UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period
ended June 30, 1999
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period
from __________ to __________
Commission File Number 1-6247
ALZA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 77-0142070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1900 Charleston Road
P.O. Box 7210
Mountain View, California 94039-7210
(Address of principal executive offices)
Registrant's telephone number, including area code (650) 564-5000
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes (X) No ( )
Number of shares outstanding of each of the registrant's classes
of common stock as of July 30, 1999:
Common Stock, $.01 par value - 101,596,932 shares
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ALZA CORPORATION
FORM 10-Q/A for the Quarter Ended
June 30, 1999
INDEX
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 3
Signatures 4
Exhibits
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10.1 Form of Amendment to Executive
Agreement between ALZA Corporation and Certain
Executive Officers dated as of June 11, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
ALZA CORPORATION
Date: March 27, 2000 By: /s/ Peter D. Staple
Peter D. Staple
Executive Vice President
and Chief Administrative Officer
<PAGE>
EXHIBIT INDEX
Exhibit
10.1 Form of Amendment to Executive Agreement between
ALZA Corporation and Certain Executive Officers
dated as of June 11, 1999.
Exhibit 10.1
FORM OF AMENDMENT TO EXECUTIVE AGREEMENT
AMENDMENT (the "Amendment") to Executive
Agreement (the "Executive Agreement"), between
_____________ (the "Executive") and ALZA Corporation, a
Delaware corporation (the "Company").
WHEREAS, Compensation and Benefits Committee
(the "Committee") of the Board of Directors (the "Board")
of the Company previously authorized the Company to enter
into agreements with certain executive officers of the
Company (the "Executive Agreements") providing for the
payment of severance and other benefits upon termination
of such executives following a change in control of the
Company;
WHEREAS, the Committee has determined that it
is in the best interests of the Company and its
stockholders to modify such benefits in the manner set
forth below.
NOW, THEREFORE, in consideration of the mutual
agreements hereinafter set forth, and for other good and
valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Executive and the
Company have agreed and do hereby agree to amend the
Executive Agreement as follows, effective as of the 11th
day of June, 1999:
1. Section 6 of the Executive Agreement is hereby
renamed "Severance Payments."
2. Section 6.1(A) of the Executive Agreement is hereby
amended in its entirety to read as follows:
"In lieu of any further salary and bonus
payments to the Executive for periods subsequent to
the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the
Company shall pay to the Executive a lump sum
severance payment, in cash, equal to the product of
(x) the sum of (i) the Executive's annual base
salary in effect immediately prior to the occurrence
of the event or circumstance upon which the Notice
of Termination is based or in effect immediately
prior to the Change in Control, if higher, and (ii)
the amount paid to or accrued by the Executive
pursuant to the Company's regular bonus, incentive
cash compensation or income deferral arrangements
(and not including any special one-time awards not
made as part of a regular program) in the one-year
period immediately preceding that in which the Date
of Termination occurs or, if higher, the amount paid
or accrued in the one-year period immediately
preceding that in which the Change in Control occurs
and (y) 2.5."
3. Section 6.1(C) of the Executive Agreement is
hereby amended in its entirety to read as follows:
"All outstanding Options, to the extent not
then vested on the Date of Termination shall be
exercisable in accordance with the terms and
conditions of the Amended and Restated Stock Plan
and 1985 Stock Option Plan, as applicable, and
Executive's option agreement(s)."
4. Section 6.2 of the Executive Agreement is
hereby amended in its entirety to read as follows:
"(A) In the event the Executive becomes
entitled to the Severance Payments, if any of the
payments or benefits received or to be received by
the Executive in connection with a Change in Control
or the Executive's termination of employment
(whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the
Company, any Person whose actions result in a Change
in Control or any Person affiliated with the Company
or such Person) (all such payments and benefits,
excluding the Gross-Up Payment (as defined below),
being hereinafter referred to as the "Total
Payments") will be subject to the Excise Tax, the
Excise Tax shall be allocated pro rata to the
portion of the Total Payments that are not
attributable to the acceleration of equity-based
awards to the Executive (the "Non-Equity Payments")
and the portion of the Total Payments that are
attributable to the acceleration of equity-based
awards to the Executive (the "Equity Payments") and
the Company shall pay to the Executive an additional
amount (the "Gross-Up Payment") such that the net
amount retained by the Executive, after deduction of
any Excise Tax allocated to the Non-Equity Payments
and any Federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up
Payment, shall be equal to the Non-Equity Payments.
By way of example, if the Excise Tax equals $100,000
and each of the Non-Equity Payments and the Equity
Payments are $200,000, the Gross-Up would be based
on 50% of the Excise Tax.
(B) For purposes of determining whether any of
the Total Payments will be subject to the Excise Tax
and the amount of such Excise Tax, (i) all of the
sum of the Total Payments shall be treated as
"parachute payments" (within the meaning of section
280G(b)(2) of the Code) unless, in the opinion of
tax counsel ("Tax Counsel") reasonably acceptable to
the Executive and selected by the accounting firm
which was, immediately prior to the Change in
Control, the Company's independent auditor (the
"Auditor"), such payments or benefits (in whole or
in part) do not constitute parachute payments,
including by reason of section 280G(b)(4)(A) of the
Code, (ii) all "excess parachute payments" within
the meaning of section 280G(b)(l) of the Code shall
be treated as subject to the Excise Tax unless, in
the opinion of Tax Counsel, such excess parachute
payments (in whole or in part) represent reasonable
compensation for services actually rendered (within
the meaning of section 280G(b)(4)(B) of the Code) in
excess of the Base Amount allocable to such
reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of
any noncash benefits or any deferred payment or
benefit shall be determined by the Auditor in
accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax
at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in
the state and locality of the Executive's residence
on the date of termination (or if there is no date
of termination, then the date on which the Gross-Up
Payment is calculated for purposes of this section),
net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state
and local taxes.
(C) In the event that the Excise Tax is
finally determined to be less than the amount taken
into account hereunder in calculating the Gross-Up
Payment, the Executive shall repay to the Company,
within five (5) business days following the time
that the amount of such reduction in the Excise Tax
is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state and local income and
employment taxes imposed on the Gross-Up Payment
being repaid by the Executive, to the extent that
such repayment results in a reduction in the Excise
Tax and a dollar-for-dollar reduction in the
Executive's taxable income and wages for purposes of
federal, state and local income and employment
taxes, plus interest on the amount of such repayment
at 120% of the rate provided in section
1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken
into account hereunder in calculating the Gross-Up
Payment (including by reason of any payment the
existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of
such excess (plus any interest, penalties or
additions payable by the Executive with respect to
such excess) within five (5) business days following
the time that the amount of such excess is finally
determined. The Executive and the Company shall
each reasonably cooperate with the other in
connection with any administrative or judicial
proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total
Payments."
(D) The Executive and the Company shall enter
into an agreement, which shall (i) have a term of
one (1) year, (ii) contain appropriate provisions
restricting competition by the Executive from
working in a Listed Drug Delivery Company during the
noncompetition period, and (iii) provide the
Executive with a quarterly fee payable in cash at
the commencement of the agreement and, thereafter,
on each of the following three quarterly anniversary
dates of such commencement date in an amount equal
to $25,000.
5. Except as otherwise provided herein, the
remaining terms of the Executive Agreement shall remain
in full force and effect.
IN WITNESS WHEREOF, the Company has caused the
Amendment to be executed by its duly authorized officer,
and the Executive has hereunto signed the Amendment, as
of the date first above written.
ALZA Corporation
By: __________________________
Its:__________________________
