As filed with the Securities and Exchange Commission on November 1, 1996
Registration No. 333-13373
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MEDIMMUNE, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1555759
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
(301) 417-0770
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive office)
Wayne T. Hockmeyer, Ph.D.
Chairman and Chief Executive Officer
MedImmune, Inc.
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
(301) 417-0770
(Address, including zip code, and telephone number,
including area code, of agent for service)
_______________
Please send copies of all communications to:
Frederick W. Kanner, Esq.
Dewey Ballantine
1301 Avenue of the Americas
New York, New York 10019
(212) 259-8000
_______________
Approximate date of commencement of proposed sale to public: From time to
time after the effective date of the Registration Statement.
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. ____
_______________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the Registration Statement
becomes effective. This Prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation, or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION, DATED NOVEMBER 1, 1996
PROSPECTUS
MEDIMMUNE, INC.
$60,000,000 Principal Amount of 7% Convertible
Subordinated Notes due 2003
(Interest payable January 1 and July 1)
3,048,780 Shares of Common Stock
_______________
This Prospectus relates to (i) $60,000,000 aggregate principal amount
of 7% Convertible Subordinated Notes due 2003 (the "Notes") of MedImmune,
Inc., a Delaware corporation ("MedImmune" or the "Company"), and (ii)
3,048,780 shares of common stock, par value $.01 per share (the "Common
Stock"), of the Company which are initially issuable upon conversion of the
Notes plus such additional indeterminate number of shares of Common Stock
as may become issuable upon conversion of the Notes as a result of
adjustments to the conversion price (the "Shares"). The Notes and the
Shares that are being registered hereby are to be offered for the account
of the holders thereof (the "Selling Securityholders'). The Notes were
initially acquired from the Company by Morgan Stanley & Co. Incorporated
(the "Initial Purchaser") in July 1996 in connection with a private
offering. See "Description of the Notes."
The Notes are convertible into Common Stock of the Company at any time
after October 6, 1996 and prior to maturity, unless previously redeemed, at
a conversion price of $19.68 per share, subject to adjustments in certain
events. On October 31, 1996, the closing price of the Common Stock on the
Nasdaq National Market was $15.50 per share. The Common Stock is traded
under the symbol "MEDI."
The Notes do not provide for a sinking fund. The Notes are redeemable
at the option of the Company, in whole or in part, at the redemption prices
set forth in this Prospectus, together with accrued interest, except that
no redemption may be made prior to July 7, 1999. Upon a Fundamental Change
(as defined herein), each holder of Notes shall have the right, at the
holder's option, to require the Company to redeem such holder's Notes at
declining redemption prices, subject to adjustments in certain events as
described herein, together with accrued interest. See "Description of
Notes B Optional Redemption by the Company" and "B Redemption at Option of
the Holder."
The Notes are unsecured obligations of the Company and are
subordinated to all present and future Senior Indebtedness (as defined
herein) of the Company and will be effectively subordinated to all
indebtedness and liabilities of subsidiaries of the Company. The Indenture
(as defined herein) does not restrict the incurrence of any other
indebtedness or liabilities by the Company or its subsidiaries. See
"Description of Notes B Subordination of Notes."
The Notes have been designated for trading in the Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") Market. For a
description of certain income tax consequences to holders of the Notes, see
"Certain Federal Income Tax Considerations." The Initial Purchaser has
advised the Company that it intends to make a market in the Notes. The
Initial Purchaser, however, is not obligated to do so and any such market
making may be discontinued at any time without notice, in the sole
discretion of the Initial Purchaser. No assurance can be given that any
market for the Notes will develop or be maintained.
The Notes and the Shares are being registered to permit public
secondary trading of the Notes and, upon conversion, the underlying Common
Stock, by the holders thereof from time to time after the date of this
Prospectus. The Company has agreed, among other things, to bear all
expenses (other than underwriting discounts and commissions and fees and
expenses of counsel and other advisors to the holders of the Notes or the
underlying Common Stock) in connection with the registration and sale of
the Notes and the underlying Common Stock covered by this Prospectus.
The Company will not receive any of the proceeds from sales of Notes
or the Shares by the Selling Securityholders. The Notes and the Shares may
be offered in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. See "Plan of
Distribution." The Selling Securityholders may be deemed to be
"underwriters" as defined in the Securities Act of 1933, as amended (the
"Securities Act"). If any broker-dealers are used by the Selling
Securityholders, any commissions paid to broker-dealers and, if broker-
dealers purchase any Notes or Shares as principals, any profits received by
such broker-dealers on the resale of the Notes or Shares may be deemed to
be underwriting discounts or commissions under the Securities Act. In
addition, any profits realized by the Selling Securityholders may be deemed
to be underwriting commissions.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DESCRIPTION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is ___________, 1996
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act
with respect to the Notes and the Shares offered hereby. This Prospectus
does not contain all the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further information
with respect to the Company and the Notes and the Shares offered hereby,
reference is made to the Registration Statement and to the exhibits and
schedules filed therewith. Statements contained in this Prospectus as to
the contents of any contract or other document are not necessarily complete
and in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference. The Company
is subject to the informational requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Commission.
Copies of such reports, proxy statements, the Registration Statement and
exhibits thereto and other information may be inspected without charge at
the offices of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the regional offices of the Commission
located at 7 World Trade Center, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and
copies of such documents may be obtained from the Public Reference Section
of the Commission at its Washington, D.C. or regional offices upon the
payment of the fees prescribed by the Commission. The Commission
maintains a World Wide Web site on the Internet at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31 and June 30, 1996 and the Company's Reports on Form
8-K dated January 5, 19 and 26, February 5, 6, 14, 15 and 29, April 18 and
25, June 6 and 20, July 2 and 25, August 12, and October 24, 1996, filed
with the Commission, are hereby incorporated by reference in this
Prospectus except as superseded or modified herein. All documents filed
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the termination
of the offering being made hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of
filing of such documents. Any statement contained in any document
incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as modified or superseded, to
constitute a part of this Prospectus. The Company will provide without
charge to each person, including any beneficial owner, to whom this
Prospectus is delivered, upon written or oral request of such person, a
copy of any and all of the documents that have been or may be incorporated
by reference herein (other than exhibits to such documents which are not
specifically incorporated by reference into such documents). Such requests
should be directed to Investor Relations, MedImmune, Inc., 35 West Watkins
Mill Road, Gaithersburg, Maryland 20878, (301) 417-0770.
____________
CytoGam is a registered trademark and RespiGam is a trademark of the Company.
Page 2
THE COMPANY
MedImmune, Inc. ("MedImmune" or the "Company") is a biotechnology
company focused on developing and marketing products for the prevention and
treatment of infectious disease and for use in transplantation medicine.
The Company was incorporated in Delaware in June 1987 under the name
Molecular Vaccines, Inc., commenced operations in April 1988 and in
October 1990 changed its name to MedImmune, Inc. The mailing address of the
Company's principal executive offices is 35 West Watkins Mill Road,
Gaithersburg, Maryland 20878, and its telephone number at that address is
(301) 417-0770.
RISK FACTORS
This Prospectus (including the documents incorporated by reference
herein) contains, in addition to historical information, forward-looking
statements that involve risks and uncertainties. The Company's actual
results could differ materially. Factors that could cause or contribute to
such differences include, but are not limited to, those discussed below, as
well as those discussed elsewhere in this Prospectus (including the
documents incorporated by reference herein).
EARLY STAGE OF PRODUCT DEVELOPMENT
The Company's first product, CytoGam, has been marketed since 1991,
and on January 18, 1996, the Company's second product, RespiGam, was
licensed for marketing by the FDA. Sales of CytoGam totalled $16.2 million
in the year ended December 31, 1995 and $10.5 million for the six months
ended June 30, 1996. Sales of RespiGam commenced in late January 1996 and
totaled $3.0 million for the six months ended June 30, 1996. Gross profits
from these two products currently are not sufficient to fund the Company's
research and development programs, expenditures for which totalled $26.4
million in the year ended December 31, 1995 and $12.2 million in the six
months ended June 30, 1996. The Company's other product candidates are in
various stages of research, development or clinical testing, and none can
be sold commercially without first obtaining a license for marketing from
the FDA and, outside the United States, other regulatory authorities. The
process of obtaining such licenses usually takes a number of years to
complete and requires significant expenditures of funds to conduct clinical
trials of the safety and efficacy of a potential product. Many potential
products fail to demonstrate sufficient safety or efficacy to warrant
licensing by the FDA or other regulatory authorities, and there can be no
assurance that any of the Company's potential products will obtain the
required approval or, if approved, will obtain sufficient market acceptance
to become commercially successful.
RISKS ASSOCIATED WITH RESPIGAM
RespiGam was licensed for marketing by the FDA on January 18, 1996.
Accordingly, the Company has limited experience in selling RespiGam and in
manufacturing RespiGam in commercial quantities. The Company expects to
incur substantial costs in connection with the full marketing launch of
RespiGam in Fall 1996. The Company anticipates that, at least initially,
total costs may exceed product revenues. In addition, substantial working
capital may be required to fund inventories and receivables associated with
the commercialization of RespiGam. There can be no assurance that RespiGam
will achieve sufficient market acceptance to become profitable.
In connection with the FDA's licensing of RespiGam for marketing, the
Company agreed to conduct a post-marketing (Phase 4) clinical trial of
RespiGam. It is possible that adverse developments, if any, in that trial
could have a material adverse effect on the Company.
Page 3
RELIANCE ON THIRD PARTY MANUFACTURING; DEPENDENCE ON SUPPLIERS
The Company currently does not have facilities or staff capable of
manufacturing products in commercial quantities. The Company has relied on
contract manufacturing by third parties for the production of CytoGam and
RespiGam according to the Company's specifications. The Company's
manufacturing arrangements with the Massachusetts Public Health Biologics
Laboratories ("MPHBL") are renegotiated annually, and there can be no
assurance that any modifications to such arrangements will be on terms
favorable to the Company. The product rights to CytoGam and RespiGam are
licensed to the Company by Massachusetts Health Research Institute
("MHRI"). If MPHBL, which holds the sole product and establishment licenses
from the FDA for the manufacture of CytoGam and RespiGam, or suppliers of
raw material for the manufacture of CytoGam or RespiGam, are unable to
satisfy the Company's requirements for CytoGam or RespiGam on a timely
basis, or if MPHBL is prevented for any reason from manufacturing CytoGam
or RespiGam, the Company will likely be unable to secure alternative
suppliers or manufacturers without undue and materially adverse operational
disruption. The Company has in the past experienced product shortages for
CytoGam, which have limited product sales without producing a savings in
sales and marketing costs.
The Company relies on a limited number of suppliers to provide
substantially all of the plasma used as a raw material for production of
CytoGam and RespiGam. Any significant interruption in the delivery of these
products to the Company could adversely affect the Company's business.
Plasma suppliers obtain their supply, in turn, from human donors who are
limited as to the amount and frequency of donations. Additionally, only a
small proportion of donated plasma is suitable for the production of
CytoGam or RespiGam. Should the supply of suitable plasma donors decline,
the Company's ability to produce and sell such products could be adversely
affected.
The Company expects to require additional manufacturing capacity and
currently intends to obtain this capacity by constructing its own
manufacturing facility. The Company is in negotiations with MPHBL regarding
transfer of production of CytoGam and RespiGam to such a facility. There
can be no assurances that such negotiations will lead to an agreement. In
addition, construction of such a facility can take substantial time to
complete, and the Company could experience significant product shortages
during that period. The financing, construction and operation of
manufacturing facilities involve substantial risks that can result in
unexpected delays and costs. In addition, manufacturing facilities and
processes must undergo a comprehensive review before the FDA will issue the
establishment and product licenses necessary to produce and market products
from such a facility. The Company has no prior experience in operating
manufacturing facilities or managing such risks. As a result, there can be
no assurance that the Company will be able to manufacture CytoGam or
RespiGam in commercial volume and on a cost-effective basis.
HISTORY OF OPERATING LOSSES
The Company has incurred increasing operating losses over the last
four years and had a cumulative deficit of $78.4 million at June 30, 1996.
The Company expects its operating losses to continue and, even if one or
more of its products under development is licensed for marketing by the FDA
and achieves substantial market acceptance, there can be no assurance that
the Company will achieve profitability. Furthermore, there can be no
assurance that such regulatory approval will be obtained.
RISK OF MANAGING GROWTH
The Company has substantially increased the size of its sales and
marketing staff in connection with the approval of RespiGam, intends to
engage in commercial manufacturing and anticipates substantial growth in
other areas of its business. This potential rapid growth and expansion of
scope of operations presents a series of new risks to the Company's
management which could result in unanticipated costs, time delays or issues
of quality control, and could materially and adversely affect the Company.
Page 4
DEPENDENCE ON STRATEGIC ALLIANCES
The Company has entered into strategic alliances relating to the
marketing of RespiGam. Under these arrangements, the Company is dependent
upon its corporate partners to accomplish many of the Company's sales and
marketing goals. If those corporate partners fail to devote sufficient
effort and attention to achieving those goals, the Company's revenues would
be adversely affected.
PATENTS AND PROPRIETARY TECHNOLOGY
Products currently being developed or considered for development by
the Company are in the area of biotechnology, an area in which there are
extensive patent filings. The patent position of biotechnology firms
generally is highly uncertain and involves complex legal and factual
questions. To date, no consistent policy has emerged regarding the breadth
of claims allowed in biotechnology patents. Accordingly, there can be no
assurance that patent applications owned or licensed by the Company will
result in patents being issued or that, if issued, such patents will afford
protection against competitors with similar technology. In addition, there
can be no assurance that products covered by such patents, or any other
products developed by the Company or subject to licenses acquired by the
Company, will not be covered by third party patents, in which case
continued development and marketing of such products would require a
license under such patents. There can be no assurance that such required
licenses will be available to the Company or its licensees on acceptable
terms.
The Company is aware of several patents and patent applications which
may affect the Company's ability to make, use and sell the Company's
products or product candidates, including the following: (i) three United
States patents, directed to intravenous immune globulin containing high
concentrations of either CMV or RSV antibodies, which have been issued to a
major pharmaceutical company having substantially greater financial
resources than the Company and (ii) United States patents, directed to
mouse monoclonal antibodies against T-cells and the use thereof, which have
been issued to another major pharmaceutical company having substantially
greater financial resources than the Company. Although the Company believes
that neither its CytoGam and RespiGam technologies, which use intravenous
immune globulins containing high concentrations of CMV or RSV antibodies,
respectively, nor its MEDI-500 and BTI-322 technologies, which use
monoclonal antibodies against T-cells, infringe any valid claims of such
patents, the Company can provide no assurances that if a legal action based
on such patents were brought against the Company, such an action would be
resolved in the Company's favor. If such a dispute were resolved against
the Company, in addition to potential damages, the manufacturing and sale
of such products could be enjoined unless a license were obtained. There
can be no assurances that, if a license were required, such a license would
be made available on terms acceptable to the Company.
The Company believes that there are other patents issued to third
parties and/or patent applications filed by third parties which could have
applicability to each of the Company's products and product candidates and
could adversely affect the Company's freedom to make, use or sell such
products or use certain processes for their manufacture. The Company is
unable to predict whether it will ultimately be necessary to seek a license
from such third parties or, if such a license were necessary, whether such
a license would be available on terms acceptable to the Company. The
necessity for such a license could have a material adverse effect on the
Company's business.
There has been substantial litigation regarding patent and other
intellectual property rights in the biotechnology industry. Litigation may
be necessary to enforce certain intellectual property rights of the
Company. Any such litigation could result in substantial cost to and
diversion of effort by the Company.
Page 5
TECHNOLOGY AND COMPETITION
Biotechnology and pharmaceuticals are evolving fields in which
developments are expected to continue at a rapid pace. The Company's
success depends upon developing and maintaining a competitive position in
the development of products and technologies in its areas of focus.
Competition from other biotechnology and pharmaceutical companies is
intense. Many of these companies have substantially greater research and
development capabilities, experience and marketing, financial and
managerial resources, and represent significant competition for the
Company. Acquisitions of competing biotechnology companies by large
pharmaceutical companies could enhance such competitors' financial,
marketing and other resources. There can be no assurance that developments
by others will not render the Company's products or technologies
noncompetitive or obsolete.
GOVERNMENT REGULATION
Substantially all of the Company's products require regulatory
approval by governmental agencies. In particular, human therapeutic and
vaccine products are subject to rigorous preclinical and clinical testing
for safety and efficacy and approval processes by the FDA, as well as
regulatory authorities in foreign countries. The process of obtaining such
approvals is costly and time-consuming. There can be no assurance that
required approvals will be obtained. Any failure to obtain, or delay in
obtaining, such approvals could adversely affect the ability of the Company
or its collaborators to market products successfully and to generate
revenues from sales or royalties.
Any approved products are subject to continuing regulation, and
non-compliance with applicable requirements can result in fines, recall or
seizure of products, total or partial suspension of production, refusal of
the government to approve product license applications, restrictions on the
Company's ability to enter into supply contracts and criminal prosecution.
The FDA also has the authority to revoke product licenses and establishment
licenses previously granted. Further, the regulation of recombinant DNA
technologies and the regulation of manufacturing facilities by state, local
and other authorities is subject to change.
UNCERTAINTIES REGARDING HEALTH CARE REIMBURSEMENT AND REFORM
The Company's ability to commercialize products successfully may
depend in part on the extent to which reimbursement for the costs of such
products and related treatments will be available from government health
administration authorities, private health insurers and other
organizations. Significant uncertainty exists as to the reimbursement
status of newly approved health care products, and there can be no
assurance that adequate third-party coverage will be available for the
Company to maintain price levels sufficient for realization of an
appropriate return on its investment in developing new products. Government
and other third-party payors are increasingly attempting to contain health
care costs by limiting both coverage and the level of reimbursement for new
products approved for marketing by the FDA, and by refusing, in some cases,
to provide any coverage for uses of approved products for indications for
which the FDA has not granted marketing approval. Recent initiatives to
reduce the Federal deficit and to reform health care delivery are
increasing these cost containment efforts. As managed care organizations
continue to expand as a means of containing health care costs, the Company
believes there may be attempts by such organizations to restrict use or
delay authorization to use new products, such as those being developed by
the Company, pending completion of cost/benefit analyses of such products
by those managed care organizations. If adequate coverage and reimbursement
levels are not provided by government and other third-party payors for uses
of the Company's products, the market acceptance of these products would be
adversely affected.
Page 6
PRODUCT LIABILITY AND INSURANCE
The testing, marketing and sale of health care products entails an
inherent risk that product liability claims will be asserted against the
Company. A product liability claim or recall could have a material adverse
effect on the business or financial condition of the Company. Blood
products, such as the Company's, involve heightened risks, including the
risk of transmission of blood-borne diseases. Consequently, there are
substantial costs associated with the handling of such products and with
the disposal of the related hazardous waste material. Although the Company
has obtained product liability insurance in an amount it believes is
adequate, there can be no assurance that the Company will be able to
maintain such insurance or that liability will not exceed its insurance
coverage.
DEPENDENCE ON KEY PERSONNEL
The Company's success depends upon the continued contributions of its
executive officers and scientific and technical personnel. Many key
responsibilities within the Company have been assigned to a relatively
small number of individuals. The competition for qualified personnel is
intense, and the loss of services of certain key personnel could adversely
affect the business of the Company. The Company does not maintain or intend
to purchase "key man" life insurance on any of its personnel.
POSSIBLE PRICE VOLATILITY OF NOTES AND COMMON STOCK
The market prices for securities of biotechnology companies have been
highly volatile. The announcement of technological innovations or new
commercial products by the Company or its competitors, the impact of health
care reform, developments relating to regulatory matters or to patents or
proprietary rights, publicity regarding actual or potential medical results
with respect to products under development by the Company or others as well
as period-to-period variances in financial results could cause the market
price of the Notes and the Common Stock into which the Notes are
convertible to fluctuate substantially. In addition, the stock market has
experienced extreme price and volume fluctuations that have particularly
affected the market price for many high technology companies and that have
often been unrelated to the operating performance of these companies. These
broad market fluctuations may adversely affect the market price of the
Notes and the Common Stock into which the Notes are convertible.
SUBORDINATION
The Notes are unsecured and subordinated in right of payment in full
to all existing and future Senior Indebtedness of the Company. As a result
of such subordination, in the event of bankruptcy, liquidation or
reorganization of the Company or upon acceleration of the Notes due to an
event of default, the assets of the Company will be available to pay
obligations on the Notes only after all Senior Indebtedness has been paid
in full, and there may not be sufficient assets remaining to pay amounts
due on any or all of the Notes then outstanding. The Notes will be
structurally subordinated to the liabilities, including trade payables, of
any subsidiary of the Company. The Indenture does not prohibit or limit the
incurrence of Senior Indebtedness or the incurrence of other indebtedness
and other liabilities by the Company or any subsidiary of the Company, and
the incurrence of additional indebtedness and other liabilities by the
Company or any subsidiary of the Company could adversely affect the
Company's ability to pay its obligations on the Notes. As of June 30,
1996, the Company had approximately $2.0 million of Senior Indebtedness
outstanding. The Company anticipates that from time to time it will incur
additional indebtedness, including Senior Indebtedness, and that it will,
and subsidiaries of the Company may, from time to time incur other
additional indebtedness and liabilities.
Page 7
LIMITATIONS ON REPURCHASE OF NOTES UPON FUNDAMENTAL CHANGE
In the event of a Fundamental Change, each holder of the Notes will
have the right, at the holder's option, to require the Company to
repurchase all or a portion of such holder's Notes. The Company's ability
to repurchase the Notes upon a Fundamental Change may be limited by the
terms of the Company's Senior Indebtedness and the subordination provisions
of the Indenture. Further, the ability of the Company to repurchase the
Notes upon a Fundamental Change will be dependent on the availability of
sufficient funds and compliance with applicable securities laws.
Accordingly, there can be no assurance that the Company will be able to
repurchase the Notes upon a Fundamental Change. Failure of the Company to
repurchase Notes at the option of the holder upon a Fundamental Change
would result in an Event of Default (as defined in the Indenture) under the
Notes, which could in turn result in acceleration of the payment of other
indebtedness of the Company at the time outstanding pursuant to
cross-default provisions.
The term "Fundamental Change" is limited to certain specified
transactions and may not include other events that might adversely affect
the financial condition of the Company, nor would the requirement that the
Company offer to repurchase the Notes upon a Fundamental Change necessarily
afford holders of the Notes protection in the event of a highly leveraged
transaction, reorganization, merger or similar transaction involving the
Company.
ABSENCE OF PUBLIC MARKET FOR THE NOTES
Prior to this offering there has been no public trading market for the
Notes, although the Notes have been eligible for trading through the PORTAL
Market. Although the Initial Purchaser has advised the Company that it
currently intends to make a market in the Notes, it is not obligated to do
so and may discontinue such market making at any time without notice. In
addition, such market making activity will be subject to the limits imposed
by the Securities Act and the Exchange Act. Accordingly, there can be no
assurance that any public market for the Notes will develop or, if one does
develop, that it will be maintained. If an active public market for the
Notes fails to develop or be sustained, the trading price of such Notes
could be materially adversely affected. The Company does not intend to
apply for listing of the Notes on any securities exchange.
Page 8
USE OF PROCEEDS
The Company will not receive any of the proceeds from sales of the
Notes or the Shares by the Selling Securityholders.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
of the Company for the periods indicated:
Six Months Ended
Year Ended December 31, June 30,
1991 1992 1993 1994 1995 1995 1996
Ratio of earnings to 11.20 * * * * * *
fixed charges
______________________
* The ratio of earnings to fixed charges is computed using pre-tax
income. On this basis, earnings before fixed charges for the years
ended December 31, 1992, 1993, 1994 and 1995 and for the six months ended
June 30, 1995 and 1996 were not adequate to cover fixed charges by
$8.0 million, $12.6 million, $18.2 million, $22.0 million, $10.1
million and $8.4 million,respectively.
Page 9
The ratio of earnings to fixed charges is computed by dividing fixed
charges into earnings before income taxes plus fixed charges. Fixed
charges consist of interest expense and that portion of net rental expense
(one-third) deemed representative of the interest factor.
DESCRIPTION OF NOTES
The Notes were issued under an indenture, dated as of July 8, 1996
(the "Indenture"), between the Company and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee"). Copies of the Indenture and the
Registration Rights Agreement (as defined below) are available from the
Trustee upon request by a registered holder of the Notes. The following
summaries of certain provisions of the Notes, the Indenture and the
Registration Rights Agreement do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all the provisions
of the Notes, the Indenture and the Registration Rights Agreement,
including the definitions therein of certain terms which are not otherwise
defined in this Prospectus. Wherever particular provisions or defined
terms of the Indenture (or of the form of Note which is a part thereof) or
the Registration Rights Agreement are referred to, such provisions or
defined terms are incorporated herein by reference.
GENERAL
The Notes represent unsecured general obligations of the Company
subordinate in right of payment to certain other obligations of the Company
as described under "Subordination of Notes" and convertible into Common
Stock as described under "Conversion of Notes." The Notes are limited to
$60,000,000 aggregate principal amount, are issuable only in denominations
of $1,000 or multiples thereof and will mature on July 1, 2003, unless
earlier redeemed at the option of the Company or at the option of the
holder upon a Fundamental Change (as defined below).
The Indenture does not contain any financial covenants or restrictions
on the payment of dividends, the incurrence of Senior Indebtedness (as
defined below under "Subordination of Notes") or the issuance or repurchase
of securities of the Company. The Indenture contains no covenants or other
provisions to afford protection to holders of the Notes in the event of a
highly leveraged transaction or a change in control of the Company except
to the extent described under "Redemption at Option of the Holder."
The Notes bear interest at the rate of 7% per annum from July 8, 1996,
payable semi-annually on January 1 and July 1, commencing on January 1,
1997, to holders of record at the close of business on the preceding
December 15 and June 15, respectively, except (i) that the interest payable
upon redemption (unless the date of redemption is an interest payment date)
will be payable to the person to whom principal is payable and (ii) as set
forth in the next succeeding sentence. In the case of any Note (or portion
thereof) which is converted into Common Stock of the Company during the
period from (but excluding) a record date to (but excluding) the next
succeeding interest payment date either (i) if such Note (or portion
thereof) has been called for redemption on a redemption date which occurs
during such period, or is to be redeemed in connection with a Fundamental
Change on a Repurchase Date (as defined below) which occurs during such
period, the Company shall not be required to pay interest on such interest
payment date in respect of any such Note (or portion thereof) or (ii) if
otherwise, any Note (or portion thereof) submitted for conversion during
such period shall be accompanied by funds equal to the interest payable on
such succeeding interest payment date on the principal amount so converted
(see "Conversion of Notes" below). Interest may, at the Company's option,
be paid either (i) by check mailed to the address of the person entitled
thereto as it appears in the Note register or (ii) by transfer to an
account maintained by such person located in the United States; provided,
however, that payments to The Depository Trust Company, New York, New York
("DTC") will be made by wire transfer of immediately available funds to the
account of DTC or its nominee. Interest will be computed on the basis of a
360-day year composed of twelve 30-day months.
Page 10
FORM, DENOMINATION AND REGISTRATION
Global Note, Book-Entry Form. Notes are issuable in fully registered
form, without coupons, in denominations of $1,000 principal amount and
multiples thereof. Notes sold by the Selling Securityholders pursuant to
the Registration Statement of which this Prospectus forms a part will be
represented by a global Note (the "Registered Global Note"), except as set
forth below under "Certificated Notes." The Registered Global Note will be
deposited with, or on behalf of, DTC and registered in the name of Cede &
Co. ("Cede") as DTC's nominee. Beneficial interests in the Registered
Global Note will be exchangeable for definitive certificated Notes only in
accordance with the terms of the Indenture.
Purchasers of the Notes offered hereby may hold their interests in the
Registered Global Note directly through DTC or indirectly through
organizations which are participants in DTC (the "Participants"). Transfers
between Participants will be effected in the ordinary way in accordance
with DTC rules and will be settled in clearing house funds.
Persons who are not Participants may beneficially own interests in the
Registered Global Note held by DTC only through Participants or certain
banks, brokers, dealers, trust companies and other parties that clear
through or maintain a custodial relationship with a Participant, either
directly or indirectly ("Indirect Participants"). So long as Cede, as the
nominee of DTC, is the registered owner of the Registered Global Note, Cede
for all purposes will be considered the sole holder of the Registered
Global Note. Except as provided below, owners of beneficial interests in
the Registered Global Note will not be entitled to have certificates
registered in their names, will not receive or be entitled to receive
physical delivery of certificates in definitive form, and will not be
considered the holders thereof.
Payment of interest on and the redemption price of the Registered
Global Note will be made to Cede, the nominee for DTC, as the registered
owner of the Registered Global Note by wire transfer of immediately
available funds on each interest payment date or the redemption date, as
the case may be. Neither the Company, the Trustee nor any paying agent will
have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in the
Registered Global Note or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
The Company has been informed by DTC that, with respect to any payment
of interest on, or the redemption price of, the Registered Global Note,
DTC's practice is to credit Participants' accounts on the payment date
therefor with payments in amounts proportionate to their respective
beneficial interests in the principal amount represented by the Registered
Global Note as shown on the records of DTC, unless DTC has reason to
believe that it will not receive payment on such payment date. Payments by
Participants to owners of beneficial interests in the principal amount
represented by the Registered Global Note held through such Participants
will be the responsibility of such Participants, as is now the case with
securities held for the accounts of customers registered in "street name."
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having a beneficial interest in the principal amount represented by the
Registered Global Note to pledge such interest to persons or entities that
do not participate in the DTC system, or otherwise take actions in respect
of such interest, may be affected by the lack of a physical certificate
evidencing such interest.
Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under the Indenture) will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations. DTC has advised the Company that it will take any action
permitted to be taken by a holder of Notes (including, without limitation,
the presentation of Notes for exchange as described below), only at the
direction of one or more Participants to whose account with DTC interests
in the Registered Global Note are credited, and only in respect of the
principal amount of the Notes represented by the Registered Global Note as
to which such Participant or Participants has or have given such direction.
Page 11
DTC has advised the Company as follows: DTC 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
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance and
settlement of securities transactions between Participants through
electronic book-entry changes to the accounts of its Participants, thereby
eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations and may include certain other organizations. Certain of such
Participants (or their representatives), together with other entities, own
DTC. Indirect access to the DTC system is 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.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Registered Global Note among
Participants, it is under no obligation to perform or continue to perform
such procedures, and such procedures may be discontinued at any time. If
DTC is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by the Company within 90 days, the
Company will cause Notes to be issued in definitive form in exchange for
the Registered Global Note.
Certificated Notes. Holders of Notes may request that certificated Notes
be issued in lieu of, or in exchange for, Notes represented by the
Registered Global Note. Furthermore, certificated Notes may be issued in
exchange for Notes represented by the Registered Global Note if no
successor depositary is appointed by the Company as set forth above under
"Global Note, Book-Entry Form."
CONVERSION OF NOTES
The holders of Notes will be entitled at any time after October 6,
1996 through the close of business on the final maturity date of the Notes,
subject to prior redemption, to convert any Notes or portions thereof (in
denominations of $1,000 or multiples thereof) into Common Stock of the
Company, at the conversion price set forth on the cover page of this
Prospectus, subject to adjustment as described below. Except as described
below, no payment or other adjustment will be made on conversion of any
Notes for interest accrued thereon or for dividends on any Common Stock
issued. If any Notes not called for redemption are converted after a record
date for the payment of interest and prior to the next succeeding interest
payment date, such Notes must be accompanied by funds equal to the interest
payable on such succeeding interest payment date on the principal amount so
converted. The Company is not required to issue fractional shares of Common
Stock upon conversion of Notes and, in lieu thereof, will pay a cash
adjustment based upon the market price of Common Stock on the last business
day prior to the date of conversion. In the case of Notes called for
redemption, conversion rights will expire at the close of business on the
business day preceding the day fixed for redemption unless the Company
defaults in the payment of the redemption price. A Note in respect of which
a holder is exercising its option to require redemption upon a Fundamental
Change may be converted only if such holder withdraws its election to
exercise its option in accordance with the terms of the Indenture.
The initial conversion price of $19.68 per share of Common Stock is
subject to adjustment under formulae as set forth in the Indenture in
certain events, including:
(i) the issuance of Common Stock of the Company as a dividend or
distribution on the Common Stock;
(ii) certain subdivisions and combinations of the Common Stock;
(iii) the issuance to all holders of Common Stock of certain rights or
warrants to purchase Common Stock;
Page 12
(iv) the distribution to all holders of Common Stock of capital stock
(other than Common Stock) or evidences of indebtedness of the Company or of
assets (including securities, but excluding those rights, warrants,
dividends and distributions referred to above or paid in cash);
(v) distributions consisting of cash, excluding any quarterly cash
dividend on the Common Stock to the extent that the aggregate cash dividend
per share of Common Stock in any quarter does not exceed the greater of (x)
the amount per share of Common Stock of the next preceding quarterly cash
dividend on the Common Stock to the extent that such preceding quarterly
dividend did not require an adjustment of the conversion price pursuant to
this clause (v) (as adjusted to reflect subdivisions or combinations of the
Common Stock), and (y) 3.75 percent of the average of the last reported
sales price of the Common Stock during the ten trading days immediately
prior to the date of declaration of such dividend, and excluding any
dividend or distribution in connection with the liquidation, dissolution or
winding up of the Company. If an adjustment is required to be made as set
forth in this clause (v) as a result of a distribution that is a quarterly
dividend, such adjustment will be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to
be excluded pursuant to this clause (v). If an adjustment is required to be
made as set forth in this clause (v) as a result of a distribution that is
not a quarterly dividend, such adjustment would be based upon the full
amount of the distribution;
(vi) payment in respect of a tender offer or exchange offer by the
Company or any subsidiary of the Company for the Common Stock to the extent
that the cash and value of any other consideration included in such payment
per share of Common Stock exceeds the Current Market Price (as defined in
the Indenture) per share of Common Stock on the trading day next succeeding
the last date on which tenders or exchanges may be made pursuant to such
tender or exchange offer;
(vii) payment in respect of a tender offer or exchange offer by a
person other than the Company or any subsidiary of the Company in which, as
of the closing date of the offer, the Board of Directors is not
recommending rejection of the offer. The adjustment referred to in this
clause (vii) will only be made if the tender offer or exchange offer is for
an amount which increases the offeror's ownership of Common Stock to more
than 25% of the total shares of Common Stock outstanding, and if the cash
and value of any other consideration included in such payment per share of
Common Stock exceeds the Current Market Price per share of Common Stock on
the business day next succeeding the last date on which tenders or
exchanges may be made pursuant to such tender or exchange offer. The
adjustment referred to in this clause (vii) will generally not be made,
however, if, as of the closing of the offer, the offering documents with
respect to such offer disclose a plan or an intention to cause the Company
to engage in a consolidation or merger of the Company or a sale of all or
substantially all of the Company's assets; and
(viii) the issuance of Common Stock or securities convertible into, or
exchangeable for, Common Stock at a price per share (or having a conversion
or exchange price per share) that is less than the then Current Market
Price of the Common Stock (but excluding, among other things, issuances:
(a) pursuant to any bona fide plan for the benefit of employees, directors
or consultants of the Company now or hereafter in effect; (b) to acquire
all or any portion of a business in an arm's-length transaction between the
Company and an unaffiliated third party including, if applicable, issuances
upon exercise of options or warrants assumed in connection with such an
acquisition; (c) in a bona fide public offering pursuant to a firm
commitment underwriting or sales at the market pursuant to a continuous
offering stock program; (d) pursuant to the exercise of warrants, rights
(including, without limitation, earnout rights) or options, or upon the
conversion of convertible securities, which are issued and outstanding on
the date hereof, or which may be issued in the future at fair value and
with an exercise price or conversion price at least equal to the Current
Market Price of the Common Stock at the time of issuance of such warrant,
right, option or convertible security; and (e) pursuant to a dividend
reinvestment plan or other plan hereafter adopted for the reinvestment of
dividends or interest provided that such Common Stock is issued at a price
at least equal to 95% of the market price of the Common Stock at the time
of such issuance).
Page 13
In the case of (i) any reclassification of the Common Stock, or (ii) a
consolidation, merger or combination involving the Company or a sale or
conveyance to another person of the property and assets of the Company as
an entirety or substantially as an entirety, in each case as a result of
which holders of Common Stock shall be entitled to receive stock, other
securities, other property or assets (including cash) with respect to or in
exchange for such Common Stock, the holders of the Notes then outstanding
will generally be entitled thereafter to convert such Notes into the kind
and amount of shares of stock, other securities or other property or assets
which they would have owned or been entitled to receive upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance had such Notes been converted into Common Stock immediately
prior to such reclassification, consolidation, merger, combination, sale or
conveyance assuming that a holder of Notes would not have exercised any
rights of election as to the stock, other securities or other property or
assets receivable in connection therewith.
In the event of a taxable distribution to holders of Common Stock or
in certain other circumstances requiring conversion price adjustments, the
holders of Notes may, in certain circumstances, be deemed to have received
a distribution subject to United States income tax as a dividend; in
certain other circumstances, the absence of such an adjustment may result
in a taxable dividend to the holders of Common Stock. See "Certain Federal
Income Tax Considerations" below.
The Company from time to time may to the extent permitted by law
reduce the conversion price by any amount for any period of at least 20
days, in which case the Company shall give at least 15 days' notice of such
reduction, if the Board of Directors has made a determination that such
reduction would be in the best interests of the Company, which
determination shall be conclusive. The Company may, at its option, make
such reductions in the conversion price, in addition to those set forth
above, as the Board of Directors deems advisable to avoid or diminish any
income tax to holders of Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. See "Certain Federal Income Tax
Considerations."
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the conversion price
then in effect; provided that any adjustment that would otherwise be
required to be made shall be carried forward and taken into account in any
subsequent adjustment. Except as stated above, the conversion price will
not be adjusted for the issuance of Common Stock or any securities
convertible into or exchangeable for Common Stock or carrying the right to
purchase any of the foregoing.
OPTIONAL REDEMPTION BY THE COMPANY
The Notes are not entitled to any sinking fund. At any time on or
after July 7, 1999, the Notes will be redeemable at the Company's option on
at least 30 days' notice as a whole or, from time to time, in part at the
following prices (expressed as percentages of the principal amount),
together with accrued interest to and including the date fixed for
redemption.
If redeemed during the 12-month period beginning July 1:
Year Redemption Price
1999 104.00%
2000 103.00
2001 102.00
2002 101.00
and 100% at July 1, 2003; provided that any semi-annual payment of interest
becoming due on the date fixed for redemption shall be payable to the
holders of record on the relevant record date of the Notes being redeemed.
Page 14
If less than all of the outstanding Notes are to be redeemed, the
Trustee shall select the Notes to be redeemed in principal amounts of
$1,000 or multiples thereof by lot, pro rata or by another method the
Trustee considers fair and appropriate. If a portion of a holder's Notes is
selected for partial redemption and such holder converts a portion of such
Notes, such converted portion shall be deemed to be of the portion selected
for redemption.
REDEMPTION AT OPTION OF THE HOLDER
If a Fundamental Change (as defined below) occurs at any time prior to
July 1, 2003, each holder of Notes shall have the right, at the holder's
option, to require the Company to redeem any or all of such holder's Notes
on the date (the "Repurchase Date") that is 30 days after the date of the
Company's notice of such Fundamental Change. The Notes will be redeemable
in multiples of $1,000 principal amount.
The Company shall redeem such Notes at a price (expressed as a
percentage of the principal amount) equal to (i) 107.00% if the Repurchase
Date is during the 12-month period beginning July 1, 1996, (ii) 106.00% if
the Repurchase Date is during the 12-month period beginning July 1, 1997,
(iii) 105.00% if the Repurchase Date is during the 12-month period
beginning July 1, 1998 and (iv) thereafter at the redemption price set
forth under "Optional Redemption by the Company" which would be applicable
to a redemption at the option of the Company on the Repurchase Date;
provided that, if the Applicable Price (as defined) is less than the
Reference Market Price (as defined), the Company shall redeem such Notes at
a price equal to the foregoing redemption price multiplied by the fraction
obtained by dividing the Applicable Price by the Reference Market Price. In
each case, the Company shall also pay accrued interest on the redeemed
Notes to, but excluding, the Repurchase Date; provided that, if such
Repurchase Date is an interest payment date, then the interest payable on
such date shall be paid to the holder of record of the Notes on the
relevant record date.
The Company is required to mail to all holders of record of the Notes
a notice of the occurrence of a Fundamental Change and of the redemption
right arising as a result thereof on or before the tenth day after the
occurrence of such Fundamental Change. The Company is also required to
deliver the Trustee a copy of such notice. To exercise the redemption
right, a holder of Notes must deliver, on or before the 30th day after the
date of the Company's notice of a Fundamental Change (the "Fundamental
Change Expiration Time"), written notice of the holder's exercise of such
right, together with the Notes to be so redeemed, duly endorsed for
transfer, to the Company (or an agent designated by the Company for such
purpose). Payment for Notes surrendered for redemption (and not withdrawn)
prior to the Fundamental Change Expiration Time will be made promptly
following the Repurchase Date.
The term "Fundamental Change" means the occurrence of any transaction
or event in connection with which all or substantially all Common Stock
shall be exchanged for, converted into, acquired for or constitute the
right to receive consideration which is not all or substantially all common
stock listed (or, upon consummation of or immediately following such
transaction or event, which will be listed) on a United States national
securities exchange or approved for quotation on the Nasdaq National Market
or any similar United States system of automated dissemination of
quotations of securities prices (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise). The term "Applicable
Price" means (i) in the event of a Fundamental Change in which the holders
of the Common Stock receive only cash, the amount of cash received by the
holder of one share of Common Stock and (ii) in the event of any other
Fundamental Change, the average of the last reported sale price for the
Common Stock during the ten trading days prior to the record date for the
determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Fundamental
Change, or, if there is no such record date, the date upon which the
holders of the Common Stock shall have the right to receive such cash,
securities, property or other assets in connection with the Fundamental
Change. The term "Reference Market Price" shall initially mean $10.67 and
in the event of any adjustment to the conversion price described above
pursuant to the provisions of the Indenture the Reference Market Price
shall also be adjusted so that the ratio of the Reference Market Price to
the conversion price after giving effect to any such adjustment shall
always be the same as the ratio of $10.67 to $19.68.
Page 15
The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act which may then be
applicable in connection with the redemption rights of Note holders in the
event of a Fundamental Change. The redemption rights of the holders of
Notes could discourage a potential acquiror of the Company. The Fundamental
Change redemption feature, however, is not the result of management's
knowledge of any specific effort to obtain control of the Company by means
of a merger, tender offer, solicitation or otherwise, or part of a plan by
management to adopt a series of anti-takeover provisions.
The Company could, in the future, enter into certain transactions,
including certain recapitalizations of the Company, that would not
constitute a Fundamental Change, but that would increase the amount of
Senior Indebtedness outstanding at such time. Further, the payment of the
Fundamental Change redemption price on the Notes is subordinated to the
prior payment of Senior Indebtedness as described under "Subordination of
Notes" below. There are no restrictions in the Indenture on the creation
of additional Senior Indebtedness or other indebtedness. Under certain
circumstances, the incurrence of additional indebtedness could have an
adverse effect on the Company's ability to service its indebtedness,
including the Notes. If a Fundamental Change were to occur, there can be no
assurance that the Company would have sufficient funds to pay the
Fundamental Change redemption price for all Notes tendered by the holders
thereof. A default by the Company on its obligations to pay the Fundamental
Change redemption price could result in acceleration of the payment of
other indebtedness of the Company at the time outstanding pursuant to
cross-default provisions.
SUBORDINATION OF NOTES
The Indebtedness evidenced by the Notes is subordinated to the extent
provided in the Indenture to the prior payment in full of all Senior
Indebtedness. Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization, the payment of the
principal of, premium, if any, and interest on the Notes is to be
subordinated to the extent provided in the Indenture in right of payment to
the prior payment in full in cash of all Senior Indebtedness. In the event
of any acceleration of the Notes because of an Event of Default (as defined
in the Indenture), the holders of any Senior Indebtedness then outstanding
would be entitled to payment in full in cash of all obligations in respect
of such Senior Indebtedness before the holders of the Notes are entitled to
receive any payment or distribution in respect thereof. The Indenture will
require that the Company promptly notify holders of Senior Indebtedness if
payment of the Notes is accelerated because of an Event of Default.
The Company also may not make any payment upon or in respect of the
Notes if (i) a default in the payment of the principal of, premium, if any,
interest, rent or other obligations in respect of Senior Indebtedness
occurs and is continuing beyond any applicable period of grace or (ii) any
other default occurs and is continuing with respect to Designated Senior
Indebtedness (as defined) that permits holders of the Designated Senior
Indebtedness as to which such default relates to accelerate its maturity
and the Trustee receives a notice of such default (a "Payment Blockage
Notice") from the Company or other person permitted to give such notice
under the Indenture. Payments on the Notes may and shall be resumed (a) in
case of a payment default, upon the date on which such default is cured or
waived and (b) in case of a nonpayment default, the earlier of the date on
which such nonpayment default is cured or waived or 179 days after the date
on which the applicable Payment Blockage Notice is received. No new period
of payment blockage may be commenced pursuant to a Payment Blockage Notice
unless and until (i) 365 days have elapsed since the initial effectiveness
of the immediately prior Payment Blockage Notice and (ii) all scheduled
payments of principal, premium, if any, and interest on the Notes that have
come due have been paid in full in cash. During any period of payment
blockage, any payment that otherwise would have been made during such
period will accrue interest, to the extent legally permissible, at the
annual rate set forth on the cover page hereof from the date on which such
payment was required under the terms of the Indenture until the date of
payment. No nonpayment default that existed or was continuing on the date
of delivery of any Payment Blockage Notice to the Trustee shall be, or
shall be made, the basis for a subsequent Payment Blockage Notice.
Page 16
By reason of the subordination provisions described above, in the
event of the Company's bankruptcy, dissolution or reorganization, holders
of Senior Indebtedness may receive more, ratably, and holders of the Notes
may receive less, ratably, than the other creditors of the Company. Such
subordination will not prevent the occurrence of any Event of Default under
the Indenture.
The term "Senior Indebtedness" means the principal of, premium, if
any, interest (including all interest accruing subsequent to the
commencement of any bankruptcy or similar proceeding, whether or not a
claim for post-petition interest is allowable as a claim in any such
proceeding) and rent payable on or in connection with, and all fees, costs,
expenses and other amounts accrued or due on or in connection with,
Indebtedness (as defined below) of the Company, whether outstanding on the
date of this Indenture or thereafter created, incurred, assumed, guaranteed
or in effect guaranteed by the Company (including all deferrals, renewals,
extensions or refundings of, or amendments, modifications or supplements
to, the foregoing), unless in the case of any particular Indebtedness the
instrument creating or evidencing the same or the assumption or guarantee
thereof expressly provides that such Indebtedness shall not be senior in
right of payment to the Notes or expressly provides that such Indebtedness
is pari passu or junior to the Notes. Notwithstanding the foregoing, the
term Senior Indebtedness shall not include any Indebtedness of the Company
to any subsidiary of the Company, a majority of the voting stock of which
is owned, directly or indirectly, by the Company.
The term "Indebtedness" means, with respect to any Person (as defined
in the Indenture), and without duplication:
(a) all indebtedness, obligations and other liabilities (contingent or
otherwise) of such Person for borrowed money (including obligations of the
Company in respect of overdrafts, foreign exchange contracts, currency
exchange agreements, interest rate protection agreements, and any loans or
advances from banks, whether or not evidenced by notes or similar
instruments) or evidenced by bonds, debentures, notes or similar
instruments (whether or not the recourse of the lender is to the whole of
the assets of such Person or to only a portion thereof) (other than any
account payable or other accrued current liability or obligation incurred
in the ordinary course of business in connection with the obtaining of
materials or services),
(b) all reimbursement obligations and other liabilities (contingent or
otherwise) of such Person with respect to letters of credit, bank
guarantees or bankers' acceptances,
(c) all obligations and liabilities (contingent or otherwise) in
respect of leases of such Person required, in conformity with generally
accepted accounting principles, to be accounted for as capitalized lease
obligations on the balance sheet of such Person and all obligations and
other liabilities (contingent or otherwise) under any lease or related
document (including a purchase agreement) in connection with the lease of
real property which provides that such Person is contractually obligated to
purchase or cause a third party to purchase the leased property and thereby
guarantee a minimum residual value of the leased property to the lessor and
the obligations of such Person under such lease or related document to
purchase or to cause a third party to purchase such leased property,
(d) all obligations of such Person (contingent or otherwise) with
respect to an interest rate or other swap, cap or collar agreement or other
similar instrument or agreement or foreign currency hedge, exchange,
purchase or similar instrument or agreement,
(e) all direct or indirect guaranties or similar agreements by such
Person in respect of, and obligations or liabilities (contingent or
otherwise) of such Person to purchase or otherwise acquire or otherwise
assure a creditor against loss in respect of, indebtedness, obligations or
liabilities of another Person of the kind described in clauses (a) through
(d),
(f) any indebtedness or other obligations described in clauses
(a) through (d) secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by such Person, regardless of
whether the indebtedness or other obligation secured thereby shall have
been assumed by such Person, and
Page 17
(g) any and all deferrals, renewals, extensions and refundings of, or
amendments, modifications or supplements to, any indebtedness, obligation
or liability of the kind described in clauses (a) through (f).
The term "Designated Senior Indebtedness" means any particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to
which the Company is a party) expressly provides that such Senior
Indebtedness shall be "Designated Senior Indebtedness" for purposes of the
Indenture (provided that such instrument, agreement or other document may
place limitations and conditions on the right of such Senior Indebtedness
to exercise the rights of Designated Senior Indebtedness).
At June 30, 1996, the Company had approximately $2.0 million of
indebtedness outstanding that would have constituted Senior Indebtedness.
The Indenture does not limit the amount of additional indebtedness,
including Senior Indebtedness, which the Company can create, incur, assume
or guarantee, nor does the Indenture limit the amount of indebtedness which
any subsidiary can create, incur, assume or guarantee.
In the event that, notwithstanding the foregoing, the Trustee or any
holder of the Notes receives any payment or distribution of assets of the
Company of any kind in contravention of any of the subordination provisions
of the Indenture, whether in cash, property or securities, including,
without limitation, by way of set-off or otherwise, in respect of the Notes
before all Senior Indebtedness is paid in full, then such payment or
distribution will by held by the recipient in trust for the benefit of
holders of Senior Indebtedness or their representatives to the extent
necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to or for the holders of Senior Indebtedness.
The Company is obligated to pay reasonable compensation to the Trustee
and to indemnify the Trustee against certain losses, liabilities or
expenses incurred by it in connection with its duties relating to the
Notes. The Trustee's claims for such payments will generally be senior to
those of holders of the Notes in respect of all funds collected or held by
the Trustee.
EVENTS OF DEFAULT; NOTICE AND WAIVER
An Event of Default is defined in the Indenture as being: default in
payment of the principal of or premium, if any, on the Notes; default for
30 days in payment of any installment of interest on the Notes; default by
the Company for 60 days after notice in the observance or performance of
any other covenants in the Indenture; or certain events involving
bankruptcy, insolvency or reorganization of the Company. The Indenture
provides that the Trustee may withhold notice to the holders of the Notes
of any default (except in payment of principal of, premium, if any, or
interest with respect to the Notes) if the Trustee considers it in the
interest of the holders of the Notes to do so.
The Indenture provides that if an Event of Default shall have occurred
and be continuing, the Trustee or the holders of not less than 25% in
principal amount of the Notes then outstanding may declare the principal of
and accrued interest on the Notes to be due and payable immediately. In the
case of certain events of bankruptcy or insolvency, the principal of,
premium, if any, and interest on the Notes shall automatically become and
be immediately due and payable. However, if the Company shall cure all
defaults (except the nonpayment of principal of, premium, if any, and
interest on any of the Notes which shall have become due by acceleration)
and certain other conditions are met, with certain exceptions, such
declaration may be canceled and past defaults may be waived by the holders
of a majority of the principal amount of the Notes then outstanding.
The holders of a majority in principal amount of the Notes then
outstanding shall have the right to direct the time, method and place of
conducting any proceedings for any remedy available to the Trustee, subject
to certain limitations specified in the Indenture.
Page 18
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Notes at the time outstanding, to modify the
Indenture or any supplemental indenture or the rights of the holders of the
Notes, except that no such modification shall (i) extend the fixed maturity
of any Note, reduce the rate or extend the time for payment of interest
thereon, reduce the principal amount thereof or premium, if any, thereon,
reduce any amount payable upon redemption or repurchase thereof, change the
obligation of the Company to repurchase any Note upon the happening of any
Fundamental Change in a manner adverse to holders of Notes, impair the
right of a holder to institute suit for the payment thereof, change the
currency in which the Notes are payable, impair the right to convert the
Notes into Common Stock subject to the terms set forth in the Indenture, or
modify the provisions of the Indenture with respect to the subordination of
the Notes in a manner adverse to the holders of the Notes in any material
respect, without the consent of each holder of a Note so affected, or
(ii) reduce the aforesaid percentage of Notes whose holders are required to
consent to any such supplemental indenture, without the consent of the
holders of all of the Notes then outstanding. The Indenture also provides
for certain modifications of its terms without the consent of holders of
the Notes.
REGISTRATION RIGHTS OF THE NOTEHOLDERS
Pursuant to the terms of the Registration Rights Agreement dated as of
July 8, 1996 between the Company and the Initial Purchaser (the
"Registration Rights Agreement"), the Company has filed with the Commission
a registration statement, of which this Prospectus forms a part, covering
resales by holders of the Notes and the Common Stock issuable upon
conversion of the Notes. The Company has agreed to keep the registration
statement effective until the earlier of (i) the sale pursuant to the
registration statement of all the securities registered thereunder and
(ii) the expiration of the holding period applicable to such securities
under Rule 144(k) under the Securities Act, or any successor provision.
The Registration Rights Agreement provides that the Company may suspend the
use of this Prospectus for a period not to exceed 30 days in any
three-month period, or not to exceed an aggregate of 60 days in any
12-month period under certain circumstances relating to pending corporate
developments, public filings with the Commission and similar events. The
Company has agreed to pay predetermined liquidated damages to those holders
of Notes and those holders of Common Stock issued upon conversion of the
Notes who have requested to sell pursuant to the registration statement if
the registration statement is unavailable for periods in excess of those
permitted above. The Company has further agreed, if such unavailability
continues for an additional thirty-day period, to pay predetermined
liquidated damages to all holders of Notes and all holders of Common Stock
issued upon conversion of the Notes, whether or not such holder has
requested to sell pursuant to the registration statement. The Registration
Rights Agreement provides for Selling Securityholders to (i) be named as a
selling securityholder in a supplement to this Prospectus and (ii) deliver
this Prospectus together with the relevant Prospectus Supplement to
purchasers, and further provides for Selling Securityholders to be bound by
those provisions of the Registration Rights Agreement which are applicable
to the Selling Securityholders (including indemnification provisions). The
Company has agreed to pay all expenses incident to the Company's
performance of and compliance with the Registration Rights Agreement,
provide to each Selling Securityholder copies of this Prospectus and the
relevant Prospectus Supplement, notify each Selling Securityholder when the
registration statement has become effective and take certain other actions
as are required to permit, subject to the foregoing, unrestricted resales
of the Notes and the underlying Common Stock.
INFORMATION CONCERNING THE TRUSTEE
Norwest Bank Minnesota, National Association, as the Trustee under the
Indenture, has been appointed by the Company as paying agent, conversion
agent, registrar and custodian with regard to the Notes.
Page 19
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 60,000,000
shares of Common Stock, par value $.01 per share (the "Common Stock"), and
5,524,525 shares of Preferred Stock, par value $.01 per share (the
"Preferred Stock").
COMMON STOCK
At June 30, 1996, there were 21,655,284 shares of Common Stock
outstanding held of record by 370 stockholders. Subject to preferences that
may be applicable to any outstanding shares of Preferred Stock, the holders
of Common Stock are entitled to receive such dividends, if any, as may be
declared from time to time by the Board of Directors in its discretion from
funds legally available therefor. Upon liquidation or dissolution of the
Company, the holders of Common Stock are entitled to receive, pro rata, all
assets of the Company remaining after payment of liabilities and the
liquidation preference of any outstanding shares of Preferred Stock.
Holders of Common Stock have no preemptive or other subscription rights,
and there are no conversion rights or redemption or sinking fund provisions
with respect to such shares. The holders of Common Stock are entitled to
one vote for each share held of record on all matters submitted to a vote
of stockholders. The outstanding shares of Common Stock are, and the shares
of Common Stock to be outstanding upon completion of this offering will be,
fully paid and nonassessable. The Company has not paid and does not
presently intend to pay cash dividends on its Common Stock.
PREFERRED STOCK
At June 30, 1996, the Company had reserved 2,108,652 shares of
Series A Convertible Preferred Stock for issuance upon exercise of warrants
(the "Preferred Stock Warrants"). The Preferred Stock Warrants expire on
January 12, 2000 and are exercisable at $1.00 per share. Each share of
Series A Convertible Preferred Stock is convertible into one share of
Common Stock. In connection with the initial public offering of the Common
Stock in May 1991, the holders of the Preferred Stock Warrants agreed that,
immediately upon any exercise thereof, such holders would convert the
Series A Convertible Preferred Stock issuable upon exercise of such
warrants into shares of Common Stock.
The Company's Board of Directors has the authority to issue up to
3,000,000 additional shares of Preferred Stock from time to time in one or
more series and to fix the number of shares and the relative rights,
conversion rights, voting rights, rights and terms of redemption,
liquidation preferences and any other preferences, special rights and
qualifications of any such series. If shares of Preferred Stock with voting
rights are issued, such issuance could affect the voting rights of the
holders of the Company's Common Stock by increasing the number of
outstanding shares entitled to vote and by the creation of class or series
voting rights. In addition, any further issuance of Preferred Stock could,
under certain circumstances, have the effect of delaying or preventing a
change in control of the Company and may adversely affect the rights of
holders of Common Stock. The Company has no present plans to issue any
additional shares of Preferred Stock or to establish or designate any new
series of Preferred Stock.
Other than rights that may be granted to holders of Preferred Stock,
there is no provision in the Company's Restated Certificate of
Incorporation or By-laws that would have the effect of delaying, deterring
or preventing a change in control in the Company and that would operate
only with respect to an extraordinary corporate transaction involving the
Company, such as a merger, reorganization, tender offer, sale or transfer
of substantially all of the Company's assets, or liquidation.
Page 20
REGISTRATION RIGHTS
In December 1990, the Company entered into a stockholders' agreement
with certain stockholders (the "Stockholders' Agreement"). The signatories
to the Stockholders' Agreement are entitled to certain rights to
registration under the Securities Act of certain shares of Common Stock
held by such persons. Under the Stockholders' Agreement, these holders may
request that the Company file a registration statement under the Securities
Act and, subject to certain conditions, the Company generally will be
required to use its best efforts to effect any such registration. The
Company is not generally required to effect more than two such
registrations, although under certain circumstances the holders will have
the right to request additional registrations. In addition, if the Company
proposes to register any of its securities, either for its own account or
for the account of other stockholders, the Company is required, with
certain exceptions, to notify such holders and, subject to certain
limitations, to include in such registration all of the shares of Common
Stock requested to be included by such holders. The Company is generally
obligated to bear the expenses, other than underwriting discounts and sales
commissions, of all of these registrations. American Home Products
Corporation and Baxter Healthcare Corporation also have certain rights to
registration under the Securities Act of shares of Common Stock beginning
in January 1997. For a description of the Registration Rights Agreement
pursuant to which the Notes and Shares offered hereby are being registered
under the Securities Act, see "Description of Notes - Registration Rights
of the Noteholders."
Any exercise of such registration rights may hinder efforts by the
Company to arrange future financings and may have an adverse effect on the
market price of the Common Stock.
LIMITATION OF LIABILITY
As permitted by the Delaware General Corporation Law, the Company's
Restated Certificate of Incorporation provides that directors of the
Company shall not be personally liable to the Company or its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law, relating
to prohibited dividends or distributions or the repurchase or redemption of
stock, or (iv) for any transaction from which the director derives an
improper personal benefit.
As a result of this provision, the Company and its stockholders may be
unable to obtain monetary damages from a director for breach of his duty of
care. Although stockholders may continue to seek injunctive or other
equitable relief for an alleged breach of fiduciary duty by a director,
stockholders may not have any effective remedy against the challenged
conduct if equitable remedies are unavailable.
The Company maintains directors, and officers, liability insurance. In
addition, the Company's By-laws provide for indemnification of all officers
and directors against liabilities or expenses incurred in connection with
any action, suit or proceeding if the director or officer acted in good
faith and in a manner he reasonably believed to be in, or not opposed to,
the Company's best interests, unless the action, suit or proceeding
involves liability by the director or officer to the Company and no court
determines that such director or officer is entitled to indemnification.
The Company's by-laws also provide that expenses incurred by a director or
officer in defending any such action may be advanced by the Company if the
director or officer undertakes to repay such amount in the event it is
determined that he is not entitled to indemnification.
Page 21
BUSINESS COMBINATION PROVISIONS
The business combination provision contained in Section 203 of the
Delaware General Corporation Law ("Section 203") generally defines an
interested stockholder as any person that (i) owns, directly or indirectly
15% or more of the outstanding voting stock of a corporation or (ii) is an
affiliate or associate of a corporation and was the owner of 15% or more of
the outstanding voting stock at any time within the three-year period
immediately prior to the date on which it is sought to be determined
whether such person is an interested stockholder, and the affiliates and
the associates of such person. Under Section 203, a resident domestic
corporation may not engage in any business combination wiliquidation
preference of any outstanding shares of Preferred Stock.
Holders of Common Stock have no preemptive or other subscription rights,
and there are no conversion rights or redemption or sinking fund provisions
with respect to such shares. The holders of Common Stock are entitled to
one vote for each share held of record on all matters submitted to a vote
of stockholders. The outstanding shares of Common Stock are, and the shares
of Common Stock to be outstanding upon completion of this offering will be,
fully paid and nonassessable. The Company has not paid and does not
presently intend to pay cash dividends on its Common Stock.
PREFERRED STOCK
At June 30, 1996, the Company had reserved 2,108,652 shares of
tock plans, in certain instances), or (iii) at or subsequent to such time
the business combination is approved by the board of directors and authorized
at an annual or special meeting of stockholders by the affirmative vote of at
least 66 2'3% of the outstanding voting stock which is not owned by the
interested stockholder. The restrictions imposed by Section 203 will not
apply to a corporation if (i) the corporation's original certificate of
incorporation contains a provision expressly electing not to be governed by
Section 203; or (ii) the corporation by the action of stockholders holding
a majority of the outstanding voting stock adopts an amendment to its
certificate of incorporation or by-laws expressly electing not to be
governed by Section 203 (such amendment will not be effective until
12 months after adoption and shall not apply to any business combination
between such corporation and any person who became an interested
stockholder of such corporation at or prior to such adoption).
The Company has not elected out of the statute and, therefore, the
restrictions imposed by Section 203 will apply to the Company.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is American
Stock Transfer & Trust Company.
Page 22
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary sets forth certain Federal tax consequences of
acquiring and owning the Notes. Tax consequences that result from the tax
status or particular circumstances of the holder are not addressed. Thus,
for example, the summary does not discuss the treatment of holders that are
subject to special tax rules, such as banks, insurance companies, regulated
investment companies, personal holding companies, corporations subject to
the alternative minimum tax, and tax-exempt entities. The summary is based
on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations, court decisions and Internal Revenue Service rulings now in
effect, all of which are subject to change including changes with
retroactive effect. The summary assumes that Notes will be held as "capital
assets" as defined in the Code and that they were purchased upon their
original issuance at the initial offering price. Prospective purchasers are
advised to consult their own tax advisors regarding the tax consequences of
acquiring, holding or disposing of Notes in light of their personal
investment circumstances, and the consequences under state, local and
foreign tax laws.
NOTES PURCHASED AT A MARKET DISCOUNT
Subject to a de minimis exception, a holder of a Note acquired at a
market discount will generally be required to treat as ordinary income any
gain recognized on the disposition of the Note to the extent of the accrued
market discount on the Note at the time of disposition. For this purpose,
the market discount on a Note will generally be equal to the amount, if
any, by which the stated redemption price at maturity of the Note
immediately after its acquisition exceeds the holder's tax basis in the
Note. In general, market discount on a Note will be treated as accruing on
a straight-line basis over the term of the Note or, at the election of the
holder, under a constant yield method. A holder of a Note acquired at a
market discount may also be required to defer the deduction of a portion of
the interest on any indebtedness incurred or maintained to purchase or
carry the Note until the Note is disposed of in a taxable transaction. The
foregoing rules will not apply if the holder elects to include accrued
market discount in income currently. If a holder acquires a Note at a
market discount and receives Common Stock upon conversion of the Note, the
amount of accrued market discount with respect to the Note through the date
of the conversion will be treated, under regulations to be issued, as
ordinary income on the disposition of the Common Stock.
NOTES PURCHASED AT A PREMIUM
A holder that purchases a Note for an amount in excess of its
principal amount may be entitled to elect to treat a portion of such excess
as "amortizable bond premium," which will reduce the amount required to be
included in the holder's income each year as interest on the Note by the
amount of such premium allocable to that year based on the Note's yield to
maturity. The amount of amortizable bond premium will not, however,
include any amount attributable to the conversion features of the Note. An
election to amortize bond premium will apply to all bonds (other than tax-
exempt bonds) held by the holder at the beginning of the taxable year to
which the election applies or thereafter acquired by the holder.
REDEMPTION OR SALE OF NOTES
Generally redemption or sale of the Notes will result in taxable gain
or loss equal to the difference between (i) the amount of cash and the fair
market value of any other property received and (ii) the holder's tax basis
in the Notes. To the extent that the amount received is attributable to
accrued interest, however, that amount will be taxed as ordinary income. A
holder's tax basis in Notes generally will equal the cost of the Notes to
the holder. Subject to the market discount rules discussed above, gain or
loss on the disposition of Notes will be capital gain or loss and will be
long-term capital gain or loss if the Notes have been held for more than
one year at the time of disposition.
Page 23
CONVERSION OF NOTES INTO COMMON STOCK
No gain or loss will be recognized upon conversion of Notes into
Common Stock, except with respect to any cash paid in lieu of fractional
shares of Common Stock. The tax basis of the Common Stock received upon
conversion will be equal to the tax basis of the Notes converted, less any
portion thereof allocable to a fractional share for which cash is received.
The holding period of the Common Stock received upon conversion will
include the holding period of the Notes converted. Under the current ruling
policy of the Internal Revenue Service, cash received in lieu of a
fractional share of Common Stock should generally be treated as a payment
in exchange for such fractional share rather than as a dividend. Gain or
loss recognized on the receipt of cash paid in lieu of a fractional share
generally will be capital gain or loss and will equal the difference
between the amount of cash received and the amount of tax basis allocable
to the fractional share.
ADJUSTMENT OF CONVERSION PRICE
Holders of convertible debt instruments may be deemed to have received
constructive distributions where the conversion ratio is adjusted to
reflect property distributions with respect to the stock into which such
debt instruments are convertible. Adjustments to the conversion price made
pursuant to a bona fide reasonable adjustment formula which has the effect
of preventing the dilution of the interest of the holders of the debt
instruments, however, will generally not be considered to result in a
constructive distribution of stock. Certain of the possible adjustments
provided in the Notes may not qualify as being pursuant to a bona fide
reasonable adjustment formula. If such adjustments are made, holders of
Notes might be deemed to have received constructive distributions taxable
as dividends.
BACKUP WITHHOLDING
Under the backup withholding provisions of the Code and applicable
Treasury regulations, a holder of Notes or Common Stock may be subject to
backup withholding at the rate of 31% with respect to dividends or interest
paid on, or the proceeds of a sale, exchange or redemption of Notes or
Common Stock, unless (a) such holder is a corporation or comes within
certain other exempt categories and when required demonstrates this fact or
(b) provides a taxpayer identification number, certifies as to no loss of
exemption from backup withholding, and otherwise complies with applicable
requirements of the backup withholding rules. The amount of any backup
withholding from a payment to a holder will be allowed as a credit against
the holder's Federal income tax liability and may entitle such holder to a
refund, provided that the required information is furnished to the Internal
Revenue Service.
SPECIAL TAX RULES APPLICABLE TO FOREIGN HOLDERS
For purposes of the following discussion, a "United States Alien
Holder" is any holder who, for United States Federal income tax purposes,
is a foreign corporation, a foreign partnership, a nonresident alien
individual, or an estate or trust other than an estate or trust the income
of which is includible in income for Federal income tax purposes regardless
of its source.
Payments of interest on the Notes to a United States Alien Holder will
not be subject to United States Federal withholding tax provided that
(a) the holder does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Company entitled
to vote, (b) the holder is not a controlled foreign corporation that is
related to the Company through stock ownership and (c) either (1) the
beneficial owner of the Note, under penalties of perjury, provides the
Company or its agent with such owner's name and address and certifies that
the owner is not a United States person or (2) a securities clearing
organization, bank, or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "financial
institution") certifies to the Company or its agent, under penalties of
perjury, that such a statement has been received from the beneficial owner
by it or another financial institution and furnishes to the Company or its
agent a copy thereof.
Page 24
A United States Alien Holder generally will not be subject to United
States Federal income or withholding tax on gain realized on the sale or
exchange of Notes or Common Stock unless (i) the holder is an individual
who was present in the United States for 183 days or more during the
taxable year and (a) such holder has a "tax home" in the United States or
(b) the gain is attributable to an office or other fixed place of business
maintained in the United States by such holder, (ii) the gain is
effectively connected with the conduct of a trade or business of the holder
in the United States, or (iii) the Company is or has been a "United States
real property holding corporation" at any time within the shorter of the
five-year period preceding such disposition or such holder's holding
period. If the Company becomes a "United States real property holding
corporation," gain recognized on a disposition of Notes or Common Stock
would not be subject to Federal income tax if (i) the Common Stock is
"regularly traded on an established securities market" within the meaning
of the Code and (ii) either (A) the United States Alien Holder disposing of
Common Stock did not own, actually or constructively, at any time during
the five-year period preceding the disposition, more than 5% of the Common
Stock, or (B) in the case of a disposition of Notes, the United States
Alien Holder did not own, actually or constructively, Notes which, as of
the date of such holder's most recent acquisition of Notes, had a fair
market value greater than that of 5% of the Common Stock. The preceding
sentence assumes that the Common Stock is and will continue to be listed on
a domestic stock exchange and regularly quoted by brokers and hence will be
"regularly traded" on an established securities market at the time of
disposition. However, it may be possible to read the temporary regulations
that define "regularly traded" for this purpose as providing that the
Common Stock will not be "regularly traded" for any calendar quarter during
which 100 or fewer persons (treating related persons as one person) in the
aggregate own 50% or more of the Common Stock. If (i) this interpretation
of the temporary regulations is determined to be correct, (ii) the
temporary regulations as so interpreted are determined to be valid, and
(iii) the Company is a "United States real property holding corporation"
during the relevant time period described above, a United States Alien
Holder (without regard to its ownership percentage of Common Stock or
Notes) will be subject to United States Federal income tax with respect to
gain realized on any sale or other disposition of the Common Stock or the
Notes that occurs within a calendar quarter during which 50% or more of the
Common Stock is so owned as well as to a withholding tax (generally at a
rate of 10% of the cash proceeds). Any amount withheld pursuant to such
withholding tax will be creditable against such holder's United States
Federal income tax liability.
Income received by a United States Alien Holder in the form of
interest on the Notes or dividends on the Common Stock will be subject to a
United States Federal withholding tax at a 30% rate upon the actual payment
of the dividends or interest except as described above and except where an
applicable tax treaty provides for the reduction or elimination of such
withholding tax. However, a United States Alien Holder generally will be
taxed in the same manner as a United States corporation or resident with
respect to such income if it is effectively connected with the conduct of a
trade or business in the United States. Such effectively connected income
received by a United States Alien Holder which is a corporation may in
certain circumstances be subject to an additional "branch profits tax" at a
30% rate or, if applicable, a lower treaty rate. To determine the
applicability of a tax treaty providing for a lower rate of withholding,
dividends paid to an address in a foreign country are presumed under
current Treasury regulations to be paid to a resident of that country.
Treasury regulations proposed in April 1996 would, if adopted in final
form, require United States Alien Holders to file a "withholding
certificate" with the Company's withholding agent, or, under certain
circumstances, a "qualified intermediary," to obtain the benefit of an
applicable tax treaty providing for a lower rate of withholding tax. Such
certificate would have to contain the name and address of the holder and
the basis for any reduced rate claimed. These withholding certificates
would be required for payments made after December 31, 1997.
Dividends paid to United States Alien Holders that are subject to the
withholding tax described above will generally be exempt from United States
backup withholding tax and United States information reporting
requirements, other than reporting of dividend payments for purposes of the
withholding tax noted above. Backup withholding and information reporting
generally will not apply to payments of interest if the certification
described above is received, provided the payor does not have actual
knowledge that the holder is a United States person. Payment of the
proceeds of the sale of the Notes or the Common Stock to or through a
United States office of a broker will be subject to information reporting
and possible backup withholding at a rate of 31% unless the owner certifies
its non-United States status under penalties of perjury or
Page 25
otherwise establishes an exemption. Payment of the proceeds of the sale of
the Notes or the Common Stock to or through a foreign office of a broker
generally will not be subject to backup withholding tax. However, in the
case of the payment of proceeds from the disposition of the Notes or the
Common Stock through a foreign office of a broker that is (i) a United
States person, (ii) a "controlled foreign corporation" for United States
Federal income tax purposes, or (iii) a foreign person 50% or more of whose
gross income from all sources for a specified period is derived from
activities that are effectively connected with the conduct of a United
States trade or business, information reporting is required on the payment
unless the broker has documentary evidence in its files that the owner is a
non-United States person and the broker has no actual knowledge to the
contrary. Any amounts withheld under the backup withholding rules from a
payment to a United States Alien Holder will be allowed as a refund or a
credit against such United States Alien Holder's United States Federal
income tax, provided that the required information is furnished to the
Internal Revenue Service.
The backup withholding and information reporting rules would also be
changed by the Treasury regulations proposed in April 1996. These
regulations, if adopted in final form, would provide that proceeds from the
disposition of Common Stock after December 31, 1997 would be exempt from
backup withholding and information reporting only if the United States
Alien Holder complies with the "withholding certificate" requirements
described above or otherwise establishes an exemption.
Notes held by an individual who at the time of death is not a United
States citizen or resident, as specially defined for United States estate
tax purposes, will not be subject to United States Federal estate tax
provided (i) the Notes were not held in connection with a United States
trade or business and (ii) the individual does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote. Common Stock owned by
such an individual at the time of death, and in certain circumstances
transferred before death, will be includible in the taxable estate and may
be subject to United States Federal estate tax unless otherwise provided by
an applicable tax treaty. Estates of nonresident aliens are generally
allowed a statutory credit which has the effect of offsetting United States
Federal estate tax imposed on the first $60,000 of the taxable estate.
Page 26
SELLING SECURITYHOLDERS
The Notes were originally acquired on July 8, 1996 from the Company
by the Initial Purchaser. The Initial Purchaser advised the Company that
the Initial Purchaser has resold the Notes in transactions exempt from the
registration requirements of the Securities Act to "qualified institutional
buyers" (as defined in Rule 144A of the Securities Act), certain
institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3), or (7) under the Securities Act) and outside the United States to non-
U.S. persons in offshore transactions in reliance on Regulation S under the
Securities Act. These subsequent purchasers, or their transferees,
pledgees, donees or successors, may from time to time offer and sell any or
all of the Notes and/or Shares pursuant to this Prospectus.
The Notes and the Shares have been registered pursuant to the
Registration Rights Agreement which provides that the Company file a
registration statement with regard to the Notes and the Shares within 90
days of the date of original issuance of the Notes and keep such
registration statement effective until the earlier of (i) the sale pursuant
to the registration statement of all the securities registered thereunder
and (ii) the expiration of the holding period applicable to such securities
under Rule 144(k) under the Securities Act or any successor provision.
Although none of the Selling Securityholders has advised the Company that
it currently intends to sell all or any of the Notes or Shares pursuant to
this Prospectus, the Selling Securityholders may choose to sell the Notes
and/or Shares from time to time upon notice to the Company. See "Plan of
Distribution."
Prior to any use of this Prospectus in connection with an offering
of the Notes and/or Shares, this Prospectus will be supplemented to set
forth the name and number of shares beneficially owned by the Selling
Securityholder intending to sell such Notes and/or Shares and the number of
Notes and/or Shares to be offered. The Prospectus Supplement will also
disclose whether any Selling Securityholder selling in connection with such
Prospectus Supplement has held any position or office with, been employed
by or otherwise has had a material relationship with, the Company or any of
its affiliates during the three years prior to the date of the Prospectus
Supplement.
Page 27
PLAN OF DISTRIBUTION
The Notes and the Shares are being registered to permit public
secondary trading of such securities by the holders thereof from time to
time after the date of this Prospectus. The Company has agreed, among
other things, to bear all expenses (other than underwriting discounts and
selling commissions and fees and expenses of counsel and other advisors to
holders of the Notes and the underlying Common Stock) in connection with
the registration and sale of the Notes and the Shares covered by this
Prospectus.
The Company will not receive any of the proceeds from the offering of
Notes and the Shares by the Selling Securityholders. The Selling
Securityholders may sell all or a portion of the Notes and Shares
beneficially owned by them and offered hereby from time to time on any
exchange on which the securities are listed on terms to be determined at
the times of such sales. The Selling Securityholders may also make private
sales directly or through a broker or brokers. Alternatively, any of the
Selling Securityholders may from time to time offer the Notes or shares of
Common Stock beneficially owned by them through underwriters, dealers or
agents, who may receive compensation in the form of underwriting discounts,
commissions or concessions from the Selling Securityholders and the
purchasers of the Notes or shares of Common Stock for whom they may act as
agent. The aggregate proceeds to the Selling Securityholders from the sale
of the Notes or shares of Common Stock offered by them hereby will be the
purchase price of such Notes or shares of Common Stock less discounts and
commissions, if any.
The Notes and the Shares may be sold from time to time in one or more
transactions at fixed offering prices, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices
will be determined by the holders of such securities or by agreement
between such holders and underwriters or dealers who may receive fees or
commissions in connection therewith.
The outstanding Common Stock is publicly traded on the Nasdaq National
Market, and the Shares have been approved for trading on the Nasdaq
National Market. The Initial Purchaser has advised the Company that it is
making and currently intends to continue making a market in the Notes;
however, it is not obligated to do so and any such market-making may be
discontinued at any time without notice, in the sole discretion of the
Initial Purchaser. The Company does not intend to apply for listing of the
Notes on any securities exchange. Accordingly, no assurance can be given
as to the development or liquidity of any trading market that may develop
for the Notes. See "Risk Factors C Absence of Public Market for the
Notes."
In order to comply with the securities laws of certain states, if
applicable, the Notes and Shares will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states the Notes and Shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is
complied with.
The Selling Securityholders and any broker-dealers, agents or
underwriters that participate with the Selling Securityholders in the
distribution of the Notes or the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act, in which event any commissions
received by such broker-dealers, agents or underwriters and any profits
realized by the Selling Securityholders on the resales of the Notes or the
Shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
In addition, any securities covered by this Prospectus which qualify
for sale pursuant to Rule 144, Rule 144A or any other available exemption
from registration under the Securities Act may be sold under Rule 144, Rule
144A or such other available exemption rather than pursuant to this
Prospectus. There is no assurance that any Selling Securityholder will
sell any or all of the Notes or Shares described herein, and any Selling
Securityholder may transfer, devise or gift such securities by other means
not described herein.
Page 28
The Notes were originally sold by the Company to the Initial Purchaser
in July 1996 in a private placement. The Company agreed to indemnify and
hold the Initial Purchaser harmless against certain liabilities under the
Securities Act that could arise in connection with the sale of the Notes by
the Initial Purchaser. The Registration Rights Agreement provides for the
Company and the Selling Securityholders to indemnify each other against
certain liabilities arising under the Securities Act.
The Company has agreed to use its best efforts to cause the
registration statement to which this Prospectus relates to become effective
as promptly as is practicable and to keep the registration statement
effective until the earlier of (i) the sale pursuant to the registration
statement of all the securities registered thereunder and (ii) the
expiration of the holding period applicable to such securities under Rule
144(k) under the Securities Act or any successor provision. The
Registration Rights Agreement provides that the Company may suspend the use
of this Prospectus in connection with sales of Notes and Shares by holders
for a period not to exceed 30 days in any three-month period, or not to
exceed an aggregate of 60 days in any 12-month period, under certain
circumstances relating to pending corporate developments, public filings
with the Commission and similar events. Expenses of preparing and filing
the registration statement and all post-effective amendments will be borne
by the Company.
LEGAL MATTERS
The validity of the Notes and the underlying Common Stock will be
passed upon for the Company by Dewey Ballantine, New York, New York.
EXPERTS
The balance sheets of the Company as of December 31, 1994 and 1995 and
the statements of operations, shareholders' equity and cash flows for each
of the three years in the period ended December 31, 1995, included in the
Company's 1995 Annual Report to Shareholders, which have been incorporated
by reference in this Prospectus, have been audited by Coopers & Lybrand
L.L.P., independent public accountants, as set forth in their report dated
February 6, 1996, accompanying such financial statements, and are
incorporated herein by reference in reliance upon the report of such firm,
which report is given on the authority of said firm as experts in
accounting and auditing.
Any financial statements and schedules hereafter incorporated by
reference in the registration statement of which this Prospectus is a part
that have been audited and are the subject of a report by independent
accountants will be so incorporated by reference in reliance upon such
reports and upon the authority of such firms as experts in accounting and
auditing to the extent covered by consents filed with the Commission.
Page 29
No person is authorized in
connection with any offering made
hereby to give any information or to
make any representation not contained MedImmune, Inc.
in this Prospectus, and, if given or
made, such information or
representation must not be relied upon $60,000,000 Principal Amount
as having been authorized by the of
Company. This Prospectus does not 7% Convertible Subordinated
constitute an offer to sell or a Notes
solicitation of an offer to buy any due 2003
security other than the Notes or the
shares of Common Stock offered hereby,
nor does it constitute an offer to
sell or a solicitation of an offer to 3,048,780 Shares of
buy any of the securities offered Common Stock
hereby to any person in any
jurisdiction in which it is unlawful
to make such an offer or solicitation.
Neither the delivery of this
Prospectus nor any sale made hereunder
shall under any circumstances create
any implication that the information
contained herein is correct as of any
date subsequent to the date hereof.
___________________ _____________________________
PROSPECTUS
___________, 1996
____________________________
TABLE OF CONTENTS
Page
Available Information 2
Incorporation of Certain
Documents by Reference 2
The Company 3
Risk Factors 3
Use of Proceeds 9
Ratio of Earnings to
Fixed Charges 9
Description of Notes 10
Description of Capital
Stock 20
Certain Federal Income
Tax Considerations 23
Selling Securityholders 27
Plan of Distribution 28
Legal Matters 29
Experts 29
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Registrant in connection with
the distribution of the securities being registered are as follows:
SEC Registration Fee $ 20,690
Nasdaq National Market Listing Fee 17,500
Accounting Fees and Expenses 20,000
Legal Fees and Expenses 25,000
Blue Sky Fees and Expenses 5,000
Miscellaneous
11,810
Total $100,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the General Corporation Law of the
State of Delaware (the "DGCL") empowers a corporation to indemnify any
person who was or is a party or who is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (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, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that
such person acted in any of the capacities set forth above, against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he 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 may be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of
Chancery or such other court shall deem proper.
Section 145 further provides that to the extent a director, officer,
employee or agent of a corporation has been successful on the merits or
otherwise in the defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in defense of any claim, issue
or matter therein, he shall be indemnified
II-1
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that indemnification provided for
by Section 145 shall not be deemed exclusive of any other rights to which
the indemnified party may be entitled; that indemnification provided for by
Section 145 shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of such person's heirs, executors
and administrators; and that the corporation is empowered 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 Section 145.
The Company also provides liability insurance for its directors and
officers which provides for coverage against loss from claims made against
directors and officers in their capacity as such, including liabilities
under the Securities Act of 1933, as amended.
Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director (i) for
any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section
174 of the DGCL, or (iv) for any transaction from which the director
derived an improper personal benefit. Article EIGHTH of the Company's
Restated Certificate of Incorporation limits the liability of directors to
the fullest extent permitted by Section 102(b)(7).
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
4.1 Form of Common Stock certificate (1)
4.2 Indenture dated as of July 8, 1996 between the
Company and Norwest Bank Minnesota, National Association (2)
4.3 Form of Note (included in Exhibit 4.2)(2)
4.4 Registration Rights Agreement dated as of July 8,
1996 between the Company and Morgan Stanley & Co. Incorporated (2)
5.1 Opinion of Dewey Ballantine (2)
12.1 Statement re: calculation of ratio of earnings to
fixed charges (2)
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Dewey Ballantine (included in Exhibit 5.1)
(2)
24.1 Power of Attorney (2)
25.1 Statement of Eligibility of the Trustee on Form T-1 (2)
_________________
(1) Filed as an exhibit to the Company's Registration Statement on Form S-1
(No. 33-39579) and incorporated herein by reference.
(2) Previously filed.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding)
II-2
is asserted by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
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, as amended;
(ii)To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement.
Provided, however, That paragraphs (1)(i) and (1)(ii) of this section
do not apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, 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.
(4) 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.
II-3
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 the requirements for filing on Form S-3 and has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Gaithersburg, State
of Maryland, on the 1st day of November, 1996.
MEDIMMUNE, INC.
*
_________________________
Wayne T. Hockmeyer, Ph.D.
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signatures Title Date
* Chairman, Chief
Wayne T. Hockmeyer, Ph.D. Executive Officer and November 1, 1996
Director (Principal
/s/David M. Mott President, Chief November 1, 1996
Operating Officer and
Director (Principal Financial
and Accounting Officer)
* Executive Vice November 1, 1996
Franklin H. Top, Jr., M.D. President, Medical
Director and Director
* Director November 1, 1996
M. James Barrett, Ph.D.
* Director November 1, 1996
Barbara Hackman Franklin
* Director November 1, 1996
James H. Cavanaugh, Ph.D.
*
Director November 1, 1996
Lawrence C. Hoff
* Director November 1, 1996
Gordon S. Macklin
*By: David M. Mott Director November 1, 1996
Attorney-in-Fact
II-4
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of MedImmune, Inc. on Form S-3 (Registration No. 333-
13373) of our report dated February 6, 1996 on our audits of the
financial statements of MedImmune, Inc., as of December 31, 1995
and 1994, and for each of the three years in the period ended
December 31, 1995, which report is included in the MedImmune,
Inc. 1995 Annual Report to Shareholders, and to our report dated
February 6, 1996 on the financial statement schedule of
MedImmune, Inc. which report is included in the MedImmune, Inc.
1995 Annual Report on Form 10-K. We also consent to the
reference to our firm under the caption "Experts."
Coopers & Lybrand L. L. P.
Rockville, Maryland
November 1, 1996
