<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE
ACT OF 1934)
Alpharma Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Alpharma Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Statement)
Warrants to Purchase Class A Common Stock, $.20 Par Value Per Share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
Warrants--020813119
Warrants--020813127
- --------------------------------------------------------------------------------
(CUSIP Numbers of Class of Securities)
Jeffrey E. Smith
c/o Alpharma Inc.
One Executive Drive
Fort Lee, New Jersey 07024
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
October 21, 1998
- --------------------------------------------------------------------------------
(Date Tender Offer First Published, Sent or Given to Security Holders
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
Transaction Amount Of Filing Fee
Valuation(1) $2,404.96
$12,024,794
- --------------------------------------------------------------------------------
[_]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount previously paid: _____________ Filing Party: __________________________
Form or registration no.: ___________ Dated filed: ___________________________
Instruction. Ten Copies of this statement, including all exhibits, shall be
filed with the Commission.
- --------
(1) Pursuant to Rule 0-11(b)(2), the filing fee has been determined based on
the average of high and low prices of the Warrants on October 15, 1998.
<PAGE>
EXPLANATORY NOTE
Copies of the Offer to exchange any and all warrants (the "Warrants") to
purchase shares of Class A common stock, $.20 par value per share (the
"Shares") of Alpharma Inc. (the "Company") and the Letter of Transmittal
(which, as amended or supplemented from time to time, collectively constitute
the "Offer") have been filed by the Company as Exhibits to this Issuer Tender
Offer Statement. Unless otherwise indicated, all material incorporated by
reference in this Statement in response to items or sub-items of this
Statement is incorporated by reference to the information contained in the
Offer under the indicated caption.
ITEM 1. SECURITY AND ISSUER.
(a) See "Information Concerning the Company."
(b) See Cover Page of the Offer, "Description of the Capital Stock and the
Warrants" and "Price Range of the Warrants and the Shares; Dividends."
(c) See "Price Range of the Warrants and the Shares; Dividends."
(d) Not Applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) See "Background Relating to the Warrants and the Offer."
(b) Not Applicable.
ITEM 3. PURPOSES OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
See "Background to Relating to the Warrants and the Offer" and "Information
Concerning the Company."
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
See "Price Range of the Warrants and the Shares; Dividends" and "Background
Relating to the Warrants and the Offer."
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
None.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
None.
ITEM 7. FINANCIAL INFORMATION.
See "Information Concerning the Company--Financial Information."
ITEM 8. ADDITIONAL INFORMATION.
(a) See "Background to Relating to the Warrants and the Offer" and
"Description of the Capital Stock and the Warrants."
(b) None.
(c) Not Applicable.
(d) None.
(e) See the Offer.
<PAGE>
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
(a)(1) Offer.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Instructions to Registered Holder and/or Book-Entry Transfer
Facility Participant from Beneficial Owner.
(b) Not Applicable.
(c) Not Applicable.
(d)(1) Tax Opinion of U.S. Tax Counsel.
(d)(2) Tax Opinion of Norwegian Tax Counsel.
(e) Not Applicable.
(f) Not Applicable.
</TABLE>
2
<PAGE>
SIGNATURE
AFTER DUE 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.
October 21, 1998
_____________________________________
(DATE)
/s/ Jeffrey E. Smith
_____________________________________
(SIGNATURE)
Jeffrey E. Smith
(VICE PRESIDENT, FINANCE AND CHIEF
FINANCIAL OFFICER)
_____________________________________
(NAME AND TITLE)
THE ORIGINAL STATEMENT SHALL BE SIGNED BY EACH PERSON ON WHOSE BEHALF THE
STATEMENT IS FILED OR HIS AUTHORIZED REPRESENTATIVE. IF THE STATEMENT IS
SIGNED ON BEHALF OF A PERSON BY HIS AUTHORIZED REPRESENTATIVE (OTHER THAN
EXECUTIVE OFFICER OR GENERAL PARTNER OF THE PERSON FILING THIS STATEMENT)
EVIDENCE OF THE REPRESENTATIVE'S AUTHORITY TO SIGN ON BEHALF OF SUCH PERSON
SHALL BE FILED WITH THE STATEMENT. THE NAME AND ANY TITLE OF EACH PERSON WHO
SIGNS THE STATEMENT SHALL BE TYPED OR PRINTED BENEATH HIS SIGNATURE.
3
<PAGE>
EXHIBIT (a)(1)
OFFER
BY
ALPHARMA INC.
TO EXCHANGE ANY AND ALL OUTSTANDING WARRANTS
TO PURCHASE ITS CLASS A COMMON STOCK
FOR A NUMBER OF
NEWLY ISSUED SHARES OF ITS CLASS A COMMON STOCK
DETERMINED PURSUANT TO AN EXCHANGE FORMULA
---------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON FRIDAY, NOVEMBER 20, 1998 UNLESS THE OFFER IS EXTENDED.
---------------
Each outstanding Warrant represents a currently exercisable right of the
holder of such Warrant to purchase 1.061 shares of Class A common stock, $.20
par value per share (the "Shares" or the "Class A Stock"), at $20.69 in cash
per Share on or before the expiration date of the Warrants. See "Description
of the Capital Stock and the Warrants."
As described in this Offer, Alpharma Inc., a Delaware corporation (the
"Company") is offering to issue to each holder of Warrants a number of Shares
in exchange for each Warrant determined pursuant to an exchange formula based
on the market prices of the Shares during the Offer. The number of Shares to
be issued for each Warrant pursuant to the Offer is the result of dividing (i)
the sum of $1.00 plus the Warrant Spread (as defined) by (ii) the Average
Market Price (as defined) (the "Exchange Formula"). "Warrant Spread" means
1.061 times the result of subtracting $20.69 from the Average Market Price.
The Average Market Price will be the arithmetic average (rounded to the
nearest cent) of the closing prices of the Shares on the New York Stock
Exchange (the "NYSE") on each of the ten consecutive days on which the Shares
trade on the NYSE commencing with the first day following the filing of the
Company's Form 10-Q Report for the period ended September 30, 1998. The
Company expects to file such Form 10-Q Report on or about October 30, 1998.
The Company will not be required to issue any fractional Shares.
Warrantholders will receive cash in lieu of any such fractional Shares,
calculated on the basis of the Average Market Price.
The Offer is subject to the terms and conditions set forth herein, including
the condition that the Average Market Price is not less than $20.69 per share.
An investment in Shares is subject to various risks. See "Information
Concerning the Company--Risk Factors."
Neither the Company nor its Board of Directors nor any individual Director
or Officer of the Company makes any recommendation that any Warrantholder
tender or refrain from tendering Warrants pursuant to the Offer.
The issuance of Shares pursuant to the Offer has not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), pursuant to an
exemption thereunder. See "Certain Consequences of Shares Not Being Registered
Under the Securities Act of 1933." The Shares and the Warrants, except for the
Sissener Warrants (as defined), are listed for trading on the NYSE. The newly
issued Shares will also be listed for trading on the NYSE.
---------------
Any Warrantholder desiring to tender all or any portion of such
Warrantholder's Warrants should either (1) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in
the Letter of Transmittal and deliver it and any other required documents to
BankBoston, N.A., the Depositary, or to Alpharma AS, the Subdepositary, at one
of the addresses set forth on the back cover of this Offer, and either deliver
the certificate(s) representing such Warrants to the Depositary or
Subdepositary along with the Letter of Transmittal or tender such Warrants
pursuant to the procedure for book-entry transfer set forth herein or
(2) request such Warrantholder's broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for such Warrantholder. Any
Warrantholder whose Warrants are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if such Warrantholder
desires to tender such Warrants.
Any Warrantholder who desires to tender Warrants and whose certificates
representing such Warrants are not immediately available, or who cannot comply
with the procedure for book-entry transfer on a timely basis, may tender such
Warrants by following the procedures for guaranteed delivery set forth herein.
Questions and requests for assistance or additional copies of this Offer,
the Letter of Transmittal and the Notice of Guaranteed Delivery may be
directed to the Depositary, the Subdepositary, Diane M. Cady, Vice President,
Investor Relations of the Company, or Sverre Bjertnes, Vice President, Finance
International of Alpharma AS, at their respective addresses and telephone
numbers set forth on the back cover of this Offer.
---------------
The date of this Offer is October 21, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
INTRODUCTION....................................................................................... 1
THE EXCHANGE OFFER................................................................................. 4
1.Terms of the Offer; Conditions; Extension of Tender Period; Termination; Amendment............. 4
2.Acceptance for Exchange and Issuance of Shares................................................. 5
3.Procedure for Tendering Warrants............................................................... 6
(a)Valid Tender of Warrants.................................................................... 6
(b)Book-Entry Transfer......................................................................... 7
(c)Signature Guarantees........................................................................ 7
(d)Guaranteed Delivery......................................................................... 7
(e)Determination of Validity................................................................... 8
4.Withdrawal Rights.............................................................................. 8
5.Certain Consequences of Shares Not Being Registered Under the Securities Act of 1933........... 8
6.Background Relating to the Warrants and the Offer.............................................. 9
7.Certain Tax Consequences of the Offer.......................................................... 10
(a)Certain U.S. Federal Income Tax Consequences................................................ 10
(b)Certain Norwegian Income Tax Consequences................................................... 12
8.Price Range of the Warrants and the Shares; Dividends.......................................... 12
DESCRIPTION OF THE CAPITAL STOCK AND THE WARRANTS.................................................. 14
1.Common Stock................................................................................... 14
2.Preferred Stock................................................................................ 14
3.Warrants....................................................................................... 14
INFORMATION CONCERNING THE COMPANY................................................................. 16
1.Information Incorporated by Reference; Availability of Information............................. 16
2.Risk Factors................................................................................... 16
(a)Government Regulation....................................................................... 16
(b)Risks Associated with Leverage.............................................................. 17
(c)Risks Associated with Acquisitions.......................................................... 18
(d)Foreign Operations; Risk of Currency Fluctuation............................................ 18
(e)Fluctuating Operating Results............................................................... 18
(f)Competition................................................................................. 18
(g)Dependence on Single Sources of Raw Material Supply and Contract Manufacturers.............. 19
(h)Third Party Reimbursement Pricing Pressures................................................. 19
(i)Potential Liability for Current Products.................................................... 19
(j)Relationship of the Company and Industrier; Controlling Stockholder; Conflicts of Interest.. 20
(k)Possible Stock Price Volatility............................................................. 20
(l)Shares Eligible for Future Sale............................................................. 20
3.General........................................................................................ 20
4.Financial Information.......................................................................... 21
MISCELLANEOUS...................................................................................... 24
</TABLE>
i
<PAGE>
INTRODUCTION
Alpharma Inc., a Delaware corporation (the "Company") is offering to
exchange any and all of the outstanding warrants (the "Warrants") to purchase
shares of Class A common stock, $.20 par value per share (the "Shares"), of
the Company for a number of newly issued Shares determined pursuant to an
Exchange Formula (as defined) in accordance with the terms and subject to the
conditions set forth in this Offer and in the related Letter of Transmittal
(which, as amended or supplemented from time to time, collectively constitute
the "Offer").
Each outstanding Warrant represents a currently exercisable right of the
holder of such Warrant to purchase 1.061 Shares at $20.69 in cash per Share on
or before the expiration date of the Warrants. The expiration date of the
Warrants is the close of business on January 3, 1999, unless extended by the
Company in its discretion. Warrants which are not exercised prior to the
expiration date of the Warrants will cease to be exercisable. See "Description
of the Capital Stock and the Warrants."
As described in this Offer, the Company is offering to issue to each holder
of Warrants a number of Shares in exchange for each Warrant determined
pursuant to an exchange formula based on the market prices of the Shares
during the Offer. The exchange formula is intended to provide a Warrantholder
with an opportunity to exchange Warrants for a number of Shares having an
aggregate value equal to the spread between the exercise price of the Warrants
and the average market price of the Shares during a period following the
filing of the Company's Quarterly Report on Form 10-Q which contains financial
results for the period ended September 30, 1998, plus $1.00.
The number of Shares to be issued for each Warrant pursuant to the Offer is
the result of dividing (i) the sum of $1.00 plus the Warrant Spread (as
defined) by (ii) the Average Market Price (as defined) (the "Exchange
Formula"). "Warrant Spread" means 1.061 times the result of subtracting $20.69
from the Average Market Price. The Average Market Price will be the arithmetic
average (rounded to the nearest cent) of the closing prices of the Shares on
the New York Stock Exchange (the "NYSE") on each of the ten consecutive days
on which the Shares trade on the NYSE commencing on the first day following
the filing of the Company's Form 10-Q Report for the period ended September
30, 1998. The Company expects to file such Form 10-Q Report on or about
October 30, 1998. The Company will not be required to issue any fractional
Shares. Warrantholders will receive cash in lieu of any such fractional
Shares, calculated on the basis of the Average Market Price.
Assuming a hypothetical Average Market Price of $24.69, the following is an
example of a calculation according to the Exchange Formula:
EXAMPLE:
If AVERAGE MARKET PRICE = $24.69
WARRANT SPREAD = [1.061 X ($24.69--$20.69)] = $4.24
EXCHANGE FORMULA = $1 + $4.24 = $5.24
$24.69 = .2122 shares per Warrant
Thus, according to the above example, a Warrantholder would receive 212 Shares
for 1,000 Warrants tendered plus a cash payment of $4.94.
The determination of the Exchange Formula shall be made by the Company and
its determination shall be final and conclusive on all Warrantholders. The
Company intends to issue a press release via PRNewswire to major business
publications and news services in the United States and Norway setting forth
the Average Market Price and the Exchange Formula as promptly as practicable
following the Company's determination.
Tender of Warrants pursuant to the Offer may be made to BankBoston, N.A.,
the Depositary, or to Alpharma AS, the Subdepositary according to the
procedures set forth herein. See "The Exchange Offer--
<PAGE>
Procedure for Tendering Warrants." Questions for assistance may be directed to
Diane M. Cady, Vice President, Investor Relations of the Company, or Sverre
Bjertnes, Vice President, Finance International of Alpharma AS at their
respective addresses and telephone numbers set forth on the back cover of this
Offer.
The Offer is subject to the condition that the Average Market Price be not
less than $20.69 and the additional condition that there shall not have
occurred prior to acceptance of the Warrants pursuant to the Offer: (i) any
event, circumstance or development or prospective event, circumstance or
development which has or may have a material effect, whether positive or
negative, on the business, operations, financial position or results of
operations of the Company and its subsidiaries taken as a whole which, in the
judgment of the Company's Board of Directors, makes it inadvisable for the
Company to consummate the Offer; (ii) any suit or other proceeding or any
threatened suit or other proceeding relating to the Offer, the Warrants or the
issuance of Shares pursuant to the Offer; (iii) any order or preliminary or
permanent injunction entered in any action or proceeding before any court or
any statute, rule, regulation, order or official interpretation being enacted,
amended, enforced or interpreted or threatened to be enacted, amended,
enforced or interpreted by any federal, state, local or foreign legislative
body, court, government or governmental, administrative or regulatory
authority or agency which, in the judgment of the Board of Directors of the
Company, has or may have the effect of making illegal or restraining or
prohibiting the making of the Offer, the acceptance for exchange of the
Warrants or the issuance of Shares in exchange for the Warrants, or the
consummation of the Offer; (iv) any suspension or limitation of trading in
securities generally on the NYSE, or any setting of minimum prices for trading
on such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (v) any banking
moratorium declared by Federal or New York authorities; or (vi) any outbreak
or escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of the Board of
Directors of the Company, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it inadvisable for the Company to
consummate the Offer.
An investment in Shares is subject to various risks. See "Information
Concerning the Company--Risk Factors."
The issuance of Shares pursuant to the Offer has not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), pursuant to an
exemption thereunder. See "Certain Consequences of Shares Not Being Registered
Under the Securities Act of 1933."
Tendering Warrantholders will not be obligated to pay any brokerage fees or
commissions or any transfer or stock issuance taxes with respect to the
issuance of Shares in exchange for Warrants pursuant to the Offer.
As of September 30, 1998, there were outstanding 3,596,254 Warrants and
25,467,722 shares of common stock, consisting of 15,967,722 Shares and
9,500,000 of Class B common stock. The Shares and the Warrants, except for the
Sissener Warrants (as defined), are listed for trading on the NYSE. The newly
issued Shares will also be listed for trading on the NYSE. The Company will
not reissue Warrants exchanged pursuant to the Offer. Such tendered Warrants
will be canceled.
Neither the Company nor its Board of Directors nor any individual Officer or
Director of the Company makes any recommendation that any Warrantholder tender
or refrain from tendering Warrants pursuant to the Offer. Mr. E.W. Sissener,
the Chairman and Chief Executive Officer of the Company, and Mr. Gert Munthe,
President and Chief Operating Officer of the Company, beneficially own
1,383,004 Warrants and 110,094 Warrants, respectively, and each has informed
the Company that he intends to tender the Warrants he beneficially owns
pursuant to the Offer. Mr. Sissener has informed the Company that he has no
present intention to dispose of the Shares he will receive in the Offer unless
the Norwegian tax deferral described herein is not obtained. See "Background
Relating to the Warrants and the Offer" and "Certain Tax Consequences of the
Offer--Certain Norwegian Income Tax Consequences."
* * * * *
2
<PAGE>
Warrantholders are urged to read this Offer and the related Letter of
Transmittal carefully before deciding whether to tender their Warrants.
* * * * *
Certain statements under the captions "Background Relating to the Warrants
and the Offer" and "Information Concerning the Company" and elsewhere in this
Offer constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the
Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Such factors include the items referred to under the
caption "Information Concerning the Company--Risk Factors" and other factors
referenced in this Offer or in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997, which is incorporated herein by reference.
See "Information Concerning the Company--Risk Factors."
3
<PAGE>
THE EXCHANGE OFFER
1.TERMS OF THE OFFER; CONDITIONS; EXTENSION OF TENDER PERIOD; TERMINATION;
AMENDMENT
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Company will accept any and all Warrants validly tendered
and not properly withdrawn on or prior to the Expiration Date (as hereinafter
defined) of the Offer and will exchange each Warrant for a number of newly
issued Shares determined pursuant to the Exchange Formula (as hereinafter
defined).
Each outstanding Warrant represents a currently exercisable right of the
holder of such Warrant to purchase 1.061 shares of Class A common stock, $.20
par value per share (the "Shares" or the "Class A Stock") at $20.69 in cash
per Share on or before the expiration date of the Warrants.
The number of Shares to be issued for each Warrant pursuant to the Offer is
the result of dividing (i) the sum of $1.00 plus the Warrant Spread (as
defined) by (ii) the Average Market Price (as defined) (the "Exchange
Formula"). Warrant Spread means 1.061 times the result of subtracting $20.69
from the Average Market Price. The Average Market Price will be the arithmetic
average (rounded to the nearest cent) of the closing prices of the Shares on
the New York Stock Exchange (the "NYSE") on each of the ten consecutive days
on which the Shares trade on the NYSE commencing with the first day following
the filing of the Company's Form 10-Q Report for the period ended September
30, 1998. The Company expects to file such Form 10-Q Report on or about
October 30, 1998. The Company will not be required to issue any fractional
Shares. Warrantholders will receive cash in lieu of any such fractional
Shares, calculated on the basis of the Average Market Price. Warrantholders
will be paid such amounts in U.S. dollars, except for Warrantholders resident
in Norway, who will be paid such amounts in Norwegian Kroner at the exchange
rate (as determined by the Company) at the close of business on the Expiration
Date (as defined below).
The term "Expiration Date" means 5:00 p.m., New York City time, on Friday,
November 20, 1998, unless the Company shall have extended the period during
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by the Company,
shall expire.
Notwithstanding any other provision of the Offer, the obligation of the
Company to accept Warrants for exchange or to issue Shares in exchange for
Warrants tendered pursuant to this Offer is subject to the condition that the
Average Market Price be not less than $20.69 and the additional condition that
there shall not have occurred prior to acceptance of the Warrants pursuant to
the Offer: (i) any event, circumstance or development or prospective event,
circumstance or development which has or may have a material effect, whether
positive or negative, on the business, operations, financial position or
results of operations of the Company and its subsidiaries taken as a whole
which, in the judgment of the Board of Directors of the Company, makes it
inadvisable for the Company to consummate the Offer; (ii) any suit or other
proceeding or any threatened suit or other proceeding relating to the Offer,
the Warrants, or the issuance of Shares pursuant to the Offer; (iii) any order
or preliminary or permanent injunction entered in any action or proceeding
before any court or any statute, rule, regulation, order or official
interpretation being enacted, amended, enforced or interpreted or threatened
to be enacted, amended, enforced or interpreted by any federal, state, local
or foreign legislative body, court, government or governmental, administrative
or regulatory authority or agency which, in the judgment of the Board of
Directors of the Company, has or may have the effect of making illegal or
restraining or prohibiting the making of the Offer, the acceptance for
exchange of the Warrants or the issuance of Shares in exchange for Warrants or
the consummation of the Offer; (iv) any suspension or limitation of trading in
securities generally on the NYSE, or any setting of minimum prices for trading
on such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; or (v) any banking
moratorium declared by Federal or New York authorities; or (vi) any outbreak
or escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of the Board of
Directors of the Company, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it inadvisable for the Company to
consummate the Offer.
4
<PAGE>
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any
such condition or may be waived by the Company in whole or in part at any time
and from time to time in its reasonable discretion.
The Company expressly reserves the right, subject to applicable laws
(including applicable regulations of the Securities and Exchange Commission
(the "Commission")) at any time or from time to time to (i) extend the Offer,
in which event all Warrants previously tendered and not properly withdrawn or
accepted will remain subject to the Offer, but subject to the tendering
Warrantholder's right to withdraw Warrants tendered by such Warrantholder;
(ii) to delay acceptance for exchange of or, regardless of whether such
Warrants were theretofore accepted for exchange, to delay the issuance of
Shares in exchange for such Warrants in order to comply, in whole or in part,
with any applicable law or government regulation; (iii) to terminate the Offer
(whether or not any Warrants have theretofore been accepted for exchange) if
any of the conditions referred to above have not been satisfied; (iv) to waive
any condition, in whole or part; or (v) to amend the Offer in any respect
(provided that such amendment does not decrease the number of Shares issued in
exchange for Warrants under the Exchange Formula or add additional conditions
to the Offer). Such delay, termination, waiver or amendment will be effected
in each case by the Company giving oral or written notice of such delay,
termination, waiver or amendment to the Depositary. The Company acknowledges
that (i) Rule 14e-1(c) under the Exchange Act requires the Company to effect
the exchange of Shares for Warrants in accordance with the Exchange Formula or
to return the Shares tendered promptly after the termination or withdrawal of
the Offer and (ii) the Company may not delay acceptance for exchange of, or
the issuance of Shares in exchange for such Warrants (except as provided by
clause (ii) above) upon the occurrence of any of the conditions specified
above without extending the period of time during which the Offer is open.
The failure by the Company at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right, the waiver of any such
right with respect to particular facts or circumstances shall not be deemed a
waiver with respect to any other facts or circumstances, and each such right
shall be deemed an ongoing right that may be asserted at any time or from time
to time.
Any such extension, delay, termination, waiver or amendment will be followed
as promptly as practicable by the Company issuing a press release via
PRNewsire to major business publications and news services in the United
States and Norway. In the case of an extension, a press release will be issued
no later than 9:00 a.m. New York City time, on the next business day after the
previously scheduled Expiration Date.
If the Company makes a material change in the terms of the Offer or if the
Company waives a material condition of the Offer, the Company will extend the
Offer for a period of time which will depend on the facts and circumstances,
including the materiality, of the changes. With respect to a change in the
Exchange Formula, a minimum ten business day extension will be made to allow
for adequate dissemination of information regarding the change to
Warrantholders. Any extension of the Offer will not constitute a waiver by the
Company of any of the conditions to the Offer.
2.ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF SHARES
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Company will accept for exchange all Warrants validly
tendered and not properly withdrawn on or prior to the Expiration Date as soon
as practicable after the later to occur of: (i) the Expiration Date and (ii)
the date of satisfaction or waiver of the conditions set forth above. As soon
as practicable following the acceptances for exchange of properly tendered
Warrants and the required documentation, the Company will issue Shares to the
holder of such Warrants in accordance with the Offer. The Company intends to
deliver to the Depositary stock certificates representing all Shares issuable
pursuant to the Offer. The Depositary will cause certificates for the Shares
due to each tendering Warrantholder to be mailed to such Warrantholder
following acceptance of the Warrants. Tendering Warrantholders whose Warrants
are accepted pursuant to the Offer will become stockholders of record with
respect to the Shares issuable to them as of the date the Depositary receives
certificates for such Shares. The Company reserves the
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right, in its sole discretion and subject to applicable law, to delay
acceptance of Warrants for exchange or the issuance of Shares for Warrants in
order to comply, in whole or in part, with any applicable law or government
regulation.
For purposes of the Offer, the Company shall be deemed to have accepted for
exchange all properly tendered Warrants as and when the Company gives oral or
written notice to the Depositary of its acceptance of such Warrants for
exchange pursuant to the Offer. The issuance of Shares in exchange for
Warrants accepted for exchange pursuant to the Offer will occur as promptly as
practicable following acceptance of the Warrants and receipt of the required
documentation. The Depositary will act as agent for the tendering
Warrantholders for the purpose of receiving certificates for the Shares issued
pursuant to the Offer from the Company and transmitting such certificates to
tendering Warrantholders. Under no circumstances will interest be paid by the
Company with respect to the Shares issuable pursuant to the Offer, regardless
of any delay in issuing such Shares. The Company will pay all transfer and
stock issuance taxes, if any, payable on the issuance of Shares pursuant to
the Offer.
In all cases the issuance of Shares in exchange for Warrants tendered and
accepted for exchange pursuant to the Offer will be made only after timely
receipt by the Depositary or Subdepositary of a certificate(s) for such
Warrants or a timely confirmation of a book-entry transfer of such Warrants
into the Depositary's account at a Book-Entry Transfer Facility (as defined),
a Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or an Agent's Message (as
defined), and any other documents required by the Letter of Transmittal. For a
description of the procedure for tendering Warrants pursuant to the Offer, see
Section 3 below.
If any tendered Warrants are not accepted for exchange for any reason or if
certificate(s) are submitted for more Warrants than are tendered, certificates
evidencing unpurchased or untendered Warrants will be returned without expense
to the tendering Warrantholder (or, in the case of Warrants tendered by book-
entry transfer into the Depositary's account at a Book-Entry Transfer Facility
pursuant to the procedures set forth in Section 3, such Warrants will be
credited to an account maintained at such Book-Entry Transfer Facility) as
promptly as practicable following the expiration, termination or withdrawal of
the Offer.
If the Company amends the Exchange Formula or its determination thereof so
that the number of Shares to be issued in exchange for Warrants pursuant to
the Offer is increased, such increased number of Shares will be issued to all
Warrantholders whose Warrants are exchanged pursuant to the Offer, whether or
not such Warrants were tendered or accepted for exchange prior to such
increase in the number of Shares.
3.PROCEDURE FOR TENDERING WARRANTS
(A) VALID TENDER OF WARRANTS. Except as set forth below, in order for
Warrants to be validly tendered pursuant to the Offer, the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
together with any required signature guarantees, or an Agent's Message (as
defined below) in connection with a book-entry delivery of Warrants as
described below, and any other documents required by the Letter of
Transmittal, must be received by the Depositary or Subdepositary at one of the
addresses set forth on the back cover of this Offer. In addition, either
certificates evidencing tendered Warrants must be received by the Depositary
or Subdepositary at any such address or such Warrants must be tendered
pursuant to the procedure for book-entry transfer (and a confirmation of
receipt of such delivery must be received by the Depositary), in each case on
or prior to the Expiration Date or the guaranteed delivery procedures set
forth below must be complied with. The term "Agent's Message" means a message
transmitted by The Depository Trust Company (the "Book-Entry Transfer
Facility") to and received by the Depositary and forming a part of a book-
entry transfer confirmation, which states that such Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Warrants which are the subject of
such Book-Entry Confirmation, that such participant has received and agrees to
be bound by the terms of the Letter of Transmittal and that the Company may
enforce such agreement against such participant.
6
<PAGE>
(B) BOOK-ENTRY TRANSFER. The Depositary will establish an account with
respect to the Warrants at each Book-Entry Transfer Facility for purposes of
the Offer within two business days after the date of this Offer. Any financial
institution that is a participant in the system of any Book-Entry Transfer
Facility may make book-entry delivery of Warrants by causing a Book-Entry
Transfer Facility to transfer such Warrants into the Depositary's account in
accordance with that Book-Entry Transfer Facility's procedures for such
transfer. Although delivery of Warrants may be affected through book-entry
transfer at a Book-Entry Transfer Facility, the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry transfer, and any other required documents, must, in any case, be
received by the Depositary or Subdepositary at one of the addresses set forth
on the back cover of this Offer on or prior to the Expiration Date, or the
guaranteed delivery procedures described below must be complied with.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
(C) SIGNATURE GUARANTEES. Signatures on Letters of Transmittal need not be
guaranteed if (i) the Letter of Transmittal is signed by the registered holder
of Warrants tendered or (ii) such Warrants are tendered for the account of an
Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal.
If the certificates representing Warrants are registered in the name of a
person other than the signer of the Letter of Transmittal, then the tendered
certificates must be endorsed or accompanied by appropriate stock powers,
signed exactly as the name(s) of the registered holder(s) appear(s) on the
certificates, with the signatures on the certificates or stock powers
guaranteed as described below.
If signatures are required as set forth above, then signatures on Letters of
Transmittal must be guaranteed by a financial institution (including most
banks, savings and loan associations and brokerage houses) which is a
participant in the Securities Transfer Agents Medallion Program, the NYSE
Medallion Signature Program, or the Stock Exchange Medallion Program (each of
the foregoing constituting an "Eligible Institution"). See Instructions 1 and
5 of the Letter of Transmittal.
(D) GUARANTEED DELIVERY. If a Warrantholder desires to tender Warrants
pursuant to the Offer and such Warrantholder's certificates are not
immediately available, or time will not permit the certificates and all other
required documents to reach the Depositary or Subdepositary on or prior to the
Expiration Date or such Warrantholder cannot complete the procedure for book-
entry transfer on a timely basis, such Warrants may nevertheless be tendered
if the following guaranteed delivery procedures are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Company, is received by
the Depositary as provided below on or prior to the Expiration Date; and
(iii) the certificates (or a book-entry transfer confirmation)
representing all tendered Warrants, in proper form for transfer, in each
case together with the Letter of Transmittal (or a facsimile thereof)
properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message)
and any other documents required by the Letter of Transmittal are received
by the Depositary within three NYSE trading days after the date of
execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF CERTIFICATES AND ALL OF THE REQUIRED DOCUMENTS,
INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION
AND RISK OF THE TENDERING WARRANTHOLDER AND THE
7
<PAGE>
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY OR
SUBDEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO INSURE TIMELY DELIVERY.
(E) DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for exchange of any
tender of Warrants will be determined by the Company in its sole discretion,
which determination shall be final and binding. The Company reserves the
absolute right to reject any and all tenders of Warrants determined by it not
to be in proper form or the acceptance for exchange of which may, in the
opinion of the Company's counsel, be unlawful. The Company reserves the
absolute right to waive any defect or irregularity in any tender of Warrants
of any particular Warrantholder. The Company's interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
Instructions thereto) will be final and binding. None of the Company, any of
its affiliates or assigns, the Depositary, the Subdepositary, or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification.
4.WITHDRAWAL RIGHTS
Tenders of Warrants pursuant to the Offer may be withdrawn at any time on or
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after December 5, 1998 unless theretofore accepted
for payment as provided in this Offer. If the Company extends the Offer, is
delayed in accepting Warrants for exchange or issuing Shares in exchange for
Warrants or is unable to accept Warrants for exchange or issue Shares pursuant
to the Offer for any reason, then, without prejudice to the Company's rights
under the Offer, the Depositary and the Subdepositary may, on behalf of the
Company, retain all Warrants tendered, and such Warrants may not be withdrawn
except to the extent that tendering Warrantholders are entitled to withdrawal
rights as set forth in this Section 4.
For a withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary or
Subdepositary at one of the addresses set forth on the back cover of this
Offer. Any notice of withdrawal must specify the name of the person who
tendered the Warrants to be withdrawn, the number of Warrants to be withdrawn
and the name of the registered holder, if different from that of the person
who tendered such Warrants. If certificates evidencing Warrants to be
withdrawn have been delivered or otherwise identified to the Depositary, then
prior to the physical Depositary, and the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution unless such Warrants
have been tendered for the account of an Eligible Institution. If Warrants
have been tendered pursuant to the procedure for book-entry transfer set forth
in Section 3, the notice of withdrawal must specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Warrants.
Withdrawals may not be rescinded, and Warrants withdrawn will thereafter be
deemed not validly tendered for purposes of the Offer. However, withdrawn
Warrants may be retendered at any time prior to the Expiration Date by again
following one of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Company, in its sole
discretion, whose determination shall be final and binding. None of the
Company, any of its affiliates or assigns or the Depositary or the
Subdepositary or any other person will be under any duty to give notification
of any defects or irregularities in any notice of withdrawal or incur any
liability for failure to give such notification.
5.CERTAIN CONSEQUENCES OF SHARES NOT BEING REGISTERED UNDER THE SECURITIES ACT
OF 1933
The offer and issuance of Shares by the Company pursuant to the Offer has
not been registered under the Securities Act of 1933, as amended (the
"Securities Act"). The Company has been advised that the offer and issuance of
shares pursuant to this Offer is exempt from registration under Section
3(a)(9) of the Securities Act. Section 3(a)(9) provides an exemption from
registration for "any security exchanged by the issuer with its
8
<PAGE>
existing security holders exclusively where no commission or other
remuneration is paid or given directly or indirectly for soliciting such
exchange."
The Company has further been advised that the Shares issued pursuant to the
Offer are not restricted securities and may be resold by the recipients
thereof without regard to the limitation of Rule 144 and without such
recipients being deemed underwriters for purposes of the Securities Act;
except that:
(a) Shares issued in exchange for Warrants to persons who originally
received such Warrants pursuant to the exemption from registration in
Section 4(2) of the Securities Act or from the person who acquired such
Warrants in a non-public transaction may be restricted securities within
the meaning of Rule 144; and if the Shares issued in exchange for any
Warrants are restricted securities, the recipient of such Shares may tack
the period during which such recipient held the Warrants for purposes of
Rule 144; and
(b) Shares issued in exchange for Warrants that are held by affiliates of
the Company (which includes all of the Sissener Warrants) will be entitled
to tack the period during which such Warrants were held by the recipient
prior to the exchange. Accordingly, such affiliates who have held their
Warrants for more than one year will be able to sell or transfer the Shares
received in exchange for their Warrants in accordance with the volume
limitations and manner of sale limitations and other provisions set forth
in Rule 144.
An additional consequence of the issuance of Shares pursuant to the Offer
not being registered under the Securities Act is that certain protections set
forth in Section 11 and other provisions of the Securities Act will not be
available to Warrantholders who exchange Warrants for Shares in the Offer.
6.BACKGROUND RELATING TO THE WARRANTS AND THE OFFER.
On October 3, 1994, the Company acquired the pharmaceutical, animal health,
aquatic animal health and bulk antibiotics businesses of A.L. Industrier A.S.,
a Norwegian corporation formerly named Apothekernes Laboratorium A.S.
("Industrier"). As part of the consideration for these businesses, the Company
issued the Warrants to the approximately 400 shareholders of Industrier,
primarily through a tender offer procedure in Norway.
Industrier owns all of the outstanding Class B common stock of the Company,
and Mr. E.W. Sissener, the Chairman and Chief Executive Officer of the
Company, beneficially owns a majority of Industrier's outstanding shares. As a
result, Industrier and Mr. Sissener may be deemed to control the Company. See
"Information Concerning the Company--Risk Factors--Relationship of the Company
and Industrier; Controlling Stockholder, Conflicts of Interest." As a result
of the issuance of the Warrants to the Industrier shareholders in 1994, Mr.
Sissener and a family corporation controlled by him received and currently
hold 1,383,004 Warrants (the "Sissener Warrants") constituting approximately
38.5% of the aggregate number of outstanding Warrants. In addition, Mr. Gert
Munthe, President and Chief Operating Officer of the Company, beneficially
owns 110,094 Warrants (all of which are held by his spouse). Certain other
officers and directors of the Company, all of whom are Norwegian residents,
beneficially own 10,011 Warrants.
In September 1995, the Shares issuable upon exercise of all outstanding
Warrants except the Sissener Warrants were registered under the Securities Act
of 1933, as amended (the "Securities Act"). The Sissener Warrants and Shares
issuable upon exercise thereof were registered under the Securities Act in
September, 1998. The Warrants, except for the Sissener Warrants, were listed
for trading on the NYSE in 1995. See "Price Range of the Warrants and the
Shares; Dividends." As of September 30, 1998, Warrants for an aggregate number
of 2,000 Shares had been exercised. The Company believes that over 60% of the
Warrants (including the Sissener Warrants) were held at September 30, 1998, by
the original recipients in 1994.
During the second quarter of 1998 the Finance Committee of the Board
responded to concerns raised by certain directors and members of management
that the approaching expiration of the Warrants on January 3, 1999 and the
likely exercise of the Warrants shortly before expiration might result in
market disruption affecting the Company's Shares and greater dilution to
earnings per Share than if the Company repurchased the Warrants.
9
<PAGE>
During the second quarter of 1998, Mr. Sissener advised the Board that for
personal financial reasons he did not intend to exercise the Sissener
Warrants, but instead intended to sell either the Sissener Warrants or the
Shares issuable on exercise of such Warrants. He asked the Company to assist
in this effort. During June and July, 1998, Messrs. I. Roy Cohen and Glen E.
Hess (the members of the Finance Committee other than Messrs. Sissener and
Munthe), together with Mr. Jeffrey Smith, Chief Financial Officer, reviewed
the impact on the Company of the Warrants being exercised according to their
terms as compared to various alternatives involving the purchase or
modification of the Warrants. In conducting such review, the following factors
were considered: the projected earnings of the Company through 1999; the
Company's capital requirements; the Company's financing arrangements and the
projected costs of borrowings; the estimated future market price of the Shares
based on a range of possible earnings per Share and multiples thereof; a range
of Warrant values and projected costs of acquiring the Warrants; calculations
of dilution to earnings per Share that results from exercise of the Warrants
at various earnings levels; arbitrage transactions relating to the Warrants
and the effect of Share transactions following Warrant exercise on the market
price of the Shares; and possible future Share offerings by the Company. As
part of such review, Messrs, Cohen, Hess and Smith discussed the foregoing
matters with representatives of investment banks familiar with the Company.
The Company has not received any report or appraisal of any kind from any
outside party which materially relates to the Offer in any way.
In late July, 1998, Messrs Cohen and Hess recommended that the Audit
Committee and Board of Directors consider a proposal that the Company offer to
acquire the Warrants for Shares on terms substantially similar to the Offer
(but with possible reduction of the $1.00 component of the Exchange Formula
and a possible maximum Warrant Spread). The recommendation was based on (i)
management's estimates of anticipated higher Company earnings per share in the
second half of 1998 and in 1999 and a view that such performance, if achieved,
could enable the Company to receive greater proceeds from a future share
offering than if the Warrants were exercised, (ii) the elimination of the
market uncertainty and potential overhang that could result from an exercise
of the Warrants and (iii) an expected anti-dilutive effect of the proposed
exchange offer on future earnings per share. The Audit Committee reviewed the
proposal, concluded that the proposal was fair to the holders of the Company's
Class A Stock and favorably recommended the proposal to the Board. At a
Special Meeting on July 28, 1998, the Board considered the proposal (with
Messrs. Sissener and Munthe abstaining) and approved the proposal in concept,
but subject to a final decision and determination of specific terms of the
proposed offer after review of financial projections of the Company for the
second half of 1998 and the preliminary budget for 1999 at a meeting in
October, 1998. On August 6, 1998, the Company issued a release announcing that
the Board would consider making an offer to all Warrantholders to exchange
Warrants for Shares at an exchange ratio based on the market value of the
Shares at the time of the exchange plus a premium of up to $1.00.
During the period from October 5 through October 12, 1998, Messrs. Cohen and
Hess discussed the proposed offer and reviewed the movements in the market
prices of the Shares and Warrant market price since the August 6, 1998 public
announcement of the proposed offer, the Company's preliminary results for the
third quarter and projected results for the fourth quarter of 1998, and the
Company's financing arrangements and capital requirements. They discussed
possible variations in the $1.00 premium component of the Exchange Formula and
other aspects of the Offer and determined to recommend the terms of the Offer.
At separate meetings on October 14, 1998, Mr. Cohen, as Chairman of the
Finance Committee, recommended the specific terms of the Offer to the Audit
Committee and the Board. The Audit Committee reaffirmed its recommendation of
the Offer as fair to the holders of the Company's Class A Stock. The Board
reviewed the Company's financial projections for 1998 and the Company's
preliminary budget for 1999, the Company's capital requirements and existing
borrowing level and capacity and other factors, received reports of divisional
management and, after discussion (with Messrs. Sissener and Munthe abstaining)
approved and authorized the Offer.
7.CERTAIN TAX CONSEQUENCES OF THE OFFER.
(A) CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The Company has received an opinion from Kirkland & Ellis summarizing
certain U.S. federal income tax consequences of the Offer to persons who
exchange Warrants pursuant to the Offer. This summary is based upon
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the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations promulgated thereunder, as well as judicial and administrative
interpretations thereof, all of which are subject to change, including changes
which may be retroactive. No opinion of counsel or ruling from the Internal
Revenue Service ("IRS") will be requested by the Company on any tax issue
connected with Offer. Accordingly, no assurance can be given that the IRS will
not challenge certain of the tax positions described herein or that such a
challenge would not be successful.
Except for section 7(b) below relating to Norway, the discussion below does
not address the foreign, state or local tax consequences of the transactions
to be accomplished pursuant to the Offer, nor does it specifically address the
tax consequences to taxpayers subject to special treatment under the federal
income tax laws (including dealers in securities, foreign persons, life
insurance companies, tax-exempt organizations, financial institutions, S
corporations and taxpayers subject to the alternative minimum tax). The
discussion below assumes that the Warrants are held by Holders at the
Expiration Date of the Offer as a capital asset within the meaning of Code
Section 1221.
ACCORDINGLY, EACH HOLDER OF OUTSTANDING WARRANTS IS URGED TO CONSULT HIS OWN
TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE EXCHANGE. NO
REPRESENTATIONS WITH RESPECT TO THE TAX CONSEQUENCES TO ANY PARTICULAR HOLDER
WHO TENDERS WARRANTS ARE MADE HEREBY.
The term "U.S. Holder" means a holder of a Warrant that is, for U.S. federal
income tax purposes, (A) a citizen or resident of the U.S., (B) a corporation,
limited liability company, partnership or other entity created or organized
under the laws of the U.S. or of any political subdivision thereof, (C) an
estate, the income of which is subject to U.S. federal income taxation
regardless of source, or (D) a trust, if a court within the United States is
able to exercise primary jurisdiction over its administration and one or more
United States persons have the authority to control all of its substantial
decisions. The term "Non-U.S. Holder" means a holder of a Warrant that is not
a U.S. Holder.
General Tax Consequences of the Exchange to U.S. Holders. The Exchange
should be treated as a "recapitalization" of the Company within the meaning of
Code Section 368(a)(1)(E). As a result of this characterization, a U.S. Holder
of Warrants who participates in the Exchange should not recognize gain or
loss, except as described below with respect to payment in lieu of fractional
shares. The tax basis of the Shares received by a U.S. Holder pursuant to the
Exchange should be equal to such holder's adjusted tax basis in the Warrants
transferred in exchange therefor. The holding period of the Shares received
should include the period during which the U.S. Holder held the Warrants
exchanged therefor. U.S. Holders of Warrants who do not participate in the
Exchange should not recognize any gain or loss as a result of other holders of
Warrants participating in the Exchange.
Consequences of the Exchange to the Company. The Company should not
recognize any gain or loss from the Exchange.
Consequences of Payment in Lieu of Fractional Shares--U.S. Holders. A U.S.
Holder's receipt of cash in lieu of a fractional share in connection with the
Exchange should be treated as a redemption of such fractional Share
immediately after such fractional Share was issued in the Exchange. The amount
of gain realized by a U.S. Holder, if any, would equal the excess of the cash
received over such holder's adjusted basis in the fractional Share redeemed. A
U.S. Holder's gain or loss with respect to the deemed redemption of a
fractional Share, therefore, should be equal to the difference between the
cash received in lieu of the fractional Share and the U.S. Holder's basis
allocable to the fractional Share. Basis will be allocable to a fractional
Share in proportion which the value of the fractional Share bears to the value
of all of the Shares (including the fractional Share) received in the
Exchange.
Any gain recognized from the deemed redemption of a fractional Share as a
result of the Exchange should be capital gain. Any such capital gain would be
long term capital gain if the U.S. Holder's holding period in such Warrants is
more than one year at the time of the exchange. An individual U.S. Holder will
generally be subject to a maximum tax rate of 20% on long-term capital gain.
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Consequences of Payment in Lieu of Fractional Shares--Non-U.S. Holders. A
Non-U.S. Holder will not be subject to U.S. federal income or withholding tax
with respect to gain recognized from the deemed redemption of a fractional
Share (as determined above) on an exchange of Warrants pursuant to the Offer
unless (i) the gain is effectively connected with the conduct by the Non-U.S.
Holder of a trade or business in the United States or (ii) in the case of a
Non-U.S. Holder that is an individual, such Holder is present in the United
States for 183 or more days in the taxable year of the disposition and either
such Holder (a) has a "tax home" (within the meaning of Section 911(d)(3) of
the Code) in the United States or (b) maintains an office or fixed place of
business in the United States to which such gain is attributable.
Backup Withholding and Information Reporting for Payment in Lieu of
Fractional Shares. A. U.S. Holder of Warrants who participates in the Offer
may be subject to backup withholding at the rate of 31% with respect to
"reportable payments" which should include any cash received in lieu of
fractional Shares. The payor will be required to deduct and withhold the
prescribed amounts if (a) the payee fails to furnish a taxpayer identification
number ("TIN") to the payor in the manner required, (b) the IRS notifies the
payor that the TIN furnished by the payee is incorrect, (c) there has been a
"notified payee underreporting", or (d) there has been a failure of the payee
to certify under penalty of perjury that the payee is not subject to
withholding under the backup withholding rules. In general, if any one of the
events listed above occurs, the Company may be required to withhold at a rate
of 31%. Amounts paid as backup withholding do not constitute an additional tax
and will be credited against the holder's federal income tax liabilities, so
long as the required information is provided to the IRS. The Company will
report to the holders and to the IRS the amount of any "reportable payments"
for each calendar year and the amount of tax withheld, if any, with respect to
payment on the securities.
A Non-U.S. Holder of Warrants who participates in the Offer may also be
subject to information reporting and backup withholding with respect to gain
recognized from the deemed redemption of a fractional share unless the Non-
U.S. Holder or beneficial owner certifies its status as such or otherwise
establishes an exemption from information reporting and backup withholding and
the payor has such evidence in its records as to such status or exemption. To
be exempt from withholding with respect to payments in lieu of fractional
Shares, a Non-U.S. Holder must generally complete and provide the payor with a
Form W-8 or other documentary evidence certifying that such Non-U.S. Holder is
an exempt foreign person.
(B) CERTAIN NORWEGIAN INCOME TAX CONSEQUENCES
The Company has been advised that an exchange of Warrants for Shares
pursuant to the Offer will be treated for Norwegian tax purposes as a disposal
of the Warrants.
Unless a deferral (as described below) is obtained, the Exchange will
subject Warrantholders taxable in Norway to a tax on any capital gain
recognized as result of the Exchange. The amount of gain or loss realized by a
Warrantholder in the Exchange would equal the difference, if any, between (i)
the tax cost price of the Warrants surrendered and (ii) the fair market value
of the Shares received by the Warrantholder plus any cash amount received by
the Warrantholder in lieu of fractional shares. Any gain will be subject to
tax at a rate of 28%. Any loss may be deductible for tax purposes.
The tax cost price of the Warrants held by persons who received the Warrants
in connection with the 1994 combination is NK 28.70. This value has been
accepted by the Norwegian tax authorities. The tax cost price of the Shares
received in the Exchange will equal the fair market value of the Shares at the
time of their receipt by Warrantholders. The Company will, on behalf of the
Warrantholders, address the Norwegian Ministry of Finance and apply for a tax
deferral. If granted the capital gain realized as a result of the Exchange may
be deferred until the Shares received in the Exchange are sold. There can be
no assurance that such a tax deferral will be granted.
8.PRICE RANGE OF THE WARRANTS AND THE SHARES; DIVIDENDS
The Shares and the Warrants, except for the Sissener Warrants, are listed
and traded on the NYSE under the symbols ALO and ALO ws, respectively. The
following table sets forth, for the periods indicated, the high and low
closing prices per Warrant and per Share as reported by the National Quotation
Bureau, LLC, and the dividend declared per Share.
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The Company has been informally advised by the NYSE that it is not
reasonably likely that the exchange of Shares for Warrants pursuant to the
Offer will result in the delisting of the Warrants on the NYSE.
<TABLE>
<CAPTION>
CASH
WARRANTS SHARES DIVIDENDS
--------------- ------------------ DECLARED
HIGH LOW HIGH LOW PER SHARE
-------- ------ -------- --------- ---------
<S> <C> <C> <C> <C> <C>
QUARTER ENDED:
1998
Fourth (through October 15,
1998).......................... $6 1/8 $3 1/2 $25 7/8 $23 3/16 N/A
Third........................... 6 5/8 3 1/8 26 5/16 21 7/16 $0.045
Second.......................... 4 1/32 2 1/8 23 19 3/4 0.045
First........................... 5 1/4 2 3/4 24 5/16 18 15/16 0.045
1997
Fourth.......................... 5 11/16 3 3/4 23 7/8 21 1/4 0.045
Third........................... 6 2 3/4 23 1/2 15 1/4 0.045
Second.......................... 3 1/2 1 7/8 18 1/8 13 1/2 0.045
First........................... 3 1/2 2 15 1/8 11 3/8 0.045
1996
Fourth.......................... 4 3/8 1 5/8 16 1/2 10 5/8 0.045
Third........................... 7 4 1/4 21 1/4 14 5/8 0.045
Second.......................... 9 3/4 5 1/2 26 19 1/8 0.045
First........................... 11 5/8 8 1/2 27 3/8 22 0.045
</TABLE>
On October 15, 1998, the closing sale price of the Warrants and the Shares
on the NYSE was $3.625 per Warrant and $23.9375 per Share. WARRANTHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE WARRANTS AND THE SHARES.
13
<PAGE>
DESCRIPTION OF THE CAPITAL STOCK AND THE WARRANTS
The Company's authorized capital stock currently consists of: (i) 40,000,000
shares of Class A Stock (the "Class A Stock"), of which 15,967,722 shares were
issued and outstanding as of September 30, 1998, (ii) 15,000,000 shares of
Class B common stock, $.20 par value per share (the "Class B Stock" and,
together with the Class A Stock, the "Common Stock"), of which 9,500,000
shares were issued and outstanding as of September 30, 1998, and (iii) 500,000
shares of Preferred Stock, par value $1.00 per share (the "Preferred Stock"),
of which none were issued and outstanding as of September 30, 1998. The
following description of the capital stock of the Company is a summary of
certain provisions of the Company's Amended and Restated Certificate of
Incorporation and is qualified in its entirety by the provisions of such
document which has been filed with the Commission. As of September 30, 1998,
the Class A Stock was held of record by 1,281 stockholders.
1.COMMON STOCK
The Class A Stock and the Class B Stock are identical in all respects,
including with respect to the right to receive dividends, except as follows:
(i) the holders of the Class A Stock are currently entitled as a class to
elect 33 1/3% of the Board of Directors (rounded to the nearest whole number,
but not less than two members of the Company's Board of Directors), and the
holders of the Class B Stock are entitled as a class to elect the remaining
directors; (ii) on all other matters submitted to a vote of stockholders, the
holders of the Class A Stock are entitled to one vote per share of Class A
Stock held, and the holders of the Class B Stock are entitled to four votes
per share of Class B Stock held; (iii) the holders of the Class B Stock have
the right at any time and from time to time to convert each share of Class B
Stock into one share of Class A Stock; and (iv) shares of Class A Stock may be
declared and paid as dividends on shares of both Class A Stock and Class B
Stock; shares of Class B Stock may be declared and paid as dividends on shares
of both Class A Stock and Class B Stock; shares of Class A Stock may be
declared and paid as dividends on shares of Class A Stock and shares of Class
B Stock may be declared and paid as dividends on shares of Class B Stock; and
in any such case the same number of shares must be declared and paid as
dividends in respect of each outstanding share of Class A Stock and each
outstanding share of Class B Stock. The special voting rights of the holders
of the Class A Stock as reflected in clause (i) above terminate if the number
of issued and outstanding shares of Class A Stock is less than 10% of the
aggregate number of issued and outstanding shares of Class A Stock and Class B
Stock, and the special voting rights of the holders of the Class B Stock as
reflected in clauses (i) and (ii) above terminate if the number of issued and
outstanding shares of Class B Stock is less than 12 1/2% of such aggregate
number, in each case as determined on the record date for the stockholder
vote.
The Company may not subdivide or combine either class of Common Stock
without at the same time combining or subdividing shares of the other class of
Common Stock in the same proportion. Upon liquidation of the Company, holders
of the Class A Stock and the Class B Stock are entitled to share ratably in
any assets available for distribution to stockholders after payment of all
obligations of the Company, and payments due in respect of any other senior
securities of the Company, including any shares of Preferred Stock. Holders of
Common Stock do not have cumulative voting rights or preemptive, subscription
or, except as set forth above with respect to the Class B Stock, conversion
rights.
2.PREFERRED STOCK
The Preferred Stock may be issued in one or more series, with such
designations, relative rights, powers, priorities, preferences and limitations
thereof as the Board of Directors, without any stockholder action, may
determine, provided that the right of the holders of Class A Stock, voting as
a class, to elect no less than 25% of the Board of Directors may not be
limited by the grant of voting rights to any series of Preferred Stock.
3.WARRANTS
General. The Warrants have been issued in registered form pursuant to the
terms of a warrant agreement (the "Warrant Agreement") dated October 3, 1994
between the Company and BankBoston, N.A. (formerly known as The First National
Bank of Boston), as the warrant agent (the "Warrant Agent"), a copy of which
has
14
<PAGE>
been filed with the Commission and is incorporated herein by reference. The
statements herein relating to the Warrants and the Warrant Agreement are
summaries and are subject to the detailed provisions of the Warrant Agreement,
to which reference is hereby made for a complete statement of those
provisions. Whenever particular provisions of the Warrant Agreement or terms
defined therein are referred to herein, those provisions or definitions are
incorporated by reference as part of the statements made, and the statements
are qualified in their entirety by that reference.
Exercise of Warrants. Each Warrant represents a currently exercisable right
of the holder thereof to purchase 1.061 Shares at $20.69 in cash per Share.
The Warrants are exercisable, at the holder's option, as a whole or from time
to time in part at any time until 5:00 p.m., New York City time, on January 3,
1999, unless extended by the Company in its discretion, (the "Warrant
Expiration Date") in accordance with the terms of the Warrants and the Warrant
Agreement. The Company will not be required to issue any fractional Shares or,
under certain circumstances, any fractional Warrants. Holders of Warrants will
receive cash in lieu of any such fractional Shares or Warrants.
Certain Adjustments. No adjustment in the Exercise Price or the number of
Shares purchasable upon exercise of the Warrants will be made for any cash
dividends or distributions payable out of consolidated earnings or earned
surplus. The Exercise Price and the number of Shares purchasable upon exercise
of each Warrant are subject to adjustment upon (1) the payment of a dividend
by the Company on its shares of Class A Stock in shares of Class A Stock or
Class B Stock, (2) any subdivision, combination, or reclassification of the
Shares, (3) any distribution by the Company generally to the holders of the
Shares of certain rights, options, or warrants to subscribe for or purchase
Shares at a price per Share lower than the then current market price per
Share, or (4) any distribution by the Company generally to the holders of the
Shares of evidences of indebtedness or assets (excluding certain cash
dividends or distributions), or other rights, options, warrants or convertible
or exchangeable securities containing the right to subscribe for or purchase
Shares. No adjustment in the Exercise Price or the number of Shares
purchasable upon exercise of the Warrants will be required until cumulative
adjustments would require a change of at least 1% in the number of Shares
purchasable upon exercise of the Warrants. In lieu of adjusting the number of
Shares issuable upon exercise of each Warrant, the Company may elect to adjust
the number of outstanding Warrants.
Notwithstanding the foregoing, in case of a consolidation, merger, sale or
conveyance of the property of the Company as an entirety or substantially as
an entirety, the holder of each outstanding Warrant shall continue to have the
right to exercise the Warrant for the kind and amount of Shares and other
securities and property receivable by a holder of the number of Shares for
which such Warrants were exercisable immediately prior thereto.
Transferability. Any Warrant may be transferred, split up, combined or
exchanged for another Warrant or Warrants entitling the registered holder
thereof to purchase a like number of Shares as the Warrant certificate or
certificates surrendered. Certificates may be exchanged for other certificates
in different denominations representing Warrants to purchase the same
aggregate number of Shares at any time.
No Rights as Holder of Shares. No holder of Warrants shall be entitled to
vote or consent or receive dividends or be deemed for any other purpose the
holder of Shares or of any other securities of the Company that may at any
time be issuable upon the exercise of the Warrants until the Warrants are
properly exercised as provided in the Warrant Agreement.
15
<PAGE>
INFORMATION CONCERNING THE COMPANY
1.INFORMATION INCORPORATED BY REFERENCE; AVAILABILITY OF INFORMATION
The following documents have been filed with the Securities and Exchange
Commission (the "Commission") and are incorporated by reference into this
Offer: the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997; the Company's Current Report on Form 8-K dated March 30,
1998; the Company's Quarterly Reports on Form 10-Q for the quarter ended March
31, 1998 and June 30, 1998, respectively; and the Company's Current Report on
Form 8-K dated May 7, 1998, as supplemented by Form 8-K/A dated July 21, 1998.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act of 1934 (the "Exchange Act") after the
date of this Offer and prior to the consummation of the exchange contemplated
hereby shall be deemed to be incorporated by reference in this Offer and to be
a part hereof from the date of filing of such documents. The Company has also
filed with the Commission an Issuer Tender Offer Statement on Schedule 13E-4
(the "Schedule 13E-4") which includes certain additional information relating
to the Offer.
The Company is subject to the informational requirements of the Exchange Act
and, in accordance therewith, files reports, proxy statements and other
information with the Commission. The Schedule 13E-4, as well as reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices of the Commission: Seven World Trade Center, Suite 1300, New York, New
York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such materials can be obtained by mail from the
Public Reference Section of the Commission, at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Shares and the
Warrants are listed on the New York Stock Exchange (the "NYSE"), and copies of
reports, proxy statements and other information concerning the Company can be
inspected at the offices of the NYSE located at 20 Broad Street, New York, New
York 10005. The Commission maintains a World Wide Web site on the Internet at
http://www.sec.gov that contains reports, proxy statements and other
information regarding registrants that file electronically with the
Commission. The Company is simultaneously mailing copies of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1997 and the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 to
Warrantholders of record resident in Norway.
2.RISK FACTORS
In addition to the other information included or incorporated in this Offer,
Warrantholders should consider carefully the following risk factors in
evaluating the Company and its business before tendering Warrants in exchange
for Shares.
(A) GOVERNMENT REGULATION. The research, development, manufacturing and
marketing of the Company's products are subject to extensive government
regulation by either the Food and Drug Administration ("FDA") or the U.S.
Department of Agriculture ("USDA"), as well as by the Drug Enforcement
Administration ("DEA"), the Federal Trade Commission ("FTC"), the Consumer
Product Safety Commission ("CPSC"), and by comparable authorities in the
European Union ("EU"), Norway, Indonesia and other countries. Although Norway
is not a member of the EU, it is a member of the European Economic Association
and, as such, has accepted all EU regulations with respect to pharmaceuticals.
Government regulation includes detailed inspection of and controls over
testing, manufacturing, safety, efficacy labeling, storage, record keeping,
approval, advertising, promotion, sale and distribution of pharmaceutical
products. Noncompliance with applicable requirements can result in civil or
criminal fines, recall or seizure of products, total or partial suspension of
production and/or distribution, debarment of individuals or the Company from
obtaining new generic drug approvals, refusal of the government to approve new
products and criminal prosecution. Such government regulation substantially
increases the cost of producing human pharmaceutical and animal health
products.
In the U.S., the FDA has imposed stringent regulatory requirements relating
to the operation of manufacturing plants. The Company's U.S. manufacturing
facilities, as well as two of the Company's European
16
<PAGE>
plants that manufacture products for export to the U.S. and certain of its
contract manufacturers, are affected in that they are required to comply with
the U.S. manufacturing regulations. Failure to demonstrate compliance during
periodic inspections could lead to a cessation or curtailment of plant
operations. Similar regulatory requirements exist in the foreign countries
where the Company or its contract manufacturers have facilities and in certain
countries where the Company sells its products, and non-compliance could lead
to adverse events similar to those described above.
The Company and its subsidiaries have filed applications to market
pharmaceutical and animal health products with regulatory agencies both in the
U.S. and internationally. The timing of receipt of approvals of these
applications, and the timing of such receipt, can significantly affect future
revenues and income. This is particularly important with respect to human
pharmaceuticals where it is the Company's strategy to obtain regulatory
approval to market a generic formulation as soon as third party's patent
protection ends and prior to the price erosion normally caused by the entry of
other generic competitors. There can be no assurance that new product
approvals will be obtained in a timely manner, if ever. Failure to obtain such
approvals, or to obtain such approvals when expected, could have a material
adverse effect on the Company's business, results of operations, and financial
condition.
The Company's animal health products, such as feed additives, could be
affected by legislation or regulatory rulings under consideration in the
European Union and in one or more countries restricting the sale of products
containing antibiotics. Based upon public reports, the Company understands
that the governments of certain European countries have banned the sale of
certain antibiotic products. The Company cannot predict whether such
initiatives will ultimately affect its products. If any such restrictive
legislation or regulation were adopted, its impact on the Company would depend
on the nature of the restriction and the size of the markets affected.
Regulatory compliance impacts operating expenses directly by requiring the
addition of personnel, programs and capital and indirectly by adding
activities without directly increasing efficiency. The costs both direct and
indirect of regulatory compliance (which have increased in recent years) may
continue to increase in the future.
(B) RISKS ASSOCIATED WITH LEVERAGE. As of June 30, 1998, the Company had
total outstanding long-term indebtedness of approximately $437 million, or
approximately 65% of the Company's total capitalization. In addition, the
Company may incur additional indebtedness through borrowings (up to $73
million as of June 30, 1998) under its various credit agreements, subject to
the satisfaction of certain financial tests and maintenance of certain
financial ratios. The degree to which the Company is leveraged could have
important consequences to the Company, including the following: (i) the
Company's ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions or other purposes may be limited
or impaired; (ii) the Company's operating flexibility with respect to certain
matters is limited by covenants contained in the credit agreements, which
limit the ability of the Company's operating subsidiaries to incur additional
indebtedness and contingent liabilities, grant liens, pay dividends, make
investments, prepay other indebtedness or engage in certain asset sales,
acquisitions, joint ventures, mergers and consolidations; and (iii) the
Company's degree of leverage may make it more vulnerable to economic
downturns, may limit its ability to pursue other business opportunities and
may reduce its flexibility in responding to changing business and economic
conditions. In addition, the Company believes that it has greater leverage on
its balance sheet than many of its competitors. Under the currently existing
credit agreements, a material portion of the Company's bank indebtedness
matures in 2000 and additional equity financing would have been required by
December 31, 1998 in order to comply with a certain leverage ratio. However,
the Company has a commitment from its principal banks to refinance its bank
indebtedness prior to the end of 1998, which would extend the maturity of its
bank indebtedness, increase interest costs and provide greater flexibility
under the various debt covenants so that additional equity financing would not
be required.
In connection with potential acquisitions, the Company may incur additional
indebtedness, in which event the Company's leverage would be increased.
17
<PAGE>
(C) RISKS ASSOCIATED WITH ACQUISITIONS. The Company maintains its search for
acquisitions which will provide new product and market opportunities, leverage
existing assets and add critical mass. The Company is actively evaluating
various acquisition possibilities, including joint ventures and licensing
arrangements. On May 7, 1998, the Company completed the Cox Acquisition. The
Company cannot predict whether any additional acquisition which meets its
criteria will be available on terms acceptable to the Company, that financing
for any such acquisitions will be available on satisfactory terms, that the
Company will be able to accomplish its strategic objectives as a result of any
such acquisition, that any business or assets acquired by the Company will be
integrated successfully into the Company's operations or that such integration
will not involve significant costs. Given other transactions in the
pharmaceutical industry, and the values of potential acquisition targets, the
Cox Acquisition was, and any future acquisitions could initially be, dilutive
to the Company's earnings and may add significant intangible assets and
related goodwill amortization charges. Depending upon the timing and success
of the Company's acquisition strategy and other corporate developments, the
Company may seek additional debt or equity financing, resulting in additional
leverage and dilution of ownership, respectively. There can be no assurance
that the Company's acquisition strategy, or any other component of its growth
strategy, will be successful.
(D) FOREIGN OPERATIONS; RISK OF CURRENCY FLUCTUATION. The Company's foreign
operations are subject to various risks which are not present in domestic
operations, including, in certain countries, currency exchange fluctuations
and restrictions, restrictions on imports, government price controls,
restrictions on the level of remittance of dividends, interest, royalties and
other payments, the need for governmental approval of new operations, the
continuation of existing operations and other corporate actions, political
instability, the possibility of expropriation and uncertainty as to the
enforceability of commercial rights, trademarks and other proprietary rights.
The Company's Far East operations, particularly Indonesia where the Company
has a manufacturing facility, are being affected by the wide currency
fluctuations and decreased economic activity in many countries in such
geographical areas and by the social and political unrest in Indonesia. While
the Company's present exposure to economic factors in the Far East is not
material, the region is an important area for the Company's anticipated future
growth.
While from time to time the Company may engage in hedging activities, the
Company cannot predict future currency fluctuations or future governmental
regulatory actions or their impact on the Company.
(E) FLUCTUATING OPERATING RESULTS. The Company has experienced in the past,
and will experience in the future, variations in revenues and net income as a
result of many factors, including past and potential acquisitions, the level
of selling, general and administrative expenses, the general condition of the
pharmaceutical industry, and industry announcements and releases of new
products. The Company's planned operating expenditures and certain capital
expenditure programs are based on sales forecasts. If revenues are below
expectations in any given period, operating results could be materially
adversely affected. Additionally, the Company's operating results could be
adversely affected by delays in the introduction of new products.
(F) COMPETITION. All of the Company's businesses operate in highly
competitive markets and many of the Company's competitors are substantially
larger and have greater financial, technical and marketing resources than the
Company. As a result, the Company may be at a disadvantage in its ability to
develop new products to meet competitive demands. In addition, once a product
is approved, the Company may not be able to market its product (or establish a
favorable market price) as effectively as larger competitors.
The U.S. generic pharmaceutical industry has historically been characterized
by intense competition. As patents for brand-name products and other bases for
market exclusivity expire, prices typically decline as generic competitors
enter the marketplace. Normally, there is a further unit price decline as the
number of generic competitors increase causing an intensifying of competitive
pricing. The timing of these price decreases as to any particular product is
unpredictable and can result in a significantly curtailed profitable generic
product life-
18
<PAGE>
cycle. In addition brand-name manufacturers frequently take actions to prevent
or discourage the use of generic equivalents through marketing and regulatory
activities and litigation.
Generic pharmaceutical market conditions in the U.S. were further
exacerbated in the second half of 1996 by a fundamental shift in industry
distribution, purchasing and stocking patterns resulting from increased
importance of sales to major wholesalers and a concurrent reduction in sales
to private label generic distributors. The Company believes that this trend
continues to date. Wholesaler programs generally require lower prices on
products sold, lower inventory levels kept at the wholesaler and fewer
manufacturers selected to provide products to the wholesaler's own marketing
programs.
The factors which have adversely affected the U.S. generic pharmaceutical
industry may also affect some or all of the markets in which the International
Pharmaceutical Division operates. In addition, in Europe the Company is
encountering price pressure from parallel imports (i.e., imports of identical
products from lower priced markets under EU laws of free movement of goods)
and general governmental initiatives to reduce drug prices. Parallel imports
could lead to lower volume growth and both parallel imports and governmental
cost containment could create downward pressure on prices in certain product
and geographical market areas including the Nordic countries where the Company
has significant sales.
The Company has been and will continue to be affected by the competitive and
changing nature of this industry. Accordingly, because of competition, the
significance of relatively few major customers (e.g., large wholesalers and
chain stores), a rapidly changing market and uncertainty of timing of new
product approvals, the sales volume, prices and profits of the Company's U.S.
and International Pharmaceutical Divisions and its generic competitors are
subject to unforeseen fluctuation.
(G) DEPENDENCE ON SINGLE SOURCES OF RAW MATERIAL SUPPLY AND CONTRACT
MANUFACTURERS. Raw materials used in certain products are currently sourced
from single qualified suppliers, both foreign and domestic, and certain
products sold by the Company are purchased from single contract manufacturers.
Although the Company has not experienced difficulty to date in acquiring
active raw materials, other materials for production development, or products
purchased from contract manufacturers, there can be no assurance that supply
interruptions will not occur in the future or that the Company will not have
to obtain substitute materials or products, which would require additional
product validations and regulatory submissions. Further, there can be no
assurance that contract manufacturers that supply the Company will continue to
do so. Any such interruption of supply could have a material adverse effect on
the Company's ability to manufacture products, to sell products manufactured
under contract or to obtain or maintain regulatory approval of such products.
(H) THIRD PARTY REIMBURSEMENT PRICING PRESSURES. The Company's commercial
success in producing, marketing and selling generic products will depend, in
part, on the availability of adequate reimbursement from third-party health
care payers, such as government and private health insurers and managed care
organizations. Third-party payers are increasingly challenging the pricing of
medical products and services. There can be no assurance that reimbursement
will be available to enable the Company to maintain its present product price
levels. In addition, the market for the Company's products may be limited by
actions of third-party payers. For example, many managed health care
organizations are now controlling the pharmaceutical products for which
reimbursement will be provided. The resulting competition among pharmaceutical
companies to place their products on these approved lists has created a trend
of downward pricing pressure in the industry. There can be no assurance that
the Company's products will be included on the approved lists of managed care
organizations or that downward pricing pressures in the industry generally
will not negatively impact the Company's business, results of operations and
financial condition.
(I) POTENTIAL LIABILITY FOR CURRENT PRODUCTS. Continuing studies of the
proper utilization, safety, and efficacy of pharmaceuticals and other health
care products are being conducted by the industry, government agencies and
others. Such studies, which increasingly employ sophisticated methods and
techniques, can call into question the utilization, safety and efficacy of
previously marketed products and in some cases have resulted, and may in the
future result, in the discontinuance of their marketing and, in certain
countries, give rise to claims
19
<PAGE>
for damages from persons who believe they have been injured as a result of
their use. The Company's business, results of operations and financial
condition could be materially adversely affected by the assertion of such a
product liability claim.
(J) RELATIONSHIP OF THE COMPANY AND INDUSTRIER; CONTROLLING STOCKHOLDER;
CONFLICTS OF INTEREST. Industrier, as the beneficial owner of 100% of the
outstanding shares of the Class B Stock, is presently entitled to elect two-
thirds of the members of the Company's Board of Directors and to cast in
excess of a majority of the votes generally entitled to be cast on matters
presented to the Company's stockholders. Accordingly, Industrier controls the
Company and its policies. At September 30, 1998 there were 9,500,000 shares of
Class B Stock outstanding, which shares represented approximately 37% of the
total Common Stock outstanding. Industrier's ownership of the Class B Stock
has the effect of preventing hostile takeovers, including transactions in
which stockholders might otherwise receive a premium for their shares over
current market prices. Approximately 50% of the Class B Stock is pledged by
Industrier to its lenders. Industrier also beneficially owns a convertible
note of the Company in the principal amount of $67,850,000, which may convert
upon the occurrence of certain events after April 6, 2001 into 2,372,896
shares of Class B Stock.
E.W. Sissener, Chairman and Chief Executive Officer of the Company, is also
Chairman of Industrier and controls Industrier. Gert Munthe, President and
Chief Operating Officer of the Company, is a director of Industrier. Mr.
Sissener controls a majority of Industrier's outstanding shares and thus may
be deemed the indirect controlling stockholder of the Company. The Company and
Industrier engage in various transactions from time to time, including the
provision of administrative services and the sale of certain products, and
conflicts of interest are present with respect to the terms of such
transactions. The Company believes that contractual arrangements with
Industrier are no less favorable to the Company than other third party
contracts that are negotiated on an arm's length basis. All contractual
arrangements between the Company and Industrier are subject to approval by, or
ratification of, the Audit Committee of the Board of Directors of the Company
consisting of directors who are unaffiliated with Industrier, as to the
fairness of the terms and conditions of such arrangements to the Company.
(K) POSSIBLE STOCK PRICE VOLATILITY. The stock market has from time to time
experienced significant price and volume fluctuations that may be unrelated to
the operating performance of particular companies. In addition, the market
price of the Class A Stock, like the stock prices of many publicly traded
pharmaceutical companies, has been and may continue to be highly volatile. The
sale by the Company's major shareholders or members of the Company's
management of shares of Common Stock, announcement of technological
innovations or new commercial products by the Company or its competitors,
publicity regarding actual or potential medical results relating to marketed
products, regulatory developments in either the U.S. or foreign countries,
public concern as to the safety of pharmaceutical products, factors present in
foreign operations, the loss of suppliers or contract manufacturers, third
party reimbursement pressures, potential liability for current products and
economic and other external factors, as well as period-to-period fluctuations
in financial results, among other factors, may have a significant impact on
the market price of the Class A Stock. Transactions involving the Warrants may
also increase the volatility of the price of the Class A Stock.
(L) SHARES ELIGIBLE FOR FUTURE SALE. Sales of substantial numbers of shares
of Class A Stock in the public market could adversely affect the market price
of the Company's Class A Stock. In addition to the shares purchasable on
exercise of the Warrants, 9,500,000 shares of Class B Stock, all of which are
held by Industrier, are exchangeable into shares of Class A Stock, on a one
for one basis, although Industrier has agreed not to sell any shares of Class
B Stock or convert any Class B Stock into Class A Stock until after October
31, 1999. See "Description of the Capital Stock and Warrants."
3.GENERAL
Alpharma is a multinational pharmaceutical company that develops,
manufactures and markets specialty human pharmaceutical and animal health
products. The Company manufactures and markets approximately 600
pharmaceutical products for human use and 40 animal health products. The
Company conducts business in more
20
<PAGE>
than 50 countries and has approximately 3,000 employees at 38 sites in 21
countries. For the year ended December 31, 1997 and the six months ended June
30, 1998, the Company generated revenue of approximately $500 million and $266
million, respectively, and operating income of approximately $47 million and
$25 million, respectively.
The Company's human pharmaceutical business is the largest manufacturer and
marketer of generic liquid and topical pharmaceuticals in the U.S. The Company
has a leading position in branded generic pharmaceuticals in the Nordic
countries. It also has an expanding presence internationally, particularly in
Europe, where the Company obtained a substantial generic pharmaceutical market
presence in the U.K. through the May 7, 1998 acquisition of Arthur H. Cox and
Co. Ltd. and related marketing subsidiaries (the "Cox Acquisition"). In
addition, the Company is the world's leading producer of bacitracin, zinc
bacitracin and polymixin, which are important pharmaceutical grade
antibiotics. The human pharmaceutical segment generated approximately $327
million and $183 million of revenue for the year ended December 31, 1997 and
the six months ended June 30, 1998.
The Company's animal health business is a leading provider of animal feed
additives for the poultry and swine industries, as well as vaccines for the
aquaculture industry. The animal health segment generated approximately $173
million and $83 million of revenue for the year ended December 31, 1997 and
the six months ended June 30, 1998.
Alpharma has spent over $30 million annually over the last three years on
research and development for new products, technologies and proprietary
processes. In human pharmaceuticals, these activities have focused on known
chemical entities and proprietary technologies. Its animal health and fine
chemicals divisions utilize the Company's expertise in fermentation,
specialized recovery and purification technologies in the development of new
products and technologies. In the U.S., the Company has 20 animal health
product applications pending, 14 of which are for approval to use an existing
Company product in combination with another existing Company or third-party
product. Internationally, Alpharma has 34 foreign product applications
pending, substantially all of which seek approval to sell an existing Company
product in a new foreign market. In its aquaculture business, the Company has
four additional fish vaccine product applications pending in various
countries.
The Company's strategy is to increase revenue and profitability by (i)
building upon its market leadership positions; (ii) leveraging its
manufacturing strengths; (iii) accelerating research and development; (iv)
expanding markets globally; and (v) pursuing complementary acquisitions that
can provide new products and market opportunities as well as leverage existing
assets.
The Company was originally organized as A.L. Laboratories, Inc., a wholly
owned subsidiary of A.L. Industrier A.S. ("Industrier"), a Norwegian health
care company (previously named Apothekernes Laboratorium A.S.) and
subsequently changed its name to Alpharma Inc. to operate worldwide as one
corporate entity. In 1994, the Company acquired the complementary human
pharmaceutical, animal health and fine chemicals businesses of Industrier. The
Company issued the Warrants, to the shareholders of Industrier as part of the
consideration paid by the Company in such acquisition.
4.FINANCIAL INFORMATION
The following table represents consolidated financial data for the Company
for the years ended December 31, 1996 and 1997 and for the six-months ended
June 30, 1997 and 1998.
Financial data for the years 1996 and 1997 has been derived from the audited
consolidated financial statements of the Company in its Annual Report on Form
10-K for the fiscal year ended December 31, 1997. Unaudited financial data for
the six months ended June 30, 1998 and 1997 has been derived from the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998.
21
<PAGE>
ALPHARMA INC. AND SUBSIDIARIES
SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX SIX
MONTHS MONTHS
ENDED ENDED
YEARS ENDED DECEMBER 31, JUNE 30, JUNE 30,
--------------------------- -------- --------
1997 1996(1) 1998(2) 1997
------------ ------------- -------- --------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA
Total revenues................ $ 500,288 $ 486,184 $266,075 $240,410
------------ ------------ -------- --------
Operating income.............. 46,898 3,920 24,746 18,814
------------ ------------ -------- --------
Interest expense.............. (18,581) (19,976) (10,979) (9,332)
Other income (expense), net... (567) (170) 182 (167)
------------ ------------ -------- --------
Income (loss) before income
taxes........................ 27,750 (16,226) 13,949 9,315
------------ ------------ -------- --------
Provision (benefit) for income
taxes........................ 10,342 (4,765) 6,242 3,585
------------ ------------ -------- --------
Net income (loss)............. $ 17,408 $ (11,461) $ 7,707 $ 5,730
============ ============ ======== ========
Average number of shares
outstanding
Basic....................... 22,695 21,715 25,367 21,796
============ ============ ======== ========
Diluted..................... 22,780 21,715 25,757 21,824
============ ============ ======== ========
Earnings (loss) per share: Net
income (loss)
Basic....................... $ 0.77 $ (0.53) $ 0.30 $ 0.26
============ ============ ======== ========
Diluted..................... $ 0.76 $ (0.53) $ 0.30 $ 0.26
============ ============ ======== ========
</TABLE>
(1) 1996 includes management actions relating to production rationalizations
and severance which reduce operating income by $18,800. These amounts are
net after tax of approximately $12,600 ($0.58 per share).
(2) Six Months ended June 30, 1998 includes results of Cox Pharmaceuticals
acquired in May 1998 and one time charges of $3,600 pre-tax ($3,100 after
tax) or $0.12 per share related to the acquisition.
<TABLE>
<CAPTION>
SIX SIX
MONTHS MONTHS
ENDED ENDED
YEARS ENDED DECEMBER 31, JUNE 30, JUNE 30,
------------------------- -------- --------
1997 1996 1998(3) 1997
------------ ------------ -------- --------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA
Current assets.................... 273,677 274,859 305,163 251,082
Non-current assets................ 358,189 338,548 549,530 319,213
------------ ------------ -------- --------
Total assets.................... $ 631,866 $ 613,407 $854,693 $570,295
============ ============ ======== ========
Current liabilities............... 133,926 155,651 140,068 110,253
Long-term debt, less current
maturities....................... 223,975 233,781 437,381 226,070
Deferred taxes and other non-
current liabilities.............. 35,492 37,933 37,900 35,590
Stockholders' equity.............. 238,473 186,042 239,344 198,382
------------ ------------ -------- --------
Total liabilities and
stockholder's equity........... $ 631,866 $ 613,407 $854,693 $570,295
============ ============ ======== ========
</TABLE>
(3) June 30, 1998 includes accounts from the date of the acquisition (May
1998) of Cox Pharmaceuticals.
22
<PAGE>
ALPHARMA INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT FOR RATIO DATA)
<TABLE>
<CAPTION>
SIX SIX
MONTHS MONTHS
ENDED ENDED
YEARS ENDED DECEMBER 31, JUNE 30, JUNE 30,
------------------------- -------- --------
1997 1996(4) 1998 1997
----------- ------------- -------- --------
<S> <C> <C> <C> <C>
Income before provision for income
taxes............................. $ 27,750 $ (16,226) $13,949 $ 9,315
Add:
Portion of rents representative of
the interest factor.............. 1,942 2,193 1,012 942
Interest on indebtedness.......... 18,581 19,976 10,979 9,332
Amortization of debt expense...... 309 302 293 158
Amortization of interest
capitalized...................... 380 397 204 190
----------- ------------ ------- -------
INCOME AS ADJUSTED............... $ 48,962 $ 6,642 $26,437 $19,937
=========== ============ ======= =======
FIXED CHARGES
Interest on indebtedness(a)....... $ 18,581 $ 19,976 $10,979 $ 9,332
Interest capitalized(b)........... 407 572 342 127
Amortization of debt expense(c)... 309 302 293 158
Rent expense...................... 5,825 6,578 3,035 2,827
Portion of rents representative of
the interest factor(d)........... 1,942 2,193 1,012 942
----------- ------------ ------- -------
Fixed charges (a+b+c+d).......... $ 21,239 $ 23,043 $12,626 $10,559
=========== ============ ======= =======
RATIO OF EARNINGS TO FIXED
CHARGES........................... 2.31 -- 2.09 1.89
=========== ============ ======= =======
</TABLE>
- --------
(4)Earnings in 1996 were not sufficient to cover fixed charges. The deficiency
of earnings was $16,400.
- --------------------------------------------------------------------------------
ALPHARMA INC. AND SUBSIDIARIES
COMPUTATION OF BOOK VALUE PER COMMON SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX SIX
MONTHS MONTHS
ENDED ENDED
YEARS ENDED DECEMBER 31, JUNE 30, JUNE 30,
------------------------- -------- --------
1997 1996 1998 1997
------------ ------------ -------- --------
<S> <C> <C> <C> <C>
Stockholders' equity............. $238,473 $186,042 $239,344 $198,382
Common shares outstanding........ 25,343 21,765 25,414 23,076
BOOK VALUE PER COMMON SHARE........ $ 9.41 $ 8.55 $ 9.42 $ 8.60
============ ============ ======== ========
</TABLE>
23
<PAGE>
MISCELLANEOUS
The Company is not aware of any jurisdiction where the making of the Offer
is prohibited by administrative or judicial action pursuant to any valid
statute of such jurisdiction. If the Company becomes aware of any such valid
statute prohibiting the making of the Offer or the acceptance of Warrants
pursuant thereto, the Company will make a good faith effort to comply with
such statute. If, after such good faith effort, the Company cannot comply with
such statute, the Offer will not be made to (nor will tenders be accepted from
or on behalf of) the holders of Warrants in such jurisdiction.
The Company has filed with the Commission the Schedule 13E-4 pursuant to
Rule 13e-4 under the Exchange Act containing certain additional information
with respect to the Offer. Such Schedule and any amendments thereto, including
exhibits, may be examined and copies may be obtained from the principal office
of the Commission in the manner set forth under the heading "Information
Concerning the Company--Information Incorporated by Reference; Availability of
Information" (except that they will not be available at the regional offices
of the Commission).
No person has been authorized to give any information or make any
representation on behalf of the Company not contained in this Offer or in the
Letter of Transmittal and, if given or made, such information or
representations must not be relied upon as having been authorized.
Alpharma Inc.
October 21, 1998
24
<PAGE>
THE DEPOSITARY FOR THE OFFER IS:
BANKBOSTON, N.A.
<TABLE>
<S> <C> <C>
By Registered or Certified By Hand: By Overnight Delivery:
Mail:
BankBoston, N.A. Securities Transfer & Reporting Services, Inc. BankBoston, N.A.
Attn: Corporate c/o Boston EquiServe LP Attn: Corporate
Reorganization 1 Exchange Place Reorganization
P.O. Box 8029 55 Broadway, 3rd floor 150 Royall Street
Boston, MA 02266-8029 New York, NY 10006 Canton, MA 02021
</TABLE>
THE SUBDEPOSITARY FOR THE OFFER IN NORWAY IS:
ALPHARMA AS
<TABLE>
<S> <C>
By Hand/Overnight: By Mail:
Alpharma AS Alpharma AS
Attn: Sverre Bjertnes Attn: Sverre Bjertnes
Harbitzalleen 3 Harbitzalleen 3, P.O. Box 158
Skoyen N-0212, Oslo, Skoyen N-0212, Oslo,
Norway Norway
</TABLE>
Questions and requests for assistance may be directed to the Information Agents
at their respective addresses and telephone numbers listed below. Additional
copies of this Offer, the Letter of Transmittal and other exchange offer
materials may be obtained by contacting the persons identified below and will
be furnished promptly at the Company's expense:
Diane Cady Sverre Bjertnes
Vice President, Investor Relations Vice President, Finance-International
Alpharma Inc. Alpharma AS
One Executive Drive Harbitzalleen 3, P.O. Box 158
Fort Lee, NJ 07024 Skoyen N-0212, Oslo, Norway
Ph: (201) 228-5085 (+47) 22 52 9120
Toll Free (U.S. only): 1-800-200-9159
<PAGE>
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
OUTSTANDING WARRANTS TO PURCHASE CLASS A COMMON STOCK
OF
ALPHARMA INC.
PURSUANT TO THE OFFER DATED OCTOBER 21, 1998
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON NOVEMBER 20, 1998 UNLESS EXTENDED (THE "EXPIRATION DATE").
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Offer, this Letter of Transmittal should be
completed, signed, and submitted to the Depositary or the Subdepositary:
The Depositary for the Offer is:
BankBoston, N.A.
<TABLE>
<S> <C> <C>
By Registered or Certified By Hand: By Overnight Delivery:
Mail:
BankBoston, N.A. Securities Transfer & Reporting Services, Inc. BankBoston, N.A.
Attn: Corporate c/o Boston EquiServe LP Attn: Corporate
Reorganization Reorganization
P.O. Box 8029 1 Exchange Place 150 Royall Street
Boston, MA 02266-8029 55 Broadway, 3rd floor Canton, MA 02021
New York, NY 10006
</TABLE>
The Subdepositary for the Offer in Norway is:
Alpharma AS
<TABLE>
<S> <C>
By Hand/Overnight: By Mail:
Alpharma AS Alpharma AS
Attn: Sverre Bjertnes Attn: Sverre Bjertnes
Harbitzalleen 3 Harbitzalleen 3, P.O. Box
158
Skoyen N-0212, Oslo, Skoyen N-0212, Oslo,
Norway Norway
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY ADDITIONAL
INFORMATION YOU MAY CONTACT THE DEPOSITARY, THE SUBDEPOSITARY, DIANE M. CADY,
VICE PRESIDENT, INVESTOR RELATIONS OF THE COMPANY, OR SVERRE BJERTNES, VICE
PRESIDENT, FINANCE INTERNATIONAL OF ALPHARMA AS, AT THEIR RESPECTIVE ADDRESSES
AND TELEPHONE NUMBERS SPECIFIED IN THE OFFER.
BOX 1
DESCRIPTION OF WARRANTS TENDERED
(ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGREGATE
NUMBER OF AGGREGATE
NAME(S) AND ADDRESS(ES) OF REGISTERED WARRANTHOLDER(S), CERTIFICATE WARRANTS NUMBER OF
EXACTLY AS NAME(S) APPEAR(S) ON WARRANT CERTIFICATE(S) NUMBER(S) OF EVIDENCED BY WARRANTS
(PLEASE FILL IN, IF BLANK) WARRANTS* CERTIFICATE(S) TENDERED**
- ----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
<S> <C> <C> <C>
TOTAL
</TABLE>
- -------------------------------------------------------------------------------
* Need not be completed by persons tendering by book-entry transfer.
** Unless otherwise indicated in this column, all Warrants evidenced by
all Warrant Certificates identified in this box or delivered to the
Depositary or the Subdepositary herewith shall be deemed tendered. See
Instruction 4.
<PAGE>
BOX 2
BENEFICIAL OWNER(S)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATE OF PRINCIPAL RESIDENCE OF EACH BENEFICIAL OWNER OF AGGREGATE NUMBER OF TENDERED WARRANTS HELD FOR
TENDERED WARRANTS ACCOUNT OF BENEFICIAL OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C>
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
</TABLE>
The undersigned hereby acknowledges receipt of the Offer dated October 21,
1998 of Alpharma Inc., a Delaware corporation (the "Company"), and this Letter
of Transmittal (the "Letter of Transmittal"), which, as amended or
supplemented from time to time collectively constitute the Company's Offer
(the "Offer") to exchange any and all of the outstanding warrants to purchase
(the "Warrants") shares of Class A common stock, $.20 par value per share (the
"Shares") of the Company for a number of newly issued Shares determined
pursuant to an exchange formula, as described herein (the "Exchange Formula").
Each outstanding Warrant represents right of the holder of such Warrant to
purchase 1.061 Shares at $20.69 in cash per Share on or before the expiration
date of the Warrants which is the close of business on January 3, 1999 unless
extended by the Company in its discretion. Warrants which are not exercised
prior to the expiration date will cease to be exercisable. See the Offer under
the caption "Description of the Capital Stock and the Warrants." The number of
Shares to be issued for each Warrant pursuant to the Offer is the result of
dividing (i) the sum of $1.00 plus the Warrant Spread (as defined) by (ii) the
Average Market Price (as defined) (the "Exchange Formula"). "Warrant Spread"
means 1.061 times the result of subtracting $20.69 from the Average Market
Price. The Average Market Price will be the arithmetic average (rounded to the
nearest cent) of the closing prices of the Shares on the New York Stock
Exchange (the "NYSE") on each of the ten consecutive days on which the Shares
trade on the NYSE commencing on the first day following the filing of the
Company's Form 10-Q Report for the period ended September 30, 1998. The
Company expects to file such Form 10-Q Report on or about October 30, 1998.
The Company will not be required to issue any fractional Shares.
Warrantholders will receive cash in lieu of any such fractional Shares,
calculated on the basis of the Average Market Price. The issuance of Shares
pursuant to the Offer has not been registered under the Securities Act of
1933, as amended, pursuant to an exemption thereunder. See the Offer under the
caption "Certain Consequences of Shares Not Being Registered Under the
Securities Act of 1933." The Shares and the Warrants, except for the Sissener
Warrants (as defined), are listed for trading on the NYSE. The newly issued
Shares will also be listed for trading on the NYSE. Capitalized terms used but
not defined herein have the meanings ascribed to them in the Offer.
The Letter of Transmittal is to be used by Warrantholders if (i)
certificates evidencing tendered Warrants are to be physically delivered to
the Depositary or the Subdepositary herewith by such Warrantholders; (ii)
tender of Warrants is to be made by book-entry transfer to the Depositary's
account at the Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedures set forth under the caption "The Exchange Offer--
Procedures for Tendering Warrants" in the Offer; or (iii) tender of Warrants
is to be made according to the guaranteed delivery procedures set forth under
the caption "The Exchange Offer--Procedures for Tendering Warrants--Guaranteed
Delivery" in the Offer; and, in each case, instructions are not being
transmitted through the DTC Automated Tender Offer Program ("ATOP").
Warrantholders that are tendering by book-entry transfer to the Depositary's
account at the Book-Entry Transfer Facility can execute the tender through
ATOP for which the transaction will be eligible. The Book-Entry Transfer
Facility participants that are accepting the Offer must transmit their
acceptances to the Book-Entry Transfer Facility which will verify the
acceptance and execute a book-entry delivery to the Depositary's account at
the Book-Entry Transfer Facility. The Book-Entry Transfer Facility will then
send an Agent's Message to the Depositary for its acceptance. Delivery of the
Agent's Message by the Book-Entry Transfer Facility will satisfy the terms of
the Offer as to execution and delivery of a Letter of Transmittal by the
participant identified in the Agent's Message.
2
<PAGE>
The undersigned hereby tenders the Warrants described in the box entitled
"Description of Warrants Tendered" above (the "Tendered Warrants") pursuant to
the terms and conditions described in the Offer and this Letter of
Transmittal. The undersigned is the registered owner of all the Tendered
Warrants and the undersigned represents that it is either (i) the beneficial
owner of the Tendered Warrants ("Beneficial Owners") or (ii) it has received
from each Beneficial Owne a duly completed and executed form of "Instruction
to Registered Warrantholder and/or Book-Entry Transfer Facility Participant
from Beneficial Owner" accompanying this Letter of Transmittal, instructing
the undersigned to take the action described in this Letter of Transmittal.
Subject to, and effective upon, the acceptance for exchange of the Tendered
Warrants, the undersigned hereby assigns and transfers to, or upon the order
of, the Company, all right, title, and interest in, to, and under the Tendered
Warrants.
Please issue the Shares exchanged for Tendered Warrants in the name(s) of
the undersigned. Similarly please send or cause to be sent the certificates
for the Shares (and accompanying documents, as appropriate) to the undersigned
at the address shown in the box entitled "Description of Warrants Tendered"
above.
The undersigned hereby irrevocably constitutes and appoints the Depositary
and the Subdepositary and each of them as the true and lawful agents and
attorneys in fact of the undersigned with respect to the Tendered Warrants,
with full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to deliver the Tendered Warrants
to the Company or cause ownership of the Tendered Warrants to be transferred
to, or upon the order of, the Company, on the books of the registrar for the
Warrants and deliver all accompanying evidences of transfer and authenticity
to, or upon the order of, the Company upon receipt by the Depositary or the
Subdepositary, as the undersigned's agent, of the Shares to which the
undersigned is entitled upon acceptance by the Company of the Tendered
Warrants pursuant to the Offer and in accordance with the terms of the Offer.
The undersigned understands that tenders of Warrants pursuant to the
procedures described under the caption "The Exchange Offer" in the Offer and
in the instructions hereto will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of
the Offer, subject only to withdrawal of such tenders on the terms set forth
in the Offer under the caption "The Exchange Offer--Withdrawal Rights." All
authority herein conferred or agreed to be conferred shall survive the death
or incapacity of the undersigned and any Beneficial Owner(s), and every
obligation of the undersigned or any Beneficial Owners hereunder shall be
binding upon the heirs, representatives, successors, and assigns of the
undersigned and such Beneficial Owner(s).
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, exchange, assign, and transfer the Tendered
Warrants and that the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges, encumbrances, and
adverse claims when the Tendered Warrants are acquired by the Company as
contemplated herein. The undersigned and each Beneficial Owner will, upon
request, execute and deliver any additional documents reasonably requested by
the Company, the Depositary or the Subdepositary as necessary or desirable to
complete and give effect to the transactions contemplated hereby.
The undersigned hereby represents and warrants that the information set
forth in Box 2 is true and correct.
[_]CHECK HERE IF TENDERED WARRANTS ARE BEING DELIVERED HEREWITH.
[_]CHECK HERE IF TENDERED WARRANTS ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE DEPOSITARY AND COMPLETE
"USE OF GUARANTEED DELIVERY" BELOW (BOX 3).
[_]CHECK HERE IF TENDERED WARRANTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE "USE OF BOOK-ENTRY TRANSFER" BELOW (BOX 4).
3
<PAGE>
BOX 3 BOX 4
USE OF GUARANTEED DELIVERY USE OF BOOK-ENTRY TRANSFER
(SEE INSTRUCTION 2)
(SEE INSTRUCTION 1)
TO BE COMPLETED ONLY IF WARRANTS TO BE COMPLETED ONLY IF DELIVERY
ARE BEING TENDERED BY MEANS OF A OF TENDERED WARRANTS IS TO BE
NOTICE OF GUARANTEED DELIVERY. MADE BY BOOK-ENTRY TRANSFER.
Name of Tendering Institution:
Name(s) of Registered __________________________________
Warrantholder(s): Account Number:
__________________________________
__________________________________
Date of Execution of Notice of Transaction Code Number:
Guaranteed Delivery: __________________________________
__________________________________
Name of Institution which Guaran-
teed Delivery:
__________________________________
4
<PAGE>
BOX 5
TENDERING WARRANTHOLDER SIGNATURE
(SEE INSTRUCTIONS 1 AND 5)
X _____________________________________________________
X _____________________________________________________
(SIGNATURE OF REGISTERED WARRANTHOLDER(S) OR
AUTHORIZED SIGNATORY)
Note: The above lines must be signed by the registered
Warrantholder(s) as their name(s) appear(s) on the
Warrant certificates. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact,
officer, or other person acting in a fiduciary or
representative capacity, such person must set forth
his or her full title below. See Instruction 5.
Name(s):
________________________________________________
________________________________________________
Capacity:
________________________________________________
________________________________________________
Street Address:
____________________________________________
____________________________________________
____________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: _______________________
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 5)
Authorized Signature
X _____________________________________________________
Name: _________________________________________________
(PLEASE PRINT)
Title: ________________________________________________
Name of Firm: _________________________________________
(MUST BE AN ELIGIBLE INSTITUTION AS DEFINED IN
INSTRUCTION 2)
Address:
________________________________________________
________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: _______________________
Dated: ________________________________________________
5
<PAGE>
CERTIFICATE OF FOREIGN STATUS
Name (if joint names, list first and circle the name
SUBSTITUTE of the person or entity whose number you enter in
Part 1 below. See instructions if your name has
changed.)
FORM W-8 --------------------------------------------------------
Address
DEPARTMENT OF
THE TREASURY --------------------------------------------------------
INTERNAL City, State and ZIP Code
REVENUE
SERVICE
--------------------------------------------------------
List account number(s) here (optional)
--------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR U.S. TAX- U.S. Social
PAYER IDENTIFICATION NUMBER ("TIN") Security
(IF ANY) IN THE BOX AT RIGHT AND CER- Number or
TIFY BY SIGNING AND DATING BELOW TIN (if any)
--------------------------------------------------------
PART 2--Check the box if you are an exempt foreign
person under backup withholding rules of the Internal
Revenue Code because (1) you are a nonresident alien
individual or a foreign corporation, partnership,
estate, or trust and (2) you are an individual who
has not been, and plans not to be, present in the
United States for a total of 183 days or more during
the calendar year and (3) you are neither engaged,
nor plan to be engaged during the year, in a U.S.
trade or business that has effectively connected
gains from transactions with a broker or barter
exchange. [_]
--------------------------------------------------------
CERTIFICATION--UNDER THE PENALTIES OF
PERJURY, I CERTIFY THAT THE INFORMA- PART 3--
TION PROVIDED ON THIS FORM IS TRUE, Awaiting
CORRECT AND COMPLETE. TIN [_]
Signature: _____________ Date: ______
6
<PAGE>
PAYOR'S NAME: ALPHARMA INC.
Name (if joint names, list first and circle the name
SUBSTITUTE of the person or entity whose number you enter in
Part 1 below. See instructions if your name has
changed.)
FORM W-9 --------------------------------------------------------
Address
DEPARTMENT OF
THE TREASURY --------------------------------------------------------
INTERNAL City, State and ZIP Code
REVENUE
SERVICE
--------------------------------------------------------
List account number(s) here (optional)
--------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TAXPAYER Social
IDENTIFICATION NUMBER ("TIN") IN THE Security
BOX AT RIGHT AND CERTIFY BY SIGNING Number or
AND DATING BELOW TIN
--------------------------------------------------------
PART 2--Check the box if you are NOT subject to
backup withholding under the provisions of section
3406(a)(1)(C) of the Internal Revenue Code because
(1) you have not been notified that you are subject
to backup withholding as a result of failure to
report all interest or dividends or (2) the Internal
Revenue Service has notified you that you are no
longer subject to backup withholding. [_]
--------------------------------------------------------
CERTIFICATION--UNDER THE PENALTIES OF
PERJURY, I CERTIFY THAT THE INFORMA- PART 3--
TION PROVIDED ON THIS FORM IS TRUE, Awaiting
CORRECT AND COMPLETE. TIN [_]
Signature: _____________ Date: ______
7
<PAGE>
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND WARRANTS. A properly completed
and duly executed copy of this Letter of Transmittal and any documents
required by this Letter of Transmittal must be received by the Depositary or
the Subdepositary at their respective addresses set forth herein, and either
certificates for Tendered Warrants must be received by the Depositary or the
Subdepositary at the addresses set forth herein or such Tendered Warrants must
be transferred pursuant to the procedures for book-entry transfer described in
the Offer under the caption "The Exchange Offer--Procedure for Tendering
Warrants" (and a confirmation of such transfer received by the Depositary), in
each case prior to 5:00 p.m., New York City time, on the Expiration Date. The
method of delivery of certificates for Tendered Warrants, this Letter of
Transmittal and all other required documents to the Depositary or the
Subdepositary, including delivery through any Book-Entry Transfer Facility is
at the option and risk of the tendering Warrantholder and the delivery will be
deemed made only when actually received by the Depositary or the
Subdepositary. If delivery is by mail, registered mail with return receipt
requested, properly insured, is recommended. Instead of delivery by mail, it
is recommended that the Warrantholder use an overnight or hand delivery
service. In all cases, sufficient time should be allowed to assure timely
delivery. No Letter of Transmittal or Warrants should be sent to the Company.
Neither the Company nor the registrar is under any obligation to notify any
tendering Warrantholder of the Company's acceptance of Tendered Warrants prior
to the closing of the Offer.
2. GUARANTEED DELIVERY PROCEDURES. Warrantholders who wish to tender their
Warrants but whose Warrant certificates are not immediately available, and who
cannot deliver their Warrant certificates, this Letter of Transmittal or any
other documents required hereby to the Depositary or Subdepositary prior to
the Expiration Date must tender their Warrants according to the guaranteed
delivery procedures set forth below, including completion of Box 3. Pursuant
to such procedures: (i) such tender must be made by or through a firm which is
a member of a recognized Medallion Program approved by the Securities Transfer
Association Inc. (an "Eligible Institution") and the Notice of Guaranteed
Delivery must be signed by the Warrantholder; (ii) prior to the Expiration
Date, the Depositary must have received from the Warrantholder and the
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by mail or hand delivery) setting forth the name and
address of the Warrantholder, the certificate number(s) of the Tendered
Warrants and the principal amount of Tendered Warrants, stating that the
tender is being made thereby and guaranteeing that, within three New York
Stock Exchange trading days after the Expiration Date, this Letter of
Transmittal together with the certificate(s) representing the Warrants and any
other required documents will be deposited by the Eligible Institution with
the Depositary; and (iii) such properly completed and executed Letter of
Transmittal, as well as all other documents required by this Letter of
Transmittal and the certificate(s) representing all Tendered Warrants in
proper form for transfer, must be received by the Depositary within three New
York Stock Exchange trading days after the Expiration Date. Any Warrantholder
who wishes to tender Warrants pursuant to the guaranteed delivery procedures
described above must ensure that the Depositary receives the Notice of
Guaranteed Delivery relating to such Warrants prior to 5:00 p.m., New York
City time, on the Expiration Date. Failure to complete the guaranteed delivery
procedures outlined above will not, of itself, affect the validity or effect a
revocation of any Letter of Transmittal form properly completed and executed
by an Eligible Warrantholder who attempted to use the guaranteed delivery
process.
3. BENEFICIAL OWNER INSTRUCTIONS TO REGISTERED WARRANTHOLDERS. Only a
Warrantholder in whose name Tendered Warrants are registered in the Warrant
Register (or the legal representative or attorney-in-fact of such registered
Warrantholder) may execute and deliver this Letter of Transmittal. Any
Beneficial Owner of Tendered Warrants who is not the registered Warrantholder
must arrange promptly with the registered Warrantholder to execute and deliver
this Letter of Transmittal on his or her behalf through the execution and
delivery to the registered Warrantholder of the Instructions to Registered
Warrantholder and/or Book-Entry Transfer Facility Participant from Beneficial
Owner form accompanying this Letter of Transmittal.
4. PARTIAL TENDERS. If less than the entire aggregate number of Warrants
held by the Warrantholder is tendered, the tendering Warrantholder should fill
in the aggregate number tendered in the columns labeled "Aggregate Number of
Warrants Tendered" of the box entitled "Description of Warrants Tendered"
above. The entire number of Warrants delivered to the Depositary of the
Subdepositary will be deemed to have been tendered unless otherwise indicated.
If the entire number of all Warrants held by the Warrantholder is not
tendered, then Warrants for the number of Warrants not tendered and Shares
issued in exchange for any Warrants tendered and accepted will be sent to the
Warrantholder at his or her registered address.
8
<PAGE>
5. SIGNATURES ON THE LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
registered Warrantholder(s) of the Tendered Warrants, the signature must
correspond with the name(s) as written on the face of the Tendered Warrants
without alteration, enlargement or any change whatsoever.
If any of the Tendered Warrants are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any Tendered
Warrants are held in different names, it will be necessary to complete, sign
and submit as many separate copies of the Letter of Transmittal as there are
different names in which Tendered Warrants are held.
If this Letter of Transmittal is signed by the registered Warrantholder(s)
of Tendered Warrants, and Shares issued in exchange therefor are to be issued
(and any untendered principal amount of Warrants is to be reissued) in the
name of the registered Warrantholder(s), then such registered Warrantholder(s)
need not and should not endorse any Tendered Warrants, nor provide a separate
stock power. In any other case, such registered Warrantholder(s) must either
properly endorse the Tendered Warrants or transmit a properly completed
separate stock power with this Letter of Transmittal, with the signature(s) on
the endorsement or stock power guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered Warrantholder(s) of any Tendered Warrants, such Tendered Warrants
must be endorsed or accompanied by appropriate stock powers, in each case,
signed as the name(s) of the registered Warrantholder(s) appear(s) on the
Tendered Warrants, with the signature(s) on the endorsement or stock power
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Tendered Warrants or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by
the Company, evidence satisfactory to the Company of their authority to so act
must be submitted with this Letter of Transmittal.
Endorsements on Tendered Warrants or signatures on stock powers required by
this Instruction 5 must be guaranteed by an Eligible Institution.
6. TRANSFER AND STOCK ISSUANCE TAXES. The Company will pay all transfer or
stock issuance taxes, if any, applicable to the exchange of Tendered Warrants
pursuant to the Offer. If, however, a transfer tax is imposed for any reason
other than the transfer and exchange of Tendered Warrants pursuant to the
Offer, then the amount of any such transfer taxes (whether imposed on the
registered Warrantholder or on any other person) will be payable by the
tendering Warrantholder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with this Letter of Transmittal, the
amount of such taxes will be billed directly to such tendering Warrantholder.
7. TAX IDENTIFICATION NUMBER. Federal income tax law requires that the
Warrantholder(s) of any Tendered Warrants which are accepted for exchange must
provide the Company (as payor) with its correct taxpayer identification number
("TIN"), which, in the case of a Warrantholder who is an individual, is his or
her social security number. If the Company is not provided with the correct
TIN, the Warrantholder may be subject to backup withholding and a $50 penalty
imposed by the Internal Revenue Service. (If withholding results in an over-
payment of taxes, a refund may be obtained.) Certain Warrantholders
(including, among others, all corporations and certain foreign individuals)
are not subject to these backup withholding and reporting requirements.
To prevent backup withholding payments with respect to gain on the deemed
redemption of fractional Shares, each Warrantholder of Tendered Warrants must
provide such Warrantholder's correct TIN by completing the enclosed Substitute
Form W-8 or W-9, as applicable, certifying that the TIN provided is correct
(or that such Warrantholder is awaiting a TIN), and that (i) the Warrantholder
has not been notified by the Internal Revenue Service that such Warrantholder
is subject to backup withholding as a result of failure to report all interest
or dividends; (ii) the Internal Revenue Service has notified the Warrantholder
that such Warrantholder is no longer subject to backup withholding; or that
(iii) the Warrantholder is a foreign individual for Federal Tax purposes.
The Company reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Company's obligation regarding backup
withholding.
9
<PAGE>
8. VALIDITY OF TENDERS. All questions as to the validity, form, eligibility
(including time of receipt), acceptance and withdrawal of Tendered Warrants
will be determined by the Company in its sole discretion, which determination
will be final and binding. The Company reserves the absolute right to reject
any and all Warrants not validly tendered or any Warrants the Company's
acceptance of which would, in the opinion of the Company or their counsel, be
unlawful. The Company also reserves the right to waive any conditions of the
Offer or defects or irregularities in tenders of Warrants as to any
ineligibility of any Warrantholder who seeks to tender Warrants in the Offer.
The interpretation of the terms and conditions of the Offer (including this
Letter of Transmittal and the instructions hereto) by the Company shall be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Warrants must be cured within such time as the
Company shall determine. Neither the Company, the Depositary, the
Subdepositary nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of Warrants,
nor shall any of them incur any liability for failure to give such
notification. Tenders of Warrants will not be deemed to have been made until
such defects or irregularities have been cured or waived. Any Warrants
received by the Depositary or the Subdepositary that are not properly tendered
and as to which the defects or irregularities have not been cured or waived
will be returned by the Depositary to the tendering Warrantholders, unless
otherwise provided in this Letter of Transmittal, as soon as practicable
following the Expiration Date.
9. WAIVER OF CONDITIONS. The Company reserves the absolute right to amend,
waive or modify any of the conditions in the Offer in the case of any Tendered
Warrants.
10. NO CONDITIONAL TENDER. No alternative, conditional, irregular, or
contingent tender of Warrants or transmittal of this Letter of Transmittal
will be accepted.
11. MUTILATED, LOST, STOLEN OR DESTROYED WARRANTS. Any tendering
Warrantholder whose Warrants have been mutilated, lost, stolen or destroyed
should contact the Depositary at the address indicated herein for further
instructions.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance or additional copies of the Offer or this Letter of Transmittal may
be directed to the Depositary, the Subdepositary, Diane M. Cady, Vice
President Investor Relations of the Company or Sverre Bjertnes, Vice President
Finance International of Alpharma AS, at their respective addresses indicated
in the Offer. Warrantholders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Offer.
13. ACCEPTANCE OF TENDERED WARRANTS AND ISSUANCE OF WARRANTS; RETURN OF
WARRANTS. Subject to the terms and conditions of the Offer, the Company will
accept for exchange all validly tendered Warrants as soon as practicable after
the Expiration Date and will issue Shares therefor as soon as practicable
after the required documentation has been received. For purposes of the Offer,
the Company shall be deemed to have accepted tendered Warrants when, as and if
the Company has given written or oral notice (immediately followed in writing)
thereof to the Depositary. If any Tendered Warrants are not exchanged pursuant
to the Offer for any reason, such unexchanged Warrants will be returned,
without expense, to the undersigned at the address shown in the box entitled
"Description of Warrants Tendered" above.
14. WITHDRAWAL. Tenders may be withdrawn only pursuant to the procedures set
forth in the Offer under the caption "The Exchange Offer--Withdrawal Rights."
10
<PAGE>
EXHIBIT (a)(3)
NOTICE OF GUARANTEED DELIVERY
WITH RESPECT TO
OUTSTANDING WARRANTS TO PURCHASE CLASS A COMMON STOCK
OF
ALPHARMA INC.
Pursuant to the Offer Dated October 21, 1998
This form must be used by a holder of Warrants to purchase (the "Warrants")
shares of Class A Common Stock, $.20 par value per share (the "Shares") of
Alpharma Inc., a Delaware corporation (the "Company"), who wishes to tender
Warrants to the Depositary pursuant to the guaranteed delivery procedures
described in "The Exchange Offer--Procedure for Tendering Warrants--Guaranteed
Delivery" of the Company's Offer, dated October 21, 1998 (the "Offer") and in
Instruction 2 to the related Letter of Transmittal. Any holder who wishes to
tender Warrants pursuant to such guaranteed delivery procedures must ensure
that the Depositary receives this Notice of Guaranteed Delivery prior to the
Expiration Date of the Offer. Capitalized terms used but not defined herein
have the meanings ascribed to them in the Offer or the Letter of Transmittal.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON NOVEMBER 20, 1998 UNLESS EXTENDED (THE "EXPIRATION DATE").
The Depositary for the Offer is:
BankBoston, N.A.
<TABLE>
<S> <C> <C>
By Registered or Certified By Hand: By Overnight Delivery:
Mail:
BankBoston, N.A. Securities Transfer & Reporting Services, Inc. BankBoston, N.A.
Attn: Corporate c/o Boston EquiServe LP Attn: Corporate
Reorganization Reorganization
P.O. Box 8029 1 Exchange Place 150 Royall Street
Boston, MA 02266-8029 55 Broadway, 3rd floor Canton, MA 02021
New York, NY 10006
</TABLE>
The Subdepositary for the Offer in Norway is:
Alpharma AS
<TABLE>
<S> <C>
By Hand/Overnight: By Mail:
Alpharma AS Alpharma AS
Attn: Sverre Bjertnes Attn: Sverre Bjertnes
Harbitzalleen 3 Harbitzalleen 3, P.O. Box
158
Skoyen N-0212, Oslo, Skoyen N-0212, Oslo,
Norway Norway
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.
<PAGE>
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible
Institution" under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Letter of
Transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and subject to
the conditions set forth in the Offer and the related Letter of Transmittal,
receipt of which is hereby acknowledged, the principal amount of Warrants set
forth below pursuant to the guaranteed delivery procedures set forth in the
Offer and in Instruction 2 of the Letter of Transmittal.
The undersigned hereby tenders the Warrants listed below:
<TABLE>
<CAPTION>
CERTIFICATE NUMBER(S) (IF KNOWN) OF WARRANTS OR AGGREGATE NUMBER OF AGGREGATE NUMBER OF
ACCOUNT NUMBER AT THE BOOK-ENTRY FACILITY WARRANTS REPRESENTED WARRANTS TENDERED
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
PLEASE SIGN AND COMPLETE
- -------------------------------------------------------------------------------
Signatures of Registered Holder(s)
or
Authorized Signatory: ______________ Date: _______________, 1998
------------------------------------ Address: ___________________________
------------------------------------ ------------------------------------
Name(s) of Registered Holder(s): ___ Area Code and Telephone No. ________
------------------------------------
------------------------------------
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly
as their name(s) appear on certificates for Warrants or on a security
position listing as the owner of Warrants, or by person(s) authorized to
become Holder(s) by endorsements and documents transmitted with this Notice
of Guaranteed Delivery. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer or other person acting in
a fiduciary or representative capacity, such person must provide the
following information.
Please print name(s) and address(es)
Name(s): ____________________________________________________________________
-----------------------------------------------------------------------------
Capacity: ___________________________________________________________________
Address(es): ________________________________________________________________
-----------------------------------------------------------------------------
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., or is a commercial bank or trust company having an office or
correspondent in the United States, or is otherwise an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended, guarantees deposit with the Depositary of
the Letter of Transmittal (or facsimile thereof), together with the Warrants
tendered hereby in proper form for transfer (or confirmation of the book-
entry transfer of such Warrants into the Depositary's account at the Book-
Entry Transfer Facility described in the Offer under the caption "The
Exchange Offer--Procedure for Tendering Warrants--Guaranteed Delivery" and
in the Letter of Transmittal) and any other required documents, all by 5:00
p.m., New York City time, on the third New York Stock Exchange trading day
following the Expiration Date of the Offer.
Name of firm _______________________
------------------------------------
(Authorized Signature)
Address ____________________________
------------------------------------ Name _______________________________
(Please Print)
(Include Zip Code)
Area Code and Tel. No. _____________ Title ______________________________
Dated ________________________, 1998
DO NOT SEND SECURITIES WITH THIS FORM. ACTUAL SURRENDER OF SECURITIES MUST
BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, AN EXECUTED LETTER OF TRANSMITTAL.
3
<PAGE>
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. Delivery of this Notice of Guaranteed Delivery. A properly completed and
duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by
the Depositary at its address set forth herein prior to the Expiration Date of
the Offer. The method of delivery of this Notice of Guaranteed Delivery and
any other required documents to the Depositary is at the election and sole
risk of the holder, and the delivery will be deemed made only when actually
received by the Depositary. If delivery is by mail, registered mail with
return receipt requested, properly insured, is recommended. As an alternative
to delivery by mail, the holders may wish to consider using an overnight or
hand delivery service. In all cases, sufficient time should be allowed to
assure timely delivery. For a description of the guaranteed delivery
procedures, see Instruction 2 of the Letter of Transmittal.
2. Signatures on this Notice of Guaranteed Delivery. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Warrants
referred to herein, the signature must correspond with the name(s) written on
the face of the Warrants without alteration, enlargement, or any change
whatsoever. If this Notice of Guaranteed Delivery is signed by a participant
of the Book-Entry Transfer Facility whose name appears on a security position
listing as the owner of the Warrants, the signature must correspond with the
name shown on the security position listing as the owner of the Warrants.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Warrants listed or a participant of the Book-Entry
Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by
appropriate stock powers, signed as the name of the registered holder(s)
appears on the Warrants or signed as the name of the participant shown on the
Book-Entry Transfer Facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and submit with the Letter of Transmittal evidence
satisfactory to the Company of such person's authority to so act.
3. Requests for Assistance or Additional Copies. Questions and requests for
assistance and requests for additional copies of the Offer may be directed to
the Depositary, the Subdepositary, Diane M. Cady, Vice President-Investor
Relations of the Company, or Sverre Bjertnes, Vice President-Finance
International of Alpharma AS, at the addresses specified in the Offer. Holders
may also contact their broker, dealer, commercial bank, trust company, or
other nominee for assistance concerning the Offer.
4
<PAGE>
EXHIBIT (a)(4)
INSTRUCTIONS TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER
OF
ALPHARMA INC.
OUTSTANDING WARRANTS TO PURCHASE CLASS A COMMON STOCK
To Registered Holder and/or Participant of the Book-Entry Transfer Facility:
The undersigned hereby acknowledges receipt of the Offer, dated October 21,
1998 of Alpharma Inc., a Delaware corporation (the "Company"), and the
accompanying Letter of Transmittal (the "Letter of Transmittal"), which, as
amended or supplemented from time to time collectively constitute, the
Company's offer (the "Offer"). Capitalized terms used but not defined herein
have the meanings ascribed to them in the Offer.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to action to be taken by you relating to the Offer
with respect to the Warrants held by you for the account of the undersigned.
The aggregate number of Warrants held by you for the account of the
undersigned is (FILL IN AMOUNT): Warrants.
With respect to the Offer, the undersigned hereby instructs you (CHECK
APPROPRIATE BOX):
[_] TO TENDER the following Warrants held by you for the account of the
undersigned (INSERT AGGREGATE NUMBER OF WARRANTS):
[_] NOT TO TENDER any Warrants held by you for the account of the
undersigned.
If the undersigned instructs you to tender the Warrants held by you for the
account of the undersigned, it is understood that you are authorized (a) to
make, on behalf of the undersigned (and the undersigned, by its signature
below, hereby makes to you), the representation and warranties contained in
the Letter of Transmittal that are to be made with respect to the undersigned
as a beneficial owner; (b) to agree, on behalf of the undersigned, as set
forth in the Letter of Transmittal; and (c) to take such other action as
necessary under the Offer or the Letter of Transmittal to effect the valid
tender of such Warrants.
SIGN HERE
Name of beneficial owner(s): ______________________________________________
Signature(s): _____________________________________________________________
Name (please print): ______________________________________________________
Address: __________________________________________________________________
--------------------------------------------------------------------
---------------------------------------------------------------------
Telephone number: _________________________________________________________
Taxpayer Identification or Social Security Number: ________________________
Date: _____________________________________________________________________
<PAGE>
Exhibit (d)(1)
KIRKLAND & ELLIS
Partnerships Including Professional Corporations
Citicorp Center
153 East 53rd Street
New York, New York 10022-4675
To Call Writer Direct: 212 446-4800 Facsimile:
212 446-4800 212 446-4900
October 21, 1998
Alpharma Inc.
One Executive Drive
Fort Lee, NJ 07024
Re: Issuer's Tender Offer Statement
-------------------------------
Ladies and Gentlemen:
We have acted as counsel to Alpharma Inc. (the "Company") in
-------
connection with its offer to exchange any and all of the outstanding warrants to
purchase shares of Class A common stock, $.20 par value per share (the
"Shares"), of the Company for a number of newly issued Shares determined
------
pursuant to an exchange formula (collectively, the "Tender Offer").
------------
You have requested our opinion as to certain United States federal
income tax consequences of the Tender Offer. In preparing our opinion, we have
reviewed and relied upon the Company's Issuer Tender Offer Statement, dated as
of October 21, 1998 (the "Statement") to be filed with the Securities and
---------
Exchange Commission, certain representations by the Company, and such other
documents as we deemed necessary.
On the basis of the foregoing, it is our opinion that the statements
under the heading "Certain Federal Income Tax Consequences" in the Statement are
correct.
The opinion set forth above is based upon the applicable provisions of
the Internal Revenue Code of 1986, as amended, the Treasury Regulations
promulgated or proposed thereunder, current positions of the Internal Revenue
Service (the "IRS") contained in published revenue rulings, revenue procedures,
---
and announcements, existing judicial decisions and other applicable authorities.
No tax ruling has been sought from the IRS with respect to any of the matters
discussed herein. Unlike a ruling from the IRS, an opinion of counsel is not
binding on the IRS. Hence, no assurance can be given that the opinion stated in
this letter will not be successfully challenged by the IRS or by a court. We
express no opinion concerning any tax consequences of the Tender Offer except as
expressly set forth above.
Chicago London Los Angeles Washington, D.C.
<PAGE>
KIRKLAND & ELLIS
Alpharma Inc.
October 21, 1998
Page 2
We hereby consent to the filing of this opinion as Exhibit (d)(1) to
the Statement. We also consent to the reference to our firm under the heading
"Certain Federal Income Tax Consequences." In giving this consent, we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ Kirkland & Ellis
Kirkland & Ellis
<PAGE>
Exhibit (d)(2)
A D V O K A T F I R M A E T
WIERSHOLM
MELLBYE & BECH
ANS-M.N.A.
Alpharma Inc.
One Executive Dr.
P.O. Box 1399
Fort Lee, NJ 07024
USA
Oslo, 20 October 1998
Ref: HW-80703
Partner in charge:
Per Raustol
RE: ISSUER'S TENDER OFFER STATEMENT
Ladies and Gentlemen:
We have acted as Norwegian counsel to Alpharma Inc. (the "Company") in
-------
connection with its offer to exchange any and all of the outstanding warrants to
purchase shares of Class A common stock, $.20 par value per share (the
"Shares"), of the Company for a number of newly issued Shares determined
------
pursuant to an exchange formula (collectively, the "Tender Offer").
------------
You have requested our opinion as to certain Norwegian income tax consequences
of the Tender Offer. In preparing our opinion, we have reviewed and relied upon
the Company's Issuer Tender Offer Statement, dated as of October, 1998 (the
"Statement") to be filed with the Securities and Exchange Commission, certain
- ----------
representations by the Company, and such other documents as we deemed necessary.
On the basis of the foregoing, it is our opinion that the statements under the
heading "Certain Norwegian Tax Consequences" in the Statement are correct.
The opinion set forth above is based upon the applicable provisions of the
Norwegian Tax Act of 1911 as amended and the Norwegian Companies Taxation Act of
1991 as amended, as well as general and announced opinions from the Norwegian
Ministry of Finance in respect of taxation of warrants.
No tax ruling has been sought from the Norwegian tax authorities with respect to
any of the matters discussed herein. No assurance can be given that the opinion
stated in this letter will not be successfully challenged by the
Advokatfirmaet Wiersholm, Mellbye & Bech ANS-M.N.A.
Postadresse/Postal address: Postboks 400 Sentrum, N-0103 Oslo, Norway,
Besoksadresse/Office address: Kirksgaten 15, Oslo, Norway.
Telefon: (+47) 22 400 600. Telefax (+47) 22 410 600. Bankgiro/Bank Account No:
6011.05.43908.Reg. No: 958389566
<PAGE>
Wiersholm
Mellbye & Bech
Norwegian tax authorities or by a court. We express no opinion concerning any
tax consequences of the Tender Offer except as expressly set forth above.
We hereby consent to the filing of this opinion as an exhibit to the Statement.
Wiersholm, Mellbye & Bech
/s/ Harald Willumsen /s/ Arnljot Hustad
- ------------------------------ -----------------------------
Harald Willumsen Arnljot Hustad
2
