AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 8, 1999
REGISTRATION NO. 333-_____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
KOS PHARMACEUTICALS, INC.
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
FLORIDA 65-0670898
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION)
1001 BRICKELL BAY DRIVE, SUITE 2502
MIAMI, FLORIDA 33131 33131
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
EMPLOYEE STOCK PURCHASE PLAN
(FULL TITLE OF PLAN)
DANIEL M. BELL
1001 BRICKELL BAY DRIVE, 25TH FLOOR
MIAMI, FLORIDA 33131
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(305) 577-3464
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS TO:
STEVEN SONBERG, ESQ.
HOLLAND & KNIGHT, LLP
701 BRICKELL AVE, SUITE 3000
MIAMI, FLORIDA 33131
(305) 789-7794
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
TITLE OF AMOUNT TO PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED (1) MAXIMUM MAXIMUM REGISTRATION
OFFERING PRICE AGGREGATE FEE
PER UNIT(2) OFFERING PRICE (2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,000,000 $6.1563 $6,156,300 $1,712
================================================================================================================================
(1) This Registration Statement also covers any additional shares that may
hereafter become purchasable as a result of the adjustment provisions
in the Plan or the agreement pursuant to which such shares are issued.
(2) Estimated solely for the purpose of calculating the registration fee
based upon the average of the high and low prices reported on the
consolidated reporting system for the Nasdaq National Market on
January 6, 1999.
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission by the Kos Pharmaceuticals, Inc. (the "Company") are incorporated
herein by reference:
(1) The Company's Transition Report, as amended, on Form 10-K/A for the
transition period from July 1, 1997 to December 31, 1997;
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 30, 1998;
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998;
(4) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998;
(5) All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all remaining securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this prospectus and to be part
thereof from the date of filing of such documents; and
(6) The description of the Company's Common Stock contained under the
caption "Description of Registrant's Capital Stock" in the 424(b) Prospectus and
incorporated by reference into the Registration Statement of the Company on Form
8-A (Commission File No. 000-22171) filed with the Commission pursuant to
Section 12(g) of the Exchange Act on February 25, 1997.
Any statement in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or replaces such statement. Any statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
The Company undertakes to provide without charge to each person,
including any beneficial owner, to whom this prospectus is delivered, upon
written or oral request of such person, a copy of any and all information that
has been incorporated by reference in this prospectus (not including exhibits to
the information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that this prospectus
incorporates). Such request should be directed to the President, Kos
Pharmaceuticals, Inc., 1001 Brickell Bay Drive, 25th Floor, Miami, Florida
33131, telephone number (305) 577-3464.
<PAGE>
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable; the class of securities to be offered is registered
under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Florida Business Corporation Act ("FBCA") and the Company's Bylaws
provide that in certain cases, each officer and director of the Company shall be
indemnified by the Company against certain costs, expenses and liabilities which
he or she may incur in his or her capacity as such. The Company also intends to
purchase directors' and officers' liability insurance consistent with the
provisions of the Florida Business Corporation Act to protect directors and
officers from liabilities against various laws, including the Securities Act of
1933.
The Company's Bylaws provide:
RIGHT TO INDEMNIFICATION. Any person, his heirs, or personal
representative, made, or threatened to be made a party to any
threatened, pending, or completed action or proceeding, whether civil,
criminal, administrative, regulatory, or investigative ("Proceeding")
because he is or was a director or officer of this Corporation or
serves or served any other corporation or other enterprise in any
capacity at the request of this Corporation, shall be indemnified by
this Corporation, to the full extent permitted by the Florida Business
Corporation Act; provided, however, that the Corporation shall
indemnify any such person seeking indemnity in connection with a
Proceeding (or part thereof) initiated by such person only if such
Proceeding (or part thereof) was authorized by the Board of Directors
of the Corporation. In discharging his duty, any director or officer,
when acting in good faith, may rely upon information, opinions,
reports, or statements, including financial statements and other
financial data, in each case prepared or presented by (1) one or more
officers or employees of the Corporation whom the director or officer
reasonably believes to be reliable and competent in the matters
presented, (2) counsel, public accountants, or other persons as to
matters that the director or officer believes to be within that
person's professional or expert competence, or (3) in the case of a
director, a committee of the board of directors upon which he does not
serve, duly designated according to law, as to matters within its
designated authority, if the director reasonably believes that the
committee is competent.
ADVANCES. The rights set forth above in this Article VI shall include
the right to be paid by the Corporation expenses incurred in defending
or being represented in any such Proceeding in advance of its final
disposition; provided, however, that the payment of such expenses
incurred by a director or officer because he is or was a director of
officer of this Corporation or serves or served any other corporation
or enterprise in any capacity at the request of this Corporation (and
not in any other capacity in which service was or is rendered by such
person while a director or officer, including service to an employee
benefit plan) in advance of the final disposition of such
<PAGE>
Proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it should be determined ultimately that such
director or officer is not entitled to be indemnified under this
Article VI or otherwise.
CONTRACT RIGHT. All rights to indemnification, including advancement of
expenses, shall be deemed to be provided by a contract between the
Corporation and the director or officer who serves in such capacity at
any time while this Article VI and other relevant provisions of the
Florida Business Corporation Act and other applicable law, if any, are
in effect, such that any repeal or modification thereof shall not
adversely affect any right existing at the time of such repeal or
modification.
RIGHT TO BRING SUIT. If a claim under the preceding paragraphs of this
Article VI is not paid in full by the Corporation within 90 days after
a written claim therefor has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation
to recover the unpaid amount of the claim and, if successful in whole
or in part, the claimant shall be entitled to be paid also the expense,
including attorney's fees, of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any Proceeding in advance of
its final disposition where the required undertaking has been tendered
to the Corporation) that the claimant has not met the applicable
standard of conduct which makes it permissible under the Florida
Business Corporation Act for the Corporation to indemnify the claimant
for the amount claimed, but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel, or its shareholders)
to have made a determination prior to the commencement of such action
that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in the
Florida Business Corporation Act, nor an actual determination by the
Corporation (including its Board of Directors, independent legal
counsel, or its shareholders) that the claimant had not met such
applicable standard of conduct, shall be a defense to the action or
create a presumption that claimant had not met the applicable standard
of conduct.
NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by this
Article VI shall not be exclusive of any other right which such person
may have or hereafter acquire under any statute, provision of these
Bylaws, the Articles of Incorporation, agreement, vote of shareholders
or disinterested directors or otherwise.
INSURANCE. The Corporation may maintain insurance, at its expense, for
the purpose of indemnifying itself and any director, officer, employee
or agent of the Corporation or another corporation, partnership, trust
or other enterprise, whether or not the Corporation would have the
power to provide such indemnity under the Florida Business Corporation
Act.
Section 607.0850 of the FBCA, "Indemnification of officers, directors,
employees and agents," provides:
(1) A corporation shall have power to indemnify any person who was or
is a party to any proceeding (other than an action by, or in the right
of, the corporation), by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation or is or was
serving at the
<PAGE>
request of the corporation as a director, officer, employee, or agent
of another corporation, partnership, joint venture, trust, or other
enterprise against liability incurred in connection with such
proceeding, including any appeal thereof, if he or she acted in good
faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any proceeding by
judgment, order, settlement, or conviction or upon a plea of nolo
contendere or its equivalent shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which he or
she reasonably believed to be in, or not opposed to, the best interests
of the corporation or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was
unlawful.
(2) A corporation shall have power to indemnify any person, who was or
is a party to any proceeding by or in the right of the corporation to
procure a judgment in its favor 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 and amounts paid
in settlement not exceeding, in the judgment of the board of directors,
the estimated expense of litigating the proceeding to conclusion,
actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof. Such
indemnification shall be authorized if such person acted in good faith
and in a manner he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation, except that no
indemnification shall be made under this subsection in respect of any
claim, issue, or matter as to which such person shall have been
adjudged to be liable unless, and only to the extent that, the court in
which such proceeding was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the
adjudication of liability but in view of all circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
(3) To the extent that a director, officer, employee, or agent of a
corporation has been successful on the merits or otherwise in defense
of any proceeding referred to in subsection (1) or subsection (2), or
in defense of any claim, issue, or matter therein, he shall be
indemnified against expenses actually and reasonably incurred by him in
connection therewith.
(4) Any indemnification under subsection (1) or subsection (2), unless
pursuant to a determination by a court, shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee,
or agent is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in subsection (1) or
subsection (2). Such determination shall be made:
(a) By the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such
proceeding;
(b) If such a quorum is not obtainable or, even if obtainable,
by majority vote of a committee duly designated by the board
of directors (in which directors who are parties may
participate) consisting solely of two or more directors not at
the time parties to the proceeding;
<PAGE>
(c) By independent legal counsel;
1. Selected by the board of directors prescribed in
paragraph (a) or the committee prescribed in
paragraph (b); or
2. If a quorum of the directors cannot be obtained
for paragraph (1) and the committee cannot be
designated under paragraph (b), selected by majority
vote of the full board of directors (in which
directors who are parties may participate); or
(d) By the shareholders by a majority vote of a quorum
consisting of shareholders who were not parties to such
proceeding or, if no such quorum is obtainable, by a majority
vote of shareholders who were not parties to such proceeding.
(5) Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination
that indemnification is permissible. However, if the determination of
permissibility is made by independent legal counsel, persons specified
by paragraph (4)(c) shall evaluate the reasonableness of expenses and
may authorize indemnification.
(6) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the corporation in advance of the
final disposition of such proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if he or
she is ultimately found not to be entitled to indemnification by the
corporation pursuant to this section. Expenses incurred by other
employees and agents may be paid in advance upon such terms or
conditions that the board of directors deems appropriate.
(7) The indemnification and advancement of expenses provided pursuant
to this section are not exclusive, and a corporation may make any other
or further indemnification or advancement of expenses of any of its
directors, officers, employees, or agents, under any bylaw, agreement,
vote of shareholders or disinterested directors, or otherwise, both as
to action in his or her official capacity and as to action in another
capacity while holding such office. However, indemnification or
advancement of expenses shall not be made to or on behalf of any
director, officer, employee, or agent if a judgment or other final
adjudication establishes that his or her actions, or omissions to act,
were material to the cause of action so adjudicated and constitute:
(a) A violation of the criminal law, unless the director,
officer, employee, or agent had reasonable cause to believe
his or her conduct was lawful or had no reasonable cause to
believe his or her conduct was unlawful;
(b) A transaction from which the director, officer, employee,
or agent derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the
liability provisions of s. 607.0834 are applicable; or
<PAGE>
(d) Willful misconduct or a conscious disregard for the best
interests of the corporation in a proceeding by or in the
right of the corporation to procure a judgment in its favor or
in a proceeding by or in the right of a shareholder.
(8) Indemnification and advancement of expenses as provided in this
section shall continue as, unless otherwise provided when authorized or
ratified, to a person who has ceased to be a director, officer,
employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person, unless otherwise
provided when authorized or ratified.
(9) Unless the corporation's articles of incorporation provide
otherwise, notwithstanding the failure of a corporation to provide
indemnification, and despite any contrary determination of the board or
of the shareholders in the specific case, a director, officer,
employee, or agent of the corporation who is or was a party to a
proceeding may apply for indemnification or advancement of expenses, or
both, to the court conducting the proceeding, to the circuit court, or
to another court of competent jurisdiction. On receipt of an
application, the court, after giving any notice that it considers
necessary, may order indemnification and advancement of expenses,
including expenses incurred in seeking court-ordered indemnification or
advancement of expenses, if it determines that:
(a) The director, officer, employee, or agent is entitled to
mandatory indemnification under subsection (3), in which case
the court shall also order the corporation to pay the director
reasonable expenses incurred in obtaining court-ordered
indemnification or advancement of expenses;
(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue
of the exercise by the corporation of its power pursuant to
subsection (7); or
(c) The director, officer, employee, or agent is fairly and
reasonably entitled to indemnification or advancement of
expenses, or both, in view of all the relevant circumstances,
regardless of whether such person met the standard of conduct
set forth in subsection (1), subsection (2), or subsection
(7).
(10) For purposes of this section, the term "corporation" includes, in
addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director,
officer, employee, or agent of a constituent corporation, or is or was
serving at the request of a constituent corporation as a director,
officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, is in the same position under this
section with respect to the resulting or surviving corporation as he or
she would have with respect to such constituent corporation if its
separate existence had continued.
<PAGE>
(11) For purposes of this section;
(a) The term "other enterprises" includes employee benefit
plans;
(b) The term "expenses" includes counsel fees, including those
for appeal;
(c) The term "liability" includes obligations to pay a
judgment, settlement, penalty, fine (including an excise tax
assessed with respect to any employee benefit plan), and
expenses actually and reasonably incurred with respect to a
proceeding;
(d) The term "proceeding" includes any threatened, pending, or
completed action, suit, or other type of proceeding, whether
civil, criminal, administrative, or investigative and whether
formal or informal;
(e) The term "agent" includes a volunteer;
(f) The term "serving at the request of the corporation"
includes any service as a director, officer, employee, or
agent of the corporation that imposes duties on such persons,
including duties relating to an employee benefit plan and its
participants or beneficiaries; and
(g) The term "not opposed to the best interest of the
corporation" describes the actions of a person who acts in
good faith and in a manner he or she reasonably believes to be
in the best interests of the participants and beneficiaries of
an employee benefit plan.
(12) A corporation shall have power 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 the person and incurred by him
or her in any such capacity or arising out of his or her status as
such, whether or not the corporation would have the power to indemnify
him against such liability under the provisions of this section.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company,
the Company has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
<PAGE>
ITEM 8. EXHIBITS.
The exhibits filed as part of this Registration Statement are as follows:
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
4.1 -- Articles of Incorporation of the Company, as
amended, (incorporated by reference to Exhibit 3.1 of
the Registrant's Registration Statement on Form S-1
filed with the Commission on December 17, 1997, as
amended (File No. 333-17991)).
4.2 -- Bylaws of the Registrant (incorporated by
reference to Exhibit 3.2 of the Registrant's
Registration Statement on Form S-1 filed with the
Commission on December 17, 1997, as amended (File No.
333-17991)).
5 -- Opinion of Holland & Knight LLP
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Holland & Knight LLP (included in opinion
filed as Exhibit 5)
24 -- Powers of Attorney (included on the signature page to
this Registration Statement)
99 -- Employee Stock Purchase Plan
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
A. (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form
<PAGE>
of prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement; provided, however, that paragraphs (a) (1) (i)
and (1) (ii) do not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in periodic
reports filed or furnished to the Commission by the Registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose 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 herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. 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 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.
C. 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 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 of controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, Kos Pharmaceuticals, Inc., certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Miami, State of Florida,
on the 8th day of January, 1999.
KOS PHARMACEUTICALS, INC.
By: /s/ DANIEL M. BELL
-------------------------------
Daniel M. Bell, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Daniel M. Bell and Juan F. Rodriguez and each of them,
his true and lawful attorney-in-fact and agents, with full power of substitution
and resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in their
capacities on January 8, 1999.
SIGNATURE TITLE DATE
/s/ DANIEL M. BELL President, Chief Executive January 8, 1999
- --------------------------- Officer and Director
Daniel M. Bell (Principal Executive Officer)
/s/ MICHAEL JAHARIS Chairman of the Board of January 8, 1999
- --------------------------- Directors
Michael Jaharis
/s/ DUNCAN H. COCROFT Senior Vice President January 8, 1999
- --------------------------- (Principal Financial Officer)
Duncan H. Cocroft
/s/ JUAN F. RODRIGUEZ Controller January 8, 1999
- --------------------------- (Principal Accounting Officer)
Juan F. Rodriguez
/s/ ROBERT E. BALDINI Vice Chairman of the Board of January 8, 1999
- --------------------------- Directors
Robert E. Baldini
/s/ JOHN BRADEMAS Director January 8, 1999
- ---------------------------
John Brademas
/s/ STEVEN JAHARIS Director January 8, 1999
- ---------------------------
Steven Jaharis
/s/ LOUIS C. LASAGNA Director January 8, 1999
- ---------------------------
Louis C. Lasagna
/s/ MARK NOVITCH Director January 8, 1999
- ---------------------------
Mark Novitch
Director January _, 1999
- ---------------------------
Frederick B. Whittemore
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
5 -- Opinion of Holland & Knight LLP
23.1 -- Consent of Arthur Andersen LLP
99 -- Employee Stock Purchase Plan
EXHIBIT 5
January 8, 1999
Kos Pharmaceuticals, Inc.
1001 Brickell Bay Drive
Suite 2502
Miami, Florida 33131
Re: Kos Pharmaceuticals, Inc. (the "Company") - Registration
Statement on Form S-8
Ladies & Gentlemen:
You have requested our opinion in connection with the above-referenced
Registration Statement, (the "Registration Statement") in connection with the
registration for sale of up to 1,000,000 shares (the "Shares") of the common
stock, $.01 par value per share, of the Company (the "Common Stock"), which may
be issued by the Company to certain of its employees under the Company's 1999
Employee Stock Purchase Plan (the "Plan").
We have reviewed copies of the Articles of Incorporation and Bylaws of the
Company, and have examined such corporate documents and records and other
certificates, and have made such investigations of law, as we have deemed
necessary in order to render the opinion hereinafter set forth.
Based upon and subject to the foregoing and assuming no change in relevant
facts, we are of the opinion that the Shares are duly authorized, and upon
issuance of the Shares in accordance with the Plan and for the consideration set
forth in the Plan, will be validly issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not hereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
HOLLAND & KNIGHT LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report
dated January 23, 1998 (except with respect to the matter discussed in Note 12
as to which the date is February 19, 1998), included in Kos Pharmaceuticals,
Inc.'s Form 10-K/A, for the transition period from July 1, 1997, to
December 31, 1997, and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Miami, Florida,
January 8, 1999.
EXHIBIT 99
KOS PHARMACEUTICALS, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of the Plan is to provide employees of Kos
Pharmaceuticals, Inc. and its Designated Subsidiaries with an
opportunity to purchase Common Stock of the Company through accumulated
payroll deductions. It is the intention of the Company that the Plan
qualify as an "employee stock purchase plan" under Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"). The provisions
of the Plan shall be construed so as to extend and limit participation
in a manner consistent with the requirements of Section 423 of
the Code.
2. DEFINITIONS.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Common Stock" shall mean the common stock of the Company, par
value $.01 per share.
(c) "Company" shall mean Kos Pharmaceuticals, Inc., a Florida
corporation.
(d) "Compensation" shall mean all base straight time gross
earnings and commissions, exclusive of payments for overtime,
shift premium, incentive compensation, incentive payments,
bonuses and other compensation.
(e) "Designated Subsidiary" shall mean any subsidiary that has
been designated by the Board from time to time in its sole
discretion as eligible to participate in the Plan.
(f) "Employee" shall mean any individual (i) who is an employee of
the Company for federal income tax withholding purposes, and
(ii) who has completed at least 90 days of service for the
Company, and (iii) whose customary employment with the Company
is at least twenty (20) hours per week and more than five (5)
months in any calendar year. For purposes of the Plan, the
employment relationship shall be treated as continuing intact
while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave
exceeds 90 days and the individual's right to re-employment is
not guaranteed either by statute or by contract, the
employment relationship shall be deemed to have terminated on
the 91st day of such leave.
(g) "Enrollment Date" shall mean the first day of each Offering
Period.
(h) "Exercise Date" shall mean the last day of each Offering
Period.
<PAGE>
(i) "Fair Market Value" shall mean the value of the Common Stock.
If the Common Stock is listed on any established stock
exchange or a national market system, including without
limitation the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation
System ("Nasdaq"), the Fair Market Value of a share of Common
Stock shall be the closing sales price for a share of Common
Stock (or the closing bid, if no sales were reported), as
quoted on such system or exchange (or the exchange with the
greater volume of trading in Common Stock) on the day of such
determination as reported in the WALL STREET JOURNAL or such
other source as the Board deems reliable. In the absence of an
established market for the Common Stock, the Fair Market Value
of a share of Common Stock shall be determined in good faith
by the Board.
(j) "Offering Period" shall mean, except as otherwise provided
herein, a period of approximately six (6) months, commencing
on the first Trading Day on or after January 1 and terminating
on the last Trading Day occurring in the period ending the
following June 30, or commencing on the first Trading Day on
or after July 1 and terminating on the last Trading Day
occurring in the period ending with the following December 31.
The duration of Offering Periods may be changed pursuant to
Section 4 of the Plan.
(k) "Plan" shall mean Kos Pharmaceuticals, Inc. 1999 Employee
Stock Purchase Plan, as set forth herein and as amended from
time to time.
(l) "Purchase Price" shall mean an amount equal to eighty-five
percent (85%) of the Fair Market Value of a share of Common
Stock on the Enrollment Date or on the Exercise Date,
whichever is lower.
(m) "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan that have not yet been
exercised and the number of shares of Common Stock that have
been authorized for issuance under the Plan but not yet placed
under option.
(n) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50 percent of the voting shares are held
by the Company or a Subsidiary, whether or not such
corporation now exists or is hereafter organized or acquired
by the Company or a Subsidiary.
(o) "Trading Day" shall mean a day on which national stock
exchanges are open for trading.
3. ELIGIBILITY.
(a) INITIAL ELIGIBILITY. An Employee, as defined in 2(f) above,
who shall be employed by the Company on the date his or her
participation in the Plan is to become effective shall be
eligible to participate in offerings under the Plan that
commence on or after such Employee becomes a participant in
the Plan.
2
<PAGE>
(b) RESTRICTIONS ON PARTICIPATION. Notwithstanding any provisions
of the Plan to the contrary, no Employee shall be granted an
option under the plan:
(i) if, immediately after the grant, such Employee (or
any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company, and/or hold
outstanding options to purchase such stock,
possessing five percent (5%) or more of the total
combined voting power or value of all classes of the
capital stock of the Company or of any Subsidiary; or
(ii) that permits his or her rights to purchase stock
under all employee stock purchase plans of the
Company and its subsidiaries to accrue at a rate that
exceeds twenty-five thousand dollars ($25,000) in
fair market value of stock (determined at the time
such option is granted) for each calendar year in
which such option is outstanding.
(c) COMMENCEMENT OF PARTICIPATION. An eligible Employee may become
a participant by completing an authorization for payroll
deduction on the form provided by the Company and filing with
the Company's Human Resources Department on or before the date
set therefor by the Board, which date shall be prior to the
Enrollment Date for the Offering Period. Payroll deductions
for a participant shall commence on the applicable Enrollment
Date when his authorization for a payroll deduction becomes
effective and shall end at the time that an Employee's
participation in the Plan terminates, as per Section 8 of the
Plan.
4. OFFERING PERIODS. Except as otherwise provided herein, the Plan shall
be implemented by consecutive six (6) month Offering Periods. The first
Offering Period shall commence on the first Trading Day on or after
February 15, 1999. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof)
with respect to future Offering Periods without stockholder approval if
such change is announced at least five (5) days prior to the scheduled
beginning of the first Offering Period to be affected thereafter.
5. PAYROLL DEDUCTIONS.
(a) AMOUNT OF DEDUCTION. At the time a participant files his or
her subscription agreement, he or she shall elect to have
payroll deductions made on each pay day during the time he is
a participant in an Offering Period in an amount not to exceed
ten percent (10%) of the Compensation that he or she receives
on each pay day during the Offering Period.
(b) PARTICIPANT'S ACCOUNT. All payroll deductions made for a
participant shall be credited to his or her account under the
Plan and shall be made in whole percentages of Compensation
only. A participant may not make any additional payments into
his or her account.
3
<PAGE>
(c) CHANGES IN PAYROLL DEDUCTION. A participant may discontinue
his or her participation in the Plan as provided in Section
8(a) of the Plan, or may increase or decrease the rate of his
or her payroll deductions during the Offering Period by
completing a new authorization for payroll deduction on the
form provided by the Company and filing such form with the
Company's Human Resources Department. The Board may, in its
discretion, limit the number of participation rate changes
during any Offering Period. The change in rate shall be
effective with the first full payroll period following five
(5) business days after the Company's receipt of the new
subscription agreement unless the Company elects to process a
given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive
Offering Periods unless terminated as provided in Section 10
hereof.
6. GRANT OF OPTION. On the Enrollment Date of each Offering Period, a
participant shall be deemed to have received an option to purchase on
each Exercise Date during such Offering Period at the applicable
Purchase Price a maximum number of shares of Common Stock determined by
dividing such participant's payroll deductions accumulated prior to
such Exercise Date and retained in the participant's account as of the
Exercise Date by the applicable Purchase Price.
7. EXERCISE OF OPTION.
(a) AUTOMATIC EXERCISE. Unless a participant withdraws all of the
payroll deductions credited to his or her account prior
thereto as provided in Section 8 of the Plan, his or her
option for the purchase of Common Stock with payroll
deductions made during an Offering Period shall be deemed to
have been exercised automatically on the Exercise Date
applicable to such Offering Period for the purchase of a
number of full shares of Common Stock that the accumulated
payroll deductions in his or her account at that time will
purchase at the applicable option price (but not in excess of
the number of shares for which options have been granted to
the participant under Section 6 of the Plan). No fractional
shares shall be purchased; any payroll deductions accumulated
in a participant's account that are not sufficient to purchase
a full share shall be retained in the participant's account
for the subsequent Offering Period, subject to earlier
withdrawal by the participant as provided in Section 8 of the
Plan. Any other monies left over in a participant's account
after the Exercise Date shall be returned to the participant.
During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.
(b) DELIVERY. As promptly as practicable after the Exercise Date
of each Offering Period, the Company shall arrange the
delivery to each participant, as appropriate, including, but
not limited to, direct deposit into a book entry account or
brokerage account, the shares purchased upon exercise of his
or her option.
4
<PAGE>
8. WITHDRAWAL.
(a) GENERAL. A participant may withdraw all of the payroll
deductions credited to his or her account and not yet used to
exercise his or her option under the Plan at any time during
an Offering Period by giving written notice to the Company in
the form of a notice of withdrawal provided by the Company.
All of the participant's payroll deductions credited to his or
her account shall be paid to such participant, such
participant's option for the Offering Period shall be
automatically terminated, and no further payroll deductions
for the purchase of shares shall be made for such Offering
Period.
(b) EFFECT ON SUBSEQUENT PARTICIPATION. A participant's withdrawal
of the payroll deductions credited to his or her account shall
not have any effect upon his or her eligibility to participate
in any similar plan that may hereafter be adopted by the
Company. If, however, a participant withdraws the payroll
deductions credited to his or her account during an Offering
Period, payroll deductions shall not resume until after the
completion of the succeeding Offering Period and will require
that the participant delivers to the Company a new
subscription agreement prior to the completion of such
succeeding Offering Period.
(c) TERMINATION OF EMPLOYMENT. Upon a participant's ceasing to be
an Employee, for any reason, he or she shall be deemed to have
elected to withdraw from the Plan and the payroll deductions
credited to such participant's account during the Offering
Period but not yet used to exercise the option shall be
returned to such participant or, in the case of his or her
death, to the person or persons entitled thereto under Section
12 of the Plan, and such participant's option shall be
automatically terminated. Notwithstanding the preceding
sentence, a participant who receives payment in lieu of notice
of employment shall be treated as continuing to be an Employee
for the participant's customary number of hours per week of
employment during the period in which the participant is
subject to such payment in lieu of notice.
9. INTEREST. No interest shall accrue on the payroll deductions of a
participant in the Plan.
5
<PAGE>
10. STOCK.
(a) MAXIMUM SHARES. The maximum number of shares of the Company's
Common Stock that shall be made available for sale under the
Plan shall be one million (1,000,0000) shares, subject to
adjustment upon changes in capitalization of the Company as
provided in Section 16 of the Plan. If, on a given Exercise
Date, the number of shares with respect to which options are
to be exercised exceeds the number of shares available under
the Plan, the Company shall make a pro rata allocation of the
shares remaining available for purchase in as uniform a manner
as shall be practicable and as it shall determine to be
equitable, and the balance of payroll deductions credited to
the account of each participant shall be returned to him or
her as promptly as possible.
(b) PARTICIPANT'S INTEREST IN OPTION STOCK. The participant shall
have no interest or voting right in shares covered by his or
her option until such option has been exercised.
(c) REGISTRATION OF STOCK. Shares to be delivered to a participant
under the Plan shall be registered in the name of the
participant or in the name of the participant and his or her
spouse as joint tenants with right of survivorship.
11. ADMINISTRATION. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or
its committee shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine
eligibility and to adjudicate all disputed claims filed under the Plan.
Every finding, decision and determination made by the Board or its
committee shall, to the full extent permitted by law, be final and
binding upon all parties.
12. DESIGNATION OF BENEFICIARY. A participant may file a written
designation of a beneficiary who is to receive shares and cash, if any,
from the participant's account under the Plan in the event of such
participant's death subsequent to an Exercise Date on which the option
is exercised but prior to delivery to such participant of such shares
and cash. In addition, a participant may file a written designation of
a beneficiary who is to receive any cash from the participant's account
under the Plan in the event of such participant's death prior to
exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective. Such designation of beneficiary may
be changed by the participant at any time by written notice. In the
event of the death of the participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time
of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may
deliver such shares and/or cash to the spouse or to any one or more
dependents or relatives of such participant, or, if no spouse,
dependent or relative is known to the Company, then to such other
person as the Company may designate.
6
<PAGE>
13. TRANSFERABILITY. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to
receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of
descent and distribution) by the participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to
withdraw funds from an Offering Period in accordance with Section 8 of
the Plan.
14. USE OF FUNDS. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate such payroll
deductions.
15. REPORTS. Individual accounts shall be maintained for each participant
in the Plan. Statements of account shall be given to each participating
Employee promptly after the completion of each Offering Period, which
statements shall set forth the amounts of payroll deductions, the
Purchase Price, the number of shares purchased and the remaining cash
balance, if any.
16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, LIQUIDATION,
MERGER OR ASSET SALE.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by
the shareholders of the Company, (i) the Reserves, (ii) the
maximum number of shares each participant may purchase during
each Offering Period, (iii) the Purchase Price per share, and
(iv) the number of shares of Common Stock covered by each
option under the Plan that has not yet been exercised shall be
proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected
without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without
receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common
Stock subject to an option.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period
then in progress shall be shortened by setting a new Exercise
Date (the "New Exercise Date"), and shall terminate
immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the
Board. The New Exercise Date shall be before the date of the
Company's proposed dissolution or liquidation. The Board shall
notify each
7
<PAGE>
participant in writing, at least ten (10) business days prior
to the New Exercise Date, that the Exercise Date for the
participant's option has been changed to the New Exercise Date
and that the participant's option shall be exercised
automatically on the New Exercise Date, unless prior to such
date the participant has withdrawn the payroll deductions
credited to his or her account as provided in Section 8 of the
Plan.
(c) MERGER OR ASSET SALE. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, the
Company shall use its best efforts to have each outstanding
option assumed or an equivalent option substituted by the
successor corporation or a parent or Subsidiary of the
successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option,
the Company shall set a New Exercise Date and any Offering
Periods then in progress shall end on the New Exercise Date.
The New Exercise Date shall be the date immediately prior to
the date of the Company's proposed sale or merger. The Board
shall notify each participant in writing, at least ten (10)
business days prior to the New Exercise Date, that the
Exercise Date for the participant's option has been changed to
the New Exercise Date and that the participant's option shall
be exercised automatically on the New Exercise Date, unless
prior to such date the participant has withdrawn the payroll
deductions credited to his or her account as provided in
Section 8 of the Plan.
17. AMENDMENT OR TERMINATION. The Board of Directors of the Company may at
any time and for any reason terminate or amend the Plan. Except as
provided in Section 16 of the Plan, no such termination can affect
options previously granted; provided, that an Offering Period may be
shortened by the Board of Directors to an earlier Exercise Date and the
Plan may be terminated immediately thereafter if the Board determines
that the termination of the Plan is in the best interests of the
Company and its shareholders. Except as provided in Section 16 of the
Plan, no amendment may make any change in any option theretofore
granted that adversely affects the rights of any participant. To the
extent necessary to comply with Section 423 of the Code (or any
successor rule or provision or any other applicable law, regulation or
stock exchange rule), the Company shall obtain shareholder approval for
any amendment to the Plan in such a manner and to such a degree as
required. Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected,"
the Board (or its committee) shall be entitled to change Offering
Periods, limit the frequency and/or number of changes in the amount
withheld during an Offering Period, establish the exchange ratio
applicable to amounts designated by a participant in order to adjust
for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and
adjustment periods and/or accounting and crediting procedures to ensure
that amounts applied toward purchase of Common Stock for each
participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole
discretion advisable that are consistent with the Plan.
8
<PAGE>
18. NOTICES. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Company at
the location, or by the person, designated by the Company for the
receipt thereof.
19. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to an option unless the exercise of such option and the
issuance and delivery of such shares pursuant thereto shall comply with
all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
rules and regulations promulgated thereunder, and the requirements of
any stock exchange upon which the shares may be listed, and shall be
further subject to the approval of counsel for the Company with respect
to such compliance. As a condition to the exercise of an option, the
Company may require the person exercising such option to represent and
warrant at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to sell
or distribute such shares if, in the opinion of counsel for the
Company, such a representation is required by any of the aforementioned
applicable provisions of law. The terms and conditions of options
granted under the Plan to, and the purchase of shares by, persons
subject to Section 16 of the Exchange Act shall comply with the
applicable provisions of Rule 16b-3 under the Exchange Act. This Plan
shall be deemed to contain, and such options shall contain, and the
shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3
under the Exchange Act to qualify for the maximum exemption from
Section 16 of the Exchange Act with respect to Plan transactions.
20. TAX WITHHOLDING. At the time the option is exercised, in whole or in
part, or at the time some or all of the Company's Common Stock issued
under the Plan is disposed of, the participant must make adequate
provision for the Company's federal, state or other tax withholding
obligations, if any, that arise upon the exercise of the option or the
disposition of the Common Stock. At any time, the Company may, but
shall not be obligated to, withhold from the participant's compensation
the amount necessary for the Company to meet applicable
withholding obligations, including any withholding required to make
available to the Company any tax deductions attributable to sale or
early disposition of Common Stock by the Employee.
21. TERM OF PLAN. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of
ten (10) years unless terminated under Section 17 of the Plan.
9
