<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
JUNE 25, 1999
Date of Report (Date of earliest event reported)
NEOPHARM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-90516 51-0327886
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 CORPORATE NORTH
SUITE 215
BANNOCKBURN, ILLINOIS 60015
(Address of principal executive offices)
(847) 295-8678
Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
On June 25, 1999, NeoPharm, Inc. (the "Company") called its Redeemable
Common Stock Purchase Warrants (the "Warrants") for redemption on July 28,
1999 (the "Redemption Date"). The Warrants are exercisable, prior to the
Redemption Date, for two shares of the Company's Common Stock at a purchase
price of $9.80 per Warrant ($4.90 per share of Common Stock). Warrants may
be exercised until 5:00 p.m. on the day prior to the Redemption Date. On and
after the Redemption Date, each Warrant will be redeemed by the Company, in
accordance with its terms, at a price of $0.01 per Warrant. As of June 25,
1999, there were approximately 837,067 Warrants issued and outstanding which
are convertible into 1,674,134 shares of Common Stock.
The Common Stock underlying the Warrants has been registered under the
Securities Act of 1933, as amended (the "Securities Act") and on the American
Stock Exchange.
Also on June 25, 1999, the Company called for redemption on July 28,
1999, the redeemable warrant portion of the Representative's Warrants which
were issued at the time of the Company's initial public offering (the
"Representative's Warrants"). The redeemable warrant portion of the
Representative's Warrants are exercisable prior to the Redemption Date for
two shares of the Company's Common Stock at a purchase price of $13.72 per
Representative's Warrant ($6.86 per share of Common Stock). As of June 25,
1999, there were eight holders of Representative's Warrants and a total of
135,000 shares of Common Stock are issuable upon exercise of the redeemable
warrant portion of the Representative's Warrant.
Item 7. Exhibits.
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Exhibit 10.1 Notice of Redemption, dated June 25, 1999 to Registered
Holders of NeoPharm, Inc., Redeemable Common Stock
Purchase Warrants
Exhibit 10.2 Prospectus dated June 24, 1999, as filed with the Commission
as part of the Company's Registration Statement on Form S-3
as amended on Form S-1 (File No. 333-68133), is incorporated
by reference.
</TABLE>
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEOPHARM, INC.
Dated: July 7, 1999 By: /s/ James M. Hussey
-----------------------------
James M. Hussey
President and Chief
Executive Officer
3
<PAGE>
NEOPHARM, INC.
June 25, 1999
To: Registered Holders of NeoPharm, Inc. Redeemable Common Stock Purchase
Warrants
NeoPharm, Inc. has called all of its issued and outstanding Redeemable
Common Stock Purchase Warrants (the "Warrants") for redemption on July 28, 1999.
The enclosed Notice of Redemption (printed on blue paper) gives the details of
the call and sets out the options available to you. Please read it carefully and
note the following:
- Your Warrants will be redeemed on July 28, 1999 for $0.01 per Warrant
unless you elect to convert your Warrants into Common Stock.
- You may exercise each Warrant for NeoPharm Common Stock at a conversion
rate of two (2) shares of Common Stock and a purchase price of $9.80 per
Warrant ($4.90 per share).
- If the market price of NeoPharm Common Stock is at least $4.91 per share,
holders who convert will receive Common Stock with a market value greater
than the cost of exercising a Warrant.
- If you wish to convert Warrants into Common Stock, you must do so before
5:00 p.m., New York City time, on JULY 27, 1999 (the business day prior to
the redemption date). Any called Warrants that have not been converted
before 5:00 p.m. on July 27, 1999 will be redeemed for cash.
- Generally, there is no taxable gain or loss on conversions of Warrants
into Common Stock (although the subsequent sale of the Common Stock will
give rise to a taxable gain or loss). CONSULT YOUR OWN TAX ADVISOR FOR THE
SPECIFIC TAX CONSEQUENCES APPLICABLE TO YOU.
- A Prospectus dated June 24, 1999 describing NeoPharm and the Common Stock
accompanies the Notice of Redemption and should be reviewed by you prior
to making an election to exercise your Warrants.
FOR INFORMATION OR ASSISTANCE,
PLEASE CONTACT GEORGESON & COMPANY INC.
BANKS AND BROKERS CALL: (212) 440-9800 (COLLECT)
ALL OTHERS CALL: (800) 223-2064 (TOLL FREE)
<PAGE>
NOTICE OF REDEMPTION
NEOPHARM, INC.
REDEEMABLE COMMON STOCK PURCHASE WARRANTS
CUSIP NUMBER 640919 11 4*
THE CONVERSION PRIVILEGE DESCRIBED BELOW EXPIRES AT 5:00 P.M.,
NEW YORK CITY TIME, ON JULY 27, 1999
NOTICE IS HEREBY GIVEN that NeoPharm, Inc. (the "Company") has called for
redemption on July 28, 1999 (the "Redemption Date") all of its issued and
outstanding Redeemable Common Stock Purchase Warrants (the "Warrants") at a
redemption price of $0.01 per Warrant (the "Redemption Price").
Holders of record of Warrants who do not elect to convert their Warrants
into Common Stock of the Company will be entitled to receive the Redemption
Price on or after the Redemption Date upon presentation and surrender of
certificate(s) evidencing Warrants at the office of Harris Trust and Savings
Bank, the Company's transfer agent for the Warrants (the "Transfer Agent"), as
follows:
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BY HAND OR OVERNIGHT COURIER: BY MAIL:
Harris Trust and Savings Bank Harris Trust and Savings Bank
Corporate Actions P.O. Box 830
311 West Monroe Street Chicago, Illinois 60690-0830
11th Floor
Chicago, Illinois 60606
FOR INFORMATION OR ASSISTANCE, PLEASE CALL
Georgeson & Company Inc.
Banks and Brokers call: (212) 440-9800 (collect)
All others call: (800) 223-2064 (toll free)
</TABLE>
On the Redemption Date, the Redemption Price will become due and payable on
each Warrant and all rights of the holders of Warrants by reason of the
ownership of such Warrants will terminate, except the right to receive the
Redemption Price, without interest, upon surrender of their Warrants therefor.
Each Warrant is convertible, at the option of the holder, into TWO shares of
the Company's common stock, par value $.0002145 per share (the "Common Stock"),
at a conversion price of $9.80 per Warrant (equivalent to $4.90 per share of
common stock). The right to convert Warrants into Common Stock will terminate at
5:00 p.m., New York City time, on July 27, 1999, the business day prior to the
Redemption Date.
On or prior to July 28, 1999, the Company will deposit with Harris Trust and
Savings Bank funds necessary to pay the Redemption Price on all Warrants that
have not been converted into Common Stock.
- ------------------------
* No representation is made as to the accuracy of this CUSIP number either
as printed on the certificates representing Redeemable Common Stock Purchase
Warrants or contained in this Notice of Redemption.
<PAGE>
IMPORTANT INFORMATION FOR HOLDERS OF WARRANTS
GENERAL
Under the terms of the Warrant Agreement, the Company may call the Warrants
for redemption if the average closing sale price of the Company's Common Stock
as reported by the American Stock Exchange equals or exceeds $5.60 for twenty
(20) trading days within a period of thirty (30) consecutive trading days ending
on the fifth trading day prior to the date of the notice of redemption. For the
period from May 11, 1999 to June 18, 1999 (the date which is five days prior to
this Redemption Notice), the price of the Company's Common Stock has traded
above $5.60 per share with the result that the condition precedent for calling
the Warrants have been satisfied.
MARKET CONSIDERATIONS
On June 23, 1999, the reported closing price of the Common Stock on the
American Stock Exchange was $17 per share. During the period from January 1,
1998 through June 23, 1999, the high and low sales prices per share of the
Common Stock as reported on the American Stock Exchange were $21 5/8 and $2,
respectively. If the market price of the Common Stock is greater than $4.90 per
share, holders who elect to convert their Warrants will receive, upon
conversion, shares of Common Stock having a market value, on the date of
exercise, greater than the cash that they would be required to expend in order
to exercise their Warrant.
FEDERAL INCOME TAX CONSIDERATIONS
The following summarizes the principal federal income tax considerations,
under current law, relevant to the conversion of Warrants into Common Stock and
to the redemption of Warrants. It does not address all potentially relevant
federal income tax matters, including consequences to persons (such as foreign
persons, banks, life insurance companies, dealers in securities, and tax-exempt
organizations) subject to special provisions of federal income tax law. THE
FOLLOWING SUMMARY IS FOR GENERAL INFORMATION ONLY, AND HOLDERS OF WARRANTS
SHOULD CONSULT THEIR OWN TAX ADVISORS ABOUT THE FEDERAL, STATE, LOCAL, AND
FOREIGN TAX CONSEQUENCES OF THE CONVERSION OR REDEMPTION OF CALLED SHARES.
CONVERSION INTO COMMON STOCK. Under current United States federal income
tax law, no taxable gain or loss will be recognized by any holder of Warrants on
the conversion of such shares into Common Stock, except with respect to any cash
received in exchange for a fractional interest in Common Stock. Holders
receiving cash in lieu of fractional shares will be treated as if such
fractional shares had been redeemed by the Company for cash. Unless such
redemption is found to be essentially equivalent to a dividend, the holder will
recognize gain or loss measured by the difference between the holder's basis in
the fractional share surrendered and the amount of cash received. The tax basis
for the shares of Common Stock received upon conversion will be equal to the
adjusted tax basis of the Warrants converted, reduced by the portion of such
basis allocable to any fractional interest exchanged for cash. The holding
period of the shares of Common Stock received upon conversion will include the
holding period of the Warrants converted, provided such Warrants were held as a
capital asset at the time of conversion.
REDEMPTION. Taxable income or loss will be recognized by any holder whose
Warrants are redeemed by the Company for a cash payment. Generally, the
redemption of all of a holder's Warrants for cash will result in capital gain or
loss equal to the difference between the holder's tax basis in the Warrants
redeemed and the amount of cash received. Such gain or loss will be long-term
capital gain or loss if the holding period for the Warrants exceeds one year.
Under certain circumstances involving a redemption by the Company (such as where
a holder's interest in the Company is not sufficiently reduced), capital gain or
loss treatment does not apply, and the entire amount of the cash received upon
redemption of the Warrants will be taxable as a dividend, which will be taxable
as ordinary income. However, if a holder completely terminates such holder's
interest in the Company (taking into account shares deemed owned by the holder
by reason of certain constructive ownership rules) as a result of a redemption
of Warrants, the redemption proceeds will not be taxable as a dividend.
Moreover, if, as a result of a redemption of the Warrants, a holder whose stock
interest in the Company is minimal and who exercises no control over the
Company's affairs experiences an actual reduction in such holder's proportionate
interest in the Company (taking into account the constructive ownership rules
mentioned above), then based upon a published Internal Revenue Service ruling,
such holder should also be exempt from dividend treatment.
<PAGE>
ALTERNATIVES AVAILABLE TO HOLDERS OF WARRANTS
Holders of Warrants have the following alternatives, each of which should be
carefully considered:
1. CONVERSION OF WARRANTS INTO COMMON STOCK
Each Warrant may be converted, at the option of the holder thereof, at any
time prior to 5:00 p.m., New York City time, on July 27, 1999 into TWO shares of
Common Stock at the conversion price of $9.80 per Warrant (equivalent to $4.90
per share of Common Stock). To effect such conversion, holders of Warrants must
surrender the certificate(s) for their Warrants at the offices of the Transfer
Agent at either of the addresses set forth above prior to 5:00 p.m., New York
City time, on July 27, 1999, accompanied by (1) an irrevocable written notice of
election to convert such Warrants into Common Stock and (2) a certified or
cashiers check for the full Purchase Price for the number of shares to be
acquired (an amount equal to $9.80 X the number of Warrants converted).
Completion, execution and return of the enclosed Letter of Transmittal, marked
clearly to indicate a choice for conversion in Item B, will constitute
compliance with such notice requirements.
No fractional shares of Common Stock are issuable upon conversion. The
Company will pay the cash equivalent of any such fractional interest based upon
the last reported sale price of the Common Stock on the American Stock Exchange
on the business day prior to the day of conversion.
IF THE MARKET PRICE OF THE COMMON STOCK IS AT LEAST $4.91 PER SHARE, UPON
CONVERSION, A HOLDER OF WARRANTS WILL RECEIVE COMMON STOCK WITH A MARKET VALUE,
PLUS CASH IN LIEU OF ANY FRACTIONAL SHARE, IF ANY, GREATER THAN THE AMOUNT OF
CASH THE HOLDER WOULD OTHERWISE BE ENTITLED TO RECEIVE UPON REDEMPTION AND TO
HAVE PAID IN ORDER TO EXERCISE THE WARRANT. HOLDERS OF WARRANTS ARE URGED TO
OBTAIN CURRENT MARKET QUOTATIONS FOR THE COMMON STOCK. IT SHOULD BE NOTED THAT
THE PRICE OF THE COMMON STOCK RECEIVED UPON CONVERSION WILL FLUCTUATE IN THE
MARKET. NO ASSURANCE IS GIVEN AS TO THE PRICE OF THE COMMON STOCK AT ANY FUTURE
TIME. HOLDERS WHO SELL THEIR COMMON STOCK SHOULD EXPECT TO INCUR VARIOUS
EXPENSES IN CONNECTION WITH THE SALE.
THE WARRANTS MAY BE CONVERTED INTO COMMON STOCK ONLY BY DELIVERY OF
CERTIFICATES THEREFOR, ACCOMPANIED BY THE LETTER OF TRANSMITTAL OR THE NOTICE
DESCRIBED ABOVE, AND THE FULL AMOUNT OF THE PURCHASE PRICE FOR ALL SHARES OF
COMMON STOCK TO BE ACQUIRED, TO THE TRANSFER AGENT PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON JULY 27, 1999. SINCE IT IS THE TIME OF RECEIPT, NOT THE TIME OF
MAILING, THAT DETERMINES WHETHER WARRANTS HAVE BEEN TIMELY TENDERED FOR
CONVERSION, SUFFICIENT TIME SHOULD BE ALLOWED FOR CERTIFICATES SENT BY MAIL TO
BE RECEIVED BY THE TRANSFER AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON
JULY 27, 1999.
ANY WARRANTS THAT HAVE NOT BEEN PROPERLY PRESENTED FOR CONVERSION PRIOR TO
5:00 P.M., NEW YORK CITY TIME, ON JULY 27, 1999 WILL BE AUTOMATICALLY REDEEMED
AS SET FORTH HEREIN UPON SURRENDER OF THE CERTIFICATES THEREFOR.
2. REDEMPTION OF WARRANTS ON JULY 28, 1999
Any Warrants that have not been converted into Common Stock by 5:00 p.m.,
New York City time, on July 27, 1999, will be redeemed at the Redemption Price
of $0.01 per Warrant. From and after the Redemption Date, holders of Warrants
will no longer have any rights as holders of such Warrants other than the right
to receive the Redemption Price, without interest, upon surrender of their
certificates therefor. Certificates for Warrants to be surrendered for
redemption must be delivered, together with a completed and executed Letter of
Transmittal, to the Transfer Agent, at either of the addresses set forth above,
for payment of the Redemption Price. Holders who wish their Warrants to be
redeemed should clearly mark Item B of the Letter of Transmittal to indicate a
choice for redemption. If no choice is indicated in Item B, the delivery of
certificates for Warrants accompanied by an executed Letter of Transmittal and
full payment of the Purchase Price prior to 5:00 p.m., New York City time, on
July 27, 1999 will be treated as an instruction to convert such Warrants into
Common Stock. Notwithstanding that a choice is indicated in Item B for
conversion, if either the Letter of Transmittal is not properly executed or
payment of the Purchase Price does not accompany the Warrant certificates,
delivery of the certificates will be treated as a request for redemption.
<PAGE>
LETTER OF TRANSMITTAL
TO ACCOMPANY CERTIFICATES REPRESENTING
REDEEMABLE COMMON STOCK PURCHASE WARRANTS OF
NEOPHARM, INC.
HARRIS TRUST AND SAVINGS BANK
TRANSFER AGENT
ITEM A: DESCRIPTION OF CERTIFICATES SURRENDERED
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<CAPTION>
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Name(s) and address(es) of Registered Holder(s) COLUMN 1 COLUMN 2 COLUMN 3
exactly as name(s) appear(s) on certificate(s) Certificate # Number of Warrants Amount of Purchase Price
(Number of
Warrants X $9.80)
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<S> <C> <C> <C>
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</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY
- --------------------------------------------------------------------------------
ITEM B: THE CERTIFICATES LISTED ABOVE ARE TRANSMITTED HEREWITH FOR THE ACTION
INDICATED BELOW:
WARRANTS LISTED IN COLUMN 2 OF ITEM A--Indicate Choice by Checking Only One Box:
/ / CONVERSION into Common Stock of the Company at a conversion price of $9.80
per Warrant (equivalent to a conversion rate of two shares of Common Stock
for each Warrant), with cash in lieu of any fractional share (See
Instruction 2).
/ / REDEMPTION at the price of $0.01 for each Warrant surrendered for
redemption. (See Instruction 3).
IF NO BOX IS CHECKED ABOVE, THE DELIVERY OF CERTIFICATES TOGETHER WITH THIS
PROPERLY EXECUTED LETTER OF TRANSMITTAL AND FULL PAYMENT OF THE APPROPRIATE
PURCHASE PRICE PRIOR TO 5:00 P.M. NEW YORK CITY TIME, ON JULY 27, 1999 WILL BE
TREATED AS AN INSTRUCTION TO CONVERT ALL WARRANTS LISTED IN COLUMN 2 OF ITEM A
INTO SHARES OF COMMON STOCK OF THE COMPANY. IF CERTIFICATES AND THIS LETTER OF
TRANSMITTAL ARE RECEIVED AFTER 5:00 P.M., NEW YORK CITY TIME, ON JULY 27, 1999
OR IF THE FULL AMOUNT OF THE PURCHASE PRICE DOES NOT ACCOMPANY THIS LETTER OF
TRANSMITTAL, ALL WARRANTS LISTED IN COLUMN 2 OF ITEM A WILL BE REDEEMED
REGARDLESS OF WHICH OR WHETHER ANY CHOICE IS INDICATED.
<TABLE>
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ITEM C: SPECIAL ISSUANCE INSTRUCTIONS ITEM D: SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the Common Stock certificate(s) To be completed ONLY if the Common Stock certificate(s)
and/or check are to be issued in the name of someone other and/or check are to be sent to someone other than the
than the registered holder (See Instructions 4 and 5). undersigned, or to the undersigned at an address other than
Issue to: that shown in item A (See instructions 2 and 3).
NAME: Mail to:
Address: Name:
City, State, Zipcode: Address:
Taxpayer ID or Soc.Sec. #: City, State, Zipcode:
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</TABLE>
<PAGE>
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ITEM E: STOCKHOLDER SIGN HERE
IN ADDITION, COMPLETE SUBSTITUTE FORM W-9
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(SIGNATURES(S) OF REGISTERED HOLDER(S)
Must be signed by the registered holder(s) exactly as name(s) appear(s) on
Certificate(s) or by person(s) authorized to become registered holder(s) by
Certificate(s) and documents transmitted herewith. If signature by an
attorney-in-fact, trustee, executor, administrator, guardian, officer of a
corporation or other person acting in a fiduciary or representative capacity,
please provide the following information. (See instructions 4, 5 and 6).
Dated: ____________________________________, 1999
Name(s) ________________________________________________________________________
(Please Print or Type)
Capacity (Full Title) __________________________________________________________
Address: _______________________________________________________________________
Area Code and Telephone No: ____________________________________________________
Tax Identification and Social Security Number __________________________________
- --------------------------------------------------------------------------------
ITEM F: SIGNATURE GUARANTEE
(IF REQUIRED--SEE INSTRUCTIONS 4, 5 AND 6)
Authorized Signature ___________________________________________________________
Name ___________________________________________________________________________
(Please Print or Type)
Title: _________________________________________________________________________
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
Area Code and Telephone No: ____________________________________________________
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REMEMBER TO ENCLOSE YOUR CERTIFICATES
AND PURCHASE PRICE PAYMENT
SUBSTITUTE FORM W-9 REQUEST FOR
TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION
PAYOR'S NAME: HARRIS TRUST AND SAVINGS BANK
- --------------------------------------------------------------------------------
Name as shown on account (if joint list first and circle name of person or
entity whose number you enter below)
Name ___________________________________________________________________________
Address ________________________________________________________________________
City, State and Zipcode ________________________________________________________
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SUBSTITUTE Taxpayer identification No.--For all Accounts Social Security Number
FORM W-9 Enter your taxpayer identification number in the appropriate ------------------------
DEPARTMENT OF THE TREASURY box. Employer Identification
INTERNAL REVENUE SERVICE For most individuals this is your social security number. If No.
PAYER'S REQUEST FOR you do not have a number, see the enclosed Guidelines. ------------------------
TAXPAYER IDENTIFICATION NUMBER Note: If the account is in more than one name, see the chart
(TIN) in the enclosed Guidelines on which number to give the payor.
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</TABLE>
CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER
(OR I AM WAITING FOR A NUMBER TO BE ISSUED TO ME) AND
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE I HAVE NOT BEEN
NOTIFIED BY THE INTERNAL REVENUE SERVICE ("IRS") THAT I AM SUBJECT TO BACKUP
WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR
THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING.
Certification Instruction--You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of under
reporting interest or dividends on you tax returns. However, if after being
notified by the IRS that you were subject to backup withholding you received
another notification from the IRS that you are no longer subject to backup
withholding, do not cross out item (2). The certification requirement does not
apply to real estate transactions, mortgage interest paid, the acquisition or
abandonment of secured property, contributions to an individual retirement
account, and payments other than interest and dividends. Also see "Signing the
Certification" under "Specific Instructions" in the enclosed Guidelines.
SIGNATURE: _____ DATE: ________________________
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NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE
"APPLIED FOR" IN THE SPACE FOR THE "TIN" ON SUBSTITUTE FORM W-9.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER THE PENALTY OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS
NOT BEEN ISSUED TO ME AND EITHER (A) I HAVE MAILED OR DELIVERED AN APPLICATION
TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVIEW
SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE OR (B) I INTEND TO MAIL
OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT THE PAYOR WILL
WITHHOLD 31% OF ALL REPORTABLE PAYMENTS MADE TO ME AND THAT IF I DO NOT PROVIDE
TAXPAYER IDENTIFICATION NUMBER WITHIN 60 DAYS, THE PAYOR WILL NOT REFUND SUCH
AMOUNTS.
SIGNATURE: _____ DATE: ______________________________
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<PAGE>
If you wish to CONVERT your Warrants into Common Stock, your Certificate(s)
along with the Purchase Price and the Letter of Transmittal must be received by
the Transfer Agent identified below prior to 5:00 p.m., New York City time, on
July 27, 1999.
INSTRUCTIONS FOR COMPLETING LETTER OF TRANSMITTAL
1. GENERAL
If you wish to convert Redeemable Common Stock Purchase Warrants (the
"Warrants") of NeoPharm, Inc. (the "Company") that have been called for
redemption, the certificate(s) representing your Warrants ("Certificates"), a
CERTIFIED OR CASHIER'S CHECK in the amount of the applicable Purchase Price (as
herein defined) for the number of Warrants being converted and a properly
completed Letter of Transmittal must be RECEIVED by Harris Trust and Savings
Bank (the "Transfer Agent") at one of the addresses set forth below prior to
5:00 p.m., New York City time, on July 27, 1999. See Instruction 2. Under the
terms of the Warrants, each Warrant may be converted into two shares of Common
Stock upon payment of $9.80 per Warrant (the "Purchase Price" and the equivalent
of $4.90 per share of Common Stock). If you wish to surrender your Warrants for
redemption, the Certificate(s), along with the Purchase Price and a properly
completed Letter of Transmittal, must be surrendered to the Transfer Agent at
one of the addresses set forth below. See Instruction 3.
<TABLE>
<S> <C>
BY HAND OR OVERNIGHT COURIER: BY MAIL:
Harris Trust and Savings Bank Harris Trust and Savings Bank
Attn: Corporate Actions P.O. Box 830
311 West Monroe Street Chicago, Illinois 60690
11th Floor
Chicago, Illinois 60606
</TABLE>
FOR INFORMATION CALL GEORGESON & COMPANY INC. (THE "INFORMATION AGENT"):
BANKS AND BROKERS CALL: (212) 440-9800 (COLLECT). ALL OTHERS CALL: (800)
223-2064 (TOLL FREE).
Please do not send Certificates directly to the Company. Your Certificates,
together with the applicable Purchase Price and your signed and completed Letter
of Transmittal and any other required documents (see Instructions 4 and 5
below), should be mailed in the enclosed addressed envelope, or otherwise
delivered, to the Transfer Agent, at the appropriate address indicated above.
The method of delivery is at the option and risk of the holder. If mail is used,
it is recommended that registered mail with return receipt requested, properly
insured, be used as a prevention against loss (though use of this method of
delivery may result in delay). Consideration should be given to using some form
of express delivery service as the conversion alternative expires at 5:00 p.m.,
New York City time, on July 27, 1999.
ALL ELECTIONS TO CONVERT OR REDEEM ARE IRREVOCABLE.
ITEMS B, E AND THE SUBSTITUTE FORM W-9 OF THE LETTER OF TRANSMITTAL MUST BE
COMPLETED IN ALL CASES. IF IN ANY CASE YOU WISH A COMMON STOCK CERTIFICATE
AND/OR CHECK TO BE MAILED TO AN ADDRESS OTHER THAN THAT SHOWN IN ITEM A ON THE
LETTER OF TRANSMITTAL, YOU MUST COMPLETE ITEM D.
2. IF YOU WISH TO CONVERT YOUR REDEEMABLE COMMON STOCK PURCHASE WARRANTS
If you wish to convert any of your Warrants to Common Stock, your
Certificates, the applicable Purchase Price for the number of Warrants to be
converted and a properly completed Letter of Transmittal must be received by the
Transfer Agent at one of the addresses indicated above prior to 5:00 p.m., New
York City time, on July 27, 1999.
<PAGE>
No fractional shares of Common Stock will be issued upon conversion.
Instead, a cash payment for any fractional shares will be made on the basis of
the last reported sales price of the Common Stock on the American Stock Exchange
on the last business day prior to the date of conversion.
If the Common Stock certificate and fractional share check, if any, are to
be issued in the same name(s) as that in which the Certificates transmitted
herewith are registered, complete items B and E and the Substitute Form W-9.
If the Common Stock certificate and fractional share check, if any, are to
be issued in different name(s) than those indicated in Item A, see instructions
4 and 5 and complete items C and F, in addition to all other applicable items.
If the Common Stock certificate and fractional share check, if any, are to
be mailed to an address other than as indicated in Item A, complete Item D, in
addition to all other applicable items.
NOTE: IF THE PRICE OF THE COMMON STOCK IS GREATER THAN $4.90 PER SHARE, UPON
CONVERSION, HOLDERS OF CONVERTED WARRANTS WILL RECEIVE SHARES OF COMMON
STOCK (PLUS CASH IN LIEU OF ANY FRACTIONAL SHARE) HAVING A MARKET VALUE
GREATER THAN THE PURCHASE PRICE THEY WILL BE REQUIRED TO TENDER UPON A
CONVERSION OF THEIR WARRANTS.
3. IF YOU WISH TO REDEEM YOUR WARRANTS
If you wish your Warrants to be redeemed by the Company for cash, the
Certificates and the properly completed Letter of Transmittal should be sent to
the Transfer Agent at one of the addresses indicated above. You should clearly
mark Item B of the Letter of Transmittal to indicate your choice for redemption.
If no choice is indicated in Item B, but the Certificates have been delivered
accompanied by the required Purchase Price and an executed Letter of Transmittal
prior to 5:00 p.m., New York City time, on July 27, 1999, such delivery will be
treated as an instruction to convert your Warrants into Common Stock. If you
request redemption, a check will be issued to you when the Certificates
transmitted for redemption have been received by the Transfer Agent, but in no
event will the check be issued earlier than July 28, 1999.
If the check is to be issued in the same name(s) in which the Certificates
are registered, complete items B and E and the Substitute Form W-9.
If the check is to be issued in different name(s) than those indicated in
Item A, see instructions 4 and 5 and complete Items C and F, in addition to all
other applicable Items.
If the check is to be mailed to an address other than as indicted in Item A,
complete Item D, in addition to all other applicable Items.
NOTE: THE REDEMPTION PAYMENT OF $0.01 PER WARRANT IS EXPECTED TO BE
CONSIDERABLY LESS THAN THE CURRENT MARKET VALUE OF THE COMMON STOCK (PLUS
CASH IN LIEU OF ANY FRACTIONAL SHARE) RECEIVABLE UPON CONVERSION OF
WARRANTS.
4. SIGNATURE AND MEDALLION STAMP REQUIREMENTS
If the Letter of Transmittal is signed by the registered holder(s) of the
Certificates transmitted therewith, the signature(s) must correspond exactly
with the name(s) of such registered holder(s). If the Letter of Transmittal is
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or other persons acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and
proper evidence satisfactory to the Company of their authority to so act must be
submitted, and the signature(s) must be properly guaranteed by a commercial bank
or trust company in the United States or by a firm which is a member of a
national registered securities exchange or of the National Association of
Securities Dealers, Inc. (the "NASD"). See Instruction 5 below.
2
<PAGE>
If you have completed Item C regarding special issuance instructions, the
signature on the Letter of Transmittal must be guaranteed, in the space provided
in Item F, by a commercial bank or trust company in the United States or by a
firm which is a member of a registered national securities exchange or of the
NASD. See Instruction 5 below.
5. CERTIFICATE OR CHECK TO BE ISSUED IN A DIFFERENT NAME
If a Common Stock certificate or a check is to be issued in a name other
than that of the registered owner of the Certificate(s), your Certificate(s)
must be properly endorsed or be accompanied by appropriate stock powers (which
may consist of the Letter of Transmittal), properly executed by the registered
owner(s), so that such endorsement or stock powers are signed exactly as the
name(s) of the registered owner(s) appear on the Certificates, and the
signature(s) must be properly guaranteed by a commercial bank or trust company
in the United States or by a firm which is a member of a registered national
securities exchange or of the NASD. Complete Items B, C, E, F and the Substitute
Form W-9.
If the Letter of Transmittal is signed in Item E by someone other than the
registered owner, the Certificates must be properly endorsed or be accompanied
by appropriate stock powers, properly executed by the registered owner(s), so
that such endorsement or stock powers are signed exactly as the name(s) of the
registered owner(s) appear on the Certificate(s), and the signature(s) must be
properly guaranteed by a commercial bank or trust company in the United States
or by a firm which is a member of a registered national securities exchange or
of the NASD. Complete Items B, C, E, F and the Substitute Form W-9.
6. JOINT HOLDERS AND CERTIFICATES REGISTERED IN DIFFERENT NAMES
If Certificates are surrendered by joint holders or owners, all such persons
must sign the Letter of Transmittal in Item E. If Certificates are registered in
different names or forms of ownership, separate Letters of Transmittal must be
completed, signed and returned for each different registration.
7. STOCK TRANSFER TAXES
The conversion of Redeemable Common Stock Purchase Warrants will be effected
without charge to the converting holder for any stock transfer tax payable in
connection with the issuance of Common Stock on conversion except as set forth
below. If Common Stock certificates issued upon conversion are to be registered
in the name of any person OTHER THAN the registered owner of surrendered
Certificates, complete Item C. In that case, the amount of any stock transfer
taxes (whether imposed on the registered owner(s) of the Certificate(s) or such
person(s)) payable on account of the transfer to such person(s) must accompany
this Letter of Transmittal or evidence must be submitted as to the payment of
such taxes, or exemption therefrom. The Company will not be required to issue or
deliver Common Stock certificates in any such case until such person(s) has made
payment or submitted such evidence.
8. LOST OR DESTROYED CERTIFICATES
If your Certificates have been either lost or destroyed, notify the Transfer
Agent of this fact promptly at one of the addresses set forth above. You will
then be instructed as to the steps you must take in order to convert your
Warrants into Common Stock or to have your Warrants redeemed. The Letter of
Transmittal and related documents cannot be processed until the lost certificate
procedures have been completed.
9. QUESTIONS ON HOW TO SUBMIT YOUR CERTIFICATES
Questions and requests for assistance on how to submit your Certificates, as
well as requests for additional copies of the Letter of Transmittal, should be
directed to Georgeson & Company Inc. (the "Information Agent") by telephoning as
follows: Banks and Brokers should call (212) 440-9800 (collect) and all others
should call (800) 223-2064 (toll free).
3
<PAGE>
10. 31% BACKUP WITHHOLDING
In order to avoid "backup withholding" of Federal Income tax on the cash
received upon surrender of Warrants for redemption, the holder must, unless an
exemption applies, provide the Transfer Agent with his or her correct taxpayer
identification number ("TIN") on the Substitute Form W-9 in the Letter of
Transmittal and certify, under penalties of perjury, that such number is correct
and that he or she is not subject to backup withholding. If the correct TIN is
not provided, a $50 penalty may be imposed by the Internal Revenue Service and
cash payments made with respect to Warrants surrendered for redemption may be
subject to backup withholding of 31%.
Backup withholding is not an additional Federal Income tax. Rather, the
Federal Income tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If backup withholding results in an
overpayment of taxes, a refund may be obtained from the Internal Revenue
Service.
The TIN to be provided on the Substitute Form W-9 is that of the registered
holder(s) of the surrendered Certificates. The TIN for an individual is his or
her social security number. If the person surrendering Certificates has not been
issued a TIN and has applied or intends to apply for a TIN in the near future,
write "Applied For" in the space for the TIN on the Substitute Form W-9 and
complete the Certificate of Awaiting Taxpayer Identification Number contained in
the Substitute Form W-9 in order to avoid backup withholding. Notwithstanding
that the Certificate of Awaiting Taxpayer Identification Number is completed,
the Transfer Agent will withhold 31% on any payment with respect to the Warrants
made prior to the time it is provided with a properly certified TIN.
Exempt persons (including, among others, corporations) are not subject to
backup withholding. A foreign person may qualify as an exempt person by
submitting a Form W-8, signed under penalties of perjury, certifying such
person's foreign status. Such statements can be obtained from the Transfer
Agent. A holder should consult his or her tax advisor as to his or her
qualifications for an exemption from backup withholding and the procedure for
obtaining such exemptions.
For additional guidance see the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9.
4
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- ------------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
<C> <S> <C>
1. An individual's The individual
account
2. Two or more The actual owner of the
individuals (joint account, or, if combined
account) funds, the first individual
on the account(1)
3. Custodian account The minor(2)
of a minor (Uniform
Gift to Minors Act)
4 a. The usual The grantor-trustee(1)
revocable savings
trust account
(grantor is also
trustee)
b. So-called trust The actual owner(3)
account that is not
a legal or valid
trust under state
law
5. Sole proprietorship The owner
account
- ------------------------------------------------------------
<CAPTION>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF--
<C> <S> <C>
- ------------------------------------------------------------
6. Sole proprietorship The owner(3)
account
7. A valid trust, The legal entity (Do not
estate or pension furnish the identifying
trust number of the personal
representative or trustee
unless the legal entity
itself is not designated in
the account title).(4)
8. Corporate account The corporation
9. Association, club, The organization
religious,
charitable,
educational or
other tax-exempt
organization
10. Partnership account The partnership
11. A broker or The broker or nominee
registered nominee
12. Account with the The public entity
Department of
Agriculture in the
name of public
entity (such as a
state or local
government, school
district, or
prison) that
receives
agricultural
program payments
</TABLE>
- --------------------------------------------------------------------------------
(1) List first and circle the name of person whose number you furnish.
(2) Circle the minor's name and furnish the minor's Social Security number.
(3) Show the name of the owner. See Item 5 or 6. You may also enter your
business name.
(4) List first and circle the name of the valid trust, estate of pension trust.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-5, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempt from backup withholding on ALL payments include the
following:
- - A corporation.
- - A financial institution.
- - An organization exempt from tax under section 501(a), or an individual
retirement plan.
- - The United States or any agency or instrumentality thereof.
- - A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- - A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
- - An international organization or any agency or instrumentality thereof.
- - A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- - A real estate investment trust.
- - A common trust fund operated by a bank under section 584(a).
- - An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a) (I).
- - An entity registered at all times under the Investment Company Act of 1940.
- - A foreign central bank of issue.
- - Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- - Payments to nonresident aliens subject to withholding under section 1441.
- - Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- - Payments of patronage dividends where the amount received is not paid in
money.
- - Payments made by certain foreign organizations.
- - Payments made to a nominee.
- - Payments of interest not generally subject to backup withholding include the
following:
- - Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
- - Payments of tax-exempt interest (including exempt-
interest dividends under section 852).
- - Payments described in section 6049 (b) (5) to nonresident aliens.
- - Payments on tax-free covenant bonds under section 1451.
- - Payments made by certain foreign organization.
- - Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1984, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION
CONTACT YOUR TAX CONSULTANT
OR THE INTERNAL REVENUE SERVICE
