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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
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Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
ALKERMES, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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ALKERMES, INC.
CAMBRIDGE, MASSACHUSETTS 02139
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 2000
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TO THE SHAREHOLDERS:
A special meeting of shareholders of Alkermes, Inc. (the
"Company") will be held at the offices of the Company, 64 Sidney Street,
Cambridge, Massachusetts 02139, on Friday, April 28, 2000, at 10:00 A.M. for the
following purposes:
1. To consider and take action on a proposal to adopt an
amendment to the Company's Second Amended and
Restated Articles of Incorporation, as amended, to
effect a two-for-one split of the Company's Common
Stock, par value $.01 per share ("Common Stock") and
increase the total number of authorized shares of the
Company from 85,000,000 to 165,000,000, including an
increase in the number of authorized shares of the
Company's Common Stock from 80,000,000 to
160,000,000.
2. To transact such other business as may properly come
before the meeting.
The Board of Directors has fixed March 10, 2000 as the record
date for determining the holders of Common Stock entitled to notice of and to
vote at the meeting. Consequently, only holders of Common Stock of record on the
transfer books of the Company at the close of business on March 10, 2000 will be
entitled to notice of and to vote at the meeting.
Please complete, date and sign the enclosed proxy and return
it promptly in the enclosed, self-addressed envelope requiring no postage if
mailed in the United States. If you attend the meeting, you may vote in person.
Morris Cheston, Jr.
Secretary
March _____, 2000
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ALKERMES, INC.
PROXY STATEMENT
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors of
Alkermes, Inc., a Pennsylvania corporation ("Alkermes" or the "Company"), in
connection with a special meeting of its shareholders to be held at the offices
of the Company, 64 Sidney Street, Cambridge, Massachusetts 02139, at 10:00 a.m.,
on April 28, 2000 (the "Meeting"). Copies of this Proxy Statement and the
accompanying proxy are being mailed on or after March _____, 2000 to the holders
of record of Common Stock on March 10, 2000 (the "Record Date"). The proxy may
be revoked by a shareholder at any time prior to its use by giving notice of
such revocation to the Secretary of the Company, by appearing at the Meeting and
voting in person or by returning a later dated proxy. The expense of this
solicitation will be paid by the Company. Some of the officers and regular
employees of the Company may solicit proxies personally and by telephone.
Unless specific instructions are given to the contrary, the persons
named in the accompanying proxy will vote FOR the proposed amendment to effect
the stock split and increase the number of authorized shares of capital stock
and Common Stock. With respect to all other matters, the persons named in the
accompanying proxy will vote as stated herein. See "Other Business."
Holders of Common Stock of record at the close of business on the
Record Date will be entitled to cast one vote per share so held of record on
such date on all items of business properly presented at the Meeting.
The Company had 26,670,144 shares of Common Stock outstanding on the
Record Date. The presence at the Meeting, in person or by proxy, of shareholders
entitled to cast at least a majority of the votes that all shareholders are
entitled to cast on a particular matter will constitute a quorum for the
purposes of consideration and action on such matter.
PROPOSED AMENDMENT TO ALKERMES' ARTICLES OF INCORPORATION
TO EFFECT A TWO-FOR-ONE STOCK SPLIT OF
AND INCREASE THE AUTHORIZED COMMON STOCK
At the Meeting, Alkermes' shareholders will be asked to adopt an
amendment to Article Fourth of Alkermes' Second Amended and Restated Articles of
Incorporation, as amended, to effect a two-for-one split of its Common Stock
(the "Stock Split") and to increase the total number of shares which Alkermes
shall have authority to issue from 85,000,000 to 165,000,000, including an
increase in the number of shares of Common Stock which Alkermes shall have the
authority to issue from 80,000,000 to 160,000,000 (the "Increase", and together
with the Stock Split, the "Amendment").
The Board of Directors believes that adoption of the proposed Amendment
is in the best interest of the Company and its shareholders. Adoption of the
proposed Amendment requires the affirmative vote of a majority of the votes cast
by all holders of Common Stock entitled to vote thereon. Abstentions will be
counted as present for purposes of determining the presence of a quorum for
purposes of this proposal,
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but will not be counted as votes cast. Broker non-votes (shares held by a broker
or nominee as to which the broker or nominee does not have the authority to vote
on a particular matter) will not be counted as present for purposes of
determining the presence of a quorum for purposes of this proposal and will not
be voted. Accordingly, neither abstentions nor broker non-votes will have any
effect on the outcome of the vote on this proposal.
The Board of Directors recommends that you vote FOR the adoption of the
proposed Amendment to the Articles.
On February 25, 2000, the Alkermes Board of Directors approved, and
proposed that the shareholders adopt, an amendment to the first paragraph of
Article Fourth of Alkermes' Second Amended and Restated Articles of
Incorporation, as amended, so that the same shall read in full as follows:
"FOURTH: The aggregate number of shares which the
Corporation has authority to issue is 165,000,000 shares par value $.01
per share of which 160,000,000 shares are designated as Common Stock
(hereinafter referred to as "Common Stock"). Each share of Common Stock
which is issued and outstanding when this provision becomes effective,
including each share owned by the Corporation, if any, shall be
reclassified as two fully paid and non-assessable shares of Common
Stock, par value $.01 per share, which shall be included in the
160,000,000 shares of Common Stock herein authorized."
PURPOSE AND EFFECT OF TWO-FOR-ONE STOCK SPLIT
The Board of Directors believes that the Stock Split would broaden the
market for the Company's Common Stock resulting in more widespread ownership and
greater interest in the Company, particularly by individuals. The Board of
Directors believes that these results would be of benefit both to the Company
and the shareholders. The closing price of the Common Stock on The Nasdaq
National Market on March __, 2000 was $_____.
If the proposed Amendment is adopted, the Stock Split is expected to
become effective at the close of business on April 28, 2000 and each shareholder
of record at that time would be the record owner of, and entitled to receive, a
certificate or certificates representing one additional share of Common Stock
for each share of Common Stock then owned of record by such shareholder. It is
anticipated that certificates representing the additional shares to which the
common shareholders will be entitled as a result of the Stock Split will be
mailed to shareholders on or about May 12, 2000. The Company will apply for
listing on The Nasdaq National Market the additional shares of Common Stock to
be issued in the event the Stock Split is approved. In addition, appropriate
adjustments will be made to the Company's stock option and stock award plans and
to the number of shares to be issued upon conversion of outstanding preferred
stock and corporate notes.
CERTIFICATES REPRESENTING SHARES OF COMMON STOCK SHOULD BE
RETAINED BY EACH SHAREHOLDER AND SHOULD NOT BE RETURNED TO THE COMPANY OR TO ITS
TRANSFER AGENT. IT WILL NOT BE NECESSARY TO SUBMIT OUTSTANDING CERTIFICATES FOR
EXCHANGE.
The Company is of the opinion that the proposed Stock Split would
result in no gain or loss or realization of taxable income to owners of Common
Stock under existing United States federal income tax laws. The basis for tax
purposes of each new share and each retained share of Common Stock would be
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equal to one-half of the basis for tax purposes of the corresponding share
immediately preceding the Stock Split. In addition, the holding period for the
additional shares issued pursuant to the Stock Split would be deemed to be the
same as the holding period for the original share of Common Stock. Shareholders
are urged to consult their tax advisors concerning the consequences of the
proposed Stock Split under any foreign, state and local tax laws that may apply
to their particular situations, which may be materially different from the
United States federal income tax consequences described above.
If shareholders dispose of their shares after the Stock Split, they may
pay higher brokerage commissions on the same relative interest in the Company
because that interest is represented by a greater number of shares. Shareholders
may wish to consult their brokers to ascertain the brokerage commission that
would be charged for disposing of the greater number of shares. The proposed
Amendment will not affect the par value of the Common Stock, the shareholders'
interest in the Company or their existing rights. The Common Stock account of
the Company will be increased to an amount equal to $.01 multiplied by the
number of issued shares of Common Stock immediately after the effectiveness of
the Stock Split, and the additional paid-in capital account of the Company will
be decreased by the amount of such increase.
PURPOSE AND EFFECT OF THE INCREASE
The Company is currently authorized to issue 80,000,000 shares of
Common Stock, of which 26,670,144 shares were issued and outstanding as of March
10, 2000. As of March 10, 2000, an aggregate of 12,477,609 shares of Common
Stock were reserved for issuance. This includes 1,845,018 shares of Common Stock
reserved for issuance upon conversion of the outstanding 3 3/4% Convertible
Subordinated Notes due 2007; 3,880,252 shares of Common Stock reserved for
issuance upon conversion of the outstanding shares of $3.25 Convertible
Exchangeable Preferred Stock or the debentures issued in exchange therefor;
5,824,770 shares of Common Stock issuable upon exercise or vesting of
outstanding stock options and stock awards and available for future grant or
award under various stock option and stock award plans; 149,791 shares of Common
Stock reserved for issuance upon exercise of outstanding 1994 and 1995 Class A
Warrants; and 777,778 shares of Common Stock reserved for issuance upon
conversion or redemption of the 1999 Redeemable Convertible Exchangeable
Preferred Stock or upon conversion of the Non-Voting Common Stock. Consequently,
as of March 10, 2000, 40,852,247 authorized shares of Common Stock were unissued
and not reserved for future issuance, of which approximately 39,147,753 shares
will be issued or reserved for issuance on April 28, 2000 if the Stock Split is
approved.
The Company is also authorized to issue 5,000,000 shares of capital
stock, which the Board of Directors has the power to issue in one or more
classes or series within each class and to fix the number of shares of each
class or series and all designations, preferences, limitations and special
rights, if any, of the shares in each series. The proposed Amendment does not
increase or otherwise affect these shares. Of these shares, the Board has
designated 450,000 shares as Non-Voting Common Stock, $.01 par value per share,
none of which is issued or outstanding, 696,500 shares as preferred stock, $.01
par value per share, issuable in series, none of which is issued or outstanding,
3,500 shares as 1999 Redeemable Convertible Exchangeable Preferred Stock, $.01
par value per share, all of which are issued and outstanding, and 2,299,000
shares as $3.25 Convertible Exchangeable Preferred Stock, par value $.01 per
share, all of which are issued and outstanding.
The Company believes that in order to take advantage of opportunities
described below, it needs to maintain a sufficient amount of authorized, but
unissued and
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unreserved Common Stock. The proposed Increase will keep the Company in a
similar position with respect to such authorized but unissued and unreserved
Common Stock as it was immediately prior to the Stock Split. As of the Record
Date, the same percentage of the authorized shares of Common Stock would be
unissued and unreserved both immediately before and after the effectiveness of
the proposed Amendment. The Stock Split is expected to be advantageous because
it will broaden the market for the stock resulting in more widespread ownership
and greater interest in the Company, particularly by individuals, thus
benefitting both the Company and the shareholders. Therefore, the Alkermes Board
of Directors believes that the adoption of the proposed Increase is advantageous
to Alkermes and its shareholders. The additional authorized Common Stock, after
completion of the Stock Split, could be issued from time to time to such persons
and for such consideration as the Board may determine for corporate purposes
which the Board may deem desirable including, without limitation, financings,
acquisitions, stock options, warrants, employee benefit plans, stock splits,
stock dividends or other distributions. The Board of Directors believes that
having authority to issue additional shares of Common Stock, without (except as
required by law, regulation or any exchange on which Alkermes' securities may
then be listed) obtaining specific shareholder approval will avoid the possible
delay of calling and holding a special meeting of shareholders to increase the
Company's authorized capital at the time a transaction may be proposed, so as to
enhance the Company's ability to take prompt advantage of market conditions and
to respond promptly to any future acquisition opportunities. The Company has no
present plan, understanding or arrangement to issue any of the additional shares
of Common Stock that will be authorized if the proposed Increase is adopted,
other than as a result of the Stock Split.
The authorization of additional shares of Common Stock will not, by
itself, have any effect on the rights of existing holders of Common Stock.
However, if the proposed Increase is approved, the Board of Directors will not
be required to obtain further shareholder approval prior to the issuance of any
such additional shares, except as may be required by law, regulation or any
exchange on which Alkermes' securities may then be listed. For example, because
the Common Stock is listed on the Nasdaq National Market, shareholder approval
is required before the Company could issue an amount of shares equal to 20% or
more of the number of outstanding shares of Common Stock in certain
transactions, including acquisitions. The shareholders do not have preemptive
rights to purchase additional shares of Common Stock and any issuance of Common
Stock on other than a pro rata basis may dilute the present equity ownership of
current shareholders.
Although the Board of Directors has no present intention of doing so,
the authorized but unissued Common Stock could be issued in one or more
transactions which would make more difficult or costly, and less likely, a
takeover of the Company or the removal of the Board or management. The issuance
of additional shares of stock would also have the effect of diluting the stock
ownership of persons seeking to obtain control of the Company. The proposed
Increase is not being recommended in response to any specific effort of which
the Company is aware to obtain control of the Company, nor is the Board of
Directors currently proposing to shareholders any anti-takeover measures. In
addition, there are a number of provisions which could have an anti-takeover
effect which currently apply to the Company, including (a) the Board of
Directors' ability to issue capital stock in one or more series with such
preferences and rights as the Board determines, (b) certain bylaws provisions
such as the requirement that nominees for election as directors of the Company
shall be submitted in writing to the Company not less than ninety days prior to
the date of the prior year's proxy statement, and (c) certain provisions of the
Pennsylvania Business Corporation Law of 1988, as amended.
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MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the
ownership of Common Stock as of March 10, 2000 by (i) each person who is known
by the Company to be the owner of 5% or more of the outstanding shares of Common
Stock, (ii) each director of the Company, (iii) the CEO and each of the
Company's four most highly compensated executive officers other than the CEO who
were serving as executive officers at the end of the last completed fiscal year,
and (iv) all the directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Number of
Shares
Beneficially Percentage
Owned Beneficially Owned(1)
------------ ---------------------
<S> <C> <C>
Floyd E. Bloom(2)...................................................... 133,500 *
Robert A. Breyer(3).................................................... 204,850 *
John K. Clarke(4)...................................................... 34,468 *
Richard F. Pops(5)..................................................... 322,591 1.20%
Alexander Rich(6)...................................................... 191,700 *
Paul Schimmel(6)....................................................... 263,800 *
Michael A. Wall(6)..................................................... 462,350 1.73
Raymond T. Bartus(7)................................................... 116,000 *
Michael J. Fox(8)...................................................... 0 0
James M. Frates(9)..................................................... 27,250 *
Michael J. Landine(10)................................................. 98,150 *
All directors and executive officers as a group (11 persons)(11)....... 1,854,659 6.76
</TABLE>
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* Represents less than 1% of the outstanding shares of the Common Stock.
(1) As of March 10, 2000, there were 26,670,144 shares of the Common Stock
outstanding.
(2) Includes 123,500 shares of Common Stock held by The Corey Bloom Family
Trust of which Dr. Bloom is a Trustee. Also includes 10,000 shares of
Common Stock subject to options which are exercisable.
(3) Includes 178,750 shares of Common Stock subject to options which are
exercisable or will become exercisable within 60 days of March 10,
2000.
(4) Includes 20,000 shares of Common Stock subject to options which are
exercisable.
(5) Includes 310,000 shares of Common Stock subject to options which are
exercisable or which will become exercisable within 60 days of March
10, 2000.
(6) Includes 10,000 shares of Common Stock subject to options which are
exercisable.
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(7) Includes 110,000 shares of Common Stock subject to options which are
exercisable or which will become exercisable within 60 days of March
10, 2000.
(8) All of Dr. Fox's options were canceled unexercised upon his resignation
in April 1999.
(9) Consists of 27,250 shares of Common Stock subject to options which will
become exercisable within 60 days of March 10, 2000.
(10) Includes 97,750 shares of Common Stock subject to options which are or
will become exercisable within 60 days of March 10, 2000.
(11) Includes 783,750 shares of Common Stock subject to options which are
exercisable or which will become exercisable within 60 days of March
10, 2000. Also includes 123,500 shares of Common Stock held in trust.
OTHER BUSINESS
The Board of Directors does not intend to present to the Meeting any
business other than adoption of the Amendment to the Articles of Incorporation
to increase the authorized shares of Common Stock and effect the Stock Split. If
any other matter is presented to the Meeting which under applicable proxy
regulations need not be included in this Proxy Statement or which the Board of
Directors did not know a reasonable time before this solicitation would be
presented, the persons named in the accompanying proxy will have discretionary
authority to vote proxies with respect to such matter in accordance with their
best judgment.
DEADLINE FOR SHAREHOLDERS PROPOSALS
The Company must have received any proposal which a shareholder wishes
to submit at the 2000 annual meeting of shareholders before March 10, 2000 if
the proposal is to be considered by the Board of Directors for inclusion in the
proxy material for that meeting. If any shareholder wishes to present a proposal
to the 2000 annual meeting of shareholders that is not included in the Company's
proxy statement for that meeting and fails to submit such proposal to the
Secretary of the Company on or before May 24, 2000, then the persons named in
the proxy will be allowed to use their discretionary voting authority when the
proposal is raised at the annual meeting, without any discussion of the matter
in the Company's proxy statement. In addition, in accordance with the Company's
bylaws, any nominee for election as a director of the Company at the 2000 annual
meeting of shareholders must be submitted in writing to the Company on or before
April 9, 2000, which is ninety (90) days prior to the date of the proxy
statement with regard to the 1999 annual meeting.
By Order of the Board of Directors
Morris Cheston, Jr.
Secretary
March ___, 2000
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PROXY
ALKERMES, INC.
CAMBRIDGE, MASSACHUSETTS
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 28, 2000
The undersigned shareholder of Alkermes, Inc. hereby appoints James M.
Frates and Charles Carelli, and each of them, attorneys and proxies, with power
of substitution in each of them, to vote and act for and on behalf of the
undersigned at the special meeting of shareholders of the Company to be held at
the offices of the Company, 64 Sidney Street, Cambridge, Massachusetts 02139, at
10:00 a.m., April 28, 2000, and at all adjournments thereof, according to the
number of shares which the undersigned would be entitled to vote if then
personally present, as indicated hereon and in their discretion upon such other
business as may come before the meeting, all as set forth in the notice of the
meeting and in the proxy statement furnished herewith, copies of which have been
received by the undersigned; hereby ratifying and confirming all that said
attorneys and proxies may do or cause to be done by virtue hereof.
IT IS AGREED THAT UNLESS OTHERWISE MARKED ON THE OTHER SIDE, SAID
ATTORNEYS AND PROXIES ARE APPOINTED WITH AUTHORITY TO VOTE FOR THE PROPOSAL
LISTED ON THE OTHER SIDE HEREOF.
(PLEASE FILL IN, SIGN AND DATE ON THE OTHER SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE)
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SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
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<PAGE> 10
[X] Please mark
votes as in
this example.
1. To consider and take action on a proposal
to adopt an amendment to the Company's
Second Amended and Restated Articles of FOR AGAINST ABSTAIN
Incorporation, as amended, to effect a two-
for-one split of the Company's Common Stock, [ ] [ ] [ ]
par value $.01 per share ("Common Stock") and
increase the total number of authorized shares
of the Company from 85,000,000 to 165,000,000,
including an increase in the number of
authorized shares of Common Stock from
80,000,000 to 160,000,000.
2. To transact such other business as may properly come before the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as your name(s) appear(s) hereon. All holders must sign.
When signing in a fiduciary capacity, please indicate full title as such.
If a corporation or partnership, please sign in full corporate or partnership
name by authorized person.
Signature: Date: Signature: Date:
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