth quarter of the calendar year. This high concentration of product sales in
a portion of the year can create additional risks, such as exaggerated adverse
consequences of any manufacturing or supply delays or of any unsuccessful sales
or marketing strategies and has the effect of causing quarter-to-quarter sales
results to vary widely.
INCREASED WORK FORCE COULD RESULT IN SUBSTANTIAL COSTS AND TIME DELAYS:
Recent increases in the size of our work force and scope of operations could
be harmful to us. In connection with our increased marketing efforts for Synagis
and Ethyol, for manufacturing in our Frederick facility and the acquisition of
U.S. Bioscience, Inc., we have substantially increased the size of our work
force. The acquisition of Aviron would further increase the size of our work
force. This rapid growth and increased scope of operations present risks we have
not previously encountered and could result in substantial unanticipated costs
and time delays which could materially and adversely affect our business.
SIGNIFICANT COSTS COULD RESULT FROM OUR MANUFACTURING FACILITY:
Our Frederick manufacturing facility could result in significant costs to
us. We received approval from the FDA in 1999 for an amendment to our Biologics
License Application for the production of Synagis at the Frederick manufacturing
facility. Additionally, we received approval from the FDA in December 2000 for
an amendment to the license held by the University of Massachusetts,
Massachusetts Biologics Laboratories (the "State Lab") to allow us to perform a
portion of the CytoGam production process in our Frederick manufacturing
facility. Currently, we have excess capacity in the plasma production portion of
the Frederick facility. We will continue to incur substantial fixed costs
associated with the facility that may not be offset by product revenues.
WE HAVE LIMITED EXPERIENCE IN COMMERCIAL MANUFACTURING:
We may encounter many new risks associated with commercial manufacturing,
such as:
- costs of operating and maintaining the production facility may be in
excess of our expectations;
- product defects may result;
- contamination of product or product loss could occur;
- our production process may result in environmental problems; and
14
- we may not be able to manufacture products at a cost that is competitive
with third party manufacturing operations.
If we were to experience any one or more of these problems, there could be a
material adverse effect on our business, financial condition or results of
operations.
WE ARE DEPENDENT ON THIRD PARTY MANUFACTURERS AND SUPPLIERS:
We are currently, and for the foreseeable future expect to be, dependent on
a limited number of contract manufacturers for some or all of the manufacture of
our current and future products (if any). We depend on Boehringer Ingleheim
Pharma KG ("BI") to produce some of the Synagis we sell. BI's facility is
subject to inspection and approval by both United States and foreign regulatory
authorities in order to maintain its license to manufacture our products. Should
BI be unable to supply Synagis to us for any reason, there can be no assurance
that we would be able to secure an alternate manufacturer on a timely basis,
without increased cost or at all.
We depend on the State Lab for a portion of the production of our plasma
derived products. The State Lab holds the sole product and establishment
licenses from the FDA for the manufacture of CytoGam and RespiGam. We rely on
the State Lab to manufacture all of the bulk product for CytoGam that we sell
and to produce all of the RespiGam that we sell. We also rely on Aventis Pasteur
to package and fill all of our plasma derived products. Our manufacturing
arrangements with the State Lab are renegotiated annually. We cannot guarantee
that any new arrangements will be made on terms favorable to us. In addition, we
rely on a limited number of suppliers to obtain substantially all of the plasma
used as raw material for the production of CytoGam and RespiGam. We also depend
on third parties to manufacture the drug substance for Ethyol. There can be no
assurance that third party manufacturers will give our orders highest priority,
or that we would be able to readily find substitute manufacturers without
significant delays or increased costs.
OUR RESEARCH AND DEVELOPMENT ACTIVITIES ARE COSTLY AND MAY NOT BE
SUCCESSFUL:
A considerable portion of our annual operating budget is spent on research,
development and clinical activities. We are currently developing numerous
products that may never reach clinical trials, achieve success in the clinic, be
submitted to the appropriate regulatory authorities for approval, or be approved
for marketing or manufacturing by the appropriate regulatory authorities.
Further, we rely on numerous third parties to assist in various stages of
the development process. Third-party contract costs are typically substantial.
In addition, the third party contractors we use may be unable to complete their
work in a timely fashion or in a manner that is satisfactory to us. Should they
be unable to meet our needs, we may have to incur substantial additional costs,
which could have a material adverse effect on our business, financial condition
or results of operation.
WE ARE DEPENDENT ON STRATEGIC ALLIANCES:
We depend on strategic alliances with our corporate partners to accomplish
many of our goals. If those corporate partners fail to devote sufficient effort
and attention to achieving those goals, we would be adversely affected.
PATENT PROTECTION FOR OUR PRODUCTS MAY BE INADEQUATE OR COSTLY TO ENFORCE:
We may not be able to obtain effective patent protection for products we
develop. We are currently developing, or considering developing, products in the
biotechnology industry, an industry in which there are extensive patent filings.
The patent position of biotechnology firms generally is highly uncertain and
involves complex legal and factual questions. To date, no consistent policy has
emerged regarding the breadth of claims allowed in biotechnology patents.
Accordingly, there can be no
15
assurance that our patent applications will result in patents being issued or
that, if issued, such patents will afford protection against competitors with
similar technology. Litigation could be necessary from time to time in order to
enforce our intellectual property rights. There has been substantial litigation
regarding patent and other intellectual property rights in the biotechnology
industry. If we were required to litigate, there could be substantial cost
involved and significant diversion of our business efforts.
WE MAY BE REQUIRED TO SEEK PATENT LICENSES FROM THIRD PARTIES:
We believe that there are patents issued to third parties and/or patent
applications filed by third parties which could apply to each of our products
and product candidates. These patents and/or applications could limit our
ability to manufacture, use or sell our products. In such a case, we may be
required to obtain a patent license in order to avoid infringing a third party's
intellectual property rights. If such a license were necessary, there can be no
assurance that it would be available on terms acceptable to us or at all, which
could have a material adverse effect on our business, financial condition or
results of operations.
TECHNOLOGICAL DEVELOPMENTS BY OUR COMPETITORS MAY RENDER OUR PRODUCTS
OBSOLETE:
If our competitors were to develop superior products or technologies, our
products or technologies could be rendered noncompetitive or obsolete.
Biotechnology and pharmaceuticals are evolving fields in which developments are
expected to continue at a rapid pace. Our success depends upon achieving and
maintaining a competitive position in the development of products and
technologies. Competition from other biotechnology and pharmaceutical companies
is intense. Many of our competitors have substantially greater research and
development capabilities, marketing, financial and managerial resources and
experience in the industry. Were a competitor to develop a better product or
technology, our products or technologies could be rendered obsolete, decreasing
our product sales and resulting in a material adverse effect on our business,
financial condition or results of operations.
COMPLIANCE WITH GOVERNMENT REGULATIONS IS COSTLY AND TIME-CONSUMING:
Substantially all of our products require costly and time-consuming
regulatory approval by governmental agencies. In particular, human therapeutic
and vaccine products are subject to rigorous preclinical and clinical testing
for safety and efficacy and approval processes by the FDA in the United States,
as well as regulatory authorities in foreign countries. There can be no
assurance that required approvals will be obtained. If we were unable to obtain
these approvals on a timely basis or at all, our ability to successfully market
products directly and through our collaborators, and to generate revenues from
sales or royalties, would be impaired.
All approved products are subject to continuing regulation. If we were to
fail to comply with applicable requirements, we could be subject to:
- fines, recall or seizure of products;
- total or partial suspension of production;
- refusal by the government to approve our product license applications;
- restrictions on our ability to enter into supply contracts; and
- criminal prosecution.
The FDA also has the authority to revoke product licenses and establishment
licenses previously granted to us. Currently, we are marketing Ethyol for the
treatment of patients with NSCLC. This indication was approved under the FDA's
Accelerated Approval Regulations. These regulations require that we conduct
clinical studies to verify and describe the clinical benefit of the approved
indication.
16
We have completed trials which we anticipate will be sufficient to meet the
FDA's requirements. If the FDA is not satisfied that we have met the
requirements, it may withdraw its approval of Ethyol in the NSCLC indication.
Should the FDA revoke any product or establishment licenses granted to us, it
could have a material adverse effect on our business, financial condition or
results of operations.
PRODUCT LIABILITY CLAIMS MAY RESULT FROM SALES OF OUR PRODUCTS AND PRODUCT
RECALLS MAY BE NECESSARY:
As a developer, tester, manufacturer, marketer and seller of healthcare
products, we are potentially subject to product liability claims. Our blood
products, such as CytoGam and RespiGam, involve heightened risks of claims,
including the risk of claims resulting from the transmission of blood-borne
diseases. Defending a product liability claim could be costly and divert our
focus from business operations. There can be no assurance that we will be able
to maintain our current product liability insurance at a reasonable cost, or at
all. If a claim were successful, there is no guarantee that the amount of the
claim would not exceed the limit of our insurance coverage. Further, a
successful claim could result in the recall of some or all of our products. Any
of these occurrences could have a material adverse effect on our business,
financial condition or results of operations. Additionally, blood products like
CytoGam and RespiGam are occasionally recalled from the market because of risks
of contamination from infectious agents or for other reasons which are often
beyond our control. Any such recall of our blood products would adversely affect
our sales.
WE DEPEND ON KEY PERSONNEL:
Our success depends upon the continued contributions of its executive
officers and scientific and technical personnel. Many key responsibilities have
been assigned to a relatively small number of individuals. The competition for
qualified personnel is intense, and the loss of services or certain key
personnel could adversely affect our business. We do not maintain or intend to
purchase "key man" life insurance on any of our personnel.
THE PRICE OF OUR COMMON STOCK COULD FLUCTUATE SIGNIFICANTLY OVER TIME:
The market price of our common stock has fluctuated significantly over time,
and it is likely that the price will fluctuate in the future. Investors and
analysts have been, and will continue to be, interested in our reported
earnings, as well as how we perform compared to their expectations.
Announcements by us or others regarding operating results, existing and future
collaborations, results of clinical trials, scientific discoveries, commercial
products, patents or proprietary rights or regulatory actions may have a
significant effect on the market price of our common stock. In addition, the
stock market has experienced extreme price and volume fluctuations that have
particularly affected the market price for many biotechnology companies and that
have often been unrelated to the operating performance of these companies. These
broad market fluctuations may adversely affect the market price of our common
stock.
CHANGES IN FOREIGN CURRENCY EXCHANGE RATES OR INTEREST RATES COULD RESULT IN
LOSSES:
We have entered into foreign exchange forward contracts which could result
in losses. Because we have contracts for the future purchase of inventory which
are denominated in foreign currencies, there is a chance that foreign currency
exchange rate or interest rate changes could result in increases or decreases in
the actual cost of our purchases. To reduce the risk of unpredictable changes in
the cost of our purchases, we may enter into forward foreign exchange contracts,
which allow us to purchase, for a fixed price on a specific date in the future,
the amount of foreign currency necessary to pay for our contractual purchase of
inventory. Fluctuations in the anticipated payment date for the inventory could
require us to adjust the date of the contract, which could result in a change in
the foreign currency exchange rate of the contracts, which in turn could have an
adverse effect on our financial results. Additionally, certain of our
distribution agreements outside the United States provide for us to be paid
17
based upon sales in local currency. Changes in foreign currency exchange rates
could adversely affect the amount we expect to collect.
THE SUCCESS OF OUR PRODUCTS MAY BE LIMITED BY GOVERNMENT AND THIRD-PARTY
PAYORS:
The continuing efforts of government and third-party payors to contain or
reduce the costs of health care through various means may negatively affect
sales of our products. In many foreign markets, pricing and profitability of
pharmaceutical products is subject to governmental control. In the United States
there have been, and we expect there will continue to be, various federal and
state proposals to implement similar government controls over pricing and
profitability. The adoption by the federal government or state governments of
any such proposals could limit the commercial success of our existing or any
future products.
Both in the United States and elsewhere, sales of pharmaceutical products
depend on the availability of reimbursement to the consumer from third-party
payors, such as government and private insurance plans. Third-party payors are
increasingly challenging the prices charged for products, and are limiting
reimbursement levels offered to consumers for these products. To the extent that
third-party payors focus their efforts on our products, sales of such products
could be negatively affected.
18
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This preliminary prospectus contains forward-looking statements. All
statements that are not historical facts, including without limitation those
relating to the future business prospects, revenues and income of MedImmune or
Aviron, wherever they occur in this preliminary prospectus, are necessarily
estimates reflecting and involving a number of risks and uncertainties that
could cause actual results to differ materially from those suggested by the
forward-looking statements. Such forward-looking statements should, therefore,
be considered in light of various important factors, including those set forth
in this preliminary prospectus. The safe harbor provided by the Private
Securities Litigation Reform Act of 1995 does not apply to statements made in
connection with this exchange offer. Important factors that could cause actual
results to differ materially from estimates or projections contained in the
forward-looking statements include without limitation:
- the failure of the offer and the merger to be consummated
- the ability of the companies to successfully integrate
- challenges inherent in new product development and marketing
- failure to get approval for or successfully commercialize potential
products
- governmental laws and regulations, including possible healthcare reform
- the availability of favorable tax and accounting treatment for the merger
- competitive factors, including technological advances achieved and patents
attained by competitors and generic competition as patents on MedImmune's
and Aviron's products expire
- government laws and regulations affecting domestic and foreign operations,
including those relating to trade, monetary and fiscal policies, taxes,
price controls, regulatory approval of new products and licensing
- those factors listed in the companies' reports and filings with the U.S.
Securities and Exchange Commission.
Words such as "estimate," "project," "plan," "intend," "expect," "believe"
and similar expressions are intended to identify forward-looking statements.
These forward-looking statements are found at various places throughout this
preliminary prospectus and the other documents incorporated by reference,
including, but not limited to, the Annual Report on Form 10-K for the year ended
December 31, 2000 of MedImmune, including any amendments, and the Annual Report
on Form 10-K for the year ended December 31, 2000 of Aviron, including any
amendments. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this prospectus.
Neither MedImmune nor Aviron 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 preliminary prospectus or to reflect the
occurrence of unanticipated events.
The foregoing list sets forth some, but not all, of the factors that could
affect MedImmune's and Aviron's ability to achieve results described in any
forward-looking statements. Investors are cautioned not to place undue reliance
on such statements that speak only as of the date made. Investors also should
understand that it is not possible to predict or identify all such factors and
that this list should not be considered a complete statement of all potential
risks and uncertainties. Investors should also realize that if underlying
assumptions prove inaccurate or unknown risks or uncertainties materialize,
actual results could vary materially from MedImmune's and Aviron's projections.
MedImmune and Aviron undertake no obligation to update any forward-looking
statements as a result of future events or developments.
19
BACKGROUND OF THE OFFER
From time to time, MedImmune evaluates strategic acquisition opportunities
to accelerate growth of its business and product lines. In furtherance of that
goal, on October 1, David Mott, chief executive officer of MedImmune, called
Boyd Clarke, Aviron's chief executive officer, to indicate that MedImmune would
be interested in investigating a strategic transaction between the two
companies. Mr. Clarke responded that he would consider Mr. Mott's proposal.
Barbara Franklin and Wayne Hockmeyer, who are directors of both Aviron and
MedImmune, were informed of the potential transaction. Due to their position as
directors of both companies, they each determined to recuse themselves from all
discussions by either board of directors concerning any potential transaction
between the two companies.
Following the October 1 call between Mr. Mott and Mr. Clarke, the two had
several discussions concerning a potential transaction and the timing and nature
of any due diligence process that would be possible should they decide to pursue
a potential transaction. Mr. Clarke emphasized that any process should not
intrude into Aviron's operational efforts to file a reply to the Complete
Response Letter the FDA had issued regarding Aviron's Biologics License
Application for FluMist. On October 10, MedImmune and Aviron entered into a
confidentiality and standstill agreement. Shortly thereafter, Aviron began
providing MedImmune with confidential background materials which MedImmune
analyzed.
On October 14, representatives of Aviron and MedImmune met in Bethesda,
Maryland to review the businesses and operations of the two companies.
On November 6, MedImmune held a meeting of its board of directors. At the
meeting, the senior management provided a briefing on the potential transaction
and the evaluation process that was underway. The board authorized management to
continue the process.
Over the next several weeks, MedImmune and Aviron continued due diligence on
each other and discussed the benefits and risks of a potential combination.
During this period, initial discussions with respect to valuation of Aviron and
an exchange ratio occurred between Mr. Mott and Mr. Clarke.
On November 27, 2001, management updated the MedImmune board of directors
regarding the proposed transaction.
Also on that date, MedImmune's counsel, Dewey Ballantine LLP, provided a
draft merger agreement to Aviron. On November 29, Aviron provided MedImmune with
its comments to the merger agreement. Later that day, Aviron, MedImmune and
their representatives discussed the terms and conditions of the offer and
merger. On November 30, representatives of Aviron and Latham & Watkins, Aviron's
counsel, met at MedImmune's offices to conduct further due diligence on
MedImmune and further negotiations of the merger agreement and the exchange
ratio occurred.
Negotiations continued on the merger agreements and on the exchange ratio.
By the morning of December 2, the terms and conditions of the merger agreement,
including the exchange ratio, were substantially final.
On December 2, 2001, the board of directors of each of MedImmune and Aviron
held separate meetings to consider the proposed transaction, and each board of
directors approved the proposed transaction.
Later on December 2, 2001 Aviron and MedImmune executed the merger agreement
and on the morning of December 3, publicly announced the transaction.
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REASONS FOR THE OFFER
MEDIMMUNE'S REASONS FOR THE OFFER
We believe that our acquisition of Aviron represents a compelling
opportunity to enhance value for both Aviron and MedImmune stockholders, for
reasons that include the following:
- Our acquisition of Aviron represents an excellent strategic fit, combining
the infectious disease, respiratory disease, vaccine and pediatric
capabilities of two biotech leaders, and an opportunity to generate
substantial growth in the near and long-term.
- We believe that adding FluMist to our existing lead product,
Synagis-Registered Trademark- (palivizumab), could enable MedImmune to
join the elite group of biotechnology companies that have more than one
product with greater than $1 billion in annual sales potential.
- Given our strengths in research and development, manufacturing, marketing
and regulatory affairs, we are well suited to analyze the FluMist
opportunity and enhance Aviron's current efforts to gain final regulatory
approval for the product.
- Our success in launching and marketing Synagis and our strengths in
manufacturing and regulatory affairs position us to maximize the long-term
value of FluMist, if and when approved for manufacturing by the FDA.
- Our objective, consistent with Aviron's previously stated goal, is to
launch FluMist in 2002, which would diversify and expand our revenue base
and have the potential to significantly accelerate our revenue and
earnings growth rates from 2003 through 2006.
Achieving these objectives depends on a number of contingencies, including
those relating to regulatory approval, to integrating companies that have
previously operated independently and on other uncertainties described under
"Risk Factors" on page 13.
REASONS FOR THE RECOMMENDATION OF AVIRON'S BOARD OF DIRECTORS
At a meeting held on December 2, 2001, the Aviron board, by the unanimous
vote of the directors present, approved the merger agreement and the
transactions contemplated thereby, including the offer and the merger, and
determined that the transactions contemplated by the merger agreement, including
the offer and the merger, were fair to and in the best interests of Aviron and
its stockholders. The Aviron board, by unanimous vote of the directors present,
recommended that Aviron's stockholders accept the offer and tender their shares
pursuant to the offer.
Information about the recommendation of Aviron's board of directors is more
fully set forth in Aviron's Solicitation/Recommendation Statement on
Schedule 14D-9, which is being mailed to Aviron stockholders together with this
prospectus.
To Aviron's knowledge, after reasonable inquiry, all of its executive
officers, directors and their affiliates currently intend to tender all Aviron
shares that are held of record or are beneficially owned by them pursuant to the
offer, other than the Aviron shares, if any, held by such persons that, if
tendered, could cause them to incur liability under Section 16(b) of the
Exchange Act.
21
THE OFFER
We are offering to exchange 1.075 MedImmune shares for each outstanding
Aviron share validly tendered.
You will not receive any fractional shares of MedImmune common stock.
Instead, you will receive cash in an amount equal to the market value of any
fractional shares you would otherwise have been entitled to receive.
If you are the record owner of your shares, in which case you would
currently hold physical certificates, and you tender your shares directly to the
exchange agent, you will not be obligated to pay any charges or expenses of the
exchange agent or any brokerage commissions. If you own your shares through a
broker or other nominee and your broker or nominee tenders the shares on your
behalf, your broker or nominee may charge you a fee for doing so. You should
consult your broker or nominee to determine whether any charges will apply.
We are making this offer in order to acquire all of the outstanding Aviron
shares. We intend, promptly after completion of the offer, to have Apple Merger
Corp., our wholly owned subsidiary which is making the offer, merge with Aviron.
The purpose of the merger is to acquire all Aviron shares not tendered and
exchanged pursuant to the offer. In the merger, each remaining Aviron share
would be converted into the right to receive 1.075 MedImmune shares, without
interest.
Our obligation to exchange shares of MedImmune common stock for Aviron
shares pursuant to the offer is subject to several conditions referred to below
under "--Conditions of Our Offer," including the minimum tender condition, the
regulatory approvals condition and other conditions that are discussed below.
TIMING OF OUR OFFER
Our offer is scheduled to expire at 12:00 midnight, New York City time on
January 9, 2002, the "expiration date," unless we extend the period of time for
which the offer is open, in which case the term "expiration date" means the
latest time and date on which the offer, as so extended, expires. For more
information, you should read the discussion under the caption "--Extension,
Termination and Amendment."
EXTENSION, TERMINATION AND AMENDMENT
We expressly reserve the right, in our sole discretion (subject to the
provisions of the merger agreement), at any time or from time to time, to extend
the period of time during which our offer remains open, and we can do so by
giving oral or written notice of the extension to the exchange agent. If we
decide to so extend our offer, we will make an announcement to that effect no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date. Subject to the provisions of the merger
agreement, we are not making any assurance that we will exercise our right to
extend our offer, although we currently intend to do so until all conditions
have been satisfied or waived. During any such extension, all Aviron shares
previously tendered and not properly withdrawn will remain subject to the offer,
subject to your right to withdraw your Aviron shares. You should read the
discussion under the caption "--Withdrawal Rights" for more details.
Subject to the SEC's applicable rules and regulations, we also reserve the
right, in our sole discretion (subject to the provisions of the merger
agreement), at any time or from time to time:
- to delay our acceptance for exchange or exchange of any Aviron shares
pursuant to our offer or to terminate our offer and not accept for
exchange or exchange any Aviron shares not previously accepted for
exchange, or exchanged, upon the failure of any of the conditions of the
offer to be satisfied; and
22
- to waive any condition or otherwise amend the offer in any respect, by
giving oral or written notice of such delay, termination or amendment to
the exchange agent and by making a public announcement.
We will follow any extension, termination, amendment or delay, as promptly
as practicable, with a public announcement. In the case of an extension, any
announcement will be issued no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled expiration date. Subject to
applicable law (including Rules 14d-4(d) and 14d-6(c) under the Exchange Act,
which require that any material change in the information published, sent or
given to stockholders in connection with the offer be promptly sent to
stockholders in a manner reasonably designed to inform stockholders of the
change) and without limiting the manner in which we may choose to make any
public announcement, we assume no obligation to publish, advertise or otherwise
communicate any such public announcement other than by making a release to the
Dow Jones News Service.
We confirm to you that if we make a material change in the terms of our
offer or the information concerning the offer, or if we waive a material
condition of the offer, we will extend the offer to the extent required under
the Exchange Act. If, prior to the expiration date, we change the percentage of
Aviron shares being sought or the consideration offered to you, that change will
apply to all holders whose Aviron shares are accepted for exchange pursuant to
our offer. If at the time notice of that change is first published, sent or
given to you, the offer is scheduled to expire at any time earlier than the
tenth business day from and including the date that the notice is first so
published, sent or given, we will extend the offer until the expiration of that
ten business-day period. For purposes of our offer, a "business day" means any
day other than a Saturday, Sunday or federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
We may, although we do not currently intend to, elect to provide a
subsequent offering period of three to 20 business days after the acceptance of
Aviron shares in the offer if the requirements under Exchange Act Rule 14d-11
have been met. You will not have the right to withdraw your Aviron shares that
you tender in the subsequent offering period, if any.
PROCEDURE FOR TENDERING
For you to validly tender Aviron shares pursuant to the offer:
- a properly completed and duly executed letter of transmittal (or manually
executed facsimile of that document), along with any required signature
guarantees, or an agent's message in connection with a book-entry
transfer, and any other required documents, must be transmitted to and
received by the exchange agent at one of its addresses set forth on the
back cover of this preliminary prospectus, and certificates for tendered
Aviron shares must be received by the exchange agent at such address or
those Aviron shares must be tendered pursuant to the procedures for
book-entry tender set forth below (and a confirmation of receipt of such
tender received (we refer to this confirmation below as a "book-entry
confirmation")), in each case before the expiration date; or
- you must comply with the guaranteed delivery procedures set forth below.
An Aviron share which is properly withdrawn pursuant to the offer will not
be considered validly tendered, unless and until it is tendered again pursuant
to the procedures set forth herein.
BOOK-ENTRY TRANSFER. The exchange agent will establish accounts with
respect to the Aviron shares at The Depository Trust Company (which we refer to
as the "Book-Entry Transfer Facility") for purposes of the offer within two
business days after the date of this preliminary prospectus, and any financial
institution that is a participant in the Book-Entry Transfer Facility may make
book-entry delivery of the Aviron shares by causing the Book-Entry Transfer
Facility to transfer such Aviron shares into the exchange agent's account in
accordance with the Book-Entry Transfer Facility's procedure for
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the transfer. However, although delivery of Aviron shares may be effected
through book-entry at the Book-Entry Transfer Facility, the letter of
transmittal (or a manually signed facsimile thereof), with any required
signature guarantees, or an agent's message in connection with a book-entry
transfer, and any other required documents, must, in any case, be transmitted to
and received by the exchange agent at one or more of its addresses set forth on
the back cover of this preliminary prospectus prior to the expiration date, or
the guaranteed delivery procedures described below must be followed.
The term "agent's message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the exchange agent and forming a part of
a book-entry confirmation, which states that the Book-Entry Transfer Facility
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Aviron shares which are the subject of the
book-entry confirmation, that the participant has received and agrees to be
bound by the terms of the letter of transmittal and that we may enforce that
agreement against the participant.
SIGNATURE GUARANTEES. Signatures on all letters of transmittal must be
guaranteed by an eligible institution, except in cases in which Aviron shares
are tendered either by a registered holder of Aviron shares who has not
completed the box entitled "Special Issuance Instructions" on the letter of
transmittal or for the account of an eligible institution.
If the certificates for Aviron shares are registered in the name of a person
other than the person who signs the letter of transmittal, or if certificates
for unexchanged Aviron shares are to be issued to a person other than the
registered holder(s), the certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered owner or owners appear on the certificates, with the signature(s)
on the certificates or stock powers guaranteed in the manner we have described
above.
GUARANTEED DELIVERY. If you wish to tender Aviron shares pursuant to our
offer and your certificates are not immediately available or you cannot deliver
the certificates and all other required documents to the exchange agent prior to
the expiration date or cannot complete the procedure for book-entry transfer on
a timely basis, your Aviron shares may nevertheless be tendered, so long as all
of the following conditions are satisfied:
- you make your tender by or through an eligible institution;
- a properly completed and duly executed notice of guaranteed delivery,
substantially in the form made available by us, is received by the
exchange agent as provided below on or prior to the expiration date; and
- the certificates for all tendered Aviron shares (or a confirmation of a
book-entry transfer of such securities into the exchange agent's account
at the Book-Entry Transfer Facility as described above), in proper form
for transfer, together with a properly completed and duly executed letter
of transmittal (or a manually signed facsimile thereof), with any required
signature guarantees (or, in the case of a book-entry transfer, an agent's
message) and all other documents required by the letter of transmittal are
received by the exchange agent within three NASDAQ trading days after the
date of execution of such notice of guaranteed delivery.
You may deliver the notice of guaranteed delivery by hand or transmit it by
facsimile transmission or mail to the exchange agent and you must include a
guarantee by an eligible institution in the form set forth in that notice.
The method of delivery of Aviron share certificates and all other required
documents, including delivery through the Book-Entry Transfer Facility, is at
your option and risk, and the delivery will be deemed made only when actually
received by the exchange agent. If delivery is by mail, we recommend registered
mail with return receipt requested, properly insured. In all cases, you should
allow sufficient time to ensure timely delivery.
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EXCHANGE FOR SHARES TENDERED. In all cases, we will exchange Aviron shares
tendered and accepted for exchange pursuant to our offer only after timely
receipt by the exchange agent of certificates for Aviron shares (or timely
confirmation of a book-entry transfer of such securities into the exchange
agent's account at the Book-Entry Transfer Facility as described above),
properly completed and duly executed letter(s) of transmittal (or a manually
signed facsimile(s) thereof), or an agent's message in connection with a
book-entry transfer, and any other required documents.
APPOINTMENT. By executing a letter of transmittal as set forth above, you
irrevocably appoint our designees as your attorneys-in-fact and proxies, each
with full power of substitution, to the full extent of your rights with respect
to your Aviron shares tendered and accepted for exchange by us and with respect
to any and all other Aviron shares and other securities issued or issuable in
respect of the Aviron shares on or after December 2, 2001. That appointment is
effective, and voting rights will be affected, when and only to the extent that
we accept the Aviron shares that you have tendered with the exchange agent. All
such proxies will be considered coupled with an interest in the tendered Aviron
shares and therefore will not be revocable. Upon the effectiveness of such
appointment, all prior proxies that you have given will be revoked, and you may
not give any subsequent proxies (and, if given, they will not be deemed
effective). Our designees will, with respect to the Aviron shares for which the
appointment is effective, be empowered, among other things, to exercise all of
your voting and other rights as they, in their sole discretion, deem proper at
any annual, special or adjourned meeting of Aviron's stockholders or otherwise.
We reserve the right to require that, in order for Aviron shares to be deemed
validly tendered, immediately upon our exchange of those Aviron shares, we must
be able to exercise full voting rights with respect to such Aviron shares.
DETERMINATION OF VALIDITY. We will decide questions as to the validity,
form, eligibility (including time of receipt) and acceptance for exchange of any
tender of Aviron shares, in our sole discretion, and our determination will be
final and binding. We reserve the absolute right to reject any and all tenders
of Aviron shares that we determine are not in proper form or the acceptance of
or exchange for which may, in the opinion of our counsel, be unlawful. We also
reserve the absolute right to waive any defect or irregularity in the tender of
any Aviron shares. No tender of Aviron shares will be deemed to have been
validly made until all defects and irregularities in tenders of Aviron shares
have been cured or waived.
Neither we, the exchange agent, the information agent nor any other person
will be under any duty to give notification of any defects or irregularities in
the tender of any Aviron shares or will incur any liability for failure to give
any such notification. Our interpretation of the terms and conditions of our
offer (including the letter of transmittal and instructions thereto) will be
final and binding.
BINDING AGREEMENT. The tender of Aviron shares pursuant to any of the
procedures described above will constitute a binding agreement between us and
you upon the terms and subject to the conditions of the offer.
WITHDRAWAL RIGHTS
Your tender of Aviron shares pursuant to the offer is irrevocable, except
that, other than during a subsequent offering period, Aviron shares tendered
pursuant to the offer may be withdrawn at any time prior to the expiration date,
and, unless we previously accepted them pursuant to the offer, may also be
withdrawn at any time after February 7, 2002. If we elect to provide a
subsequent offering period under Exchange Act Rule 14d-11, you will not have the
right to withdraw Aviron shares that you tender during the subsequent offering
period.
For your withdrawal to be effective, the exchange agent must receive from
you a written telex or facsimile transmission notice of withdrawal at one of its
addresses set forth on the back cover of this preliminary prospectus, and your
notice must include your name, address, social security number, the
25
certificate number(s) and the number of Aviron shares to be withdrawn as well as
the name of the registered holder, if it is different from that of the person
who tendered those Aviron shares.
A financial institution must guarantee all signatures on the notice of
withdrawal. Most banks, savings and loan associations and brokerage houses are
able to effect these signature guarantees for you. The financial institution
must be a participant in the Securities Transfer Agents Medallion Program, an
"eligible institution," unless those Aviron shares have been tendered for the
account of any eligible institution. If Aviron shares have been tendered
pursuant to the procedures for book-entry tender discussed under the caption
entitled "--Procedure for Tendering," any notice of withdrawal must specify the
name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Aviron shares and must otherwise comply with the
Book-Entry Transfer Facility's procedures. If certificates have been delivered
or otherwise identified to the exchange agent, the name of the registered holder
and the serial numbers of the particular certificates evidencing the Aviron
shares withdrawn must also be furnished to the exchange agent, as stated above,
prior to the physical release of the certificates.
We will decide all questions as to the form and validity (including time of
receipt) of any notice of withdrawal, in our sole discretion, and our decision
will be final and binding. Neither we, the exchange agent, the information agent
nor any other person will be under any duty to give notification of any defects
or irregularities in any notice of withdrawal or will incur any liability for
failure to give any notification. Aviron shares properly withdrawn will be
deemed not to have been validly tendered for purposes of our offer.
EXCHANGE OF AVIRON SHARES; DELIVERY OF MEDIMMUNE COMMON STOCK
Upon the terms and subject to the conditions of our offer (including, if the
offer is extended or amended, the terms and conditions of the extension or
amendment), we will accept for exchange, and will exchange, Aviron shares
validly tendered and not properly withdrawn promptly after the expiration date.
In addition, subject to applicable rules of the SEC, we expressly reserve the
right to delay acceptance for exchange or the exchange of Aviron shares in order
to comply with any applicable law. In all cases, exchange of Aviron shares
tendered and accepted for exchange pursuant to the offer will be made only after
timely receipt by the exchange agent of:
- certificates for those Aviron shares (or a confirmation of a book-entry
transfer of those Aviron shares in the exchange agent's account at the
Book-Entry Transfer Facility); and
- any other required documents.
For purposes of the offer, we will be deemed to have accepted for exchange
Aviron shares validly tendered and not properly withdrawn as, if and when we
notify the exchange agent of our acceptance of the tenders of those Aviron
shares pursuant to the offer. The exchange agent will deliver MedImmune common
stock in exchange for Aviron shares pursuant to the offer and cash instead of
fractional shares of MedImmune common stock as soon as practicable after receipt
of our notice. The exchange agent will act as agent for tendering stockholders
for the purpose of receiving cash to be paid instead of fractional shares of
MedImmune common stock from us and transmitting such cash to you and causing the
shares of MedImmune common stock to be delivered to you. You will not receive
any interest on any cash that we pay you, even if there is a delay in making the
exchange.
26
If we do not accept any tendered Aviron shares for exchange pursuant to the
terms and conditions of the offer for any reason, or if certificates are
submitted for more Aviron shares than are tendered, we will return certificates
for such unexchanged Aviron shares without expense to the tendering stockholder
or, in the case of Aviron shares tendered by book-entry transfer of such Aviron
shares into the exchange agent's account at the Book-Entry Transfer Facility
pursuant to the procedures set forth above under the caption entitled
"--Procedure for Tendering," those Aviron shares will be credited to an account
maintained within the Book-Entry Transfer Facility, as soon as practicable
following expiration or termination of the offer.
CASH INSTEAD OF FRACTIONAL SHARES OF MEDIMMUNE COMMON STOCK
We will not issue certificates representing fractional shares of our common
stock pursuant to the offer. Instead, each tendering stockholder who would
otherwise be entitled to a fractional share of our common stock will receive
cash in an amount equal to that fraction multiplied by the closing price for a
share of MedImmune common stock, as reported in the New York City edition of THE
WALL STREET JOURNAL, on the date that we accept those Aviron shares for
exchange.
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes the anticipated material U.S. federal
income tax consequences of the offer and the merger to Aviron stockholders who
exchange their Aviron shares for MedImmune shares pursuant to the offer or the
merger. This discussion does not purport to be a complete analysis or discussion
of all potential tax effects relevant to the offer and the merger. Further, this
discussion does not address all of the U.S. federal income tax consequences that
may be relevant to Aviron stockholders in light of their particular
circumstances, nor does the discussion address the U.S. federal income tax
consequences that may be applicable to Aviron stockholders subject to special
tax treatment under the Internal Revenue Code of 1986, as amended (which we
refer to as the Code), including but not limited to stockholders:
- who are dealers in securities, traders that mark to market, foreign
individuals (I.E., individuals who are not citizens or residents of the
United States), foreign corporations, foreign partnerships or other
foreign entities, mutual funds, financial institutions, insurance
companies or tax-exempt entities;
- who acquired their shares through the exercise of stock options, through
stock purchase plans, in other compensatory transactions, or through a
tax-qualified retirement plan;
- whose shares are qualified small business stock for purposes of
Section 1202 of the Code;
- who hold their shares as part of an integrated investment such as a hedge,
straddle, or other risk reduction strategy or as part of a constructive
sale or conversion transaction;
- who do not hold their shares as capital assets; or
- whose functional currency is not the U.S. dollar.
In addition, the following discussion does not address the tax consequences, if
any, of the offer or the merger under state, local, foreign, and other tax laws.
MedImmune and Aviron have been advised by Dewey Ballantine LLP and Latham &
Watkins, respectively, that subject to the assumptions, exceptions, limitations
and qualifications set forth in this discussion and in their respective
opinions, it is their opinion, as of the date of this prospectus, that for U.S.
federal income tax purposes the offer and the merger, together, will qualify as
a reorganization within the meaning of Section 368(a) of the Code. These tax
opinions are attached as Exhibits 8.1 and 8.2, respectively, to the registration
statement on the Form S-4 filed with the Securities and Exchange Commission,
which includes this prospectus. It is a condition to the acceptance of the
shares tendered
27
in the offer that the parties receive such opinions dated both as of the date of
the preliminary prospectus included in the Form S-4 and as of the date of the
expiration of the offer. The tax opinions referred to above and the consequences
summarized below are conditioned upon, among other things, all of the following
factual assumptions (which we refer to as the supporting conditions):
- the offer and the merger are completed under the current terms of the
merger agreement;
- the minimum tender condition for the offer is satisfied; and
- the merger is completed promptly after the offer.
In addition to these supporting conditions, the opinions of Dewey Ballantine
LLP and Latham & Watkins have relied and will rely upon, and the consequences
summarized below are based upon, representations and covenants made by
MedImmune, Apple Merger Corp. and Aviron, including those contained in tax
representation letters of MedImmune, Apple Merger Corp. and Aviron, and certain
assumptions including, but not limited to, the absence of changes in facts or in
law between the date of this prospectus and the effective time of the merger. If
any of those representations, covenants or assumptions is inaccurate or if any
of the supporting conditions is not satisfied, the tax opinions of Dewey
Ballantine LLP and Latham & Watkins described above cannot be relied upon. In
addition, the ability to satisfy the supporting conditions, and therefore the
U.S. federal income tax consequences of the offer and the merger, depend in part
on facts that will not be available before the completion of the merger. There
can be no assurance that the offer and the merger will be completed, or that the
supporting conditions will be satisfied.
The tax opinions referred to above and this discussion are based upon the
provisions of the Code, applicable Treasury regulations, judicial decisions and
Internal Revenue Service (which we refer to as the IRS) rulings, in each case,
as in effect as of the date of this document. The tax opinions involve legal
judgments, some of which relate to matters that are not directly addressed by
court decisions or other authorities. No rulings have been or will be sought
from the IRS concerning the tax consequences of the offer and the merger and the
tax opinions do not bind the IRS or the courts. Accordingly, no assurance can be
given that the conclusions reached in the tax opinions will not be contested by
the IRS or, if contested, will be sustained by a court. Furthermore, there can
be no assurance that future legislative, judicial or administrative changes or
interpretations, which changes or interpretations could apply retroactively,
will not affect the accuracy of the statements or conclusions set forth in the
tax opinions or in this discussion.
If the offer and/or the merger does not qualify as a reorganization, then
among other things, a holder of Aviron shares would be required to recognize any
gain (but may not be able to recognize any loss) realized upon exchange of the
holder's Aviron shares for the MedImmune shares in the offer and/or the merger,
as applicable, measured by the difference between the fair market value of the
MedImmune shares and the amount of any cash instead of a fraction of a MedImmune
share received by such holder and such holder's tax basis in the Aviron shares
surrendered.
Assuming that the offer and the merger, together, qualify as a
reorganization, and subject to the assumptions, exceptions, limitations and
qualifications described above, for U.S. federal income tax purposes:
- A holder of Aviron shares will not recognize any gain or loss upon
exchange of the holder's Aviron shares for MedImmune shares in the offer
or the merger, except for gain or loss resulting from cash that the holder
receives instead of a fractional share of MedImmune common stock.
- A holder of Aviron shares who receives cash in lieu of a fractional share
of MedImmune common stock will be treated as receiving such cash in
exchange for such fractional share interest, and generally will recognize
gain or loss for U.S. federal income tax purposes, measured
28
by the difference between the amount of cash received and the portion of
the tax basis of the Aviron shares allocable to the fractional share
interest. Such gain or loss will be capital gain or loss and generally
will be long term capital gain or loss if the Aviron shares have been held
for more than one year.
- A holder of Aviron shares will have an aggregate tax basis in the
MedImmune shares received in the offer or the merger equal to (1) the
aggregate tax basis in the Aviron shares surrendered by that holder in the
offer or merger, reduced by (2) any tax basis in such Aviron shares that
is allocable to a fraction of a MedImmune common share for which cash is
received.
- The holding period for MedImmune shares received in exchange for Aviron
shares in the offer or the merger will include the holding period for
Aviron shares surrendered for them in the offer or the merger.
- Under specified circumstances, holders of Aviron shares may be entitled to
appraisal rights in connection with the merger. If appraisal rights are
available, and a holder of Aviron shares receives cash pursuant to the
exercise of appraisal rights, such holder generally will recognize gain or
loss, measured by the difference between the amount received (other than
any amount relating to interest, if any, which will be taxable as ordinary
income) and such holder's tax basis in such Aviron shares. A holder of
Aviron shares who exercises appraisal rights is urged to consult his or
her own tax advisor.
FEDERAL INCOME TAX CONSEQUENCES IF THE MERGER IS NOT CONSUMMATED. In
addition to the limitations, assumptions, exceptions and qualifications
described above, this discussion does not address, and no opinion has been given
concerning, any tax consequences of the offer if the merger is not consummated.
If the merger is not consummated, the federal income tax consequences of the
exchange of Aviron shares in the offer will depend on facts and circumstances
that are not yet known. Such facts and circumstances include, among other
things, the percentage of Aviron shares tendered in the offer. You are urged to
consult your tax advisor regarding the tax consequences to you of your
participation in the offer if the merger is not consummated.
BACKUP WITHHOLDING. Under the Code, a holder of Aviron shares may be
subject to backup withholding with respect to the amount of cash, if any,
received unless the holder provides proof of an applicable exemption or a
correct taxpayer identification number, and otherwise complies with applicable
requirements of the backup withholding rules. Any amounts withheld under the
backup withholding rules are not an additional tax and may be refunded or
credited against the holder's U.S. federal income tax liability, provided the
required information is furnished to the IRS.
THE DISCUSSION OF MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES SET FORTH
ABOVE IS INTENDED TO PROVIDE ONLY A GENERAL SUMMARY AND IS NOT INTENDED TO BE A
COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL U.S. FEDERAL INCOME TAX
CONSEQUENCES OF THE OFFER AND THE MERGER. IN ADDITION, THE DISCUSSION DOES NOT
ADDRESS TAX CONSEQUENCES THAT MAY VARY WITH, OR ARE CONTINGENT ON, INDIVIDUAL
CIRCUMSTANCES. MOREOVER, THE DISCUSSION DOES NOT ADDRESS ANY NON-INCOME TAX OR
ANY FOREIGN, STATE, LOCAL OR OTHER TAX CONSEQUENCES OF THE OFFER OR THE MERGER
AND DOES NOT ADDRESS THE TAX CONSEQUENCES OF ANY TRANSACTION OTHER THAN THE
OFFER AND THE MERGER. ACCORDINGLY, EACH AVIRON STOCKHOLDER IS STRONGLY URGED TO
CONSULT WITH A TAX ADVISOR TO DETERMINE THE PARTICULAR FEDERAL, STATE, LOCAL OR
FOREIGN INCOME, REPORTING OR OTHER TAX CONSEQUENCES OF THE OFFER AND THE MERGER
TO SUCH STOCKHOLDER.
PURPOSE OF OUR OFFER; THE MERGER; APPRAISAL RIGHTS
PURPOSE. We are making the offer in order to acquire all of the outstanding
Aviron shares. We intend, promptly after completion of the offer, to have our
wholly owned subsidiary merge with and into Aviron. The purpose of the merger is
to acquire all Aviron shares not tendered and exchanged pursuant to the offer.
29
PLANS FOR AVIRON. It is expected that following the merger, MedImmune will
continue to evaluate the business and operations of Aviron and MedImmune intends
to seek additional information about Aviron during this period. Thereafter,
MedImmune intends to review such information as part of a comprehensive review
of Aviron's business, operations, capitalization and management with a view to
optimizing Aviron's potential in conjunction with MedImmune's businesses.
APPROVAL OF THE MERGER. Under Delaware law, the approval of the board of
directors of a company and the affirmative vote of the holders of a majority of
its outstanding shares are required to approve and adopt a merger and a merger
agreement. The Aviron board of directors has previously approved the merger.
Accordingly, if we complete the offer (and the minimum tender condition is
satisfied), we would have a sufficient number of Aviron shares to approve the
merger without the affirmative vote of any other holder of Aviron shares.
Therefore, unless the merger is consummated in accordance with the short-form
merger provisions described below (in which case, no action by the stockholders
of Aviron, other than MedImmune, will be required to consummate the merger), the
only remaining corporate action of Aviron will be the approval and adoption of
the merger agreement by the affirmative vote of a majority of the outstanding
Aviron shares.
POSSIBLE SHORT-FORM MERGER. The short-form merger provisions of Delaware
would permit the merger to occur without a vote of Aviron's stockholders if
MedImmune were to acquire at least 90% of the outstanding Aviron shares in the
offer or otherwise (including as a result of purchases by MedImmune during any
subsequent offering period). If, however, MedImmune does not acquire at least
90% of the then outstanding Aviron shares pursuant to the offer or otherwise,
and a vote of Aviron's stockholders is required under Delaware law, a longer
period of time will be required to effect the merger.
APPRAISAL RIGHTS. Aviron stockholders do not have appraisal rights in
connection with the offer.
If more than a majority but less than 90% of the outstanding Aviron shares
are validly tendered and not properly withdrawn in the offer, we will effect a
long-form merger (as described above) as permitted under Section 251 of the
DGCL. Aviron stockholders who have not exchanged their Aviron shares in the
offer will not have appraisal rights in connection with a long-form merger.
However, if at least 90% of the outstanding Aviron shares are validly
tendered and not properly withdrawn in the offer, we will effect a short-form
merger (as described above). Aviron stockholders at the time of a short-form
merger will have the right to dissent and demand appraisal of their Aviron
shares. Under Section262 of the DGCL, dissenting stockholders who comply with
the applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Aviron shares (exclusive of any element
of value arising from the accomplishment or expectation of the merger) and to
receive payment of such fair value in cash, together with a fair rate of
interest, if any. In CEDE & CO. and CINERAMA, INC. V. TECHNICOLOR, INC., the
Supreme Court of the State of Delaware construed the relevant provisions of
Delaware law and held that the "accomplishment or expectation" exclusion from
the calculation of fair value set forth in the preceding sentence is narrow and
is designed to eliminate use of pro forma data and projections of a speculative
variety relating to the completion of a merger. The court held that it is
appropriate to include in the calculation of fair value any known elements of
value. We cannot assure you as to the methodology a court would use to determine
fair value or how a court would select which of the elements of value are to be
included in such a determination.
CONDITIONS OF OUR OFFER
Notwithstanding any other term of the offer, subject to the terms of the
merger agreement, we shall not be required to accept for payment or, subject to
any applicable rules and regulations of the SEC, including Rule 14e-1(c) under
the Exchange Act (relating to our obligation to pay for or return
30
tendered shares after the termination or withdrawal of the offer), to pay for
any shares tendered pursuant to the offer if immediately prior to the expiration
of the offer:
MINIMUM TENDER CONDITION. There must be validly tendered and not properly
withdrawn prior to the expiration of the offer a number of Aviron shares which
will constitute a majority of the total number of outstanding Aviron shares
(assuming the exercise or conversion of all outstanding options, warrants,
rights and convertible securities which are exercisable or convertible prior to
the merger) as of the date that we accept the Aviron shares pursuant to our
offer. Based on information supplied by Aviron, the number of Aviron shares
needed to satisfy the minimum tender condition would have been 20,671,184 as of
December 31, 2001. As of December 31, 2001, there were 31,422,092 Aviron shares
outstanding and 9,920,276 shares issuable upon exercise or conversion of
outstanding options, warrants or convertible securities.
ANTITRUST CONDITION. Any applicable waiting period under the Hart-Scott
Rodino Act and any other applicable antitrust law shall not have expired or been
terminated.
REGISTRATION STATEMENT EFFECTIVENESS CONDITION. The Form S-4 shall not have
become effective under the Securities Act or shall be the subject of any stop
order or proceedings seeking a stop order.
NASDAQ LISTING CONDITION. The MedImmune shares to be issued in the offer
shall not have been approved for listing on the Nasdaq, subject to official
notice of issuance.
OTHER CONDITIONS OF THE OFFER. At any time on or after the date of the
merger agreement and prior to the expiration date, any of the following
conditions exists:
- there shall be entered, threatened, instituted, pending or issued by any
governmental entity any suit, action, proceeding, judgment or decree:
- challenging the acquisition by MedImmune or Apple Merger Corp. of any
shares under the offer, seeking to restrain or prohibit the making or
consummation of the offer or the merger or seeking to obtain from Aviron,
MedImmune or Apple Merger Corp. any damages that are material in relation
to Aviron and its subsidiaries taken as a whole,
- seeking to prohibit or materially limit the ownership or operation by
Aviron, MedImmune or any of their respective subsidiaries of a material
portion of the business or assets of Aviron and its subsidiaries, taken
as a whole, or MedImmune and its subsidiaries, taken as a whole, or to
compel Aviron and its subsidiaries, taken as a whole or MedImmune to
dispose of or hold separate any material portion of the business or
assets of Aviron or MedImmune and its subsidiaries, taken as a whole, in
each case as a result of the offer or any of the other transactions
contemplated by the merger agreement,
- seeking to impose material limitations on the ability of MedImmune or
Apple Merger Corp. to acquire or hold, or exercise full rights of
ownership of, any shares to be accepted for payment pursuant to the offer
including, without limitation, the right to vote such shares on all
matters properly presented to the stockholders of Aviron,
- seeking to prohibit MedImmune or any of its subsidiaries from effectively
controlling in any material respect any material portion of the business
or operations of Aviron or its subsidiaries, or
- which otherwise is reasonably likely to have a material adverse effect on
Aviron;
- there shall be any statute, law, ordinance, rule, regulation, judgment,
order or decree enacted, entered, enforced, promulgated or deemed
applicable to the offer or the merger, by any governmental entity, other
than the routine application to the offer or the merger of applicable
31
waiting periods under the Hart-Scott Rodino Act, that is reasonably likely
to result, directly or indirectly, in any of the consequences referred to
in the preceding paragraph;
- there shall have occurred any material adverse effect with respect to
Aviron (see "The Merger Agreement--Representations and Warranties" for a
definition of "material adverse effect");
- the board of directors of Aviron or any committee thereof shall have
(1) withdrawn or modified in a manner adverse to MedImmune or Apple Merger
Corp. its approval or recommendation of the offer or the merger or its
adoption of the merger agreement, (2) approved or recommended or taken a
neutral position with respect to any takeover proposal or (3) failed to
reaffirm its recommendation of the offer or the merger or its adoption of
the merger agreement, in all cases within ten business days of being
requested by MedImmune to do so or the board of directors of Aviron or any
committee thereof shall have resolved to take any of the foregoing
actions;
- any of the representations and warranties of Aviron set forth in the
merger agreement shall not be true and correct in all respects (without
regard for any material adverse effect, materiality or similar
qualifiers), except where the failures to be true and correct would not,
in the aggregate, have a material adverse effect on Aviron, or the
representations and warranties set forth in section 4.23 of the merger
agreement with respect to FluMist shall not be true and correct in all
respects, in each case at the date of the merger agreement and as of the
expiration of the offer (as though made as of such date, except that those
representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date);
- Aviron shall have failed to perform or comply, in all material respects,
with any agreement, obligation or covenant to be performed or complied
with by it under the merger agreement;
- the merger agreement shall have been terminated in accordance with its
terms or MedImmune and Aviron shall have agreed that Apple Merger Corp.
terminate the offer or postpone the acceptance for payment of shares
thereunder; or
- either MedImmune or Aviron shall have failed to receive, as of the date of
the preliminary prospectus included in the Form S-4, the tax opinion which
such party is to obtain as of such date as described in the merger
agreement, or, as of the date of the expiration of the offer, the opinion
which such party is to obtain as of such date as described in the merger
agreement, both opinions to the effect that the offer and the merger,
together, will qualify as a reorganization within the meaning of
section 368(a) of the Code.
Except for the tax opinion condition and certain other conditions set forth
in the merger agreement, none of which shall be waived without the prior written
consent of Aviron, the foregoing conditions are for the sole benefit of
MedImmune and Apple Merger Corp. and may, subject to the last sentence of this
paragraph and the terms of the merger agreement, be waived by MedImmune and
Apple Merger Corp. in whole or in part at any time and from time to time in
their reasonable discretion. The failure by MedImmune or Apple Merger Corp. at
any time to exercise any of the foregoing rights shall not be deemed a waiver of
any such right, the waiver of any such right with respect to particular facts
and circumstances shall not be deemed a waiver with respect to any other facts
and circumstances and each such right shall be deemed an ongoing right that may
be asserted, subject to the last sentence of this paragraph, at any time and
from time to time. All conditions to the offer, other than those dependent upon
the receipt of necessary governmental approvals, will be asserted, satisfied or
waived on or before the expiration of the offer.
STATE TAKEOVER LAWS AND REGULATORY APPROVALS
Except as set forth herein, we are not aware of any licenses or regulatory
permits that appear to be material to the business of Aviron and its
subsidiaries, taken as a whole, and that might be adversely affected by our
acquisition of Aviron shares in the offer. In addition, except as set forth
herein, we are
32
not aware of any filings, approvals or other actions by or with any governmental
authority or administrative or regulatory agency that would be required for our
acquisition or ownership of the Aviron shares. Should any such approval or other
action be required, we expect to seek such approval or action, except as
described under "State Takeover Laws." Should any such approval or other action
be required, we cannot be certain that we would be able to obtain any such
approval or action without substantial conditions or that adverse consequences
might not result to Aviron's or its subsidiaries' businesses, or that certain
parts of Aviron's, MedImmune's or any of their respective subsidiaries'
businesses might not have to be disposed of or held separate in order to obtain
such approval or action. In that event, we may not be required to purchase any
Aviron shares in the offer.
STATE TAKEOVER LAWS.
A number of states have adopted takeover laws and regulations that purport
to be applicable to attempts to acquire securities of corporations that are
incorporated in those states or that have substantial assets, stockholders,
principal executive offices or principal places of business in those states. To
the extent that these state takeover statutes purport to apply to the offer or
the merger, we believe that those laws conflict with United States federal law
and are an unconstitutional burden on interstate commerce. In 1982, the Supreme
Court of the United States, in EDGAR V. MITE CORP., invalidated on
constitutional grounds the Illinois Business Takeovers Statute, which, as a
matter of state securities law, made takeovers of corporations meeting certain
requirements more difficult. The reasoning in that decision is likely to apply
to certain other state takeover statutes. In 1987, however, in CTS CORP. V.
DYNAMICS CORP. of America, the Supreme Court of the United States held that the
State of Indiana could as a matter of corporate law and, in particular, those
aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders, as long as
those laws were applicable only under certain conditions. Subsequently, in TLX
ACQUISITION CORP. V. TELEX CORP., a federal district court in Oklahoma ruled
that the Oklahoma statutes were unconstitutional insofar as they apply to
corporations incorporated outside Oklahoma, because they would subject those
corporations to inconsistent regulations. Similarly, in TYSON FOODS, INC. V.
MCREYNOLDS, a federal district court in Tennessee ruled that four Tennessee
takeover statutes were unconstitutional as applied to corporations incorporated
outside Tennessee. This decision was affirmed by the United States Court of
Appeals for the Sixth Circuit. In 1988, a federal district court in Florida
held, in GRAND METROPOLITAN PLC V. BUTTERWORTH, that the provisions of the
Florida Affiliated Transactions Act and Florida Control Share Acquisition Act
were unconstitutional as applied to corporations incorporated outside of
Florida.
We reserve the right to challenge the validity or applicability of any state
law allegedly applicable to the offer or the merger, and nothing herein nor any
action that we take in connection with the offer is intended as a waiver of that
right. In the event that it is asserted that one or more takeover statutes apply
to the offer or the merger, and it is not determined by an appropriate court
that the statutes in question do not apply or are invalid as applied to the
offer or the merger, as applicable, we may be required to file certain documents
with, or receive approvals from, the relevant state authorities, and we might be
unable to accept for exchange or exchange Aviron shares tendered in the offer or
be delayed in continuing or consummating the offer. In that case, we may not be
obligated to accept for exchange, or exchange for, any Aviron shares tendered.
ANTITRUST. Under the HSR Act and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the "Antitrust
Division") and the FTC and certain waiting period requirements have been
satisfied. The exchange of Aviron shares pursuant to the offer is subject to
these requirements.
Pursuant to the requirements of the HSR Act, we filed a Notification and
Report Form with respect to the offer with the Antitrust Division and the FTC on
December 4, 2001. The offer cannot be
33
completed until a required waiting period of 30 days from the date of our filing
has expired or been terminated earlier by the FTC or the Antitrust Division. The
FTC or the Antitrust Division can also request additional information and
materials from MedImmune in connection with their review of the offer. Should
there be an additional request, MedImmune and Aviron cannot complete the offer
until 30 days after MedImmune has substantially complied with the request for
additional information, unless the 30-day waiting period is terminated early. If
either agency believes that the offer would violate the federal antitrust laws
by substantially lessening competition in any line of commerce affecting United
States consumers, they have the authority to seek to enjoin the transactions.
We can give no assurance that a challenge to the offer will not be made or,
if such a challenge is made, that it would be unsuccessful. Expiration or
termination of the HSR Act waiting period is a condition to the offer.
Private parties (including individual states) may also bring legal actions
under the antitrust laws. We do not believe that the consummation of the offer
will result in a violation of any applicable antitrust laws. However, there can
be no assurance that a challenge to the offer on antitrust grounds will not be
made, or what the result will be if such a challenge is made. For a description
of certain conditions to the offer, including conditions with respect to
litigation and certain governmental actions and for certain termination rights
in connection with antitrust suits, see "--Conditions of Our Offer."
CERTAIN EFFECTS OF THE OFFER
MARKET FOR THE SHARES. The tender of Aviron shares pursuant to the offer
will reduce the number of Aviron shares that might otherwise trade publicly and
will reduce the number of holders of Aviron shares and could adversely affect
the liquidity and market value of the remaining Aviron shares held by the
public.
NASDAQ NATIONAL MARKET LISTING. Depending upon the number of Aviron shares
purchased pursuant to the offer, the Aviron shares may no longer meet the
requirements of the National Association of Securities Dealers for continued
inclusion on the Nasdaq National Market, which requires that an issuer either:
- have at least 750,000 publicly held shares, held by at least 400 round lot
stockholders, with a market value of at least $5,000,000, have at least
two market makers, have net tangible assets of at least $4 million, and
have a minimum bid price of $1; or
- have at least 1,100,000 publicly held shares, held by at least 400 round
lot stockholders, with a market value of at least $15,000,000, have a
minimum bid price of $5, have at least 4 market makers and have either
(1) a market capitalization of at least $50,000,000 or (2) a total of at
least $50,000,000 in assets and revenues, respectively.
If the Nasdaq National Market ceased publishing quotations for the Aviron
shares, it is possible that the Aviron shares would continue to trade in the
over-the-counter market and that price or other quotations would be reported by
other sources. The extent of the public market for such Aviron shares and the
availability of such quotations would depend, however, upon such factors as the
number of stockholders and/or the aggregate market value of such securities
remaining at such time, the interest in maintaining a market in the Aviron
shares on the part of securities firms, the possible termination of registration
under the Exchange Act as described below, and other factors. We cannot predict
whether the reduction in the number of Aviron shares that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for, or
marketability of, the Aviron shares or whether it would cause future market
prices to be greater or lesser than the price we are presently offering.
REGISTRATION UNDER THE EXCHANGE ACT. Aviron shares are currently registered
under the Exchange Act. Aviron can terminate that registration upon application
to the SEC if the outstanding shares are not listed on a national securities
exchange and if there are fewer than 300 holders of record of Aviron
34
shares. Termination of registration of the Aviron shares under the Exchange Act
would reduce the information that Aviron must furnish to its stockholders and to
the SEC and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b) and the requirement of
furnishing a proxy statement in connection with stockholders meetings pursuant
to Section 14(a) and the related requirement of furnishing an annual report to
stockholders, no longer applicable with respect to Aviron shares. In addition,
if Aviron shares are no longer registered under the Exchange Act, the
requirements of Rule 13e-3 under the Exchange Act with respect to "going-
private" transactions would no longer be applicable to Aviron. Furthermore, the
ability of "affiliates" of Aviron and persons holding "restricted securities" of
Aviron to dispose of such securities pursuant to Rule 144 under the Securities
Act may be impaired or eliminated. If registration of the shares under the
Exchange Act were terminated, they would no longer be eligible for Nasdaq
National Market listing or for continued inclusion on the Federal Reserve
Board's list of "margin securities."
STATUS AS "MARGIN SECURITIES." The Aviron shares are presently "margin
securities" under the regulations of the Federal Reserve Board, which has the
effect, among other things, of allowing brokers to extend credit on the
collateral of Aviron shares. Depending on the factors similar to those described
above with respect to listing and market quotations, following consummation of
the offer, the Aviron shares may no longer constitute "margin securities" for
the purposes of the Federal Reserve Board's margin regulations, in which event
the Aviron shares would be ineligible as collateral for margin loans made by
brokers.
RELATIONSHIPS BETWEEN AVIRON AND MEDIMMUNE
Except as set forth herein, neither we nor, to the best of our knowledge,
any of our directors, executive officers or other affiliates has any contract,
arrangement, understanding or relationship with any other person with respect to
any securities of Aviron, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any such securities, joint ventures, loan or option arrangements, puts or
calls, guaranties of loans, guaranties against loss or the giving or withholding
of proxies. Except as described herein, there have been no contacts,
negotiations or transactions since December 31, 1999, between us or, to the best
of our knowledge, any of our directors, executive officers or other affiliates
on the one hand, and Aviron or its affiliates, on the other hand, concerning a
merger, consolidation or acquisition, a tender offer or other acquisition of
securities, an election of directors, or a sale or other transfer of a material
amount of assets. Except as described herein, neither we, nor, to the best of
our knowledge, any of our directors, executive officers or other affiliates has,
since December 31, 1999, had any transaction with Aviron or any of its executive
officers, directors or affiliates that would require disclosure under the rules
and regulations of the SEC applicable to the offer. Two of our directors, Wayne
Hockmeyer and Barbara Franklin, are also directors of Aviron. Prior to joining
Aviron, Boyd Clarke was an employee of MedImmune. His employment arose in
connection with the merger between MedImmune and U.S. Bioscience, Inc. in
November, 1999.
ACCOUNTING TREATMENT
The merger will be accounted for as a purchase transaction for financial
reporting purposes, in accordance with generally accepted accounting principles
in the United States of America. Accordingly, a determination of the fair value
of Aviron's assets and liabilities will be made in order to allocate the
purchase price to the assets acquired and the liabilities assumed. In connection
with the merger, MedImmune anticipates that it will incur a one-time charge
consisting of a write-off of the value of purchased in-process research and
development estimated to be approximately $1,145 million. The purchase price
allocation, including the one-time charge for write-off of the value of
purchased in-process research and development, is subject to revision when
additional information concerning asset and liability valuations is obtained.
35
FEES AND EXPENSES
We have retained Merrill Lynch & Co. to act as the dealer manager in
connection with our offer and to provide various financial advisory services to
us in connection with our offer and the merger. Merrill Lynch will receive
reasonable and customary compensation for these services and will be reimbursed
for out-of-pocket expenses, including reasonable expenses of counsel and other
advisors. We have agreed to indemnify Merrill Lynch and related persons against
various liabilities and expenses in connection with its services as the dealer
manager and financial advisor, including various liabilities and expenses under
the U.S. federal securities laws. From time to time, Merrill Lynch and its
affiliates may actively trade the debt and equity securities of MedImmune and
Aviron for their own account or for the accounts of customers and, accordingly,
may hold a long or short position in those securities. Merrill Lynch has in the
past performed various investment banking and financial advisory services for us
for which they have received customary compensation.
We have retained MacKenzie Partners, Inc. as information agent in connection
with the offer. The information agent may contact holders of Aviron shares by
mail, telephone, telex, telegraph and personal interview and may request
brokers, dealers and other nominee stockholders to forward material relating to
the offer to beneficial owners of Aviron shares. We will pay the information
agent reasonable and customary compensation for these services in addition to
reimbursing the information agent for its reasonable out-of-pocket expenses. We
have agreed to indemnify the information agent against certain liabilities and
expenses in connection with the offer, including certain liabilities under the
United States federal securities laws.
We have retained American Stock Transfer & Trust Company as the exchange
agent. The exchange agent will be paid reasonable and customary compensation for
its services in connection with the offer and will be reimbursed for its
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities and expenses, including certain liabilities under the United States
federal securities laws.
Except as set forth above, we will not pay any fees or commissions to any
broker, dealer or other person for soliciting tenders of Aviron shares pursuant
to the offer. We will reimburse brokers, dealers, commercial banks and trust
companies and other nominees, upon request, for customary clerical and mailing
expenses incurred by them in forwarding offering materials to their customers.
STOCK EXCHANGE LISTING
Our common stock is listed on the Nasdaq National Market under the symbol
"MEDI."
THE MERGER AGREEMENT
The following description of the merger agreement describes the material
terms of the merger agreement but does not purport to describe all the terms of
the agreement. The merger agreement is attached hereto as Annex B. All Aviron
stockholders are urged to read the merger agreement in its entirety because it
is the legal document that governs the offer and the merger.
THE OFFER
TERMS OF THE OFFER. The merger agreement provides for the commencement of
our offer to exchange 1.075 shares of MedImmune common stock, together with the
associated share purchase rights, for each outstanding share of Aviron common
stock, together with any associated share purchase rights.
EXTENSIONS OF THE OFFER. The initial expiration date of the offer will be
the twentieth business day after the commencement of the offer. We may, without
the consent of Aviron, (1) and are obligated, at the request of Aviron, to
extend the offer, for one or more successive periods beyond the initial
expiration date of ten or fewer business days so long as the merger agreement is
in effect, if any of the
36
conditions to the offer have not been satisfied or waived, (2) extend the offer
for any period required by any rule, regulation, interpretation or position of
the SEC applicable to the offer or any period required by applicable law, and
(3) extend the offer for 10 business days after the latest permissible
expiration date if less than 90% of the Aviron shares have been tendered and
MedImmune irrevocably waives specified conditions precedent to completion of the
offer. In addition, MedImmune may elect to provide a subsequent offering period
for no more than 20 business days after the acceptance of Aviron shares,
pursuant to Rule 14d-11 promulgated under the Exchange Act in order to meet the
objective (which is not a condition to the offer) that there be validly tendered
at least 90% of the then outstanding Aviron shares.
PROMPT PAYMENT FOR AVIRON SHARES AFTER THE CLOSING OF THE OFFER. Subject to
the conditions of the offer, promptly after the expiration of the offer, we will
accept for exchange and exchange for all Aviron shares validly tendered and not
properly withdrawn.
THE MERGER
THE MERGER. The merger agreement provides that a wholly owned MedImmune
subsidiary will be merged with and into Aviron, and Aviron will be the surviving
corporation. In the merger, each remaining Aviron share outstanding following
the offer, other than those owned by MedImmune and its subsidiaries or Aviron,
will be converted into 1.075 MedImmune shares, provided that no fractional
MedImmune shares will be issued and subject to any applicable appraisal rights,
as described below. Our wholly owned subsidiary is Apple Merger Corp..
EFFECTIVE TIME OF THE MERGER. The merger will become effective upon the
filing of a certificate of merger or a certificate of ownership and merger with
the Secretary of State of Delaware or such later time as is agreed by Aviron and
MedImmune and specified in the certificate of merger. The filing of the
certificate of merger will take place as soon as practicable on or after the
satisfaction of the conditions to the merger.
CERTIFICATE OF INCORPORATION; BYLAWS; DIRECTORS AND OFFICERS. At the
effective time of the merger, the certificate of incorporation of Apple Merger
Corp. as in effect immediately prior to the merger will become the Certificate
of Incorporation of Aviron and the bylaws of Apple Merger Corp. as in effect
immediately prior to the merger will become the bylaws of Aviron, in each case
until amended.
At the effective time of the merger, the directors of Apple Merger Corp.
shall become the directors of Aviron and the officers of Aviron shall continue
as the officers of Aviron, in each case until the earlier of their resignation
or removal or until their respective successors are duly elected and qualified.
AVIRON BOARD OF DIRECTORS. Upon the acceptance for exchange of tendered
Aviron shares pursuant to the offer, MedImmune will be able to designate such
number of directors to the Aviron board of directors as is proportionate to the
percentage of Aviron shares outstanding that are beneficially owned by
MedImmune. If requested by MedImmune, after acceptance for exchange of the
shares, Aviron and its board of directors will immediately increase the size of
its board of directors or secure the resignations of or remove such number of
incumbent directors, to the extent permitted by applicable law, as is necessary
to enable MedImmune's designees to be appointed to the Aviron board of
directors, and will cause MedImmune's designees to be appointed. Aviron will
also, if requested by MedImmune, appoint MedImmune's designated directors to
each committee of Aviron's board of directors in an amount that is at least
proportionate to such designees' representation on the full board of directors.
However, until the effective time of the merger, at least two members of
Aviron's board of directors who are directors of Aviron prior to consummation of
the offer and are not also directors of MedImmune will remain on the board of
directors. Following the appointment of MedImmune's
37
designees prior to the effective time of the merger, the concurrence of a
majority of such continuing directors of Aviron will be required to:
- amend or terminate the merger agreement;
- extend or waive the time for the performance of any of the obligations or
other acts of MedImmune or Apple Merger Corp. under the merger agreement;
or
- waive any of Aviron's rights under the merger agreement.
TREATMENT OF AVIRON STOCK OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES
Each Aviron stock option granted to a current or former employee, officer,
or consultant of Aviron will become exercisable into the number of MedImmune
shares equal to the number of Aviron shares subject to such option multiplied by
the exchange ratio of 1.075. The exercise price for each option will equal the
aggregate exercise price for the Aviron shares otherwise purchaseable under such
stock option, divided by the aggregate number of MedImmune shares deemed
purchaseable under such stock option pursuant to the exchange ratio. Stock
options granted by Aviron will otherwise be subject to the same terms and
conditions, including provisions regarding vesting, as in effect at the time the
merger becomes effective. Each Aviron stock option granted to a non-employee
director will be cancelled prior to closing of the offer and the merger after
the director is given a chance to exercise such option with respect to all
vested and non-vested shares.
Aviron has issued a number of warrants which are exercisable for Aviron
shares and $200 million principal amount of convertible notes which are
convertible into Aviron shares. A number of the warrants will expire on the
closing date of the merger. In connection with the merger, the remaining
warrants and the convertible notes will become exercisable for or convertible
into MedImmune shares, at an exercise or conversion price that has been adjusted
in accordance with the terms of the warrants or convertible notes, as the case
may be, as a result of the merger.
REPRESENTATIONS AND WARRANTIES
The merger agreement contains various customary representations and
warranties made by each party to the other. The representations and warranties
contained in the merger agreement do not survive the effective time of the
merger.
A number of the representations and warranties are qualified by a material
adverse effect or material adverse change standard. A material adverse effect or
material adverse change with respect to Aviron or MedImmune means any change,
effect, event, occurrence or state of facts, individually or together with all
other changes, effects, events, occurrences or states of fact, that is or is
reasonably likely to be materially adverse to the business, financial condition
or results of operations of Aviron or MedImmune, as the case may be, and its
subsidiaries, taken as a whole, other than any change or condition relating to
the economy or securities markets in general or the industry in which Aviron or
MedImmune, as the case may be, operates.
Aviron has made several representations concerning FluMist, including that
except as otherwise disclosed to MedImmune, neither Aviron nor any of its
subsidiaries is in violation of or in default under any material contract
related to the development, commercialization, production, marketing or sale of
FluMist, and that Aviron possesses all material intellectual property rights and
licenses necessary for commercialization.
COVENANTS
MedImmune and Aviron have each undertaken certain covenants in the merger
agreement. The following summarizes the more significant of these covenants.
38
INTERIM OPERATIONS OF AVIRON. Aviron has agreed to operate its business in
the ordinary course and, consistent with past practice from the date of the
merger agreement to the effective time of the merger. The merger agreement
contains a number of specific restrictions on Aviron and its subsidiaries.
NO SOLICITATION. Aviron agrees not to solicit or encourage any third party
takeover proposals or participate in negotiations and discussions regarding,
provide information for or otherwise facilitate a takeover proposal (generally
defined as the acquisition of 15% or more of Aviron or its shares).
However, the Aviron board of directors may furnish information or
participate in negotiations regarding a takeover proposal in response to an
unsolicited superior proposal which did not result from a breach of the merger
agreement, if it determines that failure to do so will be reasonably likely to
result in a breach of its fiduciary duties. Aviron must provide MedImmune with
one day advance notice before doing so to comply with the provisions described
below.
If there is third party contact regarding a takeover proposal, Aviron must
provide MedImmune with the identity of the third party, the terms of the
proposal and written materials related thereto, and keep MedImmune informed on a
current basis.
Prior to furnishing information Aviron and the third party must enter into a
confidentiality agreement no less favorable to Aviron than the existing
confidentiality agreement between Aviron and MedImmune.
A takeover proposal means, other than the transactions contemplated by the
merger agreement, any inquiry, proposal or offer from any person relating to:
- any direct or indirect acquisition or purchase of a business or assets
that constitutes 15% or more of the net revenues, net income or the assets
of Aviron or its subsidiaries, taken as a whole, or
- 15% or more of any class of equity securities of Aviron or its
subsidiaries, or
- any tender offer, exchange offer or other transaction that if consummated
would result in any person beneficially owning 15% or more of any class of
equity securities of Aviron or any of its subsidiaries, or
- any merger, consolidation, business combination, recapitalization,
liquidation or dissolution or any similar transaction involving Aviron or
any of its subsidiaries.
A superior proposal means any bona fide proposal made by a third party:
- to acquire more than 50% of the combined voting power of the outstanding
Aviron shares (assuming the exercise or conversion of all outstanding
options, warrants, rights and convertible securities) or all or
substantially all the assets of Aviron and its subsidiaries taken as a
whole;
- that is on terms which the Board of Directors of Aviron determines in its
good faith judgment (after receiving advice from a financial advisor of
nationally recognized reputation) to be more favorable to Aviron and its
stockholders from a financial point of view than the offer and the merger
after taking into account the terms of the merger agreement (including any
amendment that may be proposed by MedImmune);
- which is reasonably capable of being consummated; and
- for which financing, to the extent required, is then committed or which,
in the good faith judgment of the Board of Directors of Aviron, is
reasonably capable of being obtained on a prompt basis by such third
party.
RECOMMENDATION. Aviron has represented and warranted that its board of
directors by unanimous vote of the directors present (1) determined that the
offer and the merger are advisable and are fair to
39
and in the best interests of Aviron stockholders, (2) approved the offer and the
merger, and (3) resolved to recommend that the Aviron stockholders accept the
offer, tender their Aviron shares to MedImmune and approve and adopt the merger
agreement and the merger. Aviron may not withdraw, modify or amend these
recommendations unless the Aviron board of directors determines that failure to
do so would violate its fiduciary duties.
STOCKHOLDER RIGHTS AGREEMENT. Aviron maintains a stockholder rights
agreement under which Aviron stockholders are granted the right to receive
shares of Aviron preferred stock upon the occurrence of certain events. Aviron
has amended this rights agreement in order to provide that the rights will not
be triggered by either the offer or the merger.
COVENANT TO CALL STOCKHOLDER MEETING AND PREPARE AND MAIL PROXY
STATEMENT. If approval of Aviron's stockholders is required by applicable law
in order to consummate the merger, Aviron has agreed to call a meeting of its
stockholders for the purpose of approving and adopting the merger agreement and
the merger. If required by applicable law, as soon as practicable after the
acceptance for exchange of the Aviron shares pursuant to the offer, Aviron has
agreed to prepare and file with the SEC a proxy statement for the purposes of
soliciting proxies to approve and adopt the merger agreement and the merger.
Aviron will take the actions necessary or advisable to secure the vote or
consent of stockholders as may be required by Delaware law to complete the
merger and, subject to applicable fiduciary requirements, will recommend
adoption and approval of the merger agreement and the merger. Aviron has agreed
to use its reasonable best efforts to mail the proxy statement to its
stockholders promptly after the registration statement containing the proxy
statement has been declared effective by the SEC.
USE OF REASONABLE BEST EFFORTS. MedImmune and Aviron have agreed to use
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the offer, the merger,
and the other transactions contemplated by the merger agreement, including:
- the taking of all reasonable acts necessary to cause the conditions to the
offer and the merger to be satisfied;
- the obtaining of all other necessary actions or nonactions, waivers,
consents and approvals from governmental authorities and the making of all
other necessary registrations and filings;
- the obtaining of all necessary consents, approvals or waivers from third
parties;
- using their reasonable best efforts to secure opinions from their counsel
to the effect that the transaction will qualify as a reorganization within
the meaning of Section 368(a) of the Code;
- the defending of any lawsuits or other legal proceedings, whether judicial
or administrative, challenging the merger agreement or the offer or
merger, including seeking to have any stay or temporary restraining order
entered by any court or other governmental authority vacated or reversed;
and
- the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the
purposes of, the merger agreement.
Notwithstanding the foregoing, MedImmune will not be required to divest any
assets or any portion of any business of it or Aviron or any of their respective
subsidiaries or to agree to any restrictions on the operation of its or its
subsidiaries' business.
INDEMNIFICATION AND INSURANCE. Upon completion of the merger, MedImmune
will assume all rights of current or former Aviron directors and officers to
indemnification and exculpation from liabilities for acts or omissions occurring
at or prior to the merger, as provided in Aviron's current
40
certificate of incorporation, bylaws and any indemnification agreement between
such directors or officers and Aviron in effect as of the date of the merger
agreement.
For six years after the merger, MedImmune will cause the surviving
corporation to maintain in effect Aviron's current officers' and directors'
liability insurance in respect of acts or omissions occurring at or prior to the
effective time of the merger, covering each person currently covered by Aviron's
officers' and directors' liability insurance policy. Such insurance will contain
terms with respect to coverage and amount that are no less favorable to the
terms currently in effect, provided that MedImmune may substitute such insurance
with policies of MedImmune containing terms with respect to coverage and amount
that are no less favorable to such directors and officers. In satisfying this
obligation, MedImmune will not be required to pay premiums in excess of 150% of
the amount per annum paid by Aviron in its last full fiscal year, provided that
if MedImmune is not able to obtain such coverage for such 150% amount, MedImmune
will nevertheless be obligated to provide such coverage as may be obtained for
such 150% amount. In lieu thereof, either party may obtain a single premium
insurance policy covering matters prior to the merger, so long as the cost is
less than $2,000,000.
ADDITIONAL AGREEMENTS
TAX TREATMENT. MedImmune and Aviron have agreed to use their reasonable
best efforts to cause the transaction to qualify, and not to take or fail to
take, or cause or permit to be taken or fail to be taken, any action which could
reasonably be expected to prevent the transaction from qualifying, as a
reorganization within the meaning of Section 368(a) of the Code. MedImmune and
Aviron have also agreed to use their reasonable best efforts to secure opinions
from their counsel to the effect that the transaction will qualify as a
reorganization within the meaning of Section 368(a) of the Code.
FEES AND EXPENSES. Except for the termination fee discussed below, each
party shall bear its own expenses in connection with the merger, provided that
Aviron and MedImmune will each pay one-half of the costs and expenses incurred
in connection with the HSR filing fees and the filing, printing and mailing the
proxy statement and the related registration statement.
CONDITIONS OF THE OFFER
See "The Offer--Conditions of Our Offer" on page 30.
CONDITIONS TO THE MERGER
The obligations of MedImmune and Aviron to consummate the merger are subject
to the satisfaction of the following conditions:
- STOCKHOLDER APPROVAL. If required under Delaware law, the affirmative vote
of a majority of the outstanding shares of Aviron to adopt the merger
agreement.
- NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order, preliminary
or permanent injunction or other judgment, action or order issued by any
court of competent jurisdiction or governmental agency or other statute,
law, rule, legal restraint or prohibition shall be in effect preventing
the consummation of the merger.
- EXCHANGE OF SHARES. MedImmune or any of its affiliates shall have
purchased shares pursuant to the offer.
- EFFECTIVENESS OF S-4. If stockholder approval is required, MedImmune's
post-effective amendment to the S-4 relating to Aviron stockholder
approval shall have been declared effective.
- NASDAQ LISTING. The MedImmune shares to be issued in the merger shall have
been approved for listing on the Nasdaq National Market System, subject to
official notice of issuance.
41
TERMINATION OF THE MERGER AGREEMENT
The merger agreement may be terminated at any time prior to the acceptance
of Aviron shares for payment pursuant to the offer:
- by mutual written consent of MedImmune and Aviron.
- by either MedImmune or Aviron if:
- the offer has expired without the acceptance for payment of the Aviron
shares;
- Apple Merger Corp. has not accepted for payment any Aviron shares
before May 31, 2002; provided, however, that this right to terminate
the merger agreement is not available to any party whose failure to
perform any of its obligations under the merger agreement results in
the failure of any such condition, or if the failure of such condition
results from facts or circumstances that constitute a breach of a
representation or warranty; or
- any temporary restraining order, injunction or other judgment, action
or order applicable to the offer, the merger or the other transactions
contemplated by the merger agreement has become final and
nonappealable.
- by MedImmune if (i) the board of directors of Aviron or any committee
thereof shall have (x) withdrawn or modified in a manner adverse to
MedImmune or Apple Merger Corp. its approval or recommendation of the
offer or the merger or the adoption of the merger agreement, (y) approved
or recommended or taken a neutral position with respect to any takeover
proposal, (z) failed to reaffirm its recommendation of the offer or the
merger or its adoption of this Agreement within ten business days of being
requested by MedImmune to do so or (ii) the board of directors of Aviron
or any committee thereof shall have resolved to take any of the foregoing
actions;
- by MedImmune prior to the purchase of Aviron shares pursuant to the offer
if Avrion shall have breached or failed to perform in any material respect
any representation, warranty, covenant or other agreement contained in
this Agreement that (1) would give rise to the failure of a condition to
the offer relating to representations or covenants and (2) cannot be or
has not been cured within 10 business days after the giving of written
notice to Aviron;
- by Aviron prior to the purchase of Aviron shares pursuant to the offer if
there is a MedImmune breach analogous to the Aviron breaches described in
the provision immediately above; or
- by Aviron prior to the acceptance for exchange of Aviron shares pursuant
to the offer, in response to a superior proposal which was unsolicited and
which did not otherwise follow a breach of the merger agreement, in order
to concurrently enter into a definitive acquisition agreement with respect
to such superior proposal (the determination of whether a proposal is a
superior proposal is to be made only after consideration of any
modification proposed by MedImmune), but only:
- at a time that is after the third business day following MedImmune's
receipt of written notice advising MedImmune that the Aviron board of
directors is prepared to accept such superior proposal, specifying the
material terms and conditions of such superior proposal (including a
copy of any proposed agreement) and identifying the person making such
superior proposal (any revised proposal shall constitute a new proposal
and shall require an additional three business days notice and
compliance with the other matters set forth herein),
- if requested by MedImmune, Aviron shall have cooperated in good faith
with MedImmune to revise the terms of the merger agreement such that
the proposal is no longer a superior proposal, and
42
- after MedImmune shall have received the termination fee described
below.
TERMINATION FEES
Aviron shall pay MedImmune a fee of $51 million if:
- following the public announcement of a third party takeover proposal,
(1) the merger agreement is terminated under the termination provision
relating to the expiration of the offer without the acceptance for
exchange of shares or the provision relating to no acceptance for exchange
of share by May 31, 2002 and (2) within twelve months of termination
Aviron enters into an acquisition agreement with respect to a takeover
proposal or a takeover proposal is consummated;
- following the public announcement of a third party takeover proposal,
(1) the merger agreement is terminated under the termination provision
relating to a breach by Aviron due to a willful and material breach by
Aviron and (2) within six months of termination Aviron enters into an
acquisition agreement with respect to a takeover proposal or a takeover
proposal is consummated;
- MedImmune terminates the merger agreement under the termination provision
relating to a change in recommendation by Aviron; or
- Aviron terminates the merger agreement under the provision relating to the
acceptance of a superior proposal.
See "The Offer--Conditions of Our Offer" on page 30.
AMENDMENTS, EXTENSION AND WAIVER
AMENDMENT. The merger agreement may be amended before or after obtaining
Aviron stockholder approval. However, after the exchange of shares pursuant to
the offer is completed, no amendment which changes the merger agreement or the
merger consideration is permitted, if such change would adversely affect Aviron
stockholders. After approval by Aviron stockholders, no amendment may be made
which by law requires further approval by such stockholders without first
obtaining such approval.
EXTENSION AND WAIVER. Subject to the amendment provisions discussed above
and the terms of the offer described in "The Merger Agreement--The
Offer--Extension, Termination and Amendment", prior to completion of the merger,
Aviron and MedImmune may (1) extend the time for the performance of any of the
obligations of the other, (2) waive any inaccuracies in the representations and
warranties contained in the merger agreement or (3) waive compliance with any of
the agreements or conditions to the merger agreement.
Following the appointment of any directors selected by MedImmune and prior
to the effective time of the merger, any amendment of the merger agreement, any
termination of the merger agreement by Aviron, any extension or waiver by Aviron
of the time for the performance of any of the obligations or other acts of
MedImmune or waiver of any of Aviron's rights under the merger agreement will
require the concurrence of a majority of the Aviron directors then in office who
were directors of Aviron prior to the consummation of the offer.
THE CONFIDENTIALITY AGREEMENT
MedImmune and Aviron entered into a customary confidentiality agreement
dated as of October 10, 2001 which contains customary standstill and
confidentiality provisions.
INTERESTS OF CERTAIN PERSONS
Some directors and executive officers of Aviron may have interests in the
offer and the merger that are different from or in addition to your interests.
Information about these interests is more fully set forth in Aviron's
Solicitation/Recommendation Statement on Schedule 14D-9, including the
Information Statement attached as Schedule I to the Schedule 14D-9, which is
being mailed to Aviron stockholders with this preliminary prospectus.
In addition, see the "Merger Agreement--Covenants--Indemnification and
Insurance."
43
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The following unaudited pro forma condensed combined financial data present
the effect of the pending acquisition of Aviron by MedImmune, which is to be
accounted for as a purchase. The unaudited pro forma condensed combined balance
sheet presents the combined financial position of MedImmune and Aviron as of
September 30, 2001 assuming that the acquisition had occurred as of that date.
Such pro forma information is based upon the historical consolidated balance
sheet data of MedImmune and Aviron as of September 30, 2001. The unaudited pro
forma combined statements of operations for the year ended December 31, 2000 and
nine month period ended September 30, 2001 give effect to the acquisition of
Aviron by MedImmune as if such acquisition had occurred on January 1, 2000.
The unaudited pro forma condensed combined 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 purposes of developing such pro forma
information. The unaudited pro forma condensed combined financial data are not
necessarily an indication of the results that would have been achieved had the
transaction been consummated as of the dates indicated or that may be achieved
in the future.
44
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL HISTORICAL ACQUISITION PRO FORMA
MEDIMMUNE AVIRON ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
Revenues:
Product sales........................ $495,803 $ -- $ -- $495,803
Other revenue........................ 44,692 32,242 (14,725)(a) 62,209
-------- -------- -------- --------
Total revenues......................... 540,495 32,242 (14,725) 558,012
Costs and Expenses:
Cost of sales........................ 127,320 -- -- 127,320
Research and development............. 66,296 80,521 (46,290)(b),(c) 100,527
Acquisition of in-process research
and development.................... -- 10,904 -- 10,904
Selling, general and
administrative..................... 157,330 13,849 2,858 (b),(c) 174,037
Other operating expenses............. 9,231 -- 65,563 (b),(c),(d) 74,794
-------- -------- -------- --------
Total expenses......................... 360,177 105,274 22,131 487,582
-------- -------- -------- --------
Operating income (loss)................ 180,318 (73,032) (36,856) 70,430
Interest income........................ 29,569 6,541 -- 36,110
Interest expense....................... (474) (11,020) -- (11,494)
-------- -------- -------- --------
Earnings (loss) before income taxes and
cumulative effect of a change in
accounting principle................. 209,413 (77,511) (36,856) 95,046
Provision (benefit) for income tax..... 64,436 -- (38,774)(e) 25,662
-------- -------- -------- --------
Earnings (loss) before cumulative
effect of a change in accounting
principle............................ $144,977 $(77,511) $ 1,918 $ 69,384
======== ======== ======== ========
Basic earnings per share:
Earnings (loss) before cumulative
effect of a change in accounting
principle............................ $ 0.69 $ 0.29
Shares used in calculation of basic
earnings per share................... 209,101 242,880
Diluted earnings per share:
Earnings (loss) before cumulative
effect of a change in accounting
principle............................ $ 0.66 $ 0.27
Shares used in calculation of diluted
earnings per share................... 220,428 256,062
45
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2001
(IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL HISTORICAL ACQUISITION PRO FORMA
MEDIMMUNE AVIRON ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
Revenues:
Product sales........................ $303,508 $ -- $ -- $303,508
Other revenue........................ 22,468 11,665 2,325 (a) 36,458
-------- -------- -------- --------
Total revenues......................... 325,976 11,665 2,325 339,966
Costs and Expenses:
Cost of sales........................ 76,270 -- -- 76,270
Research and development............. 61,616 91,470 (64,066)(b),(c) 89,020
Selling, general and
administrative..................... 128,170 14,227 1,390 (b),(c) 143,787
Other operating expenses............. 7,669 -- 73,707 (b),(c),(d) 81,376
-------- -------- -------- --------
Total expenses......................... 273,725 105,697 11,031 390,453
-------- -------- -------- --------
Operating income (loss)................ 52,251 (94,032) (8,706) (50,487)
Interest income...................... 28,418 16,123 -- 44,541
Interest expense..................... (447) (12,346) -- (12,793)
Gain on investment................... -- 1,086 -- 1,086
-------- -------- -------- --------
Earnings (loss) before income taxes and
cumulative effect of a change in
accounting principle................. 80,222 (89,169) (8,706) (17,653)
Provision (benefit) for income tax..... 29,768 -- (35,682)(e) (5,914)
-------- -------- -------- --------
Earnings (loss) before cumulative
effect of a change in accounting
principle............................ $ 50,454 $(89,169) $ 26,976 $(11,739)
======== ======== ======== ========
Basic earnings per share:
Earnings (loss) before cumulative
effect of a change in accounting
principle............................ $ 0.24 $ (0.05)
Shares used in calculation of basic
earnings per share................... 213,075 246,854
Diluted earnings per share:
Earnings (loss) before cumulative
effect of a change in accounting
principle............................ $ 0.23 $ (0.05)
Shares used in calculation of diluted
earnings per share................... 219,864 246,854
46
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2001
(IN THOUSANDS)
HISTORICAL HISTORICAL ACQUISITION PRO FORMA
MEDIMMUE AVIRON ADJUSTMENTS COMBINED
---------- ---------- ----------- ----------
ASSETS:
Cash, cash equivalents and marketable
securities........................... $ 283,215 $409,333 $ -- $ 692,548
Other current assets................... 106,489 16,363 -- 122,852
---------- -------- --------- ----------
Total current assets..................... 389,704 425,696 -- 815,400
Property and equipment, net.............. 89,572 38,205 (8,237)(a) 119,540
Deferred tax assets, net................. 198,117 -- 104,810 (b) 302,927
Marketable securities.................... 372,036 37,843 -- 409,879
Intangible assets, net................... -- 43,284 100,000 (c) 143,284
Goodwill................................. -- -- 20,000 (c) 20,000
Other assets............................. 4,087 10,561 -- 14,648
---------- -------- --------- ----------
Total assets............................. $1,053,516 $555,589 $ 216,573 $1,825,678
========== ======== ========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities.................... $ 104,085 $ 32,252 $ 49,485 (d),(e) $ 185,822
Long-term debt......................... 8,997 -- 204,000 (g) 212,997
Long-term obligations.................. -- 227,681 (194,000)(g) 33,681
Other liabilities...................... 1,812 9,331 (7,500)(f) 3,643
---------- -------- --------- ----------
Total liabilities........................ 114,894 269,264 51,985 436,143
SHAREHOLDERS' EQUITY:
Common stock and paid-in-capital......... 884,450 647,327 999,293 (h) 2,531,070
Unearned compensation.................... -- -- (51,184)(i) (51,184)
Accumulated earnings (deficit)........... 43,369 (362,536) (781,987)(h),(j) (1,101,154)
Accumulated other comprehensive income... 10,803 1,534 (1,534)(h) 10,803
---------- -------- --------- ----------
Total shareholders' equity............... 938,622 286,325 164,588 1,389,535
---------- -------- --------- ----------
Total liabilities and shareholders'
equity................................. $1,053,516 $555,589 $ 216,573 $1,825,678
========== ======== ========= ==========
47
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
NOTE 1--BASIS OF PRESENTATION
On December 2, 2001, MedImmune and Aviron entered into the merger agreement
under which MedImmune is to acquire Aviron in this offer and the second-step
merger. The acquisition of Aviron is to be accounted for as a purchase. As of
December 31, 2001, there were 31,422,092 Aviron shares outstanding and 6,720,276
shares issuable upon exercise of outstanding options and warrants. Based on this
and the exchange ratio of 1.075 MedImmune shares for each Aviron share, Aviron's
stockholders, will receive a total of 33,778,748 shares of MedImmune common
stock and holders of Aviron options and warrants will have the right to receive
7,224,296 MedImmune shares. In addition, holders of Aviron's $200 million of
convertible notes will be able to convert the notes into a total of
3.44 million MedImmune shares. The purchase price of the Aviron acquisition is
approximately $1.6 billion including the value of the MedImmune shares to be
issued for Aviron shares and the estimated value of these options and warrants
and estimated transaction costs. These estimates are preliminary and the actual
number of MedImmune shares issued will depend on the actual number of Aviron
shares outstanding as of the date of consummation of the merger.
The value of the MedImmune shares used in determining the purchase price was
$44.10 per share based on the closing price of MedImmune's common stock on
November 30, 2001, the last business day prior to the signing of the merger
agreement.
The purchase consideration is estimated as follows (in millions):
Common stock................................................ $1,490
Assumption of Aviron's options and warrants, less intrinsic
value of unvested options................................. 105
Estimated transaction expenses.............................. 21
------
$1,616
======
The allocation of the purchase price as of September 30, 2001 is summarized
below (in millions):
Assets:
Cash and marketable securities.............................. $ 447
Other current assets........................................ 16
Other long-term assets...................................... 40
Deferred tax assets......................................... 105
Intangible assets........................................... 143
In-process research and development......................... 1,145
Goodwill.................................................... 20
------
Total assets:............................................... 1,916
------
Liabilities:
Current liabilities......................................... 32
Restructuring liability..................................... 28
Long-term debt.............................................. 204
Long-term obligations....................................... 34
Other liabilities........................................... 2
------
Total liabilities........................................... 300
------
Net assets acquired:........................................ $1,616
======
48
The above purchase price allocation is preliminary. The final determination
of the allocation of purchase price will be determined based on the fair value
of assets acquired, including the fair value of in-process research and
development and other intangibles, and the fair value of liabilities assumed as
of the date that the acquisition is consummated. The purchase price allocation
will remain preliminary until MedImmune is able to (i) complete a third party
valuation of significant intangible assets acquired including in-process
research and development, (ii) evaluate restructuring plans to be undertaken
following the consummation of the merger, (iii) conduct a detailed review of the
value of deferred tax assets and liabilities of Aviron, and (iv) evaluate the
fair value of other assets and liabilities acquired. The final determination of
the purchase price is expected to be completed shortly after the consummation of
the merger. The actual amounts allocated to assets and liabilities could differ
significantly from the amounts presented in the unaudited pro forma condensed
combined financial data.
The amount allocated to in-process research and development represents an
estimate of the fair value of purchased in-process technology for projects that,
as of the date of the acquisition, had not yet reached technological feasibility
and had no alternative future use. The value of these projects will be
determined by estimating the resulting net cash flows from the sale of the
products resulting from the completion of the projects. The resulting cash flows
will then be discounted back to their present value at appropriate discount
rates. For purposes of the pro forma balance sheet as of September 30, 2001
$1,145 million of the total purchase price has been allocated to in-process
research and development--primarily the estimated value of Aviron's lead product
candidate, FluMist(TM). FluMist(TM) has not been approved by the FDA and remains
in the development stage. The amounts allocated to in-process research and
development will be charged to the statement of operations in the period the
acquisition is consummated.
NOTE 2--PRO FORMA ADJUSTMENTS:
PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
The following adjustments are reflected in the pro forma condensed
statements of operations to reflect the estimated impact of the merger on the
historical combined results of MedImmune and Aviron.
(a) To adjust Aviron's accounting policy for revenue recognition on milestone
payments received from collaborative partners to conform to MedImmune's
historical accounting policy.
(b) To reclassify certain of Aviron's expenses to conform to MedImmune's
historical presentation.
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2001 DECEMBER 31, 2000
------------------ -----------------
Research and development................... $(65,446) $(49,743)
Selling, general and administrative........ 504 568
Other operating expenses................... 64,942 49,175
(c) To reflect stock compensation expense for unvested stock options assumed in
conjunction with the merger in accordance with FIN 44, "Accounting for
Certain Transactions Involving Stock Compensation--an interpretation of APB
25" in the amount of $15,464 and $6,031 for the pro
49
forma year ended December 31, 2000 and nine month period ended
September 30, 2001, respectively.
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2001 DECEMBER 31, 2000
------------------ -----------------
Research and development................... $1,380 $ 3,453
Selling, general and administrative........ 886 2,290
Other operating expenses................... 3,765 9,721
------ -------
$6,031 $15,464
====== =======
(d) To adjust amortization of certain intangible assets to be acquired from
Aviron and existing intangible assets based on their estimated fair market
value and estimated lives in the amount of $6,667 and $5,000 for the pro
forma year ended December 31, 2000 and nine month period ended
September 30, 2001, respectively.
(e) To adjust historical income tax expense for the impact of losses incurred by
Aviron and for the impact of certain pro-forma adjustments.
Pro Forma basic and diluted net loss per share are computed by dividing the
pro forma net income (loss) attributable to common shareholders by the pro
forma weighted average number of common shares outstanding. Potentially
dilutive securities are not taken into account when their effects would be
anti-dilutive. A reconciliation of shares used to compute historical basic
and diluted net income (loss) per share to shares used to compute pro forma
basic and diluted net income (loss) per share is as follows:
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2001 DECEMBER 31, 2000
------------------ -----------------
Shares used to compute MedImmune historical
basic net income per share............... 213,075 209,101
Shares issued in acquisition............... 33,779 33,779
------- -------
Shares used to compute pro forma basic net
income (loss) per share.................. 246,854 242,880
======= =======
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2001 DECEMBER 31, 2000
------------------ -----------------
Shares used to compute MedImmune historical
diluted net income per share............. 219,864 220,428
Shares issued in acquisition............... 33,779 33,779
Adjustment to eliminate the dilutive impact
of MedImmune securities.................. (6,789) --
Dilutive impact of Aviron securities....... -- 1,855
------- -------
Shares used to compute pro forma diluted
net income (loss) per share.............. 246,854 256,062
======= =======
50
PRO FORMA CONDENSED BALANCE SHEET
The following adjustments reflected in the pro forma condensed balance sheet
reflect the estimated impact of events that are directly attributable to the
merger of MedImmune and Aviron.
(a) To adjust certain tangible assets to their estimated fair market value.
(b) To reflect the estimated value, based on the currently effective tax rate,
of deferred tax assets to be acquired from Aviron, principally related to
net operating loss carryforwards.
(c) To record intangible assets and goodwill arising from the transaction.
(d) To record the liability for estimated transaction costs of $21 million.
(e) To adjust liabilities for estimated costs of $28 million under a
restructuring plan to be completed following the consummation of the merger.
(f) To adjust the recorded amount of Aviron deferred revenue to its estimated
fair market value.
(g) To adjust the recorded amount of Aviron convertible subordinated borrowings
to its estimated market value based on the market price of the publicly
traded debt securities.
(h) To record the issuance of MedImmune common stock, and the assumption of
options and warrants as part of the purchase price and record the
elimination of Aviron's equity prior to the transaction.
(i) To reflect the intrinsic value of unvested MedImmune stock options granted
to employees of Aviron for the portion related to future service, including
$22 million of unearned compensation related to a restructuring plan.
(j) To reflect the estimated value of in-process research and development to be
acquired from Aviron in the amount of $1,145 million. Such amount will be
recorded as an expense in the period that the merger is consummated. Because
this expense is directly attributable to the merger and will not have a
continuing impact, this expense is not reflected in the pro forma condensed
combined statement of operations.
INFORMATION ABOUT MEDIMMUNE
MedImmune was founded in 1988 and is a biotechnology company headquartered
in Gaithersburg, Maryland with five products on the market and a diverse product
portfolio. MedImmune is focused on using advances in immunology and other
biological sciences to develop important new products that address significantly
unmet medical needs in areas of infectious disease and immune regulation.
MedImmune also focuses on oncology through its wholly-owned subsidiary,
MedImmune Oncology, Inc. (formerly U.S. Bioscience, Inc.), acquired in
November 1999.
In 1998, MedImmune launched Synagis-Registered Trademark- (palivizumab) in
the United States for preventing respiratory syncytial virus (RSV) in high-risk
pediatric patients. Synagis is the first and only monoclonal antibody approved
for an infectious disease and has become an important new pediatric product for
the prevention of RSV, the leading cause of viral pneumonia and bronchiolitis in
infants and children.
MedImmune also markets CytoGam-Registered Trademark- (cytomegalovirus immune
globulin intravenous (human)), (CMV-IGIV) and RespiGam-Registered Trademark-
(respiratory syncytial virus immune globulin intravenous (human)), (RSV-IGIV)
and has several product candidates undergoing clinical trials. Through MedImmune
Oncology's sales and marketing group, MedImmune also markets Ethyol (amifostine)
and NeuTrexin (trimetrexate glucuronate for injection). MedImmune has three
manufacturing facilities: a manufacturing facility in Frederick, Maryland; a
fill and finish facility in Nijmegen, the Netherlands, and a pilot manufacturing
facility at its headquarters in Gaithersburg, Maryland.
51
INFORMATION ABOUT AVIRON
Aviron is a biopharmaceutical company focused on developing and
commercializing innovative vaccine technologies to prevent infectious disease
and improve quality of life in the general population. Aviron currently is
focusing its efforts on its lead product candidate, FluMist-TM-, an
investigational live attenuated vaccine delivered as a nasal mist for the
prevention of influenza. Aviron's goal is to become a leader in the discovery,
development, manufacture and marketing of innovative vaccines that are safe,
effective and suitable for widespread use. Aviron's vaccine development programs
are based on proprietary-genetic engineering technologies and novel, convenient
delivery systems.
COMPARISON OF RIGHTS OF COMMON STOCKHOLDERS
OF MEDIMMUNE AND AVIRON
Set forth on the following pages is a summary comparison of material
differences between the rights of a MedImmune stockholder under our current
certificate of incorporation and bylaws (right column) and the rights of an
Aviron stockholder under the current Aviron certificate of incorporation and
bylaws (left column). Copies of these documents will be sent to holders of
Aviron shares upon request. A summary by its nature is not complete. We
encourage you to refer to our certificate of incorporation and bylaws which are
incorporated in this document by reference, the Aviron certificate of
incorporation and bylaws, and the relevant provisions of Delaware law.
SUMMARY OF MATERIAL DIFFERENCES BETWEEN THE RIGHTS OF AVIRON STOCKHOLDERS AND
THE
RIGHTS OF MEDIMMUNE STOCKHOLDERS
AVIRON STOCKHOLDER RIGHTS MEDIMMUNE STOCKHOLDER RIGHTS
----------------------------- -----------------------------
Authorized Capital Stock The Aviron Restated The MedImmune Restated
Certificate of Incorporation Certificate of Incorporation
as amended authorizes the as amended authorizes the
issuance of up to 100,000,000 issuance of up to 320,000,000
shares of common stock, par shares of common stock, par
value $0.001 per share and value $0.01 per share and
5,000,000 shares of preferred 5,524,525 shares of preferred
stock, par value $0.001 per stock, par value $0.01 per
share. As of December 31, share. As of December 31,
2001, 31,422,092 shares of 2001, 214,478,807 shares of
common stock and no shares of common stock and no shares of
preferred stock were issued preferred stock were issued
and outstanding. and outstanding.
Special Stockholders' Aviron's bylaws provide that MedImmune's bylaws provide
Meetings special meetings may be that special meetings may be
called by the Chairman of the called by the Board, the
Board of Directors, the Chief Chairman, the President or
Executive Officer, the Board the Secretary, or
of Directors pursuant to a recordholders of a majority
resolution adopted by a of the shares of common stock
majority of the total number issued and outstanding.
of authorized directors, or
by the holders of at least
10% of the shares entitled to
vote.
52
AVIRON STOCKHOLDER RIGHTS MEDIMMUNE STOCKHOLDER RIGHTS
----------------------------- -----------------------------
Organization of Aviron's bylaws provide that MedImmune's bylaws provide
Stockholders' Meetings in the absence of the that in the absence of the
Chairman of the Board, the Chairman of the Board, the
Chief Executive Officer (CEO) President shall preside over
shall preside over meetings. the meeting. In the absence
If the CEO is absent, any of the President, any other
other person chosen by a officer designated by the
majority of the stockholders Board of Directors shall
entitled to vote present in preside, and in the absence
person or by proxy shall of such person, a stockholder
preside over the meeting. of record chosen by a
majority in voting interest
of the stockholders present
in person or by proxy will
preside.
Classification of Board of The Board is divided into The Board is not divided into
Directors three classes. classes.
Size of Board Aviron's certificate of MedImmune's Board of
incorporation authorizes the Directors currently consists
Board to fix the number of of nine directors, but the
directors solely by bylaws authorize the whole
resolution. The board board to change this number
currently consists of eight from time to time. The "whole
directors divided into three board" refers to the number
classes with each class of directors from time to
serving for a term of three time authorized to be on the
years. Board regardless of the
number of directors then in
office.
Board Annual Meetings Aviron's bylaws provide that MedImmune's bylaws provide
the annual meeting of the that the annual meeting of
Board of Directors is to be the Board of Directors shall
held immediately before or occur as soon as practicable
after the annual meeting of after each annual election of
stockholders. Notice of the directors unless the Board
annual meeting is not has transacted all business
required. by written consent. Notice of
the annual meeting must be
given to each director except
those who shall attend the
meeting.
Board Special Meetings According to Aviron's bylaws, According to MedImmune's
special meetings may be bylaws, special meetings may
called by the Chairman of the be called by the Board, the
Board, the CEO, or any two Chairman, or the President.
directors.
53
AVIRON STOCKHOLDER RIGHTS MEDIMMUNE STOCKHOLDER RIGHTS
----------------------------- -----------------------------
Removal of Directors Aviron's certificate of MedImmune's bylaws provide
incorporation provides that that MedImmune directors or
the entire Board of Directors the entire Board may be
or any individual director removed with or without
may be removed from office cause, at any time by the
with cause by a majority of vote of the holders of two
the outstanding shares thirds of the shares then
entitled to vote and without entitled to vote or by
cause by two thirds of the written consent of the
voting shares entitled to stockholders.
vote.
Board Vacancies Aviron's certificate of MedImmune's bylaws provide
incorporation provides that that the vacancies on
any vacancies on the Board MedImmune's Board may be
and newly created filled by vote of
directorship resulting from stockholders or by their
any increase in the written consent or by vote of
authorized number of the Board of Directors or by
directors elected, shall, the directors' written
unless the Board of Directors consent. If the number of
determines by resolution that directors then in office is
any such vacancies or newly less than a quorum, the
created directorship shall be vacancies may be filled by a
filled by stockholders, be vote of a majority of the
filled only by a vote of the directors then in office.
majority of directors then in
office, even though less than
a quorum of the Board of
Directors.
Board Quorum Requirements According to Aviron's bylaws, According to MedImmune's
a quorum of the Board of bylaws, a quorum of the Board
Directors consists of a of Directors consists of one
majority of the exact number third of the total number of
of directors fixed from time directors then in office (but
to time by the Board of not less than two if the
Directors. number of directors is
greater than one).
Removal of Officers According to Aviron's bylaws, According to MedImmune's
officers may be removed by a bylaws, officers may be
vote of the majority of removed by the Board or by
directors in office, by the the stockholders of the
unanimous written consent of Corporation with or without
the directors, or by a cause.
committee or superior
officers upon which such
power of removal may have
been conferred by the Board.
54
AVIRON STOCKHOLDER RIGHTS MEDIMMUNE STOCKHOLDER RIGHTS
----------------------------- -----------------------------
Indemnification of Directors The Aviron certificate and The MedImmune bylaws provide
and Officers bylaws provide for the for indemnification of
indemnification of directors, officers and directors of
officers, employees or agents MedImmune to the fullest
to the fullest extent extent authorized by Delaware
authorized by Delaware law, Law.
except that the bylaws also
provide that if a director or
officer initiates a
proceeding, the corporation
will not indemnify such
person unless (a) such
indemnification is expressly
required to be made by law,
(b) the proceeding was
authorized by the Board of
Directors of the corporation,
or (c) such indemnification
is provided by the
corporation, in its sole
discretion, pursuant to the
powers vested in the
corporation under Delaware
General Corporation Law.
Amendment to Charter Aviron's certificate of Under MedImmune's Restated
incorporation provides that Certificate of Incorporation,
amendments to the charter unless otherwise provided,
generally require the vote of the Corporation reserves the
the holder's of at least two right to at any time amend
thirds of the outstanding any provision contained
shares authorized to vote, therein.
except only a majority is
required to amend the
authorized capital of the
company.
Amendment to Bylaws Aviron's bylaws may be MedImmune's bylaws may be
amended by the vote of at amended by the majority of
least two thirds of all the shares entitled to vote
outstanding shares with at an election of directors,
voting power. by consent of the
stockholders, by vote of the
Board, or by the directors'
written consent.
55
LEGAL MATTERS
The validity of the MedImmune common stock offered hereby will be passed
upon for MedImmune by Dewey Ballantine LLP. Each of Dewey Ballantine LLP,
counsel to MedImmune, and Latham & Watkins, counsel to Aviron, will deliver an
opinion concerning certain federal income tax consequences of the offer and the
merger.
EXPERTS
The financial statements, except as they relate to the financial statements
of U.S. Bioscience, Inc. for the year ended December 31, 1998, incorporated in
this preliminary prospectus, by reference to MedImmune, Inc.'s Annual Report on
Form 10-K for the year ended December 31, 2000, have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given upon authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Aviron appearing in Aviron'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 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 of U.S. Bioscience, Inc. for the year
ended December 31, 1998 not presented separately in the consolidated financial
statements of MedImmune, Inc. incorporated herein by reference have been audited
by Ernst & Young LLP, independent auditors. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
MedImmune and Aviron file annual, quarterly and special reports, proxy
statements and other information with the SEC under the Exchange Act. You may
read and copy this information at the Public Reference Room of the SEC, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information.
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates.
The SEC also maintains an Internet web site that contains reports, proxy
statements and other information about issuers, like MedImmune and Aviron, who
file electronically with the SEC. The address of that site is
http://www.sec.gov.
You can also inspect reports, proxy statements and other information about
MedImmune and Aviron at the offices of the Nasdaq National Market, 20 Broad
Street, New York, New York 10005.
We filed a registration statement on Form S-4 to register with the SEC the
sale of the shares of MedImmune common stock to be issued pursuant to the offer.
This preliminary prospectus is a part of that registration statement. As allowed
by SEC rules, this preliminary prospectus does not contain all the information
you can find in the registration statement or the exhibits to the registration
statement. In addition, we also filed with the SEC a statement on Schedule TO
pursuant to Rule 14d-3 under the Exchange Act to furnish certain information
about the offer. You may obtain copies of the Form S-4 and the Schedule TO (and
any amendments to those documents) in the manner described above.
The SEC allows us to "incorporate by reference" information into this
preliminary prospectus, which means that we can disclose important information
to you by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this preliminary
prospectus, except for any information superseded by information contained
directly in this preliminary prospectus. This preliminary prospectus
incorporates by reference the documents set forth
56
below that MedImmune and Aviron have previously filed with the SEC. These
documents contain important information about MedImmune and Aviron and their
financial condition.
The following documents listed below that MedImmune and Aviron have
previously filed with the SEC are incorporated by reference:
MedImmune SEC Filings Period
--------------------- ------
Current Report on Form 8-K................... Dated December 27, 2001
Current Report on Form 8-K................... Dated December 21, 2001
Amended Quarterly Report on Form 10-Q........ Dated December 14, 2001
Amended Quarterly Report on Form 10-Q........ Dated December 14, 2001
Quarterly Report on Form 10-Q................ Quarter ended September 30, 2001
Current Report on Form 8-K................... Dated September 11, 2001
Quarterly Report on Form 10-Q................ Quarter ended June 30, 2001
Current Report on Form 8-K................... Dated May 22, 2001
Quarterly Report on Form 10-Q................ Quarter ended March 31, 2001
Proxy Statement.............................. Filed on March 8, 2001
Annual Report on Form 10-K................... Year ended December 31, 2000
Description of Common Stock and Amended and
Restated Rights Agreement.................... Incorporated by reference to MedImmune's
Registration Statements on Form 8-A dated
April 4, 1991 and December 1, 1998
Aviron SEC Filings Period
------------------ ------
Current Report on Form 8-K................... Dated December 3, 2001
Quarterly Report on Form 10-Q................ Quarter ended September 30, 2001
Current Report on Form 8-K................... Dated July 30, 2001
Current Report on Form 8-K................... Dated June 18, 2001
Quarterly Report on Form 10-Q................ Quarter ended June 30, 2001
Quarterly Report on Form 10-Q................ Quarter ended March 31, 2001
Proxy Statement.............................. Filed on May 3, 2001
Annual Report on Form 10-K................... Year ended December 31, 2000
Amended Annual Report on Form 10-K........... Year ended December 31, 2000
All documents filed by MedImmune and Aviron pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act from the date of this preliminary
prospectus to the date that shares are accepted for exchange pursuant to our
offer (or the date that our offer is terminated) shall also be deemed to be
incorporated herein by reference.
Documents incorporated by reference are available from us without charge
upon request to our information agent, MacKenzie Partners, Inc., 156 Fifth
Avenue, New York, New York 10010-7002, collect at (212) 929-5500 or toll-free at
(800) 322-2885. In order to ensure timely delivery, any request should be
submitted no later than five business days prior to the expiration of the offer.
If you request any incorporated documents from us, we will mail them to you by
first class mail, or another equally prompt means, within one business day after
we receive your request.
WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ABOUT OUR OFFER THAT IS DIFFERENT FROM, OR IN ADDITION TO, THAT
CONTAINED IN THIS PRELIMINARY PROSPECTUS OR IN ANY OF THE MATERIALS THAT WE HAVE
INCORPORATED BY REFERENCE INTO THIS PRELIMINARY 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 DOCUMENT ARE UNLAWFUL, OR
IF YOU ARE A PERSON TO WHOM IT IS UNLAWFUL TO DIRECT THESE TYPES OF ACTIVITIES,
THEN THE OFFER PRESENTED IN THIS DOCUMENT DOES NOT EXTEND TO YOU. THE
INFORMATION CONTAINED IN THIS DOCUMENT SPEAKS ONLY AS OF THE DATE OF THIS
DOCUMENT UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE
APPLIES.
57
ANNEX A
DIRECTORS AND EXECUTIVE OFFICERS OF MEDIMMUNE, INC.
Set forth in the table below are the name and the present principal
occupations or employment and the name, principal business and address of any
corporation or other organization in which such occupation or employment is
conducted, and the five-year employment history of each of the directors and
executive officers of MedImmune. Except as noted, each of the executive officers
and directors named in the table below has held the indicated office or position
in his or her principal occupation for at least five years. Each person listed
below held the earliest indicated office or position as of at least five years
ago. Except as noted, each person identified below is a United States citizen.
The principal business address of MedImmune and, unless otherwise indicated, the
business address of each person identified below is 35 West Watkins Mill Road,
Gaithersburg, Maryland 20878.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
---- ----------------------------------------------------------
Wayne T. Hockmeyer, Ph.D. Dr. Wayne T. Hockmeyer (age 57) founded MedImmune, Inc. in
April 1988 as President and Chief Executive Officer and
was elected to serve on the Board of Directors in May
1988. He became Chairman of the Board of Directors in May
1993. Dr. Hockmeyer relinquished his position as Chief
Executive Officer in October 2000 and now serves as the
Chairman of the Board of Directors. Dr. Hockmeyer earned
his bachelor's degree from Purdue University and earned
his Ph.D. from the University of Florida in 1972. Prior to
founding MedImmune, he served as a commissioned officer in
the United States Army from 1966 to 1986. From 1980 to
1986 he was Chairman of the Department of Immunology at
the Walter Reed Army Institute of Research. In 1986, Dr.
Hockmeyer joined Praxis Biologics as Vice President of
Research and Development and was there until founding
MedImmune, Inc. in 1988. Active in other leadership roles,
Dr. Hockmeyer was appointed by Governor Parris Glendening
to the Maryland Economic Development Commission and the
Maryland Technology Development Corporation. He is a
member of the Board of Directors of Digene Corporation,
Aviron, Intermune Pharmaceuticals, Inc., GenVec, Inc.,
TolerRx, Diversa, and Advancis Pharmaceutical Corp. Dr.
Hockmeyer is also a member of the Board of Directors of
the Biotechnology Industry Organization, the Technology
Council of Maryland, a member of the Board of Visitors of
the University of Maryland Biotechnology Institute, the
University of Maryland Baltimore County and the Board of
Advisors of the Institute of Human Virology.
David M. Mott Mr. Mott (age 36) was appointed Vice Chairman and Chief
Executive Officer in October 2000. He joined the Company
in April 1992 as Vice President with responsibility for
business development, strategic planning and investor
relations. In 1994, Mr. Mott assumed additional
responsibility for the medical and regulatory groups, and
in March 1995 was appointed Executive Vice President and
Chief Financial Officer. In November 1995, Mr. Mott was
appointed to the position of President and Chief
A-1
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
---- ----------------------------------------------------------
Operating Officer and was elected to the Board of
Directors. In October 1998, Mr. Mott was appointed Vice
Chairman and Chief Financial Officer. Prior to joining the
Company, he was a vice President in the Health Care
Investment Banking Group at Smith Barney, Harris Upham &
Co., Inc. Mr. Mott is Chairman of the Board of Directors
of Conceptis Technologies and also serves on the Board of
Trustees of St. James School and on the Board of Governors
of Beauvoir, the National Cathedral Elementary School. He
holds a bachelor of arts degree from Dartmouth College.
Melvin D. Booth Mr. Booth (age 56) joined the Company in October 1998 as
President and Chief Operating Officer and was elected to
serve on the Board of Directors in November 1998. From
July 1995 until October 1998, Mr. Booth was President,
Chief Operating Officer and a member of the Board of
Directors of Human Genome Sciences, Inc. Prior to this
time, Mr. Booth was employed at Syntex Corporation from
1975 to 1995, where he held a variety of positions,
including President of Syntex Laboratories, Inc. from 1993
to 1995 and Vice President of Syntex Corporation from 1992
to 1995. From 1992 to 1993, he served as the President of
Syntex Pharmaceuticals Pacific. From 1991 to 1992, he
served as an area Vice President of Syntex, Inc. From 1986
to 1991, he served as the President of Syntex, Inc.,
Canada. Mr. Booth is a past Chairman of the Pharmaceutical
Manufacturers Association of Canada, and is currently a
board member of NovaScreen Biosciences Corporation and
Spacehab, Inc. Mr. Booth graduated from Northwest Missouri
State University and holds a Certified Public Accountant
Certificate.
Franklin H. Top, Jr., M.D. Dr. Top (age 66) joined the Company in June 1988 as
Executive Vice President. He was elected to the Board of
Directors in July 1988 and became the Company's Medical
Director in 1990. From 1987 to 1988, Dr. Top served as
Senior Vice President for Clinical and Regulatory Affairs
at Praxis. Prior to 1987, Dr. Top served for 22 years in
the U.S. Army Medical Research and Development Command,
where he was appointed Director, Walter Reed Army
Institute of Research in 1983. Dr. Top holds a doctorate
of medicine cum laude and a bachelor of science degree in
biochemistry from Yale University.
M. James Barrett, Ph.D. Dr. Barrett (age 59) has been a director of the Company
since 1988. As of September 2001 he is the Chairman and a
director of Sensors for Medicine and Science, Inc. and is
General Partner of New Enterprise Associates. From January
1997 to September 2001 he was founder Chairman of the
Board and Chief Executive Office of Sensors for Medicine
and Science, Inc. From July 1987 to September 1996, he was
Chief Executive Officer and a director of Genetic Therapy,
Inc. From 1982 to July 1987, Dr. Barrett served as
President of Life Technologies, Inc. and its
A-2
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
---- ----------------------------------------------------------
predecessor, Bethesda Research Laboratories, Inc. Prior to
1982, he was employed at SmithKline Beecham Corporation
for 13 years, where he held a variety of positions,
including President of its In Vitro Diagnostic Division
and President of SmithKline Clinical Laboratories. Dr.
Barrett holds a doctorate in biochemistry from the
University of Tennessee and a master's degree in business
administration from the University of Santa Clara.
James H. Cavanaugh, Ph.D. Dr. Cavanaugh (age 64) has been a director of the Company
since September 1990 and has been President of HealthCare
Ventures L.L.C. (HCV) since 1989. Prior thereto, Dr.
Cavanaugh served as President of SmithKline and French
Laboratories U.S., Inc., from March 1985 to February 1989
and as President of SmithKline Clinical Laboratories from
1981 to 1985. Prior thereto, Dr. Cavanaugh was the
President of Allergan International, a specialty eye care
company. Dr. Cavanaugh also serves as a member of the
Board of Directors of 3-Dimensional Pharmaceuticals, Inc.,
Shire Pharmaceuticals Group PLC, Diversa Corp. and
Versicor, Inc. Prior to his industry experience, Dr.
Cavanaugh was Deputy Assistant to the President for
Domestic Affairs and Deputy Chief of the White House
Staff. Before his White House tour, he served as Deputy
Assistant Secretary for Health and Scientific Affairs in
the U.S. Department of Health, Education and Welfare and
as Special Assistant to the Surgeon General of the U.S.
Public Health Service. In addition to serving on the
boards of directors of several health care and
biotechnology companies, Dr. Cavanaugh currently serves on
the Board of Trustees of the National Center For Genome
Resources, the Board of Directors of the National Venture
Capital Association and as Trustee Emeritus of the
California College of Medicine. He has served on the Board
of Directors of the Pharmaceutical Manufacturers
Association, Unihealth America, and the Proprietary
Association. He was a Founding Director of the Marine
National Bank in Santa Ana, California. Dr. Cavanaugh
holds a doctorate and a master's degree from the
University of Iowa and a bachelor of science degree from
Fairleigh Dickinson University.
Barbara Hackman Franklin Ms. Franklin (age 61) has been a director of the Company
since November 1995 and, since January 1995, serves as the
President and Chief Executive Officer of Barbara Franklin
Enterprises, a private international consulting and
investment firm in Washington, D.C. Between January 1993
and January 1995, she was a lecturer and served as a
director of various corporations and organizations.
Previously, Ms. Franklin served as the 29th U.S. Secretary
of Commerce. She has also served as an Alternate
Representative to the United Nations General Assembly. Ms.
Franklin founded Franklin Associates, an internationally
A-3
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
---- ----------------------------------------------------------
recognized consulting firm, and served as its President
from 1984 through 1992. She was Senior Fellow of the
Wharton School of the University of Pennsylvania
(1979-1988), one of the original Commissioners of the U.S.
Consumer Product Safety Commission (1973-1979) and a staff
assistant to the President, creating the first White House
effort to recruit women for high level government jobs
(1971-1973). Earlier she held executive positions at
Citibank and the Singer Company. Ms. Franklin currently
serves on the board of directors of Aviron; Aetna Inc.;
The Dow Chemical Company; Milacron, Inc; Watson Wyatt,
Inc.; and is Chairman of the Board of Guest Services,
Inc., a private hospitality company. She has been a
director of the Nasdaq Stock Market, Inc. and the American
Institute of CPA's and has been awarded the John J. McCloy
Award for contributions to audit excellence. Ms. Franklin
graduated from the Pennsylvania State University and
received a master's degree in business administration from
Harvard University.
Lawrence C. Hoff Mr. Hoff (age 72) has been a director of the Company since
April 1991. In 1990, Mr. Hoff retired as President and
Chief Operating Officer of the Upjohn Company. Mr. Hoff
joined Upjohn in 1950 as a pharmaceutical sales
representative. He was appointed Vice President for
Domestic Pharmaceutical marketing in 1969. In 1973, Mr.
Hoff was elected to the Board of Directors of Upjohn and
the following year became Vice President and General
Manager of Domestic Pharmaceutical Operations. He was
promoted to Executive Vice President in 1977, was named
President in 1984, and President and Chief Operating
Officer in 1987. Mr. Hoff was elected to the Board of
Directors of the Pharmaceuticals Manufacturers Association
("PMA", now known as Pharma) in 1984. He was elected
Chairman-elect of the PMA in 1986 and Chairman in 1987.
Mr. Hoff graduated from Stanford University and has
received honorary degrees from the Massachusetts College
of Pharmacy and Allied Health Sciences and from Kalamazoo
College.
Gordon S. Macklin Mr. Macklin (age 73) has been a director of the Company
since July 1994. He is currently Deputy Chairman of White
Mountains Insurance Group, Ltd. Mr. Macklin has been an
independent financial advisor since 1992. He served as
Chairman of the White River Corporation from 1994 to 1998.
From 1987 through 1992, he was Chairman of Hambrecht and
Quist Group, an investment banking and venture capital
firm. Previously, Mr. Macklin was President of the
National Association of Securities Dealers, Inc., from
1970 through 1987. He also served as Chairman of National
Clearing Corporation (1970 to 1975) and as a partner and
member of the Executive Committee of McDonald & Company
Securities, Inc., where he was employed from 1950 through
1970. Mr. Macklin serves on the Boards of Martek
Biosciences
A-4
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
---- ----------------------------------------------------------
Corporation, Overstock.com, Spacehab, Inc., WorldCom,
Inc., White Mountains Insurance Group, Ltd., and is
director, trustee or managing general partner, as the case
may be, of 48 of the investment companies in the Franklin
Templeton Group of Funds.
James F. Young James F. Young, Ph.D. (age 48) has over 20 years of
experience in the fields of molecular genetics,
microbiology, immunology and pharmaceutical development.
Dr. Young was promoted to the position of President,
Research and Development in November 2000. He joined
MedImmune in 1989 as Vice President, Research and
Development. In 1995, he was promoted to Senior Vice
President and in 1999 he was promoted to Executive Vice
President, Research and Development. Throughout this
period he has overseen the preclinical development of all
products in MedImmune's pipeline, including the company's
flagship product, Synagis-Registered Trademark-, which is
the first and still the only monoclonal antibody approved
for an infectious disease.
Prior to MedImmune, from 1983 to 1989 Dr. Young was
instrumental in building the department of molecular
genetics at Smith Kline & French Laboratories, culminating
in the position of Director, Department of Molecular
Genetics. From 1978 to 1983, he was on the faculty of the
department of microbiology at Mount Sinai School of
Medicine in New York, NY.
Dr. Young received his doctorate in microbiology and
immunology from Baylor College of Medicine in Houston,
Texas and Bachelor of Science degrees in biology and
general science from Villanova University in Villanova,
Pennsylvania.
Gregory S. Patrick Mr. Gregory S. Patrick (age 50) joined MedImmune as Senior
Vice President and Chief Financial Officer in February
2001. From August, 1999 through February, 2001, he served
as Chief Financial Officer for Ventiv Health, Inc., a
global outsourced sales and marketing services company,
serving the pharmaceutical, life sciences, and biotech
industries. Previously, Mr. Patrick spent 14 years at
Merck & Co., Inc., where he held a number of senior
financial positions, including Vice President and Group
Controller with responsibility for Merck's research,
worldwide vaccines, and Asia/Pacific human health
marketing divisions. Mr. Patrick also served as Vice
President and Controller of Merck's manufacturing
division, where he made substantial contributions in
identifying opportunities to enhance financial
performance, in establishing appropriate performance
metrics, and in crafting and implementing the division's
strategic vision. Previously, Mr. Patrick held senior
positions in Merck's financial evaluation and analysis
area, where he was instrumental
A-5
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
---- ----------------------------------------------------------
in the analysis, structuring, and negotiation of joint
ventures and product licensing agreements.
Prior to his Merck experience, Mr. Patrick was an
associate with Booz, Allen & Hamilton, and also held a
range of financial and engineering roles at Exxon. He
holds a B.S. and M.E. in environmental engineering with a
minor in chemical engineering from Rensselear Polytechnic
Institute and an M.B.A. in Finance from New York
University.
Armando Anido Mr. Armando Anido (age 44), the Senior Vice President of
Sales and Marketing, joined the Company in 1999. Prior to
joining the Company, Mr. Anido was Vice President of CNS
Marketing at Glaxo Wellcome, Inc. from 1996 to 1999. While
there, he had profit and loss responsibility for a CNS
business, managed the CNS marketing team, and was directly
responsible for the launches of seven products/line
extensions within 24 months. Prior to this time, Mr. Anido
served in various positions at Lederle Laboratories from
1989 to 1995, culminating in his service as the Vice
President of Anti-Infectives Marketing.
Mr. Anido is a registered pharmacist, and holds a Bachelor
of Science in pharmacy and a Master of Business
Administration degree from West Virginia University.
Edward M. Connor, Jr., M.D. Dr. Connor (age 49) joined the Company in 1994 as Director
of Clinical Studies and was promoted to Vice President in
1995 and Senior Vice President, Clinical Development in
2000. During this time, he directed the pivotal trial for
licensure of RespiGam-Registered Trademark- and the
clinical program that led to FDA approval of
Synagis-Registered Trademark-. Dr. Connor is currently
responsible for all clinical research activities for
MedImmune's pipeline. From 1985 to 1994, Dr. Connor served
as Chief of Pediatric Infectious Diseases, Director of
Pediatric HIV Research, and Principal Investigator of the
Pediatric AIDS Clinical Trials Unit at University of
Medicine and Dentistry of New Jersey, where he conducted
studies of the epidemiology and treatment of AIDS in
children, as well as the effects of antiviral compounds on
the transmission of HIV from mother to newborn.
Dr. Connor served as Chairman of the National Institutes
of Allergy and Infectious Diseases Pediatric AIDS Clinical
Trials Group and Chairman of the Perinatal Transmission
Committee. He has been a consultant to numerous national
and international agencies in the areas of clinical
research. Dr. Connor graduated SUMMA CUM LAUDE from
Villanova University with a Bachelor of Science in Biology
and received his doctorate in medicine from the University
of Pennsylvania School of Medicine. He was a Resident and
Chief Resident in Pediatrics at Northwestern University
School of Medicine (Children's Memorial Hospital) and
completed a Fellowship in Pediatric Infectious Diseases
and Immunology and
A-6
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
---- ----------------------------------------------------------
was the Bradford Scholar at the University of Rochester
School of Medicine and Dentistry.
Michael Richman Mr. Michael S. Richman (age 40) joined the Company in 1996
as Vice President, Business Development. In 2000,
Mr. Richman was appointed to the position of Senior Vice
President, Corporate Development and Administration
responsible for business development, legal affairs, and
project management. Prior to joining the Company,
Mr. Richman spent 12 years at Chiron Corporation where he
held the position of Director, Corporate Business
Development with responsibility for business development
in diagnostics, vaccines, and therapeutic. Other positions
held at Chiron included Manager of Intellectual Property
responsible for building and protecting the organization's
patent and trademark portfolio, as well as an initial
position in research.
Mr. Richman holds a Bachelor of Science degree in
Genetics/ Molecular Biology from the University of
California-Davis and a Masters Science Business
Administration degree in International Business from San
Francisco State University.
DIRECTOR AND OFFICER OF APPLE MERGER CORP.
David Mott is the chief executive officer and sole director of Apple Merger
Corp. Additional information regarding Mr. Mott is set forth above.
A-7
ANNEX B
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
DATED AS OF DECEMBER 2, 2001
AMONG
MEDIMMUNE, INC.,
APPLE MERGER CORP.
AND
AVIRON
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
--------
ARTICLE I THE OFFER........................................................... 1
Section 1.1 The Offer................................................... 1
Section 1.2 Company Actions............................................. 3
Section 1.3 Directors of the Company.................................... 3
ARTICLE II THE MERGER......................................................... 4
Section 2.1 The Merger.................................................. 4
Section 2.2 Closing..................................................... 4
Section 2.3 Effective Time.............................................. 5
Section 2.4 Certificate of Incorporation and Bylaws..................... 5
Section 2.5 Directors and Officers...................................... 5
ARTICLE III CONVERSION AND EXCHANGE OF STOCK.................................. 5
Section 3.1 Effect on Capital Stock..................................... 5
Section 3.2 Exchange of Certificates.................................... 6
Section 3.3 Stock Options............................................... 8
Section 3.4 Dissenting Shares........................................... 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................... 9
Section 4.1 Organization, Standing and Corporate Power.................. 9
Section 4.2 Subsidiaries................................................ 9
Section 4.3 Capital Structure........................................... 9
Section 4.4 Authority; Noncontravention................................. 10
Section 4.5 SEC Documents............................................... 11
Section 4.6 Information Supplied........................................ 12
Section 4.7 Absence of Certain Changes or Events........................ 12
Section 4.8 Litigation.................................................. 12
Section 4.9 Contracts................................................... 12
Section 4.10 Compliance with Laws........................................ 13
Section 4.11 Absence of Changes in Benefit Plans......................... 14
Section 4.12 ERISA Compliance............................................ 14
Section 4.13 Labor Relations............................................. 16
Section 4.14 Taxes....................................................... 17
Section 4.15 Excess Parachute Payments................................... 19
Section 4.16 Title to Properties......................................... 19
Section 4.17 Intellectual Property....................................... 19
Section 4.18 Voting Requirements......................................... 20
Section 4.19 State Takeover Statutes..................................... 20
Section 4.20 Brokers..................................................... 20
Section 4.21 Opinion of Financial Advisor................................ 20
Section 4.22 Rights Agreement............................................ 20
Section 4.23 FM.......................................................... 21
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.................... 22
Section 5.1 Organization, Standing and Corporate Power.................. 22
Section 5.2 Capital Structure........................................... 22
Section 5.3 Authority; Noncontravention................................. 23
Section 5.4 Parent SEC Documents........................................ 23
Section 5.5 Information Supplied........................................ 24
Section 5.6 Absence of Certain Changes or Events........................ 24
B-i
PAGE
--------
Section 5.7 Litigation.................................................. 24
Section 5.8 Compliance with Laws........................................ 24
Section 5.9 Tax Matters................................................. 25
Section 5.10 Interim Operations of Sub................................... 25
Section 5.11 Parent Stockholder Approval................................. 25
Section 5.12 Brokers..................................................... 25
ARTICLE VI COVENANTS.......................................................... 25
Section 6.1 Conduct of Business by the Company.......................... 25
Section 6.2 No Solicitation............................................. 28
Section 6.3 Advice of Changes........................................... 29
Preparation of the Form S-4 and the Proxy Statement;
Section 6.4 Stockholders Meeting........................................ 29
Section 6.5 Accountants' Letters........................................ 30
Section 6.6 Access to Information; Confidentiality...................... 30
Section 6.7 Reasonable Best Efforts..................................... 31
Section 6.8 Indemnification, Exculpation and Insurance.................. 31
Section 6.9 Public Announcements........................................ 32
Section 6.10 Affiliates.................................................. 32
Section 6.11 Stock Exchange Listing...................................... 32
Section 6.12 Tax Treatment............................................... 32
Section 6.13 Stockholder Litigation...................................... 33
Section 6.14 Rights Agreement............................................ 33
Section 6.15 Employee Benefits........................................... 33
Section 6.16 FIRPTA...................................................... 33
Section 6.17 Section 16 Matters.......................................... 33
ARTICLE VII CONDITIONS PRECEDENT.............................................. 34
Conditions to Each Party's Obligation to Effect the
Section 7.1 Merger...................................................... 34
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER................................ 34
Section 8.1 Termination................................................. 34
Section 8.2 Effect of Termination....................................... 35
Section 8.3 Amendment................................................... 35
Section 8.4 Extension; Waiver........................................... 35
Section 8.5 Expenses.................................................... 35
ARTICLE IX GENERAL PROVISIONS................................................. 36
Section 9.1 Nonsurvival of Representations and Warranties............... 36
Section 9.2 Notices..................................................... 36
Section 9.3 Definitions................................................. 37
Section 9.4 Interpretation.............................................. 38
Section 9.5 Counterparts................................................ 38
Section 9.6 Entire Agreement; No Third-Party Beneficiaries.............. 38
Section 9.7 Governing Law............................................... 38
Section 9.8 Assignment.................................................. 38
Section 9.9 Enforcement................................................. 38
Section 9.10 Severability................................................ 39
Section 9.11 Mutual Drafting............................................. 39
Annex A. Conditions to the Offer
Annex B. Form of Affiliate Letter
B-ii
AGREEMENT AND PLAN OF MERGER, dated as of December 2, 2001, among
MedImmune, Inc., a Delaware corporation ("Parent"), Apple Merger Corp., a
Delaware corporation and a wholly-owned subsidiary of Parent ("Sub"), and
Aviron, a Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of the Company, Parent and Sub each has, in
light of and subject to the terms and conditions set forth herein,
(i) determined that a business combination between Parent and the Company is
fair to and in the best interests of their respective stockholders and
(ii) accordingly has approved an exchange offer (the "Offer") as described
herein and a merger (the "Merger") of Sub with and into the Company, with the
Company as the surviving corporation (the "Surviving Corporation"), upon the
terms and subject to the conditions set forth herein;
WHEREAS, by resolutions duly adopted, the respective Boards of Directors of
the Company, Parent and Sub have approved and adopted this Agreement and the
transactions contemplated hereby; and
WHEREAS, for U.S. Federal income tax purposes, Parent, Sub and the Company
intend that the Offer and the Merger shall be treated as an integrated
transaction (together, the "Transaction") and shall qualify as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained in this Agreement, the parties
hereto agree as follows:
ARTICLE I
THE OFFER
Section 1.1 THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with the terms hereof and that none of the events set forth in
Section 5 of Annex A hereto shall have occurred or be existing, Sub shall
commence, within the meaning of Rule 14d-2 promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act"), as promptly as reasonably practicable
after the date hereof, the Offer to exchange 1.075 (the "Exchange Ratio") shares
of common stock, par value $0.01 per share, together with the associated rights
to purchase Series B Junior Preferred Stock, par value $0.01 per share
(collectively, the "Parent Shares"), of Parent for each outstanding share of
common stock, par value $0.001 per share (the "Shares"), of the Company.
(b) The obligation of Sub to accept for payment and pay for Shares validly
tendered pursuant to the Offer shall be subject only to the conditions set forth
in Annex A hereto (any of which may be waived in whole or in part by Sub in its
reasonable discretion, except that Sub shall not waive the Minimum Condition (as
defined in Annex A), the Tax Opinion Condition or the conditions set forth in
paragraphs (2), (3) or (4) of Annex A without the prior written consent of the
Company) and to the terms and conditions of this Agreement. Sub expressly
reserves the right to increase the consideration payable in the Offer and to
make any other changes in the terms of the Offer; provided, however, that no
change may be made without the prior written consent of the Company which
(i) changes the form of consideration or decreases the amount payable per Share
tendered pursuant to the Offer, (ii) reduces the number of Shares that are
subject to the Offer, (iii) increases the Minimum Condition, (iv) imposes
conditions to the Offer in addition to the conditions set forth in Annex A
hereto, (v) except as provided in Section 1.1(c), extends the Offer or
(vi) amends any other term of the Offer in any manner adverse to the holders of
the Shares. No certificates or scrip representing fractional Parent Shares shall
be issued in connection with the exchange of Parent Shares for Shares upon
consummation of the Offer, and in lieu thereof each tendering stockholder who
would otherwise be entitled to a fractional Parent Share in the Offer will be
paid an amount in cash equal to the product
B-1
obtained by multiplying (A) the fractional share interest to which such holder
(after taking into account all Shares validly tendered for exchange and not
withdrawn by such holder) would otherwise be entitled by (B) the closing price
for a Parent Share as reported in the New York City edition of The Wall Street
Journal (or, if not reported thereby, any other authoritative source) on the
date Sub accepts Shares for exchange in the Offer. The Company agrees that no
Shares held by the Company or any of its subsidiaries will be tendered to Sub
pursuant to the Offer.
(c) Subject to the terms of the Offer and this Agreement, Sub will accept
for exchange and pay for all Shares validly tendered pursuant to the Offer as
promptly as practicable after the expiration of the Offer. The initial
expiration date of the Offer shall be the twentieth business day following the
commencement of the Offer. Notwithstanding anything herein, Sub may, without the
consent of the Company, (i) and agrees to at the request of the Company, extend
the Offer for successive periods of not in excess of 10 business days if at any
expiration date of the Offer any of the conditions to the Offer shall not be
satisfied or waived, (ii) extend the Offer for any period required by any rule,
regulation, interpretation or position of the SEC or the staff thereof
applicable to the Offer or any period required by applicable law and (iii) if
less than 90% of the outstanding Shares shall have been validly tendered
pursuant to the Offer as of the scheduled or extended expiration date and Sub
shall have irrevocably waived the conditions to the Offer set forth in Sections
5(c)-(h) of Annex A, extend the Offer for an aggregate period of not more than
10 business days beyond the latest expiration date that would otherwise be
permitted under this sentence. In addition, Sub may elect to provide a
subsequent offering period aggregating no more than 20 business days after the
acceptance of Shares pursuant to the Offer pursuant to Rule 14d-11 promulgated
under the Exchange Act to meet the objective (which is not a condition to the
Offer) that there be validly tendered a number of Shares which constitutes at
least 90% of the then outstanding Shares.
(d) On the date of the commencement of the Offer, Parent shall file with the
SEC a registration statement on Form S-4 (the "Form S-4") to register the offer
and sale of Parent Shares pursuant to the Offer. The Form S-4 will include a
preliminary prospectus containing the information required under Rule 14d-4(b)
promulgated under the Exchange Act. On the date of commencement of the Offer,
Parent and Sub shall (i) file with the SEC a Tender Offer Statement on Schedule
TO which will contain or incorporate by reference all or part of the preliminary
prospectus and form of the related letter of transmittal (together with any
supplements or amendments, the "Offer Documents") and (ii) cause the Offer
Documents to be disseminated to the holders of Shares. Parent and Sub agree that
the Offer Documents shall comply in all material respects with the Securities
Exchange Act of 1934 (the "Exchange Act"), and the rules and regulations
promulgated thereunder and the Offer Documents, on the date first published,
sent or given to the Company's stockholders, shall not 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, in light of
the circumstances under which they were made, not misleading, except that no
covenant or representation is made by Parent or Sub with respect to information
supplied by the Company or any of its stockholders specifically for inclusion or
incorporation by reference in the Offer Documents. Each party hereto agrees
promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that such information shall have become false or
misleading in any material respect. Parent and Sub agree to take all steps
necessary to cause the Offer Documents as so corrected to be filed with the SEC
and the applicable Offer Documents as so corrected to be disseminated to holders
of Shares, in each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given an opportunity to
review and comment on the Offer Documents prior to their being filed with the
SEC or disseminated to the holders of Shares. Parent and Sub agree to provide
the Company and its counsel any comments Parent, Sub or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after the receipt of such comments.
B-2
Section 1.2 COMPANY ACTIONS.
(a) The Company hereby approves of and consents to the Offer and represents
and warrants that the Company's Board of Directors, at a meeting duly called and
held, has duly and by unanimous vote of the directors present (i) determined
that this Agreement and the transactions contemplated hereby, including the
Offer and the Merger, are advisable and are fair to and in the best interests of
the stockholders of the Company, (ii) approved and adopted this Agreement and
the transactions contemplated hereby, including the Offer and the Merger and the
acquisition of Shares pursuant thereto, and (iii) resolved to recommend that the
stockholders of the Company accept the Offer, tender their Shares thereunder and
approve and adopt this Agreement and the Merger. The Company hereby consents to
the inclusion in the Offer Documents of the matters described in the immediately
preceding sentence; provided, however, that such recommendation and approval may
be withdrawn, modified or amended if the Board of Directors of the Company
determines in good faith, after consultation with outside counsel, that failure
to do so would be a breach of its fiduciary duties under applicable law.
(b) On the date of commencement of the Offer, the Company shall file with
the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect
to the Offer (such Schedule 14D-9, and the documents included therein, together
with any supplements or amendments thereto, the "Schedule 14D-9") containing the
recommendation described in paragraph (a) and shall disseminate the
Schedule 14D-9 to the stockholders of the Company. The Company agrees that the
Schedule 14D-9 shall comply in all material respects with the requirements of
the Exchange Act and the rules and regulations promulgated thereunder and, on
the date filed with the SEC and on the date first published, sent or given to
the Company's stockholders, shall not 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, in light of the circumstances
under which they were made, not misleading, except that no covenant is made by
the Company with respect to information supplied by Parent or Sub specifically
for inclusion in the Schedule 14D-9. Each of the Company, Parent and Sub agrees
promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that such information shall have become
false or misleading in any material respect, and the Company further agrees to
take all steps necessary to amend or supplement the Schedule 14D-9 and to cause
the Schedule 14D-9 as so amended or supplemented to be filed with the SEC and
disseminated to the Company's stockholders, in each case as and to the extent
required by applicable federal securities laws. Parent and its counsel shall be
given reasonable opportunity to review and comment upon the Schedule 14D-9 prior
to its filing with the SEC or dissemination to stockholders of the Company. The
Company agrees to provide Parent and its counsel any comments the Company or its
counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments.
(c) The Company shall promptly furnish Parent with mailing labels containing
the names and addresses of all record holders of Shares and with security
position listings of Shares held in stock depositories, each as of a recent
date, together with all other available listings and computer files containing
names, addresses and security position listings of record holders and
non-objecting beneficial owners of Shares. The Company shall furnish Parent with
such additional information, including updated listings and computer files of
holders of Shares, mailing labels and security position listings, and such other
assistance as Parent or its agents may reasonably request.
Section 1.3 DIRECTORS OF THE COMPANY.
(a) Effective upon the acceptance of Shares for payment pursuant to the
Offer (the "Appointment Time"), Parent shall be entitled to designate such
number of directors on the Board of Directors of the Company as is equal to the
product (rounded up to the next whole number) obtained by multiplying the total
number of directors on such Board at that time by the percentage that the number
of Shares
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then beneficially owned by Parent (including such Shares so accepted) bears to
the total number of Shares then outstanding. In furtherance thereof, the Company
and its Board of Directors shall, after the acceptance of such Shares by Parent
or any of its affiliates pursuant to the Offer, upon request of Parent,
immediately increase the size of its Board of Directors or secure the
resignations of such number of incumbent directors or remove such number of
incumbent directors, or any combination of the foregoing, as is necessary to
enable Parent's designees to be so appointed to the Board of Directors of the
Company and shall cause Parent's designees to be so appointed. Effective upon
the acceptance of Shares by Parent or any of its affiliates pursuant to the
Offer, the Company shall, if requested by Parent, also cause directors
designated by Parent to constitute at least the same percentage (rounded up to
the next whole number) of each committee of the Company's Board of Directors as
is on the Company's Board of Directors after giving effect to the foregoing
changes to the composition of the Company's Board of Directors. Notwithstanding
the foregoing, there shall be until the Effective Time (as defined below) at
least two members of the Company's Board of Directors who are directors of the
Company prior to consummation of the Offer (each, a "Continuing Director"),
provided that, in such event, if the number of Continuing Directors shall be
reduced below two for any reason whatsoever, the remaining Continuing Director
shall designate a person to fill such vacancy who shall be deemed to be a
Continuing Director for purposes of this Agreement or, if no Continuing
Directors then remain, the other directors shall designate two persons to fill
such vacancies who shall not be officers or affiliates of the Company, or
officers or affiliates of Parent or any of its subsidiaries, and such persons
shall be deemed to be Continuing Directors for purposes of this Agreement.
(b) Subject to applicable law, the Company shall take all action requested
by Parent necessary to effect any such election or appointment. The Company
shall comply with and immediately take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under Section 1.3(a), including mailing to
stockholders, together with the Schedule 14D-9, the information required by such
Section 14(f) and Rule 14f-1 as is necessary to enable Parent's designees to be
appointed to the Company's Board of Directors. Parent will supply the Company
and be solely responsible for any information with respect to Parent, its
designees and its nominees, officers, directors and affiliates required by such
Section 14(f) and Rule 14f-1.
(c) Following the appointment of Parent's designees to the Company's Board
of Directors pursuant to this Section 1.3 and prior to the Effective Time,
(i) any amendment or termination of this Agreement by the Company, (ii) any
extension or waiver by the Company of the time for the performance of any of the
obligations or other acts of Parent or Merger Sub under this Agreement, or
(iii) any waiver of any of the Company's rights hereunder shall, in any such
case, require the concurrence of a majority of the Continuing Directors then in
office.
ARTICLE II
THE MERGER
Section 2.1 THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), Sub shall be merged with and into the Company at the Effective
Time. Following the Effective Time, the separate corporate existence of Sub
shall cease and the Company shall continue as the Surviving Corporation and
shall succeed to and assume all the rights and obligations of Sub in accordance
with the DGCL.
Section 2.2 CLOSING. The closing of the Merger (the "Closing") will take
place at 10:00 a.m. on a date to be specified by the parties (the "Closing
Date"), which shall be no later than the second business day after satisfaction
or waiver of the conditions set forth in ARTICLE VII (other than those
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or waiver of those conditions), at the offices of Dewey
Ballantine LLP, 1301 Avenue of the Americas, New York, New York 10019, unless
another time, date or place is agreed to by the parties hereto.
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Section 2.3 EFFECTIVE TIME. Subject to the provisions of this Agreement,
as soon as practicable on the Closing Date, the parties shall file a certificate
of merger or a certificate of ownership and merger (the "Certificate of Merger")
executed in accordance with the relevant provisions of the DGCL and shall make
all other filings or recordings required under the DGCL. The Merger shall become
effective at such time as the Certificate of Merger is duly filed with the
Secretary of State of the State of Delaware, or at such other time as Parent and
the Company shall agree and specify in the Certificate of Merger (the time the
Merger becomes effective being the "Effective Time").
Section 2.4 CERTIFICATE OF INCORPORATION AND BYLAWS.
(a) The Certificate of Incorporation of Sub, as in effect immediately prior
to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided therein or by
applicable law.
(b) The Bylaws of Sub, as in effect immediately prior to the Effective Time,
shall be the Bylaws of the Surviving Corporation until thereafter amended as
provided therein or by applicable law.
Section 2.5 DIRECTORS AND OFFICERS.
(a) The directors of Sub immediately prior to the Effective Time shall be
the directors of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified.
(b) The officers of the Company immediately prior to the Effective Time
shall be the officers of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified.
ARTICLE III
CONVERSION AND EXCHANGE OF STOCK
Section 3.1 EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any Shares or
any shares of capital stock of Sub:
(a) CAPITAL STOCK OF SUB. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one validly issued, fully paid
and nonassessable share of common stock of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED STOCK. Each Share that
is owned by Parent, Sub or the Company shall automatically be canceled and
retired and shall cease to exist, and no Parent Shares or other consideration
shall be delivered in exchange therefor.
(c) CONVERSION OF SHARES. Subject to Section 3.2(e), each issued and
outstanding Share (other than any shares to be canceled in accordance with
Section 3.1(b)) shall be converted into the right to receive a number of validly
issued, fully paid and nonassessable Parent Shares equal to the Exchange Ratio
(together with the amount of cash in lieu of fractional shares payable pursuant
to Section 3.2(e), the "Merger Consideration"). As of the Effective Time, all
such Shares shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of a certificate which
immediately prior to the Effective Time represented any such Shares shall cease
to have any rights with respect thereto, except the right to receive the Merger
Consideration, without interest. Notwithstanding anything herein to the
contrary, if between the date of this Agreement and the Effective Time the
outstanding Shares or Parent Shares shall have been changed into a different
number of shares or a different class, by reason of the occurrence or record
date of any stock dividend, other extraordinary dividend, subdivision,
reclassification, recapitalization, split, combination, exchange of shares or
similar transaction, the Exchange Ratio shall be appropriately adjusted.
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Section 3.2 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. As of the Effective Time, Parent shall deposit with
American Stock Transfer Company of New York or another bank or trust company
designated by Parent (the "Exchange Agent"), for the benefit of the holders of
Shares, for exchange in accordance with this ARTICLE III, through the Exchange
Agent, certificates representing the Parent Shares (such Parent Shares, together
with any dividends or distributions with respect thereto with a record date
after the Effective Time and any cash payments in lieu of any fractional Parent
Shares, being hereinafter referred to as the "Exchange Fund") issuable pursuant
to Section 3.1 in exchange for outstanding Shares.
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable 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 represented outstanding Shares (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 delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
surrendering the Certificates in exchange for certificates representing the
Merger Consideration. Upon surrender of a Certificate for cancellation to the
Exchange Agent, together with such letter of transmittal, duly executed, and
such other documents as may reasonably be required by the Exchange Agent, the
holder of such Certificate shall be entitled to receive in exchange therefor
(x) a certificate representing that number of whole Parent Shares which such
holder has the right to receive pursuant to the provisions of this ARTICLE III
after taking into account all the Shares then held by such holder under all such
Certificates so surrendered, (y) cash in lieu of fractional Parent Shares to
which such holder is entitled pursuant to Section 3.2(e) and (z) any dividends
or other distributions to which such holder is entitled pursuant to
Section 3.2(c), and the Certificate so surrendered shall forthwith be canceled.
In the event of a transfer of ownership of Shares which is not registered in the
transfer records of the Company, a certificate representing the proper number of
Parent Shares may be issued to a person other than the person in whose name the
Certificate so surrendered is registered, if, upon presentation to the Exchange
Agent, such Certificate shall be properly endorsed or otherwise be in proper
form for transfer and the person requesting such issuance shall pay any transfer
or other taxes required by reason of the issuance of Parent Shares to a person
other than the registered holder of such Certificate or establish to the
reasonable satisfaction of Parent that such tax has been paid or is not
applicable. Notwithstanding anything to the contrary contained herein, no
certificate representing Parent Shares or cash in lieu of a fractional share
interest shall be delivered to a person who is an "affiliate" (as contemplated
by Section 6.10 hereof) of the Company unless such affiliate has theretofore
executed and delivered to Parent the agreement referred to in Section 6.10.
Until surrendered as contemplated by this Section 3.2(b), 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 and any dividends or other
distributions to which such holder is entitled pursuant to Section 3.2(c). No
interest will be paid or will accrue on any amounts payable to holders of
Certificates pursuant to this ARTICLE III.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends or
other distributions with respect to Parent Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate with
respect to the Parent Shares represented thereby, and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 3.2(e)
until the holder of record of such Certificate shall surrender such Certificate
in accordance with this ARTICLE III. Subject to the effect of applicable
escheat, tax or other applicable laws, following surrender of any such
Certificate, there shall be paid to the record holder of the certificate
representing whole Parent Shares issued in exchange therefor, without interest,
(i) promptly after such surrender, the amount of any cash payable in lieu of a
fractional Parent Shares to which such holder is entitled pursuant to
Section 3.2(e)
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and the amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole Parent Shares and
(ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time but prior to such
surrender and a payment date subsequent to such surrender payable with respect
to such whole Parent Shares.
(d) NO FURTHER OWNERSHIP RIGHTS IN SHARES. All Parent Shares issued upon
the surrender for exchange of Certificates in accordance with the terms of this
ARTICLE III (including any cash paid pursuant to Section 3.2(c) or
Section 3.2(e)) shall be deemed to have been issued (and paid) in full
satisfaction of all rights pertaining to the Shares previously represented by
such Certificates.
(e) NO FRACTIONAL SHARES. No certificates or scrip representing fractional
Parent Shares shall be issued upon the surrender for exchange of Certificates,
no dividend or distribution of Parent shall relate to such fractional share
interests and such fractional share interests will not entitle the owner thereof
to vote or to any rights of a stockholder of Parent. Notwithstanding any other
provision of this Agreement, each holder of Shares exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a Parent
Share (after taking into account all Certificates delivered by such holder)
shall receive, in lieu thereof, cash (without interest) in an amount equal to
such fractional part of a Parent Shares multiplied by the closing price for a
Parent Share as reported in the New York City edition of The Wall Street Journal
(or, if not reported thereby, any other authoritative source) on the date prior
to the date of the Merger.
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund which
remains undistributed to the holders of the Certificates for six months after
the Effective Time shall be delivered to Parent, upon demand, and any holders of
the Certificates who have not theretofore complied with this ARTICLE III shall
thereafter look only to Parent for, and Parent shall remain liable for, payment
of their claim for Merger Consideration and any dividends or distributions with
respect to Parent Shares pursuant to Section 3.2(c).
(g) NO LIABILITY. None of Parent, Sub, the Company or the Exchange Agent
shall be liable to any person in respect of any Parent Shares (or dividends or
distributions with respect thereto) or cash in lieu of fractional Parent Shares
or cash from the Exchange Fund, in each case delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(h) 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.
(i) 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 the
Surviving Corporation, the posting by such person of a bond in such reasonable
amount as the Surviving Corporation may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration and unpaid dividends and distributions on Parent Shares
deliverable in respect thereof, in each case pursuant to this Agreement.
(j) WITHHOLDING. Parent or the Exchange Agent (and Sub in respect of the
Offer) shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Shares such amounts as
Parent or the Exchange Agent (and Sub in respect of the Offer) are required to
deduct and withhold under the Code, or any provision of state, local or foreign
tax law, with respect to the making of such payment. To the extent that amounts
are so withheld by Parent or the Exchange Agent (and Sub in respect of the
Offer), such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of Shares in respect of whom such
deduction and withholding was made by Parent or the Exchange Agent (and Sub in
respect of the Offer).
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(k) NO INTEREST. No interest shall be paid or shall accrue on any amounts
to be paid pursuant to this ARTICLE III.
(l) 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 on the stock transfer books of the Surviving
Corporation of the Shares which were outstanding immediately prior to the
Effective Time. From and after the Effective Time, the holders of certificates
representing Shares outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such Shares except as otherwise
provided herein. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Exchange Agent for any reason, they shall be
canceled and exchanged as provided in this ARTICLE III.
Section 3.3 STOCK OPTIONS.
(a) The Board of Directors of the Company (or, if appropriate, any committee
administering the Company Stock Plans) has taken such actions as may be required
to (and no further actions are needed to) cause each Stock Option, whether
vested or unvested, outstanding immediately prior to the Effective Time to be
exercisable solely for a number of Parent Shares (rounded to the nearest whole
share) determined by multiplying the number of Shares subject to such Stock
Option by the Exchange Ratio, at a price per Parent Share (rounded up to the
nearest whole cent) equal to (A) the aggregate exercise price for the Shares
otherwise purchasable pursuant to such Stock Option divided by (B) the aggregate
number of Parent Shares deemed purchasable pursuant to such Stock Option. The
Stock Options shall otherwise be subject to the same terms and conditions
(including provisions regarding vesting) as in effect at the Effective Time. As
used herein, "Stock Options" shall mean options to purchase Shares granted under
any plan or arrangement providing for the grant of options to purchase Shares to
current or former officers, directors, employees or consultants of the Company
or its subsidiaries, other than the Company's 1996 Non-Employee Director and
1996 Employee Stock Purchase Plan (the "Company Stock Plans"). The Company has
made available to Parent true and complete copies of all such plans or
arrangements.
(b) The adjustments provided herein with respect to any Stock Options that
are "incentive stock options" as defined in Section 422 of the Code shall be and
are intended to be effected in a manner which is consistent with Section 424(a)
of the Code.
(c) The Company hereby represents that no Stock Option, or any other
security issued by the Company or any subsidiary or any agreement to which the
Company or any subsidiary is a party or is bound, will entitle any person (other
than Parent as provided herein) to acquire any security of the Surviving
Corporation or any subsidiary.
(d) At or prior to the Effective Time, Parent shall take all corporate
action necessary to reserve for issue a sufficient number of Parent Shares for
delivery upon exercise of Stock Options. No later than five business days after
the Effective Time, Parent shall file a Registration Statement on Form S-8 (or
any successor or other appropriate forms), with respect to the Parent Shares
subject to such Stock Options.
(e) The Company shall take all necessary action to provide that on the day
prior to the Effective Time (the "Termination Date"), (i) any outstanding
options to purchase Shares under the Company's 1996 Employee Stock Purchase Plan
(the "ESPP") shall terminate (ii) all amounts allocated to each participant's
account under the ESPP shall thereupon be used to purchase from the Company
whole Shares at a price determined under the terms of the ESPP for outstanding
offering periods using the Termination Date as the final purchase date for each
such offering period; and (iii) the ESPP will terminate. At the Effective Time,
any Shares so purchased will be treated as provided in Section 3.1 of this
Agreement. The Company shall take all actions necessary so as not to allow any
participant to increase the rate of their contributions to the ESPP between
December 1, 2001 and the Termination
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Date. Prior to the Effective Time, the Company shall take all actions (including
amending the terms of the ESPP) necessary to give effect to the transactions
contemplated by Section 3.3(e).
Section 3.4 DISSENTING SHARES. Notwithstanding anything in this
Article III to the contrary, if the Merger is effectuated pursuant to
Section 253 of Delaware Law, Shares outstanding immediately prior to the
Effective Time and held by a holder who has demanded appraisal for such Shares
in accordance with the relevant provisions of the DGCL shall not be converted
into a right to receive the Merger Consideration, unless such holder fails to
perfect or withdraws or otherwise loses his or her right to appraisal. If after
the Effective Time such holder fails to perfect or withdraws or loses his or her
right to appraisal, such Shares shall be treated as if they had been converted
as of the Effective Time into a right to receive the Merger Consideration. The
Company shall give Parent prompt notice of any demands received by Company for
appraisal of Shares, and Parent shall have the right to participate in all
negotiations and proceedings with respect to such demands. Company shall not,
except with the prior written consent of Parent, make any payment with respect
to, or settle or offer to settle, any such demands. Any amounts paid to a holder
pursuant to a right of appraisal will be paid by Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the disclosure schedule delivered by the Company to
Parent prior to the execution of this Agreement, which disclosure schedule
specifies the section or subsection of this Agreement to which the exception
relates (unless it is readily apparent that such disclosure is applicable to
other such section(s)) (the "Company Disclosure Schedule"), the Company
represents and warrants to Parent and Sub as follows:
Section 4.1 ORGANIZATION, STANDING AND CORPORATE POWER. Each of the
Company and its subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it is organized
and has all requisite corporate power and authority to own, lease or operate its
properties and to carry on its business as now being conducted. Each of the
Company and its subsidiaries is duly qualified or licensed to do business and is
in good standing in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure to be so
qualified or licensed individually or in the aggregate is not reasonably likely
to have a Material Adverse Effect. The Company has made available to Parent
prior to the execution of this Agreement complete and correct copies of its
Restated Certificate of Incorporation, as amended (the "Company Certificate of
Incorporation") and Bylaws (the "Bylaws"), and the comparable organizational
documents of each of its subsidiaries, in each case as amended to the date
hereof.
Section 4.2 SUBSIDIARIES. Exhibit 21.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2000 lists all the subsidiaries
of the Company. All the outstanding shares of capital stock of, or other equity
interests in or securities issued by, each such subsidiary have been validly
issued and are fully paid and nonassessable and are owned directly or indirectly
by the Company free and clear of all Liens, and free of any restriction on the
right to vote, sell or otherwise dispose of such capital stock or other
interests. Other than such subsidiaries, neither the Company nor any subsidiary
owns any equity or similar interest in any person.
Section 4.3 CAPITAL STRUCTURE.
(a) The authorized capital stock of the Company consists of 100,000,000
Shares and 5,000,000 shares of preferred stock, par value $.001 per share
("Preferred Stock"). At the close of business on November 28, 2001,
(i) 31,173,795 Shares were issued and outstanding, (ii) 555,151 Shares were held
by the Company in its treasury, none of which were acquired, directly or
indirectly, by the Company from any of its subsidiaries, and no Shares are held
by any subsidiary of the Company, (iii) 6,828,199 Shares were issuable pursuant
to outstanding Stock Options, (iv) 452,033 Shares were issuable pursuant to
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outstanding warrants, (v) 3,200,000 Shares were issuable pursuant to the
Company's 5 1/4% Subordinated Convertible Notes due 2008, (vi) no shares of
Preferred Stock were issued or outstanding and (vii) 250,000 shares of Series A
Junior Participating Preferred Stock were reserved for issuance in connection
with the Rights issued pursuant to the Rights Agreement, dated as of October 8,
1997 (the "Rights Agreement"), between the Company and EquiServe Trust Company
(as successor in interest to BankBoston, N.A.). All outstanding shares of
capital stock of the Company are, and all shares which may be issued pursuant to
the Company Stock Plans will be, when issued in accordance with the terms
thereof, duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. Section 4.3(a) of the Company Disclosure Schedule
lists as of November 28, 2001, each outstanding Stock Option or warrant to
purchase Company securities and the holder thereof, the number of shares
issuable thereunder and the grant date, exercise price, vesting schedule,
expiration date thereof and, if exercisable for securities other than Shares,
the terms of such securities.
(b) Except as referenced in Section 4.3(a): (i) there are no bonds,
debentures, notes or other indebtedness of the Company having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which stockholders of the Company may vote, (ii) other than
resulting from the issuance of Shares pursuant to the Stock Options listed in
Section 4.3(a)(iii), as permitted to be issued under Section 6.1(ii)(y) and
Rights issued under the Rights Agreement, there are no issued, issuable,
reserved for issuance or outstanding (x) shares of capital stock, equity
securities or voting securities of the Company, (y) securities of the Company
convertible into or exchangeable or exercisable for shares of capital stock or
voting securities of the Company, (z) warrants, calls, options or other rights
to acquire from the Company or any subsidiary, and no obligation of the Company
or any subsidiary to issue, any capital stock, equity securities, voting
securities or securities convertible into or exchangeable or exercisable for
capital stock, equity securities or voting securities of the Company or any
subsidiary, and (iii) neither the Company nor any subsidiary is a party to or
bound by any agreement regarding any securities of the Company or any
subsidiary, including regarding the voting (by proxy, voting trust or
otherwise), issuance, repurchase, redemption, delivery, acquisition, disposition
or registration thereof.
Section 4.4 AUTHORITY; NONCONTRAVENTION.
(a) The Company has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby,
subject, in the case of the Merger, to receipt of the Stockholder Approval. The
Board of Directors of the Company has by unanimous vote of the directors present
approved this Agreement, determined that this Agreement and the transactions
contemplated hereby are fair to and in the best interests of the Company and its
stockholders and declared that the Merger is advisable and resolved as set forth
in Section 1.2(a) hereof. This Agreement has been duly executed and delivered by
the Company and, assuming the due authorization, execution and delivery by each
of the other parties thereto, constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
(b) The execution and delivery of this Agreement do not, and the
consummation of the Merger and the other transactions contemplated by this
Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a benefit under, or
alter the rights or obligations of any party under, or result in the creation of
any pledge, claim, lien, charge, encumbrance or security interest of any kind or
nature
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whatsoever (collectively, "Liens") in or upon any of the properties or assets of
the Company or any subsidiary under, (i) the Company Certificate of
Incorporation or Bylaws or the comparable organizational documents of any of its
subsidiaries, (ii) any loan or credit agreement, bond, note, mortgage,
indenture, lease or other contract, agreement, obligation, commitment,
arrangement, understanding, instrument, permit or license applicable to the
Company or any of its subsidiaries or their respective properties or assets or
(iii) subject to the governmental filings and other matters referred to in
paragraph (c) below, any (A) statute, law, ordinance, rule or regulation or
(B) judgment, order or decree, in each case applicable to the Company or any of
its subsidiaries or their respective properties or assets, other than, in the
case of clauses (ii) and (iii), any such conflicts, violations, defaults,
termination, cancellation, acceleration, loss of benefit, alteration of rights
or obligations, Liens or other occurrences that individually or in the aggregate
are not reasonably likely to have a Material Adverse Effect.
(c) No consent, approval, order or authorization of, action by or in respect
of, or registration, declaration or filing with, any Federal, state, local or
foreign government, any court, administrative, regulatory or other governmental
agency, commission or authority or any non-governmental self-regulatory agency,
commission or authority of competent jurisdiction (each, a "Governmental
Entity") is required by or with respect to the Company or any of its
subsidiaries in connection with the execution, delivery and performance of this
Agreement by the Company or the consummation by the Company of the Merger or the
other transactions contemplated by this Agreement, except for (1) the filing of
a premerger notification and report form by the Company under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and any applicable filings and approvals under similar foreign antitrust
laws and regulations, (2) the filing with the Securities and Exchange Commission
(the "SEC") of (A) the Schedule 14D-9 and the information required by
Rule 14f-1, (B) a proxy statement relating to the adoption by the Company's
stockholders of this Agreement (as amended or supplemented from time to time,
the "Proxy Statement") and (C) such reports under the Exchange Act, as may be
required in connection with this Agreement and the transactions contemplated
hereby, (3) the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware and (4) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made individually or in the aggregate is not reasonably likely to
have a Material Adverse Effect.
Section 4.5 SEC DOCUMENTS.
(a) The Company has timely filed all reports, schedules, forms, statements
and other documents (including exhibits and other information incorporated
therein) with the SEC required to be filed by the Company since January 1, 1999
(the "SEC Documents"). As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Documents, and none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Except to the extent that information contained in any SEC
Document has been revised or superseded by a later-filed Filed SEC Document,
none of the SEC Documents contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. For purposes of this Agreement, "Filed SEC
Documents" shall mean SEC Documents filed by the Company and publicly available
prior to the date of this Agreement.
(b) The financial statements of the Company included in the SEC Documents
comply in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present
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the financial position of the Company and its consolidated subsidiaries as of
the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments not material in amount). Except (i) as set
forth in the most recent financial statements included in the Filed SEC
Documents or (ii) for liabilities incurred in connection with this Agreement,
neither the Company nor any of its subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
which, individually or in the aggregate, are reasonably likely to have a
Material Adverse Effect.
Section 4.6 INFORMATION SUPPLIED. None of the information to be supplied
by the Company specifically for inclusion or incorporation by reference in
(i) the Offer Documents, the Form S-4 or the Schedule 14D-9 will, at the time
such documents or any amendments or supplements thereto are filed with the SEC,
are first published, sent or given to stockholders of the Company or become
effective under the Securities Act, 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 light of the circumstances under
which they are made, not misleading or (ii) the Proxy Statement will, at the
date it is first mailed to the Company's stockholders and at the time of the
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, in light of the circumstances under which they are
made, not misleading. The Schedule 14D-9 and the Proxy Statement will comply in
all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder, except that no representation or warranty is made by
the Company with respect to statements made or incorporated by reference therein
based on information supplied by Parent or Sub specifically for inclusion or
incorporation by reference therein.
Section 4.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Filed SEC Documents, since December 31, 2000, (i) the Company and its
subsidiaries have conducted their business only in the ordinary course of
business consistent with past practice, (ii) there has not been any Material
Adverse Change, and (iii) neither the Company nor any subsidiary has taken any
action, or failed to take an action, if such action or failure following the
date hereof would be a violation of Section 6.1.
Section 4.8 LITIGATION. Except as disclosed in the Filed SEC Documents
there is no suit, action or proceeding pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its subsidiaries
or any of their respective properties or for which the Company or any subsidiary
is obligated to indemnify any third party that individually or in the aggregate
is reasonably likely to have a Material Adverse Effect. There is no judgment,
decree, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against, or, to the knowledge of the Company, investigation by any
Governmental Entity involving, the Company or any of its subsidiaries that
individually or in the aggregate is reasonably likely to have a Material Adverse
Effect.
Section 4.9 CONTRACTS. As of the date hereof, except as filed as an
exhibit to the Filed SEC Documents, neither the Company nor any subsidiary is a
party to, and none of their respective properties or assets are bound by, any
material contracts (including relating to distribution, sale, licensing,
marketing, manufacturing, third party suppliers of active ingredients, bulk
product and finished product to the Company). The Company has not received any
notice from any other party to any such material contract, and otherwise has no
knowledge, that such third party intends to terminate, or not renew, any such
material contract, except for such terminations or non-renewals as would not
have a Material Adverse Effect. As of the date hereof, the Company has made
available to Parent true and correct copies of all such contracts. Neither the
Company nor any of its subsidiaries, and, to the knowledge of the Company, no
other party thereto, is in violation of or in default under (nor does there
exist any condition which upon the passage of time or the giving of notice or
both would cause such a violation of or default under) any loan or credit
agreement, bond, note, mortgage, indenture, lease or other contract, agreement,
obligation, commitment, arrangement, understanding, instrument,
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permit or license 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 individually or in
the aggregate are not reasonably likely to have a Material Adverse Effect. As of
the date hereof, except as filed as an exhibit to the Filed SEC Documents,
neither the Company nor any of its subsidiaries (i) has entered into any
material contract with any affiliate of the Company (other than any subsidiary
of the Company) that is currently in effect, (ii) is a party to or otherwise
bound by any agreement or covenant not to compete or by any agreement or
covenant restricting in any material respect the development, marketing or
distribution of the Company's or its affiliates' products or services or the
conduct of their businesses, (iii) agreements regarding the registration of
securities, (iv) is a party to or otherwise bound by any agreement which would
require Parent or any of its affiliates (or than the Company and its
subsidiaries) to pay any amounts or grant any rights to any third party or which
would require the Company or any subsidiary to pay any amounts or grant any
rights based on the activities of Parent or its affiliates (other than the
Company or its subsidiaries) or (v) is a party to or otherwise bound by any
contract, the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the execution or delivery of this
Agreement or the occurrence of any of the transactions contemplated by this
Agreement, or the value of any of the benefits of which will be calculated on
the basis of any of the transactions contemplated by this Agreement, except for
such increases or accelerations as would not have a Material Adverse Effect.
Section 4.10 COMPLIANCE WITH LAWS.
(a) Each of the Company and its subsidiaries is in compliance with all
statutes, laws, ordinances, rules, regulations, judgments, orders and decrees of
any Governmental Entity (collectively, "Legal Provisions") applicable to its
business or operations, except for instances of possible noncompliance that
individually or in the aggregate are not reasonably likely to have a Material
Adverse Effect. Each of the Company and its subsidiaries has in effect all
approvals, authorizations, certificates, filings, franchises, licenses, notices,
permits and rights of or with all Governmental Entities, including all
authorizations under Environmental Laws ("Permits"), necessary for it to own,
lease or operate its properties and assets and to carry on its business and
operations as now conducted, except for the failure to have such Permits that
individually or in the aggregate is not reasonably likely to have a Material
Adverse Effect. There has occurred no default under, or violation of, any such
Permit, except for defaults under, or violations of, Permits that individually
or in the aggregate are not reasonably likely to have a Material Adverse Effect.
The Merger, in and of itself, would not cause the revocation or cancellation of
any such Permit that individually or in the aggregate is reasonably likely to
have a Material Adverse Effect. No action, demand, requirement or, to the
knowledge of the Company, investigation by any Governmental Entity and no suit,
action or proceeding by any person, in each case with respect to the Company or
any of its subsidiaries or any of their respective properties, is pending or, to
the knowledge of the Company, threatened, other than, in each case, those the
outcome of which individually or in the aggregate are not reasonably likely to
have a Material Adverse Effect.
(b) Except for those matters that individually or in the aggregate are not
reasonably likely to have a Material Adverse Effect: (A) each of the Company and
its subsidiaries is, and has been, in compliance with all applicable
Environmental Laws; (B) during the period of ownership or operation by the
Company or its subsidiaries of any of its currently or previously owned, leased
or operated properties, there have been no Releases or threatened Releases of
Hazardous Material in, on, under or affecting such properties or any contiguous
site; (C) prior to the period of ownership or operation by the Company or its
subsidiaries of any of its currently or previously owned, leased or operated
properties, to the knowledge of the Company, there were no Releases or
threatened Releases of Hazardous Material at, in, on, under or affecting any
such property or any contiguous site; and (D) neither the Company nor its
subsidiaries have received any written notice of, or entered into or assumed by
contract, judicial or administrative settlement or operation of law any
indemnification obligation, notice of alleged or potential liability, order,
settlement or decree relating to: (1) any
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violation of any Environmental Laws or the institution or pendency of any suit,
action, claim, proceeding or investigation by any Governmental Entity or any
third party in connection with any alleged violation of Environmental Laws or
any Release of any Hazardous Materials, (2) the response to or remediation of
Hazardous Material at or arising from any of the Company's or its subsidiaries'
activities or properties or any other properties or (3) payment for any response
action relating to or remediation of Hazardous Material at or arising from any
of the Company's or its subsidiaries' activities or properties or any other
properties.
(i) The term "Environmental Laws" means all applicable statutes, treaties,
rules, codes, ordinances, regulations, certificates, orders, directives,
interpretations, licenses, permits, and other authorizations of any
Governmental Entity and judgments, decrees, injunctions, writs, orders
or like action of any court, arbitrator or other administrative,
judicial or quasi-judicial tribunal or agency of competent jurisdiction,
dealing with the protection of health, welfare or the environment,
including, without limitation, flood, pollution or disaster laws and
health and environmental protection laws and regulations, and all other
rules and regulations promulgated thereunder and any provincial,
municipal, waterboard or other local statute, law, rule, regulation or
ordinance relating to public or employee health, safety or environment;
including all laws relating to Releases to air, water, land or
groundwater, relating to the withdrawal or use of groundwater, and
relating to the use, handling, transportation, manufacturing,
introduction into the stream of commerce, or disposal of Hazardous
Materials.
(ii) The term "Hazardous Materials" means any chemical, material, liquid,
gas, substance, or waste, whether naturally occurring or man-made, that
is prohibited, limited, or regulated by or pursuant to an Environmental
Law.
(iii) The term "Release" means spilling, leaking, discharging, injecting,
emitting, and or disposing and placement of a Hazardous Material in any
location that poses a threat thereof.
Section 4.11 ABSENCE OF CHANGES IN BENEFIT PLANS. Since the date of the
most recent audited financial statements included in the Filed SEC Documents,
there has not been any adoption or amendment in any material respect by the
Company or any of its subsidiaries of any collective bargaining agreement or any
Benefit Plan (defined below), or any material change in any actuarial or other
assumption used to calculate funding obligations with respect to any Pension
Plans (defined below), or any change in the manner in which contributions to any
Pension Plans are made or the basis on which such contributions are determined.
Except as set forth in the Filed SEC Documents, there exist no currently binding
employment, consulting, severance, termination or indemnification agreements,
arrangements or understandings between the Company or its subsidiaries and any
current or former officer, director or employee of the Company or its
subsidiaries. There are no collective bargaining or other labor union agreements
to which the Company or its subsidiaries is a party or by which it is bound.
Section 4.12 ERISA COMPLIANCE.
(a) Section 4.12(a) of the Company Disclosure Schedule contains a list of
each pension, retirement, savings, profit sharing, medical, dental, health,
disability, life, death benefit, group insurance, deferred compensation, stock
option, stock purchase, restricted stock, bonus or incentive, severance pay,
employment or termination, and other employee benefit or compensation plan,
trust arrangement, contract, agreement (including pursuant to any collective
bargaining agreement), policy, practice or commitment, whether formal or
informal, written or oral, in each case that are binding commitments of the
Company and its subsidiaries, under which (1) current or former employees,
directors or independent contractors of the Company or any of its subsidiaries
participate or are entitled to participate by reason of their relationship with
the Company or any of its subsidiaries, (2) to which the Company or any of its
subsidiaries is a party or a sponsor or a fiduciary thereof or by which the
Company or any of its subsidiaries (or any of their rights, properties or
assets) is currently bound
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or (3) with respect to which the Company or any of its subsidiaries has any
obligation to make payments or contributions, including, without limitation, all
"employee pension benefit plans" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) (sometimes
referred to herein as "Pension Plans"), "employee welfare benefit plans" (as
defined in Section 3(1) of ERISA) (sometimes referred to herein as "Welfare
Plans") maintained, or contributed to, by the Company, its subsidiaries or any
person or entity that, together with the Company, is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code (a "Commonly
Controlled Entity") for the benefit of any current or former officers, directors
or employees of the Company and its subsidiaries (including any such plans
maintained for current or former foreign employees) (all of the foregoing
referred to collectively herein as "Benefit Plans"). The Company has made
available to Parent true, complete and correct copies of (1) each Benefit Plan
(or, in the case of any unwritten Benefit Plans, descriptions thereof), (2) the
most recent annual report on Form 5500 required to be filed with the Internal
Revenue Service (the "IRS") with respect to each Benefit Plan, (3) the most
recent summary plan description for each Benefit Plan for which such summary
plan description is required and (4) each trust agreement and group annuity
contract relating to any Benefit Plan. Each Benefit Plan maintained or
contributed to by the Company or any of its subsidiaries has been administered
in all material respects in accordance with its terms. The Company, its
subsidiaries and all the Benefit Plans maintained or contributed to by the
Company or any of its subsidiaries are all in compliance in all material
respects with their terms and the applicable provisions of ERISA, the Code and
all other applicable laws, including laws of foreign jurisdictions.
(b) All Pension Plans maintained or contributed to by the Company or any of
its subsidiaries intended to be tax-qualified have been the subject of
determination letters from the IRS to the effect that such Pension Plans are
qualified and exempt from United States Federal income taxes under Sections
401(a) and 501(a), respectively, of the Code, and no such determination letter
has been revoked nor has any event occurred since the date of its most recent
determination letter or application therefor that would adversely affect its
qualification or materially increase its costs. All Pension Plans maintained or
contributed to by the Company or any of its subsidiaries required to have been
approved by any foreign Governmental Entity have been so approved and no such
approval has been revoked nor has any event occurred since the date of its most
recent approval or application therefor that would adversely affect its approval
or materially increase its costs.
(c) Neither the Company nor any Commonly Controlled Entity has
(1) maintained, contributed or been obligated to contribute to any Benefit Plan
that is subject to Title IV of ERISA or Section 412 of the Code or (2) has any
unsatisfied liability under Title IV of ERISA or Section 412 of the Code. None
of the Company, its subsidiaries, or any Commonly Controlled Entity has
contributed or been requested to contribute to a "multiemployer plan" as defined
in Section 3(37) of ERISA.
(d) With respect to any Welfare Plan maintained or contributed to by the
Company or any of its subsidiaries, there are no understandings, agreements or
undertakings, written or oral, that would prevent any such plan (including any
such plan covering retirees or other former employees) from being amended or
terminated without material liability to the Company on or at any time after the
Effective Time.
(e) No pending or, to the knowledge of the Company, threatened disputes,
lawsuits, claims (other than routine claims for benefits), investigations,
audits or complaints to, or by, any person or governmental authority have been
filed or are pending with respect to any Benefit Plans or the Company or any of
its subsidiaries in connection with any Benefit Plan or the fiduciaries or
administrators thereof. With respect to each Benefit Plan, there has not
occurred, and no person or entity is contractually bound to enter into, any
nonexempt "prohibited transaction" within the meaning of Section 4975 of the
Code or Section 406 of ERISA, nor any transaction that would result in a civil
penalty being imposed under Section 409 or 502(i) of ERISA.
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(f) With respect to each Benefit Plan that is subject to or governed by the
laws of any jurisdiction other than the laws of the United States (a "Foreign
Plan"): (i) all amounts required to be reserved under each book reserved Foreign
Plan have been reserved in accordance with reasonable accounting practices
prevailing in the country where such Foreign Plan is established; (ii) each
Foreign Plan (A) that is required to be registered with a Governmental Authority
has been registered, (B) has been maintained in good standing with the
appropriate Governmental Authorities, and (C) has been maintained and operated
in accordance with its terms and applicable law; and (iii) the fair market value
of the assets of each funded Foreign Plan (that is a defined pension plan or a
termination indemnity plan), and the liability of each insurer for such Foreign
Plan that is funded through insurance or through book reserve, together with any
accrued contributions, (A) is sufficient to provide, or cover liabilities
relating to, accrued benefits with respect to those current and former employees
of the Company and its subsidiaries who participate in such Foreign Plan and
(B) has been determined based on actuarial or other applicable assumptions and
valuations previously utilized in calculating the amount of employer
contributions to or the funded status or book reserve of such Foreign Plan.
(g) All contributions or payments made or deemed to have been made with
respect to each Benefit Plan that is a deferred compensation plan, including any
Pension Plan, are presently, and have been during the years to which they
relate, fully deductible pursuant to Section 404 of the Code and are not
presently, and have never been during the years to which they relate, subject to
any excise tax under Section 4972 of the Code, (ii) as of the Effective Time,
all payments of outstanding contributions, due on or prior to that date,
including minimum contributions, premiums, and funding obligations imposed by
the terms of any Benefit Plan or by any law or government agency (including
under Part 3 of ERISA), shall have been made with respect to each Benefit Plan,
(iii) all contributions to and payments with respect to or under the Benefit
Plans that are required to be made with respect to periods ending on or before
the Effective Time have been made or accrued before the Effective Time by the
Company in accordance with the appropriate plan documents, financial statements,
actuarial report, collective bargaining agreements or insurance contracts or
arrangements, and (iv) with respect to each Welfare Plan that is partially or
fully funded through a trust, all tax deductions claimed by the Company or any
of its subsidiaries relating to any such trust are allowable, and all tax
returns and other governmental filings required to be filed with respect to any
such trust, whether by the Company or any of its subsidiaries or the trust, have
been made in a timely manner.
(h) No Welfare Plan providing medical or death benefits (whether or not
insured) with respect to current or former employees of the Company or any
subsidiary continues such coverage or provides such benefits beyond their date
of retirement or other termination of service (other than coverage mandated by
section 601 of ERISA, the cost of which is fully paid by the former employee or
his or her dependents).
(i) Section 4.12(i) of the Company Disclosure Schedule lists all benefit or
compensation plans, programs, agreements or policies which provide for any
additional compensation or benefits or any acceleration of the time of payment
or vesting of any compensation or benefits under any Benefit Plan maintained or
contributed to by the Company or any of its subsidiaries as a result of the
transactions contemplated by this Agreement.
Section 4.13 LABOR RELATIONS.
(a) As of the date hereof, there is no pending or, to the knowledge of the
Company, threatened union organizational campaign effort, collective bargaining
negotiations, bargaining impasse, implementation of final offer, labor dispute,
grievance or arbitration matter, economic or unfair labor practice strike,
boycott, work stoppage, slowdown, work-to-rule or intermittent strike against
the Company or any of its subsidiaries, (b) no lockout is in effect and (c) no
permanent or temporary strike replacements are currently employed at any
facility of the Company or any subsidiary. Except as set forth in Section 4.13
of the Company Disclosure Schedule, neither the Company nor any of its
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subsidiaries, nor their respective representatives or employees, has committed
any unfair labor practices in connection with the operation of the respective
businesses of the Company or any of its subsidiaries, and there is no pending
or, to the knowledge of the Company, threatened charge, complaint, decision,
order, notice-posting requirement, settlement agreement or injunctive action or
order against the Company or any of its subsidiaries by the National Labor
Relations Board or any similar governmental or adjudicatory agency or court,
except for such as would not be reasonably likely to have a Material Adverse
Effect. Except as set forth in Section 4.13 of the Company Disclosure Schedule,
the Company and its subsidiaries have in the past been and are in compliance in
all respects with all applicable collective bargaining agreements and laws
respecting employment, employment practices, labor relations, safety and health,
wages, hours and terms and conditions of employment, except for such
noncompliance as would not be reasonably likely to have a Material Adverse
Effect. The Company and each of its subsidiaries is in material compliance with
all laws concerning the classification of employees and independent contractors
and has properly classified all such persons for purposes of participation in
the Benefit Plans, except for such noncompliance as would not be reasonably
likely to have a Material Adverse Effect. Neither the Company nor any of its
subsidiaries has experienced within the past 12 months a "plant closing" or
"mass layoff" within the meaning of the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. SectionSection 2101 et seq. Section 4.13 of the
Company Disclosure Schedule also sets forth the aggregate number of employees
who work for the Company and its subsidiaries as of the date hereof, specifying
the number of such employees who belong to a union or are otherwise covered by
an employment agreement or a collective bargaining agreement.
Section 4.14 TAXES.
(a) Each of the Company and its subsidiaries has duly and timely filed (or
had filed on its behalf) with the appropriate taxing authorities all returns,
reports or similar statements (including any related exhibits and schedules)
required to be filed with respect to any Tax (as defined below), including any
information return, claim for refund, amended return or declaration of estimated
tax ("Tax Returns") required to be filed by (or with respect to) it, and such
Tax Returns are true, correct and complete, except to the extent that failure to
file such Tax Returns or failure of such Tax Returns to be true, correct and
complete, would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(b) Each of the Company and its subsidiaries has duly and timely paid in
full any and all federal, state, local, foreign or other taxes of any kind
(together with any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any taxing authority,
including, without limitation, taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth, and taxes or other charges in the
nature of excise, withholding, AD VALOREM or valued added (collectively,
"Taxes") shown as due on such Tax Returns or otherwise due, except to the extent
that failure to pay such Taxes would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(c) Each of the Company and its subsidiaries has complied with all
applicable laws, rules and regulations relating to the payment and withholding
of Taxes and has timely withheld from employee wages and paid over to the proper
governmental authorities all amounts required to be so withheld and paid over,
except as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(d) Each of the Company and its subsidiaries has established on the Filed
SEC Documents reserves (determined without regard to deferred taxes) that are
sufficient for the payment of (i)(x) all Taxes accrued but not yet due and
payable and (y) all Taxes which, based on past settlements reached with any
taxing authorities would be payable, in each case attributable to the results of
operations of the Company and its subsidiaries through the date of such filing,
(ii) all deficiencies in Taxes through
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the date of such filing, that have been asserted, proposed or threatened in
writing, and (iii) any Taxes for which the Company or any of its subsidiaries
may be liable through the date of such filing, as a transferee or successor, by
contract or otherwise, except as where such liabilities would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(e) There is no deficiency, claim, audit, examination, action, suit,
proceeding or investigation in progress or pending or, to the knowledge of the
Company or any of its subsidiaries, threatened against or with respect to the
Company or any of its subsidiaries in respect of any Taxes which would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(f) No claim has ever been made by any taxing authority with respect to the
Company or any of its subsidiaries in a jurisdiction where the Company or such
subsidiary does not file Tax Returns that the Company or such subsidiary is or
may be subject to taxation by that jurisdiction which has not been resolved and
which would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(g) There are no requests for rulings or determinations in respect of any
Taxes pending between the Company or any of its subsidiaries and any taxing
authority which would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(h) Neither the Company nor any of its subsidiaries has executed or entered
into with the Internal Revenue Service or any taxing authority (i) any agreement
or other document extending or having the effect of extending the period for
assessment or collection of any Taxes for which the Company or any subsidiary
would be liable, which period has not since expired, or any agreement or consent
to waive an applicable statute of limitations with respect to Taxes or Tax
Returns or (ii) a closing agreement pursuant to Section 7121 of the Code, or any
predecessor provision thereof or any similar provision of foreign, state or
local Tax law that relates to the assets or operations of the Company or any
subsidiary which would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(i) Neither the Company nor any of its subsidiaries has been a member of an
affiliated group filing consolidated, combined or unitary Tax Returns other than
a group for which the Company was the common parent.
(j) Neither the Company nor any of its subsidiaries is a party to any
contract, agreement, plan or arrangement relating to allocating or sharing the
payment of, or liability for, Taxes with respect to any taxable period.
(k) The Company is not, and has not been, a "United States real property
holding corporation" within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(l) None of the outstanding indebtedness of the Company or any of its
subsidiaries constitutes indebtedness with respect to which any interest
deductions may be disallowed under Sections 163(i) or 163(l) of the Code or
under any other provision of applicable law.
(m) The net operating loss carryovers and other losses of the Company and
its subsidiaries as of December 31, 2000 that are available to offset future
income for federal, state, local or foreign tax purposes are set forth in
Section 4.14(m) of the Company Disclosure Schedule, together with the expiration
date of such carryovers and losses.
(n) The tax credit carryovers of the Company and its subsidiaries as of
December 31, 2000 that are available to offset future tax liability for federal,
state, local or foreign tax purposes are set forth in Section 4.14(n) of the
Company Disclosure Schedule, together with the expiration date of such
carryovers.
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(o) The Company has not distributed the stock of any corporation in a
transaction satisfying the requirements of Section 355 of the Code since
April 16, 1997, and the stock of the Company has not been distributed in a
transaction satisfying the requirements of Section 355 of the Code since
April 16, 1997.
(p) The Company does not have title to, lease or otherwise have any interest
in real property.
(q) Neither the Company nor any of its subsidiaries knows of any fact or
circumstance or has taken, or failed to take, any action that could reasonably
be expected to prevent the Transaction from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
Section 4.15 EXCESS PARACHUTE PAYMENTS. The Company has provided Parent
with materially true and complete compensation and related information necessary
for the determination of whether any "excise parachute payments" under
Section 280G of the Code may arise in connection with the transactions
contemplated by this Agreement with respect to any person who could be a
"disqualified individual" with respect to the Company (within the meaning of
Section 280G of the Code) and who is a party to an agreement or a participant in
a plan, program or policy required to be disclosed under
Section 4.12(i) hereof.
Section 4.16 TITLE TO PROPERTIES.
(a) Each of the Company and its subsidiaries has good and marketable title
to, or valid leasehold interests in, all its material properties and assets
except for such as are no longer used or useful in the conduct of its businesses
or as have been disposed of in the ordinary course of business and except for
defects in title, easements, restrictive covenants and similar encumbrances that
individually or in the aggregate would not materially interfere with its ability
to conduct its business as currently conducted. All such material assets and
properties, other than assets and properties in which the Company or any of its
subsidiaries has a leasehold interest, are free and clear of all Liens, except
for Liens that individually or in the aggregate would not materially interfere
with the ability of the Company and its subsidiaries to conduct their respective
businesses as currently conducted.
(b) Each of the Company and its subsidiaries has complied in all material
respects with the terms of all material leases to which it is a party and under
which it is in occupancy, and all such leases are in full force and effect,
except for such noncompliance or failure to be in full force and effect that
individually or in the aggregate is not reasonably likely to have a Material
Adverse Effect. Each of the Company and its subsidiaries enjoys peaceful and
undisturbed possession under all such material leases, except for failures to do
so that individually or in the aggregate are not reasonably likely to have a
Material Adverse Effect.
Section 4.17 INTELLECTUAL PROPERTY. Section 4.17 of the Company Disclosure
Schedule sets forth a list of all U.S. and non-U.S. patents and trademarks, and
applications therefor, and registered copyrights owned by or licensed to the
Company or its subsidiaries as of the date hereof. Except as set forth in
Section 4.17 of the Company Disclosure Schedule or the SEC Documents: (i) the
Company or one of its subsidiaries is the sole owner, free and clear of any lien
or encumbrance, or has a valid license or otherwise has the legally enforceable
right to use and enforce, without any obligation to make any fixed or contingent
payments, including royalty payments (except with respect to off-the-shelf
software on commercially reasonable terms), all U.S. and non-U.S. patents,
patent applications, registered designs, registered and unregistered trademarks,
service marks, trade names and corporate names, registered and unregistered
copyrights, computer programs, computer software and databases, internet domain
names, web sites, web pages and related items (and all intellectual property and
proprietary rights incorporated therein) and all trade secrets, research and
development, formulae, know-how, information and all other proprietary and
intellectual property, including all grants, registrations and applications
relating thereto (collectively, "Proprietary Rights") which are necessary for
the conduct of the business of the Company and its subsidiaries (all such
Proprietary Rights,
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"Company Rights"), except to the extent that the failure to so possess would not
have a Material Adverse Effect; (ii) neither the Company nor any of its
subsidiaries have received a demand, claim, notice or inquiry from any person
that the Company or any of its subsidiaries is infringing the Proprietary Rights
of any other person, and neither the Company nor any of its subsidiaries knows
of any basis for any such claims, except for such claims that would not be
reasonably likely to have a Material Adverse Effect; (iii) to the knowledge of
the Company, no person is infringing any Company Rights, except for such
infringements that would not have a Material Adverse Effect; (iv) neither the
Company nor any of its subsidiaries has licensed, or has otherwise granted, to
any third party any rights in or to any material Company Rights; and
(v) neither the Company nor any of its subsidiaries have received a demand,
claim, notice or inquiry from any person in respect of the Company Rights which
challenges, threatens to challenge or inquires as to whether there is any basis
to challenge, the validity or the enforceability of, or the rights of the
Company or its subsidiaries in, any Company Rights, and neither the Company nor
any of its subsidiaries knows of any basis for any such challenge, except for
such challenges as would not be reasonably likely to have a Material Adverse
Effect.
Section 4.18 VOTING REQUIREMENTS. The affirmative vote of a majority of
the outstanding Shares to adopt this Agreement (the "Stockholder Approval") is
the only vote of the holders of any class or series of the Company's capital
stock necessary to adopt this Agreement and approve the transactions
contemplated hereby.
Section 4.19 STATE TAKEOVER STATUTES. The Board of Directors of the
Company has approved the terms of this Agreement and the consummation of the
Merger and the other transactions contemplated by this Agreement, and such
approval represents all the action necessary to render inapplicable to this
Agreement, the Merger and the other transactions contemplated by this Agreement,
the provisions of Section 203 of the DGCL. No other state takeover statute
(including any "fair price," "merger moratorium" "control share acquisition"
statute or regulation) or similar statute or regulation applies to or purports
to apply to this Agreement, the Offer, the Merger or the other transactions
contemplated by this Agreement.
Section 4.20 BROKERS. No broker, investment banker, financial advisor or
other person, other than Morgan Stanley & Co. Incorporated, the fees and
expenses of which will be paid by the Company, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company. The Company has delivered to Parent true
and complete copies of all agreements under which any such fees or expenses are
payable and all indemnification and other agreements related to the engagement
of the persons to whom such fees are payable.
Section 4.21 OPINION OF FINANCIAL ADVISOR. The Company has received on
oral opinion of Morgan Stanley & Co. Incorporated dated the date hereof, to the
effect that, as of such date, the Exchange Ratio pursuant to this Agreement is
fair from a financial point of view to the holders of Shares, which opinion has
been or promptly will be confirmed in writing. The Company agrees to promptly
deliver a copy of such opinion to Parent.
Section 4.22 RIGHTS AGREEMENT. The Company has taken all actions necessary
to cause the Rights Agreement to be amended to (i) render the Rights Agreement
inapplicable to this Agreement, the Offer, the Merger and the other transactions
contemplated by this Agreement, (ii) ensure that (y) none of Parent, Sub or any
other subsidiary of Parent is an Acquiring person (as defined in the Rights
Agreement) pursuant to the Rights Agreement by virtue of the execution of this
Agreement, the making of the Offer or the consummation of the Offer or the
Merger or the other transactions contemplated by this Agreement and (z) a
Distribution Date or a Stock Acquisition Date (as such terms are defined in the
Rights Agreement) does not occur by reason of the execution of this Agreement,
the making of the Offer or the consummation of the Offer or the Merger or the
consummation of the other transactions contemplated by this Agreement and
(iii) provide that the
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Final Expiration Date (as defined in the Rights Agreement) shall occur
immediately prior to the expiration of the Offer. A correct and complete copy of
the Rights Agreement, as amended to date, has been furnished to Parent.
Section 4.23 FM.
(a) Section 4.23 of the Company Disclosure Schedule lists all material
contracts relating to the development, commercialization, production, marketing
or sale of FM which are not included in the Filed SEC Documents. As of the date
hereof, the Company has made available to Parent true and correct copies of all
such contracts, including all amendments and all material communications
relating thereto. Neither the Company nor any of its subsidiaries, and, to the
knowledge of the Company, no other party thereto, is in violation of or in
default under (nor does there exist any condition which upon the passage of time
or the giving of notice or both would cause such a violation of or default
under) any such contract. As of the date of this Agreement, the Company has not
received any notice from any other party to any such contract, and otherwise has
no knowledge, that such third party intends to terminate, or not renew, any such
material contract.
(b) The Company has disclosed or made available to Parent all written
communications and minutes of meetings (telephonic or otherwise) with the U.S.
Food and Drug Administration (the "FDA") and other regulatory authorities
relating to FM.
(c) From and after the date hereof, there shall have been no formal
communications from the FDA or other regulatory bodies which would be reasonably
likely to delay FDA approval of frozen FM beyond September 1, 2003.
(d) The Company possesses all material necessary intellectual property
rights and licenses to commercialize FM. As between the Company and Wyeth-Ayerst
Laboratories and related operations of American Home Products ("Wyeth"), the
Company is responsible for seeking regulatory approval of FM from the FDA and
Wyeth is responsible for seeking regulatory approval of FM from foreign
regulatory bodies. The Company has the contractual right to receive from Wyeth
all material communications between Wyeth and foreign regulatory bodies relating
to FM. There are no such communications from the FDA or foreign regulatory
bodies which indicate that liquid FM is not likely to be approved for marketing,
and the Company has no reason to believe that liquid FM cannot be successfully
developed or commercialized.
(e) FM is being developed and tested, and all applications for the approval
thereof are, in substantial compliance with applicable law and regulation,
including the Federal Food, Drug and Cosmetics Act and the regulations
thereunder, provided that to the extent this clause (f) relates to development
work conducted by Wyeth, this clause (f) is limited to the best knowledge of the
Company.
(f) Neither the Company, nor any subsidiary, nor any officer, employee or
agent of either the Company or any subsidiary has made an untrue statement of a
material fact to the FDA or other Governmental Entity, failed to disclose a
material fact required to be disclosed to the FDA or any other Governmental
Entity, or committed an act, made a statement, or failed to make a statement
that, at the time such disclosure was made, could reasonably be expected to
provide a basis for the FDA or any other Governmental Entity to invoke its
policy respecting "Fraud, Untrue Statements of Material Facts, Bribery, and
Illegal Gratuities", set forth in 56 Fed. Reg. 46191 (September 10, 1991) or any
similar policy. Neither the Company nor any subsidiary, nor any officer,
employee or agent of either the Company or any subsidiary, has been convicted of
any crime or engaged in any conduct for which debarment is mandated by 21 U.S.C.
sec. 335a(a) or any similar Legal Provision or authorized by 21 U.S.C. sec.
335a(b) or any similar Legal Provision.
(g) As of the date hereof, there are no issues regarding raw materials,
supplies or components which would be reasonably likely to prevent the launch of
frozen FM in the US in 2002. From the date
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hereof to the Appointment Time, no issues shall have arisen regarding raw
materials, supplies or components which would be reasonably likely to prevent
the launch of frozen FM in the US in 2003.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Except as set forth on the disclosure schedule delivered by Parent to the
Company prior to the execution of this Agreement, which disclosure schedule
specifies the section or subsection of this Agreement to which the exception
relates (unless it is readily apparent that such disclosure is applicable to
other such section(s)) (the "Parent Disclosure Schedule"), Parent and Sub
represent and warrant to the Company as follows:
Section 5.1 ORGANIZATION, STANDING AND CORPORATE POWER. Each of Parent and
its subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and has
all requisite corporate power and authority to carry on its business as now
being conducted. Each of Parent and its subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed individually or
in the aggregate is not reasonably likely to have a material adverse effect on
Parent. Parent has made available to the Company complete and correct copies of
its Restated Certificate of Incorporation and Bylaws and the Certificate of
Incorporation and Bylaws of Sub, in each case as amended to the date hereof.
Section 5.2 CAPITAL STRUCTURE.
(a) The authorized capital stock of Parent consists of 320,000,000 Parent
Shares and 5,524,525 shares of Preferred Stock, par value $.01 per share
("Preferred Stock"). At the close of business on November 28, 2001,
(i) 214,279,832 Parent Shares were issued and outstanding, (ii) no Parent Shares
were held by Parent in its treasury, (iii) 21,232,359 Parent Shares were
issuable pursuant to outstanding Parent Stock Options, (iv) no shares of
Preferred Stock were issued or outstanding, and (v) 1,200,000 shares of
Series B Junior Preferred Stock were reserved for issuance in connection with
the rights issued pursuant to the Amended and Restated Rights Agreement, dated
as of October 31, 1998, by and between Parent and American Stock Transfer &
Trust Company, as Rights Agent. All outstanding Parent Shares are, and all
Parent Shares which may be issued pursuant to this Agreement shall be when
issued duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights.
(b) Except as set forth in Section 5.2(a), as of the date hereof, (i) there
are no bonds, debentures, notes or other indebtedness of Parent having the right
to vote (or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which stockholders of Parent may vote, (ii) other
than resulting from the issuance of Parent Shares pursuant to Stock Options
listed in Section 5.2(a), there are no issued, issuable, reserved for issuance
or outstanding (x) shares of capital stock, equity securities or voting
securities of Parent, (y) securities of Parent convertible into or exchangeable
or exercisable for shares of capital stock or voting securities of Parent,
(z) warrants, calls, options or other rights to acquire from Parent or any
subsidiary, and no obligation of Parent or any subsidiary to issue, any capital
stock, equity securities, voting securities or securities convertible into or
exchangeable or exercisable for capital stock, equity securities or voting
securities of Parent or any subsidiary, and (iii) neither Parent nor any
subsidiary is a party to or bound by any agreement regarding any securities of
Parent or any subsidiary, including regarding the voting (by proxy, voting trust
or otherwise), issuance, repurchase, redemption, delivery, acquisition or
disposition thereof.
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Section 5.3 AUTHORITY; NONCONTRAVENTION.
(a) Each of Parent and Sub has all requisite corporate power and authority
to enter into this Agreement, and to consummate the transactions contemplated by
this Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of Parent and Sub and
no other corporate proceedings on the part of Parent or Sub are necessary to
authorize this Agreement or to consummate the transactions contemplated. This
Agreement has been duly executed and delivered by Parent and Sub, as applicable,
and, assuming the due authorization, execution and delivery by each of the other
parties thereto, constitutes the legal, valid and binding obligation of Parent
and Sub, as applicable, enforceable against Parent and Sub, as applicable, in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(b) The execution and delivery of this Agreement do not, and the
consummation of the Merger and the other transactions contemplated by this
Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a benefit under, or
alter the rights or obligations of any party under, or result in the creation of
any Lien upon any of the properties or assets of Parent or Sub under (i) the
Restated Certificate of Incorporation or Bylaws of Parent or the Certificate of
Incorporation or Bylaws of Sub, (ii) any loan or credit agreement, bond, note,
mortgage, indenture, lease or other contract, agreement, obligation, commitment,
arrangement, understanding, instrument, permit or license applicable to Parent
or Sub or their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in the following paragraph,
any (A) statute, law, ordinance, rule or regulation or (B) judgment, order or
decree, in each case applicable to Parent or Sub or their respective properties
or assets, other than, in the case of clauses (ii) and (iii), any such
conflicts, violations, defaults, termination, cancellation, acceleration, loss
of benefit, alteration of rights or obligations, Liens or other occurrence that
individually or in the aggregate are not reasonably likely to have a Material
Adverse Effect on Parent.
(c) No consent, approval, order or authorization of, action by or in respect
of, or registration, declaration or filings with, any Governmental Entity is
required by or with respect to Parent or Sub in connection with the execution
and delivery of this Agreement by Parent and Sub or the consummation by Parent
and Sub of the Merger or the other transactions contemplated by this Agreement,
except for (1) the filing of a premerger notification and report form under the
HSR Act and any applicable filings and approvals under similar foreign antitrust
laws and regulations, (2) the filing with the SEC of (A) the Offer Documents and
(B) such reports under the Exchange Act as may be required in connection with
this Agreement and the transactions contemplated by this Agreement, (3) the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware and appropriate documents with the relevant authorities of other states
in which the Company is qualified to do business and such filings with
Governmental Entities to satisfy the applicable requirements of state securities
or "blue sky" laws, (4) filings with the Nasdaq and (5) such other consents,
approvals, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made individually or in the aggregate, is not
reasonably likely to have a material adverse effect on Parent.
Section 5.4 PARENT SEC DOCUMENTS. Parent has timely filed all reports,
schedules, forms, statements and other documents (including exhibits and other
information incorporated therein) with the SEC required to be filed by the
Company since January 1, 1999 (the "Parent SEC Documents"). As of their
respective dates, the Parent SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to such Parent SEC Documents, and none of the Parent SEC Documents contained any
untrue statement of a material fact or omitted to state a
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material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Except to the extent that information contained in any Parent
SEC Document has been revised or superseded by a later-filed SEC Document filed
by Parent and publicly available prior to the date of this Agreement, none of
the Parent SEC Documents contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of Parent included in
the Parent SEC Documents comply in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the financial position of Parent and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments not material
in amount). Except (i) as set forth in the most recent financial statements
included in the Parent SEC Documents or (ii) for liabilities incurred in
connection with this Agreement, neither Parent nor any of its subsidiaries has
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) which, individually or in the aggregate, are reasonably
likely to have a Material Adverse Effect.
Section 5.5 INFORMATION SUPPLIED. None of the information supplied or to
be supplied by Parent or Sub specifically for inclusion or incorporation by
reference in (i) the Schedule 14D-9 will, at the time the Schedule 14D-9 or any
amendments or supplements thereto is first published, sent or given to
stockholders of the Company, 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 light of the circumstances under which they are
made, not misleading, or (ii) the Proxy Statement will, at the date it is first
mailed to the Company's stockholders and at the time of the 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, in light of the circumstances under which they are made, not
misleading. The Offer Documents will comply in all material respects with the
requirements of the Securities Act and the rules and regulations thereunder,
except that no representation or warranty is made by Parent or Sub with respect
to statements made or incorporated by reference therein based on information
supplied by the Company specifically for inclusion or incorporation by reference
therein.
Section 5.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Parent SEC Documents, since December 31, 2000 there has not been any Parent
Material Adverse Change or any change, fact or development which, individually
or in the aggregate, is reasonably likely to result in a Parent Material Adverse
Change.
Section 5.7 LITIGATION. Except as disclosed in the Parent SEC Documents
filed by the Parent and publicly available prior to the date of this Agreement,
there is no suit, action or proceeding pending or, to the knowledge of Parent,
threatened against or affecting Parent or any of its subsidiaries or any of
their respective properties that individually or in the aggregate, would have a
Material Adverse Effect, nor is there any judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator outstanding against, or, to the
knowledge of Parent, any action, demand, requirement or investigation by any
Governmental Entity involving, Parent or any of its subsidiaries that
individually or in the aggregate would have a Material Adverse Effect.
Section 5.8 COMPLIANCE WITH LAWS. Each of Parent and its subsidiaries is
in compliance with all Legal Provisions applicable to its business or
operations, except for instances of possible noncompliance that individually or
in the aggregate are not reasonably likely to have a Material Adverse Effect.
Each of Parent and its subsidiaries has in effect all Permits necessary for it
to own, lease or operate its properties and assets and to carry on its business
and operations as now conducted, except for the
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failure to have such Permits that individually or in the aggregate is not
reasonably likely to have a Material Adverse Effect. There has occurred no
default under, or violation of, any such Permit, except for details under, or
violations of, Permits that individually or in the aggregate are not reasonably
likely to have a Material Adverse Effect. No action, demand, requirement or
investigation by any Governmental Entity and no suit, action or proceeding by
any person, in each case with respect to Parent or any of its subsidiaries or
any of their respective properties, is, to the knowledge of Parent, pending or
threatened, other than, in each case, those the outcome of which individually or
in the aggregate are not reasonably likely to have a Material Adverse Effect.
Section 5.9 TAX MATTERS. Neither Parent nor any of its subsidiaries knows
of any fact or circumstance or has taken, or failed to take, any action that
could reasonably be expected to prevent the Transaction from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
Section 5.10 INTERIM OPERATIONS OF SUB. Sub is a direct, wholly-owned
subsidiary of Parent formed solely for the purpose of effecting the Transaction
and has conducted no activity and has incurred no liability or obligation other
than as contemplated by this Agreement.
Section 5.11 PARENT STOCKHOLDER APPROVAL. This Agreement and the
transactions contemplated hereby, including the issuance of Parent Shares
pursuant to ARTICLE III hereof, does not require the approval of the holders of
Parent Shares, including under NASD Rule 4350(i) or other applicable law.
Section 5.12 BROKERS. No broker, investment banker, financial advisor or
other person, other than Merrill Lynch & Co., the fees and expenses of which
will be paid by Parent, is entitled to any broker's, finder's, financial
advisors or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent.
ARTICLE VI
COVENANTS
Section 6.1 CONDUCT OF BUSINESS BY THE COMPANY. During the period from the
date of this Agreement to the earlier of the termination of this Agreement or
the Effective Time, the Company shall, and shall cause its subsidiaries to,
carry on their respective businesses in the ordinary course of business
consistent with past practice and in compliance with all applicable laws and
regulations and, to the extent consistent therewith, use all reasonable best
efforts to preserve intact its current business organizations, keep available
the services of its current officers and employees and preserve its
relationships with customers, suppliers, licensors, licensees, distributors and
others having business dealings with them with the intention that its goodwill
and ongoing business shall be unimpaired at the Effective Time. Without limiting
the generality of the foregoing, during the period from the date of this
Agreement to the Effective Time, unless set forth in Schedule 6.1 or as
otherwise expressly permitted by this Agreement, the Company shall not, and
shall not permit any of its subsidiaries, without the prior written consent of
Parent, to:
(i) (x) declare, set aside or pay any dividends on, or make any other
distributions (whether in cash, stock or property), in respect of, any
of its capital stock, other than dividends or distributions by a direct
or indirect wholly owned subsidiary of the Company to its parent,
(y) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities or amend the terms of any
outstanding securities (including Stock Options) or (z) purchase, redeem
or otherwise acquire any shares of its capital stock or any other
securities (other than the purchase of stock pursuant to any restricted
stock purchase agreement in effect prior to the date hereof);
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(ii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to
any Lien any shares of its capital stock, any other voting securities
or any securities convertible into, or any rights, warrants or options
to acquire, any such shares, voting securities or convertible
securities (other than (x) the issuance of Shares upon the exercise of
Stock Options or warrants outstanding on the date hereof or upon the
conversion of convertible notes outstanding on the date hereof, in each
case in accordance with their terms on the date hereof, (y) the grant
of options under the Company's 1999 Non-Officer Equity Incentive Plan
for the issuance of over 100,000 Shares per month pursuant to the
hiring of employees in the ordinary course of business, and
(z) preferred stock purchase rights under the Rights Agreement), or any
"phantom" stock, "phantom" stock rights, stock appreciation rights or
stock based performance units;
(iii) amend its Certificate of Incorporation or Bylaws or other comparable
charter or organizational documents (other than pursuant to
Section 2.4 hereof);
(iv) acquire or agree to acquire (x) by merging or consolidating with, or by
purchasing assets of, or by any other manner, any person or division,
business or equity interest of any person or (y) any assets which in
the aggregate are in excess of $3,000,000 except for purchases of raw
materials, equipment, supplies or investment securities in the ordinary
course of business consistent with past practice;
(v) sell, lease, license, mortgage or otherwise encumber or subject to any
Lien or otherwise dispose of any of its properties or assets (including
securitizations), except sales of inventory and licensing of
intellectual property rights in the ordinary course of business
consistent with past practice;
(vi) (x) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company
or any of its subsidiaries, guarantee any debt securities of another
person, enter into any "keep well" or other agreement to maintain any
financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing, except
for short-term borrowings incurred in the ordinary course of business
consistent with past practice or (y) make any loans, advances or
capital contributions to, or investments in, any other person in excess
of $2,000,000, other than in the ordinary course of business or to or
in any direct or indirect wholly owned subsidiary of the Company;
(vii) make or agree to make any new capital expenditure or expenditures
(including leases and in-licenses), or enter into any agreement or
agreements providing for payments which, in the aggregate, are in
excess of $3,000,000;
(viii) (w) pay, discharge, settle or satisfy any claims, liabilities,
obligations or litigation (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement
or satisfaction in the ordinary course of business consistent with past
practice or in accordance with their terms, of liabilities disclosed,
reflected or reserved against in the most recent consolidated financial
statements (or the notes thereto) of the Company included in the Filed
SEC Documents or incurred since the date of such financial statements
in the ordinary course of business consistent with past practice,
(x) cancel any indebtedness, (y) waive or assign any claims or rights
of substantial value or (z) waive any benefits of, or agree to modify
in any respect (A) any standstill or similar agreements to which the
Company or any of its subsidiaries is a party or (B) other than in the
ordinary course of business, any confidentiality or similar agreements
to which the Company or any of its subsidiaries is a party;
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(ix) except in the ordinary course of business consistent with past
practice, modify, amend or terminate any material contract or agreement
to which the Company or any of its subsidiaries is a party;
(x) enter into any material contracts, agreements, binding arrangements or
understandings relating to the distribution, sale, license, marketing or
manufacturing by third parties of the Company's or its subsidiaries'
products or products licensed by the Company or its subsidiaries, other
than pursuant to any such contracts, agreements, arrangements or
understandings currently in place (that have been made available to
Parent prior to the date hereof) in accordance with their terms as of
the date hereof or in the ordinary course of business;
(xi) enter into any other material agreement, other than contracts for the
sale of the Company's or its subsidiaries' products in the ordinary
course of business;
(xii) except as otherwise set forth in this Agreement, in the ordinary course
of business consistent with past practice and established guidelines
and policies of the Company or as required to comply with applicable
law, (A) adopt, enter into, terminate or amend in any material respect
(I) any collective bargaining agreement or Benefit Plan or (II) any
other agreement, plan or policy involving the Company or its
subsidiaries, and one or more of its current or former directors,
officers, consultants, or employees, (B) increase in any manner the
compensation, bonus or fringe or other benefits of, or pay any bonus
(other than any bonus accrued during Calendar Year 2001) to, any
current or former officer, director or employee, (C) pay any benefit or
amount not required under any Benefit Plan or any other benefit plan or
arrangement of the Company or its subsidiaries as in effect on the date
of this Agreement, (D) increase in any manner the severance or
termination pay of any current or former director, officer or employee,
(E) enter into or amend any employment, deferred compensation,
consulting, severance, termination or indemnification agreement,
arrangement or understanding with any current or former employee,
officer or director, (F) grant any awards under any bonus, incentive,
performance or other compensation plan or arrangement or Benefit Plan
(other than the grant of stock options, stock appreciation rights,
performance units, restricted stock, "phantom" stock or other stock
related awards which are covered by the provisions of
Section 6.1(ii) above), or remove any existing restrictions in any
Benefit Plans or agreements or awards made thereunder, (G) amend or
modify any Stock Option, (H) take any action to fund or in any other
way secure the payment of compensation or benefits under any employee
plan, agreement, contract or arrangement or Benefit Plan, (I) take any
action to accelerate the vesting of payment of any compensation or
benefit under any Benefit Plan;
(xiii) except as required by GAAP, make any change in accounting methods,
principles or practices;
(xiv) take any action that would, or that could reasonably be expected to,
result in (i) a failure of the condition set forth in Section 5(e) of
Annex A hereto, or (iii) any of the conditions to the Merger set forth
in ARTICLE VII not being satisfied;
(xv) transfer or license to any person or otherwise extend, amend or modify
any rights to the Company Rights other than in the ordinary course of
business;
(xvi) (i) fail to file all material Tax Returns ("Post-Signing Returns")
required to be filed by it (after taking into account any extensions);
(ii) fail to timely pay all material Taxes due and payable with respect
to such Post-Signing Returns that are so filed; (iii) fail to make
provision for all material Taxes payable by the Company or such
subsidiary for which no Post-Signing Return is due prior to the
Effective Time; (iv) fail to promptly notify Parent of any action,
suit, proceeding, claim or audit (collectively, "Actions") pending
against or with respect to the Company or its subsidiaries in respect
of any Tax where there is a reasonable possibility of a
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determination or decision which is reasonably likely to have a Material
Adverse Effect on the Company's Tax liabilities or Tax attributes, and
will not settle or compromise any such Action without Parent's prior
written consent; or (v) amend any material Tax Return or make any
material Tax election without Parent's prior written consent; or
(xvii) authorize, or commit or agree to take, any of the foregoing actions.
Section 6.2 NO SOLICITATION.
(a) The Company shall not, nor shall it authorize or permit any of its
subsidiaries, any of their respective officers, directors or employees or any
investment banker, financial advisor, attorney, accountant or other advisor or
representative retained by the Company or its subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or encourage (including
by way of furnishing information), or take any action designed or reasonably
likely to facilitate, any inquiries or the making of a proposal which
constitutes, or may reasonably be expected to lead to, any Takeover Proposal or
(ii) participate in any discussions or negotiations regarding any Takeover
Proposal; provided, however, that if, at any time prior to the Stockholder
Approval, the Board of Directors of the Company determines in good faith, after
consultation with outside counsel, that failure to do so would be reasonably
likely to result in a breach of its fiduciary duties under applicable law, the
Company may, in response to a Superior Proposal that was unsolicited and that
did not otherwise result from a breach of this Section 6.2 and subject to
providing at least one day advance written notice of its decision to take such
action to Parent and compliance with Section 6.2(c), (x) furnish information
with respect to the Company to the person making the Superior Proposal pursuant
to a customary and reasonable confidentiality agreement no less favorable to the
Company than the Confidentiality Agreement (as defined below) and
(y) participate in discussions or negotiations regarding such Superior Proposal.
The Company and its subsidiaries, their respective officers, directors and
employees and any investment banker, financial advisor, attorney, accountant and
other advisor or representative retained by the Company or its subsidiaries
shall immediately cease any existing discussions regarding any Takeover
Proposal.
(b) Neither the Company, nor the Board of Directors of the Company nor any
committee thereof shall (i) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar agreement
(each, an "Acquisition Agreement") related to any Takeover Proposal,
(iii) approve or recommend, or propose publicly to approve or recommend, any
Takeover Proposal, (iv) (x) redeem the Rights, (y) waive or amend any provisions
of the Rights Agreement or (z) take any action with respect to, or make any
determination under, the Rights Agreement, or (v) waive or fail to enforce the
terms of any confidentiality or standstill agreement, in any such case to permit
or facilitate a Takeover Proposal. Notwithstanding the foregoing, at any time
before the acceptance for payment of Shares in the Offer, in response to a
Superior Proposal which was unsolicited and which did not otherwise follow a
breach of this Section 6.2, the Board of Directors of the Company may (subject
to this sentence and the definition of the term "Superior Proposal") terminate
this Agreement and concurrently with such termination cause the Company to enter
into a definitive Acquisition Agreement with respect to such Superior Proposal
(the determination of whether a proposal is a Superior Proposal to be made after
consideration of any modification proposed by Parent), but only (x) at a time
that is after the third business day following Parent's receipt of written
notice advising Parent that the Board of Directors of the Company is prepared to
accept such Superior Proposal, specifying the material terms and conditions of
such Superior Proposal (including a copy of any proposed agreement) and
identifying the person making such Superior Proposal (any revised proposal shall
constitute a new proposal and shall require an additional three business days
notice and compliance with the other matters set forth herein), (y) if requested
by Parent, the Company shall have cooperated in good faith with Parent to revise
the terms hereof such that the proposal is no longer a Superior Proposal and
(z) after Parent shall have received the Termination Fee (as defined below).
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(c) In addition to the obligations of the Company set forth in
Section 6.2(a) and Section 6.2(b) hereof, the Company promptly shall advise
Parent orally and in writing of any request for information or of any Takeover
Proposal, or any inquiry with respect to any Takeover Proposal, the material
terms and conditions of such request, Takeover Proposal or inquiry, and the
identity of the person making any such request, Takeover Proposal or inquiry.
The Company will keep Parent informed on a prompt basis of the status and
details (including amendments or proposed amendments) of any such request,
Takeover Proposal or inquiry. The Company will promptly provide Parent with a
copy of any written materials received from any third party with respect to any
Takeover Proposal and of any materials provided to such third party. The Company
shall immediately provide Parent with any such information or materials if so
requested by Parent.
(d) Nothing contained in this Section 6.2 shall prohibit the Company from
(x) taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or (y) making any disclosure to
the Company's stockholders if, in the good faith judgment of the Board of
Directors of the Company, after consultation with outside counsel, failure to so
disclose would constitute a violation of the Federal securities laws or result
in breach of its fiduciary duties under applicable law.
Section 6.3 ADVICE OF CHANGES. The Company and Parent shall promptly
advise the other party orally and in writing of (i) any representation or
warranty made by it (and, in the case of Parent, made by Sub) contained in this
Agreement that is qualified as to materiality becoming untrue or inaccurate in
any respect or any such representation of warranty that is not so qualified
becoming untrue or inaccurate in any material respect, (ii) the failure of it
(and, in the case of Parent, by Sub) to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement; provided, however, that no such notification shall
affect the representations, warranties, covenants or agreements of the parties
(or remedies with respect thereto) or the conditions to the obligations of the
parties under this Agreement, (iii) any fact or development which would result
in the failure of any condition hereto not to be satisfied, (iv) any notice or
claim by any third party that its consent is or may be required pursuant to
terms of a material contract in connection with the transactions contemplated
hereby and (v) any communication from any governmental entity in connection with
the transactions contemplated hereby.
Section 6.4 PREPARATION OF THE FORM S-4 AND THE PROXY STATEMENT;
STOCKHOLDERS MEETING.
(a) If the Stockholder Approval is required by applicable law, as soon as
practicable following the purchase of Shares pursuant to the Offer, the Company
and Parent shall prepare and the Company shall file with the SEC the Proxy
Statement and Parent and the Company shall prepare and Parent shall file with
the SEC a post-effective amendment to the Form S-4, in which the Proxy Statement
will be included as a prospectus. Each of the Company and Parent shall use its
reasonable best efforts to have the post-effective amendment to the Form S-4
declared effective under the Securities Act as promptly as practicable after
such filing. The Company will use its reasonable best efforts to cause the Proxy
Statement to be mailed to the Company's stockholders as promptly as practicable
after such post-effective amendment is declared effective under the Securities
Act. Parent shall also take any action (other than qualifying to do business in
any jurisdiction in which it is not now so qualified or to file a general
consent to service of process) required to be taken under any applicable state
securities laws in connection with the issuance of Parent Shares in the Merger
and the Company shall furnish all information concerning the Company and the
holders of Shares as may be reasonably requested in connection with any such
action and the preparation, filing and distribution of the Proxy Statement. No
filing of, or amendment or supplement to, the Form S-4 will be made by Parent,
or the Proxy Statement will be made by the Company, without providing the other
party the opportunity to review and comment thereon. Parent will advise the
Company, promptly after it receives notice thereof, of the time when the
post-effective amendment to the Form S-4 has become effective, the issuance of
any stop order, the suspension of the qualification of Parent Shares issuable in
connection with the Merger
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for offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Form S-4 or comments thereon and responses thereto or requests
by the SEC for additional information. The Company will advise Parent, promptly
after it receives notice thereof, of any request by the SEC for amendment of the
Proxy Statement or comments thereon and responses thereto or requests by the SEC
for additional information. If at any time prior to the Effective Time any
information relating to the Company or Parent, or any of their respective
affiliates, officers or directors, should be discovered by the Company or Parent
which should be set forth in an amendment or supplement to any of the Form S-4
or the Proxy Statement, so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the party which discovers such information shall promptly
notify the other parties hereto and an appropriate amendment or supplement
describing such information shall be promptly filed with the SEC and, to the
extent required by law, disseminated to the stockholders of the Company.
(b) If the Stockholder Approval is required by applicable law, the Company
will, as soon as reasonably practicable following the purchase of Shares
pursuant to the Offer, establish a record date for, duly call, give notice of,
convene and hold a meeting of its stockholders (the "Stockholders Meeting") for
the purpose of obtaining the Stockholder Approval. Subject to fiduciary
requirements of applicable law, the Company will, through its Board of
Directors, recommend to its stockholders adoption of this Agreement.
Section 6.5 ACCOUNTANTS' LETTERS.
(a) The Company shall use its reasonable best efforts to cause to be
delivered to Parent two letters from Ernst & Young LLP, the Company's
independent public accountants, one dated a date within two business days before
the date on which the Form S-4 shall become effective and one dated a date
within two business days before the expiration of the Offer, each addressed to
Parent and the Company, in form and substance reasonably satisfactory to Parent
and PricewaterhouseCoopers LLP and customary in scope and substance for comfort
letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
(b) Parent shall use its reasonable best efforts to obtain two letters from
PricewaterhouseCoopers LLP, Parent's independent public accountants, one dated a
date within two business days before the date on which the Form S-4 shall become
effective and one dated a date within two business days before the expiration of
the Offer, each addressed to Parent and the Company, in form and substance
reasonably satisfactory to the Company and Ernst & Young LLP and customary in
scope and substance for comfort letters delivered by independent public
accountants in connection with registration statements similar to the Form S-4.
Section 6.6 ACCESS TO INFORMATION; CONFIDENTIALITY. The Company shall
afford to Parent, and to Parent's officers, employees, accountants, counsel,
financial advisors and other representatives, reasonable access during normal
business hours during the period prior to the Effective Time or the termination
of this Agreement to all its properties, books, contracts, commitments,
personnel and records and, during such period, the Company shall furnish
promptly to Parent (a) a copy of each report, schedule, registration statement
and other document filed by it during such period pursuant to the requirements
of United States Federal or state securities laws and (b) all other information
concerning its business, properties and personnel as Parent may reasonably
request. Except as required by law, Parent will hold, and will cause its
officers, employees, accountants, counsel, financial advisors and other
representatives and affiliates to hold, any nonpublic information received from
the Company, directly or indirectly, in accordance with the Confidentiality
Agreement dated as of October 10, 2001, between Parent and the Company (the
"Confidentiality Agreement"). Notwithstanding the foregoing, the Company shall
have no obligation to furnish trade secrets of the Company or confidential
information of third parties.
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Section 6.7 REASONABLE BEST EFFORTS. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use its
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and the other
transactions contemplated by this Agreement, including using reasonable best
efforts to accomplish the following: (i) the taking of all reasonable acts
necessary to cause the Offer Conditions and the conditions to Closing to be
satisfied, (ii) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from Governmental Entities and the making of all
necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by any
Governmental Entity, (iii) the obtaining of all necessary consents, approvals or
waivers from third parties (provided that if obtaining any such consent,
approval or waiver would require any action other than the payment of a nominal
amount, such action shall be subject to the consent of Parent, not to be
unreasonably withheld), (iv) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated hereby or thereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed and (v) the execution and delivery
of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement. In
connection with and without limiting the foregoing, the Company and its Board of
Directors shall (1) take all action necessary to ensure that no state takeover
statute or similar statute or regulation is or becomes applicable to this
Agreement, the Merger or any of the other transactions contemplated by this
Agreement and (2) if any state takeover statute or similar statute becomes
applicable to this Agreement, the Merger or any other transactions contemplated
by this Agreement, take all action necessary to ensure that the Merger and the
other transactions contemplated by this Agreement may be consummated as promptly
as practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on this Agreement, the Merger
and the other transactions contemplated by this Agreement. Nothing in this
Agreement shall be deemed to require Parent to agree to, or proffer to, divest
or hold separate any assets or any portion of any business of Parent, the
Company or any of their respective subsidiaries, or to agree to any restrictions
on the operation of its or its subsidiaries' business.
Section 6.8 INDEMNIFICATION, EXCULPATION AND INSURANCE.
(a) Parent agrees that all rights to indemnification and exculpation from
liabilities for acts or omissions occurring at or prior to the Effective Time
now existing in favor of the current or former directors or officers of the
Company as provided in the Company Certificate of Incorporation, the Bylaws or
any indemnification agreement between such directors or officers and the Company
(in each case, as in effect on the date hereof) shall be assumed by Parent,
without further action, as of the Effective Time and shall continue in full
force and effect in accordance with their terms.
(b) For six years after the Effective Time, Parent shall cause the Company
to maintain in effect the Company's current officers' and directors' liability
insurance in respect of acts or omissions occurring at or prior to the Effective
Time, covering each person currently covered by the Company's officers' and
directors' liability insurance policy (a copy of which has been heretofore
delivered to Parent), on terms with respect to such coverage and amount no less
favorable than those of such policy in effect on the date hereof; provided that
Parent may substitute therefor policies of Parent containing terms with respect
to coverage and amount no less favorable to such directors and officers;
provided, however, that in satisfying its obligation under this Section 6.8(b)
Parent shall not be obligated to pay premiums in excess of 150% of the amount
per annum paid by the Company in its last full fiscal year; and provided further
that if Parent is not able to obtain such coverage for such 150% amount, Parent
shall nevertheless be obligated to provide such coverage as may be obtained for
such 150% amount.
B-31
Notwithstanding the foregoing or any other provision in this Agreement, and in
lieu of the other provisions of this Section 6.8(b), nothing shall be deemed to
prohibit the Company or Parent from procuring such insurance coverage prior to
the Effective Time, provided that the aggregate cost of such coverage shall not
exceed $2,000,000.
(c) The provisions of this Section 6.8 are (i) intended to be for the
benefit of, and will be enforceable by, each indemnified party, his or her heirs
and his or her representatives and (ii) in addition to, and not in substitution
for, any other rights to indemnification or contribution that any such person
may have by contract or otherwise.
Section 6.9 PUBLIC ANNOUNCEMENTS. Parent and the Company will consult with
each other before issuing, and give each other the opportunity to review and
comment upon, any press release or other public statements with respect to the
transactions contemplated by this Agreement, including the Offer and the Merger,
and shall not issue any such press release or make any such public statement
prior to such consultation, except as may be required by applicable law, court
process or by obligations pursuant to any listing agreement with any national
securities exchange or national securities quotation system. The initial press
release to be issued with respect to the transactions contemplated by this
Agreement shall be in the form heretofore agreed to by the parties.
Section 6.10 AFFILIATES. Within 10 days after the date of this Agreement,
the Company shall deliver to Parent a letter identifying all persons who may be
deemed to be "affiliates" of the Company for purposes of Rule 145 under the
Securities Act. The Company shall promptly deliver to Parent an amended letter
to the extent any changes are required. The Company shall use its reasonable
best efforts to cause each such person to deliver to Parent at least five days
prior to the initial expiration of the Offer a written agreement substantially
in the form attached as Annex B hereto.
Section 6.11 STOCK EXCHANGE LISTING. To the extent Parent does not issue
treasury shares in the Merger which are already listed, Parent shall use its
reasonable best efforts to cause the Parent Shares to be issued in the Merger to
be approved for listing on the Nasdaq, subject to official notice of issuance,
prior to the Closing Date.
Section 6.12 TAX TREATMENT.
(a) The parties hereto hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
income tax regulations promulgated under the Code. Each of Parent, Sub and the
Company shall use its respective reasonable best efforts to cause the
Transaction to qualify, and shall use its respective reasonable best efforts not
to take any action, fail to take any action, or cause or permit any action to be
taken or to fail to be taken that could reasonably be expected to prevent the
Transaction from qualifying, as a reorganization within the meaning of
Section 368(a) of the Code.
(b) Unless otherwise required pursuant to a "determination" within the
meaning of Section 1313(a) of the Code, each of Parent, Sub and the Company
shall report the Transaction as a reorganization within the meaning of
Section 368(a) of the Code.
(c) The parties hereto shall cooperate and use their reasonable best efforts
in order for Parent to obtain opinions of Dewey Ballantine LLP, special counsel
to Parent, and the Company to obtain opinions of Latham & Watkins, special
counsel to the Company, dated as of the date of the preliminary prospectus
included in the Form S-4 and dated as of the date of the expiration of the
Offer, to the effect that the Transaction will qualify as a reorganization
within the meaning of Section 368(a) of the Code. In connection therewith both
Parent (together with Sub) and the Company shall deliver to such counsel
representation letters, dated and executed as of the dates of such opinions, in
form and substance satisfactory to such counsel. In rendering such opinions,
counsel shall be entitled to rely upon assumptions and representations
reasonably satisfactory to such counsel, including representations set forth in
such representation letters.
B-32
Section 6.13 STOCKHOLDER LITIGATION. The Company shall give Parent the
opportunity to participate in the defense of any stockholder litigation against
the Company and/or its directors relating to the transactions contemplated by
this Agreement. The Company shall not settle any such litigation without the
consent of Parent, which consent shall not be unreasonably withheld.
Section 6.14 RIGHTS AGREEMENT. The Board of Directors of the Company shall
take all further action (in addition to that referred to in Section 4.22 hereof)
requested in writing by Parent in order to render the rights (the "Rights")
issued pursuant to the Rights Agreement inapplicable to the Offer and the Merger
and the other transactions contemplated by this Agreement. Except as provided
above with respect to the Merger and the other transactions contemplated by this
Agreement, the Board of Directors of the Company shall not, without the prior
written consent of Parent, (a) amend the Rights Agreement or (b) take any action
with respect to, or make any determination under, the Rights Agreement,
including a redemption of the Rights or any action to facilitate a Takeover
Proposal.
Section 6.15 EMPLOYEE BENEFITS. As soon as practicable after the Effective
Time (the "Benefits Date"), Parent shall provide, or cause to be provided,
employee benefits to employees of the Company that are no less favorable in the
aggregate to those made generally available to similarly situated employees of
the Parent. From the Effective Time to the Benefits Date, the Parent shall
provide or cause to be provided, the employee benefits of the Company provided
to employees of the Company as of the date hereof (other than any Benefit Plan
providing for equity compensation). Notwithstanding the foregoing, for a period
of one year following the Effective Time, Parent shall continue the severance
policy as set forth on Schedule 6.15 to employees of the Company who continue to
be employed by Parent or any of its subsidiaries following the Effective Time.
Each Company employee who continues to be employed by Parent or any of its
subsidiaries immediately following the Effective Time shall, to the extent
permitted by law and applicable tax qualification requirements, and subject to
any generally applicable break in service or similar rule, receive credit for
all services with the Company for all purposes, including without limitation,
for eligibility to participate and vesting under any plans of the Parent for
years of service with the Company or its subsidiaries (or, if applicable,
predecessor entities) prior to the Effective Time. Parent shall cause any and
all pre-existing condition (or actively-at-work or similar) limitations,
eligibility waiting periods and evidence of insurability requirements under any
group health plans to be waived with respect to the Company participants in such
plans and their eligible dependents and shall provide them with credit for any
co-payments, deductibles, offsets (or similar payments) prior to the Effective
Time for purposes of satisfying any applicable deductible, out-of-pocket, or
similar requirements under any Parent plans in which they are eligible to
participate after the Effective Time.
Section 6.16 FIRPTA. The Company shall (i) furnish to Parent, at the
expiration of the Offer and immediately prior to the Effective Time, a
certification in accordance with Treas. Reg.
Section 1.1445-2(c)(3)(i) certifying that stock in the Company is not a U.S.
real property interest because the Company is not and has not been a United
States real property holding corporation (as defined in Section 897(c)(2) of the
Code) during the applicable period specified in Section 897(c)(1)(A)(ii) of the
Code (in such form as may be reasonably requested by Parent) and (ii) timely
deliver to the Internal Revenue Service the notification required under Treas.
Reg. Section 1.897-2(h)(2).
Section 6.17 SECTION 16 MATTERS. Prior to the expiration date of the
Offer, Parent and the Company shall take all such reasonable steps as may be
required by applicable SEC "no-action" letters (to the extent permitted under
applicable law) to cause any dispositions of Shares or acquisitions of Parent
Shares (including derivative securities with respect to Parent Shares) resulting
from the transactions contemplated by Article I and Article II of this Agreement
by each individual who is subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to the Company to be exempt under
Rule 16b-3 promulgated under the Exchange Act.
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ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) STOCKHOLDER APPROVAL. If required under the DGCL, the Stockholder
Approval shall have been obtained.
(b) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order,
preliminary or permanent injunction or other judgment, action or order issued by
any court of competent jurisdiction or governmental agency or other statute,
law, rule, legal restraint or prohibition (collectively, "Restraints") shall be
in effect preventing the consummation of the Merger; provided, however, that
each of the parties hereto shall use its reasonable best efforts to prevent the
entry of any such Restraints and to appeal as promptly as possible any such
Restraints that may be entered.
(c) EXCHANGE OF COMPANY SHARES. Parent or any of its affiliates shall have
purchased Shares pursuant to the Offer.
(d) EFFECTIVENESS OF S-4. If the Stockholder Approval is required under
applicable law, the post-effective amendment to the Form S-4 referenced in
Section 6.4 shall have been declared effective and shall not be the subject of
any stop order or proceedings seeking a stop order.
(e) NASDAQ LISTING. The Parent Shares to be issued in the Merger shall
have been approved for listing on the Nasdaq National Market System, subject to
official notice of issuance.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 TERMINATION. This Agreement may be terminated at any time
prior to the Appointment Time, whether before or after approval of the terms of
this Agreement by the stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if (x) the Offer shall have expired without the acceptance for
payment of Shares thereunder or (y) Sub shall not have accepted for
payment any Shares pursuant to the Offer prior to May 31, 2002,
provided, however, that the right to terminate this Agreement
pursuant to this (b)(i) shall not be available to any party whose
failure to perform any of its obligations under this Agreement
results in the failure of any such condition or if the failure of
such condition results from facts or circumstances that constitute a
breach of representation or warranty under this Agreement by such
party; or
(ii) if any Restraint applicable to the Offer, the Merger or the other
transactions contemplated by this Agreement shall have become final
and nonappealable;
(c) by Parent upon the occurrence of any event set forth in paragraph (d) of
Annex A to this Agreement;
(d) by Parent prior to the purchase of Shares pursuant to the Offer if the
Company shall have breached or failed to perform in any material respect any
representation, warranty, covenant or other agreement contained in this
Agreement that (i) would give rise to the failure of a condition set forth in
Section 5(e) or (f) of Annex A and (ii) cannot be or has not been cured within
10 business days after the giving of written notice to the Company;
B-34
(e) by the Company prior to the purchase of Shares pursuant to the Offer if
Parent shall have breached or failed to perform in any material respect any
representation, warranty, covenant or other agreement contained in this
Agreement that (i) would give rise to the failure of a condition set forth in
Section 5(e) or (f) of Annex A (assuming, for the purposes of this clause (i),
the word "Parent" replaced the words "the Company" in such Sections and the
reference in Section 5(e) to Section 8.1(d) were instead a reference to this
Section 8.1(e)) and (ii) cannot be or has not been cured within 10 business days
after the giving of written notice to the Company; or
(f) by the Company in accordance with Section 6.2(b), provided that it has
complied with all provisions thereof, including the notice provisions therein,
and that it has paid Parent the Termination Fee in accordance with the terms of
this Agreement.
Section 8.2 EFFECT OF TERMINATION. In the event of a termination of this
Agreement by either the Company or Parent as provided in Section 8.1, other than
with respect to the provisions of Section 8.5, this Agreement shall forthwith
become void and there shall be no liability or obligation on the part of Parent,
Sub or the Company or their respective officers or directors, provided, however,
that nothing herein shall relieve any party for liability for any willful breach
hereof.
Section 8.3 AMENDMENT. This Agreement may be amended by the parties
hereto, by duly authorized action taken, at any time before or after obtaining
the Company Stockholder Approval, but, after the purchase of Shares pursuant to
the Offer, no amendment shall be made which changes the amount or kind of Merger
Consideration or any of the terms or conditions of this Agreement if such
alteration or change would adversely affect the rights of the holders of any
Shares, and, after the Stockholder Approval, no amendment shall be made which by
law requires further approval by such stockholders without obtaining such
further approval. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
Section 8.4 EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties hereto may, to the extent legally allowed, subject to Section 8.3
and Article I, (i) extend the time for the performance of any of the obligations
or other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto or (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
Section 8.5 EXPENSES.
(a) Except as otherwise provided in this Section 8.5, each party shall bear
its own expenses in connection with the transactions contemplated by this
Agreement, provided that each of Parent and the Company shall bear and pay
one-half of (i) the costs and expenses incurred in connection with filing,
printing and mailing the Proxy Statement and the Form S-4 and (ii) the filing
fees for the premerger notification and report forms under the HSR Act and any
similar foreign antitrust laws.
(b) If (i) following the time a third party Takeover Proposal shall have
been publicly announced, this Agreement is terminated pursuant to
Section 8.1(b)(i) [no Shares purchased in Offer] and within 12 months of
termination the Company enters into an acquisition agreement with respect to a
Takeover Proposal or Takeover Proposal is consummated, (ii) following the time a
third party Takeover Proposal shall have been publicly announced, this Agreement
is terminated pursuant to 8.1(d) [Company breach] due to a willful and material
breach by the Company or any subsidiary and within six months of termination the
Company enters into an acquisition agreement with respect to a Takeover Proposal
or Takeover Proposal is consummated, (iii) this Agreement is terminated pursuant
to Section 8.1(c) [change of recommendation], or (iv) this Agreement is
terminated pursuant to Section 8.1(f) [Superior
B-35
Proposal], then the Company shall pay to Parent a fee of $51 million (the
"Termination Fee") by wire transfer of immediately available funds. Such fee
shall be paid prior to termination in the case of clause (iv) and within one
business day of termination otherwise. The Company acknowledges that the
agreements contained in this Section 8.5(b) are an integral part of the
transactions contemplated in this Agreement, and that, without these agreements,
Parent would not enter into this Agreement. Accordingly, if the Company fails to
pay the amount due pursuant to this Section 8.5(b) when it is required to be
paid, and, in order to obtain such payment, Parent commences a suit which
results in a judgment against the Company for the fee set forth in this
Section 8.5(b), the Company shall pay to Parent its costs and expenses
(including attorneys' fees) in connection with such suit, including any costs of
collection, together with interest on the amount of the fee at the publicly
announced prime rate of Citibank, N.A. in effect on the date such fee was
required to be paid.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 NONSURVIVAL 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.
Section 9.2 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given, and
shall be effective, upon receipt, if delivered personally, telecopied (which is
confirmed) or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
if to Parent or Sub, to:
MedImmune, Inc.
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
with a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
Telephone: (212) 259-8000
Telecopier: (212) 259-6333
Attention: Frederick W. Kanner
Richard D. Pritz
if to the Company, to:
Aviron
297 North Bernardo Avenue
Mountain View, California 94043
with a copy to:
Latham & Watkins
135 Commonwealth Drive
Menlo Park, California 94015
Telephone: (650) 328-4600
Telecopier: (650) 463-2600
Attention: Alan C. Mendelson
B-36
Section 9.3 DEFINITIONS. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person;
(b) "business day" means any day other than Saturday, Sunday or any other
day on which banks are legally permitted to be closed in New York;
(c) "FM" means the frozen formulation of FluMist for which the Company
submitted a Biologics License Application to the FDA in October 2000 and the
liquid formulation of FluMist which is currently being tested by Wyeth;
(d) "knowledge" of (x) the Company means the knowledge of the persons listed
on Schedule 9.3(a)(x), and (y) Parent means the knowledge of persons listed on
Schedule 9.3(a)(y);
(e) "Material Adverse Change" or "Material Adverse Effect", as used with
respect to the Company or Parent, as the case may be, means any change, effect,
event, occurrence or state of facts, individually or together with all other
changes, effects, events, occurrences or states of fact, that is or is
reasonably likely to be materially adverse to the business, financial condition
or results of operations of such entity and its subsidiaries, taken as a whole,
other than any change or condition relating to the economy or securities markets
in general or the industry in which the Company or Parent, as the case may be,
operates;
(f) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity;
(g) a "subsidiary" of any person means, with respect to such person, any
corporation, partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other subsidiary), owns,
directly or indirectly, 50% or more 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;
(h) "Superior Proposal" means any bona fide proposal made by a third party
(i) to acquire, directly or indirectly, including pursuant to a tender offer,
exchange offer, merger, consolidation or similar transaction, for consideration
consisting of cash and/or securities, more than 50% of the combined voting power
of the outstanding Shares (assuming the exercise or conversion of all
outstanding options, warrants, rights and convertible securities) or all or
substantially all the assets of the Company and its subsidiaries taken as a
whole, (ii) that is on terms which the Board of Directors of the Company
determines in its good faith judgment (after receiving advice from a financial
advisor of nationally recognized reputation) to be more favorable to the Company
and its stockholders from a financial point of view than the Merger after taking
into account the terms of this Agreement (including any amendment that may be
proposed by Parent), (iii) which is reasonably capable of being consummated and
(iv) for which financing, to the extent required, is then committed or which, in
the good faith judgment of the Board of Directors of the Company, is reasonably
capable of being obtained on a prompt basis by such third party; and
(i) "Takeover Proposal" means any inquiry, proposal or offer from any person
relating to any direct or indirect acquisition or purchase of a business or
assets that constitute 15% or more of the net revenues, net income or the assets
of the Company or its subsidiaries, taken as a whole, or 15% or more of any
class of equity securities of the Company or its subsidiaries or any tender
offer, exchange offer or other transaction that if consummated would result in
any person beneficially owning 15% or more of any class of equity securities of
the Company or any of its subsidiaries or any merger, consolidation, business
combination, recapitalization, liquidation or dissolution or any similar
transaction involving the Company or any of its subsidiaries, other than the
transactions contemplated by this Agreement.
B-37
Section 9.4 INTERPRETATION. When a reference is made in this Agreement to
an Article, a Section, Exhibit or Schedule, such reference shall be to an
Article of, a Section of, or an Exhibit or Schedule to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". References to "contracts" shall
include references to agreements, obligations, commitments, arrangements or
understandings. The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. All terms defined
in this Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such term. Any agreement, instrument or
statute defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a person are also to its
permitted successors and assigns.
Section 9.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 9.6 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This Agreement
and the Confidentiality Agreement (a) constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter of this Agreement and the
Confidentiality Agreement and (b) except for the provisions of Section 6.8, are
not intended to confer upon any person other than the parties any rights or
remedies.
Section 9.7 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.8 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without the prior written
consent of the other parties. 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. Any assignment contrary to
the provisions of this Section 9.8 shall be void.
Section 9.9 ENFORCEMENT. The parties agree that irreparable damage would
occur and that the parties would not have any adequate remedy at law in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Federal court located in the
State of Delaware or in any state court in the State of Delaware, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any Federal court located in the State of Delaware or
of any state court located in the State of Delaware in the event any dispute
arises out of this Agreement or the transactions contemplated by this Agreement,
(b) agrees that it will not attempt to deny or defeat such personal jurisdiction
by motion or other request for leave from any such court and (c) agrees that it
will not bring any action relating to this Agreement or
B-38
the transactions contemplated by this Agreement in any court other than a
Federal court located in the State of Delaware or a state court located in the
State of Delaware (other than to enforce the judgment of such court). EACH OF
PARENT, SUB AND THE COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF
PARENT, SUB AND THE COMPANY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.
Section 9.10 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. Upon such determination that any
term 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 to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
Section 9.11 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.
B-39
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
MEDIMMUNE, INC.
By: /s/ DAVID M. MOTT
-----------------------------------------
David M. Mott
Chief Executive Officer
APPLE MERGER CORP.
By: /s/ DAVID M. MOTT
-----------------------------------------
David M. Mott
Chief Executive Officer
AVIRON
By: /s/ C. BOYD CLARKE
-----------------------------------------
C. Boyd Clarke
President and Chief Executive Officer
B-40
ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other term of the Offer, subject to the terms of the
Merger Agreement, Sub shall not be required to accept for payment or, subject to
any applicable rules and regulations of the SEC, including Rule 14e-1(c) under
the Exchange Act (relating to Sub's obligation to pay for or return tendered
Shares after the termination or withdrawal of the Offer), to pay for any Shares
tendered pursuant to the Offer if immediately prior to the expiration of the
Offer (1) there shall not have been validly tendered a majority of the
outstanding Shares (assuming the exercise or conversion of all outstanding
options, warrants, rights and convertible securities which are exercisable or
convertible prior to the Merger) (the "Minimum Condition"), (2) any applicable
waiting period under the HSR Act and any other applicable antitrust law shall
not have expired or been terminated, (3) the Form S-4 shall not have become
effective under the Securities Act or shall be the subject of any stop order or
proceedings seeking a stop order, (4) the Parent Shares to be issued in the
Offer shall not have been approved for listing on the Nasdaq, subject to
official notice of issuance or (5) at any time on or after the date of the
Merger Agreement and prior to the Expiration Date, any of the following
conditions exists:
(a) there shall be entered, threatened, instituted, pending or issued by any
Governmental Entity any suit, action, proceeding, judgment or decree
(i) challenging the acquisition by Parent or Sub of any Shares under the Offer,
seeking to restrain or prohibit the making or consummation of the Offer or the
Merger or seeking to obtain from the Company, Parent or Sub any damages that are
material in relation to the Company and its subsidiaries taken as a whole,
(ii) seeking to prohibit or materially limit the ownership or operation by the
Company, Parent or any of their respective subsidiaries of a material portion of
the business or assets of the Company and its subsidiaries, taken as a whole, or
Parent and its subsidiaries, taken as a whole, or to compel the Company and its
subsidiaries, taken as a whole or Parent to dispose of or hold separate any
material portion of the business or assets of the Company or Parent and its
subsidiaries, taken as a whole, in each case as a result of the Offer or any of
the other transactions contemplated by this Agreement, (iii) seeking to impose
material limitations on the ability of Parent or Sub to acquire or hold, or
exercise full rights of ownership of, any Shares to be accepted for payment
pursuant to the Offer including, without limitation, the right to vote such
Shares on all matters properly presented to the stockholders of the Company,
(iv) seeking to prohibit Parent or any of its subsidiaries from effectively
controlling in any material respect any material portion of the business or
operations of the Company or its subsidiaries or (v) which otherwise is
reasonably likely to have a Material Adverse Effect on the Company;
(b) there shall be any statute, law, ordinance, rule, regulation, judgment,
order or decree enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, by any Governmental Entity, other than the routine
application to the Offer or the Merger of applicable waiting periods under the
HSR Act, that is reasonably likely to result, directly or indirectly, in any of
the consequences referred to in clauses (i) through (v) of paragraph (a) above;
(c) there shall have occurred any Material Adverse Effect with respect to
the Company;
(d) (i) the Board of Directors of the Company or any committee thereof shall
have (x) withdrawn or modified in a manner adverse to Parent or Sub its approval
or recommendation of the Offer or the Merger or its adoption of this Agreement,
(y) approved or recommended or taken a neutral position with respect to any
Takeover Proposal, (z) failed to reaffirm its recommendation of the Offer or the
Merger or its adoption of this Agreement within ten business days of being
requested by Parent to do so or (ii) the Board of Directors of the Company or
any committee thereof shall have resolved to take any of the foregoing actions;
B-41
(e) any of the representations and warranties of the Company set forth in
this Agreement shall not be true and correct in all respects (without regard for
any Material Adverse Effect, materiality or similar qualifiers), except where
the failures to be true and correct would not, in the aggregate, have a Material
Adverse Effect on the Company, or the representations and warranties set forth
in Section 4.23 [FM] of the Merger Agreement shall not be true and correct in
all respects, in each case at the date of the Merger Agreement and as of the
expiration of the Offer (as though made as of such date, except that those
representations and warranties that address matters only as of a particular date
shall remain true and correct as of such date);
(f) the Company shall have failed to perform or comply, in all material
respects, with any agreement, obligation or covenant to be performed or complied
with by it under the Merger Agreement;
(g) the Agreement shall have been terminated in accordance with its terms or
Parent and the Company shall have agreed that Sub terminate the Offer or
postpone the acceptance for payment of Shares thereunder; or
(h) either Parent or the Company shall have failed to receive, as of the
date of the preliminary prospectus included in the Form S-4, the opinion which
such Party is to obtain as of such date as described in Section 6.13(c) of the
Merger Agreement, or, as of the date of the expiration of the Offer, the opinion
which such Party is to obtain as of such date as described in Section 6.13(c) of
the Merger Agreement (collectively, the "Tax Opinion Condition").
Except for the Tax Opinion Condition and the conditions set forth in
paragraphs (1), (2), (3) and (4), none of which shall be waived without the
prior written consent of the Company, the foregoing conditions are for the sole
benefit of Parent and Sub and may, subject to the terms of the Merger Agreement,
be waived by Parent and Sub in whole or in part at any time and from time to
time in their reasonable discretion. The failure by Parent or Sub at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
Terms used but not defined herein shall have the meanings assigned to such
terms in the Agreement to which this Annex A is a part.
B-42
ANNEX B
FORM OF AFFILIATE AGREEMENT
, 2001
MedImmune, Inc.
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
Ladies & Gentlemen:
I have been advised that as of the date of this letter I may be deemed to be
an "affiliate" of Aviron, a Delaware corporation (the "Company"), as the term
"affiliate" is defined for purposes of Rule 145 under the Securities Act of 1933
(the "Act"). I have been further advised that pursuant to the terms of the
Agreement and Plan of Merger, dated as of December 2, 2001 (the "Merger
Agreement"), among MedImmune, Inc., a Delaware corporation ("Parent"), a
subsidiary of Parent ("Sub"), and the Company, Sub shall commence an offer to
exchange shares of common stock of Parent ("Parent Shares") for shares of common
stock of the Company ("Shares") and, following the consummation of the offer,
Sub shall be merged with the Company and each remaining Share shall be converted
into the right to receive Parent Shares (the offer and the merger are sometime
referred to as the "Transaction"), all as set forth in the Merger Agreement, and
that as a result of the Transaction, I may receive Parent Shares in exchange for
Shares owned by me. Nothing herein shall constitute an admission that I am an
affiliate of the Company.
I hereby represent, warrant and covenant to Parent that in the event I
receive any Parent Shares as a result of the Transaction:
a. I shall not make any sale, transfer or other disposition of Parent
Shares or any interests therein in violation of the Act or the rules and
regulations thereunder.
b. I have carefully read this letter and the Merger Agreement and discussed
its requirements and other applicable limitations upon my ability to sell,
transfer or otherwise dispose of Parent Shares or any interests therein to the
extent I believed necessary with my counsel or counsel for the Company.
c. I have been advised that the issuance of Parent Shares to me pursuant to
the Transaction will be registered under the Act on a Registration Statement on
Form S-4. However, I have also been advised that, since I may be deemed to have
been an affiliate of the Company and the distribution by me of the Parent Shares
has not been registered under the Act, I may not sell, transfer or otherwise
dispose of Parent Shares issued to me in the Transaction unless (i) such sale,
transfer or other disposition has been registered under the Act, (ii) such sale,
transfer or other disposition is made in conformity with the volume and other
limitations of Rule 145 promulgated under the Act and I have presented Parent
with such evidence of conformity as it may reasonably request, or (iii) in the
opinion of counsel reasonably acceptable to Parent, such sale, transfer or other
disposition is otherwise exempt from registration under the Act.
d. I understand that appropriate legends referencing the Act and this
letter may be placed on the certificates representing the Parent Shares issued
to me in the Transaction and that such legends will be removed when, in the
reasonable judgment of Parent, they are no longer required for purposes of the
Act.
B-43
e. I understand that Parent is under no obligation to register the sale,
transfer or other disposition of Parent Shares by me or on my behalf under the
Act or to take any other action necessary in order to make compliance with an
exemption from such registration available.
Very truly yours,
------------------------------------------------------------------
Name:
Accepted this day of
MEDIMMUNE, INC.
By:
------------------------
Name:
Title:
B-44
Facsimile copies of the letter of transmittal, properly completed and duly
executed, will be accepted. The letter of transmittal, share certificates and
any other required documents should be sent or delivered by each stockholder of
Aviron or such stockholder's broker, dealer, commercial bank, trust company or
other nominee to the exchange agent, at the applicable address set forth below:
The Exchange Agent for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
59 MAIDEN LANE
NEW YORK, NEW YORK 10038
(800) 937-5449
OR (718) 921-8200
Any questions or requests for assistance or additional copies of this
preliminary prospectus, the letter of transmittal, the notice of guaranteed
delivery and the other exchange offer materials may be directed to the
information agent or the dealer manager at its address and telephone number set
forth below. Stockholders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the offer.
The Information Agent for the Offer is:
[MACKENZIE PARTNERS, INC. LOGO]
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
CALL COLLECT AT (212) 929-5500
OR TOLL-FREE AT (800) 322-2885
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
FOUR WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10080
(609) 274-3066 (CALL COLLECT)
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the General Corporation Law of the State of
Delaware (the "DGCL") empowers a corporation to indemnify any person who was or
is a party or who is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that the person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that the person acted in
any of the capacities set forth above, against expenses (including attorney's
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of
Section 145, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; the indemnification provided for by
Section 145 shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of such person's heirs, executors and
administrators; and empowers the corporation to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.
MedImmune provides liability insurance for its directors and officers which
provides for coverage against loss from claims made against directors and
officers in their capacity as such, including liabilities under Securities Act
of 1933.
Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation of its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
II-1
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for a
transaction from which the director derived an improper personal benefit.
Article EIGHTH of MedImmune's Certificate of Incorporation limits the liability
of directors to the fullest extent permitted by Section 102(b)(7).
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT
NO. DESCRIPTION
--------------------- -----------
2.1 Agreement and Plan of Merger, dated as of December 2, 2001,
among MedImmune, Inc., Apple Merger Corp. and Aviron
(included as Annex B hereto).
3.1 Restated Certificate of Incorporation of MedImmune, Inc. is
incorporated herein by reference to Exhibit 3.1 to
MedImmune, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 2000.
3.2 Bylaws of MedImmune, Inc. are incorporated herein by
reference to Exhibit 3.2 to MedImmune, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2000.
5.1 Opinion of Dewey Ballantine LLP as to the validity of the
shares being issued.
8.1 Tax opinion of Dewey Ballantine LLP.
8.2 Tax opinion of Latham & Watkins.
23.1 Consent of PricewaterhouseCoopers LLP.*
23.2 Consent of Ernst & Young LLP as to Aviron.*
23.3 Consent of Ernst & Young LLP as to U.S. Bioscience, Inc.*
23.4 Consent of Dewey Ballantine LLP (included in Exhibit 5.1
hereto).
23.5 Consent of Dewey Ballantine LLP (included in Exhibit 8.1
hereto).
23.6 Consent of Latham & Watkins (included in Exhibit 8.2
hereto).
24.1 Powers of Attorney (included on the Signature Page of this
Registration Statement).
99.1 Letter of Transmittal.
99.2 Notice of Guaranteed Delivery.
99.3 Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
99.4 Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
99.5 Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
99.6 Press release dated December 3, 2001 (incorporated by
reference to the filing by MedImmune, Inc. under Rule 425 on
December 3, 2001).
99.7 Summary Advertisement as published in the Wall Street
Journal on December 11, 2001 (incorporated by reference to
the filing by MedImmune, Inc. under Rule 425 on
December 11, 2001).*
------------------------
* Filed herewith.
Except as otherwise indicated, all exhibits were previously filed with this
Registration Statement on December 10, 2001.
II-2
ITEM 22. UNDERTAKINGS.
- The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) 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.
- 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.
- The registrant undertakes that every prospectus (i) that is filed pursuant
to the paragraph immediately preceding, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Securities Act 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, each such
post-effective amendment 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.
- Insofar as indemnification for liabilities arising under the Securities
Act 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 Commission such
indemnification is against public policy as expressed in the Securities
Act 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 whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
- The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant
to Items 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 documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
- 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-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to the Registration Statement on Form S-4
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Gaithersburg, State of Maryland, on January 3, 2002.
MEDIMMUNE, INC.
By: /s/ DAVID M. MOTT
-----------------------------------------
David M. Mott
Chief Executive Officer and
Vice Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
Chairman of the Board and
------------------------------------------- the Executive Committee
Wayne T. Hockmeyer, Ph.D.
Chief Executive Officer and
/s/ DAVID M. MOTT Vice Chairman of the
------------------------------------------- Board (Principal January 3, 2002
David M. Mott Executive Officer)
* President, Chief Operating
------------------------------------------- Officer and Director January 3, 2002
Melvin D. Booth
Senior Vice President and
* Chief Financial Officer
------------------------------------------- (Principal Financial January 3, 2002
Gregory S. Patrick Officer and Principal
Accounting Officer)
* Executive Vice President,
------------------------------------------- Medical Director and January 3, 2002
Franklin H. Top, Jr., M.D. Director
* Director
------------------------------------------- January 3, 2002
M. James Barrett, Ph.D.
II-4
SIGNATURE TITLE DATE
--------- ----- ----
* Director
------------------------------------------- January 3, 2002
James H. Cavanaugh, Ph.D.
Director
-------------------------------------------
Barbara Hackman Franklin
* Director
------------------------------------------- January 3, 2002
Lawrence C. Hoff
* Director
------------------------------------------- January 3, 2002
Gordon S. Macklin
*By: /s/ DAVID M. MOTT
--------------------------------------
David M. Mott, ATTORNEY-IN-FACT
II-5
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
--------------------- -----------
2.1 Agreement and Plan of Merger, dated as of December 2, 2001,
among MedImmune, Inc, Apple Merger Corp. and Aviron
(included as Annex B hereto).
3.1 Restated Certificate of Incorporation of MedImmune, Inc. is
incorporated herein by reference to Exhibit 3.1 to
MedImmune, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 2000.
3.2 Bylaws of MedImmune, Inc. are incorporated herein by
reference to Exhibit 3.2 to MedImmune, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2000.
5.1 Opinion of Dewey Ballantine LLP as to the validity of the
shares being issued.
8.1 Tax opinion of Dewey Ballantine LLP.
8.2 Tax opinion of Latham & Watkins.
23.1 Consent of PricewaterhouseCoopers LLP.*
23.2 Consent of Ernst & Young LLP as to Aviron.*
23.3 Consent of Ernst & Young LLP as to U.S. Bioscience, Inc.*
23.4 Consent of Dewey Ballantine LLP (included in Exhibit 5.1
hereto).
23.5 Consent of Dewey Ballantine LLP (included in Exhibit 8.1
hereto).
23.6 Consent of Latham & Watkins (included in Exhibit 8.2
hereto).
24.1 Powers of Attorney (included on the Signature Page of this
Registration Statement).
99.1 Letter of Transmittal.
99.2 Notice of Guaranteed Delivery.
99.3 Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
99.4 Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
99.5 Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
99.6 Press release dated December 3, 2001 (incorporated by
reference to the filing by MedImmune, Inc. under Rule 425 on
December 3, 2001).
99.7 Summary Advertisement as published in the Wall Street
Journal on December 11, 2001 (incorporated by reference to
the filing by MedImmune, Inc. under Rule 425 on
December 11, 2001).*
------------------------
* Filed herewith
Except as otherwise indicated, all exhibits were previously filed with this
Registration Statement on December 10, 2001.
II-6