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Filed by Watson Pharmaceuticals, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933
and deemed filed pursuant to
Rule 14a-12 of the
Securities Exchange Act of 1934
Subject Company: Watson Pharmaceuticals, Inc.
Commission File No. 0-20045
SOURCE: WATSON PHARMACEUTICALS, INC.
Friday, August 18, 2000
GETTING TOGETHER
A TRANSITION NEWSLETTER FOR THE EMPLOYEES OF SCHEIN & WATSON
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August 18, 2000 Issue #3
Watson 401(k) Plan Introduced At Schein
As Watson continues to plan for how business will be conducted in the new
organization, it is also evaluating the best possible combination of employee
benefits for the newly merged workforce. The goal is to have all business units,
except Puerto Rico (which has its own set of laws) on the same benefit plans by
January 1, 2001.
The Watson 401(k) Plan has been introduced to Schein employees July 25th through
August 1st in meetings at the Brewster, Carmel, Cherry Hill, Danbury, Florham
Park and Phoenix locations. Schein employees received enrollment materials so
that they can begin participation as soon as possible following the close of the
acquisition. Other benefits should continue - unchanged - through the end of
this year.
While there are similarities between Watson and Schein benefits, there are some
differences as well. To put everyone on the same plans by January 1 will require
some changes for both Schein and Watson employees. To help ensure that these
changes are in the best interests of employees and shareholders alike, focus
groups are being conducted with Schein employees at the locations mentioned
previously.
Meetings are also being conducted with Watson employees, so both Schein and
Watson employees' concerns are being factored into the eventual design of the
new company's benefit plans.
We'll continue to keep you posted as decisions are reached and any changes are
made.
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PIN Required for 401(k)
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(For Schein Employees only)
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You will need to get your new Personalized Identification Number (PIN) in order
to change your investment election once enrolled in the Watson 401(k) Plan.
To get your PIN, please call:
1-800-978-9567.
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Date Set For Schein Shareholder Meeting
A special meeting of stockholders of Schein Pharmaceutical, Inc. will be held on
Monday, August 28, 2000 at 9:00 a.m., local time, at the executive offices of
Schein in Florham Park, New Jersey. The purpose of the meeting is to approve the
merger between Watson and Schein.
The board of directors of Schein has fixed the close of business on July 25,
2000 as the record date for determining stockholders who are entitled to vote at
this meeting. Only those holders of record of shares of Schein common stock at
the close of business on July 25, 2000 can vote at this special meeting.
Even if you plan to attend the special meeting in person, it is requested that
you sign and return the proxy card you received in the materials recently sent
to you.
This card ensures that your shares will be represented at the special meeting in
the event you are unable to attend. If you do attend the special meeting and
wish to vote in person, you may withdraw your proxy and vote in person.
What Do You Need To Do Now?
We encourage you to read the proxy statement/prospectus carefully. Then, mail
your completed and signed proxy card in the provided return envelope so that
your shares can be voted at the special meeting.
Your vote is important regardless of the number of shares you own.
R&D Organizational Announcements Made
As part of the reorganization of Schein management, there will be new reporting
relationships for the R&D organization at Schein.
Brand R&D and Medical Affairs will continue to report to Dr. Gary Kozloski, who,
in turn, will report directly to Dr. Charles Ebert, Watson's Senior Vice
President/R&D. All generic solid and injectable dosage form groups will now
report to Dr. Neil Parikh, Watson's Vice President/Generic Product Development.
The Danbury Product Development group will continue to report to Daisy
Rivera-Almentero while the Carmel Analytical R&D group will continue to report
to John Feeny
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and Chris Fowler, respectively. Both solid dosage form Product Development and
Analytical R&D groups will report to Dr. Parikh.
Dr. Fakrul Sayeed has graciously agreed to assist in a transition capacity and
will continue to supervise the Injectable R&D groups in Cherry Hill through the
completion of the merger. Dr. Sayeed will report directly to Dr. Parikh in this
transitionary role.
The Sterile Products/Product Development and Analytical R&D groups will continue
to report to Mitch Garber and Rupa Iyers, respectively; both of whom will
continue to report to Dr. Sayeed during this transition period.
Dr. Madhu Vadnere will continue in his current capacity in the R&D Business
Alliance group during the integration phase, reporting directly to Dr. Parikh.
Dr. Wanda Williams will continue to head R&D project management for Schein,
reporting directly to Dr. Parikh.
Dr. Parikh will be responsible for all generic R&D within the new Watson
organization as well as supporting solid dosage form development for several
Proprietary R&D projects.
Watson's Copiague Site Manager Retires; Schein VP Named To Oversee Facility
After more than 30 years in the pharmaceutical manufacturing industry, Bob
Glickstein, Watson's Copiague, Long Island General Manager, has announced his
retirement from the Company, effective August 24th. During Bob's leadership
tenure, the Long Island facility began production and continues to produce
Watson's nicotine polacrilex gum product (which was re-launched this past
April), while also providing contract manufacturing services to long-term
contract-holders.
Succeeding Bob as Copiague Site Manager will be Don Allen, Vice
President/Operations for Schein's Carmel, New York and Danbury, Connecticut
facilities. Like Copiague, both the Carmel and Danbury locations are solid
dosage manufacturing facilities.
Don Allen, a seven-year veteran with Schein, will continue to report to Bob
Mills, Schein's Senior Vice President/Operations.
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Stock Option Deadline
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(For Schein Employees only)
Stock options under the 1993 and 1997 Schein Employee Stock Option Plans may be
exercised only until August 25, 2000, since they will terminate as a result of
the pending Watson/Schein transaction. Information regarding the specific
instructions to exercise these stock options was sent to all Schein Employee
Stock Option Plan holders by Schein's Board of Directors on August 8th.
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If you do not exercise these options that have a deadline of August 25, 2000,
these options will expire and no longer have value.
Reminder - In order to exercise your stock options, you must use a Personalized
Identification Number (PIN). To get your PIN, you must call 1-800-411-6657.
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Questions & Answers
What happens if I miss the deadline to exercise my stock options?
If you fail to exercise your 1993 and 1997 Employee Stock Options by the
deadline, the options will expire on August 25th and will no longer have any
value. That's why it is important to get your PIN and make your decisions
promptly.
Be sure to review your documents carefully to determine if you have any of these
stock options.
What if I already hold Schein shares of common stock? How many shares of Watson
stock will I have following the merger completion? Under the terms of the merger
agreement, each outstanding share of Schein common stock (other than ineligible
and dissenting shares) will be converted into the right to receive a fraction of
a share of Watson common stock. The fraction of a share of Watson common stock
will be based on the average closing price of a share of Watson common stock on
the New York Stock Exchange for a ten-day trading period. That ten-day trading
period began August 11th and will continue through August 24th.
For specific details, please refer to page 4 in the proxy statement/prospectus
mailed to each Schein stockholder.
MERGER QUESTIONS
Two employee hotlines are up and running to take employee questions about the
Watson/Schein merger.
These hotlines are confidential.
For Schein Employees:
Dial (602) 447-3127 (or, if you are calling from a Schein location, dial
extension 3127).
For Watson Employees:
Dial (800) 249-5499, ext. 1500.
Additional Information and Where to Find It
Watson filed a Schedule TO on June 6, 2000, in connection with the tender offer
and a registration statement on SEC Form S-4 on July 14, 2000 in connection with
the merger, and Watson and Schein mailed tender offer documentation and a proxy
statement/prospectus to
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stockholders of Schein containing information about the tender offer and the
merger. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE TENDER OFFER
DOCUMENTATION, THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS
CAREFULLY. THE TENDER OFFER DOCUMENTATION, THE REGISTRATION STATEMENT AND THE
PROXY STATEMENT/PROSPECTUS CONTAIN IMPORTANT INFORMATION ABOUT SCHEIN, WATSON,
THE TENDER OFFER, THE MERGER AND RELATED MATTERS. INVESTORS AND SECURITY HOLDERS
WILL BE ABLE TO OBTAIN FREE COPIES OF THESE DOCUMENTS THROUGH THE WEB SITE
MAINTAINED BY THE SECURITIES AND EXCHANGE COMMISSION AT HTTP://WWW.SEC.GOV. FREE
COPIES OF THE TENDER OFFER DOCUMENTATION, THE PROXY STATEMENT/PROSPECTUS AND
THESE OTHER DOCUMENTS MAY ALSO BE OBTAINED FROM WATSON BY DIRECTING A REQUEST
THROUGH THE INVESTOR RELATIONS PHONE LINE AT 909-270-1400, EXTENSION 4153; BY
MAIL TO WATSON PHARMACEUTICALS, INC., ATTENTION: INVESTOR RELATIONS DEPARTMENT,
311 BONNIE CIRCLE, CORONA, CALIFORNIA 92880, FROM SCHEIN THROUGH THE INVESTOR
RELATIONS PHONE LINE AT 973-593-5535 OR BY MAIL TO SCHEIN PHARMACEUTICAL, INC.,
ATTENTION: INVESTOR RELATIONS, 100 CAMPUS DRIVE, FLORHAM PARK, NEW JERSEY,
07932.
In addition to the tender offer documentation, the registration statement and
the proxy statement/prospectus, Watson and Schein each file annual, quarterly
and special reports, proxy statements and other information with the Securities
and Exchange Commission. You may read and copy any reports, statements or other
information filed by Watson or Schein at the SEC public reference rooms at 450
Fifth Street, N.W., Washington, D.C. 20549 or at any of the Commission's other
public reference rooms in New York, New York and Chicago, Illinois. Please call
the Commission at 800-SEC-0330 for further information on the public reference
rooms. Schein's and Watson's filings with the Commission are also available to
the public from commercial document-retrieval services and at the web site
maintained by the Commission at http://www.sec.gov.
Interests of Certain Persons in the Transaction
WATSON, SCHEIN, THEIR RESPECTIVE DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN OTHER
MEMBERS OF MANAGEMENT AND EMPLOYEES MAY HAVE SOLICITED PROXIES FROM SCHEIN
STOCKHOLDERS IN FAVOR OF THE ADOPTION OF THE MERGER AGREEMENT. A DESCRIPTION OF
ANY INTERESTS THAT SCHEIN'S DIRECTORS AND EXECUTIVE OFFICERS HAVE IN THE MERGER
IS AVAILABLE IN THE PROXY STATEMENT/PROSPECTUS.
Forward Looking Information
THIS PRESS RELEASE CONTAINS CERTAIN STATEMENTS OF A FORWARD-LOOKING NATURE
RELATING TO FUTURE EVENTS OR FUTURE BUSINESS PERFORMANCE. ANY SUCH STATEMENTS
THAT REFER TO WATSON'S OR SCHEIN'S ESTIMATED OR ANTICIPATED FUTURE RESULTS,
PRODUCT DEVELOPMENT EFFORTS OR PERFORMANCE OR OTHER NON-HISTORICAL FACTS ARE
FORWARD-LOOKING AND REFLECT EACH COMPANY'S CURRENT PERSPECTIVE OF EXISTING
TRENDS AND INFORMATION. SUCH FORWARD-LOOKING STATEMENTS INCLUDE, AMONG OTHERS,
STATEMENTS REGARDING THE CONSUMMATION OF THE ACQUISITION OF SCHEIN BY WATSON AND
THE FUTURE GROWTH, IMPACT AND SUCCESS OF THE COMBINED COMPANY, INCLUDING
EXPECTATIONS REGARDING
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FINANCIAL PERFORMANCE, PRODUCT DEVELOPMENT EFFORTS AND THE SUCCESSFUL
INTEGRATION OF THE TWO BUSINESSES. SUCH FORWARD-LOOKING STATEMENTS INVOLVE RISKS
AND UNCERTAINTIES THAT CANNOT BE PREDICTED OR QUANTIFIED AND, CONSEQUENTLY,
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH
STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, AMONG OTHERS, RISKS ASSOCIATED
WITH THE INTEGRATION OF THE WATSON AND SCHEIN BUSINESSES AFTER CONSUMMATION OF
THE ACQUISITION, INCLUDING THE POSSIBLE INABILITY TO SUCCESSFULLY INTEGRATE
THESE BUSINESSES ON A COST EFFECTIVE AND TIMELY BASIS, THE POSSIBLE INABILITY TO
OBTAIN ON A TIMELY BASIS ANY REGULATORY OR THIRD PARTY APPROVALS NECESSARY TO
SUCCESSFULLY IMPLEMENT THE COMBINED COMPANY'S INTEGRATION PLANS OR THE POSSIBLE
INABILITY TO TIMELY MAKE CHANGES ON COMMERCIALLY ADVANTAGEOUS TERMS TO SCHEIN'S
BUSINESS, AND SUCH OTHER RISKS AND UNCERTAINTIES DETAILED IN WATSON'S AND
SCHEIN'S MOST RECENT FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION,
INCLUDING WATSON'S ANNUAL REPORT AND FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1999 AND FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2000, AND SCHEIN'S ANNUAL
REPORT AND FORM 10-K FOR THE YEAR ENDED DECEMBER 25, 1999 AND FORM 10-Q FOR THE
QUARTER ENDED JUNE 24, 2000.
