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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO___________)*
Schein Pharmaceutical, Inc.
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
806416-10-3
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(CUSIP Number)
Robert C. Funsten
Senior Vice President, General
Counsel and Secretary
Schein Pharmaceutical, Inc.
100 Campus Drive
Florham Park, NJ 07932
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 6, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of
that section of the Exchange Act but shall be subject to all other provisions of
the Exchange Act (however, see the Notes).
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CUSIP No. 806416-10-3
1 NAME OF REPORTING PERSON
Watson Pharmaceuticals, Inc.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
95-3872914
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_] (b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [_]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Watson Pharmaceuticals, Inc. incorporated in the state of Nevada.
NUMBER OF 7 SOLE VOTING POWER
SHARES 26,068,469
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
26,068,469
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
26,068,469 shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
77.8%
14 TYPE OF REPORTING PERSON
CO
ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D relates to the common stock, $0.01 par value per
share (the "Schein Common Stock"), of Schein Pharmaceutical, Inc., a Delaware
corporation ("Schein"). The principal executive offices of Schein are located at
100 Campus Drive, Florham Park, NJ 07932.
ITEM 2. IDENTITY AND BACKGROUND
(a) The name of the persons filing this statement is Watson
Pharmaceuticals, Inc., a Nevada corporation ("Watson"). Watson is a
pharmaceutical company primarily engaged in the development,
production, marketing and distribution of both branded and off-patent
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pharmaceutical products. WS Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of Watson ("Merger Sub"), actually holds
the shares of Schein Common Stock.
(b) The address of the principal office and principal business of
Watson is 311 Bonnie Circle, Corona, CA 92880.
(c) Set forth in Schedule I to this Schedule 13D is the name and
present principal occupation or employment of each of Watson's
executive officers and directors and the name, principal business and
address of any corporation or other organization in which such
employment is conducted.
(d) During the past five years, neither Watson nor, to Watson's
knowledge, any person named in Schedule I to this Schedule 13D, has
been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors).
(e) During the past five years, neither Watson nor, to Watson's
knowledge, any person named in Schedule I to this Schedule 13D, was a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which such person was or is
subject to a judgment, decree or final order enjoining future
violations of or prohibiting or mandating activity subject to federal
or state securities laws or finding any violation with respect to such
laws.
(f) All of the directors and executive officers of Watson named in
Schedule I to this Schedule 13D are citizens of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
In a tender offer by Merger Sub for all of the outstanding shares of
Schein Common Stock, which commenced on June 6, 2000 and expired on
July 3, 2000, Merger Sub purchased 26,068,469 shares of Schein Common
Stock, equaling 77.8% of the total outstanding stock of Schein at a
price of $19.50 per share. The funds used for the purchase were a
combination of cash and monies from Societe Generale pursuant to a
Credit Agreement, dated as of July 5, 2000 among Watson, SG Cowen
Securities Corporation and Societe Generale (the "Credit Agreement"),
a copy of which is attached to this Schedule 13D as Exhibit 99.1,
incorporated by reference from Watson's Registration Statement on Form
S-4, filed on July 14, 2000.
ITEM 4. PURPOSE OF TRANSACTION
(a) - (b) Pursuant to an Agreement and Plan of Merger dated as of May
24, 2000 (the "Merger Agreement"), among Watson, Merger Sub and
Schein, and subject to the conditions set forth therein, Merger Sub
purchased shares of Schein Common Stock in the tender offer and Merger
Sub will be merged with and into Schein (the "Merger"). In the Merger,
Schein will become a wholly owned subsidiary of Watson and each share
of Schein Common Stock will be converted into the right to receive a
fraction of a share of Watson common stock, $0.0033 par value per
share ("Watson Common Stock"), in accordance with the Merger
Agreement.
The description contained in this Item 4 of the transactions
contemplated by the Merger Agreement is qualified in its entirety by
reference to the full text of the Merger Agreement, a copy of which is
attached to this Schedule 13D as Exhibit 99.2, incorporated by
reference from Watson's Current Report on Form 8-K, filed on May 31,
2000.
(c) Not applicable.
(d) On July 6, 2000, upon consummation of the tender offer, five
persons, constituting a majority of the directors of Schein, resigned
and were replaced by five Watson representatives.
(e) None, other than a change in the number of outstanding shares of
Schein Common Stock as contemplated by the Merger Agreement.
(f) Upon consummation of the Merger, Schein will become a wholly owned
subsidiary of Watson.
(g) Upon consummation of the Merger, the Restated Certificate of
Incorporation of Schein shall remain in effect, except that such
Certificate of Incorporation shall be amended so that Article Third,
Section A reads in its entirety as follows: "The aggregate number of
shares that the Corporation shall have the authority to issue is 1,000
shares of Common Stock, par value $0.001 per share."
(h) Upon consummation of the Merger, the Schein Common Stock will
cease to be quoted on any quotation system or exchange.
(i) Upon consummation of the Merger, the Schein Common Stock will
become eligible for termination of registration pursuant to Section
12(g)(4) of the Exchange Act.
(j) Other than as described above, Watson currently has no plan or
proposal which relates to, or may result in, any of the matters listed
in Items 4(a) - (i) of Schedule 13D (although Watson reserves the
right to develop such plans).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) - (b) As a result of the tender offer, Watson, through Merger Sub,
has the power to vote an aggregate of 26,068,469 shares of Schein
Common Stock
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Except as described in this Schedule 13D: (i) neither Watson nor, to
the best knowledge of Watson, any of the persons listed in Schedule I
to this 13D or any affiliate or majority-owned subsidiary of Watson or
any of the persons so listed beneficially owns or has any right to
acquire, directly or indirectly, any shares of Schein Common Stock.
Allen Chao, Chairman of the Board, Chief Executive Officer and
President of Watson, beneficially owns 50,000 shares of Schein Common
Stock. Fred Wilkinson, Chief Operating Officer and Senior Vice
President, Sales and Marketing of Watson, beneficially owns 300 shares
of Schein Common Stock. Michael Boxer, Senior Vice President and Chief
Financial Officer of Watson, beneficially owns 1,000 shares of Schein
Common Stock.
(c) Except as described in this Schedule 13D, none of Watson nor, to
the best knowledge of Watson, any of the persons named in Schedule I
to this Schedule 13D, has effected any transaction in the shares of
Schein Common Stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
Other than as described in Item 4 above, to Watson's knowledge, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
among the persons named in Item 2 and between such persons and any person with
respect to any securities of Schein, including but not limited to transfer or
voting of any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
EXHIBIT NO. DESCRIPTION
99.1 Credit Agreement, dated as of July 5, 2000 among Watson, SG Cowen
Securities Corporation and Societe Generale, incorporated by reference
from Watson's Registration Statement on Form S-4, filed on July 14,
2000.
99.2 Agreement and Plan of Merger, dated as of May 24, 2000, by and among
Watson Pharmaceuticals, Inc., a Nevada corporation, WS Acquisition
Corp., a Delaware corporation, and Schein Pharmaceutical, Inc., a
Delaware corporation, incorporated by reference from Watson's Current
Report on Form 8-K, filed on May 31, 2000.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: July 14, 2000 WATSON PHARMACEUTICALS, INC.
By: /s/ Robert C. Funsten
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Robert C. Funsten
Senior Vice President
General Counsel and Secretary
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
WATSON AND WS ACQUISITION CORP.
DIRECTORS AND EXECUTIVE OFFICERS OF WATSON. The following table sets forth
information with respect to the executive officers and directors of Watson.
Unless otherwise indicated, the current business address of each person is
Watson Pharmaceuticals, Inc., 311 Bonnie Circle, Corona, CA 92880.
<TABLE>
<CAPTION>
POSITION WITH WATSON; PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS EMPLOYMENT
---------------------------------------- -----------------------------------------------------
<S> <C>
ALLEN Y. CHAO, PH.D. Director of Watson, Chief Executive Officer, President
and Chairman of the Board of Watson
MICHAEL J. FEDIDA, J & J Pharmacy Director of Watson and a registered pharmacist and
Cedar Chemists, Inc., 527 Cedar owner or partial owner of several retail pharmacies.
Lane, Teaneck, New Jersey 07666
MICHAEL J. FELDMAN, D'Ancona & Director of Watson and a partner of the law firm of
Pflaum, 111 E. Wacker Drive, D'Ancona & Pflaum.
Suite 2800, Chicago, Illinois 60601
ALBERT F. HUMMEL, 5726 Avenida Director of Watson and a partner in Affordable
Cantaria, P.O. Box 3407, Rancho Santa Residential Communities. In addition, Mr. Hummel
Fe, California 92067 is President of Pentech Pharmaceuticals, Inc.
RONALD R. TAYLOR, Enterprise Partners Director of Watson and is a consultant to Cardinal
Venture Capital, 7979 Ivanhoe Avenue, Health, Inc.
Suite 550, La Jolla, CA 92037
ANDREW L. TURNER, Sun Healthcare Group, Director of Watson and Chairman and Chief Executive
Inc. 101 Sun Lane N.E., Albuquerque, Officer of Sun Healthcare Group, Inc.
NM 87109
FRED G. WEISS, 16450 Maddalena Place, Director of Watson and managing director of
Delray Beach, FL 33446 FGW Associates.
MICHAEL E. BOXER Senior Vice President and Chief Financial Officer
of Watson.
CHARLES D. EBERT, PH.D. Senior Vice President, Research and Development
of Watson.
ROBERT C. FUNSTEN Senior Vice President, General Counsel and
Secretary of Watson.
DAVID C. HSIA, PH.D. Senior Vice President, Scientific Affairs of Watson.
G. FREDERICK WILKINSON Chief Operating Officer and Senior Vice President,
Sales and Marketing of Watson.
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS OF WS ACQUISITION CORP. The
directors of WS Acquisition Corp. are Allen Y. Chao, G. Frederick Wilkinson and
Michael E. Boxer. The executive officers of WS Acquisition Corp. are Allen Y.
Chao (President), Michael E. Boxer (Chief Financial Officer and Treasurer), G.
Frederick Wilkinson (Vice President) and Robert C. Funsten (Secretary).
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
99.1 Credit Agreement, dated as of July 5, 2000 among Watson, SG Cowen
Securities Corporation and Societe Generale, incorporated by reference
from Watson's Registration Statement on Form S-4, filed on July 14,
2000.
99.2 Agreement and Plan of Merger, dated as of May 24, 2000, by and among
Watson Pharmaceuticals, Inc., a Nevada corporation, WS Acquisition
Corp., a Delaware corporation, and Schein Pharmaceutical, Inc., a
Delaware corporation, incorporated by reference from Watson's Current
Report on Form 8-K, filed on May 31, 2000.
