CUSIP No. 808905103 13D
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 6)
SCIOS INC.
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(Name of Issuer)
Common Stock, $.001 par value per share
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(Title of Class of Securities)
808905103
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(CUSIP Number)
Third Security, LLC
The Governor Tyler
1902 Downey Street
Radford, Virginia 24141
Attention: Marcus E. Smith, Esq.
(540) 731-3344
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
with a copy to:
Joseph J. Giunta, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071-3144
(213) 687-5000
January 31, 2000
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(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 that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d- 1(e), 13d-1(f) or 13d-1(g), check
the following box:
/ /
CUSIP No. 808905103 13D
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This Amendment No. 6 (the "Amendment") amends and supplements the
Statement on Schedule 13D, dated July 20, 1999, as amended by Amendment No.
1, dated December 2, 1999, Amendment No. 2, dated December 9, 1999,
Amendment No. 3, dated January 13, 2000, Amendment No. 4, dated January 18,
2000, and Amendment No. 5, dated January 20, 2000 (the "Original Schedule
13D"), relating to the Common Stock, par value $.001 per share (the
"Shares"), of Scios Inc., a Delaware corporation (the "Issuer"). Each of
Randal J. Kirk, a citizen of the United States ("Mr. Kirk"), and each of
the following entities that Mr. Kirk directly controls: RJK, L.L.C., a
Virginia limited liability company ("RJK"), Kirkfield, L.L.C., a Virginia
limited liability company ("Kirkfield"), and The Kirk Family Investment
Plan, a joint account ("KFIP" and, collectively with Mr. Kirk, RJK and
Kirkfield, the "Reporting Persons"), are filing this Amendment to update
the information with respect to the Reporting Persons' purposes and
intentions with respect to the Shares.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Original Schedule 13D is hereby amended and
supplemented as follows:
On January 31, 2000, Mr. Kirk and the Issuer entered into a
Settlement Agreement that terminates the proxy contest between the parties.
Under the Settlement Agreement, Mr. Kirk has been added to the Issuer
Board's slate of nominees for election to a one-year term at the Issuer's
2000 Annual Meeting of Stockholders, increasing the total number of Issuer
Board nominees to eight (including the seven existing nominees of the
Issuer Board, who are all current members of the Issuer Board). The Issuer
Board has agreed to recommend the election of all eight nominees. The
Reporting Persons have withdrawn the nomination of their alternate slate of
Mr. Kirk and six other nominees (the "Nominees") for election to the
Issuer's Board and have agreed to discontinue all efforts (direct and
indirect) to solicit votes for the Nominees or otherwise to pursue the
Reporting Persons' nomination of their Nominees. The terms of the
settlement are set forth in the Settlement Agreement attached hereto as
Exhibit 11, and the joint press release issued on January 31, 2000 by the
Issuer and Mr. Kirk is attached hereto as Exhibit 12, both of which are
incorporated herein by reference.
Other than as described above and as previously described in the
Original Schedule 13D, the Reporting Persons do not have any present plans
or proposals which relate to or would result in (although they reserve the
right to develop such plans or proposals) any transaction, change or event
specified in Item 4 of the form of Schedule 13D.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 of the Original Schedule 13D is hereby amended to add the
following exhibits:
Exhibit 11: Settlement Agreement (excluding Exhibit 4.1
thereto, which is the form of joint press release;
see Exhibit 12)
Exhibit 12: Joint Press Release, issued January 31, 2000
SIGNATURE
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 correct.
Dated: February 1, 2000
/s/ Randal J. Kirk
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Randal J. Kirk
RJK, L.L.C.
By: /s/ Randal J. Kirk
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Randal J. Kirk
Manager
KIRKFIELD, L.L.C.
By: /s/ Randal J. Kirk
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Randal J. Kirk
Manager
THE KIRK FAMILY INVESTMENT PLAN
By: /s/ Randal J. Kirk
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Randal J. Kirk, individually and as
attorney-in-fact for each of Donna
P. Kirk, Julian P. Kirk, Martin G.
Kirk and Kellie Leigh Banks
EXHIBIT INDEX
Exhibit
Number Title Page
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11 Settlement Agreement (excluding Exhibit 4.1
thereto, which is the form of joint press release;
see Exhibit 12) 6
12 Joint Press Release, issued January 31, 2000 20
Exhibit 11
SETTLEMENT AGREEMENT
This Settlement Agreement (this "Agreement") is made as of January
31, 2000 by and among Scios Inc., a Delaware corporation (the "Company"),
Randal J. Kirk, a citizen of the United States ("Mr. Kirk"), and each of
the following entities that Mr. Kirk directly controls: RJK, L.L.C., a
Virginia limited liability company ("RJK"); Kirkfield, L.L.C., a Virginia
limited liability company ("Kirkfield"), and The Kirk Family Investment
Plan, a joint account (the "Plan" and, together with Mr. Kirk, RJK and
Kirkfield, the "Stockholders").
RECITALS:
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A. The Stockholders have reported on a Schedule 13D dated July 29,
1999, as amended (the "Schedule 13D"), that they are the beneficial owners
of an aggregate of 2,000,000 outstanding shares of the Company's common
stock, par value $.001 per share (the "Company Common Stock"), representing
approximately 5.2% of the outstanding Company Common Stock.
B. By a letter dated December 2, 1999 addressed to the Company, as
modified by a Supplement dated January 19, 2000 to their proxy statement
dated January 11, 2000, the Stockholders have nominated (the "Nomination")
Mr. Kirk and six other candidates (the "Stockholder Nominees") for election
to the Board of Directors of the Company (the "Company Board"), in place of
the current members of the Company Board, at the 2000 annual meeting of
stockholders of the Company to be held on February 28, 2000 (as the same
may be adjourned or postponed from time to time, the "2000 Annual
Meeting"). The current members of the Company Board, all but one of whom
are candidates for re-election at the 2000 Annual Meeting, have opposed the
election of the Stockholder Nominees and the parties to this Agreement (the
"Parties") have commenced a proxy contest (the "Proxy Contest") regarding
the election of their respective nominees to the Company Board at the 2000
Annual Meeting.
C. The Parties wish to settle the Proxy Contest, and enter into
certain agreements related thereto, on the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises of the
Parties contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:
1. DEFINITIONS
In addition to the other definitions contained elsewhere in this
Agreement, the following terms shall have the meanings specified below for
the purposes hereof:
"Advance Notice Bylaws" means Sections 5(b) and 5(c), together, of
the Company's Bylaws as in effect on the date hereof or any amended version
thereof or successor thereto in effect at the time of determination under
the applicable provision hereof.
"Affiliate" has the meaning set forth in the 1934 Act.
"Associate" has the meaning set forth in the 1934 Act.
"Beneficially own" has the meaning set forth in the regulations
included in Rule 13d-3 of the 1934 Act; provided, however, that for
purposes of this Agreement, any option, warrant, right, conversion
privilege or arrangement to purchase, acquire or vote Company Voting
Securities, regardless of the time period during or the time at which it
may be exercised and regardless of the consideration paid, shall be deemed
to give the holder thereof beneficial ownership of the Company Voting
Securities to which it relates. Any Company Voting Securities which are
subject to such options, warrants, rights, conversion privileges or other
arrangements shall be deemed to be outstanding for purposes of computing
the percentage of outstanding securities owned by such Person but shall not
be deemed to be outstanding for purposes of computing the percentage of
outstanding securities owned by any other Person.
"Company Voting Securities" means all classes of capital stock of
the Company which are then entitled to vote generally in the election of
directors and any securities exchanged for such classes of capital stock
and any securities convertible into or exchangeable or exercisable for such
classes of capital stock. For purposes of determining the amount or
percentage of outstanding Company Voting Securities beneficially owned by a
Person, and for purposes of calculating the aggregate voting power relating
to such Company Voting Securities, securities that are deemed to be
outstanding shall be included to the extent provided in the definition of
"Beneficially own."
"1933 Act" means the Securities Act of 1933, as amended, and the
regulations promulgated under such statute.
"1934 Act" means the Securities Exchange Act of 1934, as amended,
and the regulations promulgated under such statute.
"Person" means a natural person or any legal, commercial or
governmental entity, including, but not limited to, a corporation,
partnership, joint venture, trust, limited liability company, group acting
in concert or any person acting in a representative capacity.
"Representatives" of a Party means: (a) the officers, directors,
partners, managers or other authorized representatives of such Party; (b)
the employees or agents of such Party but only to the extent that they act
on behalf of such Party; and (c) the outside professional advisors of such
Party but only to the extent that they act in concert with such Party and
not solely in their capacities as professional advisors.
"SEC" means the Securities and Exchange Commission.
"Securities Acts" means the 1933 Act and the 1934 Act.
"Term" means the period commencing on the date of this Agreement
and continuing until the earliest to occur of: (a) the conclusion of the
2000 Annual Meeting should Mr. Kirk, having been nominated for election to
the Company Board thereat pursuant to Section 3.1, not be so elected
thereat; (b) Mr. Kirk's resignation from the Company Board pursuant to
Section 3.5; (c) the conclusion of the annual meeting of stockholders of
the Company for the year 2001 (the "2001 Annual Meeting") should Mr. Kirk,
having been nominated for election to the Company Board thereat pursuant to
Section 3.4, not be so elected thereat; or (d) the later of (i) the 30th
day prior to the deadline established by the Advance Notice Bylaws for
nominations of candidates for election to the Company Board at the annual
meeting of stockholders of the Company for the year 2002 (the "2002 Annual
Meeting"), or (ii) the date of Mr. Kirk's resignation from the Company
Board, but in no event beyond the conclusion of the 2002 Annual Meeting.
2. WITHDRAWAL OF THE NOMINATION
2.1. The Stockholders hereby irrevocably withdraw the Nomination.
2.2. The Stockholders shall forthwith discontinue all efforts
(direct and indirect) to solicit votes for the Stockholder Nominees and
shall not engage in any further solicitation activity (whether by press
release, SEC filings, mailings to the stockholders of the Company,
communications with individual stockholders of the Company, contacts with
the media or otherwise) to solicit votes for the Stockholder Nominees or
otherwise to pursue the Nomination.
3. ADDITION OF MR. KIRK AS A COMPANY BOARD NOMINEE
3.1. The Company Board has taken all action necessary to cause Mr.
Kirk to become a nominee of the Company Board for election to the Company
Board at the 2000 Annual Meeting. If he is elected and chooses to serve,
Mr. Kirk will serve as a member of the Company Board for the same term as
all other nominees elected to the Company Board at the 2000 Annual Meeting,
which term shall expire when his successor is duly elected at the 2001
Annual Meeting and qualified or upon his death, resignation or removal, all
as provided in Article IV of the Company's Bylaws. As a result of the
addition of Mr. Kirk as a nominee of the Company Board for election to the
Company Board at the 2000 Annual Meeting, the total number of the Company
Board nominees for election at the 2000 Annual Meeting shall be eight and
the Company Board shall recommend to the Company's stockholders the
election of all eight nominees.
3.2. If, at any time, whether before the vote is taken on the
election of directors at the 2000 Annual Meeting or thereafter (assuming
Mr. Kirk is elected thereat), Mr. Kirk becomes unable or unwilling to serve
as a member of the Company Board, the Company Board shall have no
obligation to nominate, elect or appoint a successor or replacement to Mr.
Kirk.
3.3. Mr. Kirk hereby confirms to the Company his consent to stand
for election as a nominee of the Company Board at the 2000 Annual Meeting.
In addition to the information that Mr. Kirk has provided to the Company in
connection with the negotiation and execution of this Agreement, Mr. Kirk
shall provide to the Company such additional information as it may from
time to time reasonably request for inclusion in materials to be
disseminated in connection with the 2000 Annual Meeting or otherwise in
order for it to comply with its disclosure requirements under the
Securities Acts.
3.4. If Mr. Kirk is elected to the Company Board at the 2000
Annual Meeting and is still a member of the Company Board at the meeting at
which the Company Board votes on its nominees (the "2001 Nominees") for
election to the Company Board at the 2001 Annual Meeting, which nomination
meeting of the Company Board (the "Nomination Meeting") the Company
covenants to hold no later than 90 days prior to the date of the 2001
Annual Meeting, then, at the Nomination Meeting, the Company Board shall
have the right (but not the obligation) to vote to include Mr. Kirk as one
of the 2001 Nominees, in which case, if Mr. Kirk consents to stand for
election as a 2001 Nominee: (a) the Company Board shall recommend to the
Company's stockholders his election, together with the election of all
other 2001 Nominees, at the 2001 Annual Meeting; and (b) the provisions of
the second sentence of Section 3.1 and the entirety of Section 3.2 shall
apply as if references therein to the 2000 Annual Meeting were references
to the 2001 Annual Meeting, and the reference in the second sentence of
Section 3.1 to the 2001 Annual Meeting was a reference to the 2002 Annual
Meeting.
3.5. If, at the Nomination Meeting, the Company Board votes not to
include Mr. Kirk as one of the 2001 Nominees and Mr. Kirk resigns from the
Company Board within 15 days of such vote, the Advance Notice Bylaws shall
automatically be deemed waived to the extent necessary to permit any or all
of the Stockholders (but no other Person) to nominate one or more of their
own candidates for election to the Company Board at the 2001 Annual
Meeting.
3.6. If, at the Nomination Meeting, the Company Board votes to
include Mr. Kirk as one of the 2001 Nominees but Mr. Kirk does not consent
to stand for election as a 2001 Nominee, the Advance Notice Bylaws shall
not be deemed waived to any extent with respect to any of the Stockholders.
4. ANNOUNCEMENTS
4.1. As soon as practicable following the execution of this
Agreement: (a) the Company and Mr. Kirk shall issue a joint press release
in the form of Exhibit 4.1 hereto (the "Joint Press Release"), which the
Company (but not the Stockholders) shall file with the SEC as additional
definitive proxy materials under the 1934 Act; (b) the Company shall file
with the SEC, and disseminate to its stockholders, a letter to its
stockholders and a supplement to its proxy statement for the 2000 Annual
Meeting disclosing, in a manner consistent with the Joint Press Release,
the terms of this Agreement and Mr. Kirk's nomination pursuant to Section
3.1, together with the information provided by Mr. Kirk, for inclusion in
such supplement, with respect to himself, the contents of which letter and
supplement shall be subject to the approval of Mr. Kirk (not to be
unreasonably withheld); (c) the Company shall file with the SEC a Current
Report on Form 8-K to disclose this Agreement in a manner consistent with
the Joint Press Release, the contents of which Current Report shall be
subject to the approval of Mr. Kirk (not to be unreasonably withheld); and
(d) the Stockholders shall file with the SEC a Schedule 13D amendment to
disclose this Agreement in a manner consistent with the Joint Press
Release, the contents of which amendment shall be subject to the approval
of the Company (not to be unreasonably withheld)
4.2. From the date of this Agreement until the earlier to occur of
(a) the expiration of the Term or (b) the resignation of Mr. Kirk from the
Company Board (if he is elected thereto), none of the Parties shall make
any public statement (including any statement in any filing with the SEC or
any other governmental agency) regarding this Agreement or any event
occurring prior to the date hereof that is inconsistent with, or
otherwise contrary to, the Joint Press Release or that is critical of any
other Party or its prior actions.
4.3. Any public statement (including any statement in any filing
with the SEC or any other governmental agency) by any Party regarding this
Agreement or any event occurring prior to the date hereof that is not
prohibited by Section 4.2 shall be made in compliance with applicable
securities laws and consistent with such Party's fiduciary duties to the
Company.
5. STANDSTILL PROVISIONS
5.1. Provided that the Company is not in material default under
this Agreement, the Stockholders agree, jointly and severally, that prior
to the expiration of the Term, unless such shall have been specifically
invited in writing by the Company, none of the Stockholders nor any of
their Affiliates, Associates or Representatives shall in any manner,
directly or indirectly:
(a) effect or seek, offer or propose (whether publicly or
otherwise) to effect, or cause or participate in or in any way assist any
other person to effect or seek, offer or propose (whether publicly or
otherwise) to effect or participate in (i) any acquisition, issuance or
disposition of any securities (or beneficial ownership thereof) or assets
of the Company or any of its subsidiaries (except as otherwise expressly
provided by Section 6.4), (ii) any tender or exchange offer, merger or
other business combination involving the Company or any of its
subsidiaries, (iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company
or any of its subsidiaries, (iv) any acquisition of the securities or
assets of any other business enterprise by the Company or any of its
subsidiaries, or (v) any "solicitation" of "proxies" (as such terms are
used in the proxy rules of the SEC);
(b) form, join or in any way participate in a "group" (as
defined under the 1934 Act) with respect to the Company (other than with any
other Stockholder);
(c) otherwise act, alone or in concert with others, to
seek to control the management, the Company Board or the policies of the
Company, including, without limitation, by (i) initiating or instituting a
stockholder solicitation for any such purpose, or (ii) nominating or
causing others to nominate or otherwise seeking to elect directors of the
Company other than those nominated by the Board;
(d) take any action which might force the Company to
make a public announcement regarding any of the types of matters set forth
in 5(a) above;
(e) enter into any discussions or arrangements with any
third party with respect to any of the foregoing; or
(f) request the Company to amend, waive or terminate any
provision of this Agreement (including this sentence).
5.2. Notwithstanding anything to the contrary in Section 5.1: (a)
the mere act of selling any Company Voting Securities beneficially owned by
any of the Stockholders shall not by itself be deemed to constitute the
participation in or assistance by any of the Stockholders with respect to
any of the foregoing provided such act is consistent with Section 6.5; (b)
Mr. Kirk's exercise of his rights, or fulfillment of his obligations, as a
member of the Company Board while he is serving thereon shall not be a
violation of Section 5.1; and (c) Mr. Kirk may make a proposal that would
otherwise be prohibited by Section 5.1 provided it is made confidentially
to the Company Board.
6. CERTAIN AGREEMENTS RELATING TO COMPANY VOTING SECURITIES
Provided that the Company is not in material default under this
Agreement, the Stockholders agree, jointly and severally as follows:
6.1. At any meeting of the stockholders of the Company held at any
time between the date of this Agreement and the expiration of the Term,
they shall: (a) vote, or cause to be voted, all Company Voting Securities
beneficially owned by any of them as of the applicable record date for such
meeting in favor of the election to the Company Board of the Persons
nominated by the Company Board for election to the Company Board at such
meeting; and (b) except as otherwise instructed by a vote of at least a
majority of the members of the Company Board, not vote, or cause to be
voted, any such Company Voting Securities in favor of the removal from the
Company Board of any director or in favor of any candidate or slate of
candidates for election to the Company Board not nominated by the Company
Board.
6.2. At any meeting of the stockholders of the Company held at any
time between the date of this Agreement and the earlier to occur of (a) the
expiration of the Term or (b) Mr. Kirk's resignation from the Company Board
(if he is elected thereto), the Stockholders shall, with respect to any
proposal to be voted upon at such meeting other than the election of
candidates to the Company Board or the removal of any member of the Company
Board, either (the choice between the following alternatives being within
the sole discretion of the Stockholders): (i) vote, or cause to be voted,
all Company Voting Securities beneficially owned by any of them as of the
applicable record date for such meeting in accordance with the
recommendation of at least a majority of the Company Board with respect to
such proposal; or (ii) vote, or cause to be voted, all such Company Voting
Securities in the same proportion as the percentage of votes cast by the
other holders of Company Voting Securities in favor of, against and
abstaining from such proposal.
6.3. At any meeting of the stockholders of the Company held at any
time between the date of this Agreement and the earlier to occur of (a) the
expiration of the Term or (b) Mr. Kirk's resignation from the Company Board
(if he is elected thereto), the Stockholders shall cause all Company Voting
Securities beneficially owned by any of them or any of their respective
Affiliates, Associates or Representatives to be present, in person or by
proxy, so that all such Company Voting Securities can be counted for the
purpose of determining the presence of a quorum at each such meeting.
6.4. From the date of this Agreement until the earlier to occur of
(a) the expiration of the Term or (b) Mr. Kirk's resignation from the
Company Board (if he is elected thereto), none of the Stockholders, nor any
of their Affiliates, Associates or Representatives, shall, directly or
indirectly, Beneficially own any Company Voting Securities exceeding, in
the aggregate among all of the Stockholders and their respective
Affiliates, Associates and Representatives, 7.2% of the then-outstanding
Company Voting Securities. Any acquisitions of beneficial ownership of
Company Voting Securities by any of the Stockholders, or their respective
Affiliates, Associates or Representatives, during the period referred to in
the immediately preceding sentence shall be made in a manner consistent
with the then-applicable policies of the Company Board regarding compliance
with the Securities Acts and transactions in Company Voting Securities by
members of the Company Board and their Affiliates (collectively, the
"Company Policies") and in compliance with all applicable laws.
6.5. From the date of this Agreement until the earlier to occur of
(a) the expiration of the Term or (b) Mr. Kirk's resignation from the
Company Board (if he is elected thereto), none of the Stockholders shall
dispose of any Company Voting Securities they currently Beneficially own
unless the Company Board (through its Chairman) receives 2 business days
prior written notice of the applicable Stockholder's intention with respect
to the disposition, including the details thereof (by way of example only,
the number of Company Voting Securities to be disposed of, and the proposed
price and buyer or other transferee or a statement of its intention to
engage in open market sale); provided, however, that the foregoing notice
requirement shall not apply to open- market sales by the Stockholders of
less than 1% of the outstanding Company Common Stock in the aggregate in
any 90-day period provided such sales are effected in accordance with the
Company Policies. Any disposition of beneficial ownership of Company Voting
Securities by any of the Stockholders during the period referred to in
the immediately preceding sentence shall be made in a manner consistent
with Company Policies and in compliance with all applicable laws.
7. SPECIAL RELEASES AND COVENANTS NOT TO SUE
7.1. The Company: (a) fully releases, remises, exonerates forever
and unconditionally discharges each of the Stockholders and their
respective Affiliates, Associates, Representatives, employees, agents and
advisors (each, a "Stockholder Releasee") from any and all liability and
responsibility for any and all Company Claims (as hereinafter defined) and;
(b) covenants and agrees not to participate in, commence or permit (to the
extent within its control) the assertion or commencement of any demand,
allegation, litigation, proceeding or action relating to any Company Claim,
and not to encourage, assist or cooperate with any Person in pursuing or
asserting any Company Claim, against any Stockholder Releasee. As used in
this agreement, "Company Claim" means any actual or alleged liability,
claim, action, suit, cause of action, obligation, debt, controversy,
promise, contract, lien, judgement, account, reckoning, bond, bill,
covenant, agreement, demand, of any kind or nature, loss, cost, damage,
penalty or expense (including, without limitation, reasonable attorneys'
fees and expenses, and the cost of investigation and litigation), whether
in law or in equity, whether known or unknown, whether matured or unmatured
and whether foreseen or unforeseen, that the Company may or could have had
or now or hereafter may have, for, upon, or by reason of, any matter, cause
or thing whatsoever resulting from, arising out of, relating to, connected
in any way with, or alleged, suggested or mentioned in connection with, (i)
the Proxy Contest or any part or aspect thereof, (ii) any action taken, or
statement made, in connection with the Proxy Contest, (iii) the acquisition
or ownership of any shares of Company Common Stock by any of the
Stockholder Releasees, or (iv) any action, failure to act, representation,
event, transaction, occurrence or other subject matter resulting from,
arising out of, relating to, connected in any way with, or alleged,
suggested or mentioned, in connection with the foregoing.
7.2. The Stockholders jointly and severally: (a) fully release,
revise, exonerate and forever and unconditionally discharge the Company and
each of its Affiliates, Associates, Representatives, employees, agents and
advisors (each, a "Company Releasee") from any and all liability and
responsibility for any and all Stockholder Claims (as hereinafter defined);
and (b) covenant and agree not to participate in, commence or permit (to
the extent within its respective control) the assertion or commencement of
any demand, allegation, litigation, proceeding or action relating to any
Stockholder Claim, and not to encourage, assist or cooperate with any
Person in pursuing or asserting any Stockholder Claim against any Company
Releasee. As used in this Agreement, "Stockholder Claim" means any actual
or alleged liability, claim, action, suit, cause of action, obligation,
debt, controversy, promise, contract, lien, judgment, account, reckoning,
bond, bill, covenant, agreement, demand of any kind or nature, loss, cost,
damage, penalty or expense (including, without limitation, reasonable
attorneys' fees and expenses, and the costs of investigation and
litigation), whether in law or in equity, whether known or unknown, whether
matured or unmatured and whether foreseen or unforeseen, that any
Stockholder may or could have had or now or hereafter may have, for, upon,
or by reason of, any matter, cause or thing whatsoever resulting from,
arising out of, relating to, connected in any way with, or alleged,
suggested or mentioned in connection with, (i) the Proxy Contest or any
part or aspect thereof, (ii) any action taken, or statement made, in
connection with the Proxy Contest, or (iii) any action, failure to act,
representation, event, transaction, occurrence or other subject matter
resulting from, arising out of, relating to, connected in any way with, or
alleged, suggested or mentioned in connection with the foregoing.
7.3. The Company, in connection with the release and covenant
contained in Section 7.1, and each of the Stockholders, in connection with
the release and covenant contained in Section 7.2, each hereby waive the
provisions of 1542 of the California Civil Code but only to the extent it
applies to their respective releases contained in the applicable such
Section. Section 1542 of the California Civil Code provides as follows:
A general release does not extend the claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected settlement with the debtor.
7.4. The Company expressly acknowledges that each Stockholder
Releasee that is not a Stockholder is an intended third party beneficiary
of the release and covenant contained in Section 7.1 and the Stockholders
jointly and severally acknowledge that each Company Releasee other than the
Company is an intended third party beneficiary of the release and covenant
contained in Section 7.2.
8. CERTAIN REPRESENTATIONS AND WARRANTIES
8.1. The Company represents and warrants to each of the
Stockholders that: (a) its execution, delivery and performance of this
Agreement has been approved by the Company Board and does not violate its
Certificate of Incorporation, Bylaws or any agreement to which it is a
party; and (b) this Agreement constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally.
8.2. The Stockholders jointly and severally represent to the
Company that: (a) the execution, delivery and performance of this Agreement
by RJK, Kirkfield and the Plan have been approved by their respective
managers, members, administrators, or other governing bodies or
authorities, as the case may be, and does not violate their respective
organizational or constituent document, (b) their execution, delivery and
performance of this Agreement does not violate any agreement to which any
of them is a party; (c) this Agreement constitutes a valid and binding
obligation of each of them, enforceable against each of them in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally; (d) they have consulted with counsel of their choice in
connection with their decision to enter into and be bound by this
Agreement; and (e) Recital A to this Agreement is a true statement of their
current aggregate beneficial ownership of Company Common Stock and, to
their best knowledge, after due inquiry, none of their respective
Affiliates, Associates or Representatives Beneficially owns any other
Company Voting Securities.
9. MISCELLANEOUS
9.1. This Agreement constitutes the entire agreement of the
parties with respect to its subject matter and supersedes any and all prior
representations, agreements or understandings, whether written or oral,
between or among any of them with respect to such subject matter. This
Agreement may be amended only by a written agreement duly executed by the
parties.
9.2. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware without regard to its
conflict of law principles. Exclusive jurisdiction to resolve any dispute
arising under or in connection with this Agreement is hereby conferred on
the Delaware Chancery Court (or, if such Court determines that it lacks
jurisdiction over the particular dispute, any other applicable court of the
State of Delaware) or, if the dispute involves issues of federal law or
over which the Delaware Chancery Court (or such other court of the State of
Delaware) lacks or declines jurisdiction, on the United States Federal
District Court for the District of Delaware. The Parties hereby submit to
the exclusive jurisdiction of each of such courts.
9.3. This Agreement may not be assigned by any Party without the
prior written consent of the other Parties. This Agreement shall be binding
upon, and inure to the benefit of, the respective successors and permitted
assigns of the Parties. Except as expressly set forth in Section 7.4, this
Agreement shall confer no rights or benefits upon any Person other than the
Parties.
9.4. Any waiver by any Party of a breach of any provision of this
Agreement shall not be deemed to be a waiver of any other breach of such
provision or of any breach of any other provision of this Agreement.
9.5. This Agreement may be executed in counterparts, each of which
shall constitute an original but all of which shall together constitute a
single instrument.
9.6. The Stockholders jointly and severally covenant that they
shall each use their commercially reasonable efforts to cause the
Stockholder Nominees other than Mr. Kirk to comply with the provisions of
Section 5 to the same extent as if such other Stockholder Nominees were
express parties thereto.
9.7. The Company shall reimburse the Stockholders for 50% of their
actual documented out-of-pocket costs in respect of: (a) fees and expenses
paid and payable by them, in connection with services provided for the
Proxy Contest, to the law firm, public relations firm and proxy
solicitation firm that have advised them in connection with the Proxy
Contest; and (b) amounts paid and payable to ADP Proxy Services in respect
of the dissemination of the written materials issued by the Stockholders
during the course of the Proxy Contest.
9.8 Without Mr. Kirk's prior consent (which shall not be
unreasonably withheld), the Company shall not: (a) change the date on which
the 2000 Annual Meeting is currently scheduled to convene; (b) hold the
2001 Annual Meeting later than June 1, 2001; or (c) amend the Advance
Notice Bylaws during the Term.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been executed by each of
the parties as of the date first above written.
SCIOS INC. RANDAL J. KIRK
By: /s/ Richard B. Brewer /s/ Randal J. Kirk
------------------------------ -----------------------------
Richard B. Brewer, Randal J. Kirk
President and Chief Executive
Officer
RJK, LLC
By: /s/ Randal J. Kirk
--------------------------
Randal J. Kirk
Manager
KIRKFIELD, LLC
By: /s/ Randal J. Kirk
-------------------------
Randal J. Kirk
Manager
THE KIRK FAMILY
INVESTMENT PLAN
By: s/ Randal J. Kirk
-----------------
Randal J. Kirk, individu-
ally and as attorney-in-fact
for each of Donna P. Kirk,
Julian P. Kirk, Martin G.
Kirk and Kellie Leigh
Banks
Exhibit 4.1
FORM OF JOINT PRESS RELEASE
[Intentionally omitted; see Exhibit 12]
Exhibit 12
[SCIOS LOGO]
820 West Maude Avenue
Sunnyvale, CA 94086
www.sciosinc.com
CONTACT:
Wendy Carhart For Randal J. Kirk
Scios Inc. Caroline Gentile
408/616-8325 Kekst and Company
or 212/521-4800
Stanley J. Kay
MacKenzie Partners, Inc.
212/929-5940
FOR IMMEDIATE RELEASE:
SCIOS AND R. J. KIRK AGREE TO END PROXY CONTEST
Parties Focused On Building Stockholder Value
SUNNYVALE, CALIFORNIA and RADFORD, VIRGINIA--January 31, 2000--Scios Inc.
(NASDAQ:SCIO) and Randal J. Kirk jointly announced today a definitive
agreement which enables Scios management to move forward with its business
strategy and expands the board of directors, if elected by stockholders, to
one that will, together with management, report beneficial ownership of
nearly ten percent of the company's fully diluted shares.
Under the agreement, which ends Mr. Kirk's proxy solicitation to elect a
new slate of directors, Mr. Kirk will be added to the slate of candidates
nominated by the Scios Board for election as directors at the 2000 annual
meeting of stockholders to be held on February 28, 2000. This will raise
the number of Board candidates to eight, including the seven current Scios
Board members who are standing for re-election. If elected, Mr. Kirk as
well as all other directors will serve for a one-year term.
Accordingly, Mr. Kirk and certain entities he controls, which own
approximately 5.2% of Scios' outstanding shares will vote their Scios
shares in favor of the Board's nominees at the upcoming annual meeting.
Randal J. Kirk stated, "I strongly believe that there is substantial
shareholder value to be realized at Scios as evidenced by the size of my
holdings, and I am pleased to be nominated to a slate of this caliber. I am
convinced that Natrecor (R), for example, is a product with extremely
attractive commercial potential, and that Scios' management should be in a
position to devote its full energies to obtaining FDA approval for this
product. At the same time, Scios' offer to have me on its board will enable
me, if elected, to work with the other directors and management to build
value for all Scios stockholders."
Donald B. Rice, Scios' Chairman, and Richard B. Brewer, President and Chief
Executive Officer, said, "The priority of the board and management of Scios
is to achieve enhanced value for all stockholders. This negotiated
agreement is consistent with that priority. By ending a distractive
situation we can now devote everyone's energies to the business of growing
Scios. Scios can now move forward with a board that is strong in business
experience, industry expertise and stockholder representation. We believe
Mr. Kirk can bring a valuable perspective to the board."
Consistent with the agreement's spirit of cooperation, Mr. Kirk and his
entities have agreed to certain "stand still " provisions. Both parties
will file the definitive settlement agreement with the SEC shortly and
Scios will be supplementing its proxy statement to add Mr. Kirk as a
nominee to its Board.
Scios, Inc.
- ----------
Scios is a biopharmaceutical company engaged in the discovery, development,
and commercialization of novel human therapeutics. Scios has commercial or
research and development relationships with Chiron Corporation, The DuPont
Pharmaceuticals Company, Eli Lilly and Company, Gen Vec Inc., Kaken
Pharmaceutical Co., Ltd., and Novo Nordisk A/S of Denmark. Scios'
Psychiatric Sales and Marketing Division successfully markets seven
psychiatric products, including co-promotion arrangements with Janssen
Pharmachetica's Risperdal (R) (risperidone) and SmithKline Beecham's
Paxil(R) (paroxetine hydrocholoride). Additional information on Scios is
available at its website located at www.sciosinc.com and in the Company's
various filings with the Securities and Exchange Commission.
