UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934*
(Amendment No. 11)
GENENTECH, INC.
______________________________________________________________________________
(Name of Issuer)
COMMON STOCK
$.02 PAR VALUE
______________________________________________________________________________
(Title of Class of Securities)
368710208
______________________________________________________________________________
(CUSIP Number)
Peter R. Douglas
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Tel. No.: (212) 450-4000
______________________________________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 7, 1995
______________________________________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with this statement. [ ] (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class
of securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such
class). (See Rule 13d-7.)
Note: This document is being electronically filed with the Commission, using
the EDGAR system. Additionally, one paper copy of the filing will
subsequently be sent to the Commission. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
*The remainder of this cover page should be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
CUSIP No. 368710208
______________________________________________________________________________
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of
Above Persons
ROCHE HOLDINGS, INC.
51-0304944
______________________________________________________________________________
(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [ ]
______________________________________________________________________________
(3) SEC Use Only
______________________________________________________________________________
(4) Source of Funds WC
______________________________________________________________________________
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
[ ]
______________________________________________________________________________
(6) Citizenship or Place of Organization
United States of America
______________________________________________________________________________
Number of (7) Sole Voting Power 76,621,009 Shares
Shares Bene- Common Stock
ficially
Owned by- (8) Shared Voting Power 0 Shares
Each Report-
ing Person - (9) Sole Dispositive Power 76,621,009 Shares
With Common Stock
(10) Shared Dispositive Power 0 Shares
______________________________________________________________________________
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
76,621,009 Shares of Common Stock
______________________________________________________________________________
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
______________________________________________________________________________
(13) Percent of Class Represented by Amount in Row (11)
65.2% of Common Stock
______________________________________________________________________________
(14) Type of Reporting Person (See Instructions)
CO, HC
The following information amends and supplements the Schedule 13D
dated September 17, 1990, as previously amended (as so amended, the "Schedule
13D").
Item 1. Security and Issuer.
This statement relates to the Common Stock, par value $.02 per
share (the "Common Stock") of Genentech, Inc., a Delaware corporation (the
"Company"). Pursuant to the terms of the Company's Certificate of
Incorporation, at the close of business on June 30, 1995, each outstanding
share of Redeemable Common Stock, par value $.02 per share (the "Redeemable
Common Stock") of the Company was automatically converted into one share of
Common Stock of the Company. The principal executive offices of the Company
are located at 460 Point San Bruno Boulevard, San Francisco, California 94080.
Item 2. Identity and Background.
This statement is filed by Roche Holdings, Inc., a Delaware
corporation ("Purchaser") and wholly owned subsidiary of Roche Finance Ltd, a
Swiss corporation ("Finance") and wholly owned subsidiary of Roche Holding
Ltd, a Swiss corporation ("Holding"). Dr. h.c. Paul Sacher, an individual and
citizen of Switzerland ("Dr. Sacher") has, pursuant to an agreement, the power
to vote a majority of the voting securities of Holding. Purchaser, Finance,
Holding and Dr. Sacher are herein referred to collectively as the "Reporting
Persons".
The address of the principal offices of Purchaser is 15 East North
Street, Dover, Delaware 19901. The address of the principal offices of
Finance is Grenzacherstrasse 122, Basel, Switzerland. The address of the
principal offices of Holding is Grenzacherstrasse 124, Basel 4002,
Switzerland. The business address of Dr. Sacher is Haus auf Burg,
Muensterplatz 4, Basel 4051, Switzerland.
Item 3. Source and Amount of Consideration
No shares of Common Stock or its predecessor Redeemable Common
Stock were acquired by any of the Reporting Persons between May 25, 1995, on
which date Amendment 10 to the Schedule 13D was filed, and July 7, 1995.
Item 4. Purpose of Transaction
On July 7, 1995, Purchaser, HLR (U.S.) II, Inc., a wholly-owned
subsidiary of Purchaser, and the Company entered into an Amendment Agreement
(the "Agreement"), which effects certain amendments to the Agreement and Plan
of Merger (the "Merger Agreement") among Purchaser, H.L.R. (U.S.) II, Inc. and
the Company, dated as of May 23, 1995, and the exhibits thereto. A copy of
the Agreement is attached hereto as Exhibit 7.6. On July 10, 1995, the
Company issued a press release announcing certain amendments effected by the
Agreement and the settlement of certain shareholder litigation arising in
connection with the Merger Agreement. A copy of the press release is attached
hereto as Exhibit 7.7. Each of the Agreement and the press release are
incorporated herein by reference.
Between May 25, 1995, on which date Amendment 10 to the Schedule
13D was filed, and July 7, 1995, the Reporting Persons did not purchase any
shares of Common Stock or its predecessor Redeemable Common Stock. Subject to
market conditions and other factors (including limits imposed by the
Governance Agreement between Purchaser and the Company), the Purchaser expects
that it or its affiliates may acquire additional Genentech stock from time to
time in the future in open-market, privately negotiated or other transactions.
Item 5. Interest in the Securities of the Issuer.
(a) Prior to June 30, 1995, the Purchaser was the beneficial
owner of 67,133,409 shares of Common Stock (100% of the Common Stock then
outstanding) and 9,487,600 shares of Redeemable Common Stock (18.8% of the
50,447,727 shares of Redeemable Common Stock outstanding as of March 31, 1995
according to the Company's Form 10-Q for the quarter ended March 31, 1995 (the
"10-Q")). Pursuant to the terms of the Company's Certificate of
Incorporation, at the close of business on June 30, 1995, each outstanding
share of Redeemable Common Stock was automatically converted into one share of
Common Stock. As a result of that conversion, the Purchaser currently is the
beneficial owner of 65.2% of the 117,581,136 shares of outstanding Common
Stock.
Except as set forth herein, neither the Reporting Persons nor any
other person controlling the Reporting Parties nor, to the best of their
knowledge, any of the persons named in Schedules A, B and C hereto
beneficially owns any Common Stock, except that Prof. Jurgen Drews owns 200
shares of Common Stock and has been granted stock options by the Company to
purchase 15,000 shares of Common Stock at $25.50 per share, all of which are
issuable under currently exercisable stock options and options exercisable
within sixty days of July 7, 1995, and 15,000 shares of Common Stock at $26.50
per share, all of which are issuable under currently exercisable stock options
and options exercisable within sixty days of July 7, 1995, and Dr. Franz B.
Humer has been granted stock options by the Company to purchase 15,000 shares
of Common Stock at $48.875, none of which are issuable under currently
exercisable stock options or options exercisable within sixty days of July 7,
1995.
(b) Except as otherwise described herein, none of the Reporting
Persons has any sole or shared power to vote or to direct the vote of any
Common Stock nor sole or shared power to dispose of or direct the disposition
of any Common Stock.
(c) No transactions in Common Stock or its predecessor Redeemable
Common Stock have been effected during the past 60 days by the Reporting
Persons nor any other person controlling the Reporting Persons nor, to the
best of their knowledge, any of the persons named in Schedules A, B and C
hereto.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
There are no contracts, arrangements, understandings or
relationships among the persons named in Item 2 or between any of such persons
and any other person with respect to any securities of the Company except as
referred to or described herein, in the Schedule 13D and previous amendments
thereto.
Item 7. Material Filed as Exhibits.
Exhibit 7.6 Amendment Agreement among Roche Holdings, Inc.,
HLR (U.S.) II, Inc. and Genentech, Inc. dated
July 7, 1995.
Exhibit 7.7 Press Release issued July 10, 1995 by Genentech,
Inc.
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and accurate.
Dated: July 10, 1995
ROCHE HOLDINGS, INC.
By /s/ Henri B. Meier
---------------------------------
Name: Henri B. Meier
Title: Vice President, Finance,
Accounting
SCHEDULE A
Executive Officers and Directors(*)
of
Roche Holdings, Inc.
The names of the Directors and the names and titles of the
Executive Officers of Roche Holdings, Inc. and their business addresses and
principal occupations are set forth below. If no address is given, the
Director's or Executive Officer's business address is that of Roche Holding
Ltd. Unless otherwise indicated, each occupation set forth opposite an
individual's name refer to Roche Holding Ltd and each individual is a Swiss
citizen.
Present Principal
Name, Business Address Occupation
- ---------------------- -----------------
*Mr. Fritz Gerber Chairman of the Board,
(President) President and
Chief Executive Officer
*Dr. Henri B. Meier Chief Financial Officer
(Vice President and
Treasurer)
Peter N. Schiller Attorney-at-Law
Hoffstots Lane
Sands Point, New York 11050
(Secretary)
SCHEDULE B
Executive Officers and Directors(*)
of
Roche Finance Ltd
The names of the Directors and the names and titles of the
Executive Officers of Roche Finance Ltd and their business addresses and
principal occupations are set forth below. If no address is given, the
Director's or Executive Officer's business address is that of Roche Holding
Ltd. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to Roche Holding Ltd and each individual is a Swiss
citizen.
Present Principal
Name, Business Address Occupation
- ---------------------- -----------------
*Mr. Fritz Gerber Chairman of the Board,
(President) President and
Chief Executive Officer
*Dr. Andres F. Leuenberger Vice Chairman of the
Board
*Dr. Henri B. Meier Chief Financial Officer
SCHEDULE C
Executive Officers and Directors(*)
of
Roche Holding Ltd
The names of the Directors and the names and titles of the
Executive Officers of Roche Holding Ltd and their business addresses and
principal occupations are set forth below. If no address is given, the
Director's or Executive Officer's business address is that of Roche Holding
Ltd. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to Roche Holding Ltd and each individual is a Swiss
citizen, except that Dr. Drews is a German citizen and Mr. Belingard is a
French citizen.
Present Principal
Name, Business Address Occupation
- ---------------------- -----------------
*Mr. Fritz Gerber Chairman of the Board and
Chief Executive Officer
*Dr. Lukas Hoffmann Vice Chairman of the Board
Le petit Essert Vice Chairman of WWF
1147 Montricher, Switzerland International
(a nonprofit organization)
*Dr. Andres F. Leuenberger Vice Chairman and Delegate
of the Board
*Dr. h.c. Paul Sacher Conductor and Founder of
Haus auf Burg Paul Sacher Foundation
Muensterplatz 4 (a nonprofit organization)
4051 Basel, Switzerland
*Dr. Franz B. Humer General Manager, Head of
Pharmaceuticals Division
*Dr. Henri B. Meier Chief Financial Officer
*Dr. Jakob Oeri Surgeon and retired
St. Alban - Vorstadt 71 Head Physician,
4052 Basel, Switzerland Kantonsspital Basel
(hospital)
*Prof. jur. Kurt Jenny Lawyer
Aeschengraben 18
4051 Basel, Switzerland
*Prof. Dr. Werner Stauffacher Head of Department of
Head of Department Research, University of
of Research Basel
University of Basel
Hebelstrasse 32
4056 Basel, Switzerland
*Prof. Charles Weissmann Professor, University of
Institut fur Zurich
Molekularbiologie I
1er Universitaet Zurich
Hoenggerberg
8093 Zurich, Switzerland
Dr. Markus Altwegg General Manager, Head of
Pharma Stammhaus Basel,
Group Informatics
Mr. Jean-Luc Belingard General Manager, Head of
Diagnostics Division
Dr. Roland Bronnimann General Manager, Head of
Vitamin and Fine Chemicals
Division.
Prof. Jurgen Drews General Manager, Head of
Research and Development
CONFORMED COPY
AGREEMENT (the "Amendment Agreement"), dated as of July 7,
1995, among Roche Holdings, Inc., a Delaware corporation ("Roche"), HLR (U.S.)
II, Inc., a Delaware corporation which is a direct wholly-owned subsidiary of
Roche ("Merger Sub"), and Genentech, Inc., a Delaware corporation (the
"Company").
WHEREAS, Roche, Merger Sub and the Company have entered into an
Agreement and Plan of Merger, dated May 23, 1995 (the "Merger Agreement");
WHEREAS, it is a condition to each party's obligations to
consummate the transactions contemplated by the Merger Agreement that the form
of New Governance Agreement shall have been executed in substantially the form
attached as Exhibit A to the Merger Agreement;
WHEREAS, it is a condition to each party's obligations to
consummate the transactions contemplated by the Merger Agreement that the form
of Marketing Agreement shall have been executed in substantially the form
attached as Exhibit D to the Merger Agreement;
WHEREAS, it is a condition to each party's obligations to
consummate the transactions contemplated by the Merger Agreement that Article
THIRD of the Company's Certificate of Incorporation shall have been amended by
operation of the Merger in substantially the form attached as Exhibit C to the
Merger Agreement (such form of amendment, the "New Article THIRD"); and
WHEREAS, the parties hereto have determined it is in the best
interests of their respective stockholders to effect certain amendments to the
Merger Agreement, the New Governance Agreement, the Marketing Agreement and
the New Article THIRD, and to make certain other covenants and agreements as
are set forth in this Amendment Agreement;
NOW THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth herein, Roche, Merger Sub and
the Company hereby agree as follows:
ARTICLE I
DEFINITIONS
All terms used in this Amendment Agreement (including the
preamble hereto) which are not otherwise defined in this Article I or
elsewhere in this Amendment Agreement shall have the meanings ascribed thereto
in the Merger Agreement.
ARTICLE II
AMENDMENTS TO THE MERGER AGREEMENT AND RELATED DOCUMENTS
2.1. Amendment of Merger Agreement. Section 7.1(c) of the
Merger Agreement is hereby amended and restated to read in its entirety as
follows:
"(c) By either the Company or Roche if the Effective Time has not
occurred on or prior to October 31, 1995."
2.2. Amendment of Marketing Agreement. Section 3(b) of
Article VII of the Marketing Agreement is hereby amended and restated to read
in its entirety as follows:
"Within ninety (90) days of the Effective Date of this Agreement,
information regarding the real estate property leases of Genentech
Canada Ltd., Genentech Europe Limited and Genentech Ltd. (Japan)
shall be made available to ROCHE and such leases shall promptly be
assumed by ROCHE as well as any other liabilities of these entities
which have arisen in the ordinary course of business except for (i) a
line of credit to Genentech Canada Ltd. used to purchase Activase
rights and (ii) severance costs relating to not more than six (6)
employees of Genentech Europe Limited."
2.3. Amendment of New Article THIRD.
(a) The first sentence of Section (c)(ii) of the New Article
THIRD is hereby amended and restated to read in its entirety as follows:
"Subject to the provisions of the Amended and Restated
Governance Agreement dated as of , 1995* between
Roche Holdings, Inc., a Delaware corporation ("Roche"), and the
Company, as such agreement may be amended from time to time (such
agreement, as amended from time to time, the "Governance Agreement"),
the Special Common Stock may, and, where the Governance Agreement so
requires, shall be redeemed, in whole but not in part (the "Call")
during the periods and at the prices and upon the terms and
conditions set forth below."
- -----------------
* To be appropriately completed prior to filing.
(b) Section (c)(ii)(C) of the New Article THIRD is hereby
amended by inserting the following language immediately prior to the first
sentence of such section:
"Upon "final Court approval of the Settlement", as defined in the
Memorandum of Understanding dated July 7, 1995 relating to the
consolidated action pending in the Delaware Chancery Court entitled
In re Genentech, Inc. Shareholders Litigation, Cons. C.A. No. 14265
(or in any superseding stipulation of settlement accepted by the
corporation and the Roche defendants in that action), each Redemption
Price set forth in paragraph (A) above shall be increased by $0.50
per share of Special Common Stock. If such "final Court approval of
Settlement" occurs after payment of the Redemption Price pursuant to
the Call, such $0.50 increase shall be promptly thereafter paid by
the corporation pursuant to section (C)(IV)(A)(1) of this Article
THIRD for each share of Special Common Stock for which payment of the
Redemption Price had previously been paid pursuant to such Call."
(c) The second sentence of Section (c)(ii)(C) of the New
Article THIRD is hereby amended and restated to read in its entirety as
follows:
"If the corporation shall at any time after the initial issuance of
any Special Common Stock declare or pay any dividend on Special
Common Stock in cash, securities or other property other than Special
Common Stock, the Redemption Prices in effect for each period after
such event shall each be reduced by the per share value of such
dividend multiplied by a fraction the numerator of which equals the
Redemption Price which would otherwise be in effect for such period
and the denominator of which equals the Redemption Price in effect at
the time of such event; provided that such adjustment shall not be
made with respect to cash dividends determined by the majority of the
Board of Directors to be in the ordinary course and approved by the
majority of the Investor Directors (as defined in the Governance
Agreement.)"
2.4. Amendment of New Governance Agreement.
(a) The last sentence of Section 1.01(a) of the New Governance
Agreement is hereby deleted and replaced with the following:
"The calculation of the Redemption Price per share of Special Common
Stock, which shall be made in accordance with paragraphs (A) and (C) of
Article THIRD, Section (c)(ii) of the Certificate of Incorporation, shall be
verified with Roche prior to the mailing of such notice. In the event that
additional amounts become payable, pursuant to the second sentence of Article
THIRD, Section (c)(ii)(C) of the Certificate of Incorporation in connection
with a redemption of the Special Common Stock pursuant to this Section
1.01(a), Roche shall promptly make available to the Depositary the aggregate
additional amount required to be paid pursuant to such second sentence of
Article THIRD, Section (c)(ii)(C)."
ARTICLE III
MISCELLANEOUS AND GENERAL
3.1. Expenses. Each party shall bear its own expenses,
including the fees and expenses of any attorneys, accountants, investment
bankers, brokers, finders or other intermediaries or other Persons engaged by
it, incurred in connection with this Amendment Agreement and the transactions
contemplated hereby.
3.2. Notices, Etc. All notices, requests, demands or other
communications required by or otherwise with respect to this Amendment
Agreement shall be in writing and shall be deemed to have been duly given to
any party when delivered personally (by courier service or otherwise), when
delivered by telecopy and confirmed by return telecopy, or seven days after
being mailed by first-class mail, postage prepaid and return receipt requested
in each case to the applicable addresses set forth below:
If to the Company:
Genentech, Inc.
490 Point San Bruno Boulevard
South San Francisco, California 94080
Attn.: John P. McLaughlin
Telecopy: 415-952-9881
Richard D. Katcher, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy: 212-403-2000
If to Roche or Merger Sub:
Roche Holdings, Inc.
c/o Roche Holding Ltd
Grenzacherstrasse 124
CH-4002 Basel
Switzerland
Telecopy: 011-41-61-688-1396
Attn.: Dr. Felix Amrein
with a copy to:
Peter R. Douglas, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: 212-450-4800
or to such other address as such party shall have designated by notice so
given to each other party.
3.3. Amendments, Waivers, Etc. This Amendment Agreement may
not be amended, changed, supplemented, waived or otherwise modified except by
an instrument in writing signed by the party against whom enforcement is
sought.
3.4. No Assignment. This Amendment Agreement shall be binding
upon and shall inure to the benefit of and be enforceable by the parties and
their respective successors and assigns; provided that, except as otherwise
expressly set forth in this Amendment Agreement, neither the rights nor the
obligations of any party may be assigned or delegated without the prior
written consent of the other party.
3.5. Entire Agreement. Except as otherwise provided herein,
this Amendment Agreement and the Merger Agreement and the exhibits thereto
embody the entire agreement and understanding between the parties relating to
the subject matter hereof and this Amendment Agreement supplements all prior
agreements and understandings relating to such subject matter. There are no
representations, warranties or covenants by the parties hereto relating to
such subject matter other than those expressly set forth in this Amendment
Agreement and any writings expressly required hereby.
3.6. No Third Party Beneficiaries. This Amendment Agreement
is not intended to be for the benefit of and shall not be enforceable by any
Person or entity who or which is not a party hereto.
3.7. Jurisdiction. Each party hereby irrevocably submits to
the exclusive jurisdiction of the United States District Court for the
Southern District of New York or any court of the State of New York located in
the City of New York in any action, suit or proceeding brought by either party
hereto and arising in connection with this Amendment Agreement, and agrees
that any such action, suit or proceeding shall be brought only in such court
(and waives any objection based on forum non conveniens or any other objection
to venue therein); provided, however, that such consent to jurisdiction is
solely for the purpose referred to in this Section 3.7 and shall not be deemed
to be a general submission to the jurisdiction of said Courts or in the State
of New York other than for such purpose. Roche and the Company hereby waive
any right to a trial by jury in connection with any such action, suit or
proceeding.
3.8. Governing Law. This Amendment Agreement and all disputes
hereunder shall be governed by and construed and enforced in accordance with
the internal laws of the State of Delaware, without regard to principles of
conflict of laws.
3.9. Name, Captions, Etc. The name assigned this Amendment
Agreement and the section captions used herein are for convenience of
reference only and shall not affect the interpretation or construction hereof.
Unless otherwise specified, (a) the terms "hereof", "herein" and similar terms
refer to this Amendment Agreement as a whole and (b) references herein to
Articles or Sections refer to articles or sections of this Amendment
Agreement.
3.10. Counterparts. This Amendment Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one instrument. Each
counterpart may consist of a number of copies each signed by less than all,
but together signed by all, the parties hereto.
IN WITNESS WHEREOF, this Amendment Agreement has been executed
and delivered by the parties set forth below.
GENENTECH, INC.
By: /s/John P. McLaughlin
----------------------------------
Name: John P. McLaughlin
Title: Senior Vice President
and Secretary
ROCHE HOLDINGS, INC.
By: /s/Fritz Gerber
----------------------------------
Name: Fritz Gerber
Title: President
HLR (U.S.) II, INC.
By: /s/Felix Amrein
----------------------------------
Name: Felix Amrein
Title: Vice President
NEWS RELEASE
Genentech, Inc. Media Contact: Laura Leber (415) 225-5759
Investor Contact: Lisa Brock (415) 225-1034
GENENTECH BOARD NAMES LEVINSON PRESIDENT & CEO; ROCHE
MERGER AGREEMENT ENHANCED, STOCKHOLDER SUITS SETTLED
--Head of R&D assumes top post after Board
accepts resignation of Kirk Raab--
SOUTH SAN FRANCISCO, Calif., July 10, 1995 - Genentech, Inc. (NYSE: GNE)
today announced the appointment of Arthur D. Levinson, Ph.D. as the company's
new president and chief executive officer. Levinson also was named to the
Board of Directors. The Board of Directors made the appointment July 7, 1995
after requesting and accepting the resignation of G. Kirk Raab from the post
the same day.
Genentech and Roche also announced that they have an agreement in
principle to settle the consolidated class action lawsuits that were filed
against Genentech, Genentech's Directors, and Roche following the announcement
of the proposed transaction between the two companies announced May 1. The
agreement was reached in return for changes in the terms of the proposed
transaction between companies, including an increase in the call prices by 50
cents per share. The "put" price of $60 per share remains unchanged.
The leadership change for Genentech follows an inquiry by the Board
of Directors. At the June 22 meeting of the Board, it was disclosed that
during the period of negotiations with Roche concerning the proposed
transaction, Mr. Raab, at his request, discussed with Roche a guarantee by
Roche of a $2 million personal bank loan to Mr. Raab. Although no guarantee
was provided, the Board decided to appoint a special committee of four
independent directors to review the fairness of the terms of the proposed
transaction with Roche, to review Mr. Raab's conduct, and to supervise
settlement discussions with lawyers representing plaintiffs.
Following its extensive review of Mr. Raab's leadership over the past
few years, the special committee recommended that the Board request and accept
Raab's resignation. The Board unanimously followed that recommendation. The
Board did note, however, that Mr. Raab had made significant contributions to
the company during his ten years of service, first as chief operating officer
and president and then as president and CEO. In the last five years, the
company's revenues have almost doubled, earnings have almost tripled, and
twice as many drugs are in Phase III development.
After reviewing the proposed merger transaction again, the non-Roche
directors, having previously received a fairness opinion from Lehman Brothers
and after receiving a second fairness opinion from Morgan Stanley, unanimously
concluded that the transaction with Roche is fair, and should continue to be
recommended to Genentech stockholders for their approval.
In announcing Levinson's appointment, Robert A. Swanson, Chairman of
the Board of Directors of Genentech, said: "As one of the very early members
of the Genentech team, Art not only knows Genentech's culture, he is part of
it and a significant driving force of it. Under his leadership, the product
pipeline has become one of the richest in the biotechnology industry. The
Board of Directors is confident that with his new leadership as CEO, and with
the full support of Genentech's very strong management team, the company will
fully capitalize on the promise of that pipeline."
Levinson, 45, joined Genentech in 1980 as a senior scientist and
became a vice president in 1989. He was named a Sr. Vice President in 1993.
Levinson has a doctorate in biochemistry from Princeton and his undergraduate
degree from the University of Washington.
"The opportunity to lead Genentech is most exciting," said Levinson.
"I bring a passion for our science and a strong commitment to the highest
business standards. Working with a very strong management team, I look
forward to helping Genentech realize its maximum growth potential."
The proposed transaction announced May 1st gives Roche the right to
cause the redemption of Genentech stock at a predetermined price that
increases quarterly through the quarter beginning April 1, 1999. The same
transaction gives Genentech stockholders the right to "put" (cause Genentech
to redeem) some or all of their stock at $60/share within a 30 business-day
period commencing July 1, 1999.
In settlement of lawsuits filed, Genentech and Roche agreed to
increase the redemption prices for Genentech's stock as outlined in the
initial transaction by 50 cents per share. The put price of the new proposed
transaction remains as in the original transaction at $60/share.
Initially, the transaction provided that the price at which Roche
could cause Genentech's stock to be redeemed be $61.25 per share beginning in
the third quarter of 1995 and increasing by $1.25 per share per quarter for
the next seven quarters and $1.50 per share per quarter for the next eight
quarters with a final redemption price of $82.00 per share in the second
quarter of 1999. The new redemption prices begin at $61.75 per share and
increases at the same rate noted above with a final redemption price of
$82.50. A table of the previous and new redemption prices is attached.
The increase in the call prices and the overall settlement are
subject to the approval of the Delaware Chancery Court. Absent final court
approval, the call prices will remain unchanged. In addition, the parties
extended the September 30, 1995 cut off date for stockholder approval of the
proposed transaction to October 31, 1995. The proposed transaction must be
approved by a majority of non-Roche stockholders.
The Company is in the process of responding to SEC comments on its
preliminary proxy statement. When the SEC review process is completed, the
proxy will be mailed to shareholders and a vote scheduled, probably in early
September.
Genentech, Inc. is a leading biotechnology company that discovers,
develops, manufactures and markets human pharmaceuticals for significant
medical needs. Ten of the currently marketed biotechnology products stem from
Genentech research, five of which are marketed directly by Genentech. The
company has six products in Phase III development. Genentech is headquartered
in South San Francisco, California, and is traded on the New York and Pacific
Stock Exchanges under the symbol GNE.
# # #
GENENTECH, INC.
CALL AND PUT PRICES
Call Period Old Price New Price
- ----------- --------- ---------
July 1, 1995 to September 30, 1995 $61.25 $61.75
October 1, 1995 to December 31, 1995 $62.50 $63.00
January 1, 1996 to March 31, 1996 $63.75 $64.25
April 1, 1996 to June 30, 1996 $65.00 $65.50
July 1, 1996 to September 30, 1996 $66.25 $66.75
October 1, 1996 to December 31, 1996 $67.50 $68.00
January 1, 1997 to March 31, 1997 $68.75 $69.25
April 1, 1997 to June 30, 1997 $70.00 $70.50
July 1, 1997 to September 30, 1997 $71.50 $72.00
October 1, 1997 to December 31, 1997 $73.00 $73.50
January 1, 1998 to March 31, 1998 $74.50 $75.00
April 1, 1998 to June 30, 1998 $76.00 $76.50
July 1, 1998 to September 30, 1998 $77.50 $78.00
October 1, 1998 to December 31, 1998 $79.00 $79.50
January 1, 1999 to March 31, 1999 $80.50 $81.00
April 1, 1999 to June 30, 1999 $82.00 $82.50
Put Period
- ----------
30 business days after June 30, 1999 $60.00 $60.00
(unchanged)
