<PAGE> 1
SCHEDULE 13D
(RULE 13d-101)
Information to be Included in Statements Filed Pursuant to Rule 13d-1(a) and
Amendments Thereto Filed Pursuant to Rule 13d-2(a)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
Cima Labs, Inc.
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(Name of Issuer)
Common Stock, $0.1 Par Value
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(Title of Class of Securities)
171796105
--------------------------------------------------------------------------------
(CUSIP Number)
Johnathan B. Levy
Lindquist & Vennum P.L.L.P.
4200 IDS Center
80 South Eight Street
Minneapolis, Minnesota 55402
Telephone: (612) 371-3211
Fax Number: (612) 371-3207
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 23, 2000
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box / /.
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule
13d-7(b) for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
CUSIP NO. 171796 10 5 13D
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Raymond A. Lipkin
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
PF
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Raymond A. Lipkin is a citizen of the United States.
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
471,600
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
93,500
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
471,600
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
93,500
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
565,100
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.20%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
--------------------------------------------------------------------------------
<PAGE> 3
CUSIP NO. 171796 10 5 13D
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Deborah A. Lipkin IRA
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
PF
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Deborah A. Lipkin IRA was organized in the State of Minnesota.
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
6,000
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
6,000
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.05%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
OO
--------------------------------------------------------------------------------
<PAGE> 4
CUSIP NO. 171796 10 5 13D
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Deborah A. Lipkin
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
PF
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Deborah A. Lipkin is a citizen of the United States.
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
0
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
15,000
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
0
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
15,000
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.13%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
--------------------------------------------------------------------------------
<PAGE> 5
CUSIP NO. 171796 10 5 13D
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1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Caroline M. Lipkin
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
PF
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Caroline M. Lipkin is a citizen of the Untied States.
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
14,000
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
14,000
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.12%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
--------------------------------------------------------------------------------
<PAGE> 6
CUSIP NO. 171796 10 5 13D
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Koloa Limited Partnership
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
PF
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Koloa Limited Partnership is an entity formed under the laws of the
State of Minnesota.
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
56,500
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
56,500
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
56,500
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.52%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
PN
--------------------------------------------------------------------------------
<PAGE> 7
CUSIP NO. 171796 10 5 13D
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Caroline M. Lipkin IRA
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
PF
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Caroline M. Lipkin was organized in the State of Minnesota.
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
1,000
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
1,000
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.009%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
OO
--------------------------------------------------------------------------------
<PAGE> 8
CUSIP NO. 171796 10 5 13D
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Katherine A. Kinnaman IRA
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
PF
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
Katherine A. Kinnaman IRA was organized in the State of Minnesota
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
1,000
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
1,000
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.009%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
OO
--------------------------------------------------------------------------------
<PAGE> 9
ITEM 1. Security and Issuer
This statement relates to shares of the common stock, par value
$0.01 per share (the "Common Stock"), of CIMA Labs, Inc., a
Delaware Corporation (the "Issuer"), whose principal executive
offices are located at 10000 Valley View Road, Eden Prairie,
Minnesota 55344-9361.
ITEM 2. Identity and Background
(a) Name: This statement is being filed by Raymond A. Lipkin.
(b) Residence Address: Mr. Lipkin's address is 161 Ferndale
Avenue South, Wayzata, Minnesota 55391.
(c) Principal Occupation: Mr. Lipkin is retired. He was
previously employed as an investment advisor.
(d) Criminal Convictions: During the last five years, Mr.
Lipkin has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors)
(e) Civil Proceedings: During the last five years, Mr. Lipkin
has not been a party to any civil proceeding of a judicial
or administrative body of competent jurisdiction as a
result of which he was or is subject to a judgment, decree
or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or
state securities laws or finding of any violation with
respect to such laws.
(f) Citizenship: Mr. Lipkin is a citizen of the United States.
Identity and Background - Reporting Persons Holding Less than 5%
of the Issuer's Outstanding Shares
Deborah A. Lipkin IRA
(a) Name: Deborah A. Lipkin IRA.
(b) Residence Address: c/o Raymond A. Lipkin, 161 Ferndale
Avenue South, Wayzata, Minnesota 55391.
(c) Principal Occupation: N/A
(d) Criminal Convictions: None
(e) Civil Proceedings: None
(f) Citizenship: Deborah A. Lipkin IRA was organized in the
State of Minnesota.
<PAGE> 10
Deborah A. Lipkin
(a) Name: Deborah A. Lipkin
(b) Residence Address: c/o Raymond A. Lipkin, 161 Ferndale
Avenue South, Wayzata, Minnesota 55391.
(c) Principal Occupation: Homemaker
(d) Criminal Convictions: None
(e) Civil Proceedings: None
(f) Citizenship: Deborah A. Lipkin is a citizen of the United
States.
Caroline M. Lipkin IRA
(a) Name: Caroline M. Lipkin IRA
(b) Residence Address: c/o Raymond A. Lipkin, 161 Ferndale
Avenue South, Wayzata, Minnesota 55391.
(c) Principal Occupation: N/A
(d) Criminal Convictions: None
(e) Civil Proceedings: None
(f) Citizenship: Caroline M. Lipkin IRA was organized in the
State of Minnesota.
Caroline M. Lipkin
(a) Name: Caroline M. Lipkin
(b) Residence Address: c/o Raymond A. Lipkin, 161 Ferndale
Avenue South, Wayzata, Minnesota 55391.
(c) Principal Occupation: Ms. Lipkin is a photographer.
(d) Criminal Convictions: None
(e) Civil Proceedings: None
(f) Citizenship: Caroline M. Lipkin is a citizen of the United
States.
Koloa Limited Partnership
(a) Name: Koloa Limited Partnership
(b) Address: c/o Raymond A. Lipkin, 161 Ferndale Avenue South,
Wayzata, Minnesota 55391
<PAGE> 11
(c) Principal Business: Family partnership organized in
Minnesota
(d) Criminal Convictions: None
(e) Civil Proceedings: None
Katherine A. Kinnaman
(a) Name: Katherine A. Lipkin
(b) Residence Address: c/o Raymond A. Lipkin, 161 Ferndale
Avenue South, Wayzata, Minnesota 55391
(c) Principal Occupation: Homemaker
(d) Criminal Convictions: None
(e) Civil Proceedings: None
(f) Citizenship: Katherine A. Kinnaman is a citizen of the
United States
Katherine A. Kinnaman IRA
(a) Name: Katherine A. Kinnaman IRA
(b) Residence Address: c/o Raymond A. Lipkin, 161 Ferndale
Avenue South, Wayzata, Minnesota 55391.
(c) Principal Occupation: N/A
(d) Criminal Convictions: None
(e) Civil Proceedings: None
(f) Citizenship: Katherine A. Kinnaman IRA was organized in
the State of Minnesota.
ITEM 3. Source And Amount of Funds or Other Consideration
Mr. Lipkin acquired 20,000 shares of Common Stock of the Issuer on
August 23, 2000 through a margin account at the brokerage firm of
Dain Rauscher. The total purchase price was $489,576, all of which
is subject to a margin balance at Dain Rauscher. Also on August
23, 2000, Mr. Lipkin acquired 15,000 shares of Common Stock of the
issuer through an account at Merrill Lynch. The total purchase
price for this acquisition was $367,959, of which $300,000 is
subject to a margin balance at Merrill Lynch.
ITEM 4. Purpose of Transaction
All of the reporting persons named herein have acquired the
securities described in Items 1 and 5 for investment purposes.
<PAGE> 12
All reporting persons hereunder may, from time to time, (1)
acquire additional shares of Common Stock (subject to availability
at prices deemed favorable to such persons) in the open market, in
privately negotiated transactions, or otherwise, or (2) attempt to
dispose of shares of Common Stock in the open market, in privately
negotiated transactions or otherwise.
None of the reporting persons named herein have present plans or
intentions that would result in or relate to any of the
transactions described in subparagraphs (a) through (j) of Item 4
of Schedule 13D.
ITEM 5. Interest in Securities of the Issuer
(a) On August 23, 2000, Mr. Lipkin purchased 35,000 shares of
Common Stock of the Issuer, which caused his beneficial
ownership of shares of the Issuer to exceed 5%. As of the
date of this filing, Mr. Lipkin beneficially owns 565,100
shares of Common Stock of the Issuer, representing
approximately 5.2% of the outstanding shares. This
percentage is based upon 10,862,989 shares of Common Stock
outstanding at August 10, 2000, as reported by Issuer's
Chief Financial Officer.
(b) As of August 30, 2000, the reporting persons hereunder own
the following shares of Common Stock of the Issuer:
<TABLE>
<CAPTION>
Shares Percentage of
Name Owned Outstanding Shares
---- ----- ------------------
<S> <C> <C>
Raymond A. Lipkin 471,600 5.2%
Koloa Limited Partnership 56,500 .52%
Deborah A. Lipkin IRA 6,000 .05%
Deborah A. Lipkin (JT) 15,000 .13%
Caroline Lipkin IRA 1,000 .009%
Caroline M. Lipkin 14,000 .12%
Katherine A. Kinnaman IRA 1,000 .009%
</TABLE>
This report is being filed with respect to the foregoing
shares of Common Stock of the Issuer, of which (i) 471,600
shares are held by Mr. Lipkin directly, in his Simplified
Employee Pension ("SEP") account or in his Individual
Retirement Account ("IRA") and are subject to his sole
voting and dispositive power, (ii) 15,000 shares are held
jointly with Mr. Lipkin's spouse and with respect to which
Mr. Lipkin has shared voting and dispositive power, (iii)
56,500 shares are held by Koloa Limited Partnership, a
family partnership in which Mr. Lipkin and his spouse are
general partners and Mr. Lipkin is the managing partner
with shared voting and dispositive power, and (iv) 22,000
shares are held by or on behalf of the family members
other than Mr. Lipkin identified above and with respect to
which Mr. Lipkin has management and shared voting power.
Mr. Lipkin disclaims beneficial ownership with respect to
all but the 471,600 shares over which he has sole voting
and dispositive power, 71,500 shares held jointly with
Mrs. Lipkin and his proportionate interest in the family
<PAGE> 13
partnership. With the exception of Mr. Lipkin, all
reporting persons hereunder disclaim beneficial ownership
of shares held by others.
(c) Transactions in the Common Stock of the Issuer effected by
Mr. Lipkin in the last 60 days are described on the
attached Appendix A and incorporated herein by reference.
All such transactions were purchases effected in the open
market. Other than as identified on Appendix A, the
reporting persons hereunder have not effected any
transactions in the Common Stock of the Issuer during the
past sixty days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Mr. Lipkin has an understanding with certain family members
described in Items 5(b) and (d) above for management of their
respective holdings of the Common Stock of the Issuer. Other than
these arrangements, Mr. Lipkin does not have any contracts,
arrangements, understandings or relationships (legal or otherwise)
with any person with respect to any securities of the Issuer.
ITEM 7. Materials to be filed as Exhibits
Appendix A - Transactions in Securities of the Issuer
Exhibit 1 Joint Filing Agreement
Exhibit 2 Margin Loan Agreement with Dain Rauscher
Exhibit 3 Margin Loan Agreement with Merrill Lynch.
<PAGE> 14
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.
September 1, 2000 /s/ Raymond A. Lipkin
-------------------------------------
Raymond A. Lipkin
September 1, 2000 Raymond A. Lipkin IRA
By: /s/ Raymond A. Lipkin
-------------------------------------
Raymond A. Lipkin
September 1, 2000 Raymond A. Lipkin SEP
By: /s/ Raymond A. Lipkin
-------------------------------------
Raymond A. Lipkin
September 1, 2000 Deborah A. Lipkin IRA
By: /s/ Deborah A. Lipkin
-------------------------------------
Deborah A. Lipkin
September 1, 2000 Katherine A. Kinnaman IRA
By: /s/ Katherine A. Kinnaman
-------------------------------------
Katherine A. Kinnaman
September 1, 2000 By: /s/ Katherine A. Kinnaman
-------------------------------------
Katherine A. Kinnaman
September 1, 2000 /s/ Caroline M. Lipkin
-------------------------------------
Caroline M. Lipkin
September 1, 2000 Koloa Limited Partnership
By: /s/ Raymond A. Lipkin
-------------------------------------
Raymond A. Lipkin, Managing Partner
September 1, 2000 Caroline M. Lipkin IRA
By: /s/ Caroline M. Lipkin IRA
-------------------------------------
Caroline M. Lipkin
<PAGE> 15
APPENDIX A
Transactions in Securities of Cima Labs, Inc.
(Shares of Common Stock of the Issuer purchased directly by Raymond A. Lipkin)
<TABLE>
<CAPTION>
No. of Shares Purchased Total
Date in the Last Sixty Days Purchase Price
---- ---------------------- --------------
<S> <C> <C>
August 23, 2000 20,000 $490,600
August 23, 2000 15,000 $367,959
Total 35,000 $858,559
</TABLE>
<PAGE> 16
EXHIBIT 1
TO SCHEDULE 13D
JOINT FILING AGREEMENT
The undersigned parties hereby agree that this Schedule 13D relating to
securities of CIMA Labs, Inc. shall be filed on behalf of each of them.
September 1, 2000 /s/ Raymond A. Lipkin
-------------------------------------
Raymond A. Lipkin
September 1, 2000 Raymond A. Lipkin IRA
By: /s/ Raymond A. Lipkin
-------------------------------------
Raymond A. Lipkin
September 1, 2000 Raymond A. Lipkin SEP
By: /s/ Raymond A. Lipkin
-------------------------------------
Raymond A. Lipkin
September 1, 2000 Deborah A. Lipkin IRA
By: /s/ Deborah A. Lipkin
-------------------------------------
Deborah A. Lipkin
September 1, 2000 Katherine A. Kinnaman IRA
By: /s/ Katherine A. Kinnaman
-------------------------------------
Katherine A. Kinnaman
September 1, 2000 By: /s/ Katherine A. Kinnaman
-------------------------------------
Katherine A. Kinnaman
September 1, 2000 /s/ Caroline M. Lipkin
-------------------------------------
Caroline M. Lipkin
September 1, 2000 Koloa Limited Partnership
By: /s/ Raymond A. Lipkin
-------------------------------------
Raymond A. Lipkin, Managing Partner
September 1, 2000 Caroline M. Lipkin IRA
By: /s/ Caroline M. Lipkin IRA
-------------------------------------
Caroline M. Lipkin
<PAGE> 17
EXHIBIT 2
<TABLE>
<CAPTION>
<S><C>
[DAIN RAUSCHER LOGO]
CLIENT MARGIN -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
ACCOUNT AGREEMENT Firm ID Account Number IE #
AND APPLICATION, page 1 of 3
------------------------------------------------------------------------------------------------------------------------------------
THIS AGREEMENT CONSISTS OF THREE PAGES. I HAVE READ AND UNDERSTAND THE TERMS OF THIS AGREEMENT.
BY SIGNING THIS AGREEMENT I ACKNOWLEDGE THAT:
1. MY SECURITIES MAY BE LOANED TO YOU OR LOANED TO OTHERS AS PROVIDED UNDER SEC RULE 15c3-3 AND OTHER APPLICABLE LAW.
2. I HAVE RECEIVED A COPY OF THIS AGREEMENT.
THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE ON PAGE 3 AT PARAGRAPH 13
------------------------------------------------------------------------------------------------------------------------------------
Name & Address of Account
------------------------------------------------------------------------------------------------------------------------------------
Client Signature (or authorized person if applicable) Date Signature of Second Party (if a joint account) Date
X /s/ Raymond A. Lipkin April 17, 1998 X
------------------------------------------------------------------------------------------------------------------------------------
Printed Name from Signature Above Printed Name from Signature Above
------------------------------------------------------------------------------------------------------------------------------------
Title, if applicable (e.g., President, Partner, Trustee, Custodian) Title, if applicable (e.g., President, Partner, Trustee,
Custodian)
------------------------------------------------------------------------------------------------------------------------------------
Telephone Number, Including Area Code Telephone Number, Including Area Code
------------------------------------------------------------------------------------------------------------------------------------
Occupation Occupation
------------------------------------------------------------------------------------------------------------------------------------
Employer Employer
------------------------------------------------------------------------------------------------------------------------------------
For office use only
------------------------------------------------------------------------------------------------------------------------------------
Investment Executive Signature Date Branch Manager Signature Date
/s/ Suzy Bookstein 4/20/98 /s/ Wade Massad
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
TO: DAIN RAUSCHER INCORPORATED (DAIN RAUSCHER)
In consideration of your continuing or now and hereafter opening an account or
accounts for the purchase and sale of securities and commodities for me, in my
name, I agree that all transactions with respect to any such account shall be
subject to the following terms:
1. STATUS OF DAIN RAUSCHER INCORPORATED AS BROKER. In purchasing or
selling securities and commodities for me you shall act as my agent
unless you notify me in writing prior to the settlement date or make
the necessary disclosure on the confirmation that you are acting as a
dealer for your own account or as an agent for some other party.
2. STATUS OF DAIN RAUSCHER AS A SELF - CLEARING FIRM. I understand that
Dain Rauscher is a self-clearing broker dealer and as such carries my
account and clears and settles all trades in my account. As used in
this agreement, the terms "you", "your" and other terms having a
similar meaning shall be deemed to refer to Dain Rauscher.
3. APPLICABLE RULES AND STATUTES. All transactions made for me under this
agreement shall be subject, where applicable, to the provisions of the
Securities Exchange Act of 1934 and the Commodity Exchange Act, to all
rules and regulations of the Securities and Exchange Commission, the
Board of Governors of the Federal Reserve System and the Commodity
Futures Trading Commission. They also shall be subject to the rules and
regulations, customs and usages of the exchange or market where my
orders are executed, as the same may be amended or supplemented from
time to time.
4. DESIGNATION OF ORDERS/SHORT SALES. Every order I give you for the sale
or purchase of securities or commodities contemplates an actual sale or
purchase. I will deliver to you securities or commodities to cover all
my sale orders and will receive and pay for on your demand all
securities and commodities covered by my purchase orders. If I fail to
deliver to you any securities or commodities which you have sold
pursuant to my order, you are authorized to borrow the securities or
commodities necessary to make delivery thereof, and in the event of
your inability to borrow or otherwise obtain the commodities or
securities, I shall be responsible for any loss you may sustain
thereby. You shall have a reasonable time to deliver to me any
securities or commodities which you have purchased for my account and
for which I have paid in full. I understand that in the case of a short
sale (delivery of borrowed shares), the short transaction may at any
time be terminated by purchasing back the shares if the borrowed shares
are recalled by the lender or otherwise become unavailable.
Furthermore, I understand that you will not be responsible for any
losses sustained by me as a result of short sale strategies that were
terminated due to unavailable shares.
continued on page # 2
<PAGE> 18
DAIN RAUSCHER CLIENT MARGIN AGREEMENT PAGE 2 OF 3
5. GRANT OF SECURITY INTEREST AND AUTHORITY TO PLEDGE. All monies, securities,
commodities and other property of mine which you may at any time be holding or
carrying for me (whether individually or jointly with others) shall be subject
to a security interest in your favor as security for all of my obligations to
you. At any time or from time to time at your discretion, without notice to me,
you may apply or transfer any and all monies, securities, commodities and other
property of mine out of and into any of my accounts with you (other than from
regulated commodity accounts). You may pledge, repledge, hypothecate and
rehypothecate any and all of my securities, commodities or other property which
you may be holding or carrying for me (whether individually or jointly with
others), to secure an amount equal to the amount due from me to you or a greater
or lesser amount. You may do this without having in your possession or subject
to your control other securities or commodities of the same kind and amount. You
may also do this with my securities or commodities alone, or with my securities
and commodities and those held by you for other clients, in which case my
securities or commodities may be commingled with those held for other clients.
You shall not be required to deliver to me the securities or commodities
deposited or received but shall be required to deliver to me only securities and
commodities of the same kind and amount.
6. MARGIN INTEREST RATE INFORMATION AND CREDIT DISCLOSURE. I will pay interest
on all credit extended to me or maintained for me by you for the purpose of
purchasing, carrying or trading in securities or commodities or otherwise,
computed on the basis of a 360 day year at an annual rate which will vary
depending upon the size of my debit balance at the time the interest computation
is made in accordance with your margin interest schedule, receipt of which is
acknowledged. In any case, the annual rate of interest will be at least 1/2 of
1% above the Base Lending Rate, provided that in no event will the interest
charge exceed that allowed by the substantive law of the State of Minnesota. I
will also pay interest on the proceeds of sales paid to me prior to settlement
date and interest on proceeds paid for securities which were not in good
delivery. I will pay other charges as you may make to cover your facilities and
extra services.
All amounts advanced and other balances due, together with interest and
commissions, shall be due and payable on demand. I will at all times maintain
such margins as you may require from time to time. You will not be liable to pay
me interest on any credit balances owed me by you but all free credit balances
in my accounts with you (except short accounts) shall be used to offset debit
balances on which interest accrues.
The rate of interest charged to my account is equal to the Base Lending Rate
plus a sliding scale of percentages according to the size of your debit balance.
The Base Lending Rate is internally determined using Broker Call, Prime Rate as
determined by commercial banks utilized by Dain Rauscher, Fed Funds, Dain
Rauscher's cost of funds, and other commercially recognized rates of interest.
These rates vary according to market conditions and Dain Rauscher reserves the
right to determine which rates, or combination of rates, will apply. The rates
of interest charged to my margin account will be determined in accordance with
the following schedule:
<TABLE>
<CAPTION>
MARGIN DEBIT BALANCE PERCENTAGE OVER BASE LENDING RATE INTEREST RATE(*)
-------------------- --------------------------------- ----------------
<S> <C> <C>
$0 to $24,999 2.75% 10.25%
$25,000 to $49,999 2.25% 9.75%
$50,000 to $74,999 1.75% 9.25%
$75,000 to $99,999 1.375% 8.875%
$100,000 to $249,999 1.125% 8.625%
$250,000 and over 1.00% 8.50%
</TABLE>
(*) Based on the 7.0% Base Lending Rate effective 12/16/98
Dain Rauscher reserves the right, under certain circumstances, to charge my
account with an interest rate higher than the above rates. In making this
determination, factors such as account activity or purpose of borrowing will be
considered.
The rate of interest will change without prior notice in accordance with changes
in the Base Lending Rate. If my interest is to be increased for any other
reason, I will be provided with at least 30 days written notice prior to the
effective date of such change.
Interest is charged on a daily basis and each day's interest is accumulated into
a monthly total. However, if a rate change occurs during an interest period, the
accrued interest to the date of such change will be posted to my account
immediately after the date of such change.
Each month in which there has been activity in my account, I will receive my
regular monthly statement, which will include a Statement of Interest Charged.
My regular monthly statement will cover a calendar month and will show each
transaction as of the trade date. The Statement of Interest Charged will show
the period during which interest was charged to my account (the interest period)
and will calculate interest from the settlement date for each transaction. The
interest period will begin prior to the beginning of the calendar month covered
by my monthly statement. Accordingly, in order to check the calculation of
interest charged to my account, it may be necessary to refer to both my prior
and current month's statements. The monthly Statement of Interest Charged will
show:
(a) The current rate charged to me and any changes in the interest
rate during the interest period.
(b) The beginning and closing balances.
(c) The daily net balance of all transactions. This figure is
obtained by adding the daily closing settlement balances in
all general accounts. The net balance in any given account
will be determined by adding the open balance, if any, to any
debits created by purchases by me or payments to you and
subtracting any credits created by sales or payments from me.
(d) Any free credit balance in my cash account which reduces the
daily net debit balance.
(e) Any marked-to-the-market adjustments. Short sale credits are
offset by similar debits inasmuch as Dain Rauscher must borrow
the same security in order to deliver it to the buyer.
Accordingly, the credit generated by any short sales does not
reduce the debit balance for purposes of computing interest
until the short position is covered. If the shorted security
appreciates in market price over the selling price, interest
will be charged on the appreciation of the value. If the
shorted security declines in price, interest will be reduced
by the drop in value. This practice of adjusting the credit
balance to correspond to the market value of the securities
sold short is known as "marking-to-the market".
(f) The number of days my account had a balance.
(g) The adjusted daily debit balance on which interest is charged.
(h) The amount of interest, based upon the following formula:
<TABLE>
<CAPTION>
<S><C>
Adjusted Debit Balance Rate Number of Days
---------------------- x ------ x --------------
1 100 360
</TABLE>
(i) Total interest charged for the period.
If there is a decline in the market value of the securities which are collateral
for my indebtedness to you, it may be necessary for you to request additional
margin. Ordinarily, the request for additional margin will be made when the
equity in the account falls below 30% of the market value of all securities in
the account. (The equity is the excess market value of the securities in the
account over the debit balance.) However, in all instances you retain the right
to require additional margin at any time you deem it advisable. These margin
calls can be met by delivery of either additional securities or cash.
continued on page # 3
<PAGE> 19
DAIN RAUSCHER CLIENT MARGIN AGREEMENT PAGE 3 OF 3
7. AUTHORITY TO SELL, LIQUIDATE OR CANCEL. We shall have the right to require
additional collateral or to liquidate any securities or any other property
whenever in our sole discretion we consider it necessary for our protection
including, but not limited to, the following:
- The margin in my account does not meet your requirements.
- A petition in bankruptcy or for the appointment of a receiver has been
filed by or against me.
- In the event of my death.
In the event of any of the above occurrences, you are authorized to:
- Close out any margin accounts.
- Buy any and all securities and commodities which may be short in such
accounts.
- Close any or all outstanding contracts.
- Reduce or satisfy any indebtedness of mine to you by selling, at
public or private sale, any or all of my securities, commodities or
other property which may be in your possession or under your control.
All of the above may be done without advertising the same and without prior
tender or notice to or demand upon me. Notwithstanding the previous sentence, if
any of the securities or other property subject to this agreement are not of a
type customarily sold in a recognized market and advance notice to me of the
liquidation of such securities or other property is required by law, I agree
that notice mailed to me at my most recent address contained in your records ten
days before you take any such action is adequate notice. Sales or purchases may
be made at your discretion on any exchange or other market where such business
is usually transacted or at public auction or private sale, and you may be the
purchaser for your own account. No specific tender, demand or notice, nor any
failure on your part to exercise such right to reduce or satisfy any such
indebtedness, shall invalidate the waiver of tender, demand and notice herein
contained. After deducting all costs and expenses of such sales and purchases,
including commissions and stamp taxes, you shall apply the net proceeds to the
payment of my obligations to you and I shall remain liable for any deficiency
remaining in such accounts. I also agree to pay all reasonable costs of
collection including, but not limited to, attorney's fees which you may incur.
8. DISCLOSURES REGARDING LIQUIDATIONS. I clearly understand that notwithstanding
a general policy of giving me notice of margin deficiency, you are not obligated
to do so. There may be circumstances which will necessitate the liquidation of
securities and/or other property in my account without notice to me to ensure
that minimum maintenance requirements are satisfied.
9. CONFIRMATIONS AND STATEMENTS. I agree to notify you immediately upon receipt
of my confirmation and/or monthly statement of any errors or misunderstandings
with respect to my account. Unless I immediately object, verbally and in
writing, confirmations of transactions and statements for my account shall be
binding to me.
10. COMMUNICATIONS. Notices and communications may be sent to me at my address
given above or at such other address as I may hereafter give you in writing, and
all communications so sent, whether by mail, telegraph, messenger or otherwise,
shall be deemed given to me personally whether actually received or not.
11. REPRESENTATIONS BY CLIENT. By signing above, I hereby represent that I am of
legal age, and that I am not an employee of any exchange, or of any corporation
of which any exchange owns a majority of the capital stock, or of a member of
any exchange, or of a member firm or member corporation registered on any
exchange, or of a bank, trust company, insurance company or of any corporation,
firm or individual engaged in the business of dealing, either as a broker or as
principal, in securities, bills of exchange, acceptances or other forms of
commercial paper, and that I will promptly notify you in writing if I am now or
will become so employed. I also represent that no other person has an interest
in my account or accounts with you.
12. CLIENT'S OBLIGATION. In the interest of better customer service and for our
mutual protection, I agree to immediately report any trades or transactions that
were executed without my authorization; any transactions which are not properly
reflected on my confirmation or monthly statement; any other activities or
omissions by you or your agents or employees that I believe to be improper. Such
communication will be directed to the Branch Manager of the branch office where
my account is maintained.
13. AGREEMENT TO ARBITRATE CONTROVERSIES. I understand that this agreement
contains a pre-dispute arbitration clause and that:
1) Arbitration is final and binding on the parties.
2) The parties are waiving their right to seek remedies in court,
including the right to a jury trial.
3) Pre-arbitration discovery is generally more limited than and different
from court proceedings.
4) The arbitrators' award is not required to include factual findings or
legal reasoning, and any party's right to appeal or to seek
modification of rulings by the arbitrators is strictly limited.
5) The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry
The client agrees that any controversy arising out of or relating directly or
indirectly to this Agreement, or any investment by the hereunder, or with
respect to transactions of any kind executed by or with Dain Rauscher, its
officers, directors, agents, employees, affiliate, or with respect to this
Agreement or any other agreements entered in to with Dain Rauscher relating to
the Accounts with Rauscher or the breach thereof, shall be settled by
arbitration pursuant to the Federal Arbitration Act and in accordance with the
then in effect, of the National Association of Securities Dealers, Inc. ("NASD")
or the New York Stock Exchange, Inc., as the Client may elect. If the Client
does not make the above election by registered mail addressed to Dain Rauscher
at its main office within 10 days after demand by Dain Rauscher that the Client
make such election, then Dain Rauscher shall have the right to elect the
arbitration tribunal of its choice. Notice preliminary to, in conjunction with
or incident to arbitration, may be sent to the Client by mail and personal
service is hereby waived. Judgement upon any award rendered by the arbitrators
may be entered in any court having jurisdiction thereof.
No person shall bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration against any who has initiated in
court a putative class action; or who is a member of a putative class who has
not opted out of the class with to any claims encompassed by the putative class
action until: (i) the request for class certification is denied; (ii) the class
is decertified; or (iii) the client is excluded from the class by the court.
Such forbearance to enforce an agreement to arbitrate shall not constitute
waiver of any rights under this Agreement except to the extent stated herein.
14. AMENDMENTS/SEVERABILITY. No provision of this agreement may be waived or
amended except in writing and signed by an authorized officer of Dain Rauscher.
I agree that you may amend this agreement upon written notice to me. This
agreement shall be continuous and shall survive any temporary or intermittent
closing out or reopening of any account with you and shall transfer to and be
binding upon your successors and assigns and my administrators, executors and
assigns. If any provision or condition of this agreement is held to be invalid
or unenforceable by any court, or regulatory or self-regulatory agency or body,
such invalidity or unenforceability shall attach only to such provision or
condition. The validity of the remaining provisions or conditions shall not be
affected thereby and this agreement shall be carried out as if any such invalid
or unenforceable provision or condition were not contained herein.
15. RECORDING OF TELEPHONE CONVERSATIONS. For our mutual protection and to avoid
misunderstandings, I understand that you and your employees or agents may from
time to time record our telephone conversations by electronic recording
equipment.
16. GOVERNING LAW. Except as otherwise provided in paragraph 13, this agreement
and its enforcement will be governed by the laws of the State of Minnesota.
17. HEADINGS ARE DESCRIPTIVE. The heading of each provision hereof is for
descriptive purposes only and shall not be deemed to modify or qualify any of
the rights or obligations set forth in each such provision.
<PAGE> 20
EXHIBIT 3
MERRILL LYNCH CLIENT RELATIONSHIP AGREEMENT
CLIENT
CLIENT 1 NAME: CLIENT 2 NAME:
--------------------- -----------------------------
SOCIAL SECURITY # SOCIAL SECURITY #
------------------ -------------------------
MAILING ADDRESS MAILING ADDRESS
------------------- ---------------------------
CITY, STATE, ZIP CODE CITY, STATE, ZIP CODE
------------- ---------------------
<TABLE>
<CAPTION>
CMA CLIENT 1 CLIENT 2 JOINT ACCT ACCT #
--- IF OTHER, SPECIFY
<S> <C> <C> <C> <C>
1st Account
-------- -------- ------------------ ----------------------------------------------
2nd Account
-------- -------- ------------------ ----------------------------------------------
3rd Account
-------- -------- ------------------ ----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CUSTODIAL Minor's Name Minor's Soc. Sec. # Acct #
---------
<S> <C> <C> <C>
1st Custodial Acct
---------------------------------------------------------------------------------------------
2nd Custodial Acct
---------------------------------------------------------------------------------------------
3rd Custodial Acct
---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RETIREMENT (If you are opening a retirement account now, please complete below)
----------
Account #
<S> <C> <C> <C> <C>
Retirement Acct Client 1
-------------- ----------------- ---------------- ------------------------------------
Retirement Acct Client 2
-------------- ----------------- ---------------- ------------------------------------
Retirement Acct Client 3
-------------- ----------------- ---------------- ------------------------------------
</TABLE>
*DESIGNATING A BENEFICIARY HAS IMPORTANT TAX CONSEQUENCES. WE URGE YOU TO
CONSULT WITH YOUR ATTORNEY OR OTHER TAX ADVISOR BEFORE COMPLETING THIS SECTION.
I HEREBY DESIGNATE THE PERSON NAMED BELOW AS PRIMARY BENEFICIARY TO RECEIVE
PAYMENT OF THE BALANCE OF THE ACCOUNT UPON MY DEATH.
**IF THERE IS NO PRIMARY BENEFICIARY AT THE TIME OF DEATH, I HEREBY SPECIFY THAT
THE BALANCE IS TO BE DISTRIBUTED TO MY CONTINGENT BENEFICIARIES LISTED BELOW.
<TABLE>
<CAPTION>
CLIENT 1 BENEFICIARIES FOR A RETIREMENT ACCOUNT
---------------------- ------------------------
Birthdate Soc Sec # Relationship Saving %
<S> <C> <C> <C> <C>
1.
------------------ ------------------------ ---------------- ------------------- ------------------
2.
------------------ ------------------------ ---------------- ------------------- ------------------
3.
------------------ ------------------------ ---------------- ------------------- ------------------
1.
------------------ ------------------------ ---------------- ------------------- ------------------
2.
------------------ ------------------------ ---------------- ------------------- ------------------
3.
------------------ ------------------------ ---------------- ------------------- ------------------
</TABLE>
<TABLE>
<CAPTION>
CLIENT 2 BENEFICIARIES FOR A RETIREMENT ACCOUNT
---------------------- ------------------------
CLIENT 1 BENEFICIARIES FOR A RETIREMENT ACCOUNT
---------------------- ------------------------
Birthdate Soc Sec # Relationship Saving %
<S> <C> <C> <C> <C>
1.
------------------ ------------------------ ---------------- ------------------- ------------------
2.
------------------ ------------------------ ---------------- ------------------- ------------------
3.
------------------ ------------------------ ---------------- ------------------- ------------------
1.
------------------ ------------------------ ---------------- ------------------- ------------------
2.
------------------ ------------------------ ---------------- ------------------- ------------------
3.
------------------ ------------------------ ---------------- ------------------- ------------------
</TABLE>
<PAGE> 21
TAX CERTIFICATION AND ACKNOWLEDGMENTS
Under penalties of perjury, I certify:
1. That the taxpayer identification number I have shown on this form is my
correct tax payer identification number; and
2. That I am not subject to backup withholding because (a) I am exempt
from backup withholding, or (b) I have not been notified by the IRS
that I am subject to backup withholding as a result of a failure to
report all interest and dividends, or (c) the IRS has notified me that
I am no longer subject to backup withholding. I understand that I must
cross out item (2) above if I have been notified by the IRS that I am
subject to backup withholding because I have failed to report all
interest and dividends on my tax return.
BY SIGNATURE BELOW, I AGREE TO THE MERRILL LYNCH CLIENT RELATIONSHIP AGREEMENT
ON THE REVERSE SIDE AND THAT IF ANY SECURITIES ACCOUNT IS ESTABLISHED WITH THE
INVESTOR CREDIT LINE (MARGIN) SERVICE, PURSUANT TO PARAGRAPH 6 OF THE CLIENT
RELATIONSHIP AGREEMENT AND THE APPLICABLE PARAGRAPH OF THE SECURITIES ACCOUNT
AGREEMENT, CERTAIN OF MY SECURITIES MAY BE LOANED TO YOU OR LOANED OUT TO
OTHERS: THAT IN ACCORDANCE WITH PARAGRAPH 11 OF THE CLIENT RELATIONSHIP
AGREEMENT, I AM AGREEING IN ADVANCE TO ARBITRATE ANY CONTROVERSIES THAT MAY
ARISE WITH YOU: AND THAT YOU ARE AUTHORIZED TO CHANGE ANY MONEY ACCOUNT AND TO
REDEEM AND/OR WITHDRAW SHARES AND/OR FUNDS IN THE PRIOR MONEY ACCOUNT FOR
REINVESTMENT IN THE NEW MONEY ACCOUNT.
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE MY CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
------------------------------------------------------------------------------
Signature Date Title (for special accounts/trustee)
------------------------------------------------------------------------------
Signature Date Title (for special accounts/co-trustee)
The Investor Creditline Service Client Agreement Note CMA, CBA and WCMA clients
who have already signed this agreement need not return this form.
IN CONSIDERATION OF YOUR ACCEPTING AND CARRYING ONE OR MORE ACCOUNTS FOR THE
UNDERSIGNED, THE UNDERSIGNED HEREBY CONSENTS AND AGREES THAT:
APPLICABLE RULES AND REGULATIONS
1. All transactions shall be subject to the constitution, rules, regulations,
customs and usages of the exchange or market and its clearinghouse, if any, on
which such transactions are executed by you (Merrill Lynch, Pierce, Fenner &
Smith Incorporated) or your agents, including your subsidiaries and affiliates.
DEFINITION
2. For purposes of this agreement, "securities and other property" shall
include, but not be limited to, money, securities, financial instruments and
commodities of every kind and nature and all contracts and options relating
thereto, whether for present or future delivery.
COLLATERAL REQUIREMENTS AND CREDIT CHARGES FOR THE INVESTOR CREDITLINE SERVICE
3. The undersigned will maintain such securities and other property in the
accounts of the undersigned for collateral purposes as you shall require from
time to time; and the monthly debit balance of such accounts shall be charged,
in accordance with your usual custom, with interest at a rate permitted by the
laws of the State of New York, it is understood that the interest charge made to
the undersigned's account at the close of a charge period will, unless paid, be
added to the opening balance for the next charge period and that interest will
be charged upon such opening balance, including all interest so added.
SECURITY INTEREST
4. All securities and other property now or hereafter held, carried or
maintained by you or by any of your affiliates in your possession or control, or
in the possession or control of any such affiliate, for any purpose, in or for
any account of the undersigned now or hereafter opened, including any account in
which the undersigned may have an interest, shall be subject to a lien for the
discharge of all the indebtedness and other obligations of the undersigned to
you, and are to be held by you as security for the payment of any liability or
indebtedness of the undersigned to you in any of said accounts. You shall have
the right to transfer securities and other property so held by you from or to
any other of the accounts of the undersigned whenever in your judgment you
consider such a transfer necessary for your protection. In enforcing your lien,
you shall have the discretion to determine which securities and property are to
be sold and which contracts are to be closed.
REPRESENTATIONS AS TO BENEFICIAL OWNERSHIP AND CONTROL
5. The undersigned represents that, with respect to securities against which
credit is or may be extended by you: (a) the undersigned is not the beneficial
owner of more than three percent (3%) of the number of outstanding shares of any
class of equity securities, and (b) does not control, is not controlled by, and
is not under common control with, the issuer of any such securities. In the
event that any of the foregoing representations are inaccurate or become
inaccurate, the undersigned will promptly so advise you in writing.
CALLS FOR ADDITIONAL COLLATERAL - LIQUIDATION RIGHTS
6. (a) You shall have the right to require additional collateral:
(1) in accordance with your general policies for the Investor CreditLine
service maintenance requirements, such as may be modified, amended
or supplemented from time to time; or
<PAGE> 22
(2) if in your discretion you consider it necessary for your protection
at an earlier or later point in time than called for by said general
policies; or
(3) in the event that a petition in bankruptcy or for appointment of a
receiver is filed by or against the undersigned; or
(4) if an attachment is levied against the accounts of the undersigned;
or
(5) in the event of the death of the undersigned.
(b) If the undersigned does not provide you with additional collateral as
you may require in accordance with (a)(1) or (2), or should an event
described in (a)(3), (4) or (5) occur (whether or not you elect to
require additional collateral), you shall have the right:
(1) to sell any or all securities and other property in the accounts of
the undersigned with you or with any of your affiliates, whether
carried individually or jointly with others;
(2) to buy any or all securities and other property which may be short
in such accounts; and
(3) to cancel any open orders and to close any or all outstanding
contracts.
You may exercise any or all of your rights under (b)(1), (2) or (3) without
further demand for additional collateral, or notice of sale or purchase, or
other notice or advertisement. Any such sales or purchases may be made at your
discretion on any exchange or other market where such business is usually
transacted, or at public auction or private sales; and you may be the purchaser
for your own account. It is understood that your giving of any prior demand or
call or prior notice of the time and place of such sale or purchase shall not be
considered a waiver of your right to sell or buy without any such demand, call
or notice as herein provided.
PAYMENT OF INDEBTEDNESS UPON DEMAND
7. The undersigned shall at all times be liable for the payment upon demand of
any debit balance or other obligations owing in any of the accounts of the
undersigned with you, and the undersigned shall be liable to you for any
deficiency remaining in any such accounts in the event of the liquidation
thereof, in whole or in part, by you or by the undersigned; and the undersigned
shall make payment of such obligations and indebtedness upon demand.
LIABILITY FOR COSTS OF COLLECTION
8. To the extent permitted by the laws of the State of New York, the reasonable
costs and expenses of collection of the debit balance and any unpaid deficiency
in the accounts of the undersigned with you, including, but not limited to,
attorneys' fees incurred and payable or paid by you, shall be payable to you by
the undersigned.
PLEDGE OF SECURITIES AND OTHER PROPERTY
9. All securities and other property now or hereafter held, carried or
maintained by you in your possession or control in any of the accounts of the
undersigned may be pledged and repledged by you from time to time without notice
to the undersigned, either separately or in common with other such securities
and other property, for any amount due in the accounts of the undersigned, or
for any greater amount, and you may do so without retaining in your possession
or under your control for delivery a like amount of similar securities or other
property.
LENDING AGREEMENT
10. In return for the extension or maintenance of any credit by you, the
undersigned acknowledges and agrees that the securities in the undersigned's
account, together with all attendant rights of ownership, may be lent to you or
lent out to others to the extent not prohibited by applicable laws, rules and
regulations. In connection with such securities loans, and in connection with
securities loans made to me to facilitate short sales, you may receive and
retain certain benefits to which the undersigned will not be entitled. The
undersigned understands that, in certain circumstances, such loans could limit
the undersigned's ability to exercise voting rights, in whole or part, with
respect to the securities lent.
PRESUMPTION OF RECEIPT OF COMMUNICATIONS
11. Communications may be sent to the undersigned at the address of the
undersigned or at such other address, as the undersigned may hereafter give you
in writing. All communications so sent, whether by mail, telegraph, messenger or
otherwise, shall be deemed given to the undersigned personally, whether actually
received or not.
ACCOUNTS CARRIED AS CLEARING BROKER
12. If you are carrying the account of the undersigned as clearing broker by
arrangement with another broker through whose courtesy the account of the
undersigned has been introduced to you, then until receipt from the undersigned
of written notice to the contrary, you may accept from such other broker,
without inquiry or investigation by you (a) orders for the purchase or sale in
said account of securities and other property on credit or otherwise and (b) any
other instructions concerning said account. You shall not be responsible or
liable for any acts or omissions of such other broker or its employees.
AGREEMENT TO ARBITRATE CONTROVERSIES
13.
- Arbitration is final and binding on the parties
- The parties are waiving their right to seek remedies in court, including the
right to jury trial.
- Prearbitration discovery is generally more limited than and different from
court proceedings
- The arbitrators' award is not required to include factual findings or legal
reasoning and any party's right to appeal or to seek modification of rulings
by the arbitrators is strictly limited.
- The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry.
The undersigned agrees that all controversies which may arise between us,
including, but not limited to, those involving any transaction or the
construction, performance or breach of this or any other agreement between us,
whether entered into prior, on or subsequent to the date hereof, shall be
determined by arbitration. Any arbitration under this agreement shall be
conducted only before the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. or arbitration facility provided by any other exchange of which
you are a member, the National Association of Securities Dealers, Inc. or the
Municipal Securities Rulemaking Board, and in accordance
<PAGE> 23
with its arbitration rules then in force. The undersigned may elect in the first
instance whether arbitration shall be conducted before the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. or arbitration facility
provided by any other exchange of which you are a member, the National
Association of Securities Dealers, Inc. or the Municipal Securities Rulemaking
Board, and in accordance with its arbitration rules then in force. The
undersigned may elect in the first instance whether arbitration shall be
conducted before the New York Stock Exchange, Inc., the American Stock Exchange,
Inc., other exchanges of which you are a member, the National Association of
Securities Dealers, Inc. or the Municipal Securities Rulemaking Board, but if
the undersigned fails to make such election, by registered letter or telegram
addressed to you at the office where the undersigned maintains the account,
before the expiration of five days after receipt of a written request from you
to make such election, then you may make such election. Judgment upon the award
of arbitrators may be entered in any court, state or federal, having
jurisdiction.
No person shall bring a putative or certified class action to arbitration, nor
seek to enforce any predispute arbitration agreement against nay person who has
initiated in court a putative class action, or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action until: (i) the class certification is denied; (ii)
the class is decertified; or (iii) the customer is excluded from the class by
the court. Such forbearance to enforce an agreement to arbitrate shall not
constitute a waiver of any rights under this agreement except to the extent
stated herein.
JOINT AND SEVERAL LIABILITY
14. If the undersigned shall consist of more than one person, their obligations
under this agreement shall be joint and several.
REPRESENTATION AS TO CAPACITY TO ENTER INTO AGREEMENT
15. The undersigned represents that no one except the undersigned has an
interest in the account or accounts of the undersigned with you. If a natural
person, the undersigned represents that the undersigned is of full age, is not
an employee of any exchange, nor of any corporation of which any exchange owns a
majority of the capital stock, nor of a member of any exchange, nor of a member
firm or member corporation registered on any exchange, nor of a bank, trust
company, insurance company or any corporation, firm or individual engaged in the
business of dealing either as broker or as principal in securities, bills of
exchange, acceptances or other forms of commercial paper. If any of the
foregoing representations is inaccurate or becomes inaccurate, the undersigned
will promptly so advise you in writing.
EXTRAORDINARY EVENTS
16. You shall not be liable for loss caused directly or indirectly by government
restrictions, exchange or market rulings, suspension of trading, war, strikes or
other conditions beyond your control
THE LAWS OF THE STATE OF NEW YORK GOVERN
17. THIS AGREEMENT AND ITS ENFORCEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK; and shall cover individually and collectively all accounts
which the undersigned may open or reopen with you; shall inure to the benefit of
your successors, whether by merger, consolidation or otherwise, and assigns, and
you may transfer the accounts of the undersigned to your successors and assigns;
and this agreement shall be binding upon the heirs, executors, administrators,
successors and assigns of the undersigned.
AMENDMENTS
18. The undersigned agrees that you shall have the right to amend this
Agreement, by modifying or rescinding any of its existing provisions or by
adding any new provision. Any such amendment shall be effective as of a date to
be established by you, which shall not be earlier than thirty days after you
send notification of any such amendment to the undersigned.
SEPARABILITY
19. If any provision or condition of this agreement shall be held to be invalid
or unenforceable by any court, or regulatory or self-regulatory agency or body,
such invalidity or unenforceability shall attach only to such provision or
condition. The validity of the remaining provisions and conditions shall not be
affected thereby and this agreement shall be carried out as if any such invalid
or unenforceable provision or condition were not contained herein.
HEADINGS ARE DESCRIPTIVE
20. The heading of each provision hereof is for descriptive purposes only and
shall not be deemed to modify or qualify any of the rights or obligations set
forth in each such provision.
CMA, CBA, AND WCMA CLIENTS MAY HAVE ALREADY SIGNED AND RETURNED THIS AGREEMENT.
IF SO, PLEASE DISREGARD.
BY SIGNING THIS AGREEMENT, THE UNDERSIGNED ACKNOWLEDGES: (1) THAT, IN ACCORDANCE
WITH PARAGRAPH 13, THE UNDERSIGNED IS AGREEING IN ADVANCE TO ARBITRATE ANY
CONTROVERSIES THAT MAY ARISE WITH YOU; (2) THAT, PURSUANT TO PARAGRAPH 10 ABOVE,
CERTAIN OF THE UNDERSIGNED'S SECURITIES MAY BE LOANED TO YOU OR LOANED OUT TO
OTHERS; AND (3) RECEIPT OF A COPY OF THIS AGREEMENT.
-------------------------------------------------------
Signature Date
Title
--------------------------------------------------
(For special accounts, example: Trustee)
Signature Date
Title
--------------------------------------------------
(Second party if joint account; co-trustee)
Signature Date
Title
--------------------------------------------------
(Second party if joint account; co-trustee)
Account No.:
-------------------------------------------
<PAGE> 24
SHORT SALES AND SHORT SALES AGAINST THE BOX
The market values of securities which are sold "short" by a client are adjusted
daily for credit purposes by a process called "marking to the market." "Short
sales against the box" are treated in exactly the same way as short sales. The
market values of all securities sold short in your account, including securities
sold "short against the box," are treated as a debit for the purpose of
calculating interest charges. In other words, the closing market value of the
securities that were sold "short against the box" is determined each business
day and depending upon whether the market value increased or decreased, the
change in the market value is either added to the net debit balance or
subtracted from the net credit balance in order to calculate interest charges.
The market value of long securities in your account against which a short sale
is made is not included in the computation of interest charges. It the total
market value increases, then the debit adjustment to the net balance will
increase by the same amount for the calculation of interest charges. Conversely,
if the total market value of the securities sold short decreases, then the debit
adjustment to the net balance will also decrease by a like amount for the
calculation if interest charges.
Please note that these upward or downward adjustments of balances are for credit
calculation purposes only. Except as noted in the following section, "Sales Not
Long and Employee Stock Option Exercises," in computing interest charges, we
offset any credit balance in any of your securities accounts with us standing in
the same name.
SALES NOT LONG AND EMPLOYEE STOCK OPTION EXERCISES
You may have the occasion to sell securities that you own but have not yet
placed into your account. The securities must be delivered to Merrill Lynch by
the settlement date of the transaction. Any credit resulting from the proceeds
of such a sale will not be used as an offset in computing interest charges until
the securities you sold are actually received into your account in good
deliverable form.
The exercise of an employee stock option may include either (1) a loan to you by
Merrill Lynch for the amount of the exercise price, together with any additional
tax withholding, up to the maximum amount that may be obtained under federal
law, currently 50% of the value of most equity securities; or (2) an advance of
funds for the amount of the exercise price, together with any additional tax
withholding up to the net sales proceeds to be received if you are exercising an
option and concurrently selling the securities. In computing interest charges,
any credit resulting from the proceeds of such a sale will not be used as an
offset until the securities to be obtained on the exercise of your employee
stock option are actually received into your account in good deliverable form.
OPTIONS
Options can be traded in an account with the Investor CreditLine service and can
be used to hedge a leveraged position. Options cannot be purchased or sold on
credit or borrowed against for purchases. No credit can be extended on options
held. Writers of options, other than certain covered call writers and certain
writers of cash-secured puts, must comply with the applicable initial equity and
maintenance requirements that are set by Merrill Lynch, subject to minimum
requirements imposed by the Federal Reserve Board and by securities and options
exchanges and other self-regulatory organizations. These requirements vary
depending on the underlying interest and the number of option contracts sold.
Merrill Lynch, the Federal Reserve Board, the securities and options exchanges
and other self-regulatory organizations may increase these requirements at any
time.
In addition, certain position limits and additional initial equity and
maintenance requirements may be imposed from time to time by Merrill Lynch
without prior notice. If these limits and additional requirements are not met,
Merrill Lynch will close out sufficient option contracts to bring the account
into compliance with them. Furthermore, options trading must be approved in
advance by Merrill Lynch and additional documents are necessary. Options
transactions involve certain risks and are not appropriate for every investor.
Contact your Financial Consultant for more specific information.
LIENS AND ADDITIONAL COLLATERAL
Any securities or other property in any of your accounts with us are collateral
for any debit balances in any of your accounts. A lien is created by these
debits to secure the amount owed to us. We retain the right to require
additional collateral any time we deem it necessary for our protection. These
maintenance calls can be met by the prompt delivery of either additional
acceptable securities or cash.
In accordance with the terms of our Client Agreement, should the equity in your
account(s) fall below our minimum maintenance requirements for the Investor
CreditLine service, securities in your account(s) may be sold to reduce or
satisfy your debit balance. At present our minimum maintenance requirement for
stocks eligible for the Investor CreditLine service is 30% of their current
market value or $3 a share, whichever is greater. As to our minimum requirements
for other types of securities or transactions, we suggest
<PAGE> 25
that you refer to this booklet and contact your Financial Consultant.(1)
TRUTH IN LENDING DISCLOSURE STATEMENT
Since it is to your advantage to know as much as possible about the terms and
conditions under which we extend credit to you, we have highlighted key
information below. In addition, this booklet explains trading on credit and
describes our general requirements for the Investor CreditLine service.
Interest will be charged, for any credit extended to you for the purpose of
buying, trading or carrying any securities, or you may simply want to borrow
cash on the collateral of your securities for a non-securities purpose. An
interest charge will be made to your account for each period during which credit
was extended to you in your account.
RATES
The "Base Lending Rate" will be used for determining interest rates to be
charged on credit extended to you. Merrill Lynch will set the Base Lending Rate,
which will be adjusted from time to time, with reference to commercially
recognized interest rates. The rates at which interest is charged on funds
borrowed through the Investor CreditLine Service are based on a sliding scale of
percentages added to the current Base Lending Rate.
<TABLE>
<CAPTION>
On Daily Debit Schedule of
Balances of: Percentage
Added
to the BLR:
Effective 7/1/97
<S> <C>
$ 0 - $49,999 2.625%
$ 50,000 - $99,999 1.625%
$ 100,000 - $499,999 0.750%
$ 500,000 - $999,999 0.625%
$ 1,000,000 - $4,999,999 0.500%
$ 5,000,000 - $9,999,999 0.375%
$10,000,000 + 0.250%
</TABLE>
Your statement of account will indicate the specific interest rate applied, the
average daily debit balance of your account, the number of days during which a
debit balance was outstanding in your account and the actual interest charge
made for the charge period. For each charge period in which there is a change in
the base lending rate, your statement of account will separately itemize that
information with respect to each rate of interest that was applied to your
account during the charge period. The foregoing rates may be varied in
individual situations, as warranted, at Merrill Lynch's discretion. Each
affected client will receive prior notification thereof.
ADJUSTMENT OF RATE WITHOUT PRIOR NOTICE
The rate of charge applicable to your account is subject to change without prior
notice in accordance with changes in the Base Lending Rate. If there is a change
in the Base Lending Rate during the charge period, the rate of interest applied
to your account will automatically be increased or decreased accordingly for the
remainder of the charge period or until another change in the Base Lending Rate
occurs. If your rate is to be changed for any other reason, you will receive at
least thirty (30) days written notice prior to such change.
CHARGE PERIOD
The period for which interest charges are made runs from the last Friday of each
month up to and including the last Thursday of the following month. There are
three variations to this: (1) if the last Friday of the month is a holiday, then
the interest charge period will end one business day earlier; (2) in December,
the interest charge period will end on the next-to-last business day of the year
(and the interest charge period for January of the following year will begin on
the last business day of the year); and (3) for accounts that receive calendar
month-end statements, the interest charge period runs from the last business day
of the calendar month up to and including the next-to-last business day of the
following calendar month.
The interest charge period parallels the monthly statement period, except that
interest for the final day of the statement period will be carried over and
reflected on the next month's statement. The final day of the statement period
is the last business Friday of the month, except (1) if that Friday is a
holiday, the final day of the statement period is the prior business day; (2) in
December, when the final day of the statement period is the last business day of
the prior year; and (3) for accounts that receive calendar year-end statements,
the final day of the statement period is the last business day of the calendar
month.
The average debit balance entry that will appear on your statement is calculated
based upon the number of days on which there was a debit balance in your account
and not on the total number of days in either the charge period or the statement
period.
COMPUTATION OF CHARGES
At the close of each charge period during which credit was extended to you
through your Investor CreditLine service, an interest charge is computed by
multiplying the average daily debit balance by the applicable schedule rate and
by the number of days during which a debit balance was outstanding and then
dividing by 360. If there has been a change in the Base Lending Rate, separate
computations will be made with respect to each rate of charge for the
appropriate number of days at each rate during the charge period. The interest
charge for the charge period is due and payable at the close of the charge
period. The exact amount due may be obtained from the Merrill Lynch office
servicing your account. If you do not pay the interest charge at the close of
the charge period, it will pay the interest charge at the close of the charge
period, it will be added to the opening debit balance for the next charge
period. Our Investor CreditLine agreements with our clients using the investor
CreditLine service are governed by the laws of the State of New York, where
Merrill Lynch maintains its principal place of business.
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(1) (C) 1997 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Printed in
the U.S.A. Member, Securities Investor Protection Corporation (SIPC). Investor
CreditLine is a service mark of Merrill Lynch & Co., Inc.
