Registration No. 333-107977
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CELGENE CORPORATION
(Exact name of Registrant as specified in its charter)
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DELAWARE 7 Powder Horn Drive 22-2711928
(State or other jurisdiction of Warren, New Jersey 07059 (I.R.S. Employer
incorporation or organization) (732) 271-1001 Identification No.)
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
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JOHN W. JACKSON
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
CELGENE CORPORATION
7 POWDER HORN DRIVE, WARREN, NEW JERSEY 07059
(732) 271-1001
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
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Copies of Communications to:
Robert A. Cantone, Esq.
Proskauer Rose LLP
1585 Broadway, New York, New York 10036-8299
(212) 969-3000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time or at one time after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest or interest investment plans, please check the
following box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
PROSPECTUS
$400,000,000
CELGENE CORPORATION
1 3/4% CONVERTIBLE NOTES DUE 2008
AND
COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES
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On June 3, 2003, we issued and sold $400,000,000 aggregate principal amount of
our 1 3/4% convertible notes due 2008 in a private placement. Selling
securityholders will use this prospectus to resell their notes and the common
stock issuable upon conversion of their notes.
The notes bear interest at an annual rate of 1.75% on the principal amount from
June 3, 2003. We will pay interest on June 1 and December 1 of each year,
beginning December 1, 2003.
Holders may convert the notes into shares of our common stock at a conversion
rate of 20.6398 shares per $1,000 principal amount of notes (representing a
conversion price of approximately $48.45), subject to adjustment, before the
close of business on June 1, 2008.
We may not redeem the notes prior to maturity.
The notes are our senior unsecured debt and rank on a parity with all of our
other existing and future senior unsecured debt and prior to all subordinated
debt.
If a fundamental change (as described in this prospectus under "Description of
Notes -- Redemption at Option of the Holder") occurs prior to maturity of the
notes, securityholders may require us to repurchase all or a portion of their
notes.
Prior to this offering, the notes have been eligible for trading on the PORTAL
Market of the Nasdaq National Market. Notes sold by means of this prospectus are
not expected to remain eligible for trading on the PORTAL Market. We do not
intend to list the notes for trading on any national securities exchange or on
the Nasdaq National Market. Our common stock trades on the Nasdaq National
Market under the symbol "CELG." On November 13, 2003, the last reported sale
price for our common stock on the Nasdaq National Market was $41.00 per share.
We will not receive any proceeds from the sale by the selling securityholders of
the notes or the common stock issuable upon conversion of the notes. The selling
securityholders may offer the notes or the underlying common stock, in
negotiated transactions or otherwise, at market prices prevailing at the time of
sale or at negotiated prices. In addition, the common stock may be offered from
time to time through ordinary brokerage transactions on the Nasdaq National
Market. See "Plan of Distribution" on page 42. The selling securityholders may
be deemed to be "underwriters" as defined in the Securities Act of 1933, as
amended (the "Securities Act"). If any broker-dealers are used by the selling
securityholders, any commissions paid to broker-dealers and, if broker-dealers
purchase any notes or common stock as principals, any profits received by such
broker-dealers on the resale of the notes or common stock, may be deemed to be
underwriting discounts or commissions under the Securities Act. In addition, any
profits realized by the selling securityholders may be deemed to be underwriting
commissions. Other than selling commissions and fees and stock transfer taxes,
we will pay all expenses of the registration of the notes and the common stock
and certain other expenses as set forth in the registration rights agreement
that we entered into with the initial purchaser of the notes.
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INVESTING IN THE NOTES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 4.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
November 14, 2003
TABLE OF CONTENTS
PAGE
ABOUT THIS PROSPECTUS.........................................................1
SUMMARY.......................................................................2
RISK FACTORS..................................................................4
FORWARD-LOOKING STATEMENTS...................................................13
USE OF PROCEEDS..............................................................14
RATIO OF EARNINGS TO FIXED CHARGES...........................................15
DESCRIPTION OF NOTES.........................................................16
DESCRIPTION OF CAPITAL STOCK.................................................27
U.S. FEDERAL INCOME TAX CONSIDERATIONS.......................................29
SELLING SECURITYHOLDERS......................................................34
PLAN OF DISTRIBUTION.........................................................42
LEGAL MATTERS................................................................43
EXPERTS......................................................................43
WHERE YOU CAN FIND MORE INFORMATION..........................................44
INCORPORATION BY REFERENCE...................................................44
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration or continuous
offering process. Under this shelf registration process, selling securityholders
may from time to time sell the securities described in this prospectus in one or
more offerings.
This prospectus provides you with a general description of the securities that
the selling securityholders may offer. A selling securityholder may be required
to provide you with a prospectus supplement containing specific information
about the selling securityholder and the terms of the securities being offered.
That prospectus supplement may include additional risk factors or other special
considerations applicable to those securities. A prospectus supplement may also
add, update or change information in this prospectus. If there is any
inconsistency between the information in this prospectus and any prospectus
supplement, you should rely on the information in that prospectus supplement.
You should read both this prospectus and any prospectus supplement together with
the additional information described under the heading "Where You Can Find More
Information."
In this prospectus and any prospectus supplement, unless otherwise indicated,
the terms "we," "us," "our" and "Celgene" refer to Celgene Corporation and its
consolidated subsidiaries.
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We have not authorized any dealer, salesman or other person to give any
information or to make any representation other than those contained or
incorporated by reference in this prospectus and any accompanying supplement to
this prospectus. You must not rely upon any information or representation not
contained or incorporated by reference in this prospectus or any accompanying
prospectus supplement. This prospectus and any accompanying supplement to this
prospectus do not constitute an offer to sell or the solicitation of an offer to
buy any securities other than the registered securities to which they relate,
nor do this prospectus and any accompanying supplement to this prospectus
constitute an offer to sell or the solicitation of an offer to buy securities in
any jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. The information contained in this prospectus
and any supplement to this prospectus is accurate as of the respective dates on
their covers. When we deliver this prospectus or a supplement or make a sale
pursuant to this prospectus or a supplement, we are not implying that the
information is current as of the date of the delivery or sale.
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SUMMARY
This summary contains basic information about us and this offering. Because it
is a summary, it does not contain all of the information that you should
consider before investing. You should read this entire prospectus (and any
prospectus supplement) carefully and the information we incorporate by reference
into it, including the section entitled "Risk Factors," before making an
investment decision.
CELGENE CORPORATION
We are a fully-integrated biopharmaceutical company, incorporated in 1986 as a
Delaware corporation.
We are primarily engaged in the discovery, development and commercialization of
novel therapies designed to treat cancer and immunological diseases through
regulation of cellular, genomic and proteomic targets. We had total revenues of
$135.7 million in 2002 and $190.7 million for the nine-month period ended
September 30, 2003, and a net loss of $100.0 million in 2002 and net income of
$8.1 million for the nine-month period ended September 30, 2003. The net loss
for 2002 included a charge to operations of $32.2 million attributable to a
litigation settlement and related agreements and $55.7 million related to an
acquired in-process research and development charge in connection with the
acquisition of Anthrogenesis Corp. We had an accumulated deficit of $322.4
million at December 31, 2002 and $314.2 million at September 30, 2003. Since our
inception in 1986, we have financed our working capital requirements primarily
through product sales, public and private sales of our equity securities and
debt, income earned on the investment of the proceeds from the sale of such
securities and revenues from research contracts and license payments.
We were incorporated in Delaware in 1986. Our principal executive offices are
located at 7 Powder Horn Drive, Warren, New Jersey 07059. Our telephone number
at this location is (732) 271-1001. Our website is located at
http://www.celgene.com. The information contained on our website is not a part
of this prospectus.
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SUMMARY OF NOTES
Securities Offered................. $400,000,000 principal amount of 1 3/4%
Convertible Notes due 2008.
Maturity Date...................... June 1, 2008.
Interest........................... 1.75% per annum on the principal amount
from June 3, 2003, payable semi-annually
in arrears in cash on June 1 and
December 1 of each year, beginning
December 1, 2003.
Conversion......................... You may convert the notes into shares of
our common stock at a conversion rate of
20.6398 shares per $1,000 principal
amount of notes (representing a
conversion price of approximately
$48.45), subject to adjustment, prior to
the close of business on the final
maturity date.
Redemption......................... We may not redeem any of the notes at
our option prior to maturity.
Fundamental Change................. If a fundamental change (as described
under "Description of Notes-- Redemption
at Option of the Holder") occurs prior
to maturity, you may require us to
redeem all or part of your notes at a
redemption price equal to 100% of their
principal amount, plus accrued and
unpaid interest and liquidated damages,
if any, up to, but excluding, the
redemption date.
Use of Proceeds.................... We will not receive any of the proceeds
from the sale by any selling
securityholder of the notes or the
shares of common stock issuable upon
conversion of the notes. See "Use of
Proceeds" on page 14.
Ranking............................ The notes are our senior unsecured debt
and rank on a parity with all of our
other existing and future senior
unsecured debt and prior to all
subordinated debt.
NASDAQ National Market Symbol...... CELG.
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RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks described below are not the only ones facing our
company. Additional risks not presently known to us or that we currently deem
immaterial may also impair our business operations.
Our business, financial condition and results of operations could be materially
adversely affected by any of these risks. The trading price of the notes and our
common stock could decline due to any of these risks, and you may lose all or
part of your investment.
This prospectus, including the documents it incorporates by reference, also
contains forward-looking statements that involve risks and uncertainties. Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including the risks
faced by us described below and elsewhere in this prospectus.
INDUSTRY RISKS
WE HAVE A HISTORY OF OPERATING LOSSES AND AN ACCUMULATED DEFICIT.
We have sustained losses in each year since our incorporation in 1986. We
sustained a net loss of $100.0 million, which included $32.2 million
attributable to a litigation settlement and related agreements and $55.7 million
related to an acquired in-process research and development charge in connection
with the Anthrogenesis acquisition, and $1.9 million for the years ended
December 31, 2002 and 2001, respectively. For the nine-month period ended
September 30, 2003, we recorded net income of $8.1 million. We had an
accumulated deficit of $322.4 million at December 31, 2002 and $314.2 million at
September 30, 2003. We expect to make substantial expenditures to further
develop and commercialize our products. We also expect that our rate of spending
will accelerate as the result of increased clinical trial costs and expenses
associated with regulatory approval and commercialization of products now in
development.
IF WE ARE UNSUCCESSFUL IN DEVELOPING AND COMMERCIALIZING OUR PRODUCTS, OUR
BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE MATERIALLY
ADVERSELY AFFECTED WHICH COULD IMPACT NEGATIVELY ON THE VALUE OF OUR COMMON
STOCK AND THE NOTES.
Many of our products and processes are in the early or mid-stages of development
and will require the commitment of substantial resources, extensive research,
development, preclinical testing, clinical trials, manufacturing scale-up and
regulatory approval prior to being ready for sale. With the exception of
Focalin(TM), Alkeran(R) and THALOMID(R), all of our other products will require
further development, clinical testing and regulatory approvals. If it becomes
too expensive to sustain our present commitment of resources on a long-term
basis, we will be unable to continue our necessary development activities.
Furthermore, we cannot be certain that our clinical testing will render
satisfactory results, or that we will receive required regulatory approval for
our products. If any of our products, even if developed and approved, cannot be
successfully commercialized, our business, financial condition and results of
operations could be materially adversely affected which could impact negatively
on the value of our common stock and the notes.
DURING THE NEXT SEVERAL YEARS, WE WILL BE VERY DEPENDENT ON THE COMMERCIAL
SUCCESS OF THALOMID(R), FOCALIN(TM), ALKERAN(R) AND THE ENTIRE RITALIN(R)
PRODUCT LINE.
At our present level of operations, we may not be able to attain or maintain
profitability if physicians prescribe THALOMID(R) only for patients who are
diagnosed with erytherma nodosum leprosum, or ENL. ENL, a complication of
leprosy, is a chronic bacterial disease. Under current regulations of the U.S.
Food and Drug Administration, we are precluded from promoting THALOMID(R)
outside this approved use. The market for the use of THALOMID(R) in patients
suffering from ENL is relatively small. We have conducted clinical studies that
appear to show that THALOMID(R) is active when used to treat disorders other
than ENL, such as multiple myeloma, but we do not know whether we will succeed
in receiving regulatory approval to market THALOMID(R) for additional
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indications. FDA regulations place restrictions on our ability to communicate
the results of additional clinical studies to patients and physicians without
first obtaining approval from the FDA to expand the authorized uses for this
product. In addition, if adverse experiences are reported in connection with the
use of THALOMID(R) by patients, this could undermine physician and patient
comfort with the product, could limit the commercial success of the product and
could even impact the acceptance of THALOMID(R) in the ENL market. We are
dependent upon royalties from Novartis Pharma AG's entire Ritalin(R) product
line as well as Focalin(TM), although we cannot directly impact their ability to
successfully commercialize these products and we have annual minimum purchase
requirements relating to Alkeran, which we license from GlaxoSmithKline, through
March 31, 2006. Additionally, our revenues would be negatively impacted if a
generic version of any of these products were to be approved.
WE FACE A RISK OF PRODUCT LIABILITY CLAIMS AND MAY NOT BE ABLE TO OBTAIN
SUFFICIENT INSURANCE ON COMMERCIALLY REASONABLE TERMS OR WITH ADEQUATE COVERAGE.
We may be subject to product liability or other claims based on allegations that
the use of our technology or products has resulted in adverse effects, whether
by participants in our clinical trials or by patients using our products.
Thalidomide, when used by pregnant women, has resulted in serious birth defects.
Therefore, necessary and strict precautions must be taken by physicians
prescribing the drug to women with childbearing potential. These precautions may
not be observed in all cases or, if observed, may not be effective. Use of
thalidomide has also been associated, in a limited number of cases, with other
side effects, including nerve damage. Although we have product liability
insurance that we believe is appropriate, we may be unable to obtain additional
coverage on commercially reasonable terms if required, or our coverage may be
inadequate to protect us in the event claims are asserted against us. Our
obligation to defend against or pay any product liability or other claim may be
expensive and divert the efforts of our management and technical personnel.
IF OUR PRODUCTS ARE NOT ACCEPTED BY THE MARKET, DEMAND FOR OUR PRODUCTS WILL
DETERIORATE OR NOT MATERIALIZE AT ALL.
It is necessary that our, and our distribution partner's, products, including
THALOMID(R) Alkeran(R) and Focalin(TM), achieve market acceptance once they
receive regulatory approval, if regulatory approval is required. A number of
factors render the degree of market acceptance of our products uncertain,
including the extent to which we can demonstrate the products' efficacy, safety
and advantages, if any, over competing products, as well as the reimbursement
policies of third-party payors, such as government and private insurance plans.
In particular, thalidomide, when used by pregnant women, has resulted in serious
birth defects, and the negative history associated with thalidomide and birth
defects may decrease the market acceptance of THALOMID(R). In addition, the
products that we are attempting to develop through our Celgene Cellular
Therapeutics division may represent substantial departures from established
treatment methods and will compete with a number of traditional drugs and
therapies which are now, or may be in the future, manufactured and marketed by
major pharmaceutical and biopharmaceutical companies. Furthermore, public
attitudes may be influenced by claims that stem cell therapy is unsafe, and stem
cell therapy may not gain the acceptance of the public or the medical community.
If our products are not accepted by the market, demand for our products will
deteriorate or not materialize at all.
WE MAY EXPERIENCE SIGNIFICANT FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS.
We have historically experienced, and expect to continue for the foreseeable
future to experience, significant fluctuations in our quarterly operating
results. These fluctuations are due to a number of factors, many of which are
outside our control, and may result in volatility of our stock price. Future
operating results will depend on many factors, including:
o demand for our products;
o regulatory approvals for our products;
o the timing of the introduction and market acceptance of new products by us
or competing companies;
o the timing and recognition of certain research and development milestones
and license fees; and
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o our ability to control our costs.
WE HAVE NO COMMERCIAL MANUFACTURING FACILITIES AND WE ARE DEPENDENT ON TWO
SUPPLIERS FOR THE RAW MATERIAL AND ONE MANUFACTURER FOR THE FORMULATION AND
ENCAPSULATION OF THALOMID(R) AND ARE DEPENDENT ON TWO SUPPLIERS FOR THE RAW
MATERIAL AND ONE MANUFACTURER FOR THE TABLETING AND PACKAGING OF FOCALIN(TM).
We currently have no facilities for manufacturing any products on a commercial
scale. Currently, we can obtain all of our bulk drug material for THALOMID(R)
from two suppliers, ChemSyn Laboratories, a Division of Eagle-Picher
Technologies, L.L.C., and Sifavitor s.p.a., and we rely on a single
manufacturer, Penn Pharmaceutical Services Limited, to formulate and encapsulate
THALOMID(R). In addition, we currently can obtain all of our bulk active
pharmaceutical ingredient for Focalin(TM) from two suppliers, Johnson Matthey
Inc. and Seigfried USA, Inc., and we rely on a single manufacturer, Mikart,
Inc., for the packaging and tableting of Focalin(TM). Presently, we are actively
seeking alternative sources to each of Penn and Mikart. The FDA requires that
all suppliers of pharmaceutical bulk material and all manufacturers of
pharmaceuticals for sale in or from the United States achieve and maintain
compliance with the FDA's current Good Manufacturing Practice, or cGMP,
regulations and guidelines. (cGMP are regulations established by the FDA that
govern the manufacture, processing, packing, storage and testing of drugs
intended for human use.) If the operations of either Penn or Mikart were to
become unavailable for any reason, any required FDA review and approval of the
operations of an alternative could cause a delay in the manufacture of
THALOMID(R) or Focalin(TM). Although we have an option to purchase the
THALOMID(R) manufacturing operations of Penn, we intend to continue to utilize
outside manufacturers if and when needed to produce our other products on a
commercial scale. If our outside manufacturers do not meet our requirements for
quality, quantity or timeliness, or do not achieve and maintain compliance with
all applicable regulations, demand for our products or our ability to continue
manufacturing such products could substantially decline, to the extent we depend
on these outside manufacturers.
WE HAVE LIMITED MARKETING AND DISTRIBUTION CAPABILITIES.
Although we have an approximately 180-person commercialization group to support
our products, we may be required to seek a corporate partner to provide
marketing services with respect to our other products. Any delay in developing
these resources could substantially delay or curtail the marketing of these
products. We have contracted with Ivers Lee Corporation, d/b/a Sharp, a
specialty distributor, to distribute THALOMID(R). If Sharp does not perform its
obligations, our ability to distribute THALOMID(R) may be severely restricted.
WE ARE DEPENDENT ON COLLABORATIONS AND LICENSES WITH THIRD PARTIES.
Our ability to fully commercialize our products, if developed, may depend to
some extent upon our entering into joint ventures or other arrangements with
established pharmaceutical and biopharmaceutical companies with the requisite
experience and financial and other resources to obtain regulatory approvals and
to manufacture and market such products. Our present joint ventures and licenses
include an agreement with Novartis Pharma AG with respect to the joint research
of SERMs, and a separate agreement wherein we have granted to Novartis an
exclusive license (excluding Canada) for the development and commercialization
of Focalin(TM), or d-MPH; an agreement with Biovail Corporation International,
wherein we granted to Biovail exclusive Canadian marketing rights for d-MPH; and
agreements with Pharmion Corporation and Penn Pharmaceuticals Services Limited
to expand the THALOMID(R) franchise internationally. Our present and future
arrangements may be jeopardized if any or all of the following occur:
o we are not able to enter into additional joint ventures or other
arrangements on acceptable terms, if at all;
o our joint ventures or other arrangements do not result in a compatible work
environment;
o our joint ventures or other arrangements do not lead to the successful
development and commercialization of any products;
o we are unable to obtain or maintain proprietary rights or licenses to
technology or products developed in connection with our joint ventures or
other arrangements; or
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o we are unable to preserve the confidentiality of any proprietary rights or
information developed in connection with our joint ventures or other
arrangements.
THE HAZARDOUS MATERIALS WE USE IN OUR RESEARCH AND DEVELOPMENT COULD RESULT IN
SIGNIFICANT LIABILITIES THAT COULD EXCEED OUR INSURANCE COVERAGE AND FINANCIAL
RESOURCES.
We use some hazardous materials in our research and development activities.
While we believe we are currently in substantial compliance with the federal,
state and local laws and regulations governing the use of these materials, we
cannot be certain that accidental injury or contamination will not occur. Any
such accident or contamination could result in substantial liabilities, that
could exceed our insurance coverage and financial resources. Additionally, the
cost of compliance with environmental and safety laws and regulations may
increase in the future, requiring us to expend more financial resources either
in compliance or in purchasing supplemental insurance coverage.
THE PHARMACEUTICAL INDUSTRY IS SUBJECT TO EXTENSIVE GOVERNMENT REGULATION WHICH
PRESENTS NUMEROUS RISKS TO US.
The preclinical development, clinical trials, manufacturing marketing and
labeling of pharmaceuticals are all subject to extensive regulation by numerous
governmental authorities and agencies in the United States and other countries.
If we are delayed in receiving, or are unable to obtain at all, necessary
governmental approvals, we will be unable to effectively market our products.
The testing, marketing and manufacturing of our products require regulatory
approval, including approval from the FDA and, in some cases, from the U.S.
Environmental Protection Agency or governmental authorities outside of the
United States that perform roles similar to those of the FDA and EPA. Certain of
our pharmaceutical products, such as Focalin(TM), fall under the Controlled
Substances Act of 1970 that requires authorization by the U.S. Drug Enforcement
Agency of the U.S. Department of Justice in order to handle and distribute these
products. The regulatory approval process presents several risks to us:
o In general, preclinical tests and clinical trials can take many years, and
require the expenditure of substantial resources, and the data obtained
from these tests and trials can be susceptible to varying interpretation
that could delay, limit or prevent regulatory approval.
o Delays or rejections may be encountered during any stage of the regulatory
process based upon the failure of the clinical or other data to demonstrate
compliance with, or upon the failure of the product to meet, a regulatory
agency's requirements for safety, efficacy and quality or, in the case of a
product seeking an orphan drug indication, because another designee
received approval first.
o Requirements for approval may become more stringent due to changes in
regulatory agency policy, or the adoption of new regulations or
legislation.
o The scope of any regulatory approval, when obtained, may significantly
limit the indicated uses for which a product may be marketed and may impose
significant limitations in the nature of warnings, precautions and
contraindications that could materially affect the profitability of the
drug.
o Approved drugs, as well as their manufacturers, are subject to continuing
and on-going review, and discovery of previously unknown problems with
these products or the failure to adhere to manufacturing or quality control
requirements may result in restrictions on their manufacture, sale or use
or in their withdrawal from the market.
o Regulatory authorities and agencies may promulgate additional regulations
restricting the sale of our existing and proposed products.
o Once a product receives marketing approval, the FDA may not permit us to
market that product for broader or different applications, or may not grant
us clearance with respect to separate product applications that represent
extensions of our basic technology. In addition, the FDA may withdraw or
modify existing clearances in a significant manner or promulgate additional
regulations restricting the sale of our present or proposed products.
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o Our labeling and promotional activities relating to our products are
regulated by the FDA and state regulatory agencies and, in some
circumstances, by the Federal Trade Commission and DEA, and are subject to
associated risks. If we fail to comply with FDA regulations prohibiting
promotion of off-label uses and the promotion of products for which
marketing clearance has not been obtained, the FDA could bring an
enforcement action against us that could inhibit our marketing capabilities
as well as result in penalties.
In addition, stem cells intended for human use are subject to FDA regulations
requiring, among other things, certain infectious disease testing. New FDA
regulations anticipated in 2003 may relate to screening of potential donors and
donations for certain infectious diseases and the establishment of quality
controls, recordkeeping and other practices related to the manufacture of human
tissue. Currently, we are required to be, and are, licensed to operate in New
York and New Jersey, two of the states in which we currently collect placentas
and umbilical cord blood for our allogeneic and private stem cell banking
businesses. If other states adopt similar licensing requirements, we would need
to obtain such licenses to continue operating. If we are delayed in receiving,
or are unable to obtain at all, necessary licenses, we will be unable to provide
services in those states which would impact negatively on our revenues.
WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY.
Our success will depend, in part, on our ability to obtain and enforce patents,
protect trade secrets, obtain licenses to technology owned by third parties,
when necessary, and conduct our business without infringing upon the proprietary
rights of others. The patent positions of pharmaceutical and biopharmaceutical
firms, including ours, can be uncertain and involve complex legal and factual
questions. In addition, the coverage sought in a patent application may not be
obtained or may be significantly reduced before the patent is issued.
Consequently, if our pending applications, or a pending application that we have
licensed-in from third parties, do not result in the issuance of patents or, if
any patents that are issued do not provide significant proprietary protection or
commercial advantage, our ability to sustain the necessary level of intellectual
property upon which our success depends may be restricted.
Moreover, different countries have different procedures for obtaining patents,
and patents issued in different countries provide different degrees of
protection against the use of a patented invention by others. Therefore, if the
issuance to us or our licensor, in a given country, of a patent covering an
invention is not followed by the issuance, in other countries, of patents
covering the same invention, or if any judicial interpretation of the validity,
enforceability or scope of the claims in a patent issued in one country is not
similar to the interpretation given to the corresponding patent issued in
another country, our ability to protect our intellectual property in other
countries may be limited.
Under the current U.S. patent laws, patent applications in the United States are
maintained in secrecy from six to 18 months, and publications of discoveries in
the scientific and patent literature often lag behind actual discoveries. Thus,
we may discover, sometime in the future, that we, or the third parties from whom
we have licensed patents or patent applications, were not the first to make the
inventions covered by the patents and patent applications in which we have
rights, or that such patents and patent applications were not the first to be
filed on such inventions. In the event that a third party has also filed a
patent application for any of the inventions described in our patents or patent
applications, or those we have licensed-in, we could become involved in an
interference proceeding declared by the U.S. Patent and Trademark Office to
determine priority of invention. Such an interference could result in the loss
of an issued U.S. patent or loss of any opportunity to secure U.S. patent
protection for that invention. Even if the eventual outcome is favorable to us,
such interference proceedings could result in substantial cost to us.
Furthermore, even if our patents, or those we have licensed-in, are issued, our
competitors may still challenge the scope, validity or enforceability of our
patents in court, requiring us to engage in complex, lengthy and costly
litigation. Alternatively, our competitors may be able to design around such
patents and compete with us using the resulting alternative technology. If any
of our issued or licensed patents are infringed, we may not be successful in
enforcing our intellectual property rights or defending the validity or
enforceability of our issued patents.
8
It is also possible that third-party patent applications and patents could issue
with claims that cover certain aspects of the subject matter claimed in the
patents owned or optioned by us or licensed to us, which may limit our ability
to practice under our patents, and may impede our efforts to obtain meaningful
patent protection of our own. If patents are issued to third parties that
contain competitive or conflicting claims, we may be legally prohibited from
pursuing research, development or commercialization of potential products or be
required to obtain licenses to these patents or to develop or obtain alternative
technology. We may be legally prohibited from using patented technology, may not
be able to obtain any license to the patents and technologies of third parties
on acceptable terms, if at all, or may not be able to obtain or develop
alternative technologies. Consequently, if we cannot successfully defend against
any patent infringement suit that may be brought against us by a third party, we
may lose the ability to practice certain subject matter delineated by patent
claims that we have exclusive rights to, whether by ownership or by license, and
that may have a material adverse effect on our business.
We rely upon trademarks and service marks to protect our rights to the
intellectual property used in our business. On October 29, 2003, we filed a
lawsuit against Centocor, Inc. to prevent Centocor's use of the term "I.M.I.D.s"
in connection Centocor's products, which use, we believe, is likely to cause
confusion with our IMiDs(TM) mark for compounds being developed by us to treat
cancer and inflammatory diseases. If we are not successful in this suit, it may
be necessary for us to adopt a different trademark for that class of compounds
and thereby lose the value we believe we have built in the IMiDs(TM) mark.
Further, we rely upon unpatented proprietary and trade secret technology that we
try to protect, in part, by confidentiality agreements with our collaborative
partners, employees, consultants, outside scientific collaborators, sponsored
researchers and other advisors. If these agreements are breached, we may not
have adequate remedies for any such breach. Despite precautions taken by us,
others may obtain access to or independently develop our proprietary technology
or such technology may be found to be non-proprietary or not a trade secret.
In addition, our right to practice the inventions claimed in some patents that
relate to THALOMID(R) arises under licenses granted to us by others, including
The Rockefeller University and Children's Medical Center Corporation, or CMCC.
In addition to these patents, which relate to thalidomide, we have also licensed
from CMCC certain patents relating to thalidomide analogs. In December 2002, we
entered into an exclusive license agreement with CMCC and EntreMed. Inc. in
connection with the settlement of certain pending litigation by and among us,
EntreMed, and the U.S. Patent and Trademark Office relating to the issuance of
certain CMCC patent applications covering thalidomide analogs. These patent
applications had been licensed exclusively to EntreMed in the field of
thalidomide analogs. In conjunction with the settlement of these suits, we
acquired preferred shares and warrants which, if converted into EntreMed common
shares, would constitute, as of March 31, 2003, 49% of the outstanding shares of
EntreMed, and EntreMed terminated its license agreements with CMCC relating to
thalidomide analogs. In turn, CMCC exclusively licensed to us these patents and
patent applications, which relate to analogs, metabolites, precursors and
hydrolysis products of thalidomide, and all stereoisomers thereof. The December
2002 exclusive license to us is worldwide and royalty-bearing, and grants us
complete control over the prosecution of the licensed thalidomide analog patent
rights. The December 2002 agreement also grants us an option to inventions in
the field of thalidomide analogs that may be developed at CMCC in the laboratory
of Dr. Robert D'Amato, pursuant to the terms and conditions of a separate
Sponsored Research Agreement negotiated between us and CMCC.
While we believe these confidentiality and license agreements to be valid and
enforceable, our rights under these agreements may not continue or disputes
concerning these agreements may arise. If any of the foregoing should occur, we
may be unable to rely upon our unpatented proprietary and trade secret
technology, or we may be unable to use the third party proprietary technology we
have licensed-in, either of which may prevent or hamper us from successfully
pursuing our business.
THE PHARMACEUTICAL INDUSTRY IS HIGHLY COMPETITIVE AND SUBJECT TO RAPID AND
SIGNIFICANT TECHNOLOGICAL CHANGE.
The pharmaceutical industry in which we operate is highly competitive and
subject to rapid and significant technological change. Our present and potential
competitors include major pharmaceutical and biotechnology companies, as well as
specialty pharmaceutical firms, such as:
o Bristol-Myers Squibb Co., which potentially competes in clinical trials
with our IMiDs(TM)and SelCIDs(TM);
o Genentech Inc., which potentially competes in clinical trials with our
IMiDs(TM)and SelCIDs(TM);
9
o AstraZeneca, which potentially competes in clinical trials with our
IMiDs(TM)and SelCIDs(TM);
o Millennium Pharmaceuticals, which potentially competes in clinical trials
with our IMiDs(TM)and SelCIDs(TM)as well as with THALOMID(R);
o Genta Inc., which potentially competes with our IMiDs(TM)and SelCIDs(TM)as
well as with THALOMID(R);
o Cell Therapeutics, which potentially competes in clinical trials with our
IMiDs(TM)and SelCIDs(TM)as well as with THALOMID(R);
o Vertex Pharmaceuticals Inc., which potentially competes in clinical trials
with our kinase inhibitors; and
o IDEC Pharmaceuticals Corporation and Ilex Oncology, Inc., both of which are
generally developing drugs that address the oncology and immunology
markets, although we are not aware of specific competing products.
Many of these companies have considerably greater financial, technical and
marketing resources than us. We also experience competition from universities
and other research institutions and, in some instances, we compete with others
in acquiring technology from these sources. The pharmaceutical industry has
undergone, and is expected to continue to undergo, rapid and significant
technological change, and we expect competition to intensify as technical
advances in the field are made and become more widely known. The development of
products or processes by our competitors with significant advantages over those
that we are seeking to develop could cause the marketability of our products to
stagnate or decline.
SALES OF OUR PRODUCTS ARE DEPENDENT ON THIRD-PARTY REIMBURSEMENT.
Sales of our products will depend, in part, on the extent to which the costs of
our products will be paid by health maintenance, managed care, pharmacy benefit
and similar health care management organizations, or reimbursed by government
health administration authorities, private health coverage insurers and other
third-party payors. These health care management organizations and third-party
payors are increasingly challenging the prices charged for medical products and
services. Additionally, the containment of health care costs has become a
priority of federal and state governments, and the prices of drugs have been
targeted in this effort. If these organizations and third-party payors do not
consider our products to be cost-effective, they may not reimburse providers of
our products or, if they do, the level of reimbursement may not be sufficient to
allow us to sell our products on a profitable basis.
WE MAY NOT REALIZE THE BENEFITS OF THE COMBINED BUSINESSES AS A RESULT OF THE
ANTHROGENESIS ACQUISITION, WHICH COULD DIMINISH THE EXPECTED BENEFITS OF THE
ACQUISITION.
Achieving the expected benefits of the Anthrogenesis acquisition, which was
consummated on December 31, 2002, will depend in large part on the successful
integration and management of certain aspects of the combined businesses in a
timely and efficient manner and the scale-up and commercialization of
Anthrogenesis' technologies and products. We must integrate the information
systems, product development, administration and other operations of the
combined company. This may be difficult and unpredictable because of possible
cultural conflicts and different opinions on technical, operational and other
integration decisions. We must also integrate the employees of the combined
company. The operations, management and personnel of the combined company may
not be compatible, and we may experience the loss of key personnel for that
reason.
We expect to incur costs from integrating Anthrogenesis' operations and
personnel. These costs may be substantial and may include costs for:
o employee retention and development; and
o integration of operating policies, procedures and systems.
If we are not successful in these integration efforts, we may not realize the
full expected benefits of the Anthrogenesis acquisition.
10
RISKS RELATED TO OUR COMMON STOCK
THE PRICE OF OUR COMMON STOCK, AND THEREFORE OF THE NOTES, MAY FLUCTUATE
SIGNIFICANTLY, WHICH MAY MAKE IT DIFFICULT FOR YOU TO RESELL THE NOTES, OR
COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES, WHEN YOU WANT OR AT PRICES
YOU FIND ATTRACTIVE.
There has been significant volatility in the market prices for publicly traded
shares of biopharmaceutical companies, including ours. We expect that the market
price of our common stock will continue to fluctuate. Because the notes are
convertible into our common stock, volatility or depressed prices for our common
stock could have a similar effect on the notes. Holders who have received common
stock upon conversion will also be subject to the risk of volatility and
depressed prices. In 2001, the intra-day price of our common stock fluctuated
from a high of $38.88 to a low of $14.40. In 2002, the intra-day price of our
common stock fluctuated from a high of $32.20 to a low of $11.32. During the
nine-month period ended September 30, 2003, the intra-day price of our common
stock fluctuated from a high of $48.88 to a low of $20.15. On October 31, 2003,
our common stock closed at a price of $41.69. The price of our common stock may
not remain at or exceed current levels. The following factors may have an
adverse impact on the market price of our common stock:
o results of our clinical trials;
o announcements of technical or product developments by our competitors;
o market conditions for pharmaceutical and biotechnology stocks;
o market conditions generally;
o governmental regulation;
o health care legislation;
o public announcements regarding medical advances in the treatment of the
disease states that we are targeting;
o patent or proprietary rights developments;
o changes in third-party reimbursement policies for our products; or
o fluctuations in our operating results.
In addition, the stock market in general has experienced extreme volatility that
has often been unrelated to the operating performance of a particular company.
These broad market fluctuations may adversely affect the market price of our
common stock and the notes.
THE NUMBER OF SHARES OF OUR COMMON STOCK ELIGIBLE FOR FUTURE SALE COULD
ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK.
Future sales of substantial amounts of our common stock could adversely affect
the market price of our common stock. As of October 31, 2003, there were
outstanding stock options and warrants for 11,872,310 shares of common stock, of
which 10,797,246 were currently exercisable at an exercise price range between
$0.15 and $70.00, with an average exercise price of $22.96. These amounts
include outstanding options and warrants of Anthrogenesis that we assumed as
part of our acquisition of Anthrogenesis on December 31, 2002 and that were
converted into outstanding options and warrants of our common stock pursuant to
an exchange ratio.
11
OUR SHAREHOLDER RIGHTS PLAN AND CERTAIN CHARTER AND BY-LAW PROVISIONS MAY DETER
A THIRD PARTY FROM ACQUIRING US AND MAY IMPEDE THE STOCKHOLDERS' ABILITY TO
REMOVE AND REPLACE OUR MANAGEMENT OR BOARD OF DIRECTORS.
Our board of directors has adopted a shareholder rights plan, the purpose of
which is to protect stockholders against unsolicited attempts to acquire control
of us that do not offer a fair price to all of our stockholders. The rights plan
may have the effect of dissuading a potential acquirer from making an offer for
our common stock at a price that represents a premium to the then current
trading price.
Our board of directors has the authority to issue, at any time, without further
stockholder approval, up to 5,000,000 shares of preferred stock, and to
determine the price, rights, privileges and preferences of those shares. An
issuance of preferred stock could discourage a third party from acquiring a
majority of our outstanding voting stock. Additionally, our board of directors
has adopted certain amendments to our by-laws intended to strengthen the board's
position in the event of a hostile takeover attempt. These provisions could
impede the stockholders' ability to remove and replace our management and/or
board of directors.
Furthermore, we are subject to the provisions of Section 203 of the Delaware
General Corporation Law, an anti-takeover law, which may also dissuade a
potential inquirer of our common stock.
RISKS RELATED TO THE NOTES
CONVERSION OF THE NOTES WILL DILUTE THE OWNERSHIP INTEREST OF EXISTING
STOCKHOLDERS AND COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK.
The conversion of some or all of the notes will dilute the ownership interests
of existing stockholders. Any sales in the public market of the common stock
issuable upon such conversion could adversely affect prevailing market prices of
our common stock. In addition, the existence of the notes may encourage short
selling by market participants.
THE NOTES ARE UNSECURED AND, THEREFORE, ARE EFFECTIVELY SUBORDINATED TO ANY OF
OUR SECURED DEBT AND ARE EFFECTIVELY SUBORDINATED TO ALL LIABILITIES OF OUR
SUBSIDIARIES.
The notes are not secured by any of our assets or those of our subsidiaries. As
a result the notes are effectively subordinated to any secured debt we may
incur. In any liquidation, dissolution, bankruptcy or other similar proceeding,
the holders of our secured debt may assert rights against the secured assets in
order to receive full payment of their debt before the assets may be used to pay
the holders of the notes.
In addition, as debt of Celgene Corporation, the notes are effectively
subordinated to all debt and other liabilities, including trade payables, of our
subsidiaries. As of September 30, 2003, our subsidiaries had total liabilities
of approximately $9.9 million, excluding intercompany liabilities.
WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO FINANCE THE
FUNDAMENTAL CHANGE REDEMPTION OPTION.
If a fundamental change, as described under the heading "Description of
Notes--Redemption at Option of the Holder," occurs prior to maturity, we may be
required to redeem all or part of the notes. We may not have enough funds to pay
the redemption price for all tendered notes. Any future credit agreements or
other agreements relating to our indebtedness may contain provisions prohibiting
redemption of the notes under certain circumstances, or may expressly prohibit
our redemption of the notes upon a fundamental change or provide that a
fundamental change constitutes an event of default under that agreement. If a
fundamental change occurs at a time when we are prohibited from purchasing or
redeeming notes, we could seek the consent of our lenders to redeem the notes or
attempt to refinance this debt. If we do not obtain consent, we would not be
permitted to purchase or redeem the notes. Our failure to redeem tendered notes
would constitute an event of default under the indenture, which might constitute
a default under the terms of our other indebtedness.
NO PUBLIC MARKET EXISTS FOR THE NOTES, AND THE RESALE OF THE NOTES IS SUBJECT TO
UNCERTAINTIES REGARDING THE EXISTENCE OF ANY TRADING MARKET FOR THE NOTES.
The notes are a new issue of securities for which there is currently no public
market. We do not intend to list the notes on any national securities exchange
or automated quotation system. We cannot assure you that an active or sustained
12
trading market for the notes will develop or that the holders will be able to
sell their notes. The initial purchaser has informed us that it intends to make
a market in the notes, but it is not obligated to do so, and its market-making
may be interrupted or discontinued without notice at any time.
Moreover, even if the holders are able to sell their notes, we cannot assure you
as to the price at which any sales will be made. Future trading prices of the
notes will depend on many factors, including, among other things, prevailing
interest rates, our operating results, the price of our common stock and the
market for similar securities. Historically, the market for convertible debt has
been subject to disruptions that have caused volatility in prices. It is
possible that the market for the notes will be subject to disruptions which may
have a negative effect on the holders of the notes, regardless of our prospects
or financial performance.
THE FUNDAMENTAL CHANGE REDEMPTION RIGHTS IN THE NOTES COULD DISCOURAGE A
POTENTIAL ACQUIRER.
The fundamental change redemption rights in the notes could discourage a
potential acquirer. However, this fundamental change redemption feature is not
the result of management's knowledge of any specific effort to obtain control of
us by means of a merger, tender offer or solicitation, or part of a plan by
management to adopt a series of anti-takeover provisions. The term "fundamental
change" is limited to specified transactions and may not include other events
that might adversely affect our financial condition or business operations. Our
obligation to offer to redeem the notes upon a fundamental change would not
necessarily afford you protection in the event of a highly leveraged
transaction, reorganization, merger or similar transaction involving us.
FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference in this prospectus are
forward-looking statements concerning our business, financial condition, results
of operations and economic performance. Forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and within the meaning of
Section 21E of the Securities Exchange Act of 1934 are included, for example, in
the discussions about:
o our strategy;
o new product development or product introduction;
o product sales, royalties and contract revenues;
o expenses and net income;
o our credit risk management;
o our liquidity;
o our asset/liability risk management; and
o our operational and legal risks.
These statements involve risks and uncertainties. Actual results may differ
materially from those expressed or implied in those statements. Factors that
could cause such differences include, but are not limited to, those discussed
under "Risk Factors."
13
USE OF PROCEEDS
The selling securityholders will receive all of the proceeds from the sale under
this prospectus of the notes and the common stock issuable upon conversion of
the notes. We will not receive any proceeds from these sales. See "Selling
Securityholders" for a list of those persons or entities receiving proceeds from
the sale of the notes and underlying common stock.
14
RATIO OF EARNINGS TO FIXED CHARGES
9 MONTHS
YEARS ENDED DECEMBER 31, ENDED
-------------------------------------------------------------------------------
September 30,
1998 1999 2000 2001 2002 2003
-------------------------------------------------------------------------------
DOLLARS IN THOUSANDS
Ratio of earnings to fixed charges -- -- -- -- -- 3.05
Deficiency of earnings available
to cover fixed charges $ (36,379) $ (32,655) $ (18,813) $ (4,136) $(101,099) --
For purposes of computing the ratio of earnings to fixed charges,
earnings consist of the sum of our pretax income from continuing operations and
fixed charges less capitalized interest. Fixed charges consist of interest
expense, amortization of debt discount, premium and expense, capitalized
interest and a portion of lease payments considered to represent an interest
factor.
15
DESCRIPTION OF NOTES
The notes were issued under an indenture dated as of June 3, 2003, between
Celgene, as issuer, and The Bank of New York, as trustee. The notes and the
shares issuable upon conversion of the notes are covered by a registration
rights agreement between us and Morgan Stanley & Co. Incorporated, as initial
purchaser listed in that agreement, dated as of June 3, 2003. Copies of the
indenture and the registration rights agreement are filed as exhibits to the
registration statement of which this prospectus forms a part. You may also
request a copy of the indenture and the registration rights agreement from the
trustee.
The following description is a summary of the material provisions of the notes,
the indenture and the registration rights agreement. It does not purport to be
complete. This summary is subject to and is qualified by reference to all the
provisions of the indenture, including the definitions of certain terms used in
the indenture, and to all provisions of the registration rights agreement.
Wherever particular provisions or defined terms of the indenture or form of note
are referred to, these provisions or defined terms are incorporated in this
propectus by reference. We urge you to read the indenture because it and not
this description defines your rights as a holder of notes.
As used in this "Description of Notes" section, references to "Celgene," "we,"
"our" or "us" refer solely to Celgene Corporation and not to our subsidiaries.
GENERAL
The notes are general unsecured obligations of Celgene and rank on a parity with
all of our other existing and future senior unsecured debt and prior to all of
our subordinated debt. The notes are effectively subordinated to all debts and
other liabilities of our subsidiaries. The notes are convertible into common
stock as described under "--Conversion of Notes." We may not redeem the notes
prior to maturity.
On June 3, 2003 we issued and sold $400,000,000 aggregate principal amount of
the notes in a private placement. The notes were issued only in denominations of
$1,000 and multiples of $1,000. The notes will mature on June 1, 2008 unless
earlier converted or redeemed upon a fundamental change.
Neither we nor any of our subsidiaries is subject to any financial covenants
under the indenture. In addition, neither we nor any of our subsidiaries is
restricted under the indenture from paying dividends, incurring debt or issuing
or repurchasing our securities.
You are not afforded protection under the indenture in the event of a highly
leveraged transaction or a change in control of us except to the extent
described below under "--Redemption at Option of the Holder."
The notes bear interest at a rate of 1.75% per annum from June 3, 2003. Interest
is calculated on the basis of a 360-day year consisting of twelve 30-day months.
We will pay interest on June 1 and December 1 of each year, beginning December
1, 2003, to record holders at the close of business on the preceding May 15 and
November 15, as the case may be, except interest payable upon redemption upon a
fundamental change will be paid to the person to whom principal is payable.
Payment of cash interest on the notes will include interest accrued through the
day before the applicable interest payment date or redemption date, as the case
may be.
We will maintain an office in the Borough of Manhattan, The City of New York,
where we will pay the principal and premium, if any, on the notes and you may
present the notes for conversion, registration of transfer or exchange for other
denominations. The office will initially be an office or agency of the trustee.
We may pay interest by check mailed to your address as it appears in the note
register, provided that if you are a holder with an aggregate principal amount
in excess of $2.0 million, you shall be paid, at your written election, by wire
transfer in immediately available funds.
However, payments to The Depository Trust Company, New York, New York, which we
refer to as DTC, will be made by wire transfer of immediately available funds to
the account of DTC or its nominee.
16
CONVERSION OF NOTES
You may convert any of your notes, in whole or in part, into common stock prior
to the close of business on the final maturity date of the notes, subject to
prior redemption of the notes.
The number of shares of common stock you will receive upon conversion of your
notes will be determined by multiplying the number of $1,000 principal amount
notes you convert by the conversion rate on the date of conversion. The initial
conversion rate for the notes is 20.6398 shares of common stock per $1,000
principal amount of notes, subject to adjustment as described below, which
represents an initial conversion price of approximately $48.45 per share. You
may convert your notes in part so long as such part is $1,000 principal amount
or an integral multiple of $1,000.
If you have submitted your notes for redemption upon a fundamental change, you
may convert your notes only if you withdraw your redemption notice. Upon
conversion of notes, a holder will not receive any cash payment of interest
(unless such conversion occurs between a regular record date and the interest
payment date to which it relates). We will not issue fractional shares of common
stock upon conversion of notes. Instead, we will pay cash in lieu of fractional
shares based on the closing sale price of our common stock on the trading day
prior to the conversion date. Our delivery to the holder of the full number of
shares of our common stock into which the note is convertible, together with any
cash payment for such holder's fractional shares, will be deemed to satisfy our
obligation to pay:
o the principal amount of the note; and
o accrued but unpaid interest attributable to the period from the most recent
interest payment date to the conversion date.
As a result, accrued but unpaid interest to the conversion date is deemed to be
paid in full rather than cancelled, extinguished or forfeited.
Notwithstanding the preceding paragraph, if notes are converted after a record
date but prior to the next succeeding interest payment date, holders of such
notes at the close of business on the record date will receive the interest
payable on such notes on the corresponding interest payment date notwithstanding
the conversion. Such notes, upon surrender for conversion, must be accompanied
by funds equal to the amount of interest payable on the notes so converted;
provided that no such payment need be made if (1) we have specified a redemption
date following a fundamental change that is after a record date but on or prior
to the next succeeding interest payment date or (2) to the extent of any overdue
interest at the time of conversion with respect to such note.
To convert your note into common stock you must:
o complete and manually sign the conversion notice on the back of the note or
facsimile of the conversion notice and deliver this notice to the
conversion agent;
o surrender the note to the conversion agent;
o if required, furnish appropriate endorsements and transfer documents;
o if required, pay all transfer or similar taxes; and
o if required, pay funds equal to interest payable on the next interest
payment date.
The date you comply with these requirements is the conversion date under the
indenture. If you hold a beneficial interest in a global note, to convert you
must comply with the last three requirements listed above and comply with DTC's
procedures for converting a beneficial interest in a global note.
17
We will adjust the conversion rate if any of the following events occurs:
(1) we issue common stock as a dividend or distribution on our common
stock;
(2) we issue to all holders of common stock certain rights or warrants
to purchase our common stock;
(3) we subdivide or combine our common stock;
(4) we distribute to all holders of our common stock, shares of our
capital stock, evidences of indebtedness or assets, including
securities but excluding:
o rights or warrants specified above;
o dividends or distributions specified above; and
o cash distributions.
If we distribute capital stock of, or similar equity interests in, a subsidiary
or other business unit of ours, the conversion rate will be adjusted based on
the market value of the securities so distributed relative to the market value
of our common stock, in each case based on the average closing sale prices of
those securities for the 10 trading days commencing on and including the fifth
trading day after the date on which "ex-dividend trading" commences for such
distribution on the Nasdaq National Market or such other national or regional
exchange or market on which the securities are then listed or quoted.
(5) we distribute cash, excluding any dividend or distribution in
connection with our liquidation, dissolution or winding up or any
quarterly cash dividend on our common stock to the extent that the
aggregate cash dividends per share of common stock in any twelve
month period does not exceed 5.0% of the average of the closing
sale prices of the common stock during the ten trading days
immediately prior to the declaration date of the dividend,
calculated at the time of each distribution.
If an adjustment is required to be made under this clause (5) as a result of a
distribution that is a quarterly dividend, the adjustment would be based upon
the amount by which the distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded pursuant to this clause. If an adjustment is
required to be made under this clause as a result of a distribution that is not
a quarterly dividend, the adjustment would be based upon the full amount of the
distribution;
(6) we or one of our subsidiaries makes a payment in respect of a
tender offer or exchange offer for our common stock to the extent
that the cash and value of any other consideration included in the
payment per share of common stock exceeds the closing sale price
per share of common stock on the trading day next succeeding the
last date on which tenders or exchanges may be made pursuant to
such tender or exchange offer; and
(7) someone other than us or one of our subsidiaries makes a payment
in respect of a tender offer or exchange offer and, as of the
closing date of the offer, our board of directors is not
recommending rejection of the offer. The adjustment referred to in
this clause (7) will only be made if:
o the tender offer or exchange offer is for an amount that increases the
offeror's ownership of common stock to more than 25% of the total shares of
common stock outstanding; and
o the cash and value of any other consideration included in the payment per
share of common stock exceeds the closing sale price per share of common
stock on the trading day next succeeding the last date on which tenders or
exchanges may be made pursuant to the tender or exchange offer.
However, the adjustment referred to in this clause (7) will generally not be
made if as of the closing of the offer, the offering documents disclose a plan
or an intention to cause us to engage in a consolidation or merger or a sale of
all or substantially all of our assets.
18
To the extent that we have a rights plan in effect at the time of any conversion
of the notes into common stock, you will receive, in addition to the common
stock, the rights under such rights plan, unless prior to any conversion the
rights have separated from the common stock, in which case the conversion rate
will be adjusted at the time of such separation as if we distributed to all
holders of our common stock, shares of our capital stock, evidences of
indebtedness or assets as described in clause (4) above, subject to readjustment
in the event of the expiration, termination or redemption of such rights.
In the event of:
o any reclassification of our common stock;
o a consolidation, merger or combination involving us; or
o a sale or conveyance to another person or entity of all or substantially
all of our property and assets;
in which holders of our common stock would be entitled to receive stock, other
securities, other property, assets or cash for their common stock, upon
conversion of your notes you will be entitled to receive the same type of
consideration that you would have been entitled to receive if you had converted
the notes into our common stock immediately prior to any of these events.
You may in certain situations be deemed to have received a distribution subject
to U.S. federal income tax as a dividend in the event of any taxable
distribution to holders of common stock or in certain other situations requiring
a conversion rate adjustment. See "U.S. Federal Income Tax Considerations."
We may, from time to time, increase the conversion rate if our board of
directors has made a determination that this increase would be in our best
interests. Any such determination by our board will be conclusive. In addition,
we may increase the conversion rate if our board of directors deems it advisable
to avoid or diminish any income tax to holders of common stock resulting from
any stock or rights distribution. See "U.S. Federal Income Tax Considerations."
We will not be required to make an adjustment in the conversion rate unless the
adjustment would require a change of at least 1% in the conversion rate.
However, we will carry forward any adjustments that are less than 1% of the
conversion rate. Except as described above in this section, we will not adjust
the conversion rate for any issuance of our common stock or convertible or
exchangeable securities or rights to purchase our common stock or convertible or
exchangeable securities.
OPTIONAL REDEMPTION BY CELGENE
We may not redeem the notes at our option in whole or in part prior to maturity.
REDEMPTION AT OPTION OF THE HOLDER
If a fundamental change of Celgene occurs at any time prior to the maturity of
the notes, you may require us to redeem your notes, in whole or in part, on a
redemption date that is 30 days after the date of our notice of the fundamental
change. The notes will be redeemable in integral multiples of $1,000 principal
amount.
We will redeem the notes at a price equal to 100% of the principal amount to be
redeemed, plus accrued interest to, but excluding, the redemption date.
We will mail to all record holders a notice of a fundamental change within 10
days after it has occurred. We are also required to deliver to the trustee a
copy of the fundamental change notice. If you elect to redeem your notes, you
must deliver to us or our designated agent, on or before the 30th day after the
date of our fundamental change notice, your redemption notice. We will promptly
pay the redemption price for notes surrendered for redemption following the
later of the redemption date and the time of book-entry transfer or delivery of
the notes to be redeemed, duly endorsed for transfer. If the paying agent holds
money sufficient to pay the redemption price for any note on the business day
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following the redemption date, then, on and after such date, the notes will
cease to be outstanding, interest will cease to accrue and all other rights of
the holder will terminate, except the right to receive the redemption price.
This will be the case whether or not book-entry transfer of the note has been
made or the note has been delivered to the paying agent.
You may withdraw any written redemption notice by delivering a written notice of
withdrawal to the paying agent prior to the close of business on the redemption
date. The withdrawal notice must state:
o the principal amount of the withdrawn notes;
o if certificated notes have been issued, the certificate numbers of the
withdrawn notes (or, if your notes are not certificated, your withdrawal
notice must comply with appropriate DTC procedures); and
o the principal amount, if any, that remains subject to the redemption
notice.
A "fundamental change" is any transaction or event (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise) in connection with which all or
substantially all of our common stock is exchanged for, converted into, acquired
for or constitutes solely the right to receive, consideration which is not all
or substantially all common stock that:
o is listed on, or immediately after the transaction or event will be listed
on, a U.S. national securities exchange, or
o is approved, or immediately after the transaction or event will be
approved, for quotation on the Nasdaq National Market or any similar U.S.
system of automated dissemination of quotations of securities prices.
We will comply with any applicable provisions of Rule 13e-4 and any other tender
offer rules under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), in the event of a fundamental change.
These fundamental change redemption rights could discourage a potential
acquirer. However, this fundamental change redemption feature is not the result
of management's knowledge of any specific effort to obtain control of us by
means of a merger, tender offer or solicitation, or part of a plan by management
to adopt a series of anti-takeover provisions. The term "fundamental change" is
limited to specified transactions and may not include other events that might
adversely affect our financial condition or business operations. Our obligation
to offer to redeem the notes upon a fundamental change would not necessarily
afford you protection in the event of a highly leveraged transaction,
reorganization, merger or similar transaction involving us.
We may be unable to redeem the notes in the event of a fundamental change. If a
fundamental change were to occur, we may not have enough funds to pay the
redemption price for all tendered notes. Any future credit agreements or other
agreements relating to our indebtedness may contain provisions prohibiting
redemption of the notes under certain circumstances, or may expressly prohibit
our redemption of the notes upon a fundamental change or provide that a
fundamental change constitutes an event of default under that agreement. If a
fundamental change occurs at a time when we are prohibited from purchasing or
redeeming notes, we could seek the consent of our lenders to redeem the notes or
attempt to refinance this debt. If we do not obtain consent, we would not be
permitted to purchase or redeem the notes. Our failure to redeem tendered notes
would constitute an event of default under the indenture, which might constitute
a default under the terms of our other indebtedness.
MERGER AND SALE OF ASSETS BY CELGENE
The indenture provides that we may not consolidate with or merge with or into
any other person or convey, transfer or lease our properties and assets
substantially as an entirety to another person, unless among other items:
o we are the surviving person, or the resulting, surviving or transferee
person, if other than us, is organized and existing under the laws of the
United States, any state thereof or the District of Columbia;
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o the successor person assumes all of our obligations under the notes and the
indenture;
o after giving effect to such transaction, there is no event of default, and
no event that, after notice or passage of time or both, would become an
event of default; and
o we have delivered to the trustee an officers' certificate and an opinion of
counsel each stating that such consolidation, merger, sale, conveyance,
transfer or lease complies with these requirements.
When such a person assumes our obligations in such circumstances, subject to
certain exceptions, we shall be discharged from all obligations under the notes
and the indenture.
EVENTS OF DEFAULT; NOTICE AND WAIVER
The following are events of default under the indenture:
o we fail to pay principal or premium, if any, when due at maturity, upon
redemption or otherwise on the notes;
o we fail to pay any interest, including liquidated damages, if any, on the
notes, when due and such failure continues for a period of 30 days;
o we fail to convert the notes upon exercise of a holder's conversion right;
o we fail to provide notice of the occurrence of a fundamental change on a
timely basis;
o we fail to perform or observe any of the covenants in the indenture for 60
days after notice; or
o certain events involving our bankruptcy, insolvency or reorganization.
The trustee may withhold notice to the holders of the notes of any default,
except defaults in payment of principal, premium, interest or liquidated
damages, if any, on the notes. However, the trustee must consider it to be in
the interest of the holders of the notes to withhold this notice.
If an event of default occurs and continues, the trustee or the holders of at
least 25% in principal amount of the outstanding notes may declare the
principal, premium, if any, and accrued interest and liquidated damages, if any,
on the outstanding notes to be immediately due and payable. In case of certain
events of bankruptcy or insolvency involving us, the principal, premium, if any,
and accrued interest and liquidated damages, if any, on the notes will
automatically become due and payable. However, if we cure all defaults, except
the nonpayment of principal, premium, if any, interest or liquidated damages, if
any, that became due as a result of the acceleration, and meet certain other
conditions, with certain exceptions, this declaration may be cancelled and the
holders of a majority of the principal amount of outstanding notes may waive
these past defaults.
Payments of principal, premium, if any, or interest on the notes that are not
made when due will accrue interest at the annual rate of 1% above the then
applicable interest rate from the required payment date.
The holders of a majority of outstanding notes have the right to direct the
time, method and place of any proceedings for any remedy available to the
trustee, subject to limitations specified in the indenture.
No holder of the notes may pursue any remedy under the indenture, except in the
case of a default in the payment of principal, premium, if any, or interest on
the notes, unless:
o the holder has given the trustee written notice of an event of default;
o the holders of at least 25% in principal amount of outstanding notes make a
written request, and offer reasonable indemnity, to the trustee to pursue
the remedy;
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o the trustee does not receive an inconsistent direction from the holders of
a majority in principal amount of the notes;
o the holder or holders have offered reasonable security or indemnity to the
trustee against any costs, liability or expense of the trustee; and
o the trustee fails to comply with the request within 60 days after receipt
of the request and offer of indemnity.
MODIFICATION AND WAIVER
The consent of the holders of a majority in principal amount of the outstanding
notes is required to modify or amend the indenture. However, a modification or
amendment requires the consent of the holder of each outstanding note if it
would:
o extend the fixed maturity of any note;
o reduce the rate or extend the time for payment of interest, including
liquidated damages, if any, on any note;
o reduce the principal amount or premium of any note;
o reduce any amount payable upon redemption of any note;
o adversely change our obligation to redeem any note upon a fundamental
change;
o impair the right of a holder to institute suit for payment on any note;
o change the currency in which any note is payable;
o impair the right of a holder to convert any note or reduce the number of
shares or the amount of any other property receivable upon conversion;
o reduce the quorum or voting requirements under the indenture;
o change any obligation of ours to maintain an office or agency in the places
and for the purposes specified in the indenture;
o subject to specified exceptions, modify certain of the provisions of the
indenture relating to modification or waiver of provisions of the
indenture; or
o reduce the percentage of notes required for consent to any modification of
the indenture.
We are permitted to modify certain provisions of the indenture without the
consent of the holders of the notes.
FORM, DENOMINATION AND REGISTRATION
The notes were issued:
o in fully registered form;
o without interest coupons; and
o in denominations of $1,000 principal amount and integral multiples of
$1,000.
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Global Note, Book-Entry Form
Notes that were sold to "qualified institutional buyers" as defined in Rule 144A
under the Securities Act were evidenced by one or more global notes which were
deposited with, or on behalf of, DTC and registered in the name of Cede & Co. as
DTC's nominee. Except as set forth below, a global note may be transferred, in
whole or in part, only to another nominee of DTC or to a successor of DTC or its
nominee.
You may hold your beneficial interests in a global note directly through DTC if
you are a participant in DTC, or indirectly through organizations that are
participants in DTC (called "participants"). Transfers between participants will
be effected in the ordinary way in accordance with DTC rules and will be settled
in clearing house funds. The laws of some states require that certain persons
take physical delivery of securities in definitive form. As a result, the
ability to transfer beneficial interests in the global note to such persons may
be limited.
If you are not a participant, you may beneficially own interests in a global
note held by DTC only through participants, or certain banks, brokers, dealers,
trust companies and other parties that clear through or maintain a custodial
relationship with a participant, either directly or indirectly (called "indirect
participants"). So long as Cede & Co., as the nominee of DTC, is the registered
owner of a global note, Cede & Co. for all purposes will be considered the sole
holder of such global note. Except as provided below, owners of beneficial
interests in a global note will:
o not be entitled to have certificates registered in their names;
o not receive physical delivery of certificates in definitive registered
form; and
o not be considered holders of the global note.
We will pay interest on and the redemption price of a global note to Cede & Co.,
as the registered owner of the global note, by wire transfer of immediately
available funds on each interest payment date or the redemption date, as the
case may be. Neither we, the trustee nor any paying agent will be responsible or
liable:
o for the records relating to, or payments made on account of, beneficial
ownership interests in a global note; or
o for maintaining, supervising or reviewing any records relating to the
beneficial ownership interests.
We have been informed that DTC's practice is to credit participants' accounts on
that payment date with payments in amounts proportionate to their respective
beneficial interests in the principal amount represented by a global note as
shown in the records of DTC, unless DTC has reason to believe that it will not
receive payment on that payment date. Payments by participants to owners of
beneficial interests in the principal amount represented by a global note held
through participants will be the responsibility of the participants, as is now
the case with securities held for the accounts of customers registered in
"street name."
Because DTC can only act on behalf of participants, who in turn act on behalf of
indirect participants, the ability of a person having a beneficial interest in
the principal amount represented by the global note to pledge such interest to
persons or entities that do not participate in the DTC system, or otherwise take
actions in respect of such interest, may be affected by the lack of a physical
certificate evidencing its interest.
Neither we, the trustee, registrar, paying agent nor conversion agent will have
any responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations. DTC has advised us that it will take any action
permitted to be taken by a holder of notes, including the presentation of notes
for exchange, only at the direction of one or more participants to whose account
with DTC interests in the global note are credited, and only in respect of the
principal amount of the notes represented by the global note as to which the
participant or participants has or have given such direction.
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DTC has advised us that it is:
o a limited purpose trust company organized under the laws of the State of
New York, and a member of the Federal Reserve System;
o "clearing corporation" within the meaning of the Uniform Commercial Code;
and
o "clearing agency" registered pursuant to the provisions of Section 17A of
the Exchange Act.
DTC was created to hold securities for its participants and to facilitate the
clearance and settlement of securities transactions between participants through
electronic book-entry changes to the accounts of its participants. Participants
include securities brokers, dealers, banks, trust companies and clearing
corporations and other organizations. Some of the participants or their
representatives, together with other entities, own DTC. Indirect access to the
DTC system is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
DTC has agreed to the foregoing procedures to facilitate transfers of interests
in a global note among participants. However, DTC is under no obligation to
perform or continue to perform these procedures, and may discontinue these
procedures at any time. If DTC is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by us within 90 days, we
will issue notes in certificated form in exchange for global notes.
REGISTRATION RIGHTS OF THE NOTEHOLDERS
We entered into a registration rights agreement with the initial purchaser of
the notes under which we were required to file a shelf registration statement,
of which this prospectus forms a part, with the Securities and Exchange
Commission covering the resale of the registrable securities by September 1,
2003, and we are required to use best efforts to cause the shelf registration to
become effective by November 30, 2003. In addition, we are required to use our
reasonable best efforts to keep the shelf registration statement of which this
prospectus is a part effective until the earlier of:
o the time where all of the registrable securities have been sold pursuant to
the shelf registration statement or pursuant to Rule 144 under the
Securities Act or any similar provision then in force; or
o the expiration of the holding period with respect to the registrable
securities under Rule 144(k) under the Securities Act, or any successor
provision.
When we use the term "registrable securities" in this section, we are referring
to the notes and the common stock issuable upon conversion of the notes until
the earliest of:
o the effective registration under the Securities Act and the resale of the
registrable securities in accordance with the registration statement;
o the expiration of the holding period under Rule 144(k) under the Securities
Act; and
o the sale of the registrable securities to the public pursuant to Rule 144
under the Securities Act.
We may suspend the use of this prospectus under certain circumstances relating
to pending corporate developments, public filings with the SEC and similar
events. Any suspension period shall not:
o exceed 30 days in any three-month period; or
o an aggregate of 90 days for all periods in any 12-month period.
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Notwithstanding the foregoing, we will be permitted to suspend the use of the
prospectus for up to 60 days in any 3-month period under certain circumstances,
relating to possible acquisitions, financings or other similar transactions.
We will pay predetermined liquidated damages on any interest payment date if the
shelf registration statement is not timely made effective or if the prospectus
is unavailable for periods in excess of those permitted above:
o on the notes at an annual rate equal to 0.5% of the aggregate principal
amount of the notes outstanding until the registration statement is made
effective or during the additional period this prospectus is unavailable;
and
o on the common stock that has been converted, at an annual rate equal to
0.5% of an amount equal to $1,000 divided by the conversion rate during
such periods.
A holder who elects to sell registrable securities pursuant to the shelf
registration statement will be required to:
o be named as a selling stockholder in this prospectus;
o deliver a prospectus to purchasers; and
o be subject to the provisions of the registration rights agreement,
including indemnification provisions.
Under the registration rights agreement we will:
o pay all expenses of the shelf registration statement;
o provide each registered holder copies of this prospectus;
o notify holders when the shelf registration statement has become effective;
and
o take other reasonable actions as are required to permit unrestricted
resales of the registrable securities in accordance with the terms and
conditions of the registration rights agreement.
The plan of distribution of the shelf registration statement will permit resales
of registrable securities by selling security holders though brokers and
dealers.
In order to be named as a selling stockholder in the prospectus at the time of
effectiveness of the shelf registration statement, you must complete and deliver
the questionnaire to us on or prior to the tenth business day before the
effectiveness of the registration statement. This summary of the registration
rights agreement is not complete. This summary is subject to, and is qualified
in its entirety by reference to, all the provisions of the registration rights
agreement.
RULE 144A INFORMATION REQUEST
We will furnish to the holders or beneficial holders of the notes or the
underlying common stock and prospective purchasers, upon their request, the
information required under Rule 144A(d)(4) under the Securities Act until such
time as such securities are no longer "restricted securities" within the meaning
of Rule 144 under the Securities Act, assuming these securities have not been
owned by an affiliate of ours.
INFORMATION CONCERNING THE TRUSTEE
We have appointed The Bank of New York, the trustee under the indenture, as
paying agent, conversion agent, note registrar and custodian for the notes. The
trustee or its affiliates may provide banking and other services to us in the
ordinary course of their business.
The indenture contains certain limitations on the rights of the trustee, if it
or any of its affiliates is then our creditor, to obtain payment of claims in
certain cases or to realize on certain property received on any claim as
security or otherwise. The trustee and its affiliates are permitted to engage in
other transactions with us. However, if the trustee or any affiliate continues
to have any conflicting interest and a default occurs with respect to the notes,
the trustee must eliminate such conflict or resign.
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GOVERNING LAW
The notes and the indenture shall be governed by and construed in accordance
with the laws of the State of New York.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 120,000,000 shares of common stock, par
value $.01 per share, and 5,000,000 shares of preferred stock, par value $.01
per share, of which 520 shares have been designated Series A convertible
preferred stock and 20,000 shares have been designated as Series B convertible
preferred stock. As of October 31, 2003, there were 81,210,352 shares of common
stock outstanding, no shares of Series A convertible preferred stock outstanding
and no shares of Series B convertible preferred stock outstanding.
COMMON STOCK
Holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders, and do not have cumulative voting
rights. Holders of common stock are entitled to receive ratably such dividends,
if any, as may be declared by our board of directors out of funds legally
available therefor, and subject to any preferential dividend rights of any then
outstanding preferred stock. Upon our liquidation, dissolution or winding up,
the holders of common stock are entitled to receive ratably our net assets
available after the payment of all debts and other liabilities and subject to
any liquidation preference of any then outstanding preferred stock. Holders of
common stock have no preemptive, subscription or conversion rights. There are no
redemption or sinking fund provisions applicable to the common stock. The
outstanding shares of common stock are, and the shares offered hereby will be
when issued and paid for, fully paid and non-assessable.
PREFERRED STOCK
Our board of directors has the authority, subject to certain restrictions,
without further stockholder approval, to issue, at any time and from time to
time, shares of preferred stock in one or more series. Each such series shall
have such number of shares, designations, preferences, voting powers,
qualifications, and special or relative rights or privileges as shall be
determined by our board of directors, which may include, among others, dividend
rights, voting rights, redemption and sinking fund provisions, liquidation
preferences, conversion rights and preemptive rights, to the full extent now or
hereafter permitted by the laws of the State of Delaware.
The rights of the holders of common stock will be subject to, and may be
adversely affected by, the rights of holders of any preferred stock that may be
issued in the future. Such rights may include voting and conversion rights which
could adversely affect the holders of the common stock. Satisfaction of any
dividend preferences of outstanding preferred stock would reduce the amount of
funds available, if any, for the payment of dividends on common stock. Holders
of preferred stock would typically be entitled to receive a preference payment.
SHAREHOLDER RIGHTS PLAN
Our board of directors has adopted a shareholder rights plan. The shareholder
rights plan was adopted to give our board of directors increased power to
negotiate in our best interests and to discourage appropriation of control of us
at a price that is unfair to our stockholders. It is not intended to prevent
fair offers for acquisition of control determined by our board of directors to
be in the best interests of us and our stockholders, nor is it intended to
prevent a person or group from obtaining representation on or control of our
board of directors through a proxy contest, or to relieve our board of directors
of its fiduciary duty to consider any proposal for our acquisition in good
faith.
The shareholder rights plan involves the distribution of one "right" as a
dividend on each outstanding share of our common stock to all holders of record
on September 26, 1996, and an ongoing distribution of one right with respect to
each share of our common stock issued subsequently. Each right shall entitle the
holder to purchase one-tenth of a share of common stock. The rights trade in
tandem with the common stock until, and become exercisable upon, the occurrence
of certain triggering events, and the exercise price is based on the estimated
long-term value of our common stock. The exercise of these rights becomes
economically attractive upon the triggering of certain "flip-in" or "flip-over"
rights which work in conjunction with the shareholder rights plan's basic
provisions. The flip-in rights will permit their holders to purchase shares of
common stock at a discounted rate, resulting in substantial dilution of an
27
acquiror's voting and economic interests in us. The flip-over element of the
shareholder rights plan involves some mergers or significant asset purchases,
which trigger certain rights to purchase shares of the acquiring or surviving
company at a discount. The shareholder rights plan contains a "permitted offer"
exception which allows offers determined by our board of directors to be in our
best interests and our stockholders to take place free of the diluting effects
of the shareholder rights plan's mechanisms.
Our board of directors retains the right, at all times prior to acquisition of
15% or more of our voting common stock by an acquiror, to discontinue the
shareholder rights plan through the redemption of all rights, or to amend the
shareholder rights plan in any respect. We have recently amended the shareholder
rights plan to provide that a qualified institutional investor (as defined in
the amendment) will not trigger any rights under the plan until it beneficially
owns at least 17% of the shares of our outstanding common stock, rather than
15%.
DELAWARE LAW AND SOME BY-LAW PROVISIONS
Our board of directors has adopted certain amendments to our by-laws intended to
strengthen our board of directors' position in the event of a hostile takeover
attempt. These by-law provisions have the following effects:
o they provide that only persons who are nominated in accordance with the
procedures set forth in the by-laws shall be eligible for election as our
directors, except as may be otherwise provided in the by-laws;
o they provide that only business brought before the annual meeting by our
board of directors or by a stockholder who complies with the procedures set
forth in the by-laws may be transacted at an annual meeting of
stockholders;
o they provide that only the chairman of the board, if any, the chief
executive officer, the president, the secretary or a majority of our board
of directors may call special meetings of our stockholders;
o they establish a procedure for our board of directors to fix the record
date whenever stockholder action by written consent is undertaken; and
o they require a vote of holders of two-thirds of the outstanding shares of
common stock to amend certain by-law provisions.
Furthermore, we are subject to the provisions of Section 203 of the Delaware
General Corporation Law, an anti-takeover law. In general, the statute prohibits
a publicly held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. For purposes of Section
203, a "business combination" includes a merger, asset sale or other transaction
resulting in a financial benefit to the interested stockholder, and an
"interested stockholder" is a person who, together with affiliates and
associates, owns, or within three years prior, did own, 15% or more of the
corporation's voting stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is American Stock Transfer
& Trust Company. It is located at 59 Maiden Lane, New York, NY 10038, and its
telephone number is (718) 921-8200.
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U.S. FEDERAL INCOME TAX CONSIDERATIONS
This section summarizes the material U.S. federal income tax considerations
relating to the purchase, ownership and disposition of the notes and the shares
of common stock into which the notes may be converted. This summary is based on
the Internal Revenue Code of 1986, as amended (the "Code"), existing and
proposed Treasury Regulations, administrative pronouncements and judicial
decisions, each as available on the date hereof. All of the foregoing are
subject to change, possibly with retroactive effect or different
interpretations. In either case, the tax consequences of purchasing, owning or
disposing of the notes or the common stock could differ from those described in
this summary. This summary generally applies only to U.S. holders that purchase
the notes in the initial offering at their issue price and hold the notes or
common stock as capital assets, generally property held for investment purposes.
For purposes of this summary, U.S. holders are beneficial owners of the notes or
the common stock that, for U.S. federal income tax purposes, are:
o citizens or residents of the United States;
o a corporation created or organized under the laws of the United States or
any State thereof (including the District of Columbia);
o an estate if its income is subject to U.S. federal income taxation
regardless of its source; or
o a trust if such trust validly elects to be treated as a U.S. person for
U.S. federal income tax purposes or if (1) a court within the United States
is able to exercise primary supervision over its administration and (2) one
or more U.S. persons have the authority to control all of the substantial
decisions of such trust.
A non-U.S. holder is a holder that is not a U.S. holder.
This summary generally does not address tax considerations that may be relevant
to particular investors, such as:
o financial institutions;
o insurance companies;
o partnerships or other entities classified as partnerships for U.S. federal
income tax purposes;
o real estate investment trusts;
o regulated investment companies;
o grantor trusts;
o dealers or traders in securities or currencies;
o tax-exempt entities;
o persons that will hold the notes or common stock as part of a "hedging" or
"conversion" transaction or as a position in a "straddle" for U.S. federal
income tax purposes;
o U.S. holders that have a "functional currency" other than the United States
dollar; and
o persons subject to the alternative minimum tax.
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YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING THE APPLICATION OF THE U.S.
FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR SITUATION AND THE CONSEQUENCES OF
FEDERAL ESTATE OR GIFT TAX LAWS, FOREIGN, STATE OR LOCAL LAWS AND TAX TREATIES.
U.S. HOLDERS
Taxation of Interest
U.S. holders will be required to recognize as ordinary income any interest paid
or accrued on the notes, in accordance with their regular method of tax
accounting for U.S. federal income tax purposes. It is expected that the notes
will be issued without original issue discount for U.S. federal income tax
purposes; however, if the "stated redemption price at maturity" of the notes
(generally, the sum of all payments required under the notes other than payments
of stated interest) exceeds their issue price by more than a de minimis amount,
a U.S. holder will be required to include such excess in gross income as
original issue discount, as it accrues, using a constant-yield method.
We may be required to make additional payments to holders of the notes if we do
not file or cause to become effective a registration statement, as described
under "Description of Notes -- Registration Rights of the Noteholders," or if
there is an event of default under the notes. The original issue discount rules
allow contingent payments such as these to be disregarded in computing a
holder's interest income if the contingency is "remote." We believe that the
possibility is remote that we will make the additional payments described above.
Our determination in this regard is binding on U.S. holders unless they disclose
their contrary position.
Sale, Exchange or Redemption of the Notes
A U.S. holder will generally recognize capital gain or loss if the holder
disposes of a note in a sale, redemption or exchange other than a conversion of
the note into common stock. The holder's gain or loss will equal the difference
between the proceeds received by the holder and the holder's adjusted tax basis
in the note. The proceeds received by the holder will include the amount of any
cash and the fair market value of any other property received for the note. The
holder's tax basis in the note generally will equal the amount the holder paid
for the note. The portion of any proceeds that is attributable to accrued
interest will not be taken into account in computing the holder's capital gain
or loss. Instead, that portion will be recognized as ordinary interest income to
the extent that the holder has not previously included the accrued interest in
income. The gain or loss recognized by a holder on a disposition of the note
will be long-term capital gain or loss if the holder held the note for more than
one year. Long-term capital gains of non-corporate taxpayers are taxed at lower
rates than those applicable to ordinary income. The deductibility of capital
losses is subject to limitation. The registration of the notes will not
constitute a taxable exchange for U.S. federal income tax purposes and, thus, a
U.S. holder will not recognize any gain or loss upon such registration.
Conversion of the Notes for Common Stock
A U.S. holder generally will not recognize any income, gain or loss on
converting a note into common stock, except that the fair market value of common
stock received with respect to accrued interest will be taxed as a payment of
interest as described under "U.S. Holders--Taxation of Interest," above. If the
holder receives cash in lieu of a fractional share of common stock, however, the
holder would be treated as if he received the fractional share and then had the
fractional share redeemed for the cash. The holder would recognize capital gain
or loss equal to the difference between the cash received and that portion of
his basis in the common stock attributable to the fractional share. The holder's
aggregate basis in the common stock will equal the holder's adjusted basis in
the note, increased, for a cash method holder, by the amount of income
recognized with respect to accrued interest, and decreased by the portion of
basis allocable to the fractional share. The holder's holding period for the
common stock will include the period during which he held the note, except that
the holding period of any common stock received with respect to accrued interest
will commence on the date after conversion.
30
Constructive Dividends
If at any time the conversion rate of the notes is increased, such increase may
be deemed to be the payment of a taxable dividend, for U.S. federal income tax
purposes, to the holders of the notes. For example, an increase in the
conversion rate in the event of distributions of our debt instruments, or our
assets, or an increase in the event of an extraordinary cash dividend, generally
will result in deemed dividend treatment to the holders of the notes, but an
increase in the event of stock dividends or the distribution of rights to
subscribe for our common stock generally will not.
Dividends
If, after a U.S. holder converts a note into common stock, we make a
distribution in respect of that stock, the distribution will be treated as a
dividend, taxable to the U.S. holder as ordinary income, to the extent it is
paid from our current or accumulated earnings and profits. In the case of
certain taxpayers, including individuals, the federal income tax rate applicable
to dividends may be lower than the rate applicable to other categories of
ordinary income. If the distribution exceeds our current and accumulated
profits, the excess will be treated first as a tax-free return of the holder's
investment, up to the holder's basis in the common stock. Any remaining excess
will be treated as capital gain. If the U.S. holder is a U.S. corporation, it
generally would be able to claim a dividends received deduction equal to a
portion of any dividends received, subject to customary limitations and
conditions.
Sale or Exchange of Common Stock
A U.S. holder will generally recognize capital gain or loss on a sale or
exchange of common stock. The holder's gain or loss will equal the difference
between the proceeds received by the holder and the holder's adjusted tax basis
in the stock. The proceeds received by the holder will include the amount of any
cash and the fair market value of any other property received for the stock. The
gain or loss recognized by a holder on a sale or exchange of stock will be
long-term capital gain or loss if the holder held the shares for more than one
year. The registration of the common stock issuable upon conversion of the notes
will not constitute a taxable exchange for U.S. federal income tax purposes and,
thus, a U.S. holder will not recognize any gain or loss upon such registration.
NON-U.S. HOLDERS
Taxation of Interest
Payments of interest to non-U.S. holders generally are subject to U.S. federal
income tax at a rate of 30%, collected by means of withholding by the payor.
Payments of interest on the notes to most non-U.S. holders, however, will
qualify as portfolio interest, and thus will be exempt from the withholding tax,
if the holders certify their nonresident status as described below. The
portfolio interest exemption will not apply to payments of interest to a
non-U.S. holder that:
o owns, directly or indirectly, at least 10% of our voting stock, or
o is a "controlled foreign corporation" that is related to us.
If payments of interest do not qualify as portfolio interest, the 30%
withholding tax might not apply, or might apply at a reduced rate, under the
terms of an income tax treaty between the United States and the non-U.S.
holder's country of residence. The portfolio interest exemption, entitlement to
treaty benefits and several of the special rules for non-U.S. holders described
below apply only if the holder certifies its nonresident status. A non-U.S.
holder can meet this certification requirement in the manner described under
"Backup Withholding and Information Reporting," below.
31
Sale, Exchange or Redemption of Notes
Non-U.S. holders generally will not be subject to U.S. federal income tax on any
gain realized on the sale, exchange, or other disposition of the notes. This
general rule, however, is subject to several exceptions. For example, the gain
would be subject to U.S. federal income tax if:
o the gain is effectively connected with the conduct by the non-U.S. holder
of a U.S. trade or business;
o the non-U.S. holder was a citizen or resident of the United States and is
subject to special rules that apply to expatriates;
o the non-U.S. holder is present in the United States for 183 days or more in
the taxable year of such sale or exchange and certain other conditions are
met; or
o the rules of the Foreign Investment in Real Property Tax Act ("FIRPTA")
(described below) treat the gain as effectively connected with a U.S. trade
or business.
The FIRPTA rules may apply to a sale, exchange or other disposition of notes if
we are, or have been within the shorter of the five-year period preceding such
sale, exchange or disposition and the period the non-U.S. holder held the notes,
a U.S. real property holding corporation ("USRPHC"). In general, we would be a
USRPHC if our interests in U.S. real estate equal or exceed 50% of our assets.
We do not believe that we are a USRPHC or that we will become one in the future.
Conversion of the Notes
A non-U.S. holder generally will not recognize any income, gain or loss on
converting a note into common stock. Any gain recognized as a result of the
holder's receipt of cash would also generally not be subject to U.S. federal
income tax. See "Non-U.S. Holders-- Sale or Exchange of Common Stock," below.
Dividends
Dividends (including any constructive dividends resulting from certain
adjustments to the conversion rate, see "U.S. Holders -- Constructive
Dividends," above) paid to a non-U.S. holder on common stock received on
conversion of a note generally will be subject to U.S. withholding tax at a 30%
rate. The withholding tax might not apply, however, or might apply at a reduced
rate, under the terms of a tax treaty between the United States and the non-U.S.
holder's country of residence. A non-U.S. holder must demonstrate its
entitlement to treaty benefits by certifying its nonresident status as described
under "Backup Withholding and Information Reporting," below.
Sale or Exchange of Common Stock
Non-U.S. holders will generally not be subject to U.S. federal income tax on any
gains realized on the sale, exchange or other disposition of common stock. This
general rule, however, is subject to exceptions. For example, the gain would be
subject to U.S. federal income tax if:
o the gain is effectively connected with the conduct by the non-U.S. holder
of a U.S. trade or business;
o the non-U.S. holder was a citizen or resident of the United States and is
subject to special rules that apply to expatriates;
o the non-U.S. holder is present in the United States for 183 days or more in
the taxable year of such sale or exchange and certain other conditions are
met; or
o the FIRPTA rules treat the gain as effectively connected with a U.S. trade
or business.
32
Income or Gains Effectively Connected With a U.S. Trade or Business
The preceding discussion of the tax consequences of the purchase, ownership or
disposition of notes or common stock by a non-U.S. holder assumes that the
holder is not engaged in a U.S. trade or business. If any interest on notes,
dividends on common stock or gain from the sale, exchange or other disposition
of notes or common stock is effectively connected with a U.S. trade or business
conducted by the non-U.S. holder, then the income or gain will be subject to
U.S. federal income tax in the same manner as if derived by a U.S. holder. If
the non-U.S. holder is eligible for the benefits of a tax treaty between the
United States and the holder's country of residence, any "effectively connected"
income or gain will be subject to U.S. federal income tax only if it is also
attributable to a permanent establishment maintained by the holder in the United
States. Payments of interest or dividends that are effectively connected with a
U.S. trade or business, and therefore included in the gross income of a non-U.S.
holder, will not be subject to the 30% withholding tax. To claim this exemption
from withholding, the holder must certify its qualification by filing Internal
Revenue Service ("IRS") Form W-8ECI. If the non-U.S. holder is a corporation,
that portion of its earnings and profits that are effectively connected with its
U.S. trade or business generally would be subject to a branch profits tax. The
branch profits tax rate is generally 30%, although an applicable tax treaty
might provide for a lower rate.
Backup Withholding and Information Reporting
The Code and the Treasury regulations require those who make specified payments
to report the payments to the IRS. Among the specified payments are interest,
dividends and proceeds paid by brokers to their customers. The required
information returns enable the IRS to determine whether the recipient properly
included the payments in income. This reporting regime is reinforced by backup
withholding rules. These rules require the payors to withhold tax at a rate of
up to 31% from payments subject to information reporting if the recipient fails
to cooperate with the reporting regime by failing to provide his taxpayer
identification number to the payor, furnishing an incorrect identification
number or repeatedly failing to report interest or dividends on his returns. The
information reporting and backup withholding rules do not apply to payments to
corporations, whether domestic or foreign.
Payments of interest or dividends to non-corporate U.S. holders of notes or
common stock will generally be subject to information reporting, and will be
subject to backup withholding unless the holder provides us or our paying agent
with a correct taxpayer identification number.
The information reporting and backup withholding rules do not apply to payments
that are subject to the 30% withholding tax on dividends or interest paid to
nonresidents, or to payments that are exempt from that tax by application of a
tax treaty or special exception. Therefore, payments of dividends on common
stock or interest on notes to non-U.S. holders generally will not be subject to
information reporting or backup withholding assuming appropriate certification
requirements are satisfied. A non-U.S. holder can meet this certification
requirement by providing an IRS Form W-8BEN or appropriate substitute form to us
or our paying agent. If the holder holds the notes through a financial
institution or other agent acting on the holder's behalf, the holder will be
required to provide appropriate documentation to the agent. The holder's agent
will then be required to provide certification to us or our paying agent, either
directly or through other intermediaries.
Payments made to U.S. holders by a broker upon a sale of notes or common stock
generally will be subject to information reporting and backup withholding. If,
however, the sale is made through a foreign office of a U.S. broker, the sale
will be subject to information reporting but not backup withholding. If the sale
is made through a foreign office of a foreign broker, the sale will generally
not be subject to either information reporting or backup withholding. This
exception may not apply, however, if the foreign broker is owned or controlled
by U.S. persons, or is engaged in a U.S. trade or business.
Payments made to a non-U.S. holder by a broker upon a sale of notes or common
stock will not be subject to information reporting or backup withholding
provided the holder certifies its foreign status.
Any amounts withheld from a payment to a holder of notes or common stock under
the backup withholding rules can be credited against any U.S. federal income tax
liability of the holder and may entitle the holder to a refund, provided the
required information is furnished to the IRS.
33
DISCLOSURE AUTHORIZATION
Notwithstanding anything herein to the contrary, investors (and each employee,
representative or other agent of the investors) may disclose to any and all
persons, without limitation of any kind, the U.S. federal income tax treatment
and tax structure of the offering and all materials of any kind (including
opinions or other tax analyses) that are provided to the investors relating to
such tax treatment and tax structure. For this purpose, "tax structure" is
limited to facts relevant to the U.S. federal income tax treatment of the
offering and does not include information relating to the identity of the
issuer, its affiliates, agents or advisors.
THE PRECEDING DISCUSSION OF CERTAIN U.S. FEDERAL TAX CONSIDERATIONS IS FOR
GENERAL INFORMATION ONLY. IT IS NOT TAX ADVICE. YOU SHOULD CONSULT YOUR OWN TAX
ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF OUR NOTES OR COMMON STOCK,
INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.
SELLING SECURITYHOLDERS
We originally issued the notes in a private placement in June 2003. The notes
were sold by the initial purchaser of the notes in a transaction exempt from the
registration requirements of the Securities Act to persons reasonably believed
by the initial purchaser to be qualified institutional buyers as defined by Rule
144A under the Securities Act. Selling securityholders, including their
transferees, pledgees or donees or their successors, may from time to time offer
and sell pursuant to this prospectus any or all of the notes and shares of
common stock into which the notes are convertible.
The following table sets forth information with respect to the selling
securityholders and the principal amount of notes beneficially owned by each
selling securityholder that may be offered pursuant to this prospectus. The
information is based on information provided by or on behalf of the selling
securityholders. The selling securityholders may offer all, some or none of the
notes or the common stock into which the notes are convertible. Because the
selling securityholders may offer all or some portion of the notes or the common
stock, we cannot estimate the amount of the notes or the common stock that will
be held by the selling securityholders upon termination of any of these sales.
In addition, the selling securityholders identified below may have sold,
transferred or otherwise disposed of all or a portion of their notes since the
date on which they provided the information regarding their notes in
transactions exempt from the registration requirements of the Securities Act.
The percentage of notes outstanding beneficially owned by each selling
securityholder is based on $400,000,000 aggregate principal amount of notes
outstanding.
The number of shares of common stock issuable upon conversion of the notes shown
in the table below assumes conversion of the full amount of notes held by each
selling securityholder at an initial conversion rate of 20.6398 shares per
$1,000 principal amount of notes and a cash payment in lieu of any fractional
shares. No selling securityholder named in the table below beneficially owns one
percent or more of our common stock, based on 81,210,352 shares of common stock
outstanding on October 31, 2003.
34
Principal Amount
of Notes Common Stock
Beneficially Common Stock Owned After
Owned and Percentage of Owned Prior Completion of the
Name Offered Hereby Notes Outstanding to the Offering(1) Offering
----------------------------- ---------------- ----------------- ------------------ -------------------
Context Convertible Arbitrage
Fund, L.P. $ 1,415,000 * 29,205 --
TQA Master Fund, Ltd. $ 8,056,000 2.0% 166,274 --
TQA Master Plus Fund, Ltd. $ 5,444,000 1.4% 112,363 --
Xavex-Convertible Arbitrage 7
Fund $ 1,000,000 * 20,639 --
Wachovia Securities Inc. $ 5,150,000 1.3% 106,294 --
Wachovia Securities,
International Ltd. $ 8,000,000 2.0% 165,118 --
Context Convertible Arbitrage
Offshore, Ltd. $ 2,335,000 * 48,193 --
Sagamore Hill Hob Fund Ltd. $ 5,000,000 1.3% 103,199 --
Barclays Global Investors
Equity Hedge Fund I $ 15,000 * 309 --
Standard Global Equity
Partners, L.P. $ 386,000 * 7,966 --
Standard Global Equity
Partners II, L.P. $ 15,000 * 309 --
Standard Pacific MAC 16, Ltd. $ 63,000 * 1,300 --
Standard Pacific Capital
Offshore Fund, Ltd. $ 1,218,000 * 25,139 --
Relay 3 Asset Holding Co.
Limited $ 16,000 * 330 --
Scorpion Offshore Investment
Fund, Ltd. $ 90,000 * 1,857 --
Standard Global Equity
Partners SA, L.P. $ 148,000 * 3,054 --
SP Holdings Ltd. $ 49,000 * 1,011 --
Salomon Brothers Asset
Management, Inc. $ 5,500,000 1.4% 113,518 --
Fore Convertible Masterfund
Ltd. $ 2,000,000 * 41,279 --
TD Securities (USA) Inc. $ 2,000,000 * 41,279 --
Credit Suisse First Boston LLC $ 400,000 * 8,255 --
ZCM Asset Holding Company, LLC $ 1,150,000 * 23,735 --
Hourglass Master Fund, Ltd. $10,350,000 2.6% 213,621 --
US Bancorp Piper Jaffray $ 4,000,000 1.0% 82,559 --
Akela Capital Master Fund,
Ltd. $ 8,500,000 2.1% 175,438 --
Zurich Institutional
Benchmarks Master Fund Ltd. $ 2,000,000 * 23,921 --
Hotel Union & Hotel Industry
of Hawaii Pension Plan $ 206,000 * 4,251 --
BP Amoco PLC Master Trust $ 575,000 * 11,867 --
Viacom Inc. Pension Plan
Master Trust $ 17,000 * 350 --
35
Principal Amount
of Notes Common Stock
Beneficially Common Stock Owned After
Owned and Percentage of Owned Prior Completion of the
Name Offered Hereby Notes Outstanding to the Offering(1) Offering
----------------------------- ---------------- ----------------- ------------------ -------------------
Sphinx Convertible Arb Fund
SPC $ 191,000 * 3,942 --
Jefferies & Company Inc. $ 4,000 * 82 --
Arkansas PERS $ 325,000 * 6,707 --
ICI American Holdings Trust $ 105,000 * 2,167 --
Zeneca Holdings Trust $ 115,000 2,373
Delaware PERS $ 465,000 * 9,597 --
Southern Farm Bureau Life
Insurance $ 745,000 * 15,376 --
Syngenta AG $ 80,000 * 1,651 --
Prudential Insurance Company
of America $ 30,000 * 619 --
AIG/National Union Fire
Insurance $ 145,000 * 2,992 --
Boilermakers Blacksmith
Pension Trust $ 1,265,000 * 26,109 --
State of Oregon/ SAIF
Corporation $ 2,925,000 * 60,371 --
State of Oregon/ Equity $ 1,475,000 * 30,443 --
Duke Endowment $ 165,000 * 3,405 --
Delta Airlines Master Trust $ 375,000 * 7,739
Nuveen Preferred &
Convertible Income Fund $ 2,065,000 * 42,621 --
C&H Sugar Company Inc. $ 125,000 * 2,579 --
Froley Revy Investment
Convertible Security Fund $ 50,000 * 1,031 --
Attorney's Title Insurance
Fund $ 70,000 * 1,444 --
Aloha Airlines Non-Pilots
Pension Trust $ 100,000 * 2,063 --
Aloha Pilots Retirement Trust $ 50,000 * 1,031 --
Hillbloom Foundation $ 40,000 * 825 --
Hawaiian Airlines Pension
Plan for Salaried Employees $ 5,000 * 103 --
Hawaiian Airlines Pilots
Retirement Plan $ 85,000 * 1,754 --
Hawaiian Airlines Employees
Pension Plan--IAM $ 30,000 * 619 --
Drury University $ 20,000 * 412 --
US Bank FBO Benedictine
Health Systems $ 155,000 * 3,199 --
Alexian Brothers Medical
Center $ 140,000 * 2,889 --
36
Principal Amount
of Notes Common Stock
Beneficially Common Stock Owned After
Owned and Percentage of Owned Prior Completion of the
Name Offered Hereby Notes Outstanding to the Offering(1) Offering
----------------------------- ---------------- ----------------- ------------------ -------------------
Meadow IAM Limited $ 1,120,000 * 23,116 --
Clinton Multistrategy Master
Fund, Ltd. $18,775,000 4.7% 387,512 --
Clinton Riverside Convertible
Portfolio Limited $18,855,000 4.7% 389,163 --
McMahan Securities Co. L.P. $ 1,120,000 * 23,116 --
Oppenheimer Convertible
Securities Fund $ 2,500,000 * 51,599 --
Nomura Securities Intl Inc. $ 5,000,000 1.3% 103,199 --
Quest Global Convertible
Master Fund Ltd. $ 500,000 * 10,319 --
Baptist Health of South
Florida $ 540,000 * 11,145 --
Nicholas Applegate --
Capital Management
Convertible Mutual Fund $ 655,000 * 13,519 --
Wake Forest University $ 440,000 * 9,081 --
Engineers Joint Pension Fund $ 360,000 * 7,430 --
San Diego County Convertibles $ 1,660,000 * 34,262 --
Arkansas Teachers Retirement $ 3,865,000 * 79,772 --
San Diego City Retirement $ 785,000 * 16,202 --
Innovest Finanzdienstle $ 1,000,000 * 20,639 --
Wyoming State Treasurer $ 850,000 17,543
Calamos(R)Market Neutral
Fund--Calamos(R) Investment
Trust $ 7,600,000 1.9% 156,862 --
OCM Convertible Trust $ 3,065,000 * 63,260 --
Delta AirLines Master
Trust--CV $ 1,100,000 * 22,703 --
State Employees' Retirement
Fund of the State of
Delaware $ 1,215,000 * 25,077 --
Partner Reinsurance Company
Ltd. $ 910,000 * 18,782 --
Chrysler Corporation Master
Retirement Trust $ 2,610,000 * 53,869 --
Motion Picture Industry
Health Plan--Active Member
Fund $ 285,000 * 5,882 --
Motion Picture Industry
Health Plan--Retiree
Member Fund $ 180,000 * 3,715 --
37
Principal Amount
of Notes Common Stock
Beneficially Common Stock Owned After
Owned and Percentage of Owned Prior Completion of the
Name Offered Hereby Notes Outstanding to the Offering(1) Offering
----------------------------- ---------------- ----------------- ------------------ -------------------
Delta Pilots Disability &
Survivorship Trust--CV $ 535,000 * 11,042 --
Vanguard Convertible
Securities Fund, Inc. $10,675,000 2.7% 220,329 --
Microsoft Corp. $ 2,080,000 * 42,930 --
Qwest Occupational Health
Trust $ 345,000 * 7,120 --
Westbay International Corp. $ 205,000 * 4,231 --
PSAM World Arb Fund Ltd. $ 173,000 * 3,570 --
Spartan Partners LP $ 351,000 * 7,244 --
PSAM Panorama Fund Ltd. $ 1,025,000 * 21,155 --
HFR Global Master Trust $ 226,000 * 4,664 --
PSAM GPS Fund Ltd. $ 134,000 2,765 --
PSAM Allegro Partners LP $ 272,000 * 5,614 --
Xavex Risk Arbitrage 5 Fund $ 114,000 * 2,352 --
Wachovia Bank National
Association $22,000,000 5.5% 454,075 --
Pioneer High Yield Fund $13,500,000 3.4% 278,637 --
Pioneer U.S. High Yield Corp.
Bond Sub Fund $ 1,500,000 * 30,959 --
Wolverine Asset Management,
LLC $ 4,775,000 1.2% 98,555 --
Associated Electric & Gas
Insurance Services, Ltd. $ 500,000 * 10,319 --
Deutsche Bank Securities $ 7,500,000 1.8% 154,798 --
Peoples Benefit Life
Insurance Company TEAMSTERS $ 3,000,000 * 61,194 --
St. Albans Partners Ltd. $ 3,000,000 * 61,919 --
Yield Strategies Fund I, L.P. $ 1,000,000 * 20,639 --
Yield Strategies Fund II, L.P. $ 1,000,000 * 20,639 --
J.P. Morgan Securities Inc. $18,500,000 4.6% 381,836 --
BNP Paribas Arbitrage $ 7,500,000 1.9% 154,798 --
Convertible Securities Fund $ 30,000 * 619 --
Nations Convertible
Securities Fund $ 3,970,000 * 81,940 --
S.A.C. Capital Associates, LLC $ 2,000,000 * 41,279 --
AQR Capital
Management, LLC $ 500,000 * 10,319 --
38
Principal Amount
of Notes Common Stock
Beneficially Common Stock Owned After
Owned and Percentage of Owned Prior Completion of the
Name Offered Hereby Notes Outstanding to the Offering(1) Offering
----------------------------- ---------------- ----------------- ------------------ -------------------
UBS O'Connor LLC f/b/o
O'Connor Global Convertible
Arbitrage Master Ltd. $ 7,000,000 1.7% 144,478 --
Tewksbury Investment Fund Ltd. $ 200,000 * 4,127 --
Citadel Equity Fund Ltd. $ 6,125,000 1.5% 126,418 --
Citadel Jackson Investment
Fund Ltd. $ 875,000 * 18,059 --
Consulting Group Capital
Markets Funds $ 900,000 * 18,575 --
Alexander Global Master Fund
Ltd. $12,000,000 3.0% 247,677 --
Goldman Sachs & Company $ 5,022,000 1.3% 103,653 --
Kayne Anderson Income
Partners, LP $ 50,000 * 1,031 --
Arbco Associates, L.P. $ 450,000 * 9,287 --
Kayne Anderson Capital Income
Partners, L.P. $ 1,300,000 * 26,831 --
Farbitrage Partners $ 600,000 * 12,383 --
HRF RV Performance Master
Trust $ 100,000 * 2,063 --
AIG DKR SoundShore Strategic
Holding Fund Ltd. $ 3,000,000 * 41,279 --
Laurel Ridge Capital, LP $ 5,000,000 1.3% 103,199 --
Arbitrex Master Fund, L.P. $ 5,000,000 1.3% 103,199 --
Retail Clerks Pension Trust #2 $ 1,000,000 * 20,639 --
DeepRock & Co. $ 1,000,000 * 20,639 --
John Deere Pension Trust $ 1,000,000 * 20,639 --
Castle Convertible Fund, Inc. $ 250,000 * 5,159 --
Excelsior Master Fund L.P. $ 1,500,000 * 30,959 --
Allstate Insurance Company $ 1,000,000 * 20,639 --
Value Line Convertible Fund
Inc. $ 200,000 * 4,127 --
Privilege Portfolio Sicay $ 4,000,000 1% 82,559 --
Banc of America Securities LLC $ 2,225,000 * 45,923 --
St. Thomas Trading, Inc. $10,483,000 2.6% 216,367 --
Man Convertible Bond Master
Fund, Inc. $ 6,827,000 1.7% 140,907 --
Grace Convertible Artitrage
Fund, Ltd. $ 5,500,000 1.4% 113,518 --
Putnam Convertible
Income-Growth Trust $ 7,900,000 2.0% 163,054 --
KBC Financial Products
(Cayman Islands) Limited $15,000,000 3.8% 309,597 --
SSI Hedged Convertible Market
Neutral L.P. $ 404,000 * 8,338 --
SSI Blended Market Neutral
L.P. $ 444,000 * 9,164 --
State of Maryland Agency $ 3,050 * 62 --
39
Principal Amount
of Notes Common Stock
Beneficially Common Stock Owned After
Owned and Percentage of Owned Prior Completion of the
Name Offered Hereby Notes Outstanding to the Offering(1) Offering
----------------------------- ---------------- ----------------- ------------------ -------------------
Delaware Public Employees
Retirement System $ 1,495 * 30 --
City and County of San
Francisco Retirement System $ 1,405 * 28 --
Advent Convertible Master
(Cayman) L.P. $ 2,368 * 48 --
HFR Arbitrage Fund $ 140 * 2 --
Alcon Laboratories $ 368 * 7 --
Occidental Petroleum
Corporation $ 255 * 5 --
British Virgin Islands Social
Security Board $ 83 * 1 --
New Orleans Firefighters
Pension/Relief Fund $ 129 * 2 --
The Grable Foundation $ 85 * 1 --
City University of New York $ 143 * 2 --
Grady Hospital Foundation $ 126 * 2 --
Arapahoe County Colorado $ 58 * 1 --
Pro-Mutual $ 718 14 --
City of New Orleans $ 193 * 3 --
Municipal Employees $ 229 * 4 --
Policemen and Firemen
Retirement System of the
City of Detroit $ 560 * 11 --
Allentown City Police Pension
Plan $ 31 * 1 --
Trustmark Insurance $ 325 * 6 --
Arlington County Employees
Retirement System $ 82 * 1 --
Asante Health Systems $ 335 * 6 --
Alpha US Sub Fund 4 LLC $ 130 * 2 --
BP Amoco Corporation Master
Trust for Employee Pension
Plans $ 8,330,000 2.1% 171,929 --
FA Convertible Arbitrage Ltd. $ 85,000 * 1,754 --
Continental Casualty Company $ 2,085,000 * 43,033 --
Morgan Stanley & Co.
Incorporated $ 1,630,000 * 33,642 --
HFR CA Select Fund $ 800,000 * 16,511 --
San Diego County Employee
Retirement Association $ 1,700,000 * 35,087 --
Zazove Convertible Arbitrage
Fund, L.P. $ 4,750,000 1.2% 98,039 --
Zazove Hedged Convertible
Fund, L.P. $ 4,300,000 1.1% 88,751 --
Zazove Income Fund, L.P. $ 2,200,000 * 45,407 --
* Represents less than 1%
(1) Includes shares of common stock issuable upon conversion of the notes.
40
None of the selling securityholders or any of their affiliates, officers,
directors or principal equity holders has held any position or office or has had
any material relationship with us within the past three years.
The initial purchaser purchased all of the notes from us in a private
transaction in June 2003. All of the notes were "restricted securities" under
the Securities Act prior to this registration. The selling securityholders have
represented to us that they purchased the notes for their own account for
investment only and not with a view toward selling or distributing them, except
pursuant to sales registered under the Securities Act or exempt from such
registration.
Information concerning the securityholders may change from time to time and any
changed information will be set forth in supplements to this prospectus if and
when necessary. In addition, the number of shares of common stock issuable upon
conversion of the notes is subject to adjustment under certain circumstances.
Accordingly, the aggregate principal amount of notes and the number of shares of
common stock into which the notes are convertible may increase or decrease.
41
PLAN OF DISTRIBUTION
We will not receive any of the proceeds of the sale of the notes and the
underlying common stock offered by this prospectus. The notes and the underlying
common stock may be sold from time to time to purchasers:
o directly by the selling securityholders; or
o through underwriters, broker-dealers or agents who may receive
compensation in the form of discounts, concessions or commissions from
the selling securityholders or the purchasers of the notes and the
underlying common stock.
The selling securityholders and any such broker-dealers or agents who
participate in the distribution of the notes and the underlying common stock may
be deemed to be underwriters. As a result, any profits on the sale of the
underlying common stock by selling securityholders and any discounts,
commissions or concessions received by any such broker-dealers or agents may be
deemed to be underwriting discounts and commissions under the Securities Act. If
the selling securityholders were deemed to be underwriters, the selling
securityholders may be subject to statutory liabilities including, but not
limited to, those of Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act.
If the notes and the underlying common stock are sold through underwriters or
broker-dealers, the selling securityholders will be responsible for underwriting
discounts or commissions or agent's commissions. The notes and the underlying
common stock may be sold in one or more transactions at:
o fixed prices;
o prevailing market prices at the time of sale;
o varying prices determined at the time of sale; or
o negotiated prices.
These sales may be effected in transactions:
o on any national securities exchange or quotation service on which the
notes or underlying common stock may be listed or quoted at the time of
the sale, including the Nasdaq National Market in the case of the
common stock;
o in the over-the-counter market;
o in transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
o through the writing of options.
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as an agent on both sides of the
transaction.
In connection with the sales of the notes or the underlying common stock or
otherwise, the selling securityholders may enter into hedging transactions with
broker-dealers. These broker-dealers may in turn engage in short sales of the
notes or the underlying common stock in the course of hedging their positions.
The selling securityholders may also sell the notes or the underlying common
stock short and deliver notes or the underlying common stock to close out short
positions, or loan or pledge notes or the underlying common stock to
broker-dealers or financial institutions that, in turn, may sell the notes or
the underlying common stock.
42
To our knowledge, there are currently no plans, arrangements or understandings
between any selling securityholders and any underwriter, broker-dealer or agent
regarding the sale of the notes or the underlying common stock by the selling
securityholders. Selling securityholders may decide to sell all or a portion of
the notes or the underlying common stock offered by them pursuant to this
prospectus or may decide to sell notes or the underlying common stock under this
prospectus. In addition, any selling securityholder may transfer, devise or give
the notes or the underlying common stock by other means not described in this
prospectus. Any notes or underlying common stock covered by this prospectus that
qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be
sold under Rule 144 or Rule 144A rather than pursuant to this prospectus.
Our common stock is quoted on the Nasdaq National Market under the symbol
"CELG." We do not intend to apply for listing of the notes on any securities
exchange or national market system. Accordingly, no assurance can be given as to
the liquidity of, or development of any trading market for, the notes.
The selling securityholders and any other persons participating in the
distribution of the notes or underlying common stock will be subject to the
Exchange Act. The Exchange Act rules include, without limitation, Regulation M,
which may limit the timing of purchases and sales of any of the notes and the
underlying common stock by the selling securityholders and any such other
person. In addition, Regulation M of the Exchange Act may restrict the ability
of any person engaged in the distribution of the notes and the underlying common
stock to engage in market making activities with respect to the particular notes
and underlying common stock being distributed for a period of up to five
business days prior to the commencement of such distribution. This may affect
the marketability of the notes and the underlying common stock and the ability
to engage in market making activities with respect to the notes and the
underlying common stock.
Under the registration rights agreement that has been filed as an exhibit to the
registration statement of which this prospectus is a part, we and the selling
securityholders will each indemnify the other against certain liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection with these liabilities.
We have agreed to pay substantially all of the expenses incidental to the
registration, offering and sale of the notes and the underlying common stock to
the public other than commissions, fees and discounts of underwriters, brokers,
dealers and agents.
LEGAL MATTERS
Proskauer Rose LLP, New York, New York, will pass on the validity of the
issuance of the securities offered in this prospectus.
EXPERTS
The consolidated financial statements and schedule of Celgene Corporation and
subsidiaries as of December 31, 2002 and 2001, and for each of the years in the
three-year period ended December 31, 2002, have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
LLP, independent accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing. The audit report
covering the December 31, 2002 consolidated financial statements refers to the
Company's adoption of Statement of Financial Accounting Standards No.141,
"Business Combinations" effective July 1, 2001.
The statements in this prospectus under the caption "Risk Factors--We may not be
able to protect our intellectual property" have been reviewed and approved by
Mathews, Collins, Shepherd & McKay, P.A. and are included herein in reliance
upon such review and approval as experts in U.S. patent law.
43
The statements in this prospectus that relate to U.S. patent rights licensed
from The Rockefeller University and Children's Medical Center Corporation under
the caption "Risk Factors--We may not be able to protect our intellectual
property" have been reviewed and approved by Pennie & Edmonds LLP as our special
patent counsel for these matters, and are included herein in reliance upon their
review and approval as experts in U.S. patent law.
With the exception of statements regarding stem cell related activities, the
statements describing legal and regulatory requirements in this prospectus under
the caption "Risk Factors--The pharmaceutical industry is subject to extensive
government regulation which presents numerous risks to us" have been reviewed
and, assuming the accuracy of the factual statements made, approved by
Kleinfeld, Kaplan and Becker, LLP, as experts in such matters, and are included
herein in reliance upon such review and approval.
The statements in this prospectus that relate to trademarks under the caption
"Risk Factors--We may not be able to protect our intellectual property" have
been reviewed by Cozen O'Conner as our special trademarks counsel for these
matters and are included herein in reliance upon such review and approval.
WHERE YOU CAN FIND MORE INFORMATION
We file reports with the Securities and Exchange Commission, or the SEC, on a
regular basis that contain financial information and results of operations. You
may read or copy any document that we file with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
information about the Public Reference Room by calling the SEC for more
information at 1-800-SEC-0330. Our SEC filings are also available at the SEC's
website at http://www.sec.gov.
Our common stock is listed on the Nasdaq National Market and we are required to
file reports, proxy statements and other information with Nasdaq. You may read
any document we file with Nasdaq at the offices of the Nasdaq Stock Market, Inc.
which is located at 1735 K Street, N.W., Washington, D.C. 20006.
Our Securities and Exchange Commission filings are also available to the public
on the Securities and Exchange Commission's Internet website at
http://www.sec.gov.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" information in documents that we
file with it. We have elected to use a similar procedure in connection with this
prospectus, which means that we can disclose important information by referring
you to those documents that are considered part of this prospectus. Information
that we file later with the SEC will automatically update and supersede the
previously filed information. We incorporate by reference the documents listed
below and any future filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this prospectus and prior to
the termination of the offering of the notes and common stock under this
prospectus.
o Our Annual Report on Forms 10-K and 10-K/A for our fiscal year ended
December 31, 2002, which includes our consolidated financial statements as
of December 31, 2002 and 2001 and for each of the years in the three-year
period ended December 31, 2002.
o Our Quarterly Reports on Form 10-Q for our fiscal quarters ended March 31,
2003, June 30, 2003 and September 30, 2003.
o Our Reports on Form 8-K filed on January 2 and 3, 2003, June 5, 2003,
August 4 and 14, 2003 and October 23, 2003.
44
You may request a copy of these filings, at no cost, by writing to or
telephoning us at the following address:
Investor Relations
Celgene Corporation
7 Powder Horn Drive
Warren, New Jersey 07059
Tel: (732) 271-1001
45
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
An estimate (other than the SEC registration fee) of the fees and expenses of
issuance and distribution of the common stock offered hereby all of which will
be paid by Celgene Corporation ("Celgene") is as follows:
SEC registration fee.................................... $ 32,360
NASDAQ National Market listing fee...................... $ 22,500
Trustee's fees and expenses............................. $ 7,500
Legal fees and expenses................................. $ 30,000
Accounting fees and expenses............................ $ 25,000
Printing Costs.......................................... $ 1,124
Total........................ $118,484
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The General Corporation Law of the State of Delaware ("DGCL") permits Celgene
and its stockholders to limit directors' exposure to liability for certain
breaches of the directors' fiduciary duty, either in a suit on behalf of Celgene
or in an action by stockholders of Celgene.
The Certificate of Incorporation of Celgene (the "Charter") eliminates the
liability of directors to stockholders or Celgene for monetary damages arising
out of the directors' breach of their fiduciary duty of care. The Charter also
authorizes Celgene to indemnify its directors, officers, incorporators,
employees and agents with respect to certain costs, expenses and amounts
incurred in connection with an action, suit or proceeding by reason of the fact
that such person was serving as a director, officer, incorporator, employee or
agent of Celgene. In addition, the Charter permits Celgene to provide additional
indemnification rights to its officers and directors and to indemnify them to
the greatest extent possible under the DGCL. Celgene has entered into
indemnification agreements with each of its officers and directors and intends
to enter into indemnification agreements with each of its future officers and
directors. Pursuant to such indemnification agreements, Celgene has agreed to
indemnify its officers and directors against certain liabilities, including
liabilities arising out of the offering made by this Registration Statement.
Celgene maintains a standard form of officers' and directors' liability
insurance policy which provides coverage to the officers and directors of
Celgene for certain liabilities, including certain liabilities which may arise
out of this Registration Statement.
ITEM 16. EXHIBITS.
The exhibits listed in the Exhibit Index as filed as part of this Registration
Statement.
EXHIBIT
NUMBER DESCRIPTION
--------- -------------------------------------------------------------------
4.1 Indenture dated as of June 3, 2003 between Celgene Corporation and
The Bank of New York, as Trustee.*
4.2 Registration Rights Agreement dated as of June 3, 2003 between
Celgene Corporation, as Issuer, and Morgan Stanley & Co.
Incorporated, as Initial Purchaser.*
4.3 Form of 1 3/4% Convertible Note Due 2008 (incorporated by reference
to Exhibit 4.1).*
II-1
5.1 Opinion of Proskauer Rose LLP.*
12.1 Statement Regarding Computation of Ratios.
23.1 Consent of KPMG LLP.
23.2 Consent of Pennie & Edmonds LLP.
23.3 Consent of Kleinfeld, Kaplan and Becker, LLP.
23.4 Consent of Mathew, Collins, Shepherd & McKay, P.A.
23.5 Consent of Proskauer Rose LLP (incorporated by reference to Exhibit
5.1).*
23.6 Consent of Cozen O'Conner
24.1 Power of Attorney (included in Signature Page).*
25.1 Statement of Eligibility of Trustee on Form T-1.*
* Previously filed
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement: (i) to
include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933; (ii) to reflect in the prospectus any facts
or events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to
such information in the Registration Statement; provided, however,
that (i) and (ii) do not apply if the Registration Statement is on
Form S-3 or Form S-8, and the information required to be included
in a post-effective amendment by (i) and (ii) is contained in
periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
II-2
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement 333-107977 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Warren, State of New
Jersey, on November 14, 2003.
CELGENE CORPORATION
By: /s/ John W. Jackson
--------------------------------
John W. Jackson
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1
to the Registration Statement 333-107977 has been signed below by the persons
whose signatures appear below, which persons have signed such Registration
Statement in the capacities indicated on November 14, 2003:
Signature Title
--------- -----
/s/ John W, Jackson Chairman of the Board and Chief
----------------------------------------- Executive Officer (Principal
John W. Jackson Executive Officer)
* President, Chief Operating Officer,
----------------------------------------- Director
Sol J. Barer
/s/ Robert J. Hugin Chief Financial Officer, Director
----------------------------------------- (Principal Accounting and Financial
Robert J. Hugin Officer)
* Director
-----------------------------------------
Jack L. Bowman
* Director
-----------------------------------------
Frank T. Cary
* Director
-----------------------------------------
Michael D. Casey
* Director
-----------------------------------------
Arthur Hull Hayes, Jr.
* Director
-----------------------------------------
Gilla Kaplan
* Director
-----------------------------------------
Richard C.E. Morgan
* Director
-----------------------------------------
Walter L. Robb
/s/ John W. Jackson
-----------------------------------------
John W. Jackson
Attorney-in-Fact
*Executed by Attorney-in-Fact
INDEX TO EXHIBITS
4.1 -- Indenture dated as of June 3, 2003 between Celgene Corporation and The
Bank of New York, Trustee.*
4.2 -- Registration Rights Agreement dated as of June 3, 2003 between Celgene
Corporation, as Issuer, and Morgan Stanley & Co. Incorporated, as
Initial Purchaser.*
4.3 -- Form of 1 3/4% Convertible Note Due 2008 (incorporated by reference to
Exhibit 4.1).*
5.1 -- Opinion of Proskauer Rose LLP.*
12.1 -- Statement Regarding Computation of Ratios.
23.1 -- Consent of KPMG LLP.
23.2 -- Consent of Pennie & Edmonds LLP.
23.3 -- Consent of Kleinfeld, Kaplan and Becker, LLP.
23.4 -- Consent of Mathew, Collins, Shepherd & McKay, P.A.
23.5 -- Consent of Proskauer Rose LLP (incorporated by reference to Exhibit
5.1).*
23.6 -- Consent of Cozen O'Conner
24.1 -- Power of Attorney (included in Signature Page).*
25.1 -- Statement of Eligibility of Trustee on Form T-1.*
* Previously filed