<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 7, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ALPHARMA INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 22-2095212
(I.R.S. EMPLOYER
(STATE OR OTHER JURISDICTION OF IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
ONE EXECUTIVE DRIVE
FORT LEE, NEW JERSEY 07024
TELEPHONE: (201) 947-7774
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL OFFICES)
JEFFREY E. SMITH
ALPHARMA INC.
ONE EXECUTIVE DRIVE
FORT LEE, NEW JERSEY 07024
TELEPHONE: (201) 947-7774
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
GLEN E. HESS, P.C.
KIRKLAND & ELLIS
CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
(212) 446-4800
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C>
5 3/4% Convertible Subordinated Notes due
2005...................................... $14,079,000 $3,914
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Class A Common Stock, par value $.20 per
share..................................... (2) (2)
</TABLE>
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(1) Estimated solely for the purposes of determining the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended.
(2) Such indeterminate number of shares of Common Stock as shall be issuable
upon the conversion of the Convertible Notes being registered hereunder.
No separate consideration will be received by the Company upon conversion
of the Convertible Notes and, accordingly, no additional registration fee
is payable pursuant to Rule 457(i) under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
PROSPECTUS
JANUARY 7, 1999
ALPHARMA INC.
$14,079,000 5 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2005
We will not receive any of the proceeds from the sale by the holders listed on
page 24 of any notes or any shares of our common stock into which the notes are
convertible.
BACKGROUND AND TERMS OF NOTES
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. BACKGROUND
On March 30, 1998 we issued
$125,000,000 worth of notes
which are convertible into
shares of our class A common
stock. We also issued
$67,850,000 worth of notes to
our controlling stockholder
which are convertible into
shares of our class B common
stock.
. THIS PROSPECTUS
Under this prospectus, the
noteholders listed on page 24
may offer to sell all or a
portion of their notes,
totaling up to $14,079,000
worth of notes and up to
492,380 shares of our class A
common stock into which those
notes are convertible.
. MATURITY
April 1, 2005.
. CONVERSION
A noteholder may convert any of
his notes into shares of our
class A common stock at any
time on or before April 1,
2005, unless we have redeemed
or repurchased those notes. The
conversion rate is $28.59375
per share, unless we adjust it
under certain circumstances.
. REDEMPTION
We may redeem the notes at any
time on or after April 6, 2001.
. MANDATORY OFFER TO REPURCHASE
If we sell certain assets or
experience specific kinds of
changes in control, we must offer
to repurchase the notes.
. SECURITY
These notes are not secured.
. RANKING
These notes are subordinated to
all of our indebtedness unless
the terms of that indebtedness
expressly provide otherwise.
These notes are subordinated to
all of our subsidiaries'
indebtedness and liabilities,
including trade payables.
. INTEREST
Fixed annual rate of 5 3/4%.
Paid every six months on April 1
and October 1.
. MARKET FOR OUR SECURITIES
We expect the notes and the
shares of our class A common
stock being registered under this
prospectus to be listed on the
New York Stock Exchange.
Already listed on the New York
Stock Exchange are:
. $111,095,000 worth of notes,
under the symbol ALO05.
. shares of our class A common
stock, including those shares
into which the listed notes are
convertible, under the symbol
ALO.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS PERMITTED.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE NOTES OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements under the caption "The Company" and elsewhere in this
Prospectus 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 Alpharma
Inc. (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, among other things, risks
associated with the following: leverage; acquisition strategy; competition;
government regulation; foreign operations, including currency fluctuations;
fluctuations in operating results; dependence on single sources of raw
material supply and manufacture; third party reimbursement pricing pressures;
potential liability for current products; and other factors referenced in this
Prospectus or in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, which is incorporated herein by reference.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement," which
term shall include any amendments thereto) on Form S-3 under the Securities
Act of 1933 (the "Securities Act"), with respect to the Company's 5 3/4%
Convertible Subordinated Notes due 2005 (the "Notes") and the shares of its
Class A Common Stock, par value $.20 per share (the "Class A Common Stock")
that are issuable upon conversion of the Notes offered hereby. This Prospectus
does not contain all the information set forth in the Registration Statement
and the exhibits and schedules thereto, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and to which
reference is hereby made. Statements made in this Prospectus as to the
contents of any document referred to are not necessarily complete. With
respect to each such document filed as an exhibit to the Registration
Statement, reference is made to the exhibit for a more complete description of
the matter involved, and each such statement shall be deemed qualified in its
entirety by such reference. The Registration Statement may be inspected and
copied at the public reference facilities maintained by the Commission
referred to below.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information with the Commission. Such
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 Class A
Common Stock is 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated by reference into this Prospectus: 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 quarters ended March 31, June 30, 1998 and September 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 after the date of this Prospectus and prior to the
termination of the offering of the Notes offered hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
2
<PAGE>
Any statement contained herein or in any document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus of which it is a part to the extent
that a statement contained herein or therein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in the Prospectus by reference,
other than exhibits to such documents unless the exhibits themselves are
specifically incorporated by reference. Requests for such copies should be
directed to Alpharma Inc., One Executive Drive, Fort Lee, New Jersey 07024,
Attention Vice President, Investor Relations (telephone number: (201) 947-
7774).
3
<PAGE>
THE COMPANY
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 than 50 countries and has approximately
3,000 employees at 38 sites in 21 countries. For the year ended December 31,
1997 and the nine months ended September 30, 1998, the Company generated
revenue and operating income of approximately $500 million and $430 million,
respectively, and $47 million and $45 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 recently obtained a substantial generic
pharmaceutical market presence in the U.K. through the May 7, 1998 acquisition
(the "Cox Acquisition") of Arthur H. Cox and Co. Ltd. and related marketing
subsidiaries (collectively, "Cox"). 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 nine months ended September 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 $174
million and $83 million of revenue for the year ended December 31, 1997 and
the nine months ended September 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 fine
chemicals divisions utilizes 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 healthcare
company (the Apothekernes Laboratorium A.S.). In 1994, the Company acquired
the complementary human pharmaceutical and animal health business of
Industrier and subsequently changed its name to Alpharma Inc. to operate
worldwide as one corporate entity.
4
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Securities by the Selling Securityholders.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company and its subsidiaries for each of the periods indicated. We
calculated the ratio of earnings to fixed charges by dividing earnings by
total fixed charges. Earnings consist of pretax income plus fixed charges and
amortization of capitalized interest less capitalized interest. Fixed charges
consist of interest expense on all indebtedness, including amortization of
deferred debt issuance costs, and a portion of rent expense (33%) estimated by
management to be the interest component of these rentals.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------ -----------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
2.00x 1.07x 2.24x -- (/1/) 2.31x 2.20x
</TABLE>
- --------
(1)Earnings in 1996 were not sufficient to cover fixed charges. The deficiency
of earnings was $16.4 million.
5
<PAGE>
DESCRIPTION OF NOTES
The Notes were issued under an indenture (the "Indenture") dated as of March
30, 1998, by and between the Company and First Union National Bank, as trustee
(the "Trustee"). The Notes were originally sold by the Company on March 30,
1998 (the "Initial Offering") to SBC Warburg Dillon Read Inc., CIBC
Oppenheimer and Cowen & Company (collectively, the "Initial Purchasers"). The
Initial Purchasers subsequently resold the Notes to qualified institutional
buyers pursuant to Rule 144A under the Securities Act and, outside the United
States, to certain persons in offshore transactions in reliance on Regulation
S under the Securities Act. The following statements are subject to the
detailed provisions of the Indenture and are qualified in their entirety by
reference to the Indenture, a copy of which will be provided to prospective
investors by the Company upon request and is also available for inspection at
the office of the Trustee. Wherever particular provisions of the Indenture are
referred to, such provisions are incorporated by reference as a part of the
statements made, and the statements are qualified in their entirety by such
reference.
GENERAL
The Notes represent unsecured general obligations of the Company,
subordinate in right of payment to certain other obligations of the Company as
described under "Subordination of Notes," and convertible into Class A Common
Stock as described under "Conversion." The Notes will mature on April 1, 2005.
The Notes are limited to $125,000,000 aggregate principal amount, all of which
has been issued. The Company will pay interest on the Notes semiannually on
April 1 and October 1 of each year, with the first payment made on October 1,
1998 at the rate of 5 3/4% per annum and will pay interest on the Notes
(except defaulted interest) to the persons who are registered holders of Notes
at the close of business on the preceding March 15 and September 15,
respectively (subject to certain exceptions in the case of Notes redeemed or
repurchased upon a Change in Control between a record date and the next
succeeding interest payment date). The Company may pay principal and interest
by check and may mail an interest check to a holder's registered address.
Holders must surrender Notes to the Paying Agent to collect principal
payments.
The Notes have been issued without coupons in denominations of $1,000 and
whole multiples of $1,000. A holder may transfer or exchange Notes in
accordance with the Indenture. No service charge will be made for any
registration of transfer, exchange or conversion of the Notes, except for any
tax or other governmental charges that may be imposed in connection with any
transfers, registration of transfers or exchanges. The registrar for the Notes
need not transfer or exchange any Notes selected for redemption. Also, it need
not transfer or exchange any Notes for a period of 15 days before selecting
Notes to be redeemed. The registered holder of a Note may be treated as its
owner for all purposes.
Initially, the Trustee will act as Registrar, Paying Agent and Conversion
Agent. The Company may appoint an additional, or change any, Paying Agent,
Registrar or Conversion Agent without notice. The Company may act in any such
capacity.
The Indenture does not contain any restrictions on the payment of dividends
or on the repurchase of securities of the Company or any financial covenants,
nor does the Indenture require the Company to maintain any sinking fund or
other reserves for repayment of the Notes.
At the time the Notes were originally issued by the Company, A.L. Industrier
A.S. ("Industrier"), the controlling stockholder of the Company, purchased at
par for cash $67.85 million principal amount of a convertible subordinated
note (the "Industrier Note"). The Industrier Note has substantially the same
terms (including interest rate, conversion and maturity date) as, and ranks
pari passu with, the Notes, except that the Industrier Note, so long as it is
held by Industrier or any other affiliate of the Registrant, is not
convertible at the holder's discretion but instead automatically converts on
or after April 6, 2001 into Class B Common Stock, par value $0.20 per share
(the "Class B Common Stock," and together with the Class A Common Stock, the
"Common Stock"), if at least 75% of the Notes are converted into Class A
Common Stock by the holders thereof. The Industrier Note is exchangeable, in
whole or in part, into Notes at any time after October 31, 1999
6
<PAGE>
at the option of Industrier. Industrier has agreed not to sell the Industrier
Note or any Common Stock until after October 31, 1999.
CONVERSION
The holders of the Notes will be entitled at any time after the original
issuance thereof and before the close of business on the date of maturity of
the Notes, subject to prior redemption or repurchase, to convert the Notes, or
portions thereof (if the portions are $1,000 or whole multiples thereof) into
shares of Class A Common Stock at the conversion price set forth on the cover
page of this Prospectus (subject to adjustments as described below). Except as
described below, no payment or adjustment will be made for accrued interest on
a converted Note or for dividends on any Class A Common Stock issued on
conversion. If any Note is converted between a record date for the payment of
interest and the next succeeding interest payment date, unless such Note has
been called for redemption on a redemption date between such dates, such Note
must be accompanied by funds equal to the interest payable to the registered
holder on such interest payment date on the principal amount so converted. A
Note converted on an interest payment date need not be accompanied by any
payment, and the interest on the principal amount of the Note being converted
will be paid on such interest payment date to the registered holder of such
Note on the immediately preceding record date. The Company will not issue
fractional shares of Class A Common Stock upon conversion of Notes and instead
will deliver a check in lieu of the fractional share based upon the market
value of the Class A Common Stock on the last trading day prior to the
conversion date. In the case of Notes called for redemption, conversion rights
will expire at the close of business on the tenth calendar day preceding the
redemption date, and in the event any holder exercises its Repurchase Right
(as defined below), such holder's conversion right will terminate upon receipt
of the written notice of exercise of such Repurchase Right. See "--Repurchase
at Option of Holders Upon Change in Control." In the case of Notes called for
redemption on a redemption date between a record date and the opening of
business on the next succeeding interest payment date, no interest will be
payable on any such Notes converted during such period.
The conversion price is subject to adjustment as set forth in the Indenture
in certain events, including, (i) the payment of dividends or distributions on
the Common Stock in shares of capital stock; (ii) subdivisions or combinations
of the Common Stock into a greater or smaller number of shares; (iii) a
reclassification of the Common Stock resulting in an issuance of any shares of
the capital stock of the Company; (iv) the distribution of rights or warrants
to all holders of Common Stock entitling them for a period of sixty days or
less to purchase Common Stock at less than the then current market price at
that time; and (v) the distribution to all holders of Common Stock of assets
or debt securities or any rights or warrants to purchase assets or debt
securities of the Company, which assets, debt securities, rights or warrants
have an aggregate fair market value on the date such distribution is declared
that exceeds the "permitted dividend amount," defined as: (x) 10% of Company's
market capitalization (the product of the current market price of the Class A
Common Stock and the number of shares of Common Stock outstanding as of any
particular date) minus (y) the aggregate value of all dividends or
distributions made to holders of Common Stock within the 12 months preceding
such distribution (excluding any distributions or dividends referred to in
(i)-(iv) above), provided that with respect to any distribution not paid out
of retained earnings, the permitted dividend amount shall be zero, other than
Common Stock, of the Company (other than cash dividends or cash distributions
payable out of consolidated net income or retained earnings). No adjustment
will be required for rights to purchase Common Stock pursuant to any plan of
the Company for reinvestment of dividends or interest, or for a change in the
par value of the Common Stock. To the extent that Notes become convertible
into cash, no adjustment will be required thereafter as to cash. No adjustment
in the conversion price will be made unless such adjustment would require a
change of at least $.25 in the conversion price; however, any adjustment that
would otherwise be required to be made shall be carried forward and taken into
account at the earlier of any subsequent adjustment or three years after the
occurrence of the event giving rise to the adjustment. The Company reserves
the right to make such reductions in the conversion price in addition to those
required in the foregoing provisions as the Company in its discretion shall
determine to be advisable in order that certain stock-related distributions
hereafter made by the Company to its stockholders shall not be taxable. Except
as stated above, the conversion price will not be adjusted for the issuance of
Common Stock or any securities convertible into or exchangeable for Common
Stock, or carrying the right to purchase any of the foregoing. See "Certain
Federal Income Tax Consequences--Conversion."
7
<PAGE>
If the Company reclassifies the Class A Common Stock or merges into, or
transfers or leases substantially all of its assets to, another corporation,
the holders of the Notes then outstanding will be entitled thereafter to
convert such Notes into the kind and amount of shares of capital stock, other
securities, cash or other assets which they would have owned immediately after
such event had such Notes been converted immediately before the effective date
of the transaction.
Conversion price adjustments may in certain circumstances result in
constructive distributions that could be taxable as dividends under the
Internal Revenue Code of 1986, as amended, to holders of Notes or to holders
of Class A Common Stock issued upon conversion thereof. See "Certain Federal
Income Tax Consequences--Conversion."
OPTIONAL REDEMPTION
The Notes may be redeemed on at least 30 and not more than 60 days notice at
the option of the Company, in whole at any time or in part from time to time,
at a redemption price of 103.286% of principal, together with accrued interest
to the date fixed for redemption, beginning April 6, 2001, and at the
following redemption prices (expressed as percentages of principal), together
with accrued interest to the date fixed for redemption, during the twelve
month period beginning April 1, in the years set forth below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2002.......................................................... 102.464%
2003.......................................................... 101.643
2004.......................................................... 100.821
</TABLE>
If less than all the Notes are to be redeemed, the Trustee will select the
Notes to be redeemed on a pro rata basis, by lot, by such method as may be
required by an exchange on which the Notes are listed or by any other method
the Trustee, in its discretion deems fair.
REPURCHASE AT OPTION OF HOLDERS UPON CHANGE IN CONTROL
Upon any Change in Control (as defined below) with respect to the Company,
each holder of the Notes and the Industrier Note shall have the right (the
"Repurchase Right"), at the holder's option, to require the Company to
repurchase all of such holder's Notes, the Industrier Note, as applicable, or
a portion thereof which is $1,000 or any integral multiple thereof, on the
date (the "Repurchase Date") that is 45 days after the date of the Company
Notice (as defined below) at a price equal to 100% of the principal amount of
the Notes, plus accrued and unpaid interest, if any, to the Repurchase Date.
Within 30 days after the occurrence of a Change in Control, the Company is
obligated to mail to all holders of record of the Notes a notice (the "Company
Notice") of the occurrence of such Change in Control and the Repurchase Right
arising as a result thereof. The Company shall deliver a copy of the Company
Notice to the Trustee and shall cause a copy of such notice to be published in
The Financial Times and The Wall Street Journal or another newspaper of
national circulation. To exercise the Repurchase Right, a holder of Notes must
deliver on or before the 30th day after the date of the Company Notice
irrevocable written notice to the Company (or an agent designated by the
Company for such purpose) and the Trustee of the holder's exercise of such
right together with the Notes with respect to which the right is being
exercised, duly endorsed for transfer.
CHANGE IN CONTROL
A "Change in Control" of the Company means (i) the acquisition by any
person, entity or "group" within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act, (excluding, for this purpose, the Company or its
subsidiaries, or any employee benefit plan of the Company or its subsidiaries
which acquires beneficial ownership of voting securities of the Company) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of shares of Common Stock sufficient to elect a majority of
directors; (ii) persons who, as of the date of the Indenture, constitute the
Board of Directors (the "Incumbent Board") cease
8
<PAGE>
for any reason to constitute at least a majority of the Board of Directors,
provided that any person becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such person were a member of the
Incumbent Board; (iii) approval by the stockholders of the Company of a
reorganization, merger or consolidation, in each case, with respect to which
persons who were the stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter,
beneficially own shares sufficient to elect a majority of directors of the
reorganized, merged or consolidated company's then outstanding voting
securities; or (iv) a liquidation or dissolution of the Company (other than
pursuant to the United States Bankruptcy Code) or the conveyance, transfer or
leasing of all or substantially all of the assets of the Company to any
person; provided, however, that for the purpose of clauses (i) through (iv)
above, the terms "person", "entity", and "group" shall not be deemed to
include (x) Industrier, (y) the stockholders of Industrier in the case of a
distribution of shares of capital stock of the Company beneficially owned by
Industrier to the shareholders of Industrier, unless a Change in Control of
Industrier has occurred or occurs concurrently with such a distribution, or in
a series of related transactions of which such distribution is a part,
(determined without regard to this clause (y) of this proviso) or (z) E.W.
Sissener, his spouse, any heir or descendant of Mr. Sissener or the spouse of
any such heir or descendant or the estate of Mr. Sissener (each, an "EWS
Party"), or any trust or other similar arrangement for the benefit of any EWS
Party or any corporation or other person or entity controlled by one or more
EWS Party, or any group of which any EWS Party is a member. For purposes of
the above sentence, a "liquidation" or "dissolution" shall not be deemed to
include any transfer of Company property solely to any of the persons
described in clauses (x), (y) and (z) of the proviso in such sentence.
No quantitative or other established meaning has been given to the phrase
"all or substantially all" (which appears in the definition of Change in
Control) by courts which have interpreted this phrase in various contexts. In
interpreting this phrase, courts make a subjective determination as to the
portion of assets conveyed, considering such factors as the value of assets
conveyed and the proportion of an entity's income derived from the assets
conveyed. To the extent the meaning of such phrase is uncertain, uncertainty
will exist as to whether or not a Change in Control may have occurred (and,
accordingly, whether or not the holders of Notes will have the right to
require the Company to repurchase their Notes).
The occurrence of a Change in Control would, in most cases, permit the
lenders to require prepayment of some or all amounts outstanding under the
Company's bank lines of credit and other debt agreements. See
"Capitalization." In the event of a Change in Control, any repurchase of the
Notes could, absent payment in full of any amounts outstanding under such
credit facilities or waiver, be prevented by the subordination provisions of
the Notes. See "--Subordination of Notes." Failure by the Company to
repurchase the Notes when required will result in an Event of Default with
respect to the Notes whether or not such repurchase is permitted by the
subordination provisions. The right to require the Company to repurchase the
Notes could delay or deter a Change in Control of the Company, whether or not
such Change in Control were supported by the Board of Directors of the
Company.
If a Change in Control occurs, there can be no assurance that the Company
would have sufficient funds or financing to repay any Senior Indebtedness then
required to be repaid or to repurchase any or all Notes then required to be
repurchased under the Indenture.
If an offer is made to repurchase Notes as a result of a Change in Control,
the Company intends to comply with all tender offer rules, including but not
limited to Section 13(e) and 14(e) under the Exchange Act and Rules 13e-1 and
14e-1 thereunder, to the extent applicable to such offer.
SUBORDINATION OF NOTES
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property,
the payment of the principal of and premium, if any, and interest on the Notes
will be subordinated, to the extent provided in the Indenture, in right of
payment to the prior payment in full of all Senior Indebtedness. The
Industrier Note ranks pari passu with the Notes.
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No payment of principal of or premium, if any, or interest may be made by
the Company, directly or indirectly, on the Notes (including any repurchase
pursuant to the exercise of the Repurchase Right) or to acquire any of the
Notes at any time if a default in payment of the principal of or premium, if
any, or interest on Senior Indebtedness exists, unless and until such default
shall have been cured or waived or shall have ceased to exist. During the
continuance of any event of default with respect to any Senior Indebtedness,
as such event of default is defined under any such Senior Indebtedness or in
any agreement pursuant to which any Senior Indebtedness has been issued (other
than default in payment of the principal of, or premium, if any, or interest
on any Senior Indebtedness), permitting the holders thereof to accelerate the
maturity thereof, no payment may be made by the Company, directly or
indirectly, with respect to principal of or premium, if any, or interest on
the Notes for 183 days following written notice to the Company, from any
holder or holders thereof or their representative or representatives or the
trustee or trustees under any indenture under which any instrument evidencing
any such Senior Indebtedness may have been issued, that such an event of
default has occurred and is continuing. However, if the maturity of such
Senior Indebtedness is accelerated, no payment may be made on the Notes until
such Senior Indebtedness that has matured has been paid or such acceleration
has been cured or waived.
Senior Indebtedness is defined in the Indenture as Indebtedness (as defined
below) of the Company outstanding at any time except Indebtedness that by its
terms is subordinate in right of payment to the Notes or Indebtedness that is
not otherwise senior in right of payments to the Notes. The Industrier Note is
not Senior Indebtedness but ranks pari passu with the Notes. Senior
Indebtedness does not include Indebtedness of the Company to any of the
Company's subsidiaries. Indebtedness is defined with respect to any person as
the principal of, and premium, if any, and interest on (a) all indebtedness of
such person for borrowed money (including all indebtedness evidenced by notes,
bonds, debentures or other securities sold by such person for money), (b) all
obligations incurred by such person in the acquisition (whether by way of
purchase, merger, consolidation or otherwise and whether by such person or
another person) of any business, real property or other assets (except
inventory and related items acquired in the ordinary course of the conduct of
the acquiror's usual business), (c) guarantees by such person of indebtedness
described in clause (a) or (b) of another person, (d) all renewals,
extensions, refundings, deferrals, restructurings, amendments and
modifications of any such indebtedness, obligation or guarantee, (e) all
reimbursement obligations of such person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
person, (f) all capital lease obligations of such person and (g) all net
obligations of such person under interest rate swap or similar agreements of
such person. There are no restrictions in the Indenture upon the creation of
additional Senior Indebtedness by the Company, or on the creation of any
Indebtedness by the Company or any of its subsidiaries.
By reason of the subordination provisions described above, in the event of
insolvency, funds which would otherwise be payable to Note holders will be
paid to the holders of Senior Indebtedness to the extent necessary to pay
Senior Indebtedness in full. As a result of these payments, general creditors
of the Company may recover less, ratably, than holders of Senior Indebtedness
and such general creditors may recover more, ratably, than holders of Notes or
other subordinated indebtedness of the Company.
MERGER OR CONSOLIDATION
The Indenture does not permit the Company to consolidate with, or merge
into, or transfer or lease all or substantially all of its assets to, another
person unless such other person is a corporation organized under the laws of
the United States, any State thereof or the District of Columbia and such
person assumes by supplemental indenture all the obligations of the Company
under the Notes and the Indenture, and immediately after giving effect to the
transaction, no default shall exist.
DEFAULTS AND REMEDIES
An Event of Default includes the occurrence of any of the following: default
for 30 days in payment of interest; default in payment of principal at
maturity, upon redemption or exercise of a Repurchase Right or otherwise;
default in payment on Indebtedness at maturity, giving effect to applicable
grace periods, of at least $5,000,000 principal amount and continuance of such
default for 30 days after notice is given in accordance
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with the Indenture, or default on Indebtedness and, as a result, payment of at
least $5,000,000 principal amount of Indebtedness is accelerated without such
acceleration having been cured, waived, rescinded, or annulled for 30 days;
failure by the Company for 60 days after notice to it to comply with any of
its other agreements in the Indenture or the Notes; and certain events of
bankruptcy or insolvency. If an Event of Default occurs and is continuing, the
Trustee or the holders of at least 25% in principal amount of the Notes may
declare all the Notes to be due and payable immediately, except for defaults
due to certain events of bankruptcy or insolvency in which case if an Event of
Default occurs and is continuing, the principal of all the Notes and the
interest thereon shall automatically become immediately due and payable. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, holders of a majority
in principal amount of the Notes may direct the Trustee in its exercise of any
trust power. The Trustee may withhold from Note holders notice of any default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Company is required to file with
the Trustee annually an officers' statement as to the absence of defaults in
fulfilling any of its obligations under the Indenture.
MODIFICATIONS OF THE INDENTURE
The Company and the Trustee may amend the Indenture without notice to any
Note holder but with the written consent of the holders of a majority in
principal amount of the outstanding Notes. However, without the consent of
each Note holder affected, an amendment may not: (i) reduce the amount of
Notes whose holders must consent to an amendment; (ii) reduce the rate or
change the time for payment of interest on any Note; (iii) reduce the
principal of or change the fixed maturity of any Note (including, without
limitation, the optional redemption provisions or the Repurchase Right); (iv)
make any Note payable in money other than that stated in the Note; (v) change
the provisions of the Indenture regarding the right of a majority of the Note
holders to waive defaults under the Indenture or impair the right of any Note
holder to institute suit for the enforcement of any payment of principal and
interest on the Notes on and after their respective due dates; (vi) make any
change that adversely affects the rights to convert any Note; or (vii) make
any change in the terms of the Notes that adversely affects the rights of any
Note holder.
SATISFACTION AND DISCHARGE OF INDENTURE
The Indenture will be discharged and canceled upon the satisfaction of
certain conditions, including the payment of all the Notes or the deposit with
the Trustee, within not more than six months prior to the maturity of the
Notes or within one year of redemption of all of the Notes, of funds
sufficient for such payment or redemption.
REPORTS TO HOLDERS OF NOTES
The Company will regularly furnish to each holder of Notes copies of its
annual report to stockholders, containing audited financial statements, and
any other financial reports which the Company furnishes to its stockholders.
TRUSTEE AND TRANSFER AGENT
The Trustee and transfer agent for the Notes is First Union National Bank.
LISTING
Prior to the effectiveness of the Registration Statement, the Notes offered
hereby were eligible for trading on the PORTAL Market; however, the Notes sold
hereunder will no longer be eligible for trading through the PORTAL Market.
The Class A Common Stock and the $111,095,000 aggregate principal amount of
Notes previously registered are listed on the NYSE under the symbols "ALO" and
"ALO05" respectively. Following registration under the Securities Act, the
Notes and the shares of Class A Common Stock offered hereby are expected to be
listed on the NYSE.
BOOK ENTRY
The Notes were issued in the form of a global security issued in reliance on
Rule 144A (the "Rule 144A Global Security") and a global security issued in
reliance on Regulation S (the "Regulation S Global Security"
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and, collectively with the Rule 144A Global Security, a "Global Security").
Upon the issuance of a Global Security, the Depository or its nominee will
credit the accounts of persons holding through it with the respective
principal amounts of the Notes represented by such Global Security. Such
accounts will be designated by the Initial Purchasers with respect to Notes
placed by the Initial Purchasers for the Company. Ownership of beneficial
interests in a Global Security will be limited to persons that have accounts
with the Depository ("participants") or persons that may hold interests
through participants. Ownership of beneficial interests by participants in a
Global Security will be shown on, and the transfer of that ownership interest
will be effected only through, records maintained by the Depository for such
Global Security. Ownership of beneficial interests in such Global Security by
persons that hold through participants will be shown on, and the transfer of
that ownership interest through such participant will be effected only
through, records maintained by such participant. The foregoing may impair the
ability to transfer beneficial interests in a Global Security.
Payment of principal, premium, if any, and interest on Notes represented by
any such Global Security will be made to the Depository or its nominee, as the
case may be, as the sole Holder of the Notes represented thereby for all
purposes under the Indenture. None of the Company, the Trustee, any agent of
the Company or the Trustee or the Initial Purchasers will have any
responsibility or liability for any aspect of the Depository's records
relating to or payments made on account of beneficial ownership interests in
Global Security representing any Notes or for maintaining, supervising or
reviewing any of the Depository's records relating to such beneficial
ownership interests.
The Company has been advised by the Depository that, upon receipt of any
payment of principal, premium, if any, or interest on any Global Security, the
Depository will immediately credit, on its book-entry registration and
transfer system, the accounts of participants with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security as shown on the records of the Depository. Payments by
participants to owners of beneficial interests in a Global Security held
through such participants will be governed by standing instructions and
customary practices as is now the case with securities held for customer
accounts registered in "street name," and will be the sole responsibility of
such participants.
A Global Security may not be transferred except as a whole by the Depository
for such Global Security to a nominee of such Depository or by a nominee of
such Depository to such Depository or another nominee of such Depository or by
such Depository or any such nominee to a successor of such Depository or a
nominee of such successor. If the Depository is at any time unwilling or
unable to continue as depository and a successor depository is not appointed
by the Company or the Depository within 90 days, the Company will issue Notes
in definitive form in exchange for the Global Security. In either instance, an
owner of a beneficial interest in the Global Security will be entitled to have
Notes equal in principal amount to such beneficial interest registered in its
name and will be entitled to physical delivery of such Notes in definitive
form. Notes so issued in definitive form will be issued in denominations of
$1,000 and integral multiples thereof and will be issued in registered form
only, without coupons. Principal, premium, if any, and interest on the Notes
will be payable, and the Notes may be presented for registration of transfer
or exchange, at the offices of the Trustee.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole Holder of the Notes represented
by such Global Security for the purposes of receiving payment on the Notes,
receiving notices and for all other purposes under the Indenture and the
Notes. Beneficial interests in Notes will be evidenced only by, and transfers
thereof will be effected only through, records maintained by the Depository
and its participants. Cede & Co. has been appointed as the nominee of the
Depository. Except as provided above, owners of beneficial interests in a
Global Security will not be entitled to and will not be considered the Holders
thereof for any purposes under the Indenture. Accordingly any such person
owning a beneficial interest in such a Global Security must rely on the
procedures of the Depository, and, if any such person is not a participant, on
the procedures of the participant through which such person owns its interest,
to exercise any rights of a Holder under the Indenture. The Indenture provides
that the Depository may grant proxies and otherwise authorize participants to
give or to take any request, demand, authorization, direction, notice,
consent, waiver or other action which a Holder is entitled to give or take
under the Indenture. The Company understands that under existing industry
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practices, in the event that the Company requests any action of Holders or
that an owner of a beneficial interest in such a Global Security desires to
give or take any action which a Holder is entitled to give or take under the
Indenture, the Depository would authorize the participants holding the
relevant beneficial interest to give or take such action and such participants
would authorize beneficial owners owning through such participants to give or
take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
The Depository has advised the Company that the Depository is a limited-
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the Exchange Act. The Depository was created to hold the
securities of its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depository's participants include securities brokers and dealers (including
the Initial Purchasers), banks, trust companies, clearing corporations and
certain other organizations, some of whom (and/or their representatives) own
the Depository. Access to the Depository's book-entry system is also available
to others, such as banks, brokers, dealers and trust companies, that clear
through or maintain a custodial relationship with a participant, either
directly or indirectly.
Exchanges between the Rule 144A Global Security and the Regulation S Global
Security. Beneficial interests in the Rule 144A Global Security may be
exchanged for beneficial interests in the Regulation S Global Security and
vice versa only in connection with a transfer of such interest. Such transfers
are subject to compliance with customary certification requirements which are
set forth in the Indenture.
Any beneficial interest in one of the Global Securities that is exchanged
for an interest in the other Global Security will cease to be an interest in
such Global Security and will become an interest in the other Global Security.
Accordingly, such interest will thereafter be subject to all transfer
restrictions and other procedures applicable to beneficial interests in such
other Global Security for as long as it remains such an interest.
Any exchange of a beneficial interest in the Regulation S Global Security
for a beneficial interest in the Rule 144A Global Security or vice versa will
be effected by the Depository by means of an instruction originated by the
Trustee through the Depository's Deposit/Withdraw at Custodian ("DWAC")
system. Accordingly, in connection with any such exchange, appropriate
adjustments will be made in the records of the Registrar to reflect a decrease
in the principal amount of such Regulation S Global Security and a
corresponding increase in the principal amount of such Rule 144A Global
Security or vice versa, as applicable.
PAYMENTS OF PRINCIPAL AND INTEREST
The Indenture requires that payments in respect of the Notes (including
principal, premium, if any, and interest) held of record by the Depository
Trust Company ("DTC") (including Notes evidenced by the Global Notes) be made
in same day funds. Payments in respect of the Notes held of record by holders
other than DTC may, at the option of the Company, be made by check and mailed
to such holders of record as shown on the register for the Notes.
REGISTRATION RIGHTS
The Company and the Initial Purchasers entered into a Registration Rights
Agreement on the Closing Date. Pursuant to the Registration Rights Agreement,
the Company agreed to file with the Commission within 90 days after the
Closing Date a shelf registration statement (the "Shelf Registration
Statement") on Form S-1 or Form S-3, if the use of such form is then
available, to cover resales of Transfer Restricted Securities by the Holders
thereof who satisfy certain conditions relating to the provision of
information in connection with the Shelf Registration Statement. The Company
agreed to use its best efforts to cause the Shelf Registration Statement to be
declared effective by the Commission on or prior to 150 days from the Closing
Date. The Company filed a Registration Statement that constituted the Shelf
Registration Statement on June 23, 1998, and such Shelf Registration Statement
was declared effective on August 26, 1998 in compliance with the Registration
Rights
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Agreement. The Company is voluntarily filing the Registration Statement of
which this Prospectus is a part in response to the requests of various Holders
and has no contractual obligations with respect thereto. The Company is
permitted to prohibit offers and sales of Transfer Restricted Securities (as
defined below) pursuant to the Shelf Registration Statement or the
Registration Statement of which this Prospectus is a part under certain
circumstances and subject to certain conditions (any period during which
offers and sales are prohibited being referred to as a "Suspension Period").
"Transfer Restricted Securities" means each Note and any underlying share of
Class A Common Stock until the date on which such Note or underlying share of
Class A Common Stock has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or the
Registration Statement of which this Prospectus is a part, the date on which
such Note or underlying share of Class A Common Stock is distributed to the
public pursuant to Rule 144 under the Securities Act or the date on which such
Note or share of Class A Common Stock may be sold or transferred pursuant to
Rule 144(k) (or any similar provision then in force).
GOVERNING LAW
The Indenture and, except as may otherwise be required by mandatory
provisions of law, Notes are governed by and construed in accordance with the
laws of the State of New York, without giving effect to such state's conflicts
of laws principles.
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DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock currently consists of: (i) 40,000,000
shares of Class A Stock (the "Class A Stock"), of which 17,393,707 shares were
outstanding as of November 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 November 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 November 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 Common 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 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 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 Common 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.
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3. WARRANTS
The Company has completed an exchange offer pursuant to which it has
accepted for exchange Warrants to purchase 3,564,210 shares of its Class A
Common Stock were tendered, accepted and exchanged for 1,235,548 newly issued
shares of Class A Common Stock. As of November 30, 1998, Warrants to purchase
288,928 shares of Class A Common Stock remained outstanding. The Warrants
expire on January 3, 1999 and are listed on the NYSE. The exercise price of
the Warrants is $20.69 per share of Class A Common Stock, subject to certain
anti-dilution adjustments thereunder.
4. TRANSFER AGENT
BankBoston, N.A. is the transfer agent for the Common Stock.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain material United States federal income
and estate tax considerations relating to the purchase, ownership and
disposition of the Notes and of Common Stock into which Notes may be
converted, but does not purport to be a complete analysis of all the potential
tax considerations relating thereto. This summary is based on the provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), the applicable
Treasury Regulations promulgated or proposed thereunder ("Treasury
Regulations"), judicial authority and current administrative rulings and
practice, all of which are subject to change, possibly on a retroactive basis.
This summary deals only with holders that will hold Notes and Common Stock
into which Notes may be converted as "capital assets" (within the meaning of
Section 1221 of the Code). This summary does not purport to deal with all
aspects of U.S. federal income taxation that might be relevant to particular
holders in light of their personal investment circumstances or status, nor
does it address tax considerations applicable to investors that may be subject
to special tax rules, such as certain financial institutions, tax-exempt
organizations, insurance companies, dealers in securities or currencies,
persons that will hold Notes as a position in a hedging transaction,
"straddle" or "conversion transaction" for tax purposes, or persons that have
a "functional currency" other than the U.S. dollar. Moreover, the effect of
any applicable state, local or foreign tax laws is not discussed. The Company
has not sought any ruling from the Internal Revenue Service (the "Service")
with respect to the statements made and the conclusions reached in the
following summary, and there can be no assurance that the Service will agree
with such statements and conclusions. THE FOLLOWING DISCUSSION IS FOR GENERAL
INFORMATION ONLY. INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT
THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES
FEDERAL INCOME AND ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS
ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN
TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
UNITED STATES HOLDERS
As used herein, the term "United States Holder" means the beneficial owner
of a Note or Common Stock that for United States federal income tax purposes
is (i) a citizen or resident of the United States, (ii) treated as a domestic
corporation or domestic partnership, or (iii) an estate or trust that is
subject to United States federal income taxation on a net income basis in
respect of the Notes or Common Stock. A trust will be a "United States Holder"
of a Note only if the trust is subject to the supervision of a court within
the United States and the control of a United States fiduciary as described in
Section 7701(a)(30) of the Code.
Payment of Interest
Interest on a Note generally will be included in the income of a United
States Holder as ordinary income at the time such interest is received or
accrued, in accordance with such Holder's method of accounting for United
States federal income tax purposes. The Notes will not have original issue
discount.
Amortizable Bond Premium
If a United States Holder of a Note acquires the Note at a cost that is in
excess of the amount payable at maturity (after reducing such costs by an
amount equal to the value of the conversion option), the United States Holder
may elect under Section 171 of the Code to amortize the excess cost (as an
offset to interest income) on a constant interest rate basis over the term of
such Note. However, because the Notes may be redeemed at the option of the
Company at a price in excess of their principal amount, a United States holder
may be required to amortize any bond premium based on the earlier call date
and the call price payable at that time. If the United States Holder makes an
election to amortize bond premium, the tax basis of all such United States
Holder's Notes will be reduced by the allowable bond premium amortization. The
amortization election would apply to all Indebtedness instruments held or
subsequently acquired by the electing purchaser and cannot be revoked without
permission from the Service. On conversion of a Note into shares of Common
Stock, no additional amortization
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of any bond premium would be allowed, and any remaining premium would be added
to the United States Holder's basis in the Common Stock received.
Market Discount
Investors acquiring Notes pursuant to this Prospectus should consider that
the resale of those Notes may be adversely affected by the market discount
provisions of Sections 1276 through 1278 of the Code. Except as described
below, gain recognized on the disposition of a Note that has accrued market
discount will be treated as ordinary income, and not capital gain, to the
extent of the accrued market discount. "Market discount" is defined generally
as the excess, if any, of (i) the principal amount of the Note over (ii) the
tax basis of the Note in the hands of the United States Holder immediately
after its acquisition.
Under a de minimis exception, there is no market discount if the excess of
the principal amount of the obligation over the United States Holder's tax
basis in the obligation is less than 0.25% of the principal amount multiplied
by the number of complete years after the acquisition date to the obligation's
date of maturity. Unless the United States Holder elects to accrue market
discount on a constant yield basis, the accrued market discount generally
would be the amount calculated by multiplying the market discount by a
fraction, the numerator of which is the number of days the obligation has been
held by the United States Holder and the denominator of which is the number of
days after the United States Holder's acquisition of the obligation up to and
including its maturity date.
If a United States Holder of a Note acquired with market discount disposes
of such Note in any transaction other than a sale, exchange or involuntary
conversion, such United States Holder will be deemed to have realized an
amount equal to the fair market value of the Note and will be required to
recognize as ordinary income any accrued market discount. See the discussion
below under "--Sale, Exchange or Redemption of the Notes" for the tax
consequences of a sale or exchange. A partial principal payment (if any) on a
Note will be includable as ordinary income upon receipt to the extent of any
accrued market discount thereon. Although it is not free from doubt, any
accrued market discount not previously taken into income prior to a conversion
of a Note into shares of Common Stock should carry over to the Common Stock
received on conversion and be treated as ordinary income upon a subsequent
disposition of such Common Stock, to the extent of any gain recognized on such
disposition. Unless the election described below is in effect, a United States
Holder of a Note acquired at a market discount also may be required to defer
the deduction of all or a portion of the interest on any indebtedness incurred
or maintained to purchase or carry the Note until the maturity of the Note or
the earlier disposition of the Note in a taxable transaction.
A United States Holder of a Note acquired at a market discount may elect to
include the market discount in income as it accrues (on either a straight-line
basis or a constant yield basis). This election would apply to all market
discount obligations acquired by the electing United States Holder on or after
the first day of the first year to which the election applies. The election
may be revoked only with the consent of the Service. If a United States Holder
of a Note elects to include market discount in income currently, the rules
discussed above regarding (i) ordinary income recognition resulting from a
sale and certain other disposition transactions and (ii) deferral of interest
deductions would not apply.
Sale, Exchange or Redemption of the Notes
Upon the sale, exchange or redemption of a Note, subject to the market
discount rules discussed above, a United States Holder generally will
recognize capital gain or loss equal to the difference between (i) the amount
of cash proceeds and the fair market value of any property received on the
sale, exchange or redemption (except to the extent such amount is attributable
to accrued and unpaid interest not previously recognized by such Holder, which
is taxable as ordinary income) and (ii) such Holder's adjusted tax basis in
the Note. A United States Holder's adjusted tax basis in a Note generally will
equal the cost of the Note to such Holder, less any principal payments
received by such Holder and increased by any market discount previously
included in income by such
18
<PAGE>
Holder. Such capital gain or loss will be long-term capital gain or loss if
the United States Holder's holding period in the Note is more than eighteen
months at the time of sale, exchange or redemption.
Conversion of the Notes
A United States Holder generally will not recognize any income, gain or loss
upon conversion of a Note into Class A Common Stock, except with respect to
cash received in lieu of a fractional share of Class A Common Stock. Such
Holder's tax basis in the Class A Common Stock received on conversion of a
Note will be the same as such Holder's adjusted tax basis in the Note at the
time of conversion (reduced by any basis allocable to a fractional share
interest), and the holding period for the Class A Common Stock received on
conversion will generally include the holding period of the Note converted.
Cash received in lieu of a fractional share of Class A Common Stock upon
conversion should be treated as a payment in exchange for the fractional share
of Class A Common Stock. Accordingly, the receipt of cash in lieu of a
fractional share of Class A Common Stock generally should result in capital
gain or loss (measured by the difference between the cash received for the
fractional share and the United States Holder's adjusted tax basis in the
fractional share).
Dividends on the Common Stock
The amount of any distribution by the Company in respect of the Common Stock
(including any liquidated damages in respect of Common Stock as described
above under "Description of Notes--Registration Rights") will be equal to the
amount of cash and the fair market value, on the date of distribution, of any
property distributed. Generally, distributions will be treated as a dividend,
subject to a tax as ordinary income, to the extent of the Company's current or
accumulated earnings and profits, then as a tax-free return of capital to the
extent of the Holder's tax basis in the Common Stock and thereafter as gain
from the sale or exchange of such stock.
In general, a dividend distribution to a corporate United States Holder will
qualify for the 70% dividends received deduction if the Holder owns less than
20% of the voting power and value of the Company's stock (other than any non-
voting, non-convertible, non-participating preferred stock). A corporate
United States Holder that owns 20% or more of the voting power and value of
the Company's stock (other than any nonvoting, non-convertible, non-
participating preferred stock) generally will qualify for an 80% dividends
received deduction. The dividends received deduction is subject, however, to
certain holding period, taxable income and other limitations.
If at any time (i) the Company makes a distribution of cash or property to
its stockholders or purchases Common Stock and such distribution or purchase
would be taxable to such stockholders as a dividend for United States federal
income tax purposes (e.g., distributions of evidences of indebtedness or
assets of the Company, but generally not stock dividends or rights to
subscribe for Common Stock) and, pursuant to the antidilution provisions of
the Indenture, the conversion price of the Notes is decreased, or (ii) the
conversion price of the Notes is decreased at the discretion of the Company,
such decrease in conversion price may be deemed to be the payment of a taxable
dividend to United States Holders of Notes (pursuant to Section 305 of the
Code) to the extent of the Company's current or accumulated earnings and
profits. Such Holders of Notes could therefore have taxable income as a result
of an event pursuant to which they received no cash or property.
Sale of Common Stock
Upon the sale or exchange of Common Stock, a United States Holder generally
will recognize capital gain or loss equal to the difference between (i) the
amount of cash and the fair market value of any property received upon the
sale or exchange and (ii) such Holder's adjusted tax basis in the Common
Stock. Such capital gain or loss will be long-term if the United States
Holder's holding period in the Common Stock is more than eighteen months at
the time of the sale or exchange. A United States Holder's basis and holding
period in Common Stock received upon conversion of a Note are determined as
discussed above under "--Conversion of the Notes."
19
<PAGE>
Information Reporting and Backup Withholding Tax
In general, certain information is required to be reported by the payor to
the Service with respect to payments of principal, premium, if any, and
interest on a Note (including the payment of liquidated damages under the
Registration Rights Agreement), payments of dividends on Common Stock,
payments of the proceeds of the sale of a Note and payments of the proceeds of
the sale of Common Stock to certain noncorporate United States Holders. The
payor will be required to withhold backup withholding tax at the rate of 31%
if (a) the payee fails to furnish a taxpayer identification number ("TIN") to
the payor or establish an exemption from backup withholding, (b) the Service
notifies the payor that the TIN furnished by the payee is incorrect, (c) there
has been a notified payee underreporting with respect to interest, dividends
or original issue discount described in Section 3406(c) of the Code or (d)
there has been a failure of the payee to certify under the penalty of perjury
that the payee is not subject to backup withholding under the Code. Any
amounts withheld under the backup withholding rules from a payment to a United
States Holder will be allowed as a credit against such Holder's United States
federal income tax liability and may entitle the Holder to a refund, provided
that the required information is furnished to the Service.
NON-UNITED STATES HOLDERS
As used herein, the term "Non-United States Holder" means any beneficial
owner of a Note or Common Stock that is not a United States Holder.
Payment of Interest
Generally, interest income of a Non-United States Holder that is not
effectively connected with a United States trade or business will be subject
to a withholding tax at a 30% rate (or, if applicable, a lower treaty rate).
However, interest paid on a Note by the Company or any Paying Agent to a Non-
United States Holder will qualify for the "portfolio interest exemption"
(provided the Company is not a "USRPHC" as defined below under "--FIRPTA
Treatment of Non-United States Holders") and therefore, subject to the
discussion of backup withholding below, will not be subject to United States
federal income tax or withholding tax, provided that such interest income is
not effectively connected with a United States trade or business of the Non-
United States Holder and provided that the Non-United States Holder (i) does
not actually or constructively own (pursuant to the conversion feature of the
Notes or otherwise) 10% or more of the combined voting power of all classes of
stock of the Company entitled to vote, (ii) is not a controlled foreign
corporation related to the Company actually or constructively through stock
ownership, (iii) is not a bank which acquired the Notes in consideration for
an extension of credit made pursuant to a loan agreement entered into in the
ordinary course of business and (iv) either (a) provides a Form W-8 (or a
suitable substitute form) signed under penalties of perjury that includes its
name and address and certifies as to its non-United States status in
compliance with applicable law and regulations, or (b) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business holds the Note and
provides a statement to the Company or its agent under penalties of perjury in
which it certifies that such a Form W-8 (or a suitable substitute) has been
received by it from the Non-United States Holder or qualifying intermediary
and furnishes the Company or its agent with a copy thereof.
Treasury Regulations that become effective January 1, 1999 provide
alternative methods for satisfying the certification requirement described in
clause (iv) above. These Treasury Regulations also will require, in the case
of Notes held by a foreign partnership, that (i) the certification described
in clause (iv) above be provided by the partners rather than by the foreign
partnership (unless the foreign partnership agrees to become a "withholding
foreign partnership") and (ii) the partnership provide certain information,
including a United States taxpayer identification number. A look-through rule
will apply in the case of tiered partnerships.
Except to the extent that an applicable treaty otherwise provides, a Non-
United States Holder generally will be taxed in the same manner as a United
States Holder with respect to interest if the interest income is effectively
connected with a United States trade or business of the Non-United States
Holder. Effectively connected interest received by a corporate Non-United
States Holder may also, under certain circumstances, be subject to an
20
<PAGE>
additional "branch profits tax" at a 30% rate (or, if applicable, a lower
treaty rate). Even though such effectively connected interest is subject to
income tax, and may be subject to the branch profits tax, it is not subject to
withholding tax if the Holder delivers a properly executed IRS Form 4224 to
the payor.
Sale, Exchange or Redemption of the Notes
A Non-United States Holder of a Note will generally not be subject to United
States federal income tax or withholding tax on any gain realized on the sale,
exchange or redemption of the Note (including the receipt of cash in lieu of
fractional shares upon conversion of a Note into Common Stock but not
including any amount representing interest or accrued market discount) unless
(1) the gain is effectively connected with a United States trade or business
of the Non-United States Holder, (2) in the case of a Non-United States Holder
who is an individual, such Holder is present in the United States for a period
or periods aggregating 183 days or more during the taxable year of the
disposition and certain other requirements are met, or (3) the Holder is
subject to tax pursuant to the provisions of the Code applicable to certain
United States expatriates.
Conversion of the Notes
In general, no United States federal income tax or withholding tax will be
imposed upon the conversion of a Note into Common Stock by a Non-United States
Holder except with respect to the receipt of cash in lieu of fractional shares
by Non-United States Holders upon conversion of a Note where any of the
conditions described above under "Non-United States Holders--Sale, Exchange or
Redemption of the Notes" is satisfied.
Sale or Exchange of Common Stock
Subject to the discussion below under "FIRPTA Treatment of Non-United States
Holders," a Non-United States Holder generally will not be subject to United
States federal income tax or withholding tax on the sale or exchange of Common
Stock unless any of the conditions described above under "Non-United States
Holders--Sale, Exchange or Redemption of the Notes" is satisfied.
FIRPTA Treatment of Non-United States Holders
Under the Foreign Investment in Real Property Tax Act of 1980, as amended
("FIRPTA"), foreign persons generally are subject to United States federal
income tax on capital gain realized on the disposition of any interest (other
than solely as a creditor) in a corporation that is a United States real
property holding corporation (a "USRPHC"). For this purpose, a foreign person
is defined as any holder who is a foreign corporation (other than certain
foreign corporations that elect to be treated as domestic corporations), a
non-resident alien individual, a non-resident fiduciary of a foreign estate or
trust, or a foreign partnership. Under FIRPTA, a corporation is a USRPHC if
the fair market value of the United States real property interests held by the
corporation is 50 percent or more of the aggregate fair market value of
certain assets of the corporation.
The Company does not currently believe that it is a USRPHC. Thus, a Non-
United States Holder of the Common Stock of the Company generally will not be
subject to U.S. federal income tax imposed by FIRPTA on a sale or other
disposition of the shares of Common Stock. Even if a corporation meets the
test for a USRPHC, a foreign person would generally not be subject to tax, or
withholding in respect to such tax, on gain from a sale or other disposition
of such corporation's stock solely by reason of the corporation's USRPHC
status if the stock is regularly traded on an established securities market
("regularly traded") during the calendar year in which such sale or
disposition occurs, provided that such holder does not own, actually or
constructively, stock with a fair market value in excess of 5 percent of the
fair market value of all such stock outstanding at any time during the shorter
of the five-year period preceding such disposition or the holder's holding
period. The Company believes that the Common Stock will be treated as
regularly traded.
21
<PAGE>
Dividends
Distributions by the Company with respect to the Common Stock that are
treated as dividends paid (or deemed paid), as described above under "United
States Holders--Dividends" to a Non-United States Holder (excluding dividends
that are effectively connected with the conduct of a trade or business in the
United States by such Holder and are taxable as described below) will be
subject to United States federal withholding tax at a 30% rate (or lower rate
provided under any applicable income tax treaty). Except to the extent that an
applicable tax treaty otherwise provides, a Non-United States Holder will be
taxed in the same manner as a United States Holder on dividends paid (or
deemed paid) that are effectively connected with the conduct of a trade or
business in the United States by the Non-United States Holder. If such Non-
United States Holder is a foreign corporation, it may also be subject to a
United States branch profits tax on such effectively connected income at a 30%
rate or such lower rate as may be specified by an applicable income tax
treaty. Even though such effectively connected dividends are subject to income
tax, and may be subject to the branch profits tax, they will not be subject to
U.S. withholding tax if the Holder delivers IRS Form 4224 to the payor.
Under current United States Treasury regulations, dividends paid to an
address in a foreign country are presumed to be paid to a resident of that
country (unless the payor has knowledge to the contrary) for purposes of the
withholding discussed above and, under the current interpretation of the
Treasury Regulations, for purposes of determining the applicability of a tax
treaty rate. Under Treasury Regulations that become effective for
distributions after 1998, however, a non-U.S. holder of Common Stock who
wishes to claim the benefit of an applicable treaty rate would be required to
satisfy applicable certification and other requirements. In addition, under
these Treasury Regulations, in the case of common stock held by a foreign
partnership, the certification requirement would generally be applied to the
partners of the partnership (unless the partnership agrees to become a
"withholding foreign partnership") and the partnership would be required to
provide certain information, including a United States taxpayer identification
number. These Treasury Regulations also provide look-through rules for tiered
partnerships.
Death of a Non-United States Holder
A Note held by an individual who is a Non-United States Holder at the time
of his or her death will not be includable in the decedent's gross estate for
United States estate tax purposes, provided that such Holder or beneficial
owner did not at the time of death actually or constructively own 10% or more
of the combined voting power of all classes of stock of the Company entitled
to vote, and provided that, at the time of death, payments with respect to
such Notes would not have been effectively connected with the conduct by such
Non-United States Holder of a trade or business within the United States.
Common Stock actually or beneficially held (other than through a foreign
corporation) by a Non-United States Holder at the time of his or her death (or
previously transferred subject to certain retained rights or powers) will be
subject to United States federal estate tax unless otherwise provided by an
applicable estate tax treaty.
Information Reporting and Backup Withholding Tax
United States information reporting requirements and backup withholding tax
will not apply to payments on a Note to a Non-United States Holder if the
statement described in "Non-United States Holders--Payment of Interest" is
duly provided by such Holder, provided that the payor does not have actual
knowledge that the Holder is a United States person.
Information reporting requirements and backup withholding tax will not apply
to any payment of the proceeds of the sale of a Note or any payment of the
proceeds of the sale of Common Stock effected outside the United States by a
foreign office of a "broker" (as defined in applicable Treasury Regulations),
unless such broker is (i) a United States person, (ii) a foreign person that
derives 50% of more of its gross income for certain periods from activities
that are effectively connected with the conduct of a trade or business in the
United States, (iii) a controlled foreign corporation for United States
federal income tax purposes or (iv) (after December 31, 1998) a foreign
partnership more than 50% of the capital or profits of which is owned by one
or more U.S.
22
<PAGE>
persons or which engages in a U.S. trade or business. Payment of the proceeds
of any such sale effected outside the United States by a foreign office of any
broker that is described in (i), (ii), (iii) or (iv) of the preceding sentence
will not be subject to backup withholding tax, but will be subject to
information reporting requirements unless such broker has documentary evidence
in its records that the beneficial owner is a Non-United States Holder and
certain other conditions are met, or the beneficial owner otherwise
establishes an exemption. Payment of the proceeds of any such sale to or
through the United States office of a broker is subject to information
reporting and backup withholding requirements, unless the beneficial owner of
the Note provides the statement described in "Non-United States Holders--
Payment of Interest" or otherwise establishes an exemption.
If paid to an address outside the United States, dividends on Common Stock
held by a Non-United States Holder will generally not be subject to the
information reporting and backup withholding requirements described in this
section, provided that the payor does not have actual knowledge that the
Holder is a United States person. However, under the Treasury Regulations
effective with respect to payments made after December 31, 1998, dividend
payments will be subject to information reporting and backup withholding
unless applicable certification requirements are satisfied. See the discussion
above with respect to rules applicable to foreign partnerships under the
Treasury Regulations that became effective on January 1, 1999.
23
<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth the name of each Selling Securityholder and
(i) the amount of Notes owned by each Selling Securityholder as of January 7,
1999 (ii) the maximum amount of Notes which may be offered for the account of
such Selling Securityholder under this Prospectus; (iii) the amount of Common
Stock owned by each Selling Securityholder as of January 7, 1999; and (iv) the
maximum amount of Common Stock which may be offered for the account of such
Selling Securityholder under this Prospectus. All information with respect to
beneficial ownership has been furnished to the Company by the respective
Selling Securityholders. Beneficial ownership of the Notes and Common Stock
listed in the table has been determined in accordance with the applicable
rules and regulations promulgated under the Exchange Act.
<TABLE>
<CAPTION>
NO. OF
AGGREGATE PRINCIPAL SHARES
NAME OF SELLING SECURITY PRINCIPAL AMOUNT % OF AMOUNT OF NOTES NO. OF OFFERED
HOLDER OF NOTES CLASS OFFERED HEREBY SHARES(1)(2) HEREBY(1)(2)
- ------------------------ ---------------- ----- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Baptist Health of South
Florida................ 106,000 0.08% 106,000 3,707 3,707
Boston Museum of Fine
Arts................... 62,000 0.05% 62,000 2,168 2,168
California Public
Employees' Retirement
System................. 3,000,000 2.40% 3,000,000 104,918 104,918
CIBC Oppenheimer
Corp. ................. 1,595,000 1.28% 1,595,000 55,781 55,781
Dunham & Associates II.. 51,000 0.04% 51,000 1,784 1,784
Dunham & Associates
III.................... 27,000 0.02% 27,000 944 944
Engineers Joint Pension
Fund................... 231,000 0.18% 231,000 8,079 8,079
Fiserv Correspondent
Services............... 509,000 0.41% 509,000 17,801 17,801
Forest Global
Convertible Fund A5.... 1,000,000 0.80% 1,000,000 34,973 34,973
JMG Convertible
Investments L.P. ...... 500,000 0.40% 500,000 17,486 17,486
Nicolas-Applegate
Convertible Fund....... 2,200,000 1.76% 2,200,000 76,940 76,940
Pell Rudman Trust....... 50,000 0.04% 50,000 1,749 1,749
Q Investments, L.P. .... 125,000 0.10% 125,000 4,372 4,372
San Diego City
Retirement............. 623,000 0.50% 623,000 21,788 21,788
San Diego County
Convertible............ 1,909,000 1.53% 1,909,000 66,763 66,763
Southport Partners
International, Ltd. ... 500,000 0.40% 500,000 17,486 17,486
Triton Capital
Investments, Ltd. ..... 500,000 0.40% 500,000 17,486 17,486
Wake Forest University.. 1,091,000 0.87% 1,091,000 38,155 38,155
----------- ----------- ------- -------
Total................. $14,079,000 11.26% $14,079,000 492,380 492,380
=========== =========== ======= =======
</TABLE>
- --------
*Less than 1%
(1)All share amounts set forth represent less than 1% of the outstanding Class
A Common Stock.
(2) Reflects the shares of Common Stock into which the Notes held by such
Selling Securityholder are convertible at the initial conversion rate.
The Conversion Price and the number of shares of Common Stock issuable
upon conversion of the Notes are subject to adjustment under certain
circumstances. Assumes conversion into Class A Common Stock of the full
amount of Notes held by the Selling Securityholder at the initial
conversion rate and the offering of such shares by such Selling
Securityholder pursuant to this Prospectus. See "Description of Notes--
Conversion Rights."
Because the Selling Securityholders may, pursuant to this Prospectus, offer
all or some portion of the Notes they presently hold or, with respect to
Common Stock, have the right to acquire upon conversion of such Notes, no
estimate can be given as to the amount of the Notes and Common Stock that will
be held by the Selling Securityholders upon termination of any such sales. In
addition, the Selling Securityholders identified above may have sold,
transferred or otherwise disposed of all or a portion of their Notes and
Common Stock since the date on which they provided the information regarding
their Notes and Common Stock, in transactions exempt from the registration
requirements of the Securities Act. See "Plan of Distribution." Such sales
would affect the data in the table above.
Only Selling Securityholders identified above who beneficially own the Notes
and Common Stock set forth opposite each such Selling Securityholder's name in
the foregoing table on the effective date of the Registration Statement may
sell such Notes and Common Stock pursuant to this Prospectus. The Company may
from time to time include additional Selling Securityholders in supplements to
this Prospectus.
The Company has agreed to pay the cost of the registration of the Securities
and the preparation of this Prospectus and the Registration Statement under
which it is filed. The Selling Securityholders are responsible for any
underwriting discounts and commissions relating to the Securities to be sold
by the Selling Securityholders.
24
<PAGE>
PLAN OF DISTRIBUTION
The Notes were issued to the Selling Securityholders in connection with an
underwritten private placement. The Notes and the underlying Common Stock may
by sold from time to time by the Selling Securityholders. The Selling
Securityholders may from time to time sell all or a portion of the Securities
in one or more transactions (which may involve one or more block transactions)
on the exchange on which the Securities are traded, if any, in the over-the-
counter market, in separately negotiated transactions or in a combination of
such transactions; each sale may be made either at market prices prevailing at
the time of such sale or at negotiated prices; some or all of the Securities
may be sold through brokers acting on behalf of the Selling Securityholders or
to dealers or underwriters for resale by such dealers or underwriters; and in
connection with such sales such brokers, dealers and underwriters may receive
compensation in the form of discounts or commissions from the Selling
Securityholders and may receive commissions from the purchasers of Securities
for whom they act as broker or agent (which discounts and commissions are not
anticipated to exceed those customary in the types of transactions involved).
Any broker or dealer participating in any such sale may be deemed to be an
"underwriter" within the meaning of the Securities Act and will be required to
deliver a copy of this Prospectus to any person who purchases any of the
Securities from or through such broker or dealer.
In connection with any sales through a broker, such broker may act as agent
for the Selling Securityholder or may purchase from the Selling Securityholder
all or a portion of such Securities as principal. Securities sold by a broker
may be made in one or more of the following transactions: (i) block
transactions (which may involve crosses) in which a broker may sell all or a
portion of such shares as agent but may position and resell all or a portion
of the block as principal to facilitate the transaction; (ii) purchases by any
broker as principal and resale by such broker for its own account; (iii) an
exchange distribution or a secondary distribution in accordance with
applicable NYSE rules; (iv) ordinary brokerage transactions and transactions
in which any broker solicits purchasers; (v) sales "at the market" to or
through the market maker or into an existing trading market, on an exchange or
otherwise, for such Securities; and (vi) sales in other ways not involving
market makers or established trading markets, including direct sales to
institutions or individual purchasers.
The Company is permitted to suspend the use of this Prospectus in connection
with the sales of Notes and the underlying Common Stock by holders upon the
happening of certain events or if there exists any fact that makes any
statement of material fact made in this Prospectus untrue or that requires the
making of additions to or changes in the Prospectus in order to make the
statements herein not misleading until such time as the Company advises the
Selling Securityholders that use of the Prospectus may be resumed. The Company
has agreed to pay the cost of the registration of the Securities and the
preparation of this Prospectus and the Registration Statement under which it
is filed. The expenses so payable by the Company are estimated to be
approximately $38,000.
In order to comply with the securities laws of certain states, if
applicable, the Notes and the underlying Common Stock may be sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the Notes and the underlying Common Stock may not
be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.
Any Securities covered by this Prospectus that qualify for sale pursuant to
Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule
144A rather than pursuant to this Prospectus. There can be no assurance that
any Selling Securityholder will sell any or all of the Notes or the underlying
Common Stock described herein, and any Selling Securityholder may transfer,
devise or gift such securities by other means not described herein.
25
<PAGE>
LEGAL MATTERS
Certain legal matters regarding the validity of the Notes and the shares of
Common Stock issuable upon the conversion of the Notes will be passed upon for
the Company by Kirkland & Ellis, New York, New York (a partnership which
includes professional corporations). Mr. Glen E. Hess has been a director of
the Company since 1983. Mr. Hess's professional corporation is a partner of
Kirkland & Ellis, a law firm which since 1978 has performed significant legal
services for the Company.
EXPERTS
The consolidated balance sheets as of December 31, 1997 and 1996 and the
consolidated statements of operations, stockholders' equity, and cash flows
for each of the three years in the period ended December 31, 1997,
incorporated by reference in this Prospectus have been incorporated herein in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of that firm as experts in accounting and auditing.
26
<PAGE>
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESEN-
TATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE SELL-
ING SECURITYHOLDERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL.
---------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Special Note Regarding Forward-Looking Statements........................... 2
Available Information....................................................... 2
Incorporation of Certain Documents by Reference............................. 2
The Company................................................................. 4
Use of Proceeds............................................................. 5
Ratio of Earnings to Fixed Charges.......................................... 5
Description of Notes........................................................ 6
Description of Capital Stock................................................ 15
Certain United States Federal Income Tax Consequences....................... 17
Selling Securityholders..................................................... 24
Plan of Distribution........................................................ 25
Legal Matters............................................................... 26
Experts..................................................................... 26
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$14,079,000
[LOGO](TM) ALPHARMA(TM)
5 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2005
---------------
PROSPECTUS
---------------
JANUARY 7, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses of the Registrant in connection
with the registration of the securities being registered, other than
underwriting discounts and commissions. All such amounts are estimates, other
than the fees payable to the Commission.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............... $ 3,914
NYSE listing fee.................................................. 3,400
Legal fees and expenses........................................... 20,000
Accounting fees and expenses...................................... 10,000
Miscellaneous..................................................... 686
-------
Total........................................................... $38,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
permits a Delaware corporation to limit the personal liability of its
directors in accordance with the provisions set forth therein. The Restated
Certificate of Incorporation of the Registrant provides that the personal
liability of its directors shall be limited to the fullest extent permitted by
applicable law.
Section 145 of the General Corporation Law of the State of Delaware contains
provisions permitting corporations organized thereunder to indemnify
directors, officers, employees or agents against expenses, judgments and fines
reasonably incurred and against certain other liabilities in connection with
any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that
such person was or is a director, officer, employee or agent of the
corporation. The Restated Certificate of Incorporation of the Registrant
provide for indemnification of its directors and officers to the fullest
extent permitted by applicable law.
ITEM 16. EXHIBITS.
The following exhibits are filed pursuant to Item 601 of Regulation S-K:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 Purchase Agreement, dated as of March 25, 1998, by and among the
Company, SBC Warburg Dillon Read Inc., CIBC Oppenheimer Corp. and
Cowen & Company (incorporated by reference to Exhibit 1.1 of the
Company's Form 8-K, dated as of March 30, 1998 (the "March Form 8-
K")).
2.1 Agreement for the sale and purchase of the issued share capital of Cox
Investments Limited, dated April 30, 1998 between Hoechst AG, Alpharma
(U.K.) Limited, and Alpharma Inc. (incorporated by reference to
Exhibit 2.1 of the Company's Form 8-K, dated as of May 7, 1998).
4.1 Indenture, dated as of March 30, 1998, by and among the Company and
First Union National Bank, as trustee, with respect to the 5 3/4%
Convertible Subordinated Notes due 2005 (incorporated by reference to
Exhibit 4.1 of the March Form 8-K).
4.2 Registration Rights Agreement, dated as of March 25, 1998, by and
among the Company, SBC Warburg Dillon Read Inc., CIBC Oppenheimer
Corp. and Cowen & Company (incorporated by reference to Exhibit 4.1 of
the March Form 8-K).
5.1 Opinion of Kirkland & Ellis regarding legality of securities being
registered.
12.1 Statements regarding computation of ratio of earnings to fixed
charges.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Kirkland & Ellis--included in Exhibit 5.1.
24.1 Powers of Attorney included in Part II of Registration Statement.
25.1 Form T-1. (incorporated by reference to Exhibit 25.1 of the Shelf
Registration Statement on Form S-3, filed with the Securities and
Exchange Commission on June 23, 1998 and declared effective on August
26, 1998).
</TABLE>
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE IT MEETS ALL
THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF FORT LEE, NEW JERSEY, AS OF DECEMBER 31, 1998.
ALPHARMA INC.
/s/ Jeffrey E. Smith
By: _________________________________
JEFFREY E. SMITH
VICE PRESIDENT, FINANCE AND CHIEF
FINANCIAL OFFICER
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jeffrey E. Smith and Robert Wrobel and each of
them, as true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution for him and his name, place and stead, in any
and all capacities to sign any and all amendments (including pre-effective and
post-effective amendments) to this Registration Statement (and any
registration statement filed pursuant to Rule 462(b) under the Securities
Act), and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND AS OF THE DATES INDICATED.
<TABLE>
<S> <C> <C>
SIGNATURE TITLE
DATE
Chairman, Chief December 31,
/s/ Einar W. Sissener Executive Officer 1998
- ------------------------------------- and Director
EINAR W. SISSENER
President and Chief December 31,
/s/ Gert W. Munthe Operating Officer 1998
- ------------------------------------- (as of May 1, 1998)
GERT W. MUNTHE and Director
Vice President, December 31,
/s/ Jeffrey E. Smith Finance and Chief 1998
- ------------------------------------- Financial Officer
JEFFREY E. SMITH
Director
- -------------------------------------
I. ROY COHEN
/s/ Thomas Gibian Director December 31,
- -------------------------------------
THOMAS GIBIAN
</TABLE>
II-3
<PAGE>
SIGNATURE TITLE DATE
<TABLE>
<S> <C> <C>
/s/ Glen E. Hess Director December 31,
1998
- -------------------------------------
GLEN E. HESS
Director
- -------------------------------------
ERIK G. TANDBERG
/s/ Peter G. Tombros Director December 31,
1998
- -------------------------------------
PETER G. TOMBROS
Director
- -------------------------------------
ERIK HORNNAESS
/s/ Oyvin A. Broymer Director December 31,
1998
- -------------------------------------
OYVIN A. BROYMER
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 Purchase Agreement, dated as of March 25, 1998, by and among the
Company, SBC Warburg Dillon Read Inc., CIBC Oppenheimer Corp. and
Cowen & Company (incorporated by reference to Exhibit 1.1 of the
Company's Form 8-K, dated as of March 30, 1998 (the "March Form 8-
K")).*
2.1 Agreement for the sale and purchase of the issued share capital of Cox
Investments Limited, dated April 30, 1998 between Hoechst AG, Alpharma
(U.K.) Limited, and Alpharma Inc. (incorporated by reference to
Exhibit 2.1 of the Company's Form 8-K, dated as of May 7, 1998).*
4.1 Indenture, dated as of March 30, 1998, by and among the Company and
First Union National Bank, as trustee, with respect to the 5 3/4%
Convertible Subordinated Notes due 2005 (incorporated by reference to
Exhibit 4.1 of the March Form 8-K).*
4.2 Registration Rights Agreement, dated as of March 25, 1998, by and
among the Company, SBC Warburg Dillon Read Inc., CIBC Oppenheimer
Corp. and Cowen & Company (incorporated by reference to Exhibit 4.1 of
the March Form 8-K).*
5.1 Opinion of Kirkland & Ellis regarding legality of securities being
registered.**
12.1 Statements regarding computation of ratio of earnings to fixed
charges.*
23.1 Consent of PricewaterhouseCoopers LLP.**
23.2 Consent of Kirkland & Ellis--included in Exhibit 5.1.**
24.1 Powers of Attorney included in Part II of Registration Statement.*
25.1 Form T-1.*
</TABLE>
- --------
* Previously filed
** Filed herewith
<PAGE>
Exhibit 5.1
January 7, 1999
Alpharma Inc.
One Executive Drive
Fort Lee, New Jersey 07024
Re: Alpharma Inc.
Registration Statement on Form S-3
Ladies and Gentlemen:
We are acting as special counsel to Alpharma Inc., a Delaware corporation
(the "Company"), in connection with its registration statement on Form S-3 (the
"Registration Statement"), filed with the Securities and Exchange Commission
(the "Commission"), relating to resales of up to $14,079,000 aggregate principal
amount of the Company's 5 3/4% Convertible Subordinated Notes due 2005 (the
"Notes") and the 492,380 shares (as such number may be adjusted between the
Company and First Union National Bank, as trustee ("the Trustee")) of Common
Stock, par value $0.20 per share, of the Company (the "Common Stock") issuable
upon conversion of the Notes in accordance with the Indenture. This opinion
letter is furnished to you at your request to enable you to fulfill the
requirements of Item 601(b)(5) of Regulation S-K in connection with the
Registration Statement.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. An executed copy of the Indenture.
3. Executed copies of the Notes, each dated as of March 30, 1998.
4. The Amended and Restated Certificate of Incorporation of the
Company, as certified by the Secretary of the State of the State
of Delaware on March 23, 1998.
5. The Amended and Restated Bylaws of the Company.
6. Resolutions of the Board of Directors of the Company adopted at a
meeting of the Board of Directors of the Company on March 2,
1998, and resolutions adopted by the Pricing Committee of the
Board of Directors on March 24, 1998, relating to the offering of
the Notes and arrangements in connection therewith.
7. Copies of all certificates and other documents delivered at the
closing of the purchase and sale of the Notes.
<PAGE>
For purposes of this opinion letter, we have assumed the authenticity
of all documents submitted to us as originals, the conformity to the originals
of all documents submitted to us as copies and the authenticity of the originals
of all documents submitted to us as copies. We have also assumed the legal
capacity of all natural persons, the genuineness of the signatures of persons
signing all documents in connection with which this opinion is rendered, the
authority of such persons signing on behalf of the parties thereto other than
the Company and the due authorization, execution and delivery of all documents
by the parties thereto other than the Company. As to any facts material to the
opinions expressed herein, we have relied upon the statements and
representations of officers and other representations of the Company and others.
Our advice on every legal issue addressed in this letter is based
exclusively on the internal laws of the State of New York, the General
Corporation Law of the State of Delaware and the federal law of the United
States of America, and represents our opinion as to how that issue would be
resolved were it to be considered by the highest court in the jurisdiction which
enacted such law. The manner in which any particular issue would be treated in
any actual court case would depend in part on facts and circumstances particular
to the case, and this opinion letter is not intended to guarantee the outcome of
any legal dispute which may arise in the future.
Based upon and subject to the foregoing qualifications, assumptions
and limitations and the further limitations set forth below, we hereby advise
you that in our opinion:
1. The Notes constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.
2. The shares of Common Stock issuable upon conversion of the Notes,
when issued in accordance with the terms of the Notes, will be
validly issued, fully paid and non-assessable.
Our opinion in paragraph 1 of this opinion letter is subject to: (i)
the effect of bankruptcy, insolvency, fraudulent conveyance and other similar
laws and judicially developed doctrines in this area such as substantive
consolidation and equitable subordination; (ii) the effect of general principles
of equity; and (iii) other commonly recognized statutory and judicial
constraints on enforceability including statutes of limitations. "General
principles of equity" include but are not limited to: principles which limit the
availability of specific performance and injunctive relief; principles which
limit the availability of a remedy under certain circumstances where another
remedy has been elected; principles requiring reasonableness, good faith and
fair dealing in the performance and enforcement of an agreement by the party
seeking enforcement; principles which may permit a party to cure a material
failure to perform its obligations; and principles affording equitable defenses
such as waiver, laches and estoppel. It is possible that some of the terms of
the Notes and the Indenture may not prove enforceable against the Company for
reasons other than those listed in this opinion letter should an actual
enforcement action be brought, but (subject to all the exceptions,
qualifications, exclusions and other limitations in this letter) such
unenforceability would not in our opinion prevent the holders of the Notes from
realizing the principal benefits purported to be provided by the Notes and the
Indenture.
<PAGE>
We do not find it necessary for the purposes of this opinion, and
accordingly we do not purport to cover herein, the application of the securities
of "Blue Sky" laws of the various states to the Notes and the Common Stock
issuable upon conversion of the Notes.
This opinion letter is limited to the specific issues addressed
herein, and no opinion may be inferred or implied beyond that expressly stated
herein. We assume no obligation to revise or supplement this opinion should the
present laws of the State of New York, the General Corporation Law of the State
of Delaware or the federal law of the United States be changed by legislative
action, judicial decision or otherwise.
We hereby consent to the filing of this opinion letter with the
Commission as Exhibit 5.1 to the Registration Statement. We also consent to the
reference to our firm under the heading "Legal Matters" in the Registration
Statement. 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 or the rules and regulations of the Commission.
Very truly yours,
/s/ Kirkland & Ellis
KIRKLAND & ELLIS
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Alpharma, Inc. on Form S-3 of our report dated February 25, 1998, on our
audits of the consolidated financial statements of Alpharma, Inc. as of
December 31, 1997 and 1996, and for the years ended December 31, 1997, 1996,
and 1995, which report is included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997. We also consent to the reference to our
firm under the caption "Experts."
PRICEWATERHOUSECOOPERS LLP
Florham Park, NJ
January 6, 1999
