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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 7)
COPLEY PHARMACEUTICAL, INC.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
21745K-10-1
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(CUSIP Number)
David A. Jenkins
President
Hoechst Corporation
86 Morris avenue
Summit, NJ 07901
(908) 231-4058
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 9, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
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This Amendment to the Statement on Schedule 13D (the "Schedule 13D")
with respect to the Common Stock of Copley Pharmaceutical, Inc. (the "Issuer")
is filed by Hoechst Corporation, a Delaware corporation ("Parent").
Item 4. Purpose of Transaction.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
As of August 9, 1999, the Issuer entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Teva Pharmaceutical USA, Inc., a Delaware
corporation ("Teva USA"), and Caribou Merger Corporation, a Delaware corporation
and a wholly owned subsidiary of Teva USA ("Purchaser"), pursuant to which
Purchaser has agreed to offer to purchase (the "Offer") all the outstanding
shares (the "Shares") of Common Stock of the Issuer at $11.00 per share net to
seller in cash without interest thereon (the "Offer Price"). The Merger
Agreement provides, among other things, that as soon as practicable after the
satisfaction or waiver of the conditions to the merger set forth in the Merger
Agreement, Purchaser will be merged with and into the Issuer (the "Merger"),
with the Issuer surviving as a wholly owned subsidiary of Teva USA. At the
effective time of the Merger (the "Effective Time"), subject to certain
exceptions, each issued and outstanding Share will be converted into the right
to receive the Offer Price or such higher price as may be paid in the Offer (the
"Merger Consideration"), less any required withholding taxes. The foregoing
summary of the Merger Agreement does not purport to be complete and is qualified
in its entirety by reference to the copy of the Merger Agreement filed as an
exhibit to the Schedule 14D-9 filed by the Issuer on August 16, 1999 (the
"Schedule 14D-9") and incorporated herein by reference.
As a condition and inducement to Teva USA and Purchaser entering into
the Merger Agreement, concurrently with the execution of the Merger Agreement,
Teva USA, Purchaser and Parent, which beneficially owns 9,934,100 or
approximately 51% of the outstanding Shares (the "Parent Shares"), entered into
a Stockholder Agreement (the "Stockholder Agreement") pursuant to which Parent
agreed, among other things, to tender (and not withdraw) its Shares pursuant to
the Offer.
Stockholder Agreement
The following summary of the material terms of the Stockholder
Agreement does not purport to be complete and is qualified in its entirety by
reference to the copy of the Stockholder Agreement filed as an exhibit to the
Schedule 14D-9 and incorporated herein.
Agreement to Tender. Under the Stockholder Agreement, Parent has agreed to
validly tender (and not withdraw), pursuant to the terms of the Offer, the
Parent Shares not later than the fifth business day after commencement of the
Offer. For the Parent Shares validly tendered in the Offer and not withdrawn,
Parent will be entitled to receive the Offer Price per share.
Agreement Not to Dispose or Encumber Shares/Hoechst Offering. Under the
Stockholder Agreement and while the Stockholder Agreement is in effect, Parent
has agreed that, except pursuant to the Offer, it will not, without the prior
written consent of Teva USA and Purchaser, (i) offer or agree to sell, transfer,
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tender, assign, pledge, encumber, or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the offer
for sale, sale, transfer, tender pledge, encumbrance, assignment or other
disposition of any or all of the Parent Shares, or any interest therein, (ii)
grant any proxies or powers of attorney with respect to the Parent Shares,
deposit any of the Parent Shares into a voting trust or enter into a voting
agreement, understanding or arrangement with respect to any of the Parent
Shares, or (iii) to take any action that could reasonably be expected to make
any representation or warranty of Parent under the Stockholder Agreement
incorrect or result in a breach of the Stockholder Agreement by Parent or of the
Merger Agreement by the Issuer. Additionally, Parent has agreed that the Parent
Shares will bear a legend stating that they are subject to the restrictions on
transfer contained in the Stockholder Agreement. Parent has also agreed to waive
any appraisal rights it may have under the Stockholder Agreement and the Merger
Agreement.
However, in order to assure that Parent will have the flexibility to
dispose of at least a portion of the Parent Shares in 1999, the Stockholder
Agreement provides that Parent will have the right to withdraw and sell up to
4,967,050 of the Parent Shares (the "Offering Shares") to up to ten (10) persons
after October 31, 1999 provided that the purchasers of the Offering Shares in
turn agree to tender the Offering Shares into the Offer. To facilitate such a
possible sale, the Stockholder Agreement permits Parent (i) to take customary
actions in preparation for a registered or unregistered secondary offering of
the Offering Shares (a "Hoechst Offering") (including conducting discussions and
negotiations with prospective placement agents and due diligence activities
involving the Issuer, and drafting any related registration statement or
offering circular); (ii) after September 30, 1999, to file with the Securities
and Exchange Commission any registration statement for a Hoechst Offering,
distribute any related prospectus or other offering circular for a Hoechst
Offering and any amendments or supplements thereto to prospective investors, and
commence marketing efforts with respect to a Hoechst Offering; and (iii) after
October 31, 1999, to consummate any Hoechst Offering with respect to the
Offering Shares; provided, that sales of the Offering Shares can be made to no
more than ten (10) purchasers and Parent will cause each Person who or which
acquires Offering Shares in any Hoechst Offering to agree in writing, in form
and substance reasonably satisfactory to Teva USA, to have with respect to such
Offering Shares the same rights and obligations under the Stockholder Agreement
as Parent (except that no such Person shall have the right to withdraw the
Offering Shares from the Offer or transfer such Shares other than pursuant to
the Offer). Any breach by any such Person of any such obligations would be
deemed a breach of the Stockholder Agreement by Parent.
Voting of Shares. In the Stockholder Agreement, Parent has agreed that from the
date thereof until the termination of the Stockholder Agreement, at any meeting
of the Issuer's stockholders (whether annual or special, and whether or not an
adjourned or postponed meeting), however called or in connection with any
written consent of the Issuer's stockholders, it will vote the Parent Shares (i)
in favor of the approval and adoption of the Merger and each of the other
actions contemplated by the Merger Agreement, (ii) against any action or
agreement that would result in a breach of any covenant, representation or
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warranty or any other obligation or agreement of the Issuer under the Merger
Agreement or of Parent under the Stockholder Agreement or that would impede,
interfere with, delay, postpone or adversely affect the Merger or the
transactions contemplated thereby or by the Stockholder Agreement. Parent has
also agreed to vote against: (A) any extraordinary corporate transaction, such
as a merger, consolidation or other business combination, involving the Issuer
or any of its subsidiaries; (B) any sale, lease or transfer of a material amount
of the assets or business of the Issuer or its subsidiaries, or any
reorganization, restructuring, recapitalization, special dividend, dissolution,
liquidation or winding up of the Issuer or its subsidiaries; (C) any change in
the present capitalization of the Issuer, including any proposal to sell any
equity interest in the Issuer or any of its subsidiaries or any amendment of the
certificate of incorporation or by-laws of the Issuer; (D) any change in a
majority of the Issuer's Board; (E) any other change in the Issuer's corporate
structure or business; and (F) any other action which is intended or could
reasonably be expected to impede, interfere with, delay, postpone, discourage or
adversely affect the Merger or the transactions contemplated by the Merger
Agreement or the Stockholder Agreement.
Termination. The Stockholder Agreement provides that it shall terminate and be
of no further force and effect automatically and without any required action of
the parties thereto upon the earlier to occur of (a) the Effective Time; (b) the
termination of the Merger Agreement by any party thereto in accordance with its
terms; (c) Purchaser's failure to commence the Offer within five (5) business
days following the date of the initial public announcement of the Offer; (d) the
termination of the Offer, or expiration of the Offer without Purchaser's having
accepted for payment and paid for all Shares tendered pursuant thereto, provided
that Parent's right to terminate shall not be available to Parent if it is then
in material breach of the Stockholder Agreement and such breach is the proximate
cause of the Offer having so expired or having been terminated; (e) any
modification of any term or condition of the Offer which would require the prior
written consent of the Issuer pursuant to certain provisions of the Merger
Agreement as in the form originally executed and without amendment (whether or
not such consent is obtained); and (f) December 31, 1999. Parent has also agreed
to pay to Teva USA $10,000,000 in cash in same day funds if the Merger Agreement
is terminated in accordance with its terms and the proximate cause of such
termination was Parent's breach of any of its representations or warranties
under the Stockholder Agreement or Parent's breach or failure to perform any of
its covenants or agreements under the Stockholder Agreement.
Representations and Warranties. The Stockholder Agreement contains various
customary representations and warranties of the parties thereto including,
without limitation, representations and warranties by Parent as to ownership of
the Parent Shares, corporate organization, power and authority, the absence of
any conflicts with charter documents and contracts, the absence of any need to
make governmental filings or to obtain consents or approvals, the execution,
delivery and performance of the Stockholder Agreement, the lack of encumbrances
on the Parent Shares and the acknowledgment of Teva USA's and Purchaser's
reliance.
No Solicitation. Parent has agreed in the Stockholder Agreement that during the
term of the Stockholder Agreement, except in connection with a Hoechst Offering,
it will not, directly or indirectly, through any officer, director, agent or
other representative, solicit, initiate or encourage, or take any other action
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designed or reasonably likely to facilitate, any inquiries or the making of any
proposal from any person (other than Teva USA, Purchaser and any of their
Affiliates) relating to (i) any acquisition of all or any of the Parent Shares
or (ii) any transaction that constitutes an Acquisition Proposal, or participate
in any negotiations regarding, or furnish to any person any information with
respect to, or otherwise cooperate in any way with, or assist or participate in
or facilitate or encourage, any effort or attempt by any person to do or seek
any of the foregoing. Without the prior written consent of Teva USA, and except
in connection with a Hoechst Offering, Parent and its affiliates shall not, and
shall instruct their respective Representatives not to, issue any press release
or make any public statement or take any action that would otherwise require any
public disclosure concerning the Merger, the Offer or the transactions
contemplated by the Merger Agreement or the Stockholder Agreement; provided,
however, that Parent may, without the prior written consent of Teva USA, issue
such press release or make such public statement or take such action as may upon
the advice of counsel be required by law, if it has provided prior notice to
Teva USA and used all reasonable efforts to consult with Teva USA.
The Chia Tai Agreement
Teva USA indicated its unwillingness to enter into the Merger
Agreement unless Teva USA was provided an option to terminate the Issuer's
indirect interest in Wuxi Chia Tai-Copley Pharmaceutical Limited, a corporation
formed under the laws of the Peoples Republic of China (the "China Joint
Venture"). Accordingly, the Issuer, Parent and, with respect to certain
provisions only, Teva USA have entered into a Purchase and Sale Agreement, dated
as of August 9, 1999 (the "Chia Tai Agreement"), relating to the China Joint
Venture. The following summary of the material terms of the Chia Tai Agreement
does not purport to be complete and is qualified in its entirety by reference to
the copy of the Chia Tai Agreement filed as an exhibit to the Schedule 14D-9 and
incorporated herein by reference.
The Issuer and Chia Tai Healthcare Group, a Hong Kong corporation,
formed Chia Tai-Copley Pharmaceutical Limited, a corporation formed under the
laws of the British Virgin Islands (the "BVI Joint Venture"). The BVI Joint
Venture and other investors formed the China Joint Venture, and in December 1995
the Issuer and Parent reached an agreement that Parent would purchase (the
"Purchase") the Issuer's approximate 49% interest in the BVI Joint Venture for
$2,107,000 (the "Purchase Price"). The BVI Joint Venture owns approximately 85%
of the China Joint Venture.
Pursuant to the Chia Tai Agreement, at any time prior to the six month
anniversary of the Offer closing date (the "Put Expiration Date"), Parent shall,
within ten (10) days of a written request by the Issuer, purchase all of the
Issuer's ownership interest in the BVI Joint Venture for the Purchase Price.
Parent also agreed to assume any and all liabilities of the Issuer or Teva USA
existing as of the time of the Purchase and arising out of the BVI Joint Venture
or the China Joint Venture, provided that the Issuer agreed that until the
earlier of the time of the Purchase and the Put Expiration Date, it would not
incur any liabilities in respect of or arising out of the BVI Joint Venture or
the China Joint Venture without the prior consent of Parent.
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The Pentoxifylline Agreement Amendment
Since January 1, 1997, the Issuer has been a party to an agreement
relating to the distribution of Pentoxifylline, a drug manufactured by Hoechst
Marion Roussel, Inc., a Delaware corporation and an affiliate of Parent ("HMR").
Teva USA, as a condition to entering into the Merger Agreement, requested that
this agreement be terminated. Accordingly, on August 9, 1999, Parent and HMR
entered into the Pentoxifylline Agreement Amendment (the "Pentoxifylline
Agreement Amendment") regarding certain changes to the parties' existing
Pentoxifylline Agreement dated as of January 1, 1997 (the "Original
Pentoxifylline Agreement"). The following summary of the material terms of the
Pentoxifylline Agreement Amendment does not purport to be complete and is
qualified in its entirety by reference to the copy of the Pentoxifylline
Agreement Amendment filed as an exhibit to the Schedule 14D-9 and incorporated
herein by reference.
The Pentoxifylline Agreement Amendment provides that after the Offer
closing date HMR will continue to receive, with respect to sales by the Issuer
of Pentoxifylline, 80% of the Copley Net Profit Margin (as defined in the
Pentoxifylline Agreement) if such number is positive, but in no event will HMR
be charged with any losses if such Copley Net Profit Margin is a negative
amount. The determination of Copley Net Profit Margin shall not give effect to
any shelf stock adjustments after the Offer closing date.
The Pentoxifylline Agreement Amendment also provides that after the
Offer closing date the Issuer's obligation to purchase and HMR's obligation to
supply pentoxifylline shall be limited to (i) 100% of the quantity set forth in
the Issuer's last forecast delivered before the Offer closing date for the three
calendar months following the month in which the Offer closing date occurs; and
(ii) 50% of the Issuer's forecast referred to in clause (i) above for the
fourth, fifth and sixth calendar months following the month in which the Offer
closing date occurs. The Pentoxifylline Agreement Amendment requires the Issuer,
until the Offer closing date, to conduct its business with respect to
pentoxifylline in the ordinary course of business. Pursuant to the
Pentoxifylline Agreement Amendment, HMR will no longer be bound to sell
pentoxifylline only to the Issuer and HMR may sell pentoxifylline to other
parties upon the earlier to occur of (i) the beginning of the fourth month after
the month in which the Offer closing date occurs and (ii) the beginning of the
first month in which the Issuer's forecast is 50% or less of the forecast for
July 1999. The Pentoxifylline Agreement Amendment provides that the Original
Pentoxifylline Agreement shall terminate at the end of the sixth calendar month
following the month in which the Offer closing date occurs, except for each
party's rights and obligations relating to pentoxifylline purchased by the
Issuer prior to such termination.
The Registration Rights Agreement
The following is a summary of certain material provisions of the
Registration Rights Agreement dated as of August 9, 1999 by and among the Issuer
and Parent (the "Registration Rights Agreement"). This summary does not purport
to be complete and is qualified in its entirety by reference to the complete
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text of the Registration Rights Agreement, a copy of which has been filed as an
exhibit to the Schedule 14D-9 and is incorporated herein by reference.
The Registration Rights Agreement provides that at any time after
September 30, 1999, Parent will be entitled to request that the Issuer register
under the Securities Act of 1933, as amended (the "Securities Act") up to
4,967,050 the Parent Shares of Common Stock (the "Registrable Shares") for sale
to not more than ten (10) purchasers as permitted by the Stockholder Agreement.
In no event will the Issuer be obligated to file more than one registration
statement under the Registration Rights Agreement.
The Issuer is required to use its reasonable best efforts to cause
such registration statement to become effective by October 31, 1999. All
out-of-pocket expenses incurred by the Issuer in complying with the registration
of the Registrable Shares that it would not otherwise have incurred absent such
registration will be borne by Parent. These expenses include all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Issuer, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
"blue sky" laws, fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars, costs of insurance and
fees and disbursements of Parent's counsel. The Issuer will bear all expenses
that it would have incurred absent the registration required by Parent.
The Issuer is not required to enter into an underwriting agreement in
connection with the registration of the Registrable Shares. The Issuer and
Parent have agreed to indemnify each other against, and to provide contribution
with respect to, certain liabilities relating to the registration of the
Registrable Shares under the Securities Act. The Registration Rights Agreement
contains various customary representations and warranties of the Issuer.
The obligations of the Issuer to register the Registrable Shares or
keep effective the registration statement shall terminate on the earliest of (A)
January 10, 2000, (B) termination of the Merger Agreement, (C) termination of
the Stockholder Agreement or (D) termination, withdrawal or expiration of the
Offer without Purchaser accepting for payment Shares thereunder.
The Representation Letter
The following is a summary of certain material provisions of a
representation letter dated as of August 9, 1999 by Parent regarding the
continued availability of insurance coverage of Parent with respect to the
Issuer's albuterol-related product liability litigation (the "Representation
Letter"). This summary does not purport to be complete and is qualified in its
entirety by reference to the complete text of the Representation Letter, a copy
of which has been filed as an exhibit to the Schedule 14D-9 and is incorporated
herein by reference.
As a condition to its entering into the transaction, Teva USA required
Parent to provide it with the Representation Letter in which Parent provided
assurance regarding the continued availability of insurance coverage of Parent
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and its affiliates related to the albuterol product liability litigation
following the consummation of the Merger. In a letter dated August 9, 1999,
Parent represented, warranted and confirmed to both the Issuer and Teva USA
that: (a) product liability claims based on injuries alleged to have been caused
by the Issuer's albuterol products are covered, and after the Offer and the
Merger will continue to be covered, under insurance policies of Parent and its
affiliated companies, subject to (1) the conditions of such policies; (2) the
existing letter agreements (the "Insurance Agreements") among the Issuer, Parent
and certain of such insurers relating to the albuterol settlement agreement; and
(3) in the case of the coverage to which the Insurance Agreements are not
applicable, the requirement that such injuries are alleged to have been caused
after November 11, 1993 and prior to the consummation of the Offer; (b) as to
the limits on the Issuer's co-insurance obligation with respect to albuterol
product liability claims under the Insurance Agreements; and (c) that in
connection with the Insurance Agreements, neither Parent nor the Issuer has,
except as set forth in the Insurance Agreements, executed any waiver of coverage
under Parent's and its affiliated companies' insurance policies relating to
injuries alleged to have been caused by the Issuer's albuterol products.
Item 7. Material to be Filed as Exhibits.
(h)(1) Agreement and Plan of Merger dated as of August 9, 1999 by and among
Teva Pharmaceuticals USA, Inc., Caribou Merger Corporation and Copley
Pharmaceutical, Inc. (filed as exhibit 3 to the Schedule 14D-9 filed
by Copley Pharmaceutical, Inc. on August 16, 1999)
(h)(2) Stockholder Agreement dated as of August 9, 1999 by and among Teva
Pharmaceuticals USA, Inc., Caribou Merger Corporation and Hoechst
Corporation (filed as exhibit 4 to the Schedule 14D-9 filed by Copley
Pharmaceutical, Inc. on August 16, 1999)
(h)(3) Registration Rights Agreement dated as of August 9, 1999 between
Copley Pharmaceutical, Inc. and Hoechst Corporation (filed as exhibit
8 to the Schedule 14D-9 filed by Copley Pharmaceutical, Inc. on August
16, 1999)
(h)(4) Purchase and Sale Agreement dated as of August 9, 1999 between Copley
Pharmaceutical, Inc. and Hoechst Corporation and, with respect to
certain provisions thereof, Teva Pharmaceuticals USA, Inc. (filed as
exhibit 9 to the Schedule 14D-9 filed by Copley Pharmaceutical, Inc.
on August 16, 1999)
(h)(5) Pentoxifylline Agreement Amendment dated as of August 9, 1999 between
Copley Pharmaceutical, Inc. and Hoechst Marion Roussel, Inc. (filed as
exhibit 10 to the Schedule 14D-9 filed by Copley Pharmaceutical, Inc.
on August 16, 1999)
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(h)(6) Letter dated as of August 9, 1999 from Hoechst Corporation to Copley
Pharmaceutical, Inc. and Teva Pharmaceuticals USA, Inc. (filed as
exhibit 11 to the Schedule 14D-9 filed by Copley Pharmaceutical, Inc.
on August 16, 1999)
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Date: August 16, 1999
HOECHST CORPORATION
By: /s/ David A. Jenkins
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Name: David A. Jenkins
Title: President
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EXHIBIT INDEX
Exhibit
(h)(1) Agreement and Plan of Merger dated as of August 9, 1999 by and among
Teva Pharmaceuticals USA, Inc., Caribou Merger Corporation and Copley
Pharmaceutical, Inc. (filed as exhibit 3 to the Schedule 14D-9 filed
by Copley Pharmaceutical, Inc. on August 16, 1999)
(h)(2) Stockholder Agreement dated as of August 9, 1999 by and among Teva
Pharmaceuticals USA, Inc., Caribou Merger Corporation and Hoechst
Corporation (filed as exhibit 4 to the Schedule 14D-9 filed by Copley
Pharmaceutical, Inc. on August 16, 1999)
(h)(3) Registration Rights Agreement dated as of August 9, 1999 between
Copley Pharmaceutical, Inc. and Hoechst Corporation (filed as exhibit
8 to the Schedule 14D-9 filed by Copley Pharmaceutical, Inc. on August
16, 1999)
(h)(4) Purchase and Sale Agreement dated as of August 9, 1999 between Copley
Pharmaceutical, Inc. and Hoechst Corporation (filed as exhibit 9 to
the Schedule 14D-9 filed by Copley Pharmaceutical, Inc. on August 16,
1999)
(h)(5) Pentoxifylline Agreement Amendment dated as of August 9, 1999 between
Copley Pharmaceutical, Inc. and Hoechst Marion Roussel, Inc. (filed as
exhibit 10 to the Schedule 14D-9 filed by Copley Pharmaceutical, Inc.
on August 16, 1999)
(h)(6) Letter dated as of August 9, 1999 from Hoechst Corporation to Copley
Pharmaceutical, Inc. and Teva Pharmaceuticals USA, Inc. (filed as
exhibit 11 to the Schedule 14D-9 filed by Copley Pharmaceutical, Inc.
on August 16, 1999)
