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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the
Commission only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Amgen Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[AMGEN LETTERHEAD WILL BE USED]
[AMGEN LOGO](R)
GORDON M. BINDER
Chairman and Chief Executive Officer
March __, 2000
DEAR STOCKHOLDER:
You are invited to attend the Annual Meeting of Stockholders of Amgen Inc.
to be held on Thursday, May 11, 2000, at 10:30 A.M., Pacific Daylight Time, at
the Regent Beverly Wilshire Hotel, 9500 Wilshire Boulevard, Los Angeles,
California.
At this year's meeting, you will be asked to: (i) elect three directors;
(ii) approve an amendment to the Company's Restated Certificate of
Incorporation, as amended, to increase the authorized shares of Common Stock of
the Company; (iii) approve an amendment to the Company's Amended and Restated
Employee Stock Purchase Plan to extend the term of such plan indefinitely; and
(iv) ratify the selection of the independent auditors. The accompanying Notice
of Meeting and Proxy Statement describe these proposals. We urge you to read
this information carefully.
Your Board of Directors unanimously believes that election of its nominees
for directors, approval of the amendment to the Restated Certificate of
Incorporation, as amended, approval of an amendment to the Company's Amended and
Restated Employee Stock Purchase Plan, and ratification of its selection of
independent auditors are in the best interests of Amgen and its stockholders,
and, accordingly, recommends a vote FOR election of the nominees for director
and FOR proposals 2, 3, and 4.
In addition to the formal business to be transacted, management will make a
presentation on developments of the past year and respond to comments and
questions of general interest to stockholders.
I personally look forward to greeting those Amgen stockholders able to
attend the meeting. If you plan to attend the Annual Meeting, please complete
and return the postage paid reply card enclosed with the Proxy Statement. We
will then send to you a map with directions to the Regent Beverly Wilshire Hotel
and an admission badge to the Annual Meeting.
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It is important that your shares be represented and voted whether or not
you plan to attend the Annual Meeting. Therefore, please sign, date and promptly
mail the enclosed proxy in the prepaid envelope provided.
Thank you.
Sincerely,
[SIG]
Gordon M. Binder
Chairman of the Board
and Chief Executive Officer
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AMGEN INC.
One Amgen Center Drive
Thousand Oaks, California 91320-1799
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 11, 2000
TO THE STOCKHOLDERS OF AMGEN INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Amgen
Inc., a Delaware corporation (the "Company"), will be held on Thursday, May
11, 2000, at 10:30 A.M., Pacific Daylight Time, at the Regent Beverly Wilshire
Hotel, 9500 Wilshire Boulevard, Los Angeles, California 90212, for the following
purposes:
1. To elect three directors to a three-year term of office expiring at
the Annual Meeting of Stockholders in the year 2003;
2. To approve an amendment to the Company's Restated Certificate of
Incorporation, as amended, to increase the authorized number of shares
of Common Stock from 1,500,000,000 shares to 2,750,000,000 shares;
3. To approve an amendment to the Company's Amended and Restated Employee
Stock Purchase Plan to extend the term of such plan indefinitely;
4. To ratify the selection of Ernst & Young LLP as independent auditors
of the Company for the year ending December 31, 2000; and
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on March 14, 2000,
as the record date for the determination of stockholders entitled to notice of
and to vote at this Annual Meeting and at any continuation, postponement or
adjournment thereof.
By Order of the Board of Directors
[SIG]
Steven M. Odre
Secretary
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Thousand Oaks, California
March __, 2000
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A PREPAID ENVELOPE IS ENCLOSED FOR THAT PURPOSE.
EVEN IF YOU HAVE VOTED YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND
THE MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A
BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO ATTEND AND VOTE AT THE MEETING,
YOU MUST OBTAIN FROM SUCH BROKER, BANK OR OTHER NOMINEE, A PROXY ISSUED IN YOUR
NAME.
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AMGEN INC.
One Amgen Center Drive
Thousand Oaks, California 91320-1799
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors (the
"Board of Directors" or the "Board") of Amgen Inc., a Delaware corporation (the
"Company" or "Amgen"), for use at the Annual Meeting of Stockholders to be held
on Thursday, May 11, 2000, at 10:30 A.M., Pacific Daylight Time (the "Annual
Meeting"), or at any continuation, postponement or adjournment thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting. The
Annual Meeting will be held at the Regent Beverly Wilshire Hotel, 9500 Wilshire
Boulevard, Los Angeles, California 90212.
On November 19, 1999, the Company effected a two-for-one stock split in the
form of a 100% stock dividend. All share and per share information presented
herein is on a post-split basis, except where specifically indicated otherwise.
Solicitation
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly and mailing of this proxy statement, the proxy and any
additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding shares of the Company's common stock (the "Common Stock") in
their names that are beneficially owned by others to forward to such beneficial
owners. The Company may reimburse persons representing beneficial owners for
their costs of forwarding the solicitation material to such beneficial owners.
Original solicitation of proxies by mail may be supplemented by telephone,
telegram or personal solicitation by directors, officers or other regular
employees of the Company. No additional compensation will be paid to directors,
officers or other regular employees for such services. In addition, the Company
has retained Georgeson
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Shareholder Communications Inc. to assist in the solicitation of proxies for a
fee estimated to be approximately $8,000, plus reasonable out-of-pocket
expenses. The Company may also be assisted in the solicitation of proxies by
Batchelder & Partners, Inc. The Company has previously engaged Batchelder &
Partners, Inc. to provide general corporate advisory services, and no additional
fee will be paid for the solicitation of proxies.
The Company intends to mail this proxy statement and accompanying proxy
card on or about March __, 2000 to all stockholders entitled to vote at the
Annual Meeting.
Stockholder Proposals
Stockholders interested in presenting a proposal for consideration at the
Company's Annual Meeting of Stockholders in the year 2001 (the "2001 Annual
Meeting") may do so by following the procedures prescribed in the Company's
Amended and Restated Bylaws (the "Bylaws") and in Rule 14a-8 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). To be eligible
for inclusion in the Company's 2001 proxy statement, stockholder proposals must
be received by the Company's Secretary no later than November 23, 2000. The
Company's Bylaws provide that stockholders desiring to nominate persons for
election to the Board of Directors or to bring any other business before the
stockholders at an annual meeting must notify the Secretary of the Company
thereof in writing and such notice must be delivered to or received by the
Secretary no later than 90 days prior to such meeting (provided, however, that
in the event that less than 100 days' notice or prior public disclosure of the
date of the meeting is made to stockholders, the notice must be received not
later than the close of business on the tenth day following the date on which
the notice of the date of such meeting was mailed or the public disclosure was
made). Such notice must include: (a) the name and address of the stockholder who
intends to make the nominations or propose the business and, as the case may be,
of the person or persons to be nominated or of the business to be proposed; (b)
a representation that the stockholder is a holder of record of stock of the
Company entitled to vote at such meeting and, if applicable, intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice; (c) if applicable, a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (d) such other information
regarding each nominee or each matter of business to be proposed by such
stockholder as would be required to be included in a proxy
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statement filed pursuant to the proxy rules of the Securities and Exchange
Commission (the "SEC") had the nominee been nominated, or intended to be
nominated, or the matter been proposed, or intended to be proposed by the Board
of Directors; and (e) if applicable, the consent of each nominee to serve as
director of the Company if so elected. While the Board will consider stockholder
proposals, the Company however reserves the right to omit from the Company's
2001 proxy statement stockholder proposals that it is not required to include
under the Exchange Act, including Rule 14a-8 thereunder.
Voting Rights and Outstanding Shares
Only holders of record of Common Stock at the close of business on March
14, 2000, will be entitled to notice of and to vote at the Annual Meeting. At
the close of business on March 14, 2000, there were outstanding and entitled to
vote __________ shares of Common Stock. Stockholders of record on such date are
entitled to one vote for each share of Common Stock held on all matters to be
voted upon at the meeting. A majority of the outstanding shares of Common Stock,
represented in person or by proxy, will constitute a quorum at the Annual
Meeting.
All votes will be tabulated by the inspector of election appointed for the
Annual Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Under the Company's Bylaws and Delaware law:
(1) shares represented by proxies that reflect abstentions or "broker non-votes"
(i.e., shares held by a broker or nominee that are represented at the meeting,
but with respect to which such broker or nominee is not empowered to vote on a
particular proposal) will be counted as shares that are present and entitled to
vote for purposes of determining the presence of a quorum; (2) there is no
cumulative voting, and the director nominees receiving the highest number of
votes, up to the number of directors to be elected, are elected and,
accordingly, abstentions, broker non-votes and withholding of authority to vote
will not affect the election of directors; (3) proxies that reflect abstentions
as to a particular proposal will be treated as voted for purposes of determining
the approval of that proposal and will have the same effect as a vote against
that proposal; and (4) proxies that reflect broker non-votes will be treated as
unvoted for purposes of determining approval of that proposal and will not be
counted as votes for or against that proposal, except for Proposal 2 (amendment
to the Restated Certificate), where broker non-votes will have the effect of a
vote against that proposal.
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Revocability of Proxies
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by sending to the
Secretary of the Company at the Company's principal executive office, One Amgen
Center Drive, Thousand Oaks, California 91320-1799, Mail Stop 27-4-A, a written
notice of revocation or a duly executed proxy bearing a later date, or it may be
revoked by attending the meeting and voting in person. Attendance at the meeting
will not, by itself, revoke a proxy.
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PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation, as amended (the
"Restated Certificate") and Bylaws provide that the Board of Directors shall be
divided into three classes, each class consisting, as nearly as possible, of
one-third of the total number of directors, with each class having a three-year
term. Vacancies on the Board may be filled only by persons elected by a majority
of the remaining directors. A director elected by the Board to fill a vacancy
(including a vacancy created by an increase in the size of the Board of
Directors) will serve for the remainder of the full term of the class of
directors in which the vacancy occurred and until such director's successor is
elected and qualified, or until such director's earlier death, resignation or
removal.
The terms of office of Mr. Gordon M. Binder, Mr. Frederick W. Gluck and Mr.
Franklin P. Johnson, Jr. expire in 2000 and all are nominees for election to the
Board. Each of the nominees would serve until his or her successor is elected
and qualified, or until such director's earlier death, resignation or removal.
If elected at the Annual Meeting, Messrs. Gluck and Johnson would serve until
the Annual Meeting in the year 2003. Mr. Binder has announced that he intends to
retire as Chief Executive Officer on the day of the Annual Meeting, and will
retire as Chairman of the Board and a director by December 31, 2000, so if
elected at the Annual Meeting, Mr. Binder would not serve for a full three year
term.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the Annual Meeting. Stockholders do
not have the right to cumulate their votes in the election of directors. It is
the intention of the persons named in the enclosed proxy, unless authorization
to do so is withheld, to vote the proxies received by them for the election of
the nominees named below. If, prior to the Annual Meeting, any nominee should
become unavailable for election, an event which currently is not anticipated by
the Board, the proxies will be voted for the election of such substitute nominee
or nominees as the Board of Directors may propose. Each person nominated for
election has agreed to serve if elected and management has no reason to believe
that any nominee will be unable to serve.
Set forth below is biographical information for each person nominated and
for each person whose term of office as a director will continue after the
Annual Meeting.
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Nominees for Election for a Three Year Term Expiring at the Annual Meeting of
Stockholders in the Year 2003
GORDON M. BINDER
Mr. Gordon M. Binder, age 64, has served as a director of the Company since
October 1988. He joined the Company in 1982 as Vice President-Finance and was
named Senior Vice President-Finance in February 1986. Mr. Binder was elected
Chief Executive Officer in October 1988 and Chairman of the Board in July 1990.
Mr. Binder has announced that he intends to retire as Chief Executive Officer on
the day of the Annual Meeting and will retire as Chairman of the Board and a
director by December 31, 2000. Mr. Binder will continue to provide certain
services to the Company thereafter as a non-executive officer employee of the
Company.
FREDERICK W. GLUCK
Mr. Frederick W. Gluck, age 64, has served as a director of the Company
since February 1998. Mr. Gluck is currently a consultant to McKinsey & Company,
Inc., a consulting firm ("McKinsey"). Mr. Gluck joined Bechtel Group, Inc. in
February 1995, and served as Vice Chairman and Director from January 1996 to
July 1998. Mr. Gluck joined McKinsey in 1967, serving as Managing Director from
1988 to 1994, and retired from that firm in February 1995. Mr. Gluck is
currently a director of ACT Networks, Inc., Columbia/HCA Healthcare Corporation,
the New York Presbyterian Hospital, Russell Reynolds Associates, Inc., Scient
Corp. and Thinking Tools, Inc.
FRANKLIN P. JOHNSON, JR.
Mr. Franklin P. Johnson, Jr., age 71, has served as a director of the
Company since October 1980. He is the general partner of Asset Management
Partners, a venture capital limited partnership. Mr. Johnson serves as the Vice
President, Chief Financial Officer and Secretary of Indo Pacific Investment
Company, a privately held investment company. Mr. Johnson has been a private
venture capital investor for more than five years. He is also a director of
Applied MicroCircuits Corporation, IDEC Pharmaceuticals Corporation and several
private companies.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.
Directors Continuing in Office Until the 2001 Annual Meeting
JERRY D. CHOATE
Mr. Jerry D. Choate, age 61, has served as a director of the Company since
August 1998. In January 1999, Mr. Choate retired as Chairman of the Board and
Chief Executive Officer of The Allstate Corporation, an insurance company
holding company ("Allstate"), where he had held such positions since January
1995. Prior to becoming Chairman of Allstate in January 1995, Mr. Choate served
as President and Chief Executive Officer of Allstate from August 1994 to January
1995, and had previously held various management positions at Allstate since
1962. Mr. Choate also serves as a director of Valero Energy Corp. and serves on
the Board of Trustees for the Van Kampen Mutual Funds.
STEVEN LAZARUS
Mr. Steven Lazarus, age 68, has served as a director of the Company since
May 1987. Since July 1994, he has been the managing general partner of ARCH
Venture Partners, L.P., an early stage venture capital partnership. He was
President and Chief Executive Officer of the Argonne National Laboratory/The
University of Chicago Development Corporation and was also associate dean at the
Graduate School of Business, the University of Chicago, from October 1986 to
July 1994. Mr. Lazarus also serves as a director of First Consulting Group,
Inc., National Venture Capital Association, New Era of Networks, Inc. and
Primark Corporation.
GILBERT S. OMENN
Dr. Gilbert S. Omenn, age 58, has served as a director of the Company since
January 1987. He has been the Executive Vice President for Medical Affairs at
the University of Michigan, Chief Executive Officer of the University of
Michigan Health System, and Professor of Internal Medicine, Human Genetics and
Public Health since September 1997. Previously, Dr. Omenn was the Dean of the
School of Public Health and Community Medicine at the University of Washington
from 1982 to September 1997. Dr. Omenn also is a director of Rohm & Haas
Company.
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Directors Continuing in Office Until the 2002 Annual Meeting
DAVID BALTIMORE
Dr. David Baltimore, age 62, has served as a director of the Company since
June 1999. He has been the President of the California Institute of Technology
since October 1997 and has been the Chairman of the National Institutes for
Health AIDS Vaccine Research Committee since December 1996. Previously, Dr.
Baltimore had been an Institute Professor at the Massachusetts Institute of
Technology ("MIT") from July 1995 to October 1997, and the Ivan R. Cottrell
Professor of Molecular Biology and Immunology at MIT from July 1994 to October
1997. Dr. Baltimore also serves as a director of Scriptgen Pharmaceuticals,
Inc., a privately held company and as a director of BB Biotech AG, a Swiss
investment company. In 1975, Dr. Baltimore was the co-recipient of the Nobel
Prize in Medicine.
WILLIAM K. BOWES, JR.
Mr. William K. Bowes, Jr., age 73, has served as a director of the Company
since April 1980. He has been a general partner of U.S. Venture Partners, a
venture capital investment firm, since July 1981. Mr. Bowes also serves as a
director of Applied Micro-Circuits, Inc., Lynx, Inc., Xoma Corporation and a
privately held U.S. Venture Partners portfolio company.
JUDITH C. PELHAM
Ms. Judith C. Pelham, age 54, has served as a director of the Company since
May 1995. She has been President and Chief Executive Officer of Mercy Health
Services, a unified system of institutions, programs and services established to
carry out the health ministry sponsored by the Sisters of Mercy Regional
Community of Detroit, since 1993. From 1987 to 1993, she was President and Chief
Executive Officer of Daughters of Charity Health Services, Austin, Texas.
KEVIN W. SHARER
Mr. Kevin W. Sharer, age 52, has served as a director of the Company since
November 1992. He also has served as President and Chief Operating Officer of
the Company since October
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1992. Prior to joining the Company, Mr. Sharer served as President of the
Business Markets Division of MCI Communications Corporation, a
telecommunications company, from April 1989 to October 1992, and served in
numerous executive capacities at General Electric Company from February 1984 to
March 1989. Mr. Sharer also serves as a director of Unocal Corporation. Mr.
Sharer will become the Company's Chief Executive Officer on the day of the
Annual Meeting.
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Board Committees and Meetings
The Board of Directors, which held seven meetings during the year ended
December 31, 1999, has an Audit Committee, a Compensation Committee, an
Executive Committee, a New Hire Stock Option Committee, a Nominating Committee
and a Strategy Committee.
The Audit Committee recommends engagement of the Company's independent
auditors and approves services performed by such auditors, including the review
and evaluation of the Company's accounting system and its system of internal
controls in connection with the Company's annual audit. During the year ended
December 31, 1999, the Audit Committee met two times. Mr. Bowes serves as
Chairman, and Dr. Omenn and Ms. Pelham serve as members of the Audit Committee.
The Compensation Committee sets guidelines for the administration of all
salaries within the Company, approves recommendations for officers' salaries,
administers incentive compensation and awards stock options to employees and
consultants under the Company's stock option plans and otherwise determines
compensation levels. During the year ended December 31, 1999, the Compensation
Committee met five times. Mr. Johnson serves as Chairman, and Messrs. Choate,
Gluck and Lazarus serve as members of the Compensation Committee.
The Executive Committee may exercise, when the Board of Directors is not in
session, all powers of the Board of Directors in the management of the business
and affairs of the Company to the extent permitted by law, the Bylaws of the
Company and as specifically granted by the Board of Directors. During the year
ended December 31, 1999, the Executive Committee did not meet in formal session,
but did meet on several occasions in informal sessions. Mr. Binder serves as
Chairman, and Messrs. Bowes and Johnson serve as members of the Executive
Committee.
The New Hire Stock Option Committee principally grants stock options to
non-officer employees upon commencement of employment with the Company and its
subsidiaries in accordance with the guidelines established by the Compensation
Committee. During the year ended December 31, 1999, the New Hire Stock Option
Committee did not meet, but did take action by written consent. Mr. Binder is
the sole member of the New Hire Stock Option Committee and Mr. Sharer is an
alternate member who may act in the absence of Mr. Binder.
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The Nominating Committee interviews, evaluates, nominates and recommends
individuals for membership on the Company's Board of Directors and committees
thereof and nominates specific individuals to be elected as officers of the
Company by the Board of Directors. During the year ended December 31, 1999, the
Nominating Committee met two times. Mr. Bowes serves as Chairman, and Mr.
Johnson and Dr. Omenn serve as members of the Nominating Committee. The
Nominating Committee will consider nominees for directors nominated by
stockholders upon submission in writing to the Secretary of the Company of the
names of such nominees in accordance with the Company's Bylaws.
The Strategy Committee meets with management of the Company to review
research strategies and proposals for collaborations and licensing of
technology. During the year ended December 31, 1999, the Strategy Committee met
three times. Mr. Lazarus serves as Chairman, and Messrs. Choate and Gluck, Dr.
Omenn and Ms. Pelham serve as members of the Strategy Committee.
During the year ended December 31, 1999, all of the directors attended at
least 75% of the total number of meetings of the Board of Directors and
committees on which they served, except for Mr. Gluck, who attended 67% of such
meetings.
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PROPOSAL 2
PROPOSAL TO AMEND THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION, AS
AMENDED, TO INCREASE THE COMPANY'SAUTHORIZED SHARES OF COMMON STOCK
FROM 1,500,000,000 SHARES TO 2,750,000,000 SHARES
The Board of Directors has adopted a resolution authorizing an amendment to
the Company's Restated Certificate of Incorporation, as amended (the "Restated
Certificate"), to increase the Company's authorized number of shares of Common
Stock from 1,500,000,000 shares to 2,750,000,000 shares. The proposed amendment
is subject to approval by the Company's stockholders. The Common Stock,
including the additional shares proposed for authorization, do not have
preemptive or similar rights, which means that current stockholders do not have
a prior right to purchase any new issue of capital stock of the Company in order
to maintain their proportionate ownership thereof. Thus, the issuances of
additional shares of Common Stock might dilute, under certain circumstances, the
ownership and voting rights of stockholders. Each of the additional authorized
shares of Common Stock will have the same rights and privileges as the currently
authorized Common Stock.
The proposed amendment will modify the first paragraph of Article Fourth of
the Restated Certificate to read as follows:
"FOURTH: This corporation is authorized to issue two (2)
classes of stock to be designated, respectively, "Preferred
Stock" and "Common Stock." The total number of shares which this
corporation is authorized to issue is Two Billion Seven Hundred
Fifty-Five Million (2,755,000,000) shares, of which Five Million
(5,000,000) shares shall be Preferred Stock and Two Billion Seven
Hundred Fifty Million (2,750,000,000) shares shall be Common
Stock, all with a par value of $.0001."
The Company is currently authorized to issue 1,505,000,000 shares of
capital stock, of which 1,500,000,000 shares are designated as Common Stock and
5,000,000 shares are designated as Preferred Stock. The proposed amendment would
increase the total number of shares of authorized capital stock to 2,755,000,000
shares and the number of shares of Common Stock authorized to 2,750,000,000. As
of February 11, 2000, 1,023,544,175 shares of Common
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Stock were issued and outstanding, and 126,975,364 additional shares of Common
Stock were reserved for issuance upon exercise of outstanding stock options, and
for issuance of shares under the Company's Amended and Restated Employee Stock
Purchase Plan (the "Employee Stock Purchase Plan") and certain equivalent stock-
based plans available solely to the Company's United Kingdom employees. As of
February 11, 2000, no shares of Preferred Stock were issued and outstanding and
the proposed amendment would not change the authorized number of shares of
Preferred Stock. Of the 5,000,000 authorized shares of Preferred Stock,
1,500,000 were designated as Series A Junior Participating Preferred Stock
("Series A Preferred Stock"), in connection with the Company's adoption of a
stockholder rights plan, none of which were issued and outstanding as of
February 11, 2000. The Board of Directors has approved an increase in the number
of shares designated as Series A Preferred Stock from 1,500,000 to 2,750,000,
subject to and conditioned upon the approval of the stockholders of the proposed
increase in the authorized number of shares of Common Stock. If the proposed
amendment is adopted, it will become effective upon the filing of the proposed
amendment with the Delaware Secretary of State.
On November 19, 1999, the Company effected a two-for-one stock split in the
form of a 100% stock dividend (the "November Stock Split"), which utilized a
substantial portion of the currently authorized 1,500,000,000 shares of Common
Stock. In addition, the Company effected a two-for-one stock split in the form
of a 100% stock dividend on February 26, 1999. The Company sought and the
stockholders approved an increase in the authorized Common Stock from
750,000,000 to 1,500,000,000 at the 1999 annual meeting of stockholders. This
increase facilitated the November Stock Split. The Board of Directors of the
Company believes that it is advisable and in the best interests of the Company
to have available additional authorized but unissued shares of Common Stock in
an amount adequate to provide for the future needs of the Company. The increase
in authorized Common Stock will not have any immediate effect on the rights of
existing stockholders. However, the additional shares will be available for
issuance from time to time by the Company, in the discretion of the Board of
Directors, without further authorization by vote of the stockholders unless such
authorization is otherwise required by applicable law or regulation. These
shares may be issued for any proper corporate purpose including, without
limitation: acquiring other businesses in exchange for shares of the Company's
Common Stock; entering into joint venture arrangements with other companies in
which Common Stock or the right to acquire Common Stock are part of the
consideration; stock splits or stock dividends; raising capital through the sale
of Common Stock; and attracting and retaining valuable employees by the issuance
of additional stock options or use of stock-based plans. Although the
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Company may engage in the foregoing actions in the future, except for the
issuance of additional stock options or issuances under the Employee Stock
Purchase Plan, no such actions involving the issuance of additional shares of
Common Stock are pending as of the date hereof. If the proposed amendment is
approved, the Board of Directors would be able to authorize the issuance of
shares of Common Stock without the necessity, and related costs and delays, of
either calling a special stockholders' meeting or waiting for the next regularly
scheduled meeting of the stockholders in order to increase the authorized shares
of Common Stock.
The issuance of the additional shares of Common Stock could have the effect
of diluting earnings per share and book value per share, which could adversely
affect the Company's existing stockholders. Issuing additional shares of Common
Stock may also have the effect of delaying or preventing a change of control of
the Company. The Company's authorized but unissued Common Stock could be issued
in one or more transactions that would make more difficult or costly, and less
likely, a takeover of the Company. The proposed amendment to the Restated
Certificate is not being recommended in response to any specific effort of which
the Company is aware to obtain control of the Company, and the Board of
Directors has no present intention to use the additional shares of Common Stock
in order to impede a takeover attempt.
The affirmative vote of a majority of the outstanding shares of Common
Stock entitled to vote at the Annual Meeting is required for approval of this
amendment to the Restated Certificate to increase the Company's authorized
shares of Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2
14
<PAGE>
PROPOSAL 3
APPROVAL OF THE COMPANY'S EMPLOYEE STOCK PURCHASE PLAN,
AS AMENDED AND RESTATED IN 1999
The Company maintains the Amended and Restated Employee Stock Purchase Plan
(the "Employee Stock Purchase Plan"), which was approved by stockholders on July
24, 1991 and which permits the grant of rights ("Purchase Rights") to purchase
common stock of the Company. On December 8, 1999, the Board of Directors
unanimously adopted, subject to stockholder approval, an amendment to the
Employee Stock Purchase Plan (as amended, the "ESPP") to provide that the ESPP
shall have an indefinite life (subject to the right of the Board of Directors to
terminate the ESPP), rather than the previously stated termination date of
January 22, 2001.
The Board of Directors extended the termination date of the ESPP in order
to extend indefinitely the period of time during which Purchase Rights may be
awarded with respect to the shares available for issuance under the ESPP. The
extension of the term of the ESPP is intended to permit future grants of
Purchase Rights to existing and new employees of the Company and its affiliates
at levels determined to be appropriate by the Board of Directors and/or a
committee designated by the Board of Directors. Stock purchase plans have for
years been an important part of the Company's overall compensation program. The
Board of Directors believes that stock purchase plans serve to attract, retain
and motivate employees, and to enhance their incentive to perform at the highest
level and contribute significantly to the Company's success.
The amendment to the Employee Stock Purchase Plan, if approved by the
stockholders, will allow the Company to grant Purchase Rights until all of the
Common Stock subject to the ESPP has been issued, or the Board of Directors
terminates the ESPP. The amendment is being submitted for stockholder approval
in order to enable the Company to continue to grant Purchase Rights which
qualify for tax treatment under Section 423 of the Internal Revenue Code of
1986, as amended (the "Code").
Stockholders are requested in this Proposal 3 to approve the amendment to
the Employee Stock Purchase Plan.
15
<PAGE>
PLAN DESCRIPTION
The following is a description of the material provisions of the ESPP.
Such description is qualified in its entirety by reference to the ESPP itself, a
copy of which is attached hereto as Attachment I. As noted below under the
------------
heading "Duration, Amendment and Termination," the Board generally has the power
to amend the ESPP without stockholder approval and reserves the right to do so.
A copy of the ESPP can also be obtained by making written request to the
Company's Secretary.
General
The ESPP was adopted to provide a means by which employees of the Company
and its affiliates could be given an opportunity to purchase stock in the
Company, to assist in retaining the services of its employees, to secure and
retain the services of new employees and to provide incentives for such persons
to exert maximum efforts for the success of the Company. Under the ESPP, the
Board may provide for the grant of rights to purchase Common Stock of the
Company to eligible employees (an "Offering") on a date or dates to be selected
by the Board.
Stock Subject to the ESPP
The shares available for issuance under the ESPP are the Company's Common
Stock. Following the 2-for-1 stock split in the form of a 100% stock dividend
effective November 19, 1999, the number of shares authorized for issuance under
the ESPP is 24,000,000 (as discussed below under the heading "Adjustment
Provisions" this maximum number of shares subject to the ESPP is subject to
adjustment upon certain changes in the Common Stock). As of March 1, 2000,
17,473,412 shares remained available for future grant under the Employee Stock
Purchase Plan. If a Purchase Right granted under the ESPP expires or otherwise
terminates without having been exercised in full, the Common Stock not purchased
under the Purchase Right shall again become available for issuance under the
ESPP. The Common Stock subject to the ESPP may be unissued shares or reacquired
shares, purchased on the open market or otherwise.
Administration
The ESPP is administered by the Board of Directors of the Company. The
Board has the power to construe and interpret the ESPP and, subject to the
provisions of the ESPP, to determine when and how rights to purchase Common
Stock will be granted, to determine the provisions of each offering of such
rights, and to designate which affiliates of the Company shall
16
<PAGE>
be eligible to participate in the ESPP. The Board of Directors is authorized to
delegate administration of the ESPP to a committee composed of not less than two
members of the Board. The Board has delegated administration of the ESPP to the
Compensation Committee of the Board. As used herein with respect to the ESPP,
the "Board" refers to the Compensation Committee as well as to the Board of
Directors itself.
Eligibility
Rights to purchase stock may be granted under the ESPP only to employees of
the Company and its affiliates who have been employed by the Company or its
affiliates for such continuous period preceding such grant as the Board may
require, which period shall not be more than two years, and whose customary
employment with the Company or its affiliate is at least 20 hours per week and
at least five months per calendar year, unless otherwise determined by the
Board. The Board may provide that if an employee becomes eligible to participate
in the ESPP during the course of an Offering, the employee may receive a right
under that Offering. Such right shall have the same characteristics as any
rights originally granted under that Offering, except that (i) the offering date
shall be the date such right is granted and (ii) the purchase period for such
right shall begin on its offering date and end coincident with the end of such
Offering. Officers of the Company shall be eligible to participate in Offerings,
although the Board may provide that certain highly compensated employees shall
not be eligible to participate.
An eligible employee may be granted rights under the ESPP only if such
rights, together with any other rights granted under all such employee stock
purchase plans of the Company or any affiliate of the Company, do not permit
such employee's rights to purchase stock of the Company or any affiliate to
accrue at a rate which exceeds $25,000 of fair market value of such stock
(determined at the time such rights are granted) for each calendar year in which
such rights are outstanding at any time (the "Purchase Limitation"). Grants or
purchases of stock of the Company pursuant to any stock option or stock award
plan of the Company are not included in any calculation of such accrual rate. No
rights may be granted under the ESPP to any person who, at the time of the
grant, owns stock possessing five percent or more of the total combined voting
power of the Company or any affiliate of the Company.
As of December 31, 1999, approximately 5,500 employees (including officers)
of the Company and its affiliates were eligible to participate under the ESPP.
17
<PAGE>
Terms of Rights
The following is a description of the terms of rights granted under the
ESPP.
Rights; Purchase Price. On each offering date, each eligible employee is
granted the right to purchase the number of shares of Common Stock of the
Company purchasable with a percentage designated by the Board not exceeding 15%
of such employee's earnings during the period which begins on the offering date
and ends on a designated exercise date not in excess of 27 months after the
offering date. In connection with each Offering, the Board shall specify a
maximum number of shares which may be purchased by any employee as well as a
maximum aggregate number of shares which may be purchased by all eligible
employees. If an Offering contains more than one exercise date, the Board may
specify a maximum aggregate number of shares which may be purchased by all
eligible employees on any given exercise date under the Offering. If the
aggregate purchase of shares upon exercise of rights granted under the Offering
would exceed any such maximum aggregate number, the Board will make a pro rata
allocation of the shares available in as nearly a uniform manner as practicable
and as the Board deems equitable.
The purchase price of stock acquired pursuant to rights granted under the
ESPP will not be less than the lesser of (i) an amount equal to 85% of the fair
market value of the stock on the offering date, or (ii) an amount equal to 85%
of the fair market value of the stock on the exercise date.
Transferability. Rights granted under the ESPP are nontransferable and may
be exercised only by the person to whom such rights are granted.
Exercise. On each exercise date, a participant's accumulated payroll
deductions and other additional payments (without any increase for interest)
will be applied to the purchase of whole shares of stock of the Company, up to
the maximum number of shares permitted pursuant to the terms of the ESPP, at the
purchase price specified in the Offering. No fractional shares will be issued
upon the exercise of rights granted under the ESPP. Any accumulated payroll
deductions remaining in a participant's account after the purchase of the number
of whole shares purchasable at the purchase price specified in the Offering in
an amount less than is required to purchase one whole share will be held in the
participant's account for the purchase of shares under the next Offering under
the ESPP, unless the participant withdraws from the next Offering or is no
longer eligible to be granted rights under the ESPP, in which case such amount
shall be distributed to the
18
<PAGE>
participant after the final exercise date, without interest. Any accumulated
payroll deductions remaining in a participant's account after such purchase in
an amount greater than that required to purchase one share will be distributed
to the participant without interest.
Participation; Withdrawal; Termination
An eligible employee may become a participant in an Offering by delivering
a participation agreement to the Company authorizing payroll deductions of up to
the maximum percentage of such employee's earnings during the purchase period,
as specified by the Board. Payroll deductions made for a participant shall be
credited to an account for such participant under the ESPP and deposited with
the general funds of the Company. A participant may reduce, increase or begin
payroll deductions after the beginning of any purchase period only as provided
for in the Offering. A participant may make additional payments into his or her
account only if specifically provided for in the Offering and only if the
participant has not had the maximum amount withheld during the purchase period.
A participant may terminate payroll deductions under the Plan and withdraw
from the Offering at any time during a purchase period prior to the exercise
date by delivering to the Company a notice of withdrawal. Upon such withdrawal,
the Company will distribute to such participant all of his or her accumulated
payroll deductions (reduced to the extent such deductions have been used to
acquire stock for the participant) under the Offering, without interest, and the
participant's interest in that Offering will be automatically terminated. Such
withdrawal will have no effect upon such participant's eligibility to
participate in any other Offerings under the ESPP, but the participant will be
required to deliver a new participation agreement in order to participate in
subsequent Offerings.
Rights granted under the ESPP will terminate immediately upon cessation of
a participating employee's employment and the Company shall distribute to such
employee all of his or her accumulated payroll deductions (reduced to the extent
such deductions have been used to acquire stock for the terminated employee)
without interest.
Adjustment Provisions
If there is any change in the stock subject to the ESPP or subject to any
rights granted under the ESPP (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares,
19
<PAGE>
exchange of shares, change in corporate structure or otherwise), the ESPP and
rights outstanding thereunder will be appropriately adjusted as to the class and
the maximum number of shares subject to such plan and the class, number of
shares and price per share of stock subject to such outstanding rights.
In the event of a dissolution or liquidation of the Company, a merger or
consolidation in which the Company is not the surviving corporation, a reverse
merger in which the Company is the surviving corporation but the shares of
Common Stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise, or any other capital reorganization in which more than 50% of
the shares of the Company entitled to vote are exchanged, then under the ESPP
the successor corporation may assume such outstanding rights or substitute
similar rights, such rights may continue in full force and effect, or
participants' accumulated payroll deductions may be used to purchase Common
Stock immediately prior to the transaction described above and the participants'
rights under the ongoing Offering terminated.
Duration, Amendment and Termination
The Employee Stock Purchase Plan currently terminates on January 22, 2001.
If the amendment being submitted to stockholders is approved, the Employee Stock
Purchase Plan will not have a termination date. The Board, however, may suspend
or terminate the ESPP without stockholder approval or ratification at any time
or from time to time. No rights may be granted under the ESPP while the ESPP is
suspended or after it is terminated. Additionally, any rights and obligations
under any rights granted while the ESPP is in effect shall not be altered or
impaired by suspension or termination of the ESPP, except with the consent of
the person to whom such rights were granted or except as necessary to comply
with any laws or governmental regulation; provided, however, that the Board
shall have the power to terminate any Offering and cause all payroll deductions
accumulated during the purchase period related to such Offering to be
distributed to participants, without interest, without such consent.
The Board may also amend the ESPP at any time or from time to time.
However, no amendment shall be effective unless approved by the stockholders of
the Company within 12 months before or after its adoption by the Board if the
amendment would: (i) modify the provisions as to eligibility for participation
(to the extent such modification requires stockholder approval in order for the
ESPP to satisfy the requirements of Section 423 of the Code); (ii) increase the
number of shares reserved for Purchase Rights; or (iii) modify the ESPP in any
other
20
<PAGE>
way if such modification requires stockholders approval in order for the ESPP to
satisfy the requirements of Section 423 of the Code. All other amendments to the
ESPP shall be effective without stockholder approval unless the Board, in its
discretion, determines that such amendment shall be subject to stockholder
approval.
FEDERAL INCOME TAX INFORMATION
The ESPP is intended to qualify for the favorable federal tax treatment
accorded employee stock purchase plans under Section 423 of the Code. Under
these provisions, a participant will be taxed on amounts withheld as if actually
received, but, except for this, no taxable income will be realized by a
participant until disposition of the shares acquired.
If the stock is disposed of more than two years after the beginning of the
offering period and more than one year after the stock is transferred to the
participant, the lesser of (i) the excess of the fair market value of the stock
at the time of such disposition over the exercise price or (ii) the excess of
the fair market value of the stock as of the beginning of the offering period
over the exercise price (determined as of the beginning of the offering period)
will be treated as ordinary income. Any further gain or any loss will be taxed
as a capital gain or loss.
If the stock is sold or disposed of before the expiration of either of the
holding periods described above, the excess of the fair market value of the
stock on the exercise date over the exercise price generally will be treated as
ordinary income at the time of such disposition, and the Company may be required
to withhold income taxes relating to such ordinary income from other payments
made to the participant. The balance of any gain will be treated as capital
gain. Even if the stock is later disposed of for less than its fair market value
on the exercise date, the same amount of ordinary income is attributed to the
participant and a capital loss is recognized equal to the difference between the
sales price and the fair market value of the stock on such exercise date.
Any capital gain or loss realized by a participant upon the disposition of
stock acquired under the ESPP will be long or short-term depending on whether
the stock has been held for more than one year.
There are no federal income tax consequences to the Company by reason of
the grant or exercise of rights under the ESPP. The Company generally is
entitled to a deduction for amounts taxed as ordinary income to a participant
upon disposition by a participant of stock before the expiration of the holding
periods described above.
21
<PAGE>
PARTICIPATION IN THE PLAN
The purchase of shares under the ESPP is discretionary, and the Company
cannot now determine the number of shares to be purchased either under the
current Offering or in any future offering by any particular employee or group.
On January 1, 1999, the Company commenced the current Offering under the
Employee Stock Purchase Plan, which will expire on March 31, 2000. On such date,
participants will be entitled to purchase shares of Common Stock at the lesser
of $22.22 (85% of the fair market value of the stock on the January 1, 1999
Offering date) or an amount equal to 85% of the fair market value of the Common
Stock on the March 31, 2000 exercise date under the Offering. Most of the
executive officers of the Company are participants in the current Offering, and
most are expected to purchase the maximum number of shares permitted. Non-
employee members of the Board of Directors are not eligible to participate in
the Employee Stock Purchase Plan. Due to the operation of the Purchase
Limitation, it is anticipated that no participant will be able to purchase more
than 1,406 shares of Common Stock in the current Offering. On December 31, 1999,
the closing price of the Common Stock on the NASDAQ was $60.063.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the meeting will be
required to approve the amendment to the Employee Stock Purchase Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 3
22
<PAGE>
PROPOSAL 4
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 2000, and has further
directed that management submit the selection of independent auditors for
ratification by the stockholders at the Annual Meeting. Ernst & Young LLP has
audited the Company's financial statements since the Company's inception in
1980. Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
Stockholder ratification of the selection of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Ernst & Young LLP
to the stockholders for ratification as a matter of corporate practice. If the
stockholders fail to ratify the selection, the Board will reconsider whether or
not to retain that firm. Even if the selection is ratified, the Board in its
discretion may direct the appointment of a different independent accounting firm
at any time during the year if the Board determines that such a change would be
in the best interests of the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the meeting will be
required to ratify the selection of Ernst & Young LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 4
23
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of February 11, 2000 by: (i) each
director; (ii) the Company's Chief Executive Officer, each of its other four
most highly compensated executive officers and one former executive officer
(collectively the "Named Executive Officers") for the year ended December 31,
1999; (iii) each person who, to the knowledge of the Company, beneficially owned
more than 5% of the Common Stock, and (iv) all directors, executive officers and
one former executive officer of the Company as a group.
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned (1) (2)
-------------------------
Beneficial Owner Number Percent
--------------- of Shares of Total
--------- --------
<S> <C> <C>
FMR Corp. (3) ......................................... 54,497,486 5.3%
82 Devonshire Street
Boston, MA 02109
David Baltimore.......................................... 0 *
Gordon M. Binder......................................... 3,688,840 *
William K. Bowes, Jr. (4)................................ 8,751,200 *
Jerry D. Choate.......................................... 80,000 *
Frederick W. Gluck....................................... 76,000 *
Franklin P. Johnson, Jr. (5)............................. 4,602,847 *
Steven Lazarus........................................... 352,818 *
Gilbert S. Omenn (6)..................................... 475,700 *
Judith C. Pelham......................................... 129,200 *
Kevin W. Sharer.......................................... 48,300 *
Lawrence M. Souza........................................ 264,856 *
George Morstyn........................................... 152,260 *
Stan M. Benson........................................... 520,680 *
N. Kirby Alton (7)....................................... 186,900 *
All directors, executive officers and one former
executive officer as a group
(21 persons) (5) (6) (8) ........................... 21,345,243 2.1%
</TABLE>
- -----------------
* Less than 1%
(1) Information in this table regarding directors, executive officers and one
former executive officer is based on information provided by them. Unless
otherwise indicated in the footnotes and subject to community property laws
where applicable, each of the directors,
24
<PAGE>
executive officers and one former executive officer has sole voting and/or
investment power with respect to such shares.
(2) Includes shares which the individuals shown have the right to acquire on
February 11, 2000, or within 60 days thereafter, pursuant to outstanding
stock options, as follows: Mr. Binder-2,838,628 shares; Mr. Bowes-289,200
shares; Mr. Choate-76,000 shares; Mr. Gluck-76,000 shares; Mr. Johnson-
289,200 shares; Mr. Lazarus-197,990 shares; Dr. Omenn-289,200 shares; Ms.
Pelham-125,200 shares; Dr. Souza-119,880 shares; Dr. Morstyn-137,968
shares; Mr. Benson-513,532 shares; Dr. Alton-97,946 shares; and all current
directors, executive officers and one former executive officer as a group-
6,799,162 shares. Such shares are deemed to be outstanding in calculating
the percentage ownership of such individual (and the group), but are not
deemed to be outstanding as to any other person.
(3) In a filing on Schedule 13G, dated February 14, 2000, FMR Corp. reported
sole dispositive power with respect to 54,497,486 shares of Common Stock
and sole voting power with respect to 4,642,922 shares of Common Stock.
Fidelity Management & Research Company ("Fidelity"), a wholly-owned
subsidiary of FMR Corp., is the beneficial owner of 48,513,664 shares.
Edward C. Johnson 3d (Chairman of FMR Corp.), FMR Corp. (through its
control of Fidelity) and certain investment funds each has sole power to
dispose of 48,513,664 shares owned by the funds. Neither FMR Corp. nor
Edward C. Johnson 3d has sole power to vote or direct the voting of shares
owned directly by the investment funds for which Fidelity acts as
investment adviser. Fidelity Management Trust Company ("FMTC") (a wholly-
owned subsidiary of FMR Corp.) is the beneficial owner of 4,845,722 shares.
Edward C. Johnson 3d and FMR Corp. (through its control of FMTC), each has
sole dispositive power over 4,845,722 shares, sole power to vote or to
direct the voting of 3,616,422 shares, and no power to vote or direct the
voting of 1,229,300 shares owned by certain institutional accounts. FMR
Corp.'s beneficial ownership may include shares beneficially owned through
Strategic Advisers, Inc., a wholly-owned subsidiary of FMR Corp. Edward C.
Johnson 3d, Chairman of FMR Corp., owns 12.0% of the outstanding voting
stock of FMR Corp. and Abigail Johnson, a director of FMR Corp., owns 24.5%
of the outstanding voting stock of FMR Corp. Members of the Johnson family
and trusts for their benefit, which collectively control approximately 49%
of the voting power of FMR Corp., may be deemed to form a "controlling
group" under the Investment Company Act of 1940. Fidelity International
Limited is the beneficial owner of 1,138,100 shares and has sole
dispositive power over 1,138,100 shares, sole voting power over 1,026,500,
and no power to vote 111,600 shares held by certain investment companies.
The foregoing information is based solely on a review of the referenced
Schedule 13G.
(4) Excludes 609,600 shares held by Mr. Bowes' wife; Mr. Bowes disclaims
beneficial ownership of such shares.
(5) Includes 3,888,647 shares held by Asset Management Partners, a venture
capital limited partnership, of which Mr. Johnson is the general partner.
As the general partner, Mr. Johnson may be deemed to have voting and
investment power as to all of these shares, and therefore may be deemed to
be a beneficial owner of such shares. Excludes 185,000
25
<PAGE>
shares held by Mr. Johnson's wife; Mr. Johnson disclaims beneficial
ownership of such shares.
(6) Includes 4,960 shares held by one of Dr. Omenn's children.
(7) Includes 88,954 shares held in a family trust with respect to which Dr.
Alton has shared voting and investment power. Excludes 27,898 shares held
by trusts established for the benefit of Dr. Alton's children; Dr. Alton
disclaims beneficial ownership of such shares.
(8) Excludes 4,852 shares held in the charitable remainder trust of one of the
executive officers, Steven M. Odre; Mr. Odre disclaims beneficial ownership
of such shares.
In 1993, the Company exercised its option to purchase the Class A and Class
B limited partnership interests of Amgen Clinical Partners, L.P. ("the
Partnership"), a limited partnership previously formed to develop and
commercialize products from certain technologies for human pharmaceutical use in
the United States. As a result of the Company exercising such option, each
holder of a limited partnership interest in the Partnership acquired contractual
contingent payment rights based on the number of such holder's interests. The
contractual contingent payment rights are not voting securities but entitle the
holders thereof to receive quarterly payments, subject to certain adjustments,
equal to a stated percentage of the Company's sales of certain products in
specified geographic areas. In 1999, holders received approximately $76,352 for
each whole contractual contingent payment right held. The following table sets
forth certain information regarding the ownership of the Company's contractual
contingent payment rights as of February 11, 2000, by: (i) each director; (ii)
each of the six Named Executive Officers of the Company; and (iii) all
directors, executive officers and one former executive officer of the Company as
a group:
26
<PAGE>
<TABLE>
<CAPTION>
Contractual Contingent
Payment Rights
Beneficially Owned (1)
---------------------
Beneficial Owner Number Percent
---------------- of Rights of Total
--------- --------
<S> <C> <C>
David Baltimore........................................... -0- *
Gordon M. Binder.......................................... 1 *
William K. Bowes, Jr...................................... 2 *
Jerry D. Choate........................................... -0- *
Frederick W. Gluck........................................ -0- *
Franklin P. Johnson, Jr. (2).............................. 4 *
Steven Lazarus............................................ -0- *
Gilbert S. Omenn.......................................... 0.5 *
Judith C. Pelham.......................................... -0- *
Kevin W. Sharer........................................... -0- *
Lawrence M. Souza......................................... 0.25 *
George Morstyn............................................ -0- *
Stan M. Benson............................................ -0- *
N. Kirby Alton............................................ 0.25 *
All directors, executive officers and one former
executive officer as a group (21 persons) (2)........... 8 1%
</TABLE>
__________________________
* Less than 1%
(1) This table is based upon information supplied by the directors, executive
officers and one former executive officer. Unless otherwise indicated in
the footnotes and subject to community property laws where applicable, each
holder of a contractual contingent payment right(s) has sole investment
power with respect to such right(s) beneficially owned.
(2) Includes four rights held by Asset Management Partners, a venture capital
limited partnership, of which Mr. Johnson is the general partner. As the
general partner, Mr. Johnson may be deemed to have investment power as to
all of these rights, and therefore may be deemed to be a beneficial owner
of such rights.
27
<PAGE>
EXECUTIVE COMPENSATION
Compensation of Directors
Directors of the Company who are also employees of the Company are not
separately compensated for their services as directors. Non-employee directors
receive a quarterly retainer of $5,000 (plus $1,500 for a Committee Chairman)
and a per Board meeting fee of $1,250 (plus $750 for Committee members attending
a committee meeting, up to a maximum of $1,500 for all committee meetings held
on the same day). The members of the Board of Directors also are entitled to
reimbursement of their expenses incurred in connection with attendance at Board
and committee meetings in accordance with Company policy. There are no family
relationships among any directors of the Company. In 1999, each of the non-
employee directors also received $2,500 for his or her attendance at a two-day
conference with the Company's senior management.
Non-employee directors are also entitled to receive stock option grants in
compensation for their service as directors. Under the Amended and Restated 1991
Equity Incentive Plan, each non-employee director is automatically granted a
non-discretionary option (a "Formula Grant") to purchase shares of Common Stock
of the Company. The exercise price of options granted under the Amended and
Restated 1991 Equity Incentive Plan is equal to 100% of the fair market value of
the underlying stock on the date of the option grant. In addition, newly
appointed non-employee directors receive an inaugural option grant pursuant to a
formula set forth in the Amended and Restated 1991 Equity Incentive Plan on
terms comparable to the Formula Grants. Non-employee directors receive annual
Formula Grants of 16,000 shares in January of each year; inaugural grants to new
non-employee directors are 60,000 shares provided, that, in either case, the
non-employee director becomes and/or is a director on the required dates for
such grants.
In January 1999, the Company granted to each of the non-employee directors,
except for Dr. Baltimore who was not then a member of the Board, a Formula Grant
under the Amended and Restated 1991 Equity Incentive Plan covering 16,000 shares
at an exercise price of $28.9688 per share. In June 1999, Dr. Baltimore received
an inaugural option grant for 60,000 shares, with an exercise price of $29.9688
per share, upon his appointment to the Board. In addition, in September 1999, a
reload option to purchase 2,846 shares at an exercise price of $43 per share was
granted to Mr. Lazarus.
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<PAGE>
A Formula Grant awarded to a non-employee director under the Amended and
Restated 1991 Equity Incentive Plan may not be exercised: (a) unless such
director has, at the date of grant, provided three years of prior continuous
service as a non-employee director, in which case such Formula Grant will become
fully vested and exercisable upon grant; or (b) until the date upon which such
director has provided one year of continuous service as a non-employee director
following the date of grant of such Formula Grant, whereupon such Formula Grant
will become fully vested and exercisable. No option under the Amended and
Restated 1991 Equity Incentive Plan is exercisable by the optionee after the
expiration of ten years from the date the original option is granted.
For stock options granted prior to June 1998, a non-employee director
optionee is entitled to a reload option ("Reload Option") in the event the
optionee exercises his or her option, in whole or in part, by surrendering other
shares of Common Stock of the Company held by such non-employee director in
accordance with the Amended and Restated 1991 Equity Incentive Plan and the
terms of the option grant. Any such Reload Option: (i) will be for a number of
shares of Common Stock equal to the number of shares of Common Stock surrendered
as part or all of the exercise price of the original option; (ii) will have an
expiration date that is the same as the expiration date of the original option;
and (iii) will have an exercise price that is equal to 100% of the fair market
value of the Common Stock subject to the Reload Option on the date of exercise
of the original option. Any such Reload Option will be subject to the
availability of sufficient shares under the Amended and Restated 1991 Equity
Incentive Plan. There will be no Reload Option on a Reload Option. Stock options
granted in June 1998 or subsequently did not have a Reload Option.
29
<PAGE>
Compensation of Executive Officers
The following table sets forth certain summary information concerning
certain compensation awarded or paid to, or earned by, the Named Executive
Officers for all services rendered in all capacities to the Company for the
years ended December 31, 1999, 1998 and 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
--------------------------------------------------- ------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary ($)(1) Bonus ($) Compensation ($) Options(#) Compensation ($)(2) (3)
- --------------------------- ---- ------------- ---------- ---------------- ----------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Gordon M. Binder, 1999 952,747 1,800,000 503,000 434,473
Chief Executive 1998 866,135 900,000 640,000 352,640
Officer and Chairman 1997 799,024 638,123 1,343,860 242,180
of the Board
Kevin W. Sharer, 1999 631,733 1,124,421 240,000 255,998
President, Chief 1998 566,501 880,808 400,000 138,258
Operating Officer and 1997 506,755 326,157 715,832 147,567
Director
Lawrence M. Souza, 1999 412,672 556,884 80,132 154,135
Senior Vice President, 1998 379,533 384,638 220,000 92,320
Research 1997 325,270 208,737 515,492 75,460
George Morstyn 1999 409,128 534,649 98,732 124,717
Senior Vice President, 1998 382,920 441,272 184,000 102,307
Development, and 1997 337,644 210,479 346,848 84,944
Chief Medical Officer
Stan M. Benson, 1999 390,208 515,894 84,000 126,694
Senior Vice President, 1998 361,801 347,763 164,000 104,604
Sales and Marketing 1997 328,519 184,393 4,728(4) 402,692 63,632
N. Kirby Alton, 1999 511,466 757,502 80,132 154,854
Former Officer (5) 1998 404,333 555,282 220,000 114,207
1997 383,779 298,583 437,492 109,352
</TABLE>
___________________
(1) Includes compensation deferred under the Company's Retirement and Savings
Plan (the "401(k) Plan") otherwise payable in cash during each calendar
year.
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<PAGE>
(2) The amounts shown for 1999 are comprised primarily of Company credits to
the Supplemental Retirement Plan (the "SRP"), with additional amounts
included as a result of a contribution (the "Company Contribution") to the
Company's 401(k) Plan for each of the Named Executive Officers (see
footnote 3 below for a description of the Company Contribution). The SRP is
a non-qualified, unfunded, deferred compensation plan. Participation in the
SRP is available to selected participants in the Company's 401(k) Plan who
are affected by the Internal Revenue Code limits on the amount of employee
compensation that may be recognized for purposes of calculating the
Company's contributions to the 401(k) Plan. Pursuant to the SRP, the
following Named Executive Officers were credited with the following
amounts, including accrued dividends, interest and unrealized gains or
losses for the years ended December 31, 1999, 1998 and 1997, respectively;
Mr. Binder, $421,673, $339,840 and $229,380; Mr. Sharer, $243,198, $125,458
and $134,767; Dr. Souza, $141,335, $79,520 and $62,660; Dr. Morstyn,
$111,917, $89,507 and $72,144; Mr. Benson, $113,894, $91,804 and $50,615;
and Dr. Alton, $142,054, $101,407 and $96,552.
(3) The amounts shown for 1999 include a Company Contribution in the amount of
$12,800 to the Company's 401(k) Plan for each of the Named Executive
Officers. The amounts shown for each of 1998 and 1997 include a Company
Contribution pursuant to the 401(k) Plan in the amount of $12,800 for each
of the Named Executive Officers, except for Mr. Benson for whom the Company
Contribution for 1997 was $13,017.
(4) Represents payments to Mr. Benson for taxes payable by him as a result of
payments to or on behalf of Mr. Benson in connection with his relocation to
the Thousand Oaks area.
(5) Dr. Alton retired as an officer of the Company effective October 20, 1999,
and has entered into an agreement with the Company. See "--Employment and
Compensation Arrangements."
31
<PAGE>
Stock Option Grants and Exercises
The Company has granted options to its executive officers under the Amended
and Restated 1991 Equity Incentive Plan and other Company stock option plans
(collectively, the "Option Plans"). The following table sets forth information
concerning individual grants of stock options made by the Company during the
year ended December 31, 1999, to each of the Named Executive Officers:
OPTION GRANTS IN FISCAL YEAR 1999
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------------------------------------------------------------------------------
Number of Potential Realizable
Securities Percent of Value at Assumed
Underlying Total Options Annual Rates of Stock
Options Granted to Exercise or Price Appreciation
Granted Employees in Base Price Expiration for Option Term (1)
--------------------------
Name (#)(2)(3) Fiscal Year (4) ($/Sh) Date 5% ($) 10% ($)
- ----- ----------- --------------- ------------ --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Gordon M. Binder 63,000(5) 0.33% 32.2188 02/23/06 826,326 1,925,691
440,000(6) 2.35% 30.4375 07/01/06 5,452,092 12,705,694
Kevin W. Sharer 240,000 1.28% 30.4375 07/01/06 2,973,869 6,930,378
Lawrence M. Souza 80,132 0.43% 30.4375 07/01/06 992,925 2,313,938
George Morstyn 80,132 0.43% 30.4375 07/01/06 992,925 2,313,938
18,600(7) 0.10% 41.9688 10/19/06 317,791 740,587
Stan M. Benson 84,000 0.45% 30.4375 07/01/06 1,040,854 2,425,632
N. Kirby Alton 80,132 0.43% 30.4375 07/01/06 992,925 2,313,938
</TABLE>
_________________________
(1) The potential realizable value is based on the term of the option at the
time of its grant, which is seven years for the stock options granted to
the Named Executive Officers in the table. The assumed 5% and 10% annual
rates of appreciation over the term of the options are set forth in
accordance with SEC rules and regulations and do not represent the
Company's estimates of stock price appreciation. The potential realizable
value is calculated by assuming that the stock price on the date of grant
appreciates at the indicated rate, compounded annually, for the entire term
of the option and that the option is exercised and the stock sold on the
last day of its term at this appreciated stock price. No valuation method
can accurately predict future stock prices or option values because there
are too many unknown factors. No gain to the optionee is possible unless
the stock
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<PAGE>
price increases over the option term. Such a gain in stock price would
benefit all stockholders.
(2) Prior to February 1999, under the terms of the Option Plans, the Board of
Directors retained discretion, subject to plan limitations, to modify the
terms of outstanding options and to reprice the options. In February 1999,
the Board of Directors unanimously adopted, and the stockholders
subsequently approved in May 1999, an amendment to the Amended and Restated
1991 Equity Incentive Plan to, among other things, delete the provisions
permitting the repricing of outstanding stock options under such plan.
(3) Options shown in the table have a term of seven years, subject to earlier
termination if the optionee ceases employment with the Company. Except as
otherwise noted, options vest and become exercisable as to 20% of the
shares covered thereby one year after the grant date and an additional 20%
on each successive anniversary date, with full vesting occurring on the
fifth anniversary date. The vesting of all options issued pursuant to the
Option Plans will be automatically accelerated in the event of a change in
control (as defined in the Option Plans). In addition, the options are
subject to certain full or partial accelerated vesting upon the death or
disability of the optionee while in the employ of the Company, or death
within three months after termination of employment or voluntary retirement
of the optionee, as provided in the option grant agreement, or at the
discretion of the Compensation Committee as permitted by the Option Plans.
See "--Employment and Compensation Arrangements."
(4) In 1999, the Company granted stock options covering a total of 18,750,952
shares of Common Stock to Company employees under all stock option plans
maintained by the Company and this number was used in calculating the
percentages.
(5) This option was granted to reflect Mr. Binder's Management Incentive Plan
achievements in 1998 in excess of the maximum award permitted thereunder
for 1998, and became fully vested and exercisable on its date of grant.
(6) This option was fully vested on the date of grant.
(7) This option grant to Dr. Morstyn becomes exercisable as to 25% of the
shares covered thereby one year after the grant date and an additional 25%
on each successive anniversary date, with full vesting occurring on the
fourth anniversary date.
33
<PAGE>
Aggregated Option Exercises
The following table sets forth information (on an aggregated basis)
concerning each exercise of stock options during the year ended December 31,
1999, by each of the Named Executive Officers and the final year-end value of
unexercised options:
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1999
AND FISCAL YEAR-END 1999 OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options Options at
at FY-End (#) FY-End ($)(1)
Shares ------------ ------------
Acquired On Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($)(2) Unexercisable Unexercisable
- ---- ------------ --------------- ------------- -------------
<S> <C> <C> <C> <C>
Gordon M. Binder 1,360,504 45,244,800 3,823,356/ 185,658,683/
1,150,920 52,241,620
Kevin W. Sharer 327,446 9,905,692 155,000/ 7,385,625/
916,326 37,771,415
Lawrence M. Souza 220,004 5,799,445 310,448/ 14,550,105/
449,172 18,935,577
George Morstyn 126,400 3,235,806 267,968/ 12,426,812/
397,212 16,214,985
Stan M. Benson 40,000 1,421,872 518,532/ 24,563,857/
512,160 22,612,870
N. Kirby Alton 78,000 2,467,744 272,906/ 11,953,623/
374,718 16,271,884
</TABLE>
- --------------------
(1) Value of unexercised in-the-money options is calculated based on the market
value of the underlying securities, minus the exercise price, and assumes
sale of the underlying securities on December 31, 1999, at a price of
$60.063 per share, the fair market value of the Company's Common Stock on
such date.
(2) Value realized is based on the market value of the Company's Common Stock
on the date of exercise, minus the exercise price, and does not necessarily
indicate that the optionee sold such stock at that price or at all.
34
<PAGE>
Change-in-Control Arrangements
Effective as of October 20, 1998 (the "Effective Date"), the Board of
Directors adopted the Amgen Inc. Change of Control Severance Plan (the "CCS
Plan") which provides certain severance benefits to persons who hold certain
designated positions with the Company as of the date on which a Change of
Control (as defined below) of the Company occurs. If a Change of Control had
occurred on December 31, 1999, the CCS Plan would have covered approximately 370
officers and key employees of the Company, including each of the Named Executive
Officers. Under the terms of the CCS Plan, the CCS Plan extends through December
31, 2001, subject to automatic one year extensions unless the Company notifies
the participants that the term will not be extended. If a Change of Control
occurs during the original or any extended term, the CCS Plan will continue in
effect for at least 36 months following the Change of Control. Prior to the
occurrence of a Change of Control, the Company has the right to terminate or
amend the CCS Plan at any time; after the occurrence of a Change of Control, the
CCS Plan may not be terminated or amended in any way which adversely affects a
participant's interests under the CCS Plan without the participant's written
consent.
Under the CCS Plan, a Change of Control generally will be deemed to have
occurred at any of the following times: (i) upon the acquisition by any person,
entity or group of beneficial ownership of 50% or more of either the then
outstanding Common Stock or the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of directors;
or (ii) at the time individuals making up the incumbent Board (as defined in the
CCS Plan) cease for any reason to constitute at least a majority of the Board;
or (iii) immediately prior to the consummation by the Company of a
reorganization, merger, or consolidation with respect to which persons who were
the stockholders of the Company immediately prior to such transaction do not,
immediately thereafter, own more than 50% of the shares of the Company entitled
to vote generally in the election of directors; or (iv) a liquidation or
dissolution of the Company or the sale of all or substantially the assets of the
Company; or (v) any other event which the incumbent Board, in its sole
discretion, determines is a change of control.
Under the CCS Plan, if a Change of Control occurs and a participant's
employment is terminated within the two year period immediately following the
Change of Control by the Company other than for Cause or Disability (each as
defined in the CCS Plan) or by the
35
<PAGE>
participant for Good Reason (as defined in the CCS Plan), the participant will
be entitled to certain payments and benefits in lieu of further salary payments
subsequent to such termination and in lieu of severance benefits otherwise
payable by the Company (but not including accrued vacation and similar benefits
otherwise payable upon termination). In the event of such termination, the
participant will receive a lump sum cash severance payment in an amount equal to
the excess, if any, of (A) the product of (x) a benefits multiple (either 3, 2
or 1, depending on the participant's position (a "Benefits Multiple")), and (y)
the sum of (i) the participant's annual base salary immediately prior to
termination or, if higher, immediately prior to the Change of Control, plus (ii)
the participant's targeted annual bonus for the year in which the termination
occurs or, if higher, the participant's average annual bonus for the three years
immediately prior to the Change of Control; over (B) the aggregate value
(determined in accordance with Section 280G of the Code) of the acceleration of
vesting of the participant's unvested stock options in connection with the
Change of Control. The terms of the Amended and Restated 1991 Equity Incentive
Plan, the Amended and Restated 1988 Stock Option Plan and the Amended and
Restated 1997 Special Non-Officer Equity Incentive Plan contain the same
definition of "change of control" as the CCS Plan definition, and such option
plans provide for the acceleration of vesting of issued and outstanding stock
options upon the occurrence of a change of control.
Participants who are senior executive-level staff members who are also
members of the Amgen Operating Committee (which presently includes each of the
Named Executive Officers other than Dr. Alton) have a Benefits Multiple of 3;
participants who are senior management-level staff members at the level of
"director" or equivalent and above (and who are not members of the Amgen
Operating Committee), have a Benefits Multiple of 2; and management-level staff
members at the level of "associate director" or equivalent have a Benefits
Multiple of 1.
The Company will also provide the participant with continued health and
other group insurance benefits for a period of 1 to 3 years (depending on the
participant's Benefits Multiple) after the participant's termination of
employment. In addition, the participant will be fully vested in his or her
accrued benefits under the Company's retirement plans and the Company will
provide the participant with additional fully vested benefits under such plans
in an amount equal to the benefits the participant would have earned under the
plans had the participant continued to be employed by the Company for a number
of years equal to the participant's Benefits Multiple. The participant will also
be indemnified by the Company and will be provided with directors' and officers'
liability insurance (if applicable), each as set forth in the CCS Plan. In
addition, if any
36
<PAGE>
payment, distribution or acceleration of vesting of any stock option or other
right with respect to a participant who is a "disqualified individual" (within
the meaning of Section 280G of the Code) would be subject to the excise tax
imposed by Section 4999 of the Code, then the Company will pay the participant
an additional lump sum cash payment in an amount equal to 20% of the amount of
the participant's "excess parachute payment" (within the meaning of Section 280G
of the Code). If a Change of Control had occurred on the Effective Date, each of
the Named Executive Officers would have received such indemnification and
liability insurance.
The CCS Plan provides that for a period of years equal to a participant's
Benefits Multiple after the participant's termination of employment, the
participant will not disclose confidential information of the Company and will
not solicit or offer employment to any of the Company's employees. In the event
that the participant breaches any of such provisions, the participant will
forfeit any right to receive further payments or benefits under the CCS Plan.
Employment and Compensation Arrangements
Pursuant to a letter agreement, dated October 11, 1999, by and between
Amgen and N. Kirby Alton, Dr. Alton resigned as Amgen's Senior Vice President,
Development and a member of Amgen's Operating Committee, but will continue to be
employed by Amgen in a part-time special assignment position with the title of
Special Advisor, Development, through October 19, 2002, subject to earlier
termination pursuant to the letter agreement. Dr. Alton will assist Dr. George
Morstyn on Amgen's product development efforts, including monitoring regulatory
developments in the pharmaceutical industry. Dr. Alton will be paid $72,250 per
month for his services. Pursuant to the letter agreement, Dr. Alton received a
cash bonus of $757,502 for his services in 1999, reimbursement of up to $20,000
of legal fees incurred by Dr. Alton in connection with the letter agreement, and
options covering 38,027 shares have been vested on an accelerated basis. Dr.
Alton's unvested options will continue to vest in accordance with their terms
while Dr. Alton is employed by Amgen. Dr. Alton will not be eligible to receive
a bonus or additional stock option grants after 1999.
The Company expects to enter into a letter agreement with Lawrence M.
Souza. Pursuant to the letter agreement, Dr. Souza will resign as Amgen's Senior
Vice President, Research and a
37
<PAGE>
member of Amgen's Operating Committee, effective March 15, 2000, but will
continue to be employed by Amgen in a part-time special assignment position with
the title of Special Advisor, Research, through July 31, 2002, subject to
earlier termination pursuant to the letter agreement. Dr. Souza will assist Dr.
Dennis Fenton by providing technical and professional assessments of the
Company's research projects, current products and products which the Company is
in the process of developing, and such other matters as Dr. Souza and Dr. Fenton
shall mutually agree upon. Dr. Souza will also assist Mr. Steven Odre on
intellectual property or other related legal matters or litigation. Dr. Souza
will be paid $66,995 per month for his services. Pursuant to the letter
agreement, Dr. Souza will receive a cash bonus of $139,221 for his services in
2000, reimbursement of up to $10,000 of legal fees incurred by Dr. Souza in
connection with the letter agreement. Dr. Souza's unvested options will continue
to vest in accordance with their terms while Dr. Souza is employed by Amgen. Dr.
Souza will not be eligible for a bonus or additional stock option grants after
March, 2000.
Prior to the Annual Meeting, the Company expects to enter into a letter
agreement with Gordon M. Binder. Pursuant to the letter agreement, Mr. Binder
will resign as Amgen's Chief Executive Officer and a member of Amgen's Operating
Committee effective on the day of the Annual Meeting, but will continue as
Chairman of the Board of Directors until December 31, 2000. He will continue to
be employed by Amgen in a part-time special assignment with the title of Special
Advisor to the Chief Executive Officer, through July 31, 2003, subject to
earlier termination pursuant to the letter agreement. Mr. Binder will assist
Kevin W. Sharer who will become the Chief Executive Officer on the day of the
Annual Meeting, or his successor, in monitoring various federal government
developments as they relate to Amgen's current and future activities, as well as
advising on certain arbitration and litigation matters such as those involving
Johnson & Johnson and Transkaryotic Therapies, Inc. and such other matters as
Mr. Binder and Mr. Sharer shall mutually agree upon. Mr. Binder will be paid an
amount per month not yet determined for his services. Pursuant to the letter
agreement, Mr. Binder will receive full salary for his services in 2000 and
partial management incentive plan payment reflecting his full time employment
through May 11, 2000. Subsequent to May 11, 2000, he will receive a salary not
yet determined for his part-time employment but will not participate in the
management incentive plan. Pursuant to the letter agreement, Mr. Binder will
receive reimbursement of up to $10,000 of legal fees incurred by Mr. Binder in
connection with the letter agreement. Mr. Binder's unvested options will
continue to vest in accordance with their
38
<PAGE>
terms while Mr. Binder is employed at Amgen. Mr. Binder will not be eligible to
receive stock option grants after May 2000.
In April 1999, Dr. Fabrizio Bonanni became Senior Vice President, Quality
and Compliance of the Company. In connection with Dr. Bonanni's employment, the
Company granted him an option to purchase 200,000 shares of Common Stock with an
exercise price of 100% of the fair market value on the date of grant, April 12,
1999. This option vests in five equal installments commencing with the first
anniversary of the date of grant and expires seven years from the date of grant.
The Company has guaranteed that, calculated as if Dr. Bonanni had not sold any
of the underlying shares, the then vested portion of such option will appreciate
in value by at least $2.5 million on at least one day on or before April 12,
2004. Notwithstanding the foregoing, the Company has not guaranteed that Dr.
Bonanni will realize this profit if Dr. Bonanni does not sell all of the vested
option shares on the date that such value is realizable.
Compensation Committee Report/1/
The Board of Directors has delegated to the Compensation Committee of the
Board of Directors (the "Compensation Committee") the authority to establish and
maintain the Job Grade and Compensation Range Tables and Merit Increase
Guidelines used to establish initial salary guidelines and merit pay increases
throughout the Company and as the basis for making specific recommendations to
the Board concerning the compensation of senior officers, including the Chief
Executive Officer. In addition, the Compensation Committee administers the
performance based Management Incentive Plan, the Company's various stock option
plans (collectively the "Stock Option Plans"), the 401(k) Plan, the SRP, the
ESPP and all other compensation and benefit programs currently in place at the
Company. Compensation Committee members are all non-employee directors.
________________________
/1/ The material in this report and in the performance graph is not soliciting
material, is not deemed filed with the SEC, and is not incorporated by
reference in any filing of the Company under the Securities Act of 1933, as
amended, or the Exchange Act, whether made before or after the date of this
proxy statement and irrespective of any general incorporation language in
such filing.
39
<PAGE>
The Compensation Committee intends to design and administer its
compensation plans to support the achievement of the Company's long-term
strategic objectives, to enhance stockholder value and, to the extent possible,
to maximize the deductibility of compensation for tax purposes. Section 162(m)
of the Code places a one million dollar limit on the amount of non-performance
based compensation for each Named Executive Officer that may be deducted by the
Company for tax purposes. It is the Compensation Committee's objective to
administer compensation programs that are in compliance with the provisions of
Section 162(m). The Compensation Committee has been advised that based upon
prior stockholder approval of the material terms of the Management Incentive
Plan and the Amended and Restated 1991 Equity Incentive Plan and Section 162(m)
transition rules, compensation under these plans is excluded from this
limitation, provided, that, the other requirements of Section 162(m) are met.
The key components of the compensation program are base salary, annual
incentive award (MIP), and equity participation. These components are
administered with the goal of providing total compensation that is competitive
in the marketplace, recognizes meaningful differences in individual performance
and offers the opportunity to earn above average rewards when merited by
individual and corporate performance.
Base Salary
Base Salaries for all employees, including executive officers of the
Company, are determined based on an established Job Grade and Compensation Range
Table that is designed to provide a Base Salary that ensures that salaries
remain competitive with the marketplace. In monitoring the Executive Job Grade
and Compensation Range Table, the members of the Compensation Committee compared
compensation information derived from compensation surveys outlining
compensation levels at major pharmaceutical companies, the majority of which are
included in the Standard & Poor's Drug Index, and leading biotechnology
companies./2/ Adjustments to each individual's Base Salary are made in
connection with annual performance
_________________
/2/ The Compensation Committee utilizes data and summaries provided by
independent consulting firms to determine comparable companies, including major
pharmaceutical and leading biotechnology companies, and their compensation
levels.
40
<PAGE>
reviews. The amounts of such increases are calculated using compensation levels
at comparable companies and the Merit Increase Guidelines that provide for
percentage salary increases based on the position in the Compensation Range and
the result of each individual's annual performance review. The Merit Increase
Guidelines are adjusted annually and reflect the Compensation Committee's
assessment of appropriate salary adjustments given the results of competitive
surveys and general economic conditions.
Performance Based Management Incentive Plan
The Management Incentive Plan has been established to reward participants
for their contributions to the achievement of Company-wide and individual
performance goals. Executive officers and Vice Presidents of the Company
nominated by the Chief Executive Officer and approved by the Compensation
Committee, are eligible to participate in the Management Incentive Plan.
Management Incentive Plan payouts are established at a level designed so that
when such payouts are added to a participant's Base Salary, the resultant
compensation for above average performance should exceed the average cash
compensation level of comparable companies and the resultant compensation for
below average performance should be less than the average cash compensation
level of comparable companies.
At the beginning of each Management Incentive Plan period, the Chief
Executive Officer recommends for approval by the Compensation Committee the
individual participants and the target incentive award for each participant
expressed as a percentage of the base pay of the participant. The Compensation
Committee establishes a formula for determining the amount of incentive award a
participant may receive. Generally, a formula established by the Compensation
Committee reflects both Company-wide goals and specific individual performance
goals for the Participant. As implemented by the Compensation Committee in past
years, at least 50% of the Company-wide goals were based upon Return on Capital
Employed ("ROCE") and Growth in Revenue, and the remainder of the Company-wide
goals were goals selected by the Committee from the goals established by
management in connection with the planning process. As implemented by the
Compensation Committee in past years, no awards were to be made to the
41
<PAGE>
participants, regardless of the performance achieved on the other goals or by
individual participants, unless either the ROCE or the Growth in Revenue goal
were achieved.
As implemented by the Compensation Committee in past years, each
participant's actual award under the Management Incentive Plan was based on both
the determination of the extent to which such participant's individual goals
were achieved (in terms of percent achievement, subject to a maximum percentage
established annually by the Compensation Committee, which may not exceed 150%)
and the Compensation Committee's determination of the extent to which the
Company-wide goals were achieved (in terms of percent achievement, subject to a
maximum percentage established by the Compensation Committee, which may not
exceed 150%). For the 1999 Management Incentive Plan year, the formula
established by the Compensation Committee to determine awards under the
Management Incentive Plan was as follows: the participant's target bonus
multiplied by the percent achievement of Company-wide goals multiplied by the
percent achievement of the participant's individual goals. Pursuant to the
February 1999 amendment to the Management Incentive Plan, the maximum amount
payable under the Management Incentive Plan to any participant in any calendar
year may not exceed $1,800,000.
The Company-wide goals for the Management Incentive Plan period ended
December 31, 1999 included goals related to ROCE, growth in revenue, profit
after taxes, specific product development objectives, a goal to identify and
initiate research programs for appropriate product candidates, and a goal to
prepare for Y2K. The relative weightings of these six factors in determining the
extent to which Company-wide goals were achieved were 30%, 20%, 20%, 15%, 10%
and 5%, respectively. For 1999, in order to stimulate increased effort toward
the development of potential products, Company-wide goals provided for an
incentive equal to 5% of the maximum payable under the Company-wide goals if a
product with significant annual sales revenue potential was in-licensed. This
goal was achieved and resulted in the inclusion of this incentive in the 1999
Management Incentive Plan payout. Based upon evaluations by management and
approved by the Compensation Committee, the Company achieved 150% of the target
Company-wide goals established under the Management Incentive Plan for the
period ended December 31, 1999.
42
<PAGE>
Stock Option Plans
The Stock Option Plans offered by the Company have been established to
provide all employees with an opportunity to share, along with stockholders, in
the long-term performance of the Company.
Periodic grants of stock options are generally made annually to all
eligible employees, with additional grants being made to certain employees upon
commencement of employment and occasionally, following a significant change in
job responsibility, scope or title or a particularly noteworthy achievement.
Stock options granted under the various stock option plans generally have a
three-, four- or five-year vesting schedule and generally expire seven years
from the date of grant. The exercise price of options granted under the stock
option plans is 100% of the fair market value of the underlying stock on the
date of grant. Guidelines for the number of stock options for each participant
in the periodic grant program generally are determined by a procedure
established by the Compensation Committee based upon several factors including
the salary grade midpoint, the performance of each participant and the
approximate market price of the stock at the time of grant. The size of the
grants, as developed under the procedure, are targeted to be somewhat above
competitive levels as a reflection of both the added incentive to continue the
favorable competitive performance of the Company, as well as the risk attached
to the future growth of the biotech industry.
CEO Compensation
Mr. Binder's Base Salary, Management Incentive Plan payout and grants of
stock options were determined in accordance with the criteria described in the
"Base Salary," "Management Incentive Plan" and "Stock Option Plans" sections of
this report. Mr. Binder's Base Salary for 1999 of $952,747 reflects the Board's
assessment of his very favorable performance and his position in the Grade and
Range Table.
43
<PAGE>
The Management Incentive Plan target for Mr. Binder for the Management
Incentive Plan period ended December 31, 1999 was set at 95% of Base Salary. The
actual award under the Management Incentive Plan for the Management Incentive
Plan period ended December 31, 1999 was $1,800,000, or 188.9% of Base Salary,
the maximum amount payable under the Management Incentive Plan. Payments made to
Mr. Binder as a participant in the Management Incentive Plan for the period
ended December 31, 1999 reflect both the Company's level of achievement of the
Company-wide goals and Mr. Binder's level of achievement of his individual
performance objectives, which included goals relating to: ROCE; growth in
revenue; profit after taxes; product development; research; Y2K preparation;
government relations; and licensing and acquisition of product candidates. As
previously discussed, no awards are made to Management Incentive Plan
participants unless the Company achieves either the ROCE or Growth in Revenue
goal; for 1999, these goals were achieved.
In July 1999, Mr. Binder was granted a periodic option to purchase 440,000
shares of Common Stock of the Company at 100% of fair market value on the date
of grant, or $30.4375 per share./3/ This grant reflects the Board's assessment
of the substantial contributions made by Mr. Binder to the growth and
performance of the Company.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Franklin P. Johnson, Jr., Chairman
Jerry D. Choate
Frederick W. Gluck
Steven Lazarus
Compensation Committee Interlocks and Insider Participation
During 1999, the Company's Compensation Committee consisted of Messrs.
Choate, Gluck, Johnson and Lazarus, all of whom are non-employee directors. No
member of the
__________________________
/3/ The number of option shares granted to Mr. Binder in 1999 and the exercise
price of the option shares have been adjusted to reflect the November 19, 1999
two-for-one stock split.
44
<PAGE>
Compensation Committee has a relationship that would constitute an interlocking
relationship with executive officers or directors of another entity.
45
<PAGE>
Performance Measurement Comparison
The chart set forth below shows the value of an investment of $100 on
December 31, 1994 in each of Amgen Common Stock, the Amex Biotech Index (the
"Amex Biotech"), the Standard & Poor's Drug Index (the "S&P Drug") and the
Standard & Poor's 500 Index (the "S&P 500"). All values assume reinvestment of
the pre-tax value of dividends paid by companies included in these indices and
are calculated as of December 31 of each year. The historical stock price
performance of the Common Stock shown in the performance graph below is not
necessarily indicative of future stock price performance.
AMGEN STOCK PRICE vs. AMEX BIOTECH, S&P DRUG, S&P 500 INDICES
Comparison of Five Year Cumulative Total Return
Value of Investment of $100 on December 31, 1994
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Amgen Inc. $ 100.00 $ 201.27 $ 184.32 $ 183.48 $ 354.46 $ 814.43
Amex Biotech $ 100.00 $ 163.01 $ 175.84 $ 197.92 $ 225.59 $ 477.00
S&P Drug $ 100.00 $ 171.64 $ 213.95 $ 340.89 $ 517.19 $ 425.65
S&P 500 $ 100.00 $ 137.58 $ 169.17 $ 225.60 $ 290.08 $ 351.11
</TABLE>
46
<PAGE>
CERTAIN TRANSACTIONS
The Company has made loans to Mr. Stan M. Benson, Dr. Fabrizio Bonanni, Ms.
Kathryn E. Falberg, Mr. Edward F. Garnett and Mr. George A. Vandeman, all of
whom are executive officers of the Company. Each such loan is evidenced by a
full recourse promissory note secured by real estate valued in excess of the
principal balance of such loan. The loans to Messrs. Benson, Garnett and
Vandeman and Dr. Bonanni were made in connection with their respective
relocations to the greater Thousand Oaks vicinity. The Company has made two
loans to Dr. Bonanni, each for $250,000, one of which provides that the Company
will forgive 20% of the loan principal on each anniversary of Dr. Bonanni's
employment until the loan is paid in full; interest payments will also be
reduced accordingly. Dr. Bonanni commenced employment with the Company in April
1999. The loan to Ms. Falberg was made for home improvement purposes. The annual
interest rate on each such loan was 4.4% during the year ended December 31, 1999
and will be 4.6% for the year ending December 31, 2000. These interest rates are
established and adjusted annually based on the average introduction rates on
adjustable loans offered by California banks and savings and loans. In
connection with Mr. Sharer's appointment as Chief Executive Officer, the Company
anticipates making a loan to Mr. Sharer in connection with his relocation to the
Thousand Oaks vicinity, with interest rate terms substantially similar to those
described above. Including principal and accrued interest, the largest
aggregate indebtedness since January 1, 1999, under the loans of each of
Messrs. Benson, Garnett and Vandeman, Dr. Bonanni and Ms. Falberg under such
loans was $400,000, $100,000, $1,774,800, $500,000 and $79,000, respectively. In
December 1999, Mr. Benson repaid his loan in full. The aggregate outstanding
indebtedness at March 13, 2000 of each of Messrs. Garnett and Vandeman, Dr.
Bonanni and Ms. Falberg under such loans was $100,000, $1,713,316, $500,000 and
$79,000, respectively.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than 10% of a registered class of the
Company's equity securities ("Reporting Persons"), to file reports of ownership
and changes in ownership with the SEC and with The Nasdaq Stock Market.
Reporting Persons are required by SEC regulations to furnish the Company with
copies of all forms they file pursuant to Section 16(a). Based solely on its
review of the copies of such reports received by it, and written representations
from certain Reporting Persons that no other reports were required for those
persons, the Company believes that, during the year ended December 31, 1999, the
Reporting Persons complied with all Section 16(a) filing requirements applicable
to them.
47
<PAGE>
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented
for consideration at the Annual Meeting. Since no stockholder proposals or
nominations were received on a timely basis, no such matters may be brought at
the Annual Meeting. If other matters are properly brought before the meeting, it
is the intention of the persons named in the accompanying proxy to vote the
shares represented thereby on such matters in accordance with their best
judgment.
By Order of the Board of Directors
[SIG]
STEVEN M. ODRE
Secretary
March __, 2000
48
<PAGE>
ATTACHMENT I
AMGEN INC.
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
-------------------------------------------------
1. PURPOSE.
-------
(a) The purpose of the Amgen Inc. Employee Stock Purchase Plan (the
"Plan") is to provide a means by which employees of Amgen Inc., a Delaware
corporation (the "Company"), and its Affiliates, as defined in subparagraph
1(b), which are designated as provided in subparagraph 2(b), may be given an
opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services
of its employees, to secure and retain the services of new employees, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
(d) The Company intends that the rights to purchase stock of the
Company granted under the Plan be considered options issued under an "employee
stock purchase plan" as that term is defined in Section 423(b) of the Code.
2. ADMINISTRATION.
--------------
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
Committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine when and how rights to purchase stock of the
Company shall be granted and the provisions of each offering of such rights
(which need not be identical).
(ii) To designate from time to time which Affiliates of the
Company shall be eligible to participate in the Plan.
49
<PAGE>
(iii) To construe and interpret the Plan and rights granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.
(iv) To amend the Plan as provided in paragraph 13.
(v) Generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient to promote the best interests of
the Company.
(c) The Board may delegate administration of the Plan to a Committee
composed of not fewer than two (2) members of the Board (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
--------------------------
(a) Subject to the provisions of paragraph 12 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to rights granted
under the Plan shall not exceed in the aggregate twenty four million
(24,000,000)/1/ shares of the Company's $.0001 par value common stock (the
"Common Stock"). If any right granted under the Plan shall for any reason
terminate without having been exercised, the Common Stock not purchased under
such right shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
4. GRANT OF RIGHTS; OFFERING.
-------------------------
The Board or the Committee may from time to time grant or provide for
the grant of rights to purchase Common Stock of the Company under the Plan to
eligible employees (an "Offering") on a date or dates (the "Offering Date(s)")
selected by the Board or the Committee. Each Offering shall be in such form and
shall contain such terms and conditions as the Board or the Committee shall deem
appropriate. If an employee has more than one right outstanding under the Plan,
unless he or she otherwise indicates in agreements or notices delivered
hereunder: (1) each agreement or notice delivered by that employee will be
deemed to apply to all of his or her
_______________________
/1/ As adjusted for the two-for-one split of the Company's Common Stock
effected in the form of a 100% stock dividend, in August 1995, February 1999 and
November 1999.
50
<PAGE>
rights under the Plan, and (2) a right with a lower exercise price (or an
earlier-granted right, if two rights have identical exercise prices), will be
exercised to the fullest possible extent before a right with a higher exercise
price (or a later-granted right, if two rights have identical exercise prices)
will be exercised. The provisions of separate Offerings need not be identical,
but each Offering shall include (through incorporation of the provisions of this
Plan by reference in the Offering or otherwise) the substance of the provisions
contained in paragraphs 5 through 8, inclusive.
5. ELIGIBILITY.
-----------
(a) Rights may be granted only to employees of the Company or, as the
Board or the Committee may designate as provided in subparagraph 2(b), to
employees of any Affiliate of the Company. Except as provided in subparagraph
5(b), an employee of the Company or any Affiliate shall not be eligible to be
granted rights under the Plan, unless, on the Offering Date, such employee has
been in the employ of the Company or any Affiliate for such continuous period
preceding such grant as the Board or the Committee may require, but in no event
shall the required period of continuous employment be equal to or greater than
two (2) years. In addition, unless otherwise determined by the Board or the
Committee and set forth in the terms of the applicable Offering, no employee of
the Company or any Affiliate shall be eligible to be granted rights under the
Plan, unless, on the Offering Date, such employee's customary employment with
the Company or such Affiliate is at least twenty (20) hours per week and at
least five (5) months per calendar year.
(b) The Board or the Committee may provide that, each person who,
during the course of an Offering, first becomes an eligible employee of the
Company or designated Affiliate will, on a date or dates specified in the
Offering which coincides with the day on which such person becomes an eligible
employee or occurs thereafter, receive a right under that Offering, which right
shall thereafter be deemed to be a part of that Offering. Such right shall have
the same characteristics as any rights originally granted under that Offering,
as described herein, except that:
(i) the date on which such right is granted shall be the
"Offering Date" of such right for all purposes, including determination of the
exercise price of such right, provided, however, that if the fair market value
of the Common Stock on the date on which such right is granted is less than the
fair market value of the Common Stock on the first day of the Offering, then,
solely for the purpose of determining the exercise price of such right, the
first day of the Offering shall be the "Offering Date" for such right;
51
<PAGE>
(ii) the Purchase Period (as defined below) for such right shall
begin on its Offering Date and end coincident with the end of such Offering; and
(iii) the Board or the Committee may provide that if such person
first becomes an eligible employee within a specified period of time before the
end of the Purchase Period (as defined below) for such Offering, he or she will
not receive any right under that Offering.
(c) No employee shall be eligible for the grant of any rights under
the Plan if, immediately after any such rights are granted, such employee owns
stock possessing five percent (5%) or more of the total combined voting power or
value of all classes of stock of the Company or of any Affiliate. For purposes
of this subparagraph 5(c), the rules of Section 424(d) of the Code shall apply
in determining the stock ownership of any employee, and stock which such
employee may purchase under all outstanding rights and options shall be treated
as stock owned by such employee.
(d) An eligible employee may be granted rights under the Plan only if
such rights, together with any other rights granted under "employee stock
purchase plans" of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee's rights to purchase stock of
the Company or any Affiliate to accrue at a rate which exceeds twenty-five
thousand dollars ($25,000) of fair market value of such stock (determined at the
time such rights are granted) for each calendar year in which such rights are
outstanding at any time.
(e) Officers of the Company shall be eligible to participate in
Offerings under the Plan, provided, however, that the Board may provide in an
Offering that certain employees who are highly compensated employees within the
meaning of Section 423(b)(4)(D) of the Code shall not be eligible to
participate.
6. RIGHTS; PURCHASE PRICE.
----------------------
(a) On each Offering Date, each eligible employee, pursuant to an
Offering made under the Plan, shall be granted the right to purchase up to the
number of shares of Common Stock of the Company purchasable with a percentage
designated by the Board or the Committee not exceeding fifteen percent (15%) of
such employee's Earnings (as defined in Section 7(a)) during the period which
begins on the Offering Date (or such later date as the Board or the Committee
determines for a particular Offering) and ends on the date stated in the
Offering, which date shall be no more than twenty-seven (27) months after the
Offering Date (the "Purchase Period"). In connection with each Offering made
under this Plan, the Board or the
52
<PAGE>
Committee shall specify a maximum number of shares which may be purchased by any
employee as well as a maximum aggregate number of shares which may be purchased
by all eligible employees pursuant to such Offering. In addition, in connection
with each Offering which contains more than one Exercise Date (as defined in the
Offering), the Board or the Committee may specify a maximum aggregate number of
shares which may be purchased by all eligible employees on any given Exercise
Date under the Offering. If the aggregate purchase of shares upon exercise of
rights granted under the Offering would exceed any such maximum aggregate
number, the Board or the Committee shall make a pro rata allocation of the
shares available in as nearly a uniform manner as shall be practicable and as it
shall deem to be equitable.
(b) The purchase price of stock acquired pursuant to rights granted
under the Plan shall be not less than the lesser of:
(i) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Offering Date; or
(ii) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Exercise Date.
(c) Each eligible employee shall have the same rights and privileges
under the Plan, except as allowed under Section 423(b)(5) of the Code.
7. PARTICIPATION; WITHDRAWAL; TERMINATION.
--------------------------------------
(a) An eligible employee may become a participant in an Offering by
delivering a participation agreement to the Company within the time specified in
the Offering, in such form as the Company provides. Each such agreement shall
authorize payroll deductions of up to the maximum percentage specified by the
Board or the Committee of such employee's Earnings during the Purchase Period.
"Earnings" is defined as the total compensation paid to an employee, including
all salary, wages (including amounts elected to be deferred by the employee,
that would otherwise have been paid, under any cash or deferred arrangement
established by the Company), overtime pay, commissions, bonuses, and other
remuneration paid directly to the employee, but excluding profit sharing, the
cost of employee benefits paid for by the Company, education or tuition
reimbursements, imputed income arising under any Company group insurance or
benefit program, traveling expenses, business and moving expense reimbursements,
income received in connection with stock options, contributions made by the
Company under any employee benefit plan, certain cost of living allowances and
tax equalization payments made to employees whose payroll originates in the
United States and who are working outside the United States, and similar items
of compensation or such other inclusions or exclusions as the Board or Committee
may
53
<PAGE>
determine for one or more specified Offerings. The payroll deductions made for
each participant shall be credited to an account for such participant under the
Plan and shall be deposited with the general funds of the Company. A participant
may reduce (including to zero), increase or begin such payroll deductions after
the beginning of any Purchase Period only as provided for in the Offering. A
participant may make additional payments into his or her account only if
specifically provided for in the Offering and only if the participant has not
had the maximum amount withheld during the Purchase Period.
(b) At any time during a Purchase Period a participant may terminate
his or her payroll deductions under the Plan and withdraw from the Offering by
delivering to the Company a notice of withdrawal in such form as the Company
provides. Such withdrawal may be elected at any time prior to the end of the
Purchase Period except as provided by the Board or the Committee in the
Offering. Upon such withdrawal from the Offering by a participant, the Company
shall distribute to such participant all of his or her accumulated payroll
deductions (reduced to the extent, if any, such deductions have been used to
acquire stock for the participant) under the Offering, without interest, and
such participant's interest in that Offering shall be automatically terminated.
A participant's withdrawal from an Offering will have no effect upon such
participant's eligibility to participate in any other Offerings under the Plan
but such participant will be required to deliver a new participation agreement
in order to participate in subsequent Offerings under the Plan.
(c) Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating employee's employment
with the Company or an Affiliate, for any reason, and the Company shall
distribute to such terminated employee all of his or her accumulated payroll
deductions (reduced to the extent, if any, such deductions have been used to
acquire stock for the terminated employee), under the Offering, without
interest.
(d) Rights granted under the Plan shall not be transferable, and
shall be exercisable only by the person to whom such rights are granted.
8. EXERCISE.
--------
(a) On each exercise date, as defined in the relevant Offering (an
"Exercise Date"), each participant's accumulated payroll deductions and other
additional payments specifically provided for in the Offering (without any
increase for interest) will be applied to the purchase of whole shares of stock
of the Company, up to the maximum number of shares permitted pursuant to the
terms of the Plan and the applicable Offering, at the purchase price specified
in the Offering. No fractional shares shall be issued upon the exercise of
rights granted
54
<PAGE>
under the Plan. The amount, if any, of accumulated payroll deductions remaining
in each participant's account after the purchase of shares which is less than
the amount required to purchase one share of stock on the final Exercise Date of
an Offering shall be held in each such participant's account for the purchase of
shares under the next Offering under the Plan, unless such participant withdraws
from such next Offering, as provided in subparagraph 7(b), or is no longer
eligible to be granted rights under the Plan, as provided in paragraph 5, in
which case such amount shall be distributed to the participant after said final
Exercise Date, without interest. The amount, if any, of accumulated payroll
deductions remaining in any participant's account after the purchase of shares
which is equal to the amount required to purchase whole shares of stock on the
final Exercise Date of an Offering shall be distributed in full to the
participant after such Exercise Date, without interest.
(b) No rights granted under the Plan may be exercised to any extent
unless the Plan (including rights granted thereunder) is covered by an effective
registration statement pursuant to the Securities Act of 1933, as amended (the
"Securities Act"). If on an Exercise Date of any Offering hereunder the Plan is
not so registered, no rights granted under the Plan or any Offering shall be
exercised on said Exercise Date and the Exercise Date shall be delayed until the
Plan is subject to such an effective registration statement, except that the
Exercise Date shall not be delayed more than two (2) months and the Exercise
Date shall in no event be more than twenty-seven (27) months from the Offering
Date. If on the Exercise Date of any Offering hereunder, as delayed to the
maximum extent permissible, the Plan is not registered, no rights granted under
the Plan or any Offering shall be exercised and all payroll deductions
accumulated during the Purchase Period (reduced to the extent, if any, such
deductions have been used to acquire stock) shall be distributed to the
participants, without interest.
9. COVENANTS OF THE COMPANY.
------------------------
(a) During the terms of the rights granted under the Plan, the
Company shall keep available at all times the number of shares of stock required
to satisfy such rights.
(b) The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the rights granted under the
Plan. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such rights unless and until such authority is obtained.
55
<PAGE>
10. USE OF PROCEEDS FROM STOCK.
--------------------------
Proceeds from the sale of stock pursuant to rights granted under the
Plan shall constitute general funds of the Company.
11. RIGHTS AS A STOCKHOLDER.
-----------------------
A participant shall not be deemed to be the holder of, or have any of
the rights of a holder with respect to, any shares subject to rights granted
under the Plan unless and until certificates representing such shares have been
issued or such shares have been credited to an account held by a bank, broker or
other nominee of the participant.
12. ADJUSTMENTS UPON CHANGES IN STOCK.
---------------------------------
(a) If any change is made in the stock subject to the Plan, or
subject to any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan and outstanding rights will
be appropriately adjusted in the class(es) and maximum number of shares subject
to the Plan and the class(es) and number of shares and price per share of stock
subject to outstanding rights. Such adjustments shall be made by the Board or
the Committee, the determination of which shall be final, binding and
conclusive. (The conversion of any convertible securities of the Company shall
not be treated as a "transaction not involving the receipt of consideration by
the Company".)
(b) In the event of: (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, then, as determined by the Board in its
sole discretion (i) any surviving corporation may assume outstanding rights or
substitute similar rights for those under the Plan, (ii) such rights may
continue in full force and effect, or (iii) participants' accumulated payroll
deductions may be used to purchase Common Stock immediately prior to the
transaction described above and the participants' rights under the ongoing
Offering terminated.
56
<PAGE>
13. AMENDMENT OF THE PLAN.
---------------------
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(i) Increase the number of shares reserved for rights under the
Plan;
(ii) Modify the provisions as to eligibility for participation
in the Plan (to the extent such modification requires stockholder approval in
order for the Plan to obtain employee stock purchase plan treatment under
Section 423 of the Code); or
(iii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to obtain employee stock
purchase plan treatment under Section 423 of the Code.
It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide eligible employees
with the maximum benefits provided or to be provided under the provisions of the
Code and the regulations promulgated thereunder relating to employee stock
purchase plans and/or to bring the Plan and/or rights granted under it into
compliance therewith.
(b) Rights and obligations under any rights granted before amendment
of the Plan shall not be impaired by any amendment of the Plan, except with the
consent of the person to whom such rights were granted or except as necessary to
comply with any laws or governmental regulation; provided, however, that the
Board shall have the power to terminate any Purchase Period and cause all
payroll deductions accumulated during the Purchase Period to be distributed to
participants, without interest, without such consent.
14. TERMINATION OR SUSPENSION OF THE PLAN.
-------------------------------------
(a) The Board may suspend or terminate the Plan at any time. No
rights may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any rights granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom such rights were granted or
except as necessary to comply with any laws or governmental regulation;
provided, however, that the Board shall have the power to suspend or terminate
the Plan and terminate any Purchase Period and cause all payroll deductions
accumulated during the Purchase Period to be distributed to participants,
without interest, without such consent.
57
<PAGE>
15. EFFECTIVE DATE OF PLAN.
----------------------
The Plan shall become effective as determined by the Board.
58
<PAGE>
[outside back cover]
[AMGEN LOGO]
- --------------------------------------------------------------------------------
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, CA 91320-1799
(C)2000 Amgen Inc. All Rights Reserved.
[Recycle Logo] Printed on recycled paper [P50206 300 M/3-99]
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NO POSTAGE
NECESSARY
IF MAILED
IN THE
UNITED STATES
BUSINESS REPLY MAIL
FIRST CLASS PERMIT NO. 67 THOUSAND OAKS, CA
POSTAGE WILL BE PAID BY ADDRESSEE
Amgen Inc.
ATTN: Secretary, Mail Stop 27-4-A
One Amgen Center Drive
Thousand Oaks, CA 91320-1799
Amgen Inc.
[_] Yes, I do plan to attend the Annual Stockholders' Meeting on Thursday, May
11, 2000.
_____________________________________________________________________________
Name (Please print)
_____________________________________________________________________________
Address
( )
- -----------------------------------------------------------------------------
City State Zip Telephone No.
[_] I require special accommodations to access the meeting location: ________
_________________________________________________________________________
_________________________________________________________________________
YOU DO NOT NEED TO RETURN THIS CARD IF YOU DO NOT PLAN TO ATTEND THE ANNUAL
STOCKHOLDERS' MEETING.
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AMGEN INC.
One Amgen Center Drive, Thousand Oaks, CA 91320-1789
Proxy Solicited by Board of Directors
For the Annual Meeting of Stockholders-May 11, 2000
Gordon M. Binder, Kevin W. Sharer and Steven M. Odre (the "Proxy Holders"), or
any of them, each with the power of substitution, hereby are authorized to
represent the undersigned, with all powers which the undersigned would possess
if personally present, to vote the shares of Amgen Inc. Common Stock of the
undersigned at the Annual Meeting of Stockholders of Amgen Inc., to be held at
the Regent Beverly Wilshire Hotel, 9500 Wilshire Boulevard, Los Angeles,
California 90212, at 10:30 A.M., PDT, on Thursday, May 11, 2000, and at any
continuation, postponement or adjournment of that meeting, upon and in respect
of the following matters and in accordance with the following instructions, with
discretionary authority as to any and all other business that may properly come
before the meeting.
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. PLEASE MARK, SIGN AND DATE THE
REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE.
Change of Address:
---------------------------------
---------------------------------
---------------------------------
(If you have written in the above space, please
mark the corresponding box on the reverse side of
this card.)
[SEE REVERSE SIDE]
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.
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[X] Please mark your votes as in this example.
1. To elect three directors for a three year term expiring at the Annual
Meeting of Stockholders in the year 2003.
WITHHOLD AUTHORITY FOR
THE INDIVIDUAL NOMINEE(S)
FOR ALL WITHHOLD IDENTIFIED IN THE SPACE
NOMINEES AUTHORITY PROVIDED BELOW
[_] [_] [_]
Nominees: Gordon M. Binder, Frederick W. Gluck, and Franklin P. Johnson,
Jr.
To withhold authority to vote for any nominee(s), write such nominee(s)'
name(s) below:
_________________________________________________________________________
_________________________________________________________________________
2. To approve an amendment to the Company's Restated Certificate of
Incorporation, as amended, to increase the authorized number of shares of
Common Stock from 1,500,000,000 shares to 2,750,000,000 shares:
FOR AGAINST ABSTAIN
[_] [_] [_]
3. To approve an amendment to the Company's Amended and Restated Employee
Stock Purchase Plan:
FOR AGAINST ABSTAIN
[_] [_] [_]
4. To ratify the selection of Ernst & Young LLP as independent auditors of the
Company for the year ending December 31, 2000:
FOR AGAINST ABSTAIN
[_] [_] [_]
In their discretion, the Proxy Holders are authorized to vote upon such
other matters as may properly come before the Annual Meeting of
Stockholders and at any continuation, postponement or adjournment thereof.
The Board of Directors at present knows of no other business to be
presented by or on behalf of the Company or the Board of Directors at the
Annual Meeting of Stockholders.
This Proxy/Direction Card will be voted as specified or, if no choice is
specified, will be voted FOR the election of the named nominees and FOR
proposals 2, 3, and 4. [This Proxy/Direction Card also serves to instruct
the respective trustees of the Amended and Restated Amgen Retirement and
Savings Plan and of the Amended and Restated Retirement and Savings Plan
for Amgen Puerto Rico, Inc. on how to vote shares held by the participants
of such plans.] The Board of Directors recommends a vote FOR election of
the nominees for director and FOR proposals 2, 3, and 4.
[_] Please indicate if a change of address was given on the reverse side.
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As of the date hereof, the undersigned hereby acknowledges receipt of the
accompanying Notice of Annual Meeting of Stockholders to be held May 11,
2000, the Proxy Statement and the 1999 Annual Report of the Company.
Signature:____________ Date:________ Signature:_____________ Date:________
NOTE: Please sign exactly as your name appears hereon. If the stock is
registered in the names of two or more persons, each should sign.
Executors, administrators, trustees, guardians and attorneys-in-fact
should add their titles. If signer is a corporation, please give
full corporate name and have a duly authorized officer sign, stating
title. If signer is a partnership, please sign in partnership name
by authorized person, stating title.
