<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-9/A
(AMENDMENT NO. 1)
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
SYNERGEN, INC.
(NAME OF SUBJECT COMPANY)
SYNERGEN, INC.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
871594107
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
GREGORY B. ABBOTT
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SYNERGEN, INC.
1885 33RD STREET
BOULDER, COLORADO 80301
(303) 938-6200
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICE AND COMMUNICATIONS ON BEHALF OF PERSON(S) FILING STATEMENT)
------------------------
COPIES TO:
<TABLE>
<S> <C>
LARRY W. SONSINI, ESQ. GEORGE A. VANDEMAN, ESQ.
AARON J. ALTER, ESQ. LATHAM & WATKINS
WILSON, SONSINI, GOODRICH & ROSATI 633 WEST FIFTH STREET, SUITE 4400
650 PAGE MILL ROAD LOS ANGELES, CALIFORNIA 90071-2007
PALO ALTO, CALIFORNIA 94304-1050 (213) 485-1234
(415) 493-9300
</TABLE>
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<PAGE> 2
This Amendment No. 1 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") of Synergen, Inc., a Delaware
corporation (the "Company"), filed with the Securities and Exchange Commission
on November 23, 1994, relating to the offer to purchase all of the outstanding
shares of the Company's Common Stock, par value $.01 per share (the "Shares")
(including the associated Preferred Stock Purchase Rights issued pursuant to the
Rights Agreement dated as of October 24, 1991, between the Company and Chemical
Trust Company of California, as Rights Agent), of Amgen Acquisition Subsidiary,
Inc. ("Purchaser"), a Delaware corporation and wholly owned subsidiary of Amgen
Inc., a Delaware corporation ("Parent"), in each case at $9.25 per Share, net to
the seller in cash, without interest. All capitalized terms not otherwise
defined herein shall have the meanings given to such terms in the Schedule
14D-9.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
Preferred Stock Purchase Rights. On October 21, 1991, the Board of
Directors of the Company declared a dividend of one right (a "Right") for each
outstanding share of the Company's Common Stock. The dividend was paid on
November 5, 1991, to stockholders of record on that date. Holders of shares of
Common Stock issued after that date and until the Rights become exercisable
receive one Right for each share of Common Stock. The Rights trade automatically
with the shares of Common Stock and, until the Rights are exercisable, are
evidenced by the certificates for the Common Stock. The terms of the Rights are
set forth in the Rights Agreement, a copy of which was filed as Exhibit 1 to the
Company's Current Report on Form 8-A, as filed with the Securities and Exchange
Commission on November 5, 1991, as amended by the Company's Form 8 Amendment,
filed on November 7, 1991. Chemical Trust Company of California has assumed all
responsibilities as the Rights Agent under the Rights Agreement. The following
summary is not complete and is qualified in its entirety by reference to the
Rights Agreement.
Each Right will entitle its registered holder to purchase from the Company
one one-hundredth of a share of the Company's Series A Junior Participating
Preferred Stock (the "Series A Preferred Stock"). The purchase price for each
one-hundredth share of Series A Preferred Stock is $335 (the "Purchase Price").
The Rights will become exercisable upon the earlier of (a) the tenth day after
the first public disclosure that a person or group has become an "Acquiring
Person" (defined below) or (b) the tenth business day after the commencement of
a tender or exchange offer (other than an offer by Company or certain related
entities) that, if consummated, would result in one person or group becoming an
Acquiring Person. In general, "Acquiring Person" means any person or group that
has beneficial ownership of 20 percent or more of the outstanding Common Stock,
but does not include Company or certain related entitles. Any Rights held by an
Acquiring Person or certain transferees of an Acquiring Person will become void
at the time the person becomes an Acquiring Person. The Rights expire on
November 5, 2001, unless earlier redeemed as described below.
Under certain circumstances, the Rights will entitle their holders to
purchase securities other than Series A Preferred Stock. If any person becomes
an Acquiring Person (other than pursuant to an offer for all shares determined
by the disinterested directors to be fair to the stockholders and in the best
interests of the Company and its stockholders (a "Qualifying Offer")), each
Right will entitle its holder to purchase upon exercise, for the Purchase Price,
Common Stock with a market value of twice the Purchase Price. In certain
circumstances, if the Company is acquired in a merger or other business
combination in which the Company is not the surviving corporation or if 50
percent or more of Company's assets or earnings power is transferred to another
entity after there is an Acquiring Person (other than in certain acquisitions
following a Qualifying Offer), each Right will entitle its holder to purchase a
number of shares of the acquiring entity's common stock with a market value of
twice the Purchase Price. However, a merger or other business combination
following a Qualifying Offer is exempted from this provision if the amount and
form of consideration being offered is the same as that paid in the Qualifying
Offer.
At any time before the earlier of (a) ten days following the first public
announcement by Company or an Acquiring Person that the Acquiring Person has
become such or (b) November 5, 2001, the Board of Directors of the Company may
redeem the Rights in whole, but not in part, for $.001 per Right (the
"Redemption Price"). Under certain circumstances specified in the Rights
Agreement, the Rights may be redeemed only with the concurrence of a majority of
the Continuing Directors (as defined in the Rights
2
<PAGE> 3
Agreement). If the Board elects to redeem the rights, the only right of the
holders of Rights will be to receive the Redemption Price.
The Rights do not entitle their holders to any rights as stockholders of
Company, such as voting or dividend rights. Company may amend the Rights
Agreement without the approval of any holder of the Rights except as otherwise
specified in that agreement.
The Rights may have certain antitakeover effects. The Rights may cause
substantial dilution to the interest in the Company held by a person or group
that attempts to acquire the Company without conditioning the offer on acquiring
a substantial number of Rights. The purpose of the Rights is to encourage
potential acquirors to negotiate with Company's Board before attempting a
takeover and to give the Board leverage in negotiating on behalf of all
stockholders of the Company the terms of any proposed takeover. The Rights may,
but are not intended to, deter takeover proposals.
As provided for in the Rights Agreement, the disinterested directors of the
Board have determined that the Offer is a Qualifying Offer. Accordingly, because
the amount and form of the Merger Consideration are the same as the amount and
form of consideration being offered in the Offer, the terms of the Rights
Agreement allowing for the exercise of the Rights in connection with a tender
offer are inapplicable to the transactions contemplated by the Offer or the
Merger.
Litigation. On Wednesday, November 23, 1994, one stockholder filed a
putative class action and derivative actions suit in the District Court, County
of Boulder, State of Colorado against the Company, certain of its officers and
directors and Parent. The case is captioned Bruce Livergood v. Synergen, Inc.,
et al., Case No. 84-CV1347 (Dist. Ct., Boulder County Ct., Colo., Nov. 23,
1994). The complaint alleges, among other things, that certain of the defendants
breached their fiduciary duties and committed fraud by omission with respect to
the transactions contemplated by the Offer and the Merger. Plaintiff seeks an
injunction, both preliminarily and permanently, enjoining the consummation of
the Offer and the Merger or, in the alternative, an award of compensatory and
punitive damages.
On Tuesday, November 29, 1994, two stockholders filed a putative class
action and derivative action suit in the District Court, County of Boulder,
State of Colorado against the Company, certain of its officers and directors and
Parent. The case is captioned John Weld, Sr. and Gerald Topiel v. Amgen, Inc.,
et al., Case No. 94-CV1370 (Dist. Ct., Boulder County Ct., Colo., Nov. 29,
1994). The complaint alleges, among other things, that certain of the defendants
breached their fiduciary duties and committed fraud by omission with respect to
the transactions contemplated by the Offer and the Merger. Plaintiffs seek an
injunction, both preliminarily and permanently, enjoining the consummation of
the Offer and the Merger or, in the alternative, an award of compensatory and
punitive damages.
The foregoing summaries, as well as the summary of the litigation captioned
Anna Stanley and Len Kahn v. Larry Soll, et al., set forth in the Schedule
14D-9, are qualified in their entirety by reference to the respective complaints
attached hereto as Exhibits 99.3-99.5, which complaints are incorporated herein
by this reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
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Exhibit 2.1* Agreement and Plan of Merger, dated as of November 17, 1994, among Parent,
Purchaser and the Company.
Exhibit 10.1* Confidentiality Agreement between the Company and Amgen Inc. dated August
22, 1994.
Exhibit 10.2* Form of Indemnification Agreement between the Company and each of its
executive officers and directors.
Exhibit 10.3* Employment Agreement dated as of May 19, 1994, Amendment to Executive
Officer Employment Agreement dated October 1, 1994, and Addendum No. 1 to
Employment Agreement dated as of October 26, 1994, between Larry Soll and
the Company.
Exhibit 10.4* Employment Agreement dated May 19, 1994, and Addendum No. 1 to Executive
Officer Employment Agreement dated as of October 26, 1994, between Gregory
Abbott and the Company.
</TABLE>
3
<PAGE> 4
<TABLE>
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Exhibit 10.5* Employment Agreement dated April 8, 1993, and Addendum No. 1 to Executive
Officer Employment Agreement dated as of October 26, 1994, between Mark
Young and the Company.
Exhibit 10.6* Employment Agreement dated April 8, 1993, and Addendum No. 1 to Executive
Officer Employment Agreement dated as of October 26, 1994, between Robert
Thompson and the Company.
Exhibit 10.7* Employment Agreement dated April 8, 1993, and Addendum No. 1 to Executive
Officer Employment Agreement dated as of October 26, 1994, between Kenneth
Collins and the Company.
Exhibit 10.8* Form of Employment Agreement between the Company and its vice presidents
and treasurer.
Exhibit 20.1* The Company's Information Statement pursuant to Section 14(f) of the
Securities Exchange Act of 1934 and Rule 14f-1 thereunder.
Exhibit 20.2* Copy of Letter to Stockholders, dated November 23, 1994.
Exhibit 99.1* Press Release issued by the Company and Parent on November 18, 1994.
Exhibit 99.2* Opinions of Morgan Stanley & Co. Incorporated and Alex. Brown & Sons
Incorporated, dated November 17, 1994.
Exhibit 99.3 Complaint in an action in the Court of Chancery of the State of Delaware
in and for New Castle County styled Anna Stanley and Len Kahn v. Larry
Soll et al., Case No. 13892 (November 18, 1994).
Exhibit 99.4 Complaint in an action in the District Court, County of Boulder, State of
Colorado styled Bruce Livergood v. Synergen, Inc. et al., Case No.
94-CV1347 (November 23, 1994).
Exhibit 99.5 Complaint in an action in the District Court, County of Boulder, State of
Colorado styled John Weld, Sr. and Gerald Topiel v. Amgen Inc., et al.,
Case No. 94-CV1370 (November 29, 1994).
</TABLE>
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* Previously filed.
4
<PAGE> 5
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: December 2, 1994 SYNERGEN, INC.
By: /s/ KENNETH J. COLLINS
-------------------------------
KENNETH J. COLLINS,
EXECUTIVE VICE PRESIDENT,
FINANCE AND ADMINISTRATION
5
<PAGE> 6
EXHIBIT INDEX
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<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------ ----------- ------------
<S> <C> <C>
2.1* Agreement and Plan of Merger, dated as of November 17, 1994, among
Parent, Purchaser and the Company....................................
10.1* Confidentiality Agreement between the Company and Amgen Inc. dated
August 22, 1994......................................................
10.2* Form of Indemnification Agreement between the Company and each of its
executive officers and directors.....................................
10.3* Employment Agreement dated as of May 19, 1994, Amendment to Executive
Officer Employment Agreement dated October 1, 1994, and Addendum No.
1 to Employment Agreement dated as of October 26, 1994, between Larry
Soll and the Company.................................................
10.4* Employment Agreement dated May 19, 1994, and Addendum No. 1 to
Executive Officer Employment Agreement dated as of October 26, 1994,
between Gregory Abbott and the Company...............................
10.5* Employment Agreement dated April 8, 1993, and Addendum No. 1 to
Executive Officer Employment Agreement dated as of October 26, 1994,
between Mark Young and the Company...................................
10.6* Employment Agreement dated April 8, 1993, and Addendum No. 1 to
Executive Officer Employment Agreement dated as of October 26, 1994,
between Robert Thompson and the Company..............................
10.7* Employment Agreement dated April 8, 1993, and Addendum No. 1 to
Executive Officer Employment Agreement dated as of October 26, 1994,
between Kenneth Collins and the Company..............................
10.8* Form of Employment Agreement between the Company and its vice
presidents and treasurer.............................................
20.1* The Company's Information Statement pursuant to Section 14(f) of the
Securities Exchange Act of 1934 and Rule 14f-1 thereunder............
20.2* Copy of Letter to Stockholders, dated November 23, 1994..............
99.1* Press Release issued by the Company and Parent on November 18,
1994.................................................................
99.2* Opinions of Morgan Stanley & Co. Incorporated and Alex. Brown & Sons
Incorporated, dated November 17, 1994................................
99.3* Complaint in an action in the Court of Chancery of the State of
Delaware in and for New Castle County styled Anna Stanley and Len
Kahn v. Larry Soll et al., Case No. 13892 (November 18, 1994)........
99.4* Complaint in an action in the District Court, County of Boulder,
State of Colorado styled Bruce Livergood v. Synergen, Inc. et al.,
Case No. 94-CV1347 (November 23, 1994)...............................
99.5* Complaint in an action in the District Court, County of Boulder,
State of Colorado styled John Weld, Sr. and Gerald Topiel v. Amgen
Inc., et al., Case No. 94-CV1370 (November 29, 1994).................
</TABLE>
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* Previously filed.
<PAGE> 1
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ---------------------------------------X
ANNA STANLEY and :
LEN KAHN :
:
Plaintiffs, :
:
- against - :
:
LARRY SOLL, GREGORY B. ABBOTT, :
ROBERT C. THOMPSON, ARTHUR H. :
HAYES, DAVID I. HIRSH, BARRY :
MACTAGGART, GLENN S. UTT, :
ROBERT F. HENDRICKSON :
and SYNERGEN INC., :
:
Defendants. :
- ---------------------------------------X
C.A. NO. 13892
CLASS ACTION COMPLAINT
----------------------
Plaintiffs, by their attorneys, allege upon personal knowledge as to
their own acts and upon information and belief as to all other matters, as
follows:
1. Plaintiffs bring this action individually and as a class action
on behalf of all persons, other than defendants, who own the securities of
Synergen, Inc. ("Synergen" or the "Company") and who are similarly situated
(the "Class") for injunctive and other relief. Plaintiffs seek the injunctive
relief herein, inter alia, to enjoin the consummation of a proposed offer (the
"Offer") announced on November 18, 1994, pursuant to which Amgen Inc. ("Amgen")
will acquire Synergen for approximately $239 million cash, or $9.25 a share of
Synergen stock. Shares not purchased in the tender offer will be acquired in a
subsequent merger at the same price after the merger. Alternatively, in the
event that the transaction is consummated, plaintiffs seek to recover damages
caused by the breach of fiduciary duties owed by the individual
<PAGE> 2
defendants.
2. The proposed transaction and the acts of the individual defendants,
as more particularly alleged herein, constitute a breach of the defendants'
fiduciary duties to plaintiffs and the Class.
3. The Offer is being advanced at an unfair price and does not
constitute a maximization of stockholder value.
4. The individual defendants' authorization to engage in the Offer was
given in breach of their fiduciary duties owed to Synergen's stockholders to
take all necessary steps to ensure that the stockholders will receive the
maximum value realizable for their shares in any sale of the Company. In the
context of this action, defendants were required to take all reasonable steps
to assure the maximization of stockholder value, including the implementation
of a bidding mechanism to foster a fair auction of the Company to the highest
bidder or the exploration of strategic alternatives that will return greater or
equivalent short-term value to plaintiffs and the Class.
PARTIES
-------
5. Plaintiffs are and, at all relevant times, have been the owner of
shares of Synergen common stock.
6. Synergen is a corporation duly organized and existing under the
laws of the State of Delaware. The Company is a biopharmaceutical company
engaged in the discovery, development and manufacture of protein-based
pharmaceuticals. The Company's research is targeted at products for
inflammatory diseases and
<PAGE> 3
neurological disorders. Synergen maintains its principal executive offices at
1885 33rd Street, Boulder, Colorado. Synergen has approximately 25,767,289
shares of common stock outstanding and approximately 2,550 stockholders of
record. Synergen stock trades on the NASDAQ national system.
7. Defendant Larry Soll ("Soll") is Chairman of the
Board of Directors. Soll's annual compensation is $163,334.
8. Defendant Gregory B. Abbott ("Abbott") is President, Chief
Executive Officer, and a director of Synergen. Abbott's annual compensation is
$197,414.
9. Defendant Robert C. Thompson ("Thompson") is the Executive Vice
President and a director of Synergen. Thompson's annual compensation is
$197,914.
10. Defendants Arthur H. Hayes, David I. Hirsh, Barry Mactaggart,
Glenn S. Utt and Robert F. Hendrickson are directors of Synergen.
11. The defendants named in paragraphs 7 through 10 are hereinafter
referred to as the "Individual Defendants."
12. Because of their positions as officers/directors of the Company,
the Individual Defendants owe a fiduciary duty of loyalty and due care to
plaintiffs and the other members of the Class.
13. Each defendant herein is sued individually as a conspirator and
aider and abettor, as well as in his capacity as an officer and/or director of
the Company, and the liability of each
<PAGE> 4
arises from the fact that he has engaged in all or part of the unlawful acts,
plans, schemes, or transactions complained of herein.
CLASS ACTION ALLEGATIONS
------------------------
14. Plaintiffs bring this action in their own behalf and as a class
action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
all stockholders of the Company, except defendants herein and any person, firm,
trust, corporation, or other entity related to or affiliated with any of the
defendants, who will be threatened with injury arising from defendants' actions
as is described more fully below.
15. This action is properly maintainable as a class action.
16. The class is so numerous that joinder of all members is
impracticable. The Company has approximately 2,550 stockholders of record.
17. There are questions of law and fact common to the Class including,
inter alia, whether:
a. the proposed offer is grossly unfair to Synergen's public
stockholders;
b. defendants have engaged and are continuing to prevent
plaintiffs and the Class from receiving the maximum value per share that could
be received in an unfettered market for control;
c. defendants willfully and wrongfully failed or
<PAGE> 5
refused to obtain or attempt to obtain a purchaser for the assets of Synergen
at a price higher than the tender offer;
d. defendants have breached or aided and abetted the breach of
the fiduciary and other common law duties owed by them to plaintiffs and the
members of the Class; and
e. plaintiffs and the other members of the Class would be
irreparably damaged were the transaction complained of herein consummated.
18. Plaintiffs are committed to prosecuting the action and have
retained competent counsel experienced in litigation of this nature.
Plaintiffs' claims are typical of the claims of the other members of the Class
and plaintiffs have the same interests as the other members of the Class.
Plaintiffs are adequate representatives of the Class.
19. The prosecution of separate actions by individual members of the
Class would create the risk of inconsistent or varying adjudications with
respect to individual members of the Class that would establish incompatible
standards of conduct for defendants, or adjudications with respect to
individual members of the Class that would as a practical matter be dispositive
of the interests of the other members not parties to the adjudications or
substantially impair or impede their ability to protect their interests.
20. The defendants have acted, or refused to act, on grounds generally
applicable to, and causing injury to, the Class and, therefore, preliminary and
final injunctive relief on behalf
<PAGE> 6
of the Class as a whole is appropriate.
SUBSTANTIVE ALLEGATIONS
-----------------------
21. By the acts, transactions, and courses of conduct alleged
herein, defendants, individually and as part of a common plan and scheme and/or
aiding and abetting one another in total disregard of their fiduciary duties,
are attempting to deprive plaintiffs and the Class unfairly of their investment
in Synergen.
22. On November 18, 1994, the Dow Jones News Wire reported that
Synergen had entered into a definitive merger agreement for Amgen to acquire
Synergen for approximately $239 million cash or $9.25 a share of Synergen
stock. Under the terms of the merger agreement, Amgen has indicated that it
will begin a cash tender offer no later than November 29, 1994 for all
outstanding shares of Synergen. Shares not purchased in the tender offer will
be acquired in a subsequent merger at the same price after the completion of
the tender Offer.
23. Defendants chose to pursue this transaction at a time when
Synergen is believed to be poised to significantly increase future earnings and
when its value is believed to be far in excess of the consideration offered in
the Offer.
24. Indeed, Synergen's revenues have increased over last year's
results. For the second quarter of 1994, Synergen reported revenues of
$5,213.200, as compared to $3,636,100 for the same period in 1993, an increase
of approximately 30 percent.
25. Defendants' knowledge and economic power and that of the
investing public is unequal because they are in possession of
<PAGE> 7
material non-public information concerning the Company's assets, businesses,
and future prospects. This disparity makes it and [sic] inherently unfair for
them to transfer ownership of Synergen from its public stockholders to Amgen
at such an unfair and grossly inadequate price.
26. The consideration to be paid to the public shareholders in the
Offer is grossly unfair, inadequate, and substantially below the fair or
inherent value of the Company. The intrinsic value of the equity of Synergen
is materially greater than the consideration being considered, taking into
account Synergen's asset value, liquidation value, its expected growth, the
strength of its business, and its revenues and cash flow and earnings power.
27. Defendants, in violation of their fiduciary obligations to
maximize stockholder value, have not considered seriously other potential
purchasers of Synergen or its stock in a manner designed to obtain the highest
possible price for Synergen's public stockholders.
28. The proposed Offer is wrongful, unfair, and harmful to
Synergen public stockholders, and will deny Class members their right to share
proportionately in the true value of Synergen's valuable assets, profitable
business, and future growth in profits and earnings, while usurping the same
for the benefit of the defendants at an unfair and inadequate price.
29. By reason of all of the foregoing, defendants herein have
participated in unfair dealing toward plaintiffs and the other
<PAGE> 8
members of the Class and have engaged in and substantially assisted and aided
and abetted each other in breach of the fiduciary duties owed by them to the
Class.
30. Defendants have violated fiduciary and other common law duties
owed to the plaintiffs and the other members of the Class in that they have not
and are not exercising independent business judgment, and have acted and are
acting to the detriment of the Class.
31. As a result of defendants' action, plaintiffs and the Class have
been and will be damaged by the breaches of fiduciary duty, and, therefore,
plaintiffs and the Class will not receive the fair value of Synergen's assets
and businesses.
32. Unless enjoined by this Court, defendants wil continue to breach
their fiduciary duties owed to plaintiffs and the Class, and will succeed in
their plan to exclude plaintiffs and the Class from the fair proportionate
share of Synergen's valuable assets and businesses, all to the irreparable harm
of the Class.
33. Plaintiffs and the Class have no adequate remedy of law.
WHEREFORE, plaintiffs pray for judgment and relief as follows:
a. declaring that this lawsuit is properly maintainable as a class
action and certifying plaintiffs as representatives of the Class;
b. declaring that the defendants and each of them have committed or
aided and abetted a group abuse of trust and have
<PAGE> 9
breached their fiduciary duties to plaintiffs and the other members of the
Class;
c. preliminarily and permanently enjoining defendants and their
counsel, Agents, employees, and all persons acting under, in concert with, or
for them, from proceeding with, consummating or closing the transaction;
d. in the event the transaction is consummated, rescinding it and
setting it aside;
e. ordering defendants, jointly and severally, to account to
plaintiffs and the Class for all profits realized and to be realized by them as
a result of the transaction complained of and, pending such accounting, to hold
such profits in a constructive trust for the benefit of plaintiffs and other
members of the Class;
f. ordering defendants to permit a stockholders' committee
consisting of class members and their representatives to participate in any
process undertaken in connection with the sale of the Company in order to
ensure a fair procedure, adequate procedural safeguards, and independent input
by plaintiffs and the Class in connection with any transaction for the public
shares or Synergen;
g. awarding compensatory damages against defendants, jointly and
severally, in an amount to be determined at trial, together with prejudgment
interest at the maximum rate allowable by law;
h. awarding plaintiffs and the Class their costs
<PAGE> 10
and disbursements and reasonable allowances for plaintiffs' counsel and experts'
fees and expenses; and
i. granting such other and further relief as may be just and
proper.
Dated: November 18, 1994
Respectfully submitted,
ROSENTHAL MONHAIT GROSS
& GODDESS, P.A.
By: /s/ [Name illegible]
---------------------------------
First Federal Plaza, Suite 214
P.O. Box 1070
Wilmington, Delaware 19899
(302) 656-4433
Attorneys for Plaintiffs
Of Counsel:
WECHSLER SKIRNICK HARWOOD
HALEBIAN & FEFFER
Robert I. Harwood, Esq.
555 Madison Avenue
New York, New York 10022
(212) 935-7400
GARWIN BRONZAFT GERSTEIN
& FISHER
Scott W. Fisher, Esq.
1501 Broadway
New York, New York 10036
(212) 398-0055
<PAGE> 1
DISTRICT COURT, COUNTY OF BOULDER, STATE OF COLORADO
CASE NO. 94CV1347 Div. 3.
- --------------------------------------------------------------------------------
VERIFIED CLASS ACTION AND DERIVATIVE ACTION COMPLAINT AND JURY DEMAND
- --------------------------------------------------------------------------------
BRUCE LIVERGOOD on Behalf of himself and all others Similarly Situated, and
Derivatively on Behalf of Synergen, a Delaware Corporation
Plaintiff,
v.
SYNERGEN, INC., AMGEN, INC., ROBERT F. HENDRICKSEN, GREGORY B. ABBOTT, LARRY
SOLL, ROBERT C. THOMPSON, DAVID I. HIRSH, ARTHUR HAYS JR., KENNETH J. COLLINS,
BARRY MAC TAGGART, GLENN S. UTT JR.
and
SYNERGEN, INC., a Delaware Corporation, a Nominal Defendant
Defendants.
- --------------------------------------------------------------------------------
Plaintiff, by and through his attorneys, hereby complains and alleges as
follows:
I. PARTIES
-------
1. Plaintiff Bruce Livergood is and was at the time of the commission
of the wrongful acts complained of herein a shareholder of Synergen inc. [sic]
On May 31, 1990, plaintiff purchased 8,000 shares of defendant Synergen, Inc.
("Synergen") at the price of $13.50 per share. Mr. Livergood has held these
shares continuously since that date. Plaintiff brings this action derivitively
[sic] on behalf of and for the benefit of Synergen (or it's [sic] successor),
named as a nominal defendant herein as a class action for the other minority
shareholders of Synergen.
<PAGE> 2
2. Defendant Synergen is a Delaware corporation with its principal
place of business in Boulder, Colorado. Synergen is a biopharmaceutical
company engaged in the discovery, development and manufacture of protein-based
pharmaceuticals.
3. Defendant Amgen, Inc. is a corporation with its principal place of
business in Thousand Oaks, California. Amgen, the world's largest
biotechnical company, discovers, develops, manufactures and markets human
therapeutics based upon advanced cellular and molecular biology.
4. Defendant Larry Soll is at all times relevant hereto, the Chairman
of the Board and Chief Executive Officer of Synergen.
5. Defendants Robert F. Hendricksen, Gregory B. Abbott, Robert C.
Thompson, David I. Hirsh, Arthur Hays, Jr., Kenneth J. Collins, Barry Mac
Taggart and Glenn S. Utt, Jr. are at all times relevant hereto, officers and\or
directors of Synergen.
6. The defendants referenced in paragraphs 4 and 5 above will be
referred to collectively herein as the "Individual Defendants."
7. Because of the Individual Defendants' positions with Synergen as
officers and directors, said individuals are in a fiduciary relationship with
plaintiffs and other public stockholders of Synergen and owe plaintiffs and
other members of the Class the highest obligations of fidelity, good faith,
prudence, fair dealing, and full, candid and adequate disclosure.
II. CLASS ACTION AND DERIVATIVE ALLEGATIONS
---------------------------------------
<PAGE> 3
8. Plaintiffs bring all claims herein as class claims and or
derivative claims pursuant to Rules 23 and 23.1 of the Colorado Rules of Civil
Procedure. The requirements of subparts 23(a) and (b)(1), (b)(2) and (b)(3)
are met with respect to the class defined below.
9. The class consists of all Synergen securities holders or their
successors in interest. Excluded from the class are the named defendants and
any person, firm, trust, corporation, or other entity related to or affiliated
with any of the defendants.
10. Synergen is a publicly traded company with about 25.9 million
shares outstanding. The members of the class are so numerous that joinder of all
members is impracticable. The exact number of class members can be determined
by appropriate discovery.
11. There are common questions of law which predominate over questions
affecting any individual class members, including the following:
a. Whether defendants have engaged in conduct constituting
unfair dealings to the detriment of the class;
b. Whether the transaction is grossly unfair to the class;
c. Whether the transaction is unlawful or fraudulent regarding
the class;
d. Whether defendants are engaging in self-dealing;
<PAGE> 4
e. Whether plaintiff and the class would be irreparably damaged
were the transactions complained of consummated; and
f. Whether defendants have breached or aided and abetted the
breach of a fiduciary duty and other common law duties owed
by them to plaintiffs and other members of the class.
12. The prerequisites to maintaining a class action for injunctive
relief exist:
a. If injunctive relief is not granted, great harm and
irreparable injury to plaintiffs and the members of the
class will continue.
b. Plaintiff and the members of the class have no adequate
remedy at law for the injuries which are threatened, in
that absent action from this court, a proposed transaction
may be consummated to the detriment of the class members.
13. Plaintiff has the same interests in this matter as all other
members of the class, and their [sic] claims are typical of all members of the
class.
14. Plaintiff is committed to pursuing this action and have [sic] retained
competent counsel experienced in class action litigation. Plaintiff will fairly
and adequately represent the interests of the class members.
15. The prosecution of separate actions by members of the class would
create a risk of establishing incompatible standards
<PAGE> 5
of conduct for the defendants -- for example, one court might decide that
defendants' actions were a breach of fiduciary duty, whereas another court
might decide that those same actions were not. Individual actions may, as a
practical matter, be dispositive of the interests of the class.
16. Defendants' actions are generally applicable to the class as a
whole, and plaintiff seeks, inter alia, equitable remedies with respect to the
class as a whole.
17. The common questions of law and fact enumerated above predominate
over questions affecting only individual members of the class, and a class
action is the superior method for fair and efficient adjudication of the
controversy. The likelihood that individual members of the class will
prosecute separate actions is remote due to the time and expense necessary to
conduct such litigation. To plaintiff's knowledge, no similar litigation is
currently pending by other members of the class. Plaintiff's counsel, highly
experienced in class actions, foresee little difficulty in the management of
this case as a class action.
18. Plaintiff has made no attempt to obtain the action sought in this
lawsuit though a demand upon the Board of Directors in that the proposed
transaction has already been approved by the Board of Directors of Synergen and
any demand would therefor be futile.
III. GENERAL ALLEGATIONS
-------------------
19. In late 1992, Synergen was engaged in the development of a drug
called Antril. Antril was an interleukin-1 receptor
<PAGE> 6
antagonist (IL-1ra) intended for use in the treatment of sepsis. In reliance
upon several public statements concerning the viability of Antril, stock rose
as high as $65.372 per share.
20. On February 22, 1993, Synergen announced that, contrary to previous
publicity, Antril's benefits were limited to only patients who had the highest
risk of death from sepsis. Due to that news, Synergen stock plummeted to
$13.50 per share, a 67% drop in price.
21. Worse yet, on July 19, 1994, Synergen announced another failure of
Antril. Previously believed to aid mortally ill patients; "double blind" tests
of Antril showed little or no improvement upon patients who were administered a
placebo. Stock in Synergen dipped to $4.50 per share. At that time, defendant
Abbott declared Synergen a "good candidate for a merger."
22. At the same time, Antril was by no means Synergen's only product.
Synergen was also conducting clinical trials for a drug called Ciliary
Neurotrophic Factor ("CNTF"), a possible cure for Lou Gehrig's disease. The
possibilities of success of CNTF are hopeful.
23. In addition to its interest in CNTF, Amgen has stated that it is
"particularly enthusiastic" about Glial Derived Neutrophic [sic] Factor
("GDNF"), which is in development as a cure for Parkinson's disease.
Synergen is actively engaged in the development of this product.
24. Synergen also possesses some $120 million in cash, and a
manufacturing plant in Boulder, Colorado worth at least $45
<PAGE> 7
million. With a reduced work force, the possibilities of Synergen's recovery
are good.
25. On November 18, 1994, Amgen agreed to buy Synergen for the sum of
$251 million, or $9.25 per share. The sum represents one-eighth of Synergen's
peak share price. The deal is valued at approximately $250 million, despite the
fact that Synergen's hard assets alone as of September 30, 1994 were valued at
approximately $180 million, and Synergen possesses tax loss carry-forwards of
approximately $200 million. Amgen will commence a cash tender offer for
Synergen no later than November 29, 1994, and the transaction is expected to be
concluded by December 31, 1994 (the "Proposed acquisition").
26. The defendants' failure to reveal material facts regarding Synergen's
financial status, and the true prospects and/or status regarding GDNF, Tumor
Necrosis Factor Binding Protein ("TNFbp") and CNTF which is in phase three
clinical trails [sic] with the results to be announced in the upcoming quarter,
would result in grossly inadequate consideration being paid to class members
in the Proposed Acquisition. As a result of the defendants' fraudulent
nondisclosures, the Proposed Acquisition price would be unconscionable, unfair
and grossly inadequate for the following reasons:
(a) the intrinsic value of Synergen's common stock is materially in
excess of the amount offered for those securities in the Proposed Acquisition
giving due consideration to: (i) the value of those drugs currently in
Synergen's "pipeline"; and (ii)
<PAGE> 8
Synergen's present and projected net asset value, and tax benefits; potential
revenue and earnings.
(b) the consideration agreed upon did not result from an appropriate
consideration of the value of Synergen because the Individual Defendants
approved the Proposed Acquisition on the terms set forth in the Agreement
without adopting proper procedures for Synergen's value to be accurately
ascertained through open bidding or at least a "market check" mechanism.
27. The Defendants have thus far failed to announce any active auction or
open bidding procedures best calculated to maximize shareholder value and have,
instead, agreed to the definitive agreement which will only serve to inhibit
the maximization of shareholder value. Synergen's stockholders will have no
effective option other than to accept the unfair terms proposed in the
Acquisition agreement.
28. The provisions of C.R.S. Section 7-113-102, Section 7-113-103, and
Section 7-113-201 et. seq. are inapplicable to this action because the proposed
merger is unlawful or fraudulent with regard to the class.
FIRST CLAIM FOR RELIEF (BREACH OF FIDUCIARY DUTY)
------------------------------------------------
29. The General Allegations are incorporated herein by this reference.
30. Synergen and the individual defendants, by virtue of their positions
over the plaintiff class, have a duty of fidelity, good faith, prudence, fair
dealing, and full disclosure.
<PAGE> 9
31. The Defendants, aided and abetted by Amgen, have violated their
fiduciary duties to Synergen and its public stockholders in that they have
failed to maximize stockholder value by failing to reveal material information
regarding certain drugs in Synergen's pipeline, failing to apprise the market
of the real benefits of Synergen's tax loss carry-forwards, failing to
actively pursue the acquisition of Synergen by other companies or conducting an
adequate market check and otherwise failing to take other steps to protect the
interests of the class.
32. As a result of defendants' breach of fiduciary duty, plaintiffs
have suffered damages which will be proved at trial.
SECOND CLAIM FOR RELIEF (FRAUD BY OMISSION)
------------------------------------------
33. The General Allegations are incorporated herein by this reference.
34. Defendants had a duty to disclose the true prospects for GDNF,
CTNF, TNFbp and certain other drugs in Synergen's "pipeline," as well as the
true economic and tax benefits to be derived by Amgen as a result of the
Proposed Acquisition, all of which were material facts in relation to the
transaction.
35. Defendants failed to disclose the facts with the intent of
creating a false impression of the actual facts in the minds of the plaintiff
class.
36. Defendants failed to disclose the facts with the intent that the
plaintiff class would take a course of action they otherwise would not have
taken, that is, refused to accept the tendered merger price.
<PAGE> 10
37. While the plaintiff class has not approved the merger, it may do so,
relying upon facts and impressions which are inaccurate.
38. The plaintiff class's reliance upon the misimpression is justified.
39. As a result of the plaintiff class's reliance, the plaintiff class
will suffer damages, which will be proved at trial.
THIRD CLAIM FOR RELIEF (INJUNCTION)
-----------------------------------
40. The General Allegations are incorporated herein by this reference.
41. Plaintiff class is entitled to an injunction, both preliminarily and
permanently enjoining the Acquisition of Synergen by Amgen.
42. The plaintiff class has no adequate remedy at law and will suffer
irreparable damage unless defendants are enjoined from breaching their
fiduciary duties and from carrying out the aforesaid plan and scheme.
WHEREFORE, plaintiff prays for the following relief:
1. That the court certify this action as a class action pursuant to Rule
23 and\or Rule 23.1 of the Colorado Rules of Civil Procedure.
2. That the court issue an injunction both preliminarily and permanently
enjoining the consummation of the Proposed Acquisition of Synergen by Amgen.
<PAGE> 11
3. Alternatively, that the court award the plaintiff class compensatory
and punitive damages which will be proved at trial.
4. That the court award cost disbursements, attorney fees, and such other
relief as the court deems just and equitable.
PLAINTIFFS REQUEST TRIAL TO A JURY ON ALL ISSUES.
Respectfully submitted this 23rd day of November, 1994.
DYER DONNELLY & LILLEY
By /s/ F. James Donnelly
---------------------------------
F. James Donnelly #12243
825 Logan Street
Denver, CO 80203-3114
(303) 861-3003
LAW OFFICES OF JOSEPH E. WEISS
319 Fifth Avenue
New York, NY 10016
(212) 532-4171
William S. Lerach, Esq.
MILBERG WEISS BERSHAD HYNES
& LERACH
600 West Broadway, Suite 1800
San Diego, CA 92101-5050
(619) 231-1058
ATTORNEYS FOR PLAINTIFFS
<PAGE> 12
DISTRICT COURT, COUNTY OF BOULDER, STATE OF COLORADO
CASE NO.
- ----------------------------------------------------------------------------
VERIFICATION
- ----------------------------------------------------------------------------
BRUCE LIVERGOOD on Behalf of Himself and all others Similarly Situated, and
Derivatively on Behalf of Synergen, a Delaware Corporation
Plaintiff,
v.
SYNERGEN, INC., AMGEN, INC., ROBERT F. HENDRICKSEN, GREGORY B. ABBOTT, LARRY
SOLL, ROBERT C. THOMPSON, DAVID I. HIRSH, ARTHUR HAYS, JR., KENNETH J. COLLINS,
BARRY MAC TAGGART, GLENN S. UTT JR.
and
SYNERGEN, INC., a Delaware Corporation, A Nominal Defendant
Defendants.
- ----------------------------------------------------------------------------
F. James Donnelly hereby states and deposes as follows:
1. I am one of the Plaintiff's attorneys in this case.
2. I have read the Verified Class Action and Derivative Action
Complaint and Jury Demand and have along with my co-counsel investigated the
facts alleged therein.
3. Upon information and belief all factual allegations stated are true
and correct.
/s/ F. JAMES DONNELLY
--------------------------
Dated: Nov. 23, 1994 F. James Donnelly
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
Subscribed and sworn to this 23rd day of November, 1994 by F. James Donnelly.
<PAGE> 13
Witness my hand and official seal. My commission expires .
/s/ CARRIE J. GORDON
----------------------------
Notary Public
<PAGE> 1
DISTRICT COURT, COUNTY OF BOULDER, STATE OF COLORADO
CASE NO.
- ------------------------------------------------------------------------------
VERIFIED CLASS ACTION AND DERIVATIVE ACTION COMPLAINT AND JURY DEMAND
- ------------------------------------------------------------------------------
JOHN WELD, SR. and GERALD TOPIEL, on Behalf of Themselves and all others
Similarly Situated, and Derivatively on Behalf of Synergen, a Delaware
Corporation,
Plaintiffs,
v.
AMGEN, INC., ROBERT F. HENDRICKSEN, GREGORY B. ABBOTT, LARRY SOLL, ROBERT C.
THOMPSON, DAVID I. HIRSH, ARTHUR HAYS JR., KENNETH J. COLLINS, BARRY MAC
TAGGART, GLENN S. UTT JR.
and
SYNERGEN, INC., a Delaware Corportion, a Nominal Defendant.
- ------------------------------------------------------------------------------
Plaintiffs, by and through their attorneys, hereby complain and allege
as follows:
I. PARTIES
-------
1. Plaintiff John Weld, Sr. is and was at the time of the commission
of the wrongful acts complained of herein a shareholder of Synergen Inc.
Plaintiff brings this action derivatively on behalf of and for the benefit of
Synergen (or its successor), named as a nominal defendant herein, as a class
action for the other minority shareholders of Synergen.
2. Plaintiff Gerald Topiel is and was at the time of the commission of
the wrongful acts complained of herein a shareholder of Synergen, Inc.
Plaintiff brings this action derivatively on behalf of and for the benefit of
Synergen (or its
<PAGE> 2
successor), named as a nominal defendant herein, as a class action for the
other minority shareholders of Synergen.
3. Defendant Synergen is a Delaware corporation with its principal
place of business in Boulder, Colorado. Synergen is a biopharmaceutical
company engaged in the discovery, development and manufacture of protein-based
pharmaceuticals.
4. Defendant Amgen, Inc. ("Amgen") is a corporation with its principal
place of business in Thousand Oaks, California. Amgen, the world's largest
biotechnical company, discovers, develops, manufactures and markets human
therapeutics based upon advanced cellular and molecular biology.
5. Defendant Larry Soll is at all times relevant hereto, the Chairman
of the Board and Chief Executive Officer of Synergen.
6. Defendants Robert F. Hendrickson, Gregory B. Abbott, Robert C.
Thompson, David I. Hirsh, Arthur Hays, Jr., Kenneth J. Collins, Barry Mac
Taggart and Glenn S. Utt, Jr. are at all times relevant hereto, officers and\or
directors of Synergen.
7. The defendants referenced in paragraphs 4 and 5 above will be
referred to collectively herein as the "Individual Defendants."
8. Because of the Individual Defendants' positions with Synergen as
officers and directors, said individuals are in a fiduciary relationship with
plaintiffs and other public stockholders of Synergen and owe plaintiffs and
other members of
<PAGE> 3
the class the highest obligations of fidelity, good faith, prudence, fair
dealing, and full, candid and adequate disclosure.
II. CLASS ACTION AND DERIVATIVE ALLEGATIONS
---------------------------------------
9. Plaintiffs bring all claims herein as class claims and or derivative
claims pursuant to Rules 23 and 23.1 of the Colorado Rules of Civil Procedure.
The requirements of subparts 23(a) and (b)(1), (b)(2) and (b)(3) are met with
respect to the class defined below.
10. The class consists of all Synergen securities holders or their
successors in interest. Excluded from the class are the named defendants and
any person, firm, trust, corporation, or other entity related to or affiliated
with any of the defendants.
11. Synergen is a publicly traded company with about 25.9 million shares
outstanding. The members of the class are so numerous that joinder of all
members is impracticable. The exact number of class members can be determined
by appropriate discovery.
12. There are common questions of law which predominate over questions
affecting any individual class members, including the following:
a. Whether defendants have engaged in
conduct constituting unfair dealings to the
detriment of the class;
b. Whether certain defendants have
breached their fiduciary duties owed by them
to plaintiffs and other members of the Class
<PAGE> 4
by failing and refusing to attempt in good
faith to maximize shareholder value in
connection with the proposed sale of
Synergen;
c. Whether the transaction is grossly
unfair to the Class;
d. Whether the transaction is unlawful
or fraudulent regarding the Class;
e. Whether defendants are engaging in
self-dealing;
f. Whether plaintiffs and the Class
would be irreparably damaged were the
transactions complained of consummated;
g. Whether defendants have breached or
aided and abetted the breach of a fiduciary
duty and other common law duties owed by them
to plaintiffs and other members of the Class;
and
h. Whether plaintiffs and the other
members of the class will be injured by the
Proposed Acquisition, and, if so, what is the
proper remedy and/or measure of damages.
13. The prerequisites to maintaining a class action for injunctive
relief exist:
a. If injunctive relief is not granted,
great harm and irreparable injury to
<PAGE> 5
plaintiffs and the members of the class
will continue.
b. Plaintiffs and the members of the
class have no adequate remedy at law for the
injuries which are threatened, in that absent
action from this court, a proposed transaction
may be consummated to the detriment of the class
members.
14. Plaintiffs have the same interests in this matter as all other
members of the class, and their claims are typical of all members of the class.
15. Plaintiffs are committed to pursuing this action and have retained
competent counsel experienced in class action litigation. Plaintiffs will
fairly and adequately represent the interests of the class members.
16. The prosecution of separate actions by members of the class would
create a risk of establishing incompatible standards of conduct for the
defendants.
17. Defendants' actions are generally applicable to the class as a whole,
and plaintiffs seek, inter alia, equitable remedies with respect to the class
as a whole.
18. The common questions of law and fact enumerated above predominate
over questions affecting only individual members of the class, and a class
action is the superior method for fair and efficient adjudication of the
controversy. Plaintiffs' counsel,
<PAGE> 6
highly experienced in class actions, foresee little difficulty in the
management of this case as a class action.
19. Plaintiffs have made no attempt to obtain the action sought in this
lawsuit though [sic] a demand upon the Board of Directors in that the proposed
transaction has already been approved by the Board of Directors of Synergen and
any demand would therefor be futile.
III. GENERAL ALLEGATIONS
-------------------
20. In late 1992, Synergen was engaged in the development of a drug
called Antril. Antril was an interleukin-1 receptor antagonist (IL-1ra) intended
for use in the treatment of sepsis. In reliance upon several public statements
concerning the viability of Antril, stock rose as high as $65.372 per share.
21. On February 22, 1993, Synergen announced that, contrary to previous
publicity, Antril's benefits were limited to only patients who had the highest
risk of death from sepsis. Due to that news, Synergen stock plummeted to $13.50
per share, a 67% drop in price.
22. Worse yet, on July 19, 1994, Synergen announced another failure of
Antril. Previously believed to aid mortally ill patients; "double blind" tests
of Antril showed little or no improvement upon patients who were administered a
placebo. Synergen stock dipped to $4.50 per share. At that time, defendant
Abbott declared Synergen a "good candidate for a merger."
<PAGE> 7
23. At the time the Antril debacle was announced, Synergen was also
conducting clinical trials for a drug called Ciliary Neurotrophic Factor
("CNTF"), a possible cure for Lou Gehrig's disease. The possibilities of success
of CNTF are hopeful.
24. In addition to its interest in Synergen's development of CNTF,
Amgen has stated that it is "particularly enthusiastic" about Glial Derived
Neutrophic [sic] Factor ("GDNF"), which Synergen is actively developing as a
cure for Parkinson's disease.
25. Synergen also possesses some $120 million in cash, and a
manufacturing plant in Boulder, Colorado worth at least $45 million. Having
reduced its work force, Synergen's possibilities of recovery are good.
26. On November 18, 1994, it was announced that Amgen agreed to buy
Synergen for approximately $250 million, or $9.25 per share. The sum represents
one-eighth of Synergen's peak share price. The deal is valued at approximately
$250 million, despite the fact that Synergen's hard assets alone as of
September 30, 1994 were valued at approximately $180 million, and Synergen
possesses tax loss carry-forwards of approximately $200 million.
27. Amgen will commence a cash tender offer for Synergen no later than
November 29, 1994, and the transaction is expected to be concluded by December
31, 1994 (the "Proposed acquisition").
28. The defendants' failure to reveal material facts regarding
Synergen's financial status, and the true prospects and/or status regarding
GDNP, Tumor Necrosis Factor Binding
<PAGE> 8
Protein ("TNFbp") and CNTF (which is in phase three clinical trials with the
results to be announced in the upcoming quarter), would result in grossly
inadequate consideration being paid to class members in the Proposed
Acquisition. As a result of the defendants' fraudulent nondisclosure, the
Proposed Acquisition price would be unconscionable, unfair and grossly
inadequate for the following reasons:
a. the intrinsic value of Synergen's common stock is
materially in excess of the amount pursuant to the Proposed
Acquisition and fails to give due consideration to: (i) the
value of those drugs currently in Synergen's "pipeline;"
and (ii) Synergern's present and projected net asset value,
tax benefits, potential revenue and earnings.
b. the consideration agreed upon did not result from an
appropriate consideration of the value of Synergen because the
Individual Defendants approved the Proposed Acquisition on the
terms set forth in the Agreement without adopting proper
procedures for Synergen's value to be accurately ascertained
through open bidding or at least a "market check" mechanism.
29. The Defendants have thus far failed to announce any active auction
or open bidding procedures best calculated to
<PAGE> 9
maximize shareholder value and have, instead, agreed to the definitive
agreement which will only serve to inhibit the maximization of shareholder
value. Synergen's stockholders will have no effective option other than to
accept the unfair terms proposed in the Acquisition agreement.
30. The provisions of C.R.S. Section 7-113-102, Section 7-113-103, and
Section 7-113-201 et. seq. are inapplicable to this action because the proposed
merger is unlawful or fraudulent with regard to the class.
FIRST CLAIM FOR RELIEF (BREACH OF FIDUCIARY DUTY)
-------------------------------------------------
31. The General Allegations are incorporated herein by this reference.
32. Synergen and the individual defendants, by virtue of their positions
over the plaintiff class, have a duty of fidelity, good faith, prudence, fair
dealing, and full disclosure.
33. The Defendants, aided and abetted by Amgen, have violated their
fiduciary duties to Synergen and its public stockholders in that they have
failed to maximize shareholder value by failing to reveal material information
regarding certain drugs in Synergen's pipeline, failing to apprise the market
of the real benefits of Synergen's tax loss carry-forwards, failing to actively
pursue the acquisition of Synergen by other companies or conducting an adequate
market check and otherwise failing to take other steps to protect the interests
of the class.
<PAGE> 10
34. As a result of defendants' breach of fiduciary duty, plaintiffs have
suffered damages which will be proven at trial.
SECOND CLAIM FOR RELIEF (FRAUD BY OMISSION)
-------------------------------------------
35. The General Allegations are incorporated herein by this reference.
36. Defendants had a duty to disclose the true prospects for GDNF, CNTF,
TNFbp and certain other drugs in Synergen's "pipeline," as well as the true
economic and tax benefits to be derived by Amgen as a result of the Proposed
Acquisition, all of which were material facts in relation to the Proposed
Acquisition.
37. Defendants failed to disclose the facts with the intent of creating a
false impression of the actual facts in the minds of the plaintiff class.
38. Defendants concealed the facts with the intent that the plaintiff
class would take a course of action they otherwise would not have taken, that
is, refused to accept the tendered merger price.
39. While the plaintiff class has not approved the merger, it may do so,
relying upon facts and impressions which are inaccurate.
40. The plaintiff class's reliance upon the misimpression is justified.
41. As a result of the plaintiff class's reliance, the plaintiff class
will suffer damages, which will be proven at trial.
<PAGE> 11
THIRD CLAIM FOR RELIEF (INJUNCTION)
-----------------------------------
42. The General Allegations are incorporated herein by this
reference.
43. Plaintiff class is entitled to an injunction, both preliminarily
and permanently enjoining the Acquisition of Synergen by Amgen.
44. The plaintiff class has no adequate remedy at law and will suffer
irreparable damage unless defendants are enjoined from breaching their
fiduciary duties and from carrying out the aforesaid plan and scheme.
WHEREFORE, plaintiffs pray for the following relief:
1. That the court certify this action as a class action pursuant to
Rule 23 and\or Rule 23.1 of the Colorado Rules of Civil Procedure.
2. That the court issue an injunction both preliminarily and
permanently enjoining the consummation of the Proposed Acquisition
of Synergen by Amgen.
3. Ordering the individual defendants to carry out their fiduciary
duties to plaintiffs and the other members of the Class by announcing their
intention to:
a. cooperate fully with any entity or person
having a bona fide interest in proposing any transaction
that would maximize shareholder value, including but not
limited to, a full buy-out or takeover of the Company;
<PAGE> 12
b. immediately undertake an appropriate evaluation
of Synergen's worth as a merger/acquisition candidate;
c. take all appropriate steps to enhance Synergen's
value and attractiveness as a merger/acquisition candidate;
d. take all appropriate steps to expose Synergen to
the marketplace, thereby facilitating an active auction of
the Company;
e. act independently so that the interests of the
Company's public shareholders will be protected; and
f. adequately ensure that no conflicts of interest
exist between the individual defendants' own interest and
their fiduciary obligation to maximize shareholder value or,
in the event such conflict exists, to ensure that all
conflicts of interest are resolved in the best interests
of the public shareholders of Synergen.
4. Alternatively, that the court award the plaintiff class
compensatory and punitive damages which will be proven at trial.
5. That the court award cost disbursements, attorney fees, and such
other relief as the court deems just and equitable.
PLAINTIFFS REQUEST TRIAL TO A JURY ON ALL ISSUES.
<PAGE> 13
Respectfully submitted this 29th day of November, 1994.
DYER DONNELLY & LILLEY
By /s/ F. James Donnelly
--------------------------
F. James Donnelly #12243
825 Logan Street
Denver, CO 80203-3114
Telephone: (303) 861-3003
MILBERG WEISS BERSHAD HYNES
& LERACH
William S. Lerach, Esq.
600 West Broadway, Suite 1800
San Diego, CA 92101-5050
Telephone: (619) 231-1058
WOLF HALDENSTEIN ADLER
FREEMAN & HERI
270 Madison Avenue
New York, NY 10016
Telephone: 212/545-4600
LAW OFFICES OF LAWRENCE G. SOICHER
300 Park Avenue, 20th Floor
New York, NY 10022
Telephone: 212/980-7000
LAW OFFICES OF JOSEPH H. WEISS
Joseph H. Weiss, Esq.
319 Fifth Avenue
New York, NY 10016
Telephone: 212/532-4171
ATTORNEYS FOR PLAINTIFFS
<PAGE> 14
DISTRICT COURT, COUNTY OF BOULDER, STATE OF COLORADO
CASE NO.
- -------------------------------------------------------------------------------
VERIFICATION
- -------------------------------------------------------------------------------
JOHN WELD, SR. and GERALD TOPIEL, on Behalf of Themselves and all others
Similarly Situated, and Derivatively on Behalf of Synergen, a Delaware
Corporation,
Plaintiffs,
v.
AMGEN, INC., ROBERT F. HENDRICKSEN, GREGORY B. ABBOTT, LARRY SOLL, ROBERT C.
THOMPSON, DAVID I. HIRSH, ARTHUR HAYS JR., KENNETH J. COLLINS, BARRY MAC
TAGGART, GLENN S. UTT JR.
and
SYNERGEN, INC., a Delaware Corporation, a Nominal Defendant.
- -------------------------------------------------------------------------------
F. James Donnelly hereby states and deposes as follows:
1. I am one of the attorneys for plaintiffs in this case.
2. I have read the Verified Class Action and Derivative Action
Complaint and Jury Demand and have, along with my co-counsel, investigated
the facts alleged therein.
3. Upon information and belief, all factual allegations stated therein
are true and correct.
DATED this 29th day of November, 1994.
/s/ F. JAMES DONNELLY
------------------------
F. James Donnelly
<PAGE> 15
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
Subscribed and sworn to before me this 29th day of November, 1994, by
F. James Donnelly.
My Commission Expires: 1-24-96
/s/ Joyce A. Bickel
------------------------------------------
Notary Public
