As filed with the Securities and Exchange Commission on October 13, 2000.
Registration No. 333-43176.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
IVAX CORPORATION
(Exact name of registrant as specified in its charter)
Florida 16-1003559
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4400 Biscayne Boulevard
Miami, Florida 33137
(305) 575-6000
(Address of principal executive offices,
including zip code and telephone number)
Carol Gillespie, Esq.
General Counsel
IVAX Corporation
4400 Biscayne Boulevard
Miami, FL 33137
(305) 575-6000
(Name, address and telephone number, including area code, of agent for service)
With a Copy to:
Alison W. Miller, Esq.
Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A.
150 West Flagler Street, Suite 2200
Miami, Florida 33130
(305) 789-3200
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
----------------------
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. [ ]
----------------------
<PAGE>
<TABLE>
<CAPTION>
Calculation of Registration Fee
===============================================================================================================================
Proposed Proposed
maximum maximum Amount of
Title of each class of securities Amount to be offering price aggregate registration
to be registered registered per security offering price fee
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
5.5% Convertible Senior Subordinated Notes
Due 2007 $250,000,000 100% $250,000,000 $66,000(1)
-------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.10 per share
(Conversion Shares) 6,729,500 shares(2) N/A N/A N/A(3)
-------------------------------------------------------------------------------------------------------------------------------
Common Stock Purchase Rights(4) 6,729,500 rights(2) N/A N/A N/A(5)
===============================================================================================================================
</TABLE>
(1) Previously paid with the initial filing of the Registration Statement on
August 7, 2000.
(2) Represents the number of shares of common stock and associated common stock
purchase rights as are initially issuable upon conversion of the 5.5%
Convertible Senior Subordinated Notes due 2007 registered hereby and,
pursuant to Rule 416 under the Securities Act of 1933, such indeterminate
number of shares of common stock and associated common stock purchase
rights as may be issued from time to time upon the conversion of the notes
as a result of the antidilution provisions thereof.
(3) Pursuant to Rule 457(i) of the Securities Act of 1933, no registration fee
is required with respect to the Common Stock.
(4) The Common Stock Purchase Rights are attached to and trade with and
transfer with the Common Stock. The Common Stock Purchase Rights are only
exercisable upon the occurrence of certain prescribed events, none of which
has occurred.
(5) Pursuant to Rule 457(i) of the Securities Act of 1933, no registration fee
is required with respect to the Common Stock Purchase Rights.
---------------------------
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE>
The information in this prospectus is not complete and may be changed. These
securities may not be sold by means of this prospectus 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 not
permitted.
SUBJECT TO COMPLETION DATED OCTOBER 13, 2000
IVAX CORPORATION
$250,000,000 5.5% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2007
AND
6,729,500 SHARES COMMON STOCK
ISSUABLE UPON CONVERSION OF THE NOTES
------------------------------------
This prospectus covers up to:
o $250,000,000 total principal amount of our 5.5% convertible
senior subordinated notes due 2007, and
o 6,729,500 shares of our common stock issuable upon conversion
of the notes together with their related common stock purchase
rights,
which the selling security holders named in this prospectus may offer and sell
from time to time. We will receive no part of the proceeds of the sales of the
securities in this offering.
We issued the notes on May 12, 2000 and May 23, 2000 in transactions
exempt from the registration requirements of the Securities Act of 1933 pursuant
to Rule 144A.
The following is a general description of the notes:
o The notes are convertible into 26.918 shares of our common
stock per $1,000 principal amount, subject to adjustment in
some circumstances.
o We will pay cash interest of 5.5% per year on the notes on May
15 and November 15 of each year, commencing on November 15,
2000. o The notes will mature on May 15, 2007.
o The notes are subordinated to all of our existing and future
senior indebtedness and structurally subordinated to all of
our subsidiaries' obligations, including trade payables. As of
June 30, 2000, we had approximately $51.0 million of
consolidated indebtedness and other obligations effectively
ranking senior to the notes.
o If we experience a change in control, we must offer to
repurchase the notes at 100% of their principal amount,
together with accrued and unpaid interest to the date of
repurchase.
o On or after May 29, 2003, we may at our option redeem the
notes at the redemption prices stated in this prospectus,
together with accrued and unpaid interest to the date of
redemption.
o The notes are not entitled to any mandatory redemption or
sinking fund.
The notes trade on the PORTAL Market. Our common stock is listed on the
American Stock Exchange under the trading symbol "IVX." On ____________, 2000,
the closing price of our common stock was $_______.
See "Risk Factors" beginning on page 1 for a discussion of factors that you
should consider before making an investment decision.
------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ______________, 2000.
<PAGE>
TABLE OF CONTENTS
PAGE
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS.............................. 1
THE COMPANY.................................................................. 1
RISK FACTORS................................................................. 1
ABOUT THIS PROSPECTUS........................................................10
WHERE YOU CAN FIND MORE INFORMATION..........................................11
INCORPORATION BY REFERENCE...................................................11
USE OF PROCEEDS..............................................................12
RATIO OF EARNINGS TO FIXED CHARGES...........................................12
SELLING SECURITY HOLDERS.....................................................12
PLAN OF DISTRIBUTION.........................................................16
TRANSFER AGENT, REGISTRAR AND TRUSTEE........................................17
DESCRIPTION OF NOTES.........................................................17
DESCRIPTION OF COMMON STOCK..................................................26
DESCRIPTION OF COMMON STOCK PURCHASE RIGHTS..................................26
CERTAIN PROVISIONS OF OUR ARTICLES OF INCORPORATION
AND BYLAWS AND FLORIDA LAW..........................................28
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS......................28
LEGAL MATTERS................................................................35
EXPERTS ....................................................................35
-ii-
<PAGE>
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements," or statements
that are based on current expectations, estimates and projections rather than
historical facts. We make these forward-looking statements in reliance on the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to a number of risks and
uncertainties, many of which are difficult to predict and are beyond our
control. Forward- looking statements are typically identified by the words
"believe," "expect," "anticipate," "intend," "estimate" and similar expressions.
Many of these risks and uncertainties are included under the caption "Risk
Factors."
Our actual results could differ materially from those contemplated by
these forward-looking statements as a result of factors including but not
limited to economic, competitive, governmental and technological factors
affecting our operations, markets, products and prices, and other factors
discussed elsewhere in this prospectus and the documents filed by us with the
Securities and Exchange Commission, or SEC.
In light of these risks and uncertainties, the results and events
contemplated by the forward-looking information contained in this prospectus
might not occur. We caution you not to place undue reliance on these
forward-looking statements.
THE COMPANY
We are a multi-national company engaged in the research, development,
manufacture and marketing of pharmaceutical products. We have subsidiaries
located throughout the world, some of which are among the leading pharmaceutical
companies in their markets. Our current business is well established, generating
net revenues in 1999 of $656 million and net income of approximately $70
million. While we expect continued growth from our current products, we
recognize that our long-term growth will depend on the discovery and development
of new products that will satisfy currently unmet medical needs. In an effort to
further our growth, we are focusing on expanding our portfolio of proprietary
and brand name pharmaceutical products through our research and development
efforts and through strategic acquisitions and collaborations. Although our
strategy is to continue to expand our generic business, we currently anticipate
that the sale of proprietary and branded products will generate an increasing
amount of our future revenues.
We market several brand name pharmaceutical products and a wide variety
of generic and over-the-counter pharmaceutical products, primarily in the United
States and the United Kingdom. We also maintain operations in Argentina, China,
the Czech Republic, France, Germany, Hong Kong, Hungary, India, Ireland, Italy,
Kazakhstan, Latvia, Peru, Poland, Russia, the Slovak Republic, Ukraine, Uruguay,
and Venezuela. We also market our products through distributors or joint
ventures in other foreign markets.
RISK FACTORS
You should carefully consider the following risks before making an
investment decision. These and other risks could materially and adversely affect
our business, operating results or financial condition. You should also refer to
the other information contained or incorporated by reference in this prospectus,
before making an investment decision.
Risks Relating to Our Company
Our research and development expenditures may not result in commercially
successful products.
We spent approximately $54.2 million during 1999 on our research and
development efforts. We budgeted approximately $80 million in the year 2000 for
research and development expenditures and may in the future increase the amounts
we expend for research and development. These amounts represent a significant
increase in the amounts we allocated to research and development in prior
periods. As a result, our research and development expenditures may have an
adverse impact on our earnings in the short term. Further, we cannot be sure
that our research and development expenditures will, in the long term, result in
the discovery or development of products which prove to be commercially
successful.
<PAGE>
Our potential acquisitions may reduce our earnings, be difficult for us to
integrate or require us to obtain additional financing.
We search for and evaluate acquisitions which will provide new product
and market opportunities, benefit from and maximize our existing assets and add
critical mass. On June 20, 2000 we announced that we had acquired Laboratorios
Elmor S.A., a pharmaceutical company based in Venezuela. Additionally, on
September 7, 2000 we announced that we had completed our acquisition of
Wakefield Pharmaceuticals, Inc., a privately held company located in Alpharetta,
Georgia. Wakefield Pharmaceuticals markets and sells respiratory products to
allergists, ear, nose and throat doctors, lung doctors and primary care
physicians. Acquisitions commonly involve risks and may have a material effect
on our results of operations. Any acquisitions we make may fail to accomplish
our strategic objectives, may not be successfully integrated with our operations
and may not perform as expected. In addition, based on current acquisition
prices in the pharmaceutical industry, acquisitions could initially dilute our
earnings and add significant intangible assets and related goodwill amortization
charges. Our acquisition strategy may require us to obtain additional debt or
equity financing, resulting in additional leverage, or increased debt
obligations as compared to equity, and dilution of ownership, respectively. We
may not be able to finance acquisitions on terms satisfactory to us.
We depend on the development, manufacture and marketing of new products for our
future success.
Our future success is largely dependent upon our ability to develop,
manufacture and market commercially viable new pharmaceutical products and
generic versions of off-patent pharmaceutical products. Generally, the
commercial marketing of products depends upon:
o continually developing and testing products;
o proving that new products are safe and effective in clinical
trials;
o proving that there is no significant difference in the rate
and extent to which the active ingredient in the generic
product and in the brand name counterpart become available at
the site of drug action; and
o receiving requisite regulatory approval for all new products.
Delays in the development, manufacture and marketing of new products
will impact our results of operations. Each of the steps in the development,
manufacture and marketing of our products, as well as the process taken as a
whole, involves significant periods of time and expense. We cannot be sure that:
o any of our products presently under development, if and when
fully developed and tested, will perform in accordance with
our expectations;
o we will obtain necessary regulatory approvals in a timely
manner, if at all; or
o we can successfully and profitably produce and market any of
our products.
We depend on our patents and proprietary rights and cannot be certain of their
confidentiality and protection.
Our success with our proprietary products depends, in large part, on
our ability to protect our current and future technologies and products and to
defend our intellectual property rights. If we fail to adequately protect our
intellectual property, competitors may manufacture and market products similar
to ours. We have been issued numerous patents covering our technologies, and
have filed, and expect to continue to file, patent applications seeking to
protect newly developed technologies and products in various countries,
including the United States. Patent applications in the United States are
maintained in secrecy until the patent application is published or the patent is
issued, but in any event no longer than 18 months after the patent application
has been filed. Since publication of discoveries in the scientific or patent
literature tends to follow actual discovery by several months, we cannot be
certain that we were the first to file patent applications on our discoveries.
We cannot be sure that patents will be issued for any of our patent applications
or that any existing or future patents that we receive or license will provide
competitive advantages for our products. We also cannot be sure that competitors
will not challenge, invalidate or circumvent any existing or future patents that
we receive
-2-
<PAGE>
or license. In addition, patent rights may not prevent our competitors from
developing, using or commercializing products that are similar or functionally
equivalent to our products.
We also rely on trade secrets, unpatented proprietary know-how and
continuing technological innovation that we seek to protect, in part, by
confidentiality agreements with licensees, suppliers, employees and consultants.
We cannot assure you that these parties will not breach these agreements. We
also cannot be certain that we will have adequate remedies for any breach.
Disputes may arise concerning the ownership of intellectual property or the
applicability of confidentiality agreements. Furthermore, we cannot be sure that
our trade secrets and proprietary technology will not otherwise become known or
that our competitors will not independently develop our trade secrets and
proprietary technology or, if patents are not issued for products arising from
research, that we will be able to maintain the confidentiality of information
relating to our products.
Third parties may claim that we infringe their proprietary rights and may
prevent us from manufacturing and selling certain of our products.
The manufacture, use and sale of new products that are the subject of
conflicting patent rights have been the subject of substantial litigation in the
pharmaceutical industry. These lawsuits relate to the validity and infringement
of patents or proprietary rights of third parties. We may be required to defend
against charges of infringement of patents or proprietary rights of third
parties. This is especially true for the sale of the generic version of products
on which the patent covering the branded product is expiring, an area where
infringement litigation is prevalent. Our defense against charges of
infringement of patent or proprietary rights of third parties could require us
to incur substantial expense and to divert significant effort of our technical
and management personnel. If found to have infringed on the rights of others, we
could lose our right to develop or make certain products or could be required to
pay monetary damages or royalties to license proprietary rights from third
parties.
Although patent and intellectual property disputes in the
pharmaceutical product area have often been settled through licensing or similar
arrangements, costs associated with these arrangements may be substantial and
could include ongoing royalties. Furthermore, we cannot be certain that the
necessary licenses would be available to us on terms we believe to be
acceptable. Accordingly, an adverse determination in a judicial or
administrative proceeding or failure to obtain necessary licenses could prevent
us from manufacturing and selling a number of our products.
We are also required to certify to regulatory authorities, such as the
United States Food and Drug Administration, or FDA, when seeking approval of
some of our products, that the product does not infringe upon third party
rights. A patent holder may challenge a notice of non-infringement or invalidity
by filing suit for patent infringement within 45 days of receiving the notice.
This challenge, if made, would prevent regulatory approval in the United States
until the suit is resolved or for at least 30 months. A challenge by a patent
holder and the associated delay could result in additional expenses or could
eventually prevent us from manufacturing and selling certain of our products.
Marketing practices such as returns, allowances and charge-backs and marketing
programs adopted by wholesalers may reduce sales revenues in subsequent periods.
Based on industry practice, generic manufacturers, including us, have
liberal return policies and have been willing to give customers post-sale
inventory allowances, pursuant to which the manufacturers give customers credits
on the manufacturer's generic products which the customers hold in inventory
after decreases in the market prices of the generic products. Like our
competitors, we also give credits for charge-backs, or the difference between
the price paid by a wholesale customer and the price paid by the wholesale
customer's end customer, to wholesale customers that have contracts with us for
their sales to hospitals, group purchasing organizations, pharmacies or other
retail customers. Although we establish reserves based on our prior experience
and our best estimates of the impact that these policies may have in subsequent
periods, we cannot ensure the adequacy of our reserves or that actual product
returns, inventory allowances and charge-backs will not exceed our estimates.
-3-
<PAGE>
The concentration of ownership among our principal shareholders may permit
corporate matters and policies to be influenced.
Our executive officers and directors and two additional shareholders
currently have or share voting control over approximately 21.3% of our issued
and outstanding common stock. As a result, these persons may have the ability to
significantly influence the election of the members of our board of directors
and other corporate decisions.
A number of internal and external factors have caused and may continue to cause
the market price of our stock to be volatile.
The market prices for securities of companies engaged in pharmaceutical
development, including ours, have been volatile. Many factors, including many
over which we have no control, may have a significant impact on the market price
of our common stock, including without limitation:
o the announcement of technological innovations or new
commercial products by us or our competitors;
o changes in governmental regulation;
o regulatory approvals obtained by us or our competitors;
o developments relating to patents or proprietary rights by us
or our competitors;
o publicity regarding actual or potential medical results for
products under development by us or our competitors; and
o period-to-period fluctuations in financial results.
Political and economic instability and foreign currency fluctuations may
adversely affect the revenue generated by our foreign operations.
Currency exchange fluctuations and restrictions, political instability
in some countries, and uncertainty as to the enforceability of, and government
control over, commercial rights may also affect our foreign operations.
We sell products in many countries that are recognized to be
susceptible to significant foreign currency risk. These products are generally
sold for United States dollars, which eliminates our direct currency risk but
increases our credit risk if the local currency devalues significantly and it
becomes more difficult for customers to purchase the United States dollars
required to pay us. Acquisitions we are currently evaluating or pursuing may
increase our foreign currency risk. On May 25, 2000 we announced that we had
purchased an additional 8.5% of our Czech Republic subsidiary, Galena, A.S.,
bringing our ownership of Galena to 94.7%. Additionally, on June 20, 2000 we
announced our acquisition of Laboratorios Elmor S.A., a pharmaceutical company
based in Venezuela. We may acquire additional operations in the future which may
expose us to additional risk.
Future inability to obtain raw materials or products from contract manufacturers
could seriously affect our operations.
We currently source raw materials and other products from single
domestic or foreign suppliers. Although to date we have not experienced
difficulty in obtaining these raw materials and products, we cannot assure you
that supply interruptions will not occur in the future or that we will not have
to obtain substitute materials or products, which would require additional
regulatory approvals. Further, we cannot assure you that our third party
suppliers will continue to do so. In addition, changes in our raw material
suppliers could result in delays in production, higher raw material costs and
loss of sales and customers because raw material sources for pharmaceutical
products must generally be approved by regulatory authorities. Any significant
interruption of supply could have a material adverse effect on our operations.
-4-
<PAGE>
Increased indebtedness may impact our financial condition and results of
operations.
At June 30, 2000, we had approximately $255.0 million of consolidated
indebtedness. We may incur additional indebtedness in the future. Our level of
indebtedness will have several important effects on our future operations,
including, without limitation:
o we will utilize a portion of our cash flow from operations for
the payment of any principal or interest due on our
outstanding indebtedness;
o outstanding indebtedness and leverage will increase our
vulnerability to adverse changes in general economic and
industry conditions, as well as to competitive pressure; and
o the level of our outstanding debt may impact our ability to
obtain additional financing for working capital, capital
expenditures or general corporate purposes.
General economic conditions, industry cycles and financial, business
and other factors affecting our operations, many of which are beyond our
control, may affect our future performance, and, as a result, may affect our
ability to make principal and interest payments on our indebtedness. We
anticipate that approximately $14.6 million of cash flow from operations will be
required to discharge our annual obligations on our currently outstanding
indebtedness. Our business might not continue to generate cash flow at or above
current levels. If we cannot generate sufficient cash flow from operations in
the future to service our debt, we may, among other things:
o seek additional financing in the debt or equity markets;
o refinance or restructure all or a portion of our indebtedness,
including the notes;
o sell selected assets; or
o reduce or delay planned capital expenditures.
These measures might not be sufficient to enable us to service our debt. In
addition, any financing, refinancing or sale of assets might not be available on
economically favorable terms.
We have enacted a shareholder rights plan and charter provisions that may have
anti-takeover effects.
We have in place a shareholders rights plan under which we issued
common stock purchase rights. As a result of the plan, each share of our common
stock carries with it one common stock purchase right. Each common stock
purchase right entitles the registered holder to purchase from us one-half (1/2)
of a share of common stock at a price of $15 per one-half (1/2) of a share of
common stock, subject to adjustment. The common stock purchase rights are
intended to cause substantial dilution to a person or group who attempts to
acquire us on terms not approved by our board of directors. The existence of the
common stock purchase rights could have the effect of making it more difficult
for a third party to acquire a majority of our common stock. Other provisions of
our articles of incorporation and bylaws may also have the effect of
discouraging, delaying or preventing a merger, tender offer or proxy contest,
which could have an adverse effect on the market price of our common stock.
Risks Relating to Our Industry
Our revenues and profits from generic pharmaceuticals will decline as additional
generic equivalents of a product are introduced.
Revenues and gross profit derived from generic pharmaceutical products
tend to follow a pattern based on regulatory and competitive factors unique to
the generic pharmaceutical industry. As patents for brand name products and the
related and regulatorily mandated exclusivity periods expire, the first generic
manufacturer to apply for regulatory approval for a generic equivalent of a
brand name product may be entitled to a one hundred eighty day period of
marketing exclusivity pursuant to the Hatch-Waxman Act during which no other
generic equivalent can be approved.
-5-
<PAGE>
If we are not the first generic applicant, our generic product will be kept off
the market for an additional one hundred eighty days after expiration of the
brand name drug's patents. Whether due to the one hundred eighty day period of
marketing exclusivity or other factors that delay the approval of other generic
competitors, the first generic equivalent on the market is usually able to
initially achieve relatively high revenues and gross profit. As other generic
manufacturers receive regulatory approvals on competing products, prices and
revenues typically decline. The timing of these declines is unpredictable and
can result in a significantly curtailed period of profitability for a generic
product. The level of revenues and gross profit attributable to generic products
that we develop and manufacture is dependent, in part, on:
o our ability to develop and introduce new generic products;
o the timing of regulatory approval of generic products;
o the number and timing of regulatory approvals of competing
products;
o strategies adopted by brand name companies to maintain market
share; and
o our cost of manufacturing.
Generic products (but not including branded generic products) represented 59.0%,
50.9% and 33.6% of our revenues for the years ended December 31, 1999, 1998 and
1997, respectively, and 50.7% of our revenues for the six months ended June 30,
2000.
Certain large drug companies are selling their own generics and are finding new
ways of extending their market exclusivity.
In addition to competition from other generic drug manufacturers, we
face competition from large drug companies as they increasingly sell their
proprietary products into the generic market directly by establishing, acquiring
or forming licensing or business arrangements with generic pharmaceutical
companies. A large drug company may sell its proprietary products directly or
through a third party to the generic market without any additional regulatory
approvals and does not face any other significant barriers to entry into the
generic market. In addition, many large drug companies are increasingly pursuing
strategies to prevent or delay the introduction of generic competition. These
strategies include, among others:
o seeking to establish regulatory obstacles to demonstrating
that there is no significant difference in the rate and extent
to which the active ingredient in the generic product and in
the brand name counterpart become available at the site of
drug action;
o instituting legal actions that automatically delay approval of
generic products which involve certifications that the brand
name drug's patents are invalid or would not be infringed by
the generic;
o obtaining approvals of patented drugs for a rare disease or
condition consequently obtaining seven years of exclusivity
for that indication;
o obtaining extensions of patent exclusivity by conducting
trials of brand name drugs using children; and
o persuading the FDA to withdraw the approvals of brand name
drugs that are about to go off patent so that the brand name
company can substitute a new patented product.
Additionally, in the United States, certain companies have lobbied Congress for
amendments to the Hatch-Waxman legislation which could give them additional
advantages over generic competitors. For example, although companies are
currently given extensions of the life of drug patents equal to the time that it
takes the FDA to approve the drug, proposals have been made to eliminate the
five-year maximum on the period of such patent extensions and to extend the
patent life by a full year for each year spent in clinical trials, rather than
the one-half year that is currently allowed.
-6-
<PAGE>
Legislative proposals, reimbursement policies of third parties, cost containment
measures and health care reform could affect the marketing, pricing and demand
for our products.
Various legislative proposals, including proposals relating to
prescription drug benefits, are under discussion which could materially impact
the pricing and sale of our products. Further, reimbursement policies of third
parties may affect the marketing of our products. Our ability to market our
products will depend in part on reimbursement levels for the cost of the
products and related treatment established by health care providers, including
government authorities, private health insurers and other organizations, such as
health maintenance organizations, or HMOs, and managed care organizations, or
MCOs. Third party payors are increasingly challenging the pricing of
pharmaceutical products and reviewing their reimbursement practices. In
addition, the following factors could significantly influence the purchase of
pharmaceutical products, which would result in lower prices and a reduced demand
for our product:
o the trend toward managed health care in the United States;
o the growth of organizations such as HMOs and MCOs;
o legislative proposals to reform health care and government
insurance programs; and
o price controls and non-reimbursement of new and highly priced
medicines for which the economic therapeutic rationales are
not established.
These cost containment measures and health care reform could affect our ability
to sell our products.
The reimbursement status of a newly approved pharmaceutical product may
be uncertain. Reimbursement policies of third parties may not include some of
our products and even if reimbursement policies of third parties grant
reimbursement status for a product, we cannot be sure that these reimbursement
policies will remain in effect. Limits placed on reimbursement could reduce the
demand for, or make it harder for people to buy, our products. The
unavailability or inadequacy of third party reimbursement for our products would
reduce or possibly eliminate demand for our products. We are unable to predict
whether governmental authorities will enact additional legislation or regulation
which will affect third party coverage and reimbursement that reduces demand for
our products.
New developments by others could make our products or technologies
non-competitive or obsolete.
The markets in which we compete and intend to compete are undergoing,
and are expected to continue to undergo, rapid and significant technological
change. Any technological advances in the pharmaceutical industry may intensify
competition. We cannot be sure that developments by others will not render our
products or technologies obsolete or uncompetitive.
Our industry is highly competitive which affects our product selection, pricing,
gross profit and market share.
The pharmaceutical industry is intensely competitive. Most or all of
the products that we commercialize will face competition from different chemical
or other agents intended to treat the same diseases. Our current and future
products will also face competition from traditional forms of drug delivery and
from advanced delivery systems being developed by others. Our competitors vary
depending upon geographic regions, product categories, and within each product
category, upon dosage strengths and drug delivery systems. Some of our major
competitors are:
o 3M
o Astra Zeneca
o Barr Laboratories
o Boehringer Ingelheim
o Bristol-Myers Squibb
-7-
<PAGE>
o Geneva Pharmaceuticals
o Glaxo Wellcome
o Eli Lilly
o Mylan Pharmaceuticals
o Novartis Pharmaceuticals
o Schering-Plough
o Teva Pharmaceuticals
Our competitors may be able to develop products and processes competitive with
or superior to our own for many reasons, including that they may have:
o significantly greater financial resources;
o larger research and development and marketing staffs; or
o larger production facilities or extensive experience in
preclinical testing and human clinical trials.
Our industry is subject to government regulation that increases our costs and
could prevent us from marketing or selling our products.
Governmental authorities in the United States and other countries
subject our operations to extensive regulation, including the regulation of the
testing, approval, manufacture, labeling, marketing and sale of pharmaceutical
products. We devote significant time, effort and expense addressing these
extensive government regulations. Failure to comply with governmental
regulations can result in fines, unanticipated compliance expenditures,
interruptions of production and criminal prosecution. The process of obtaining
regulatory approval is rigorous, time consuming and costly. We cannot be sure
that we will obtain necessary approvals on a timely basis, if at all. Delays in
receiving regulatory approvals would adversely affect our ability to market
products commercially. The FDA and comparable foreign regulatory authorities may
withdraw product approvals if we do not maintain compliance with regulatory
standards or if we experience problems relating to the products after initial
approval.
Consolidation of our customers or wholesaler programs could result in increased
pricing pressures that may adversely affect our operating results.
We make a significant amount of our United States generic
pharmaceutical sales to a relatively small number of drug wholesalers and retail
drug chains, which represent an essential part of the distribution chain of
pharmaceutical products in the United States. These sales are primarily to:
o Amerisource Health Corporation
o Bergen Brunswig Corporation
o Cardinal Health, Inc.
o McKesson HBOC, Inc.
o Eckerd Corporation
-8-
<PAGE>
Drug wholesalers and retail drug chains have undergone, and are continuing to
undergo, significant consolidation. As a result, our customers are gaining more
purchasing power and consequently increasing the pricing pressures facing our
United States generic pharmaceutical business. Further consolidation among our
customers may result in even greater pricing pressures and correspondingly
reduce the gross margins of this business, and may also cause such customers to
reduce their purchases of our products. Additionally, many wholesalers have
adopted programs under which they offer customers price discounts if they
purchase a bundled supply of one generic supplier's products. These programs
reduce the number of manufacturers selected to supply products to the wholesaler
and increase the wholesaler's ability to influence its customers' buying
decisions. These programs generally require that the manufacturer charge lower
prices on products sold and permit wholesalers to maintain lower inventory
levels. Wholesalers may continue these types of programs or adopt other programs
in the future that restrict the market for our products or require us to charge
lower prices in order to access the portion of the market that they control,
adversely affecting our results.
Our industry is susceptible to product-related liability claims that could
require us to pay substantial sums.
Like all pharmaceutical companies, we face the risk of loss and
associated adverse publicity from product liability lawsuits. We cannot assure
you that we can avoid product liability claims. We cannot be sure that our
product liability insurance will be adequate to cover claims or that we will be
able to get adequate insurance coverage in the future at acceptable costs. A
successful product liability claim in excess of our coverage could require us to
pay substantial sums.
Risks Related to the Notes
The notes are subordinated to our senior indebtedness and effectively
subordinated to all liabilities of our subsidiaries.
The notes are subordinated in right of payment to all of our existing
and future senior indebtedness, and are structurally subordinated to all
liabilities, including trade payables, of our subsidiaries. For purposes of the
notes, senior indebtedness includes all of our indebtedness that is not, by its
terms, equal or junior to the notes in priority of repayment. As of June 30,
2000, we had approximately, $51.0 million of consolidated indebtedness and other
obligations ranking senior to the notes. The indenture governing the notes does
not restrict our or our subsidiaries' incurrence of senior indebtedness or other
debt. By reason of subordination, in the event of the insolvency, bankruptcy,
liquidation, reorganization, dissolution or winding up of our business, our
assets will be available to pay the amounts due on the notes only after all
senior indebtedness has been paid in full, and, therefore, sufficient assets may
not remain to pay amounts due on any of the notes then outstanding.
The ability of our subsidiaries to make cash distributions to us will
determine our ability to meet our cash obligations in the future. Applicable law
and contractual provisions, among other things, restrict and will continue to
restrict the ability of our subsidiaries to make these distributions to us. The
indenture governing the notes does not limit the ability of our subsidiaries to
incur these restrictions and limitations in the future.
Our right to participate in the assets of our subsidiaries (and thus
the ability of holders of the notes to benefit indirectly from those assets) is
generally subject to the prior claims of the subsidiary's creditors, including
its trade creditors, except to the extent that we are recognized as a creditor
of the subsidiary, in which case our claim would still be subject to any
security interest of the subsidiary's other creditors. The notes, therefore, are
structurally subordinated to creditors, including trade creditors, of our
subsidiaries with respect to the assets of the subsidiaries against which the
creditors have a claim.
The notes are not entitled to any mandatory redemption or sinking fund and we
cannot assure purchasers of the notes that we will have the funds necessary to
redeem the notes upon their maturity.
The notes are not entitled to any mandatory redemption or sinking fund.
We are not obligated to redeem the notes before their stated maturity. We are
not accumulating money in any separate custodial account to redeem the notes,
and therefore, cannot assure you that there will be funds available to repay the
debt at maturity.
-9-
<PAGE>
We may not have the ability to raise the funds necessary to finance the "change
in control" offer required by the indenture.
If we undergo a "change in control" (as defined in the indenture), each
holder of the notes may require us to repurchase all or a portion of the
holder's notes. We cannot assure you that we will have sufficient funds
available for any required repurchases of these securities if a change in
control occurs. In addition, the terms of our outstanding debt may prohibit or
limit our ability to repurchase the notes. If we fail to repurchase the notes in
that circumstance, we will be in default under the indenture governing the
notes. As of June 30, 2000, neither we nor our subsidiaries had any indebtedness
that would become due or be subject to mandatory redemption if a change in
control were to occur other than the $250 million of debt represented by the
notes.
Absence of a public market for the notes could cause purchasers of the notes to
be unable to resell them for an extended period of time.
Although the notes trade through the PORTAL Market, there is not an
established public trading market for the notes and we cannot assure you that an
active public trading market for the notes will develop or, if one develops, how
liquid it will be. We have no present intention of listing the notes for trading
on any national securities exchange or Nasdaq stock market.
If a public trading market for the notes does not develop or is not
maintained, holders of the notes may experience difficulty in reselling, or an
inability to sell, the notes. If a public trading market for the notes develops,
the public trading market may cease at any time. If a public trading market
develops for the notes, future trading prices of the notes will depend on many
factors, including, among other things, the price of our common stock into which
the notes are convertible, prevailing interest rates, our operating results and
financial condition and the market for similar securities. Depending on these
and other factors, the notes may trade at a discount from their principal
amount.
ABOUT THIS PROSPECTUS
This prospectus is a part of the registration statement that we filed
with the SEC. The selling security holders named in this prospectus may from
time to time sell the securities described in this prospectus. You should read
this prospectus together with additional information described under the next
heading "Where You Can Find More Information."
You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with information different from
that contained in this prospectus. 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 not permitted. The information contained in
this prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or any sale of the securities. In
this prospectus, the "Company," "IVAX," "we," "us" and "our" refer to IVAX
Corporation. Our principal executive offices are located at 4400 Biscayne
Boulevard, Miami, Florida 33137, and our telephone number is (305) 575-6000.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You can inspect, read and copy these reports,
proxy statements and other information at the public reference facilities
maintained by the SEC at:
o Room 1024, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549;
o Suite 1400, 500 West Madison Street, Chicago, Illinois
60661-2511; and
o Suite 1300, 7 World Trade Center, New York, New York 10048.
-10-
<PAGE>
You can also obtain copies of these materials from the public reference
facilities of the SEC at prescribed rates. You can obtain information on the
operation of the public reference facilities by calling the SEC at
1-800-SEC-0330. The SEC also maintains a web site (http://www.sec.gov) that
makes available reports, proxy statements and other information regarding
issuers that file electronically with it. In addition, you can inspect certain
reports, proxy statements and other information we file at the offices of the
American Stock Exchange, Inc., 86 Trinity Place, New York, New York 10006.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" into this prospectus
the information we file with it, which means that we can disclose important
information to you by referring you to those documents. In addition, information
that we file with the SEC after the date of this prospectus will update and
supersede the information contained in this prospectus and incorporated filings.
The information we incorporate by reference is an important part of this
prospectus. We incorporate by reference the following documents we filed with
the SEC:
o our Annual Report on Form 10-K for the year ended December 31,
1999 filed on March 30, 2000 as amended by our Form 10-K/A
filed on May 1, 2000;
o our Quarterly Report on Form 10-Q for the quarter ended March
31, 2000 filed on May 15, 2000;
o our Quarterly Report on Form 10-Q for the quarter ended June
30, 2000 filed on August 14, 2000;
o our Current Report on Form 8-K dated February 8, 2000 and
filed on February 11, 2000;
o the description of our common stock contained in our
Registration Statement on Form 8-B filed on July 28, 1993;
o the description of our common stock purchase rights contained
in our Current Report on Form 8-K dated December 19, 1997 and
filed on December 31, 1997; and
o all other documents we subsequently file pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, or the Exchange Act, after the date of this prospectus
and before the termination of the offering, each which will be
deemed to be a part of this prospectus from the date of
filing.
To receive a free copy of any of the documents incorporated by
reference in this prospectus (other than exhibits, unless they are specifically
incorporated by reference in the documents), write to or call:
IVAX Corporation
4400 Biscayne Boulevard
Miami, Florida 33137
Attention: Corporate Secretary
Phone Number: (305) 575-6000
USE OF PROCEEDS
We will receive no proceeds from this offering. The selling security
holders will receive the proceeds from this offering.
-11-
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The table below contains our consolidated ratio of earnings to fixed
charges for the periods indicated:
<TABLE>
<CAPTION>
Six months ended Year ended December 31,
June 30, 2000 1999 1998 1997 1996 1995
---------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges: 9.71x 15.31x 5.85x (9.65x) (10.53x) 15.46x
</TABLE>
The dollar amount of the coverage deficiency for the year ended
December 31, 1997 was $160.5 million and for the year ended December 31, 1996
was $189.4 million. We computed the ratio of earnings to fixed charges by
dividing earnings by fixed charges. For purposes of computing this ratio,
"earnings" consist of net income (loss) before provision for income taxes and
minority interests minus fixed charges. "Fixed charges" consist of the sum of
interest expense on indebtedness and interest within rental expense.
SELLING SECURITY HOLDERS
We originally issued the notes on May 12, 2000 and May 23, 2000 in
transactions exempt from the registration requirements of the Securities Act of
1933, or the Securities Act, pursuant to Rule 144A. The following table sets
forth information with respect to the selling security holders and the principal
amounts of notes each selling security holder beneficially owns that may be
offered under this prospectus. The information is based on information provided
by or on behalf of the selling security holders. None of the selling security
holders nor any of their affiliates, officers, directors or principal entity
holders has held any position or office or has had any material relationship
with us within the past three years. The term "selling security holder"
includes, without duplication, the holders listed below and their transferees,
pledgees, donees or other successors. Information concerning the selling holders
may change from time to time and any changed information will be set forth in
supplements to this prospectus if and when necessary. The selling security
holders may offer all, some or none of the notes or common stock into which the
notes are convertible pursuant to this prospectus. Because the selling security
holders may offer all or some portion of the notes or the common stock, no
estimate can be given as to the amount of the notes or the common stock that
will be held by the selling security holders upon termination of any sales. In
addition, the selling security holders identified below may have sold,
transferred or otherwise disposed of all or a portion of their notes since the
date on which they provided the information regarding their notes in
transactions exempt from the registration requirements of the Securities Act.
<TABLE>
<CAPTION>
Principal Amount of Amount of Common Stock
Notes Owned and Issuable Upon Conversion of the
Selling Security Holders Offered Hereby (1)(2) Notes and Offered Hereby (1)(2)
------------------------ --------------------- -------------------------------
<S> <C> <C>
1976 Distribution Trust FBO A.R. Lauder Zinterhofer $ 20,000 538
1976 Distribution Trust FBO Jane A. Lauder $ 19,000 511
AEGIS $ 500,000 13,459
Alpine Associates $ 3,700,000 99,596
Alpine Partners, L.P. $ 600,000 16,150
Arpeggio Fund L.P. $ 946,810 25,486
Associated Electric & Gas Insurance Services Limited $ 500,000 13,459
Aventis Pension Master Trust $ 220,000 5,921
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of Amount of Common Stock
Notes Owned and Issuable Upon Conversion of the
Selling Security Holders Offered Hereby (1)(2) Notes and Offered Hereby (1)(2)
------------------------ --------------------- -------------------------------
<S> <C> <C>
Bancroft Convertible Fund, Inc. $ 500,000 13,459
Boilermaker - Blacksmith Pension Trust $ 1,400,000 37,685
Boulder II Limited $ 6,300,000 169,583
BP Amoco Corporation Master Trust for Employee Pension Plans $ 5,150,000 138,627
British Virgin Island Social Security Board $ 52,000 1,399
BS Debt Income Fund - Class A $ 15,000 403
CALAMOS Convertible Fund - CALAMOS Investment Trust $ 1,900,000 51,144
CALAMOS Convertible Growth and Income Fund - CALAMOS
Investment Trust $ 1,200,000 32,301
CALAMOS Convertible Portfolio - CALAMOS Advisors Trust $ 60,000 1,615
California Public Employees' Retirement System $ 3,000,000 80,754
Champion International Corporation Master Retirement Trust $ 380,000 10,228
Chrysler Corporation Master Retirement Trust $ 2,780,000 74,832
City of Albany Pension Plan $ 130,000 3,499
City of Knoxville Pension System $ 325,000 8,748
City University of New York $ 96,000 2,584
Continental Assurance Company Separate Account (E) $ 4,300,000 115,747
Cova Bond Debenture Fund $ 1,000,000 26,918
Delta Air Lines Master Trust $ 1,030,000 27,725
Deutsch Bank Securities $ 2,800,000 75,370
Deutsch Bank AG $ 237,000 6,379
Elf Aquitaine $ 200,000 5,383
Ellsworth Convertible Growth and Income Fund, Inc. $ 500,000 13,459
Employee Benefit Convertible Securities Fund $ 240,000 6,460
Fuji U.S. Income Open $ 1,500,000 40,377
Fundamental Investors, Inc. $15,000,000 403,770
Goldman Sachs & Co. $ 3,850,000 103,634
Grady Hospital Foundation $ 147,000 3,956
Greek Catholic Union II $ 20,000 538
Gryphon III Convertible $ 2,946,057 79,301
Highbridge International LLC $10,000,000 269,180
</TABLE>
-13-
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of Amount of Common Stock
Notes Owned and Issuable Upon Conversion of the
Selling Security Holders Offered Hereby (1)(2) Notes and Offered Hereby (1)(2)
------------------------ --------------------- -------------------------------
<S> <C> <C>
Independence Blue Cross $ 142,000 3,822
Investcorp SAM $ 3,668,993 98,761
J.P. Morgan Securities, Inc. $ 1,765,000 47,510
Kentfield Trading, Ltd. $ 4,513,000 121,480
Kettering Medical Center Funded Depreciation Account $ 85,000 2,288
Knoxville Utilities Board Retirement System $ 200,000 5,383
Lipper Convertibles, L.P. $14,500,000 390,311
Lipper Offshore Convertibles, L.P. $ 3,000,000 80,754
Local Initiatives Support Corporation $ 65,000 1,749
Lord Abbett Bond Debenture Fund $14,000,000 376,852
Louisiana Workers' Compensation Corporation $ 175,000 4,710
Merrill Lynch Insurance Group $ 349,000 9,394
Motion Picture Industry Health Plan- Retiree Member Fund $ 160,000 4,306
Motion Picture Industry Health Plan- Active Member Fund $ 325,000 8,748
Nations Convertible Securities Fund $ 3,760,000 101,211
New Orleans Firefighters Pension/Relief Fund $ 155,000 4,172
New York Life Insurance and Annuity Corporation $ 2,000,000 53,836
New York Life Insurance Company $13,200,000 353,317
Occidental Petroleum Corporation $ 263,000 7,079
OCM Convertible Limited Partnership $ 125,000 3,364
OCM Convertible Trust $ 1,175,000 31,628
Ohio Bureau of Workers Compensation $ 181,000 4,872
Onex Industrial Partners Limited $ 2,650,000 71,332
Oxford, Lord Abbett & Co. $ 1,600,000 43,068
Partner Reinsurance Company Ltd. $ 545,000 14,670
Pebble Capital, Inc. $ 2,250,000 60,565
Port Authority of Allegheny County Retirement and Disability
Allowance Plan for the Employees Represented by Local 85 of
The Amalgamated Transit Union $ 1,475,000 39,704
Raytheon Master Pension Trust $ 553,000 14,885
Rhapsody Fund L.P. $ 1,922,607 51,752
Robertson Stephens $10,000,000 269,180
Sage Capital, QIB $ 2,000,000 53,836
</TABLE>
-14-
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of Amount of Common Stock
Notes Owned and Issuable Upon Conversion of the
Selling Security Holders Offered Hereby (1)(2) Notes and Offered Hereby (1)(2)
------------------------ --------------------- -------------------------------
<S> <C> <C>
SG Cowen Securities Corporation $ 7,500,000 201,885
Shell Pension Trust $ 374,000 10,067
Silvercreek Limited Partnership $ 5,050,000 135,935
Spear, Leeds & Kellogg $ 1,000,000 26,918
State Employees' Retirement Fund of the State of Delaware $ 1,405,000 37,819
State of Connecticut Combined Investment Funds $ 3,115,000 83,849
State of Maryland Retirement Agency $ 3,610,000 97,173
The Dow Chemical Company Employee's Retirement Plan $ 2,780,000 74,832
The Fondren Foundation $ 80,000 2,153
The Grable Foundation $ 139,000 3,741
The Income Fund of America, Inc. $15,000,000 403,770
The Northwestern Mutual Life Insurance Company(3) $ 4,000,000 107,672
UBS Warburg LLC $23,895,000 643,205
Unifi, Inc. Profit Sharing Plan and Trust $ 135,000 3,633
United Food and Commercial Workers Local 1262 and Employers
Pension Fund $ 675,000 18,169
Vanguard Convertible Securities Fund, Inc. $ 3,340,000 89,906
Van Kempen Convertible Securities Fund $ 2,122,000 57,119
Van Kempen Harbor Fund $13,398,000 360,647
Van Waters & Rogers, Inc. Retirement Plan
(f.k.a Univar Corporation) $ 400,000 10,767
Wilmington Trust Co. as Owner and Trustee for the Forrestal
Funding Master Trust $41,350,000 1,113,059
Zurich HFR Master Hedge Fund Index Ltd. $ 110,000 2,960
</TABLE>
------------
(1) Amounts indicated may exceed the total amount registered due to sales or
transfers exempt from the registration requirements of the Securities Act
since the date upon which selling holders provided to us the information
regarding their notes. In addition, the conversion rate and therefore, the
number of shares of common stock issuable upon conversion of the notes, is
subject to adjustment under certain circumstances. Accordingly, the
aggregate principal amount of notes and the number of shares of common
stock into which the notes are convertible may increase or decrease.
(2) Assumes that the selling security holders will sell all of the securities
listed. We cannot be sure that the selling security holders will sell all
or any of the securities offered in this offering. The amount of securities
listed in the table represents an estimate of the amount of securities to
be offered by each selling security holder.
(3) Includes $250,000 principal amount of notes and the associated conversion
shares over which investment and voting power is shared with The
Northwestern Mutual Life Insurance Company Group Annuity Separate Account.
-15-
<PAGE>
PLAN OF DISTRIBUTION
The notes and the common stock covered by this prospectus may be sold
from time to time to purchasers directly by the selling security holders.
Alternatively, the selling security holders may from time to time offer the
securities through underwriters, broker-dealers or agents, who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the undersigned and/or the purchasers of securities for whom they may act
as agent. The selling security holders and any underwriters, broker-dealers or
agents that participate in the distribution of the securities may be deemed to
be "underwriters" within the meaning of the Securities Act and any profit on the
sale of securities by them and any discounts, commissions, concessions or other
compensation received by any such underwriter, broker-dealer or agent may be
deemed to be underwriting discounts and commissions under the Securities Act.
Because the selling security holders may be deemed to be "underwriters"
within the meaning of the Securities Act, the selling security holders will be
subject to the prospectus delivery requirements of the Securities Act. We have
informed the selling security holders that the anti-manipulative provisions of
Regulation M promulgated under the Exchange Act may apply to their sales in the
market.
The selling security holders may sell the notes and the common stock
covered by this prospectus from time to time in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at varying prices
determined at the time of sale or at negotiated prices. The selling security
holders, or the selling security holders in agreement with underwriters and
dealers who may receive fees or commissions in connection therewith, will
determine such prices. The selling security holders may sell the securities in
transactions (which may involve crosses or block transactions): (a) on any
national securities exchange or quotation service that lists or quotes the notes
or the common stock at the time of sale, (b) in the over-the-counter market; (c)
in transactions other than on such exchanges or in the over-the-counter market;
or (d) through the writing of options. At the time a selling security holder
offers securities, a supplement to this prospectus, if required, will be
distributed setting forth the aggregate amount and type of securities being
offered and the terms of the offering, including the name or names of any
underwriters, broker-dealers or agents, any discounts, commissions and other
terms constituting compensation from the selling security holders and any
discounts, commissions or concessions allowed or reallowed or paid to
broker-dealers.
To comply with the securities laws of certain jurisdictions, if
applicable, the securities will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the securities may not be offered or sold (unless they have been
registered or qualified for sale in such jurisdictions or an exemption from
registration or qualification is available and is complied with).
Pursuant to the registration rights agreement we entered into with the
initial purchasers of the notes, we will pay all expenses of the registration of
the notes and the common stock including, without limitation, SEC filing fees
and expenses of compliance with state securities or "blue sky" laws and the
reasonable fees and expenses of counsel to the selling security holders. The
selling security holders are responsible for all underwriting discounts and
selling commissions, if any. We and the selling security holders will indemnify
each other against certain liabilities, including certain liabilities under the
Securities Act, or will be entitled to contribution from the other in connection
therewith.
TRANSFER AGENT, REGISTRAR AND TRUSTEE
The transfer agent and trustee for the notes is U.S. Bank Trust
National Association at 180 East Fifth Street, St. Paul, Minnesota 55101. The
transfer agent and registrar for the common stock is ChaseMellon Shareholder
Services, LLC, 85 Challenger Road, Overpeck Centre, Ridgefield Park, New Jersey
07660.
-16-
<PAGE>
DESCRIPTION OF NOTES
This prospectus describes certain general terms and provisions of the
notes. We issued the notes under an indenture between us and U.S. Bank Trust
National Association, as trustee. 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 we have filed as an exhibit to the
registration statement of which this prospectus is a part. Particular provisions
of the indenture which are referred to in this prospectus are incorporated by
reference as a part of the statements made, and the statements are qualified in
their entirety by the reference. For purposes of this "Description of Notes"
section, the terms "IVAX," "we," "us," "our," and "company" refer only to IVAX
Corporation and not to any of our subsidiaries.
General
The notes represent our unsecured general obligations, subordinate in
right of payment to certain of our other obligations and are convertible into
common stock. We will pay interest on the notes on May 15 and November 15 of
each year at the rate of 5.5% per year to the persons who are registered holders
of notes at the close of business on the preceding May 1 and November 1,
respectively. We will make the first payment on November 15, 2000. Interest
payments on the notes are subject to 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. Unless previously redeemed, repurchased or
converted, the notes will mature on May 15, 2007. The notes are limited to
$250,000,000 total principal amount. We may pay principal, premium, if any, 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 are 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. We will not impose any service charge for any registration
of transfer, exchange or conversion of the notes, except for any tax or other
governmental charges that may be imposed on any transfers, registration of
transfers or exchanges. The registrar for the notes need not transfer or
exchange any notes selected for redemption. We may treat the registered holder
of a note as its owner for all purposes.
Initially, the trustee will act as registrar, paying agent and
conversion agent. We may appoint an additional, or change any, paying agent,
registrar or conversion agent without notice. We may act as registrar, paying
agent and/or conversion agent.
The indenture does not contain any financial covenants or any
restrictions on the payment of dividends or on the repurchase of our securities.
The indenture does not require us to maintain any sinking fund or other reserves
for repayment of the notes.
Conversion
Holders of notes, at any time before the close of business on the date
of maturity of the notes, subject to prior redemption or repurchase, can convert
the notes, or portions of the notes (if the portions are $1,000 or whole
multiples of $1,000) into 26.918 shares of common stock per $1,000 of principal
amount of notes. This rate results in a conversion price of approximately $37.15
per share. The conversion rate was determined through arm's length negotiations
with the underwriters after consideration of the market price of our common
stock at the time and the market for convertible notes, generally. Except as
described below, the number of shares into which a note is convertible will not
be adjusted for dividends on any common stock issued on conversion. We will not
issue fractional shares of 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 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 date five business days prior to the redemption date, and in
the event any holder exercises its repurchase right (as defined below), the
holder's conversion right will terminate upon our receipt of the written notice
of exercise of the repurchase right. 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 cash interest will be payable on any
notes converted during the period between a record date and the opening of
business on the next succeeding interest payment date.
-17-
<PAGE>
We are not obligated to pay interest on a note that is converted,
unless the conversion takes place between a record date for the payment of
interest and the next succeeding interest payment date, in which case we will
pay interest on the interest payment date to the registered holder of the note
on the record date. Accordingly, if a note is converted between a record date
and the next succeeding interest payment date, the note must be accompanied by
funds equal to the interest payable to the registered holder on the interest
payment date on the principal amount being converted, unless the note has been
called for redemption on a redemption date between the record date and the
interest payment date or on the interest payment date. A note converted on an
interest payment date need not be accompanied by any payment, and the interest
on the principal amount of that note will be paid on the interest payment date
to the registered holder of that note on the immediately preceding record date.
The number of shares issuable on conversion is subject to adjustment in
accordance with the indenture in a number of events, including:
o the payment of dividends or distributions on the common stock
in shares of capital stock;
o subdivisions or combinations of the common stock into a
greater or smaller number of shares;
o a reclassification of the common stock resulting in an
issuance of any shares of our capital stock;
o 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 market price at that
time; and
o the distribution to all holders of common stock of assets or
debt securities or any rights or warrants to purchase assets
or debt securities, which assets, debt securities, rights or
warrants have a total fair market value on the date the
distribution is declared that exceeds the "permitted dividend
amount" described below.
The "permitted dividend amount" means:
o 10% of our market capitalization (the product of the current
market price of our common stock and the number of shares of
our common stock outstanding as of any particular date) minus
o the total value of all dividends or distributions made to
holders of common stock within the 12 months preceding the
distribution (excluding any distributions or dividends
referred to in the first four bullet points in the preceding
paragraph), except that for any distribution not paid out of
our retained earnings, the permitted dividend amount shall be
zero, unless the dividend is paid out of consolidated net
income or in the form of common stock.
The terms of the notes do not require any adjustment for rights to
purchase common stock pursuant to any plans we have 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. The terms of the notes do not require any
adjustment in the number of shares issuable on conversion unless the adjustment
would require a change of at least 1% in the conversion ratio; however, any
adjustment that would otherwise be required to be made shall be carried forward
and taken into account in any subsequent adjustment. We reserve the right to
make increases in the conversion rate in addition to those required in the
preceding provisions as we in our discretion shall determine to be advisable in
order that stock-related distributions hereafter made by us to our stockholders
shall not be taxable or for any other appropriate reason. Except as stated
above, the issuance of common stock or any securities convertible into or
exchangeable for common stock, or carrying the right to purchase common stock or
any securities convertible into or exchangeable for common stock, will not cause
an adjustment of the number of shares issuable on conversion.
If we reclassify the common stock or merge into, or transfer or lease
substantially all of our assets to, another corporation, the holders of the
notes then outstanding will be entitled after the event to convert their notes
into the kind
-18-
<PAGE>
and amount of shares of capital stock, other securities, cash or other assets
which they would have owned immediately after the event had their notes been
converted immediately before the effective date of the event.
Adjustments in the number of shares issuable upon conversion 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 common stock issued upon conversion of the notes.
Redemption
We cannot redeem the notes prior to May 29, 2003.
Redemption at Our Option
The notes will be redeemable at our option, in whole or in part, at any
time on or after May 29, 2003 by written notice no less than 30 nor more than 60
days before the redemption date, to each holder of notes to be redeemed at the
holder's address appearing in the security register. The redemption price for
the notes, expressed as a percentage of the principal amount to be redeemed, is
as follows:
Period Beginning Redemption Price
---------------- ----------------
May 29, 2003............................ 103.143%
May 16, 2004............................ 102.357%
May 16, 2005............................ 101.571%
May 16, 2006............................ 100.786%
We will also pay accrued interest to the redemption date.
No "sinking fund" is provided for the notes, and the indenture does not
require us to redeem the notes prior to their stated maturity.
Repurchase at Option of Holders upon Change in Control
Upon any change in control (as defined below) of us, each holder of the
notes shall have the right, at the holder's option, to require us to repurchase
all or a portion of the holder's notes (in a minimum amount of $1,000 or any
integral multiple of $1,000), on the date that is 45 days after the date of the
notice from us (as described in the next paragraph) at a repurchase price equal
to 100% of the principal amount of the holder's notes tendered for repurchase,
plus accrued interest to the repurchase date.
Within 30 days after the occurrence of a change in control, we will be
obligated to mail to all holders of record of the notes a notice of the
occurrence of a change in control and the repurchase right arising as a result
of the change in control. We will deliver a copy of the company notice to the
trustee and will cause a copy of the company notice to be published in The New
York Times and The Wall Street Journal or another newspaper of national
circulation. To exercise the repurchase right, a holder of notes must, on or
before the 30th day after the date of the company notice, deliver an irrevocable
written notice to us (or an agent designated by us for this purpose) and the
trustee of the holder's exercise of its repurchase right together with the notes
for which the holder is exercising its repurchase right, duly endorsed for
transfer.
A "change in control" means:
o 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, us or our subsidiaries, or any
employee benefit plan of us or our subsidiaries which acquires
beneficial ownership of voting securities of us or any current
affiliate of us whose beneficial ownership does not in the
future exceed 45% of our outstanding
-19-
<PAGE>
common stock) 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;
o persons who, as of the date of the indenture, constitute the
board of directors (the "incumbent board") cease 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 of the indenture whose election, or
nomination for election by our stockholders, was approved by a
vote of at least a majority of the directors then comprising
the incumbent board shall be considered as though the person
were a member of the incumbent board;
o our stockholders' approval of a reorganization, merger or
consolidation, in each case, in which persons who were our
stockholders immediately prior to the reorganization, merger
or consolidation do not, immediately after the reorganization,
merger or consolidation, beneficially own shares sufficient to
elect a majority of directors of the reorganized, merged or
consolidated company; or
o our liquidation or dissolution (other than pursuant to the
United States Bankruptcy Code) or the conveyance, transfer or
leasing of all or substantially all of our assets to any
person.
Courts which have interpreted the phrase "all or substantially all"
(which appears in the definition of change in control) in various contexts have
not given this phrase any quantitative or other established meaning. In
interpreting this phrase, courts make a subjective determination as to the
portion of assets conveyed, considering factors such 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 the phrase "all or substantially all" is
uncertain, it may be uncertain whether a change in control has occurred (and,
accordingly, whether the holders of notes have the right to require us to
repurchase their notes).
The occurrence of a change in control might, under the terms of
indebtedness we may incur from time to time, permit the lenders to require us to
prepay some or all amounts outstanding under our debt agreements. In the event
of a change in control, any repurchase of the notes could, absent waiver or
payment in full of any amounts outstanding under our indebtedness or credit
facilities, be prevented. Our failure to repurchase the notes when required
would result in an event of default of the notes whether or not our lenders
permit the repurchase. The right to require us to repurchase notes could delay
or deter a change in control of us, whether or not the board of directors
supported the change in control.
If a change in control occurs, we cannot be sure that we will have
sufficient funds or financing to repay any senior indebtedness which we are then
required to repay or to repurchase any or all notes the indenture then requires
us to repurchase. If we offer to repurchase notes as a result of a change in
control, we intend 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 promulgated under the Exchange Act, to the extent applicable to the offer
to repurchase notes as a result of a change in control.
Subordination of Notes
Upon any distribution to our creditors in a liquidation or dissolution
of us or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to us or our property, the payment of all amounts due on the
notes (other than cash payments due upon conversion in lieu of fractional
shares) will be subordinated, to the extent provided in the indenture, in right
of payment to the prior payment in full of all senior indebtedness.
We will not pay, directly or indirectly, any amount due on the notes
(including any repurchase price pursuant to the exercise of the repurchase
right), or acquire any of the notes, in the following circumstances:
o if any default in payment of principal, premium, if any, or
interest on senior indebtedness (as defined below) exists,
unless and until the default has been cured or waived or has
ceased to exist;
o if any default, other than a default in payment of principal,
premium, if any, or interest, has occurred with senior
indebtedness, and that default permits the holders of the
senior indebtedness to accelerate
-20-
<PAGE>
its maturity, until the expiration of the "payment blockage
period" described below unless and until the default has been
cured or waived or has ceased to exist; or
o if the maturity of senior indebtedness has been accelerated,
until the senior indebtedness has been paid or the
acceleration has been cured or waived.
A "payment blockage period" is a period of 183 days that begins on the
date that we receive a written notice from any holder of senior indebtedness or
a holder's representative, or from a trustee under an indenture under which
senior indebtedness has been issued, that an event of default of and as defined
under any senior indebtedness (other than default in payment of the principal
of, or premium, if any, or interest on any senior indebtedness), which event of
default permits the holders of the senior indebtedness to accelerate its
maturity, has occurred and is continuing. However, if the maturity of the senior
indebtedness is accelerated, we cannot make any payments on the notes until the
senior indebtedness that has matured has been paid or the acceleration has been
cured or waived.
Senior indebtedness is defined in the indenture as all of our
indebtedness (as defined below) 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 payment to the notes. Senior
indebtedness does not include our indebtedness to any of our subsidiaries.
Indebtedness is defined with respect to any person as the principal of,
and premium, if any, and interest on:
o all indebtedness of the person for borrowed money (including
all indebtedness evidenced by notes, bonds, debentures or
other securities sold by the person for money);
o all obligations incurred by the person in the acquisition
(whether by way of purchase, merger, consolidation or
otherwise and whether by the 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);
o guarantees by the person of indebtedness described in the
first two bullet points of this paragraph of another person;
o all renewals, extensions, refundings, deferrals,
restructurings, amendments and modifications of the
indebtedness, obligation or guarantee;
o all reimbursement obligations of the person for letters of
credit, bankers' acceptances or similar facilities issued for
the account of the person;
o all capital lease obligations of the person; and
o all net obligations of the person under interest rate swap or
similar agreements of the person.
No restrictions exist in the indenture upon our creation of additional senior
indebtedness, or on our or any of our subsidiaries' creation of any
indebtedness. As of June 30, 2000 we had approximately $51.0 million of
consolidated indebtedness and other obligations effectively ranking senior to
the notes.
By reason of the subordination provisions described above, in the event
of insolvency, we will pay funds to the holders of senior indebtedness to the
extent necessary to pay senior indebtedness in full before we pay funds to note
holders. As a result of these payments, our general creditors may recover
proportionately less than holders of senior indebtedness and the general
creditors may recover proportionately more than holders of notes or our other
subordinated indebtedness.
-21-
<PAGE>
Prohibition on Layering
The indenture provides that we will not incur, create, issue, guarantee
or otherwise become liable for any indebtedness that is both:
o subordinate or junior in right of payment to any senior
indebtedness; and
o senior in any respect in right of payment to the notes.
Merger or Consolidation
The indenture does not permit us to consolidate with, or merge into, or
transfer or lease all or substantially all of our assets to, another person
unless the other person is a corporation, limited liability company or other
entity organized under the laws of the United States, any state of the United
States or the District of Columbia and the person assumes by supplemental
indenture all of our obligations under the notes and the indenture, and
immediately after giving effect to the transaction, no default exists.
Defaults and Remedies
An event of default includes the occurrence of any of the following:
o our default for 30 days in payment of interest or liquidated
damages on the notes;
o our default in payment of principal at maturity, upon
redemption or exercise of a repurchase right or otherwise;
o our failure for 60 days after notice to us to comply with any
of our other agreements in the indenture or the notes; and
o 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 total principal amount on the date of notice of
acceleration 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 amounts due) if it determines that withholding notice is in their
interests. We are required to file with the trustee annually an officers'
statement as to the absence of defaults in fulfilling any of our obligations
under the indenture.
Modifications of the Indenture
We 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:
o reduce the amount of notes whose holders must consent to an
amendment;
o reduce the rate or change the time for payment of interest on
any note;
o reduce the principal of or change the fixed maturity of any
note (including, without limitation, the optional redemption
provisions or the repurchase right);
-22-
<PAGE>
o make any note payable in money other than that stated in the
note;
o 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 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; or
o make any change that adversely affects the rights to convert
any note.
Additionally, with the consent of the trustee but without the consent of the
holders of notes, we may amend or supplement the indenture to cure any
ambiguity, omission, defect or inconsistency, to reflect any merger,
consolidation or other transaction in which a supplemental indenture would be
required, to provide for certificated as well as uncertificated notes or to make
any change that does not adversely effect the rights of any 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 of funds sufficient for the payment or redemption within not more
than six months prior to the maturity of the notes or within one year of
redemption of all of the notes.
Reports to Holder of Notes
We will regularly furnish to each holder of notes copies of the annual
report of stockholders, containing audited financial statements, and any other
financial reports which we furnish to our stockholders.
Trustee and Transfer Agent
The trustee and transfer agent for the notes is U.S. Bank Trust
National Association.
Listing
The notes trade on the PORTAL Market. Our common stock is listed on the
American Stock Exchange under the trading symbol "IVX."
Book Entry Delivery and Form
Upon the initial sale of notes offered hereby, each selling security
holder will be required to deliver a notice of the sale to the trustee and to
us. The notice will, among other things, identify the sale as a transfer
pursuant to the registration statement of which this prospectus forms a part,
certify that the prospectus delivery requirements, if any, of the Securities Act
have been satisfied, and certify that the selling security holder and the
aggregate principal amount of notes owned by such holder are identified in the
prospectus in accordance with the applicable rules and regulations under the
Securities Act.
Upon the initial transfer pursuant to the registration statement of
which this prospectus forms a part, the notes will be issued by one or more
global notes in fully registered form, without coupons in denominations of
$1,000 principal amount and integral multiples thereof. We will deposit each
global note with or on behalf of the Depository Trust Company, or DTC, and each
global note will be registered in the name Cede & Co., as DTC's nominee. Except
as set forth below, record ownership of the global note may be transferred, in
whole or in part, only to another nominee of DTC or to a successor of DTC or its
nominee.
Ownership of beneficial interests in the global note will be limited to
persons that have accounts with DTC, or participants, or persons that may hold
interests through participants. Ownership of beneficial interests by
participants in the global note will be shown on, and the transfer of that
ownership interest will be effected only through, records
-23-
<PAGE>
maintained by the depository for the global note. Ownership of beneficial
interests in the global note by persons that hold through participants will be
shown on, and the transfer of that ownership interest through the participant
will be effected only through, records maintained by the participant. These
requirements and procedures may impair the ability to transfer beneficial
interests in the global note.
Payment of all amounts due on notes represented by the global note will
be made to DTC 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 us, the
trustee, any agent of ours or the trustee or the initial purchasers will have
any responsibility or liability for any aspect of DTC's records relating to or
payments made on account of beneficial ownership interests in the global note or
for maintaining, supervising or reviewing any of DTC's records relating to the
beneficial ownership interests.
DTC has advised us that, upon receipt of any payment on the global
note, DTC 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 the global note
as shown on the records of DTC. Standing instructions and customary practices
will govern payments by participants to owners of beneficial interests in the
global note held through the participants as is now the case with securities
held for customer accounts registered in "street name." Participants are solely
responsible for these payments.
The global note may not be transferred except as a whole by DTC to a
nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC
or any nominee to a successor of DTC or a nominee of the successor. If DTC is at
any time unwilling or unable to continue as depository and we or DTC do not
appoint a successor depository within 90 days, we will issue notes in definitive
form in exchange for the global note. In either instance, an owner of a
beneficial interest in the global note will be entitled to have notes equal in
principal amount to the beneficial interest registered in its name and will be
entitled to physical delivery of the notes in definitive form. Notes so issued
in definitive form will be issued in denominations of $1,000 and integral
multiples of $1,000 and will be issued in registered form only, without coupons.
Amounts due 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 DTC, or its nominee, is the registered owner of the global
note, we will consider DTC or the nominee, as the case may be, the sole holder
of the notes represented by the global note for the purposes of receiving
payment on the notes, receiving notices and for all other purposes under the
indenture and the notes. Only records maintained by DTC and its participants
will evidence beneficial interests in notes and effect transfers of beneficial
interests in the notes. Cede & Co. has been appointed as the nominee of the
depository. Except as provided above, owners of beneficial interests in the
global note will not be entitled to and will not be considered the holders of
beneficial interests in the global note for any purposes under the indenture.
Any person owning a beneficial interest in the global note must rely on the
procedures of DTC, and, if any person is not a participant, on the procedures of
the participant through which the person owns its interest, to exercise any
rights of a holder under the indenture. The indenture provides that DTC 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. We
understand that under existing industry practices, in the event that we request
any action of holders or that an owner of a beneficial interest in the global
note desires to give or take any action which a holder is entitled to give or
take under the indenture, DTC would authorize the participants holding the
relevant beneficial interest to give or take the action and the participants
would authorize beneficial owners owning through the participants to give or
take the action or would otherwise act upon the instructions of beneficial
owners owning through them.
DTC has advised us that it 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. DTC was created
to hold the securities of its participants and to facilitate the clearance and
settlement of securities transactions among its participants in the securities
through electronic book-entry changes in accounts of the participants,
consequently eliminating the need for physical movement of securities
certificates. DTC'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
-24-
<PAGE>
their representatives) own DTC. Access to DTC'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.
Beneficial interests in the global note may be exchanged for beneficial
interests in any other global security only in connection with a transfer of
such interest. These transfers are subject to compliance with customary
certification requirements which are described in the indenture.
Any beneficial interest in the global note that is exchanged for an
interest in any other global security will cease to be an interest in the global
note and will become an interest in the other global security. After the
exchange, the interest will be subject to all transfer restrictions and other
procedures applicable to beneficial interests in the other global security for
as long as it remains such an interest. Any exchange of a beneficial interest in
the global note for a beneficial interest in any other global security will be
effected by the depository by means of an instruction originated by the trustee
through DTC's Deposit/Withdraw at Custodian system. For any such exchange,
appropriate adjustments will be made in the records of the registrar to reflect
a decrease in the principal amount of the global note and a corresponding
increase in the principal amount of the other global security.
Payments of Principal and Interest
The indenture requires that we make all payments in respect of the
notes held of record by DTC (including notes evidenced by the global securities)
in same day funds. At our option, we may make payments in respect of the notes
held of record by holders other than DTC by check and mail to the holders of
record as shown on the register for the notes.
Registration Rights; Liquidated Damages
We and the initial purchasers of the notes entered into a Registration
Rights Agreement. Pursuant to the Registration Rights Agreement, we agreed to
file the registration statement of which this prospectus forms a part with the
SEC and to use our best efforts to cause the SEC to declare it effective.
Notwithstanding the foregoing, we will be permitted to prohibit offers and sales
of the notes and common stock pursuant to this prospectus under certain
circumstances and subject to certain conditions. A "suspension period" is any
period during which we can prohibit offers and sales. We must only maintain the
effectiveness of the registration statement until the earlier of:
o the date on which such note or underlying share of common
stock has been effectively registered under the Securities Act
and disposed of, whether or not in accordance with the shelf
registration statement, and
o the date which is two years after the later of May 11, 2000
and the last date that we or any of our affiliates was the
owner of such notes (or any predecessor thereto) or such
shorter period of time as permitted by Rule 144(k) under the
Securities Act or any successor provision thereunder.
If the registration statement ceases to be effective (without being
succeeded immediately by an additional registration statement filed and declared
effective) or usable for the offer and sale of transfer restricted securities
for a period of time (including any suspension period) which shall exceed 60
days in the aggregate in any 12-month period, we will pay liquidated damages to
each selling security holder. The amount of liquidated damages payable during
any period during which a registration default shall have occurred and be
continuing is that amount which is equal to one- quarter of one percent (25
basis points) per year per $1,000 principal amount and, if applicable, on an
equivalent basis per share of common stock (subject to adjustment in the event
of stock splits, stock recombinations, stock dividends and the like)
constituting transfer restricted securities for each 90-day period until the
registration statement again becomes effective or usable up to a maximum amount
of liquidated damages of three-quarters of one percent (75 basis points) per
year per $1,000 principal amount of notes and, if applicable, on an equivalent
basis per share of common stock (subject to adjustment as set forth above)
constituting transfer restricted securities. All accrued liquidated damages
shall be paid to record holders entitled thereto by wire transfer of immediately
available funds or by federal funds check by
-25-
<PAGE>
us on each date on which interest is payable on the notes or, if no notes are
outstanding, as provided in the Registration Rights Agreement. Following the
cure of all registration defaults, liquidated damages will cease to accrue with
respect to that registration default.
We will use our best efforts to cause the shelf registration statement
to be effective for a period of two years from its effective date or such
shorter period that will terminate when each of the transfer restricted
securities covered by the shelf registration statement ceases to be a transfer
restricted security.
Governing Law
The indenture and, except as may otherwise be required by mandatory
provisions of law, notes will be governed by and construed in accordance with
the laws of the State of New York, without giving effect to its conflicts of
laws principles.
DESCRIPTION OF COMMON STOCK
We have the authority to issue 350,000,000 shares of common stock, par
value $0.10 per share. Each share of common stock entitles its holder to one
vote per share on all matters submitted to a vote of the shareholders. The
holders of common stock have equal, ratable rights to dividends from funds
legally available for dividends, when, as and if declared by the board of
directors, and are entitled to share ratably in all of the assets available for
distribution to holders of common stock upon the liquidation, dissolution or
winding-up of our affairs. Holders of common stock do not have preemptive,
subscription or conversion rights. Our articles of incorporation do not include
any redemption or sinking fund provisions. The outstanding shares of common
stock are fully paid and nonassessable. Our articles of incorporation do not
provide for cumulative voting by shareholders. Our common stock is listed on the
American Stock Exchange under the trading symbol "IVX."
DESCRIPTION OF COMMON STOCK PURCHASE RIGHTS
On December 19, 1997, our board of directors declared a dividend of one
common stock purchase right for each outstanding share of common stock. The
dividend was payable as of December 29, 1997 to shareholders of record on that
date. Each common stock purchase right entitles the registered holder to
purchase from us one-half (1/2) of a share of common stock at a price of $15 per
one-half (1/2) of a share, or the exercise price, subject to certain
adjustments. The Rights Agreement between us and the rights agent named in the
Rights Agreement describes, defines and provides the terms of the common stock
purchase rights. The common stock purchase rights are not exercisable and are
not certificated until the distribution date. Until that time the common stock
purchase rights will automatically trade with the common stock. The common stock
purchase rights will expire at the close of business on December 18, 2007,
unless we redeem them earlier. The number of shares of common stock issuable
upon exercise of the common stock purchase rights is subject to certain
adjustments from time to time in the event of a stock dividend on, or a
subdivision or combination of, the common stock. The exercise price for the
common stock purchase rights is subject to adjustment in the event of
extraordinary distributions of cash or other property to holders of common
stock. Until the holder of a common stock purchase right exercises its common
stock purchase right, the holder of a common stock purchase right will have no
rights as a shareholder, including, without limitation, the right to vote or to
receive dividends.
Distribution Date
Unless earlier redeemed by our board of directors, the common stock
purchase rights become exercisable upon the close of business on the
distribution date which is the earlier of:
o the tenth day following a public announcement that a person or
group of affiliated or associated persons, with certain
exceptions, has acquired beneficial ownership of 15% or more
of our outstanding voting stock, or an acquiring person, and
-26-
<PAGE>
o the tenth business day (or a later date as our board of
directors may determine) after the date of the commencement or
announcement of a person's or group's intention to commence a
tender or exchange offer, the completion of which would result
in the ownership of 15% or more of our outstanding voting
stock.
Effect of Triggering Event
Unless the common stock purchase rights are earlier redeemed, in the
event that, after the time that a person becomes an acquiring person, we were to
be acquired in a merger or other business combination (in which any shares of
common stock are changed into or exchanged for other securities or assets) or
more than 50% of our and our subsidiaries' (taken as a whole) assets or earning
power were to be sold or transferred in one or a series of related transactions,
the Rights Agreement provides that proper provision will be made so that each
holder of record of a common stock purchase right will from and after such date
have the right to receive, upon payment of the exercise price, that number of
shares of common stock of the acquiring company having a market value at the
time of the transaction equal to two times the exercise price. In addition,
unless the common stock purchase rights are earlier redeemed, if a person or
group (with certain exceptions) becomes the beneficial owner of 15% or more of
our voting stock, the Rights Agreement provides that proper provision will be
made so that each holder of record of a common stock purchase right, other than
the acquiring person (whose common stock purchase rights will upon the event
become null and void), will after the event have the right to receive, upon
payment of the exercise price, that number of shares of common stock having a
market value at the time of the transaction equal to two times the exercise
price. The Rights Agreement also grants our board of directors the option, after
any person or group acquires beneficial ownership of 15% or more of the voting
stock but before there has been a 50% acquisition, to exchange one share of
common stock for each then valid common stock purchase right (which would
exclude common stock purchase rights held by the acquiring person that have
become void).
Redemption
At any time on or prior to the close of business on the tenth day after
the time that a person has become an acquiring person (or a later date as a
majority of our board of directors may determine), we may redeem the common
stock purchase rights in whole, but not in part, at a price of $.01 per common
stock purchase right, or the redemption price. Immediately upon the effective
time of the action of our board of directors authorizing redemption of the
common stock purchase rights, the right to exercise the common stock purchase
rights will terminate and the only right of the holders of the common stock
purchase rights will be to receive the redemption price.
Amendment
For as long as we can redeem the common stock purchase rights, we may,
except for the redemption price or date of expiration of the common stock
purchase rights, amend the common stock purchase rights in any manner, including
an amendment to extend the time period in which we can redeem the common stock
purchase rights. At any time when we cannot redeem the common stock purchase
rights, we may amend the common stock purchase rights in any manner that does
not materially adversely affect the interests of holders of the common stock
purchase rights as holders of the common stock purchase rights.
Certain Effects of the Rights
The common stock purchase rights have certain anti-takeover effects. If
not redeemed, the common stock purchase rights will cause substantial dilution
to a person or group who attempts to acquire us on terms which our board of
directors has not approved. The common stock purchase rights should not
interfere with any merger or other business combination which our board of
directors has approved because we may redeem them at $.01 per common stock
purchase right at any time until the close of business on the tenth day (or a
later date as described above) after a person or group has obtained beneficial
ownership of 15% or more of our voting stock.
-27-
<PAGE>
CERTAIN PROVISIONS OF OUR ARTICLES OF INCORPORATION
AND BYLAWS AND FLORIDA LAW
We are subject to several anti-takeover provisions under Florida law
that apply to a public corporation organized under Florida law, unless the
corporation has elected to opt out of these provisions in its articles of
incorporation or bylaws. We have not elected to opt out of these provisions. As
a result, the common stock is subject to the "affiliated transactions" and
"control-share acquisition" provisions of the Florida Business Corporation Act.
These provisions require, subject to certain exceptions, that the holders of
two-thirds of the voting shares other than those beneficially owned by an
"interested shareholder" or a majority of disinterested directors approve an
"affiliate transaction" and that voting rights be conferred on "control shares"
acquired in specified control share acquisitions generally only to the extent
conferred by resolution approved by the shareholders, excluding holders of
shares defined as "interested shares."
Florida law presently limits the personal liability of a corporate
director for monetary damages, except where the director:
o breaches his or her fiduciary duties and
o the breach constitutes or includes certain unlawful
distributions or certain other reckless, wanton or willful
acts or misconduct.
Our bylaws provide an advance notice provision pursuant to which
nominations for election to the board of directors at a meeting of the
shareholders and business to be brought before an annual meeting of the
shareholders by shareholders must be given by written notice to the corporate
secretary, subject to certain exceptions, not less than 60 days and not more
than 90 days prior to the date of the meeting.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
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, or the Code, the applicable Treasury
Regulations promulgated thereunder, 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
purchase notes at their original issuance at their issue price. This summary
also 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 United
States federal income or estate 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, S Corporations, insurance companies, broker-dealers, dealers or
traders in securities or currencies, expatriates subject to Code Section 877 and
taxpayers subject to the alternative minimum tax, and also does not discuss
notes held as part of a hedge, straddle, "synthetic security" or other
integrated investment composed of a note and one or more other investments, or
situations in which the functional currency of the holder is not the United
States dollar. Moreover, this summary does not discuss the effect of any
applicable state, local or foreign tax laws. We have not sought any ruling from
the Internal Revenue Service, or 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.
-28-
<PAGE>
The term "United States Holder" means a holder of a note that is, for
United States federal income tax purposes:
o a citizen or resident of the United States,
o a corporation created or organized under the laws of the
United States or of any political subdivision thereof,
o an estate, the income of which is subject to United States
federal income taxation regardless of source, or
o a trust, if a court within the United States is able to
exercise primary jurisdiction over its administration and one
or more United States persons have the authority to control
all of its substantial decisions, or in the case of a trust
that was treated as a domestic trust under the law in effect
before 1997, a valid election is in place under applicable
United States Treasury Regulations to treat such trust as a
domestic trust.
The term "Non-United States Holder" means a holder of a note that is neither a
United States Holder nor a partnership for United States federal income tax
purposes.
A partnership for United States federal income tax purposes is not
subject to the income tax on income derived from holding the notes. A partner of
the partnership may be subject to tax on such income pursuant to rules similar
to the rules for United States Holders or Non-United States Holders depending on
whether the partnership is a United States or a non-United States partnership,
the partner is a United States or a non-United States person, and the
partnership is or is not engaged in a United States trade or business to which
income or gain from the notes is effectively connected.
United States Holders
Payment of Interest
Interest on a note generally will be includable in the income of a
United States Holder as ordinary income at the time such interest is received or
accrued, in accordance with such United States Holder's method of accounting for
United States federal income tax purposes.
Market Discount and Acquisition Premium
A United States Holder (other than a United States Holder who purchased
the notes upon original issuance) may be considered to have acquired its notes
with "market discount" or "acquisition premium" as such phrases are defined for
United States federal income tax purposes. In this event, we advise you to
consult your tax advisors as to the income tax consequences of the acquisition,
ownership and disposition of the notes. The gain on the disposition of a debt
obligation acquired subsequent to its original issuance at a market discount
generally is treated as ordinary income, not capital gain, to the extent of the
"accrued market discount" as that term is defined below. This rule is not
applicable if the market discount at the time of acquisition of the debt
obligation is de minimis (less than 0.25 percent of the stated redemption price
of the note multiplied by the number of complete years remaining to maturity).
In the case of the notes, market discount would generally be the excess of:
o the issue price of the notes over
o the current holder's initial basis in the note.
The accrued market discount would be the amount calculated by
multiplying the market discount by a fraction:
o the numerator of which is the number of days the holder has
held the note, and
o the denominator of which is the number of days after the
holder's acquisition of the note up to and including the
maturity date.
-29-
<PAGE>
If you acquired a note with an "acquisition premium," for instance, at
a price in excess of its face amount, then this premium is generally amortizable
by offsetting interest income, at your election, over the remaining term of the
trust preferred security.
Sale, Exchange or Redemption of the Notes
Upon the sale, exchange or redemption of a note, a United States Holder
generally will recognize capital gain or loss equal to the difference between:
o 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, which is treated as interest subject to the
rules discussed above under "Payment of Interest") and
o 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. 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 one year 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 common stock, except with respect to cash
received in lieu of a fractional share of common stock. Such holder's tax basis
in the 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 common stock received on conversion will generally include the holding
period of the note converted.
Cash received in lieu of a fractional share of common stock upon
conversion should be treated as a payment in exchange for the fractional share
of common stock. The receipt of cash in lieu of a fractional share of 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 us 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
tax as ordinary income, to the extent of our 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 capital gain from the sale or
exchange of such stock, long-term or short-term depending on whether the
holder's holding period exceeds one year.
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 our 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 our stock (other
than any non-voting, nonconvertible, 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) we make a distribution of cash or property to our
stockholders or purchase 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 ours,
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 our discretion, then such decrease in conversion price may be
deemed to be the payment of a taxable dividend to United States Holders of notes
(pursuant
-30-
<PAGE>
to Section 305 of the Code) to the extent of our 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:
o the amount of cash and the fair market value of any property
received upon the sale or exchange, and
o 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 one year 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
"United States Holders--Conversion of the Notes."
Information Reporting and Backup Withholding Tax
In general, the Service requires a payor to report certain information
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:
o the payee fails to furnish a taxpayer identification number to
the payor or establish an exemption from backup withholding,
o the Service notifies the payor that the taxpayer
identification number furnished by the payee is incorrect,
o there has been a notified payee underreporting with respect to
interest or dividends described in Section 3406(c) of the
Code, or
o 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
Payment of Interest
Generally, interest income of a Non-United States Holder that is not
effectively connected with a United States trade or business is subject to a
withholding tax at a 30% rate (or, if applicable, a lower treaty rate). However,
interest we pay or any paying agent pays on a note to a Non-United States Holder
will qualify for the "portfolio interest exemption" (provided we are not a
"USRPHC" as defined below under "Non-United States Holders--FIRPTA Treatment of
Non-United States Holders") and, 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:
o 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 our stock entitled
to vote,
-31-
<PAGE>
o is not a controlled foreign corporation related to us actually
or constructively through stock ownership,
o 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
o either provides a Form W-8 (or a suitable substitute or
successor 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 is a securities clearing organization, bank or
other financial institution that holds customers' securities
(including the note) in the ordinary course of its trade or
business and provides a statement to us or our agent under
penalties of perjury in which it certifies that such a Form
W-8 (or a suitable substitute or successor form) has been
received by it from the Non-United States Holder or qualifying
intermediary and furnishes us or our agent with a copy
thereof.
Treasury Regulations that become effective January 1, 2001 provide
alternative methods for satisfying the certification requirement described in
the fourth bullet point in the paragraph above. These Treasury Regulations also
will require, in the case of notes held by a foreign partnership, that the
partners rather than the foreign partnership (unless the foreign partnership
agrees to become a "withholding foreign partnership") provide the certification
described in the fourth bullet point in the paragraph above and that 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 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 Internal Revenue Service Form W-8ECI
(or applicable successor form) to the payor.
Sale, Exchange or Redemption of the Notes
Subject to the discussion below under "FIRPTA Treatment of Non-United
States Holders," 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:
o the gain is effectively connected with a United States trade
or business of the Non-United States Holder, or
o 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.
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 either 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 "Non-United States
Holders--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
-32-
<PAGE>
tax on the sale or exchange of common stock unless either 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, or 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, or 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 nonresident
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% or more of the aggregate fair market value of certain assets of the
corporation.
We do not currently believe that we are a USRPHC. If we are not a
USRPHC, a Non-United States Holder will not be subject to United States federal
income tax imposed by FIRPTA on a sale or other disposition of the notes or
shares of common stock. If we are a USRPHC, a Non-United States Holder generally
will not be subject to FIRPTA withholding on proceeds from a sale or other
disposition of notes or common stock by reason of our USRPHC status unless the
holder's interest in the notes or common stock exceeds the relevant threshold
described below.
Assuming the common stock is regularly traded, a Non-United States
Holder will not be subject to FIRPTA withholding on a sale or other disposition
of common stock unless such holder owns, actually or constructively, common
stock with a fair market value in excess of 5% of the fair market value of all
the common stock outstanding at any time during the shorter of the five-year
period preceding such disposition or the holder's holding period. In the case of
a sale or other disposition of notes, the relevant ownership threshold depends
upon whether the notes are regularly traded. If the notes are not regularly
traded, a Non-United States Holder will be subject to FIRPTA withholding only if
on the date the holder acquired such notes they had a fair market value greater
than 5% of the aggregate value of the outstanding common stock. If the notes are
publicly traded, a holder will be subject to FIRPTA withholding only if such
holder owned more than 5% of the total fair market value of all the notes
outstanding at any time during the shorter of the five- year period preceding
such disposition or the holder's holding period for such notes.
We believe that the common stock will be treated as regularly traded.
Dividends
Distributions by us with respect to the common stock that are treated
as dividends paid (or deemed paid), as described above under "United States
Holders--Dividends on the Common Stock," 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 United
States withholding tax if the holder delivers a properly executed Internal
Revenue Service Form W-8ECI (or applicable successor form) to the payor.
Under current 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
December 31, 2000, however, a Non-United States 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
-33-
<PAGE>
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 directly or indirectly, actually or
constructively, own 10% or more of the combined voting power of all classes of
our stock 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 such
holder duly provides the statement described in "Non-United States
Holders--Payment of Interest," 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:
o a United States person,
o 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,
o a controlled foreign corporation for United States federal
income tax purposes, or
o after December 31, 2000, a foreign partnership more than 50%
of the capital or profits of which is owned by one or more
United States persons or which engages in a United States
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 the four bullet points 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, 2000, dividend payments will be
subject to information reporting and backup withholding unless applicable
certification requirements are satisfied. For more information, see the
discussion above with respect to rules applicable to foreign partnerships under
the Treasury Regulations that become effective on January 1, 2001.
-34-
<PAGE>
LEGAL MATTERS
Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., of Miami,
Florida, will issue an opinion about certain legal matters regarding the notes,
common stock, and common stock purchase rights for us.
EXPERTS
Our consolidated balance sheets as of December 31, 1998 and 1999 and
the related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1999
incorporated by reference in this prospectus have been audited by Arthur
Andersen LLP, independent certified public accountants, to the extent and for
the periods indicated in their report with respect thereto and have been
included in this prospectus in reliance upon the authority of the firm as
experts in accounting and auditing in giving such reports.
-35-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses of IVAX Corporation
(the "Registrant") in connection with the sale and distribution of the
securities being registered, other than the underwriting discounts and
commissions. All amounts shown are estimated except for the Securities and
Exchange Commission registration fee.
SEC Registration Fee...............................................$ 66,000
AMEX Listing Fee...................................................$ 17,500
Legal Fees and Expenses............................................$ 75,000
Accounting Fees and Expenses.......................................$ 25,000
Printing Expenses .................................................$ 5,000
Miscellaneous Expenses.............................................$ 1,500
--------
TOTAL FEES AND EXPENSES...................................$190,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0831 of the Florida Business Corporation Act (the "Florida
Act") provides that a director is not personally liable for monetary damages to
the corporation or any person for any statement, vote, decision or failure to
act regarding corporate management or policy, by a director, unless: (a) the
director breached or failed to perform his duties as a director; and (b) the
director's breach of, or failure to perform, those duties constitutes: (i) a
violation of criminal law unless the director had reasonable cause to believe
his conduct was lawful or had no reasonable cause to believe his conduct was
unlawful; (ii) a transaction from which the director derived an improper
personal benefit, either directly or indirectly; (iii) a circumstance under
which the director is liable for an improper distribution; (iv) in a proceeding
by, or in the right of the corporation to procure a judgment in its favor or by
or in the right of a shareholder, conscious disregard for the best interest of
the corporation, or willful misconduct; or (v) in a proceeding by or in the
right of someone other than the corporation or a shareholder, recklessness or an
act or omission which was committed in bad faith or with malicious purpose or in
a manner exhibiting wanton or willful disregard of human rights, safety or
property.
Section 607.0850 of the Florida Act provides that a corporation shall
have the power to indemnify any person who was or is a party to any proceeding
(other than an action by, or in the right of, the corporation), by reason of the
fact that he is or was a director, officer or employee or agent of the
corporation, against liability incurred in connection with such proceeding if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interest of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. Section 607.0850 also provides that a corporation shall have the
power to indemnify any person, who was or is a party to any proceeding by, or in
the right of, the corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation, against expenses and amounts paid in settlement not exceeding, in
the judgment of the board of directors, the estimated expense of litigating the
II-1
<PAGE>
proceeding to conclusion, actually and reasonably incurred in connection with
the defense or settlement of such proceeding, including any appeal thereof.
Section 607.0850 further provides that such indemnification shall be authorized
if such person acted in good faith and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the corporation, except that no
indemnification shall be made under this provision in respect of any claim,
issue, or matter as to which such person shall have been adjudged to be liable
unless, and only to the extent that, the court in which such proceeding was
brought, or any other court of competent jurisdiction, shall determine upon
application that, despite the adjudication of liability, but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which court shall deem proper. Section 607.0850
further provides that to the extent that a director, officer, employee or agent
has been successful on the merits or otherwise in defense of any of the
foregoing proceedings, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses actually and reasonably incurred by him in
connection therewith. Under Section 607.0850, any indemnification under the
foregoing provisions, unless pursuant to a determination by a court, shall be
made by the corporation only as authorized in the specific case upon a
determination that the indemnification of the director, officer, employee or
agent is proper under the circumstances because he has met the applicable
standard of conduct. Notwithstanding the failure of a corporation to provide
such indemnification, and despite any contrary determination by the corporation
in a specific case, a director, officer, employee or agent of the corporation
who is or was a party to a proceeding may apply for indemnification to the
appropriate court and such court may order indemnification if it determines that
such person is entitled to indemnification under the applicable standard.
Section 607.0850 also provides that a corporation shall have the power
to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation against any liability
asserted against him and incurred by him in any such capacity or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of Section 607.0850.
The Registrant's bylaws provide that it shall indemnify its officers
and directors and former officers and directors to the full extent permitted by
law.
The Registrant has entered into indemnification agreements with each of
its officers and directors. The indemnification agreements generally provide
that the Registrant will pay certain amounts incurred by an officer or director
in connection with any civil or criminal action or proceeding and specifically
including actions by or in the name of the Registrant (derivative suits) where
the individual's involvement is by reason of the fact that he was or is an
officer or director. Under the indemnification agreements, an officer or
director will not receive indemnification if such person is found not to have
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Registrant. The agreements provide a number
of procedures and presumptions used to determined the officer's or director's
right to indemnification and include a requirement that in order to receive an
advance of expenses, the officer or director must submit an undertaking to repay
any expenses advanced on his behalf that are later determined he was not
entitled to receive.
The Registrant's directors and officers are covered by insurance
policies indemnifying them against certain liabilities, including liabilities
under the federal securities laws (other than liability under Section 16(b) of
the Exchange Act), which might be incurred by them in such capacities.
II-2
<PAGE>
ITEM 16. EXHIBITS
The following exhibits either are filed herewith or incorporated by
reference to documents previously filed or will be filed by amendment, as
indicated below:
<TABLE>
<CAPTION>
Exhibits Description
-------- -----------
<S> <C>
4.1* Indenture, dated as of May 12, 2000, between the Registrant and U.S. Bank
Trust, National Association, as Trustee.
4.2* Form of 5.5% Convertible Senior Subordinated Notes due 2007 in Global
Form (included as Exhibit A to Exhibit 4.1).
4.3* Registration Rights Agreement dated as of May 12, 2000 by and between the
Registrant and UBS Warburg L.L.C. and ING Barings L.L.C.
4.4* Rights Agreement dated December 19, 1997, between the Registrant and
ChaseMellon Shareholder Services, L.L.C. with respect to the IVAX
Corporation Shareholder Rights Plan (incorporated by reference to exhibit 4.3
to IVAX Corporation's Annual Report on Form 10-K for the year ended
December 31, 1999 filed on March 30, 2000).
5* Opinion of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
12 Statement regarding Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Arthur Andersen LLP.
23.2* Consent of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
(included in Exhibit 5).
24* Power of Attorney.
25* Form T-1: Statement of Eligibility of U.S. Bank Trust National Association
to act as trustee under the Indenture.
</TABLE>
------------
* Previously filed.
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-3
<PAGE>
(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 Securities and Exchange
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent
no more than a 20 % 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 the information required to be
included in a post-effective amendment by paragraphs (a)(1)(i) and (a)(1)(ii)
above may be contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the Registrant pursuant to Section 13 or
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 deemed to 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 section 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
Securities Act of 1933 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 their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
II-4
<PAGE>
whether such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(d) The undersigned Registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the Trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act (the "Act") in
accordance with the rules and regulations prescribed by the Securities and
Exchange Commission under Section 305(b)(2) of the Act.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of 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 Miami, State of Florida, on the 13th day of October,
2000.
IVAX CORPORATION
By: /s/ Phillip Frost, M.D.
-------------------------------
Phillip Frost, M.D.
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by each of the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Phillip Frost, M.D. Chairman of the Board, Chief October 13, 2000
----------------------- Executive Officer
Phillip Frost, M.D. (Principal Executive Officer)
and Director
/s/ Thomas E. Beier Senior Vice President - Finance October 13, 2000
----------------------- and Chief Financial Officer
Thomas E. Beier (Principal Financial Officer)
/s/ Thomas E. McClary Vice President - Accounting October 13, 2000
----------------------- (Principal Accounting Officer)
Thomas E. McClary
* Director October 13, 2000
-----------------------
Mark Andrews
* Director October 13, 2000
-----------------------
Ernest Biekert, Ph.D.
* Director October 13, 2000
-----------------------
Charles M. Fernandez
II-6
<PAGE>
* Director October 13, 2000
-----------------------
Jack Fishman, Ph.D.
* Director, President and October 13, 2000
----------------------- Vice Chairman of the Board
Neil Flanzraich
* Director, Vice-Chairman of October 13, 2000
----------------------- the Board, Chief Technical Officer
Jane Hsiao, Ph.D.
Director and Deputy Chief
----------------------- Executive Officer
Isaac Kaye
* By: /s/ Thomas E. Beier
--------------------
Attorney-in-fact
II-7
<PAGE>
INDEX TO EXHIBITS
Exhibits Description
-------- -----------
12 Statement regarding Computation of Ratio of Earnings
to Fixed Charges.
23.1 Consent of Arthur Andersen LLP.
II-8
