UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(AMENDMENT NO. 4 -- RESTATED)
GENETICS INSTITUTE, INC.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
371855 10 7
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(CUSIP Number)
LOUIS L. HOYNES, JR., ESQ.
Senior Vice President and General Counsel
American Home Products Corporation
5 Giralda Farms, Madison, N.J. 07940
(201) 660-5000
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
APRIL 9, 1996 (VOLUNTARY)
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement
[ ]. (A fee is not required only if the reporting person: (1)
has a previous statement on file reporting beneficial ownership
of more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto
reporting beneficial ownership of five percent or less of such
class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 or otherwise subject to
the liabilities of that section of the Securities Exchange Act of
1934 but shall be subject to all other provisions of the
(however, see the Notes).
<PAGE>
CUSIP No. 371855 10 7
1. NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AHP Biotech Holdings, Inc.
Tax I.D. 13-3641807
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
27,365,155.95
8. SHARED VOTING POWER
27,365,155.95
9. SOLE DISPOSITIVE POWER
27,365,155.95
10. SHARED DISPOSITIVE POWER
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
27,365,155.95
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
100%
14. TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
The statement on Schedule 13D dated January 24, 1992, for
the event which occurred on January 16, 1992, which was amended
by Amendment No. 1, dated June 8, 1993, Amendment No. 2, dated
July 29, 1993 and Amendment No. 3, dated February 14, 1994, is
hereby further amended in connection with the purchase by the
Reporting Person (as defined herein), in accordance with and as
required by the provisions of the Merger Agreement (as defined
herein), of shares of Common Stock of Genetics Institute, Inc. in
connection with the exercise of outstanding warrants of Genetics
Institute, Inc. Pursuant to Rule 101(a)(2)(ii) of Regulation S-T
this statement, as amended, is restated in its entirety.
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock, par value $.01
per share (each a "Share" and collectively the "Common Stock") of
Genetics Institute, Inc., a Delaware corporation (the "Company"),
which has its principal executive offices located at 87
CambridgePark Drive, Cambridge, Massachusetts 02140.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed on behalf of AHP Biotech Holdings,
Inc., a Delaware corporation (the "Reporting Person"). The
Reporting Person is an indirect wholly-owned subsidiary of
American Home Products Corporation, a Delaware corporation
("AHP"), through AHP Subsidiary (11) Corporation, a Delaware
corporation ("Sub 11") which is wholly-owned by Boca Investerings
Partnership, a New York general partnership ("Boca"), the
partners of which are AHP and AHP Subsidiary (10) Corporation, a
Delaware corporation which is wholly-owned by AHP ("Sub 10" and,
collectively with AHP, Sub 11 and Boca, the "Control Persons").
The address of the principal offices and principal business
of the Reporting Person and the Control Persons is 5 Giralda
Farms, Madison, New Jersey 07940. Set forth on Schedule A
attached hereto and incorporated herein by reference are the
names, business addresses, citizenship and present principal
occupations or employment of executive officers and directors of
the Reporting Person and AHP, and the names and addresses of the
employers of such persons.
AHP is one of the world's largest research-based
pharmaceutical and health care product companies and is a leading
developer, manufacturer and marketer of prescription drugs and
over-the-counter medications. AHP is also a leader in vaccines,
generic pharmaceuticals, biotechnology, agricultural products,
animal health care, medical devices and food products.
The Reporting Person, Boca, Sub 10 and Sub 11 are investment
entities whose principal business is the making and holding of
investments.
Neither the Reporting Person nor, to its best knowledge, the
Control Persons or any of the persons named on Schedule A
attached hereto, have during the last five years: (i) been
convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors); or (ii) been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to
such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On January 16, 1992, pursuant to the terms of the Agreement
and Plan of Merger, dated as of September 19, 1991 (the "Merger
Agreement"), among the Company, AHP, the Reporting Person and AHP
Merger Subsidiary Corporation, a Delaware corporation and a
wholly-owned subsidiary of the Reporting Person ("Merger
Subsidiary"), a copy of which is attached hereto as Exhibit I and
is hereby incorporated herein by reference, Merger Subsidiary
merged with and into the Company (the "Merger") (as more fully
described under Item 4 herein) and in connection therewith: (i)
the Reporting Person acquired 5,867,111.2 Shares upon the
conversion of the common stock of Merger Subsidiary in the Merger
(the "Merger Shares"); and (ii) the Reporting Person purchased
9,466,709 Shares directly from the Company (the "Additional
Shares").
As consideration for the acquisition of the Merger Shares,
upon the effective time of the Merger (the "Effective Time") the
Reporting Person became irrevocably obligated to deposit or cause
to be deposited in trust with The First National Bank of Boston,
acting as exchange agent (the "Exchange Agent"), an aggregate
amount approximately equal to $293.0 million to be paid to the
holders of Shares as cash consideration pursuant to the terms of
the Merger Agreement. As consideration for the purchase of the
Additional Shares, the Reporting Person paid approximately $299.1
million to the Company. The aggregate consideration of
approximately $592.1 million paid by the Reporting Person in
connection with the Merger was financed entirely from the working
capital of the Reporting Person. In addition, AHP has guaranteed
all of the financial obligations of the Reporting Person in
connection with the Merger.
On June 9, 1993, the Company called for redemption all of
its outstanding $4.00 Convertible Exchangeable Preferred Stock
(the "Preferred Stock") pursuant to the terms of the Company's
Certificate of Incorporation under which holders would be
entitled to receive a redemption price of $52.40 for each share
of Preferred Stock held as of July 15, 1993 (the "Redemption
Date"). Pursuant to the terms of the Standby Agreement (as
defined below), the Reporting Person was obligated to purchase
from the Company, at a purchase price of $29.93 per Share, the
number of Shares which would provide the Company with the funds
necessary to pay the aggregate redemption price for all shares of
Preferred Stock which had not been duly surrendered for
conversion by the close of business on the Redemption Date.
Pursuant to the terms of the Merger Agreement, upon the
conversion of Preferred Stock, the Reporting Person was obligated
to purchase, at a purchase price of $20 per Share, such number of
Shares as would equal 40% of the number of Shares that would have
been issuable upon the conversion but for the Merger. The
aggregate consideration of $32,945,305 paid by the Reporting
Person to the Company pursuant to the Standby Agreement and the
foregoing provision of the Merger Agreement was financed entirely
from the working capital of the Reporting Person.
Pursuant to the terms of the Merger Agreement, in connection
with the exercise of outstanding warrants of the Company, the
Reporting Person is obligated to purchase, at a purchase price of
$20 per Share, such number of Shares as would equal 40% of the
number of Shares that would have been issuable upon such exercise
but for the Merger. On March 6, 1996 and on April 2, 1996, upon
exercise of such warrants, the Reporting Person purchased 9,320
and 800 Shares, respectively from the Company. The aggregate
consideration of $466,000 and $40,000 ($20 for each warrant
exercised) paid by the Reporting Person was financed entirely
from the working capital of the Reporting Person.
ITEM 4. PURPOSE OF TRANSACTION.
AHP believes that the Merger presents AHP with an
opportunity to expand its investment in biotechnology through an
affiliation with the Company, a leading biotechnology company.
The Board of Directors of AHP considers the acquisition of its
equity interest in the Company on the terms set forth in the
Merger Agreement, together with its right to acquire the
remaining outstanding equity interests in the Company at fixed
prices on or prior to December 31, 1996, in accordance with the
terms of the Call Option (as described below), to be an
attractive long-term investment.
The Shares purchased by the Reporting Person in March and
July 1993 pursuant to the provisions of the Merger Agreement and
the Standby Agreement and the Shares purchased in March 1996
pursuant to the Merger Agreement upon the exercise of warrants to
purchase Shares were purchased by the Reporting Person for
investment purposes only.
As of the date hereof, the Board of Directors of the
Reporting Person has made no decision with respect to whether or
at what time the Call Option might be exercised. The Reporting
Person has purchased, and may in the future purchase or otherwise
acquire, in open market and other transactions, Depositary Shares
of the Company (as described below) in accordance with the terms
of the Governance Agreement (as described below). The Reporting
Person is the benefical owner of 947,000 such Depositary Shares.
Set forth below is a description of the material terms of
the merger, including; (i) the grant by the Company to the
Reporting Person of the Call Option; (ii) the acquisition of
Shares by the Reporting Person pursuant to the Merger; (iii) the
change in the composition of the Board of Directors of the
Company (the "Board of Directors") pursuant to the Merger; (iv)
the designation of certain committees of the Board of Directors;
(v) the grant by the Company to the Reporting Person of certain
approval rights with respect to matters of corporate governance;
(vi) the grant to AHP of certain rights with respect to material
licensing and marketing arrangements with third parties; (vii)
the restrictions on certain acquisitions and dispositions of
Shares by AHP and the Reporting Person; (viii) certain
limitations upon the voting of Shares by the Reporting Person;
(ix) certain restrictions upon the transfer of Shares by AHP and
the Reporting Person; (x) the termination of provisions regarding
matters of corporate governance; and (xi) amendments to the
Company's Restated Certificate of Incorporation (the "Certificate
of Incorporation") and the Company's By-laws (the "By-laws").
THE MERGER AND THE CALL OPTION.
On January 16, 1992, at a special meeting of stockholders of
the Company, the Company's stockholders voted to approve the
Merger Agreement and the transactions contemplated therein.
The Merger was consummated on January 16, 1992. As a result
of the Merger, each Share outstanding prior to the effective time
of Merger (the "Effective Time") was converted into the right to
receive $20.00 in cash and six-tenth (0.6) of a Depositary Share,
each Depositary Share representing one Share, subject to a call
option held by the Reporting Person to acquire all of the Shares
not owned by the Reporting Person or its affiliates (the "Call
Option").
The Depositary Shares are evidenced by depositary receipts
(the "Depositary Receipts") issued pursuant to the Depositary
Agreement, dated as of January 16, 1992 (to which holders of
Depositary Shares will be deemed parties) (the "Depositary
Agreement"), among AHP, the Reporting Person, the Company and The
First National Bank of Boston, acting as depositary (the
"Depositary"), a copy of which is attached hereto as Exhibit II
and is hereby incorporated herein by reference.
Under the terms of the Call Option, the Reporting Person has
the right, but not the obligation, to purchase the Shares held by
the Depositary, in whole but not in part, at any time on or prior
to December 31, 1996, at fixed call prices increasing by
approximately $1.84 per quarter from $50.00 per Share for the
period from the consummation of the Merger through March 31, 1992
to $85.00 per Share for the period from October 1, 1996 through
December 31, 1996, subject to certain adjustments (each such
price, a "Call Price").
Prior to the date on which the Call Option expires or is
exercised (the "Option Determination Date"), each holder of a
Depositary Share is entitled to all the rights of the Share
represented thereby, including dividend, voting and liquidation
rights. Prior to the expiration of the Call Option, holders of
Depositary Shares do not have the right to require the Depositary
to deliver the Shares represented thereby and, absent an exercise
by the Reporting Person of the Call Option, do not have the right
to require payment of the Call Price.
Following the Option Determination Date, (i) if the Call
Option is exercised, each holder of a Depositary Share would be
entitled to receive the applicable Call Price for the Share
represented thereby, without interest, and (ii) if the Call
Option expires, each holder of a Depositary Share would be
entitled to receive the Share represented thereby, together with
any declared and unpaid dividends thereon. The Depositary is
required to transfer the Shares held in the Depositary to the
Reporting Person if and when the Reporting Person exercises the
Call Option.
THE ACQUISITION OF SHARES BY THE REPORTING PERSON.
Pursuant to the terms of the Merger Agreement: (i) the
Reporting Person acquired 5,867,111.2 Merger Shares upon the
conversion of the common stock of Merger Subsidiary in the Merger
and (ii) the Reporting Person purchased 9,466,709 Additional
Shares directly from the Company.
Pursuant to the Merger (and in addition to the Call Option),
the Reporting Person was also granted the following rights (the
"Subscription Rights") to acquire additional securities of the
Company: (i) the right to purchase for cash its pro rata share of
the issuance by the Company of certain equity securities after
the Effective Time; and (ii) the right and the obligation to
purchase a number of Shares equal to 40% of the number of Shares
which would otherwise be issuable by the Company (but for the
Merger) upon the exercise of warrants of the Company or the
conversion of any 8% Convertible Subordinated Debentures due 2014
(the "Debentures") issued in exchange therefor at a purchase
price of $20.00 per Share (approximately-adjusted to reflect any
stock split, reverse stock split or other reclassification of the
Shares prior to such exercise or conversion).
Pursuant to the Governance Agreement, the Reporting Person
may purchase or otherwise acquire equity securities of the
Company so long as prior to January 1, 1997 AHP's Voting Interest
(as defined below) does not immediately after such acquisition
exceed 75%.
Upon consummation of the Merger and the transactions
contemplated thereby, (i) the Depositary Shares were authorized
to be traded on the NASDAQ National Market System under the
symbol GENIZ and (ii) the Shares ceased to be authorized to be
quoted on the NASDAQ National Market System.
CHANGE IN THE COMPOSITION OF THE BOARD OF DIRECTORS
The Governance Agreement, dated as of January 16, 1992,
among AHP, the Reporting Person and the Company (the "Governance
Agreement"), a copy of which is attached hereto as Exhibit III
and is hereby incorporated herein by reference, provides, among
other things, for the designation by the Reporting Person of two
nominees whom the Reporting Person has designated to be Mr. Fred
Hassan and Dr. Robert Levy. Mr. Hassan will serve until the 1996
Annual Meeting, and Dr. Levy will serve until the 1998 Annual
Meeting.
The Governance Agreement also limits the number of directors
that can be designated by the Reporting Person and provides that,
notwithstanding any other provision of the Governance Agreement,
the Certificate of Incorporation, By-laws or applicable law, the
Reporting Person will not at any time prior to January 1, 1997 be
entitled to designate, or to cause the nomination or election of,
more than two members of the Board of Directors. Directors
nominated by the Reporting Person pursuant to the Governance
Agreement are referred to herein as "Investor Directors" and all
other directors are referred to as "Non-investor Directors."
Pursuant to the Governance Agreement, on and after January
1, 1997 the Board of Directors of the Company will be increased
to nine directors and will include two nominees designated by the
Reporting Person and two officers of the Company nominated by the
nominating or proxy committee of the Board of Directors. The
remainder of the Board of Directors will be comprised of
Independent Directors, as defined below. Upon its request, the
Reporting Person will be entitled to designate nominees for a
number of Independent Directors equal to AHP's Voting Interest
(as defined below) times the total number of such Independent
Directors, rounded up to the next whole number if AHP's Voting
Interest is greater than 50% and less than or equal to 60% and
rounded down to the next whole number if AHP's Voting Interest is
less than or equal to 50% or greater than 60%.
Notwithstanding the foregoing, the Reporting Person will
have no right to designate any nominee for directors pursuant to
the Governance Agreement at any time after AHP's Voting Interest
has fallen below 20%. At such time as AHP's Voting Interest
falls below 20%, the Reporting Person will cause all the Investor
Directors to resign from the Board of Directors.
For purposes of the Governance Agreement, "Independent
Director" means a director of the Company who is not an officer
or employee of the Company and who is not an officer, employee,
director, principal stockholder or partner of AHP, any affiliate
or associate of AHP or any entity dependent on AHP for more than
10% of its revenues or earnings in its most recent fiscal year.
"AHP's Voting Interest" means the percentage of votes for
elections of directors of the Company generally controlled
directly or indirectly by AHP, and any affiliates or associates
of AHP, assuming the conversion, exchange or exercise into or for
voting stock of equity securities other than voting stock and not
taking into account any voting agreements or arrangements
granting to a third party control over the voting of voting stock
beneficially owned by AHP.
COMMITTEES OF THE BOARD OF DIRECTORS
Pursuant to the Governance Agreement, the Board of Directors
has designated a nominating or proxy committee, compensation
committee, intellectual property rights committee and scientific
affairs committee. Each committee of the Board of Directors
(other than any special committee or committee of Independent
Directors constituted for the purposes of making any
determination that is to be made under the terms of the
Governance Agreement or otherwise) will at all times include at
least one director designated by the Reporting Person and no
action by any such committee shall be valid unless taken at a
meeting for which adequate notice has been duly given to or
waived by the members of such committee. The director designated
by the Reporting Person to serve on any committee is entitled to
designate as his alternate another director designated by the
Reporting Person.
The Governance Agreement provides that the intellectual
property rights committee and scientific affairs committee will
each consist of two Investor Directors and two Non-investor
Directors. The intellectual property rights committee is
responsible for the general review of patent application strategy
and the approval of material decisions regarding patent
litigation strategy, including litigation commencement, defense,
prosecution and settlement. The scientific affairs committee is
responsible for the general review of the Company's research
programs and for the approval of its research budget.
The Governance Agreement provides that the compensation
committee will consist of two Non-investor Directors (neither of
whom is an officer of the Company) and one Investor Director.
The compensation committee, which only acts upon a unanimous
vote, is responsible for establishing and modifying the
compensation of all corporate officers of the Company, adoption
and amendment of all stock option and other employee benefit
plans, and the terms of any employment agreements and
arrangements with, and termination of, all corporate officers of
the Company.
The Governance Agreement provides that the nominating or
proxy committee include, in addition to a director designated by
the Reporting Person, two Non-investor Directors, and that it
have the exclusive authority to nominate individuals to fill all
positions of the Board of Directors, except for those designated
by the Reporting Person pursuant to the relevant provisions of
the Governance Agreement in accordance with the terms thereof.
With respect to any election of directors prior to January 1,
1997 (but not any election on or after January 1, 1997), any
nomination of a person not then serving as a director requires
the unanimous approval of the nominating or proxy committee,
except that the directors designated or nominated by the
Reporting Person do not require such unanimous approval. The
Company has agreed to use all reasonable efforts to solicit
proxies for the nominees for directors nominated by such
committee from all holders of voting stock entitled to vote
thereon.
CERTAIN APPROVAL RIGHTS OF THE REPORTING PERSON WITH RESPECT TO
MATTERS OF CORPORATE GOVERNANCE
The Governance Agreement provides that the approval of the
Investor Directors designated by the Reporting Person pursuant to
the Governance Agreement is required to approve any of the
following:
(a) the entry by the Company into any merger or
consolidation or the acquisition by the Company of any business
or assets that would constitute a Substantial Part (as defined
below) of the business or assets of the Company, whether such
acquisition be by merger or consolidation or the purchase of
stock or assets or otherwise;
(b) the sale, lease, pledge, grant of a security interest,
transfer or the disposal of all or a Substantial Part of the
business or assets of the Company;
(c) the issuance of any equity securities or other capital
stock of the Company, except for (i) issuances of Depositary
Shares (or, after the termination of the Call Option, Shares) or
options, warrants or rights to acquire, or securities convertible
into or exchangeable for, such Depositary Shares (or, after the
termination of the Call Option, Shares) pursuant to any employee
compensation plan that was in existence at the Effective Time or
that has been approved by the compensation committee, and (ii)
issuances thereof upon the exercise, conversion or exchange of
any outstanding equity securities or other capital stock;
(d) the repurchase or redemption of any equity securities
or other capital stock of the Company, other than redemptions
required by the terms thereof and purchases made in connection
with the Company's 1991 Restricted Plan or any similar plan
adopted with the approval of the compensation committee;
(e) any action otherwise within the purview of the
intellectual property rights committee, scientific affairs
committee or compensation committee which is presented to the
full Board of Directors for consideration and action;
(f) any amendment to the Certificate of Incorporation or
By-laws or change in the size of the Board of Directors, except
as contemplated by the Governance Agreement; and
(g) any action with respect to any shareholders rights plan
of the Company or any similar contract, agreement, plan or
arrangement.
The Governance Agreement provides that a "Substantial Part"
means more than 10% of the fair market value of the total assets
of the Company.
CERTAIN RIGHTS WITH RESPECT TO MATERIAL LICENSING AND MARKETING
ARRANGEMENTS WITH THIRD PARTIES.
The Governance Agreement provides that the Company will not,
and will not permit any of its subsidiaries to, enter into any
material third party licensing or marketing agreement with
respect to any products, processes, inventions or developments
made by the Company or any subsidiary of the Company unless it
shall have first offered to afford such licensing or marketing
rights to AHP as set forth in the Governance Agreement.
RESTRICTIONS ON CERTAIN ACQUISITIONS AND DISPOSITIONS OF SHARES
BY AHP AND THE REPORTING PERSON.
The Governance Agreement provides for certain restrictions
on acquisitions and dispositions of Shares by AHP and its
affiliates, including restrictions providing that AHP will not
(A) propose that the Company enter into any Business Combination,
as defined below, prior to January 1, 1997 with AHP or any
affiliate of AHP unless AHP in good faith determines that there
have occurred events or circumstances substantially impairing the
business, prospects or financial viability of the Company and its
subsidiaries, taken as a whole, since the Effective Time, (B) act
to consummate any Business Combination whether or not prior to
January 1, 1997, between the Company and AHP or any affiliate of
AHP without an affirmative vote of a majority of the Independent
Directors of the Company and (C) purchase or otherwise acquire
any equity securities of the Company prior to January 1, 1997
such that AHP's Voting Interest would exceed 75% except pursuant
to (x) the exercise of the Call Option, (y) a Business
Combination meeting the above requirements or (z) certain other
specific exceptions.
The term "Business Combination" as used in the Governance
Agreement means any of the following transactions: (i) any merger
or consolidation of the Company or any subsidiary with (A) AHP or
(B) any corporation (other than the Company) which is, or after
such merger or consolidation would be, an affiliate or associate
of AHP, or any tender or exchange offer by AHP or any affiliate
or associate of AHP for any equity securities of the Company or
any subsidiary thereof; (ii) any sale, lease, exchange, mortgage,
pledge, transfer or other dispositions by the Company (in one
transaction or a series of transactions) to or with AHP or any
affiliate or associate of AHP (other than the Company) of all or
a Substantial Part of the assets of the Company or any subsidiary
thereof; (iii) the issuance, exchange or transfer by the Company
or any subsidiary (in one transaction or a series of
transactions) of any securities of the Company or any subsidiary
thereof to AHP or any affiliate or associate of AHP (other than
the Company) in exchange for cash, securities or other
consideration (or a combination thereof) having an aggregate fair
market value equal to or in excess of a Substantial Part of the
assets of the Company; (iv) the adoption of any plan or proposal
for the liquidation or dissolution of the Company proposed by or
on behalf of AHP or any affiliate or associate of AHP (other than
the Company); (v) any reclassification of securities (including
any reverse stock split), recapitalization of the Company, or any
merger or consolidation of the Company with any subsidiary
thereof or any other transaction to which the Company is a party
(whether or not with or into or otherwise involving AHP or any
affiliate or associate of AHP) and which has the effect, directly
or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible
securities of the Company or any subsidiary thereof which is
directly or indirectly owned by AHP or any affiliate or associate
of AHP (other than the Company); or (vi) any agreement, contract
or other arrangement with AHP or any affiliate or associate of
AHP (other than the Company) in which AHP or any affiliate or
associate of AHP (other than the Company) has an interest (other
than proportionately as a stockholder) providing for any one or
more of the actions specified in subsections (i) to (v) above.
However, none of the following shall be deemed to be a Business
Combination: (x) any licensing, marketing or other agreements
entered into between the Company and AHP pursuant to the
Governance Agreement; (y) any issuance, exchange, or transfer of
securities by the Company to or on behalf of AHP, the Reporting
Person or any of their affiliates or associates (A) pursuant to
the provisions of the Merger Agreement or Governance Agreement or
(B) which would not result in AHP's Voting Interest exceeding 75%
immediately after the consummation thereof; and (z) any exercise
by the Reporting Person of the Call Option in accordance with the
terms of the Depositary Agreement.
LIMITATIONS UPON THE VOTING OF SHARES AND DEPOSITARY SHARES BY
THE REPORTING PERSON.
The Governance Agreement limits the voting of Shares and
Depositary Shares by the Reporting Person and its affiliates in
the following manner. In any election of directors, the
Reporting Person and its affiliates will vote their Shares and
any Depositary Shares which the Reporting Person and its
affiliates hold for all nominees in proportion to the votes cast
by the other holders of Depositary Shares; provided that the
Reporting Person and its affiliates may cast all of their votes
(i) in favor of any nominee to the Board of Directors designated
by the Reporting Person pursuant to the Governance Agreement and
(ii) in the Reporting Person's sole discretion in connection with
any election contest to which Rule 14a-11 under the Securities
Exchange Act of 1934, as amended (the "Act"), applies (the
"Director Vote Limitation"). In any vote to amend the term of
the Depositary Shares, the Reporting Person and its affiliates
will vote their Depositary Shares, if any, in proportion to the
votes cast by the holders of Depositary Shares (other than the
Reporting Person and its affiliates) (the "Amendment Vote
Limitation") and, collectively with the Director Vote Limitation,
the "Voting Limitations").
CERTAIN RESTRICTIONS UPON THE TRANSFER OF SHARES OR DEPOSITARY
SHARES BY AHP AND THE REPORTING PERSON.
The Governance Agreement provides for the following
restrictions on the transfer (the "Transfer Restrictions") of the
Shares held by the Reporting Person: (i) AHP and the Reporting
Person will not, other than to any entity that is directly or
indirectly wholly-owned by AHP, and will not permit any such
entity to, sell or otherwise transfer any Shares or Depositary
Shares prior to January 1, 1997, except that at any time after
December 31, 1993 or such earlier time as it shall have become
illegal for AHP or the Reporting Person to continue to own the
Shares or Depositary Shares directly or indirectly or to exercise
fully all rights of ownership with respect to the Shares or
Depositary Shares, AHP or the Reporting Person may sell or
otherwise transfer Shares or Depositary Shares (a) pursuant to a
registered, underwritten public offering, (b) in compliance with
the volume and manner of sale requirements of Rule 144
promulgated under the Securities Act of 1933, as amended (whether
or not such requirements are legally required) or (c) pursuant to
privately negotiated block sales in the aggregate not exceeding
15% of the Shares outstanding on a fully diluted basis; provided
that in no event shall AHP or the Reporting Person prior to
January 1, 1997 knowingly make any sale to a person who after
giving effect to such sale would beneficially own more than 5% of
the outstanding Shares or equity securities of the Company; and
(ii) AHP and the Reporting Person will not, and will not permit
any of their respective wholly-owned entities to, sell or
otherwise transfer any Shares or Depositary Shares (except for
sales to any entity that is directly or indirectly wholly-owned
by AHP) to a person who acquires Shares or Depositary Shares from
AHP or the Reporting Person representing more than 30% of the
aggregate number of outstanding Shares unless such person agrees
to be bound by the provisions of the Governance Agreement
relating to restrictions on Business Combinations to the same
extent that the Reporting Person was bound thereby.
TERMINATION OF PROVISIONS REGARDING MATTERS OF CORPORATE
GOVERNANCE.
The Governance Agreement, by its terms, will terminate at
such time, if any, as the Reporting Person and its affiliates (i)
beneficially own 100% of all outstanding classes and series of
Common Stock of the Company or (ii) no longer own any Shares
thereof. In addition, the provisions relating to Subscription
Rights, the establishment and function of committees of the Board
of Directors, the approval rights of the directors designated by
the Reporting Person and the rights of AHP with respect to
material third party licensing or marketing agreements proposed
to be entered into by the Company with third parties will
terminate upon any sale of Shares or Depositary Shares by the
Reporting Person and its affiliates if immediately thereafter
AHP's Voting Interest is less than 50%. The provisions of the
Governance Agreement relating to the election of directors and
voting of Shares will terminate upon such a sale if immediately
thereafter AHP's Voting Interest is less than 20%.
AMENDMENTS TO THE CERTIFICATE OF INCORPORATION AND BY-LAWS
Pursuant to the Merger, the Certificate of Incorporation and
By-laws were amended in order to effectuate the following
changes. Article SIXTH of the Certificate of Incorporation was
amended to state that during the pendency of the Governance
Agreement: (i) the Board of Directors must establish and empower
the committees specified in the Governance Agreement; (ii)
approval and authorization of any of the actions pursuant to
which approval rights have been granted to the Reporting Person,
as described above, shall require the approval contemplated
thereby; and (iii) any inconsistency between the other provisions
of the Certificate of Incorporation or the By-laws and the
provisions of the Governance Agreement relating to such
committees or such approvals shall be resolved in favor of the
Governance Agreement.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Following the purchase of the Shares as described in
Item 5(c), below, the Reporting Person is the beneficial owner of
27,365,155.95 Shares, consisting of (i) 5,867,111.2 Merger
Shares; (ii) 9,466,709 Additional Shares; (iii) 947,000 Shares
underlying 947,000 Depositary Shares held by the Reporting
Person; (iv) 10,407,294.72 Shares subject to the Call Option; (v)
649,608.57 Shares purchased in July 1993 upon conversion of the
Preferred Stock; (vi) 2,448.57 Shares purchased other than in
July 1993 upon conversion of the Preferred Stock; (vii) 14,863.89
Shares purchased pursuant to the Standby Agreement; and (viii)
9,320 and 800 Shares purchased pursuant to the Merger Agreement
upon the exercise of warrants to purchase Shares. Based on
27,365,155.95 Shares deemed to be outstanding pursuant to Rule
13d-3 of the Act, the Shares beneficially owned by the Reporting
Person constitute approximately 100% of the outstanding Shares.
Except as set forth herein, neither the Reporting Person
nor, to its best knowledge, any Control Persons, or any of the
persons named on Schedule A attached hereto, beneficially owns
any Shares.
(b) The Reporting Person has the sole power to vote,
subject to the Voting Limitations, and dispose of, subject to the
Transfer Restrictions, all the Shares beneficially owned by the
Reporting Person as set forth in Item 5(a) above.
(c) On July 19, 1993 and July 23, 1993, the Reporting
Person purchased 642,545.65 and 7,062.85 Shares, respectively,
pursuant to its obligations under the Merger Agreement upon the
conversion of 1,136,815 shares of Preferred Stock. On July 15,
1993, July 16, 1993 and July 23, 1993, the Reporting Person
purchased 4,114.27, 10,378.46 and 371.16 Shares, respectively,
pursuant to its obligations under the Standby Agreement upon the
redemption of 8,490 shares of Preferred Stock. On March 6, 1996
and April 2, 1996, upon exercise of outstanding warrants of the
Company, the Reporting Person purchased 9,320 and 800 Shares,
respectively from the Company pursuant to its obligations under
the Merger Agreement.
(d) Neither the Reporting Person nor, to its best
knowledge, the Control Person, or any of the persons named on
Schedule A attached hereto, has or knows any other person who has
the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, any Shares
beneficially owned by the Reporting Person.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
There are no contracts, arrangements, understandings or
relationships (legal or otherwise) among the persons named in
Item 2 or between any of such persons and any other person with
respect to any securities of the Company except as referred to or
described herein.
On June 8, 1993, the Reporting Person and the Company
entered into a standby agreement (the "Standby Agreement"), a
copy of which is attached hereto as Exhibit IV and is hereby
incorporated herein by reference, pursuant to which the Reporting
Person purchased from the Company 14,863.89 Shares of Common
Stock at a purchase price of $29.93 per Share, representing the
funds necessary to pay the aggregate Redemption Price for all
shares of Preferred Stock not duly surrendered for conversion by
the close of business on the Redemption Date.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit I. Agreement and Plan of Merger, dated as of
September 19, 1991, among Genetics Institute, Inc., American Home
Products Corporation, AHP Biotech Holdings, Inc. and AHP Merger
Subsidiary Corporation, filed with the Securities and Exchange
Commission on January 24, 1992 as Exhibit I to Item 7 to Schedule
13D of the Company.
Exhibit II. Depositary Agreement, dated as of January 16,
1992, among American Home Products Corporation, AHP Biotech
Holdings, Inc. Genetics Institute, Inc. and The First National
Bank of Boston as Depositary, filed with the Securities and
Exchange Commission on January 24, 1992 as Exhibit II to Item 7
to Schedule 13D of the Company.
Exhibit III. Governance Agreement, dated as of January 16,
1992, among American Home Products Corporation, AHP Biotech
Holdings, Inc. and Genetics Institute, Inc., filed with the
Securities and Exchange Commission on January 24, 1992 as Exhibit
III to Item 7 to Schedule 13D of the Company.
Exhibit IV. Standby Agreement, dated June 8, 1993,
between Genetics Institute, Inc. and AHP Biotech Holdings, Inc.,
filed with the Securities and Exchange Commission on June 8, 1993
as Exhibit as Exhibit IV to Amendment No. 1 to Schedule 13D of
the Company.
Schedule A. Executive Officers and Directors of AHP
Biotech Holdings, Inc. and American Home Products Corporation.
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: April 9, 1996
AHP BIOTECH HOLDINGS, INC.
By: /s/ Robert G. Blount
Robert G. Blount
Vice President
<PAGE>
SCHEDULE A
Executive Officers and Directors
of
AHP Biotech Holdings, Inc.
The names and titles of the executive officers and the
names of the directors of AHP Biotech Holdings, Inc., and their
business addresses and principal occupations are set forth below.
If no address is given, the director's or executive officer's
business address is that of AHP Biotech Holdings, Inc. Unless
otherwise indicated, each occupation set forth opposite an
individuals name refers to AHP Biotech Holdings, Inc, and each
individual is a United States citizen.
Name and Business Address
EXECUTIVE OFFICERS Position: Present Principal
Occupation
John R. Stafford President; Chairman, President
and Chief Executive Officer,
American Home Products Corporation
Robert G. Blount Vice President; Senior Executive
Vice President, American Home
Products Corporation
Thomas M. Nee Vice President; Vice President
- Taxes, American Home Products
Corporation
John R. Considine Treasurer; Vice President -
Finance, American Home Products
Corporation
Carol G. Emerling Secretary; Secretary, American
Home Products Corporation
Jack M. O'Connor Assistant Treasurer; Treasurer,
American Home Products Corporation
Gerald A. Jibilian Assistant Secretary; Vice President
and Associate General Counsel,
American Home Products Corporation
DIRECTORS
John R. Stafford (as indicated above)
Robert G. Blount (as indicated above)
Louis L. Hoynes, Jr. Senior Vice President and General
Counsel, American Home Products
Corporation
<PAGE>
Executive Officers and Directors
of
American Home Products Corporation
The names and titles of the executive officers and the names
of the directors of American Home Products Corporation and their
business addresses and principal occupations are set forth below.
If no address is given, the director's or executive officer's
business address is that of American Home Products Corporation.
Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to American Home Products Corporation
and each individual is a United States citizen.
Name and Business Address
EXECUTIVE OFFICERS Position; Present Principal
Occupation
John R. Stafford Chairman, President and Chief
Executive Officer
Robert G. Blount Senior Executive Vice President
Fred Hassan Executive Vice President
Stanley F. Barshay Senior Vice President
Joseph J. Carr Senior Vice President
Louis L. Hoynes, Jr. Senior Vice President and General
Counsel
William J. Murray Senior Vice President
David M. Olivier Senior Vice President
John R. Considine Vice President - Finance
Paul J. Jones Vice President and Comptroller
Rene R. Lewin Vice President - Human Resources
David Lilley Vice President (British Citizen)
Thomas M. Nee Vice President - Taxes
DIRECTORS
John R. Stafford (as indicated above)
Robert G. Blount (as indicated above)
Clifford L. Alexander, Jr.
Alexander & Associates President, Alexander & Associates
400 C Street, N.E. Inc. (consulting firm specializing
Washington,D.C. in workforce inclusiveness)
20002
Frank A. Bennack, Jr. President and Chief Executive
The Hearst Officer The Hearst Corporation
Corporation (owns and operates communications
959 Eighth Avenue media)
NY, NY 10019
Robin Chandler Duke National Chair, Population Action
International
John D. Feerick Dean of Fordham University School
Fordham University of Law since 1982
School of Law
140 West 62nd Street
NY, NY 10023
Fred Hassan (as indicated above)
John P. Mascotte Retired (1995) Chairman and CEO
222 Purchase Street of The Continental Corporation
Suite 345
Rye, NY 10580
Mary Lake Polan, Deparatment Chair and Professor,
M.D., Ph.D. Stanford University School of
Stanford University Medicine
School of Medicine
100 Pasteur Drive
Stanford, CA 94305
John R. Torell III Chairman, Torell Management Inc.
Torell Management, (financial advisory company)
Inc.
767 Fifth Avenue
46th Floor
NY, NY 10017
William Wrigley President, Chief Executive Officer
Wm. Wrigley Jr. and member of the Board,
Company Wm. Wrigley Jr. Company
410 North Michigan (international manufacturer of
Avenue chewing gum products)
Chicago, Illinois
60611
