AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 2002
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMGEN INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-3540776
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
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ONE AMGEN CENTER DRIVE
THOUSAND OAKS, CALIFORNIA 91320-1789
(805) 447-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
STEVEN M. ODRE, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
ONE AMGEN CENTER DRIVE
THOUSAND OAKS, CALIFORNIA 91320-1789
(805) 447-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
----------------
COPIES TO:
GARY OLSON, ESQ.
CHARLES RUCK, ESQ.
LATHAM & WATKINS
633 WEST FIFTH STREET, SUITE 4000
LOS ANGELES, CALIFORNIA 90071-2007
(213) 485-1234
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APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
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 reinvestment 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 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. [_]
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT (2) OFFERING PRICE (2) FEE (3)
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Liquid Yield Option/(TM)/ Notes due 2032.......... $ 3,950,000,000 $686.90 $2,713,255,000 $249,620
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Common Stock, par value $0.001 per share.......... 34,997,395 shares (1) (1) (1) (1)
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(1)Reflects the number of shares of common stock issuable upon conversion of
the exchange notes being registered hereunder. Each $1,000 of a LYON may be
converted for 8.8601 shares of common stock, subject to adjustments. No
additional registration fee is required pursuant to Rule 457(i) under the
Securities Act.
(2)Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based on the average of the bid and asked price per
each $1,000 of the LYONs as of May 20, 2002.
(3)Computed in accordance with Section 6(b) of the Securities Act of 1933, as
amended, by multiplying 0.000092 by the proposed maximum aggregate offering
price.
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 THAT 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.
================================================================================
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
SUBJECT TO COMPLETION, DATED MAY 22, 2002
PROSPECTUS
$3,950,000,000
[LOGO] AMGEN
LIQUID YIELD OPTION(TM) NOTES DUE 2032
(ZERO COUPON--SENIOR)
AND SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
OF THE LIQUID YIELD OPTION(TM) NOTES
----------------
This prospectus covers resale by holders of our Liquid Yield Option(TM)
Notes ("LYONs") due March 1, 2032 and shares of our common stock into which the
LYONs are convertible. We will not receive any proceeds from the resale of the
LYONs or the common stock sold hereunder.
CONVERTIBILITY OF THE LYONS:
Holders may convert each of their LYONs into 8.8601 shares of our common
stock at any time on or before the maturity date. The conversion rate may be
adjusted for certain reasons, but will not be adjusted for accrued original
issue discount. The accreted conversion price per share as of any day will
equal the issue price of a LYON plus the accrued original issue discount to
that day, divided by the then applicable conversion rate. Our common stock is
listed on the Nasdaq National Market under the symbol "AMGN." On May 21, 2002,
the last reported bid price of our common stock on the Nasdaq National Market
was $48.65.
CONTINGENT INTEREST:
We will pay contingent cash interest to the holders of LYONs during any
six-month period commencing on or after March 2, 2007 if the average market
price of a LYON for a five trading day measurement period preceding such
six-month period equals 120% or more of the sum of the issue price and accrued
original issue discount for such LYON. The contingent interest payable per LYON
in respect of any quarterly period will equal the greater of (1) the amount of
regular cash dividends paid by us per share on our common stock during that
quarterly period multiplied by the then applicable conversion rate or (2)
...0625% of the average market price of a LYON for the five trading day
measurement period preceding such six-month period, provided that if we do not
pay regular cash dividends during a semiannual period, we will pay contingent
interest semiannually at a rate of .125% of the average market price of a LYON
for the five trading day measurement period immediately preceding such
six-month period. For United States federal income tax purposes, the LYONs
constitute contingent payment debt instruments. You should read the discussion
of selected United States federal income tax consequences relevant to the LYONs
beginning on page 36.
PURCHASE OF THE LYONS BY AMGEN INC. AT THE OPTION OF THE HOLDER:
Holders may require us to purchase all or a portion of their LYONs on
March 1, 2005 at a price of $738.68 per LYON, on March 1, 2007 at a price of
$755.44 per LYON, on March 1, 2012 at a price of $799.02 per LYON, and on March
1, 2017 at a price of $845.12 per LYON. We may choose to pay the purchase price
in cash, our common stock or a combination of cash and our common stock. In
addition, upon a change in control, as defined in the indenture, of Amgen Inc.
occurring on or before March 1, 2007, holders may require us to purchase all or
a portion of their LYONs for cash.
REDEMPTION OF THE LYONS AT THE OPTION OF AMGEN INC.:
We may redeem all or a portion of the LYONs for cash at any time on or
after March 1, 2007, at the prices set forth in "Description of
LYONs--Redemption of LYONs at the Option of Amgen Inc."
Prior to this offering, the LYONs have been eligible for trading on the
PORTAL Market of the Nasdaq Stock Market. LYONs 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 LYONs for trading on any national
securities exchange or on the Nasdaq National Market.
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INVESTING IN THE LYONS INVOLVES RISKS, SOME OF WHICH ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 8 OF THIS PROSPECTUS.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The date of this prospectus is .
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(TM) Trademark of Merrill Lynch & Co., Inc.
TABLE OF CONTENTS
Incorporation of Certain Information by Reference...... 1
Where You Can Find More Information.................... 2
Forward Looking Information............................ 3
Summary................................................ 4
Risk Factors........................................... 8
Use of Proceeds........................................ 16
Dividend Policy........................................ 16
Ratio of Earnings to Fixed Charges..................... 16
Description of LYONs................................... 17
Description of Our Capital Stock....................... 34
Certain United States Federal Income Tax Considerations 36
Selling Security Holders............................... 42
Plan of Distribution................................... 46
Validity of the Securities............................. 47
Experts................................................ 47
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
We are "incorporating by reference" into this prospectus certain
information filed by us with the SEC, which means that we are disclosing
important information to you by referring you to those documents. The
information incorporated by reference is deemed to be part of this prospectus,
except to the extent modified or superseded, as described below. This
prospectus incorporates by reference the documents set forth below that have
been previously filed with the SEC. Those documents contain important
information about us and our finances.
. Our annual report on Form 10-K for the fiscal year ended December 31,
2001.
. Our Registration Statement on Form S-4 filed with the SEC on January
31, 2002 (File No. 333-81832), as amended by Amendment No. 1 to the
Registration Statement on Form S-4/A filed with the SEC on March 22,
2002.
. Our quarterly report on Form 10-Q for the quarter ended March 31,
2002.
. Our current report on Form 8-K dated February 21, 2002, filed with
the SEC on March 1, 2002.
. Our current report on Form 8-K dated May 7, 2002, filed with the SEC
on May 10, 2002.
. Our current report on Form 8-K dated May 16, 2002, filed with the SEC
on May 22, 2002.
. The description of our common stock, contractual contingent payment
rights and preferred share rights plan contained in our registration
statements on Form 8-A filed with the SEC on September 7, 1983 and
April 1, 1993, and on Form 8-K filed with the SEC on February 28,
1997 and December 18, 2000, respectively, including any amendment or
report filed for the purpose of updating that description.
All documents filed by us with the SEC under Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act from the date of this prospectus to the end of
the offering of the LYONs and the common stock under this document (other than
current reports furnished under Item 9 of Form 8-K) shall also be deemed to be
incorporated by reference and will automatically update information in this
prospectus.
Any statements made in this prospectus or in a document incorporated or
deemed to be incorporated by reference in this prospectus will be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or in any other subsequently filed
document that is also incorporated or deemed to be incorporated by reference in
this prospectus modifies or supersedes the statement. Any statement so modified
or superseded will not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
You may request a copy of these filings, at no cost, by writing or
calling us at the following address or telephone number:
Manager of Investor Relations
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, California 91320-1789
Tel: 805-447-1000
Exhibits to the filings will not be sent, however, unless those exhibits
have specifically been incorporated by reference in this document.
1
WHERE YOU CAN FIND MORE INFORMATION
We have filed and will file reports and other information with the SEC
under the Securities Exchange Act of 1934, as amended. You may read and copy
this information at the following SEC public reference room:
Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. Please call the SEC at 1-800-SEC-0330 for
additional information about the public reference room.
The SEC also maintains a web site that contains reports, proxy statements
and other information about issuers, including Amgen Inc., who file
electronically with the SEC. The address of that site is www.sec.gov.
You can also inspect reports and other information about us at the
offices of Nasdaq, 1735 K. Street, N.W., Washington, D.C., 20006.
2
FORWARD LOOKING INFORMATION
All statements included or incorporated by reference in this prospectus,
other than statements of historical facts, that address activities, events or
developments that we intend, expect, project, believe or anticipate will or may
occur in the future are forward looking statements. Such statements are
typically characterized by terminology such as "believe," "anticipate,"
"should," "intend," "plan," "will," "expect," "estimate," "project,"
"positioned," "strategy," and similar expressions. These statements are based
on assumptions and assessments made by our management in light of its
experience and its perception of historical trends, current conditions,
expected future developments and other factors our management believes to be
appropriate. These forward looking statements are subject to a number of risks
and uncertainties, including those risks described in this prospectus under
"Risk Factors," as well as other factors that our management has not yet
identified. Any such forward looking statements are not guarantees of future
performance and actual results, developments and business decisions may differ
from those contemplated by such forward looking statements. We disclaim any
duty to update any forward looking statements.
3
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION INCLUDED ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
BECAUSE THIS IS A SUMMARY, IT MAY NOT CONTAIN ALL THE INFORMATION THAT MAY BE
IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS, AS WELL AS THE
INFORMATION INCORPORATED BY REFERENCE, BEFORE MAKING AN INVESTMENT DECISION.
WHEN USED IN THIS PROSPECTUS, THE TERMS "AMGEN," "WE," "OUR" AND "US" REFER TO
AMGEN INC. AND ITS CONSOLIDATED SUBSIDIARIES, UNLESS OTHERWISE SPECIFIED.
AMGEN INC.
We are a global biotechnology company that discovers, develops,
manufactures and markets human therapeutics based on advances in cellular and
molecular biology.
We were incorporated in California in 1980 and merged into a Delaware
corporation in 1987. Our principal executive offices are located at One Amgen
Center Drive, Thousand Oaks, California 91320-1799.
THE LYONS
LYONs..................... $3,950,000,000 aggregate principal amount at
maturity of LYONs due March 1, 2032. We will not
pay interest on the LYONs prior to maturity unless
semiannual interest or contingent interest becomes
payable as described below. Each LYON was issued
at a price of $714.23 per LYON and has a principal
amount at maturity of $1,000.
Maturity of LYONs......... March 1, 2032.
Yield to Maturity of LYONs 1.125% per year, computed on a semiannual bond
equivalent basis, calculated from March 1, 2002,
excluding any contingent interest.
Conversion Rights......... Holders may surrender LYONs for conversion into
shares of our common stock at any time on or
before the maturity date, unless the LYONs have
been previously redeemed or repurchased. For each
LYON surrendered for conversion, a holder will
receive 8.8601 shares of our common stock. The
conversion rate will be adjusted for certain
reasons specified in the indenture, but will not
be adjusted for accrued original issue discount.
Upon conversion, a holder will not receive any
cash payment representing accrued original issue
discount or, except under limited circumstances,
contingent or semiannual interest. Instead,
accrued original issue discount will be deemed
paid by the shares of common stock received by the
holder on conversion. See "Certain United States
Federal Income Tax Considerations" and
"Description of LYONs--Conversion Rights."
The accreted conversion price per share as of any
day will equal the issue price of a LYON plus the
accrued original issue discount to that day,
divided by the then applicable conversion rate.
4
Ranking................... The LYONs are unsecured and unsubordinated
obligations of ours and rank equal in right of
payment to all our existing and future unsecured
and unsubordinated indebtedness. However, the
LYONs are effectively subordinated to all existing
and future obligations of our subsidiaries. As of
May 15, 2002, we had approximately $3,151 million
of senior indebtedness outstanding.
Original Issue Discount... We offered the LYONs at an issue price
significantly below the principal amount at
maturity of the LYONs. This original issue
discount accrues daily at a rate of 1.125% per
year beginning on the date of issuance of such
LYON, calculated on a semiannual bond equivalent
basis, using a 360-day year comprised of twelve
30-day months. The accrual of imputed interest
income on the LYONs, as calculated for United
States federal income tax purposes, also referred
to herein as tax original issue discount, is
expected to exceed the accrued original issue
discount. See "Certain United States Federal
Income Tax Considerations--Accrual of Interest on
the LYONs."
Contingent Interest....... We will pay contingent cash interest to the
holders of LYONs during any six-month period from
March 2 to September 1 and from September 2 to
March 1, commencing on or after March 2, 2007, if
the average market price of a LYON for the
Applicable Five Trading Day Period equals 120% or
more of the sum of the issue price and accrued
original issue discount for such LYON. "Applicable
Five Trading Day Period" means the five trading
days ending on the second trading day immediately
preceding the relevant six-month period, unless we
declare a regular cash dividend for which the
record date falls prior to the first day of a
six-month period but the payment date falls within
such six-month period, in which case the
"Applicable Five Trading Day Period" means the
five trading days ending on the second trading day
immediately preceding such record date.
The amount of contingent interest payable per LYON
in respect of any quarterly period within a
six-month period in which contingent interest is
payable will equal the greater of (1) the amount
of regular cash dividends paid by us per share on
our common stock during that quarterly period
multiplied by the number of shares of common stock
deliverable upon conversion of a LYON at the then
applicable conversion rate or (2) .0625% of the
average market price of a LYON for the Applicable
Five Trading Day Period, provided, that if we do
not pay cash dividends during a semiannual period,
we will pay contingent interest semiannually at a
rate of .125% of the average market price of a
LYON for the Applicable Five Trading Day Period.
Contingent interest, if any, will accrue and be
payable to holders of LYONs as of the record date
for the related regular cash dividend or, if no
regular cash dividend is paid by us, during a
quarter within the relevant six-month period, to
holders of LYONs as of the fifteenth day preceding
the last day of the relevant six-month period.
Such payments will be paid on the payment date of
the related regular cash dividend
5
or, if no regular cash dividend is paid by us
during a quarter within the relevant six-month
period, on the last day of the relevant six-month
period. The original issue discount will continue
to accrue at the yield to maturity whether or not
contingent interest is paid.
Tax Original Issue Discount The LYONs are debt instruments subject to the
United States federal income tax contingent
payment debt regulations. You should be aware
that, even if we do not pay any cash interest
(including any contingent interest and semiannual
interest) on the LYONs, you will be required to
include interest in your gross income for United
States federal income tax purposes. This imputed
interest, also referred to herein as tax original
issue discount, will accrue at a rate equal to
5.63% per year, computed on a semiannual bond
equivalent basis, which represents the yield we
believe we would pay, as of the original issue
date of the LYONs, on noncontingent,
nonconvertible, fixed-rate debt with terms
otherwise similar to the LYONs. The rate at which
the tax original issue discount will accrue for
United States federal income tax purposes will
exceed the stated yield of 1.125% for the accrued
original issue discount. Your adjusted tax basis
in a LYON will be increased over time to reflect
the accrual of the tax original issue discount and
will be decreased to reflect certain projected
payments.
You will recognize gain or loss on the sale,
exchange, conversion or redemption of a LYON in an
amount equal to the difference between the amount
realized on the sale, exchange, conversion or
redemption of a LYON, including the fair market
value of any common stock received upon conversion
or otherwise, and your adjusted tax basis in the
LYON. Any gain recognized by you on the sale,
exchange, conversion or redemption of a LYON
generally will be ordinary interest income; any
loss will be ordinary loss to the extent of the
interest previously included in income, and
thereafter, capital loss. See "Certain United
States Federal Income Tax Considerations."
Sinking Fund.............. None.
Redemption of LYONs at the
Option of Amgen Inc..... We may redeem all or a portion of the LYONs for
cash at any time on or after March 1, 2007, at the
redemption prices set forth in this prospectus.
See "Description of LYONs--Redemption of LYONs at
the Option of Amgen Inc."
Purchase of LYONs by Amgen
Inc. at the Option of
the Holder.............. Holders may require us to purchase all or a
portion of their LYONs:
. on March 1, 2005 at a price of $738.68 per
LYON;
. on March 1, 2007 at a price of $755.44 per
LYON;
. on March 1, 2012 at a price of $799.02 per
LYON; and
. on March 1, 2017 at a price of $845.12 per
LYON.
6
In each case, such price includes accrued original
issue discount to the purchase date. We may choose
to pay the purchase price in cash, shares of our
common stock or a combination of cash and shares
of our common stock. We may, in our sole
discretion, provide the holders with additional
rights to require us to purchase the LYONs on
additional purchase dates. See "Description of
LYONs--Purchase of LYONs by Amgen Inc. at the
Option of the Holder."
Change in Control......... Upon a change in control (as defined in the
indenture) of Amgen Inc. occurring on or before
March 1, 2007, each holder may require us to
purchase all or a portion of such holder's LYONs
for cash at a price equal to the issue price of
such LYONs plus accrued original issue discount to
the purchase date. See "Description of
LYONs--Change in Control Permits Purchase of LYONs
by Amgen Inc. at the Option of the Holder."
Optional Conversion to
Semiannual Coupon Notes
Upon Tax Event.......... From and after the occurrence of a Tax Event, as
described in this prospectus, at our option,
interest in lieu of future original issue discount
shall accrue on each LYON from the option exercise
date at 1.125% per year on a restated principal
amount equal to the issue price plus accrued
original issue discount to the date of exercise of
the option (the "Option Exercise Date") and shall
be payable semiannually on each interest payment
date to holders of record at the close of business
on each regular record date immediately preceding
such interest payment date. Interest will be
computed on the basis of a 360-day year comprised
of twelve 30-day months and will accrue from the
most recent date to which interest has been paid
or, if no interest has been paid, the Option
Exercise Date. In such event, the redemption
price, purchase price and change in control
purchase price shall be adjusted, and no future
contingent interest will be paid on the LYONs.
There will be no changes in the holder's
conversion rights. See "Description of
LYONs--Optional Conversion to Semiannual Coupon
Note Upon Tax Event."
Trading Symbol of Our
Common Stock............ Our common stock is listed on the Nasdaq National
Market under the symbol "AMGN."
7
RISK FACTORS
WE OPERATE IN A RAPIDLY CHANGING ENVIRONMENT THAT INVOLVES A NUMBER OF
RISKS, SOME OF WHICH ARE BEYOND OUR CONTROL. THE FOLLOWING RISK FACTORS SHOULD
BE CONSIDERED CAREFULLY IN EVALUATING AMGEN AND ITS BUSINESS PRIOR TO
PURCHASING THE LYONS.
RISKS RELATED TO THE LYONS
AN ACTIVE TRADING MARKET FOR THE LYONS MAY NOT DEVELOP.
The LYONs comprise a new issue of securities for which there is currently
no public market. The LYONs will not be listed on any securities exchange or
included in any automated quotation system. We do not know whether an active
trading market will develop for the LYONs. If the LYONs are traded after their
initial issuance, they may trade at a discount from their initial offering
price depending on prevailing interest rates, the market for similar
securities, the price of our common stock, its and our performance and other
factors.
IN CERTAIN CIRCUMSTANCES, YOUR CLAIMS AS A HOLDER OF A LYON COULD BE
SUBORDINATED IN THE EVENT OF OUR BANKRUPTCY.
If a holder elects to convert a LYON for common stock of Amgen Inc. and
we thereafter become the subject of bankruptcy proceedings, if we have failed
to deliver our common stock, a holder's claim in respect of the LYONs could be
subordinated to all of our existing and future obligations. Furthermore, it is
unclear how such a subordinated claim would be valued.
WE MAY NOT HAVE THE FUNDS NECESSARY TO PURCHASE LYONS AT THE OPTION OF THE
HOLDERS OR UPON A CHANGE IN CONTROL.
On specified dates and upon the occurrence of specific kinds of change in
control events occurring on or before March 1, 2007, holders of LYONs may
require us to purchase all or a portion of their LYONs.
However, it is possible that upon a change in control we would not have
sufficient funds to make the required purchase of LYONs or that restrictions in
our other indebtedness would not allow those purchases. In addition, certain
important corporate events, such as leveraged recapitalizations that would
increase the level of our indebtedness, would not constitute a "change in
control" under the indenture. See "Description of LYONs--Change in Control
Permits Purchase of LYONs by Amgen Inc. at the Option of the Holder."
YOU SHOULD CONSIDER THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF OWNING
LYONS.
The LYONs will be characterized as indebtedness of ours for United States
federal income tax purposes. Accordingly, you will be required to include
interest with respect to the LYONs in your income.
The LYONs constitute contingent payment debt instruments. As a result,
you will be required to include amounts in income, as ordinary income, in
advance of the receipt of the cash attributable thereto, and to accrue interest
on a constant yield to maturity basis at a rate comparable to the rate at which
we would issue a fixed rate noncontingent, nonconvertible debt instrument with
terms similar to the LYONs (which will be 5.63% per year on a semiannual
compounding basis). The amount of interest income required to be included by
you for each year will be in excess of the yield to maturity of the LYONs. You
will recognize gain or loss on the sale, exchange, conversion or redemption of
a LYON in an amount equal to the difference between the amount realized on such
sale, exchange, conversion or redemption, including the fair market value of
any common stock received upon conversion or otherwise, and your adjusted tax
basis in the LYON. Any gain recognized by you on the sale, exchange, conversion
or redemption of a LYON generally will be ordinary interest income; any loss
will
8
be ordinary loss to the extent of the interest previously included in income,
and thereafter, capital loss. A summary of the United States federal income tax
consequences of ownership of the LYONs is described in this prospectus under
the heading "Certain United States Federal Income Tax Considerations."
THE LYONS ARE STRUCTURALLY SUBORDINATED. THIS MAY AFFECT YOUR ABILITY TO
RECEIVE PAYMENTS ON THE LYONS.
The LYONs are obligations exclusively of Amgen Inc. We currently conduct
a significant portion of our operations through our subsidiaries and we may,
and in some cases we have plans to, conduct additional operations through
subsidiaries in the future. Our cash flow and our ability to service our debt,
including the LYONs, therefore partially depends upon the earnings of our
subsidiaries and we depend on the distribution of earnings, loans or other
payments by those subsidiaries to us.
Our subsidiaries are separate and distinct legal entities. Our
subsidiaries have no obligation to pay any amounts due on the LYONs or, subject
to existing or future contractual obligations between us and our subsidiaries,
to provide us with funds for our payment obligations, whether by dividends,
distributions, loans or other payments. In addition, any payment of dividends,
distributions, loans or advances by our subsidiaries to us could be subject to
statutory or contractual restrictions. Payments to us by our subsidiaries will
also be contingent upon our subsidiaries' earnings and business considerations.
Our right to receive any assets of any of our subsidiaries upon its
liquidation or reorganization, and, as a result, the right of the holders of
the LYONs to participate in those assets, will be effectively subordinated to
the claims of that subsidiary's creditors, including trade creditors. The LYONs
do not restrict the ability of our subsidiaries to incur additional
indebtedness. In addition, even if we were a creditor of any of our
subsidiaries, our rights as a creditor would be subordinate to any security
interest in the assets of our subsidiaries and any indebtedness of our
subsidiaries senior to indebtedness held by us.
RISKS RELATED TO OUR BUSINESS
OUR STOCK PRICE IS VOLATILE, WHICH COULD ADVERSELY AFFECT YOUR INVESTMENT.
Our stock price, like that of other biotechnology companies, is highly
volatile. For example, in the fifty-two weeks prior to May 22, 2002, the
trading price of our common stock has ranged from a high of $70.60 per share to
a low of $45.43 per share. Our stock price may be affected by such factors as:
. clinical trial results
. product development announcements by us or our competitors
. regulatory matters
. announcements in the scientific and research community
. intellectual property and legal matters
. changes in reimbursement policies or medical practices
. broader industry and market trends unrelated to our performance
In addition, if our revenues or earnings in any period fail to meet the
investment community's expectations, there could be an immediate adverse impact
on our stock price.
9
OUR PRODUCT DEVELOPMENT EFFORTS MAY NOT RESULT IN COMMERCIAL PRODUCTS.
We intend to continue an aggressive product development program.
Successful product development in the biotechnology industry is highly
uncertain, and very few research and development projects produce a commercial
product. Product candidates that appear promising in the early phases of
development, such as in early human clinical trials, may fail to reach the
market for a number of reasons, such as:
. the product candidate did not demonstrate acceptable clinical trial
results even though it demonstrated positive preclinical trial results
. the product candidate was not effective in treating a specified
condition or illness
. the product candidate had harmful side effects on humans
. the necessary regulatory bodies, such as the U.S. Food and Drug
Administration, did not approve our product candidate for an intended
use
. the product candidate was not economical for us to manufacture and
commercialize
. other companies or people have or may have proprietary rights to our
product candidate, such as patent rights, and will not let us sell it
on reasonable terms, or at all
. the product candidate is not cost effective in light of existing
therapeutics
Several of our product candidates have failed at various stages in the
product development process, including Brain Derived Neurotrophic Factor
("BDNF"), Megakaryocyte Growth and Development Factor ("MGDF") and Glial
Cell-line Derived Neurotrophic Factor ("GDNF"). For example, in 1997, we
announced the failure of BDNF for the treatment of amyotrophic lateral
sclerosis, or Lou Gehrig's Disease, because the product candidate, when
administered by injection, did not produce acceptable clinical results for a
specific use after a phase 3 trial, even though BDNF had progressed
successfully through preclinical and earlier clinical trials. In addition, in
1998, we discontinued development of MGDF, a novel platelet growth factor, at
the phase 3 trial stage after several people in platelet donation trials
developed low platelet counts and neutralizing antibodies. In 1999 we
discontinued development of GDNF after a phase 1/2 trial of GDNF in
Parkinson's disease failed to demonstrate a statistically significant benefit.
Of course, there may be other factors that prevent us from marketing a product.
We cannot guarantee we will be able to produce commercially successful
products. Further, clinical trial results are frequently susceptible to varying
interpretations by scientists, medical personnel, regulatory personnel,
statisticians, and others which may delay, limit, or prevent further clinical
development or regulatory approvals of a product candidate. Also, the length of
time that it takes for us to complete clinical trials and obtain regulatory
approval for product marketing has in the past varied by product and by the
intended use of a product. We expect that this will likely be the case with
future product candidates and we cannot predict the length of time to complete
necessary clinical trials and obtain regulatory approval. See "--Our current
products and products in development cannot be sold if we do not obtain and
maintain regulatory approval."
OUR CURRENT PRODUCTS AND PRODUCTS IN DEVELOPMENT CANNOT BE SOLD IF WE DO NOT
OBTAIN AND MAINTAIN REGULATORY APPROVAL.
We conduct research, preclinical testing, and clinical trials and we
manufacture our product candidates. We also manufacture, price, sell,
distribute, and market our products for their approved indications. These
activities are subject to extensive regulation by numerous state and federal
governmental authorities in the U.S., such as the FDA and the Health Care
Financing Administration, as well as by foreign countries, including the
European Union. Currently, we are required in the U.S. and in foreign countries
to obtain approval from those countries' regulatory authorities before we can
market and sell our products in those countries. In our experience, obtaining
regulatory approval is costly and takes many years, and after it is obtained,
it remains costly to maintain. The FDA and other U.S. and foreign regulatory
agencies have substantial discretion to terminate clinical trials, require
additional testing, delay or withhold registration and marketing approval, and
mandate
10
product withdrawals. EPOGEN(R), Kineret(TM), and Neulasta(TM) are currently
approved in the U.S. and NEUPOGEN(R) and Aranesp(TM) are currently approved in
the U.S., the EU, and in some other foreign countries for specific uses. We
currently manufacture EPOGEN(R), NEUPOGEN(R), Aranesp(TM), Kineret(TM),
Neulasta(TM), and INFERGEN(R) and market EPOGEN(R), NEUPOGEN(R), Aranesp(TM),
and Kineret(TM), and we plan to manufacture and market many of our potential
products. Even though we have obtained regulatory approval for EPOGEN(R),
NEUPOGEN(R), Aranesp(TM), Kineret(TM), Neulasta(TM), and INFERGEN(R), these
products and our manufacturing processes are subject to continued review by the
FDA and other regulatory authorities. In addition, later discovery of unknown
problems with our products or manufacturing processes could result in
restrictions on such products or manufacturing processes, including potential
withdrawal of the products from the market. If regulatory authorities determine
that we have violated regulations or if they restrict, suspend, or revoke our
prior approvals, they could prohibit us from manufacturing or selling
EPOGEN(R), NEUPOGEN(R), Aranesp(TM), Kineret(TM), Neulasta(TM), and INFERGEN(R)
until we comply or indefinitely. In addition, if regulatory authorities
determine that we have not complied with regulations in the research and
development of a product candidate, then they may not approve the product
candidate and we will not be able to market and sell it. If we are unable to
market and sell our products or product candidates, our business would be
adversely affected.
GUIDELINES AND RECOMMENDATIONS PUBLISHED BY VARIOUS ORGANIZATIONS CAN REDUCE
THE USE OF OUR PRODUCTS.
Government agencies promulgate regulations and guidelines directly
applicable to us and to our products. However, professional societies, practice
management groups, private health/science foundations, and organizations
involved in various diseases from time to time may also publish guidelines or
recommendations to the health care and patient communities. Recommendations of
government agencies or these other groups/organizations may relate to such
matters as usage, dosage, route of administration, and use of concomitant
therapies. Organizations like these have in the past made recommendations about
our products. Recommendations or guidelines that are followed by patients and
health care providers could result in decreased use of our products. In
addition, the perception by the investment community or stockholders that
recommendations or guidelines will result in decreased use of our products
could adversely affect prevailing market prices for our common stock.
OUR SALES DEPEND ON PAYMENT AND REIMBURSEMENT FROM THIRD PARTY PAYORS, AND A
REDUCTION IN THE PAYMENT RATE OR REIMBURSEMENT COULD RESULT IN DECREASED USE OR
SALES OF OUR PRODUCTS.
In both domestic and foreign markets, sales of our products are
dependent, in part, on the availability of reimbursement from third party
payors such as state and federal governments, under programs such as Medicare
and Medicaid in the U.S., and private insurance plans. In certain foreign
markets, the pricing and profitability of our products generally are subject to
government controls. In the U.S., there have been, and we expect there will
continue to be, a number of state and federal proposals that could limit the
amount that state or federal governments will pay to reimburse the cost of
drugs. In addition, we believe the increasing emphasis on managed care in the
U.S. has and will continue to put pressure on the price and usage of our
products, which may adversely impact product sales. Further, when a new
therapeutic product is approved, the availability of governmental and/or
private reimbursement for that product is uncertain, as is the amount for which
that product will be reimbursed. We cannot predict the availability or amount
of reimbursement for our recently approved products or product candidates,
including those at a late stage of development, and current reimbursement
policies for existing products may change at any time. For example, we believe
that sales of Aranesp(TM) are and will be affected by government and private
payor reimbursement policies.
If reimbursement for EPOGEN(R) and NEUPOGEN(R) changes adversely or if we
fail to obtain adequate reimbursement for our other current or future products,
health care providers may limit how much or under what circumstances they will
administer them, which could reduce the use of our products or cause us to
reduce the price of our products. This could result in lower product sales or
revenues which could have a material adverse effect on us and our results of
operations. For example, in the U.S. the use of EPOGEN(R) in connection with
11
treatment for end stage renal disease is funded primarily by the U.S. federal
government. In early 1997, HCFA instituted a reimbursement change for EPOGEN(R)
which adversely affected Amgen's EPOGEN(R) sales, until the policies were
revised. Therefore, as in the past, EPOGEN(R) sales could be adversely affected
by future changes in reimbursement rates or the basis for reimbursement by the
federal government for the end stage renal disease program.
IF OUR INTELLECTUAL PROPERTY POSITIONS ARE CHALLENGED, INVALIDATED OR
CIRCUMVENTED, OR IF WE FAIL TO PREVAIL IN PRESENT AND FUTURE INTELLECTUAL
PROPERTY LITIGATION, OUR BUSINESS COULD BE ADVERSELY AFFECTED.
The patent positions of pharmaceutical and biotechnology companies can be
highly uncertain and often involve complex legal, scientific, and factual
questions. To date, there has emerged no consistent policy regarding breadth of
claims allowed in such companies' patents. Third parties may challenge,
invalidate, or circumvent our patents and patent applications relating to our
products, product candidates, and technologies. In addition, our patent
positions might not protect us against competitors with similar products or
technologies because competing products or technologies may not infringe our
patents. For certain of our product candidates, there are third parties who
have patents or pending patents that they may claim prevent us from
commercializing these product candidates in certain territories. Patent
disputes are frequent, costly and can preclude commercialization of products.
We are currently, and in the future may be, involved in patent litigation. For
example, we are involved in ongoing patent infringement lawsuits against
Transkaryotic Therapies, Inc. and Aventis with respect to our erythropoietin
patents. The trial court decided in our favor on January 19, 2001, however,
Transkaryotic Therapies, Inc. and Aventis have appealed the decision. If we
ultimately lose these or other litigations we could be subject to competition
and/or significant liabilities, we could be required to enter into third party
licenses for the infringed product or technology, or we could be required to
cease using the technology or product in dispute. In addition, we cannot
guarantee that such licenses will be available on terms acceptable to us.
Our success depends in part on our ability to obtain and defend patent
rights and other intellectual property rights that are important to the
commercialization of our products and product candidates. We have filed
applications for a number of patents and have been granted patents or obtained
rights relating to erythropoietin, recombinant G-CSF and our other products and
potential products. We market our erythropoietin and G-CSF products as
EPOGEN(R) and NEUPOGEN(R), respectively. In the United States, we have been
issued or obtained rights to several patents relating to erythropoietin that
generally cover DNA and host cells, processes for making erythropoietin,
various product claims to erythropoietin, cells that make levels of
erythropoietin, and pharmaceutical compositions of erythropoietin. We have also
been issued or obtained rights to U.S. patents relating to G-CSF that cover
aspects of DNA, vectors, cells, processes, polypeptides, methods of treatment
using G-CSF polypeptides, methods of enhancing bone marrow transplantation, and
treating burn wounds, methods for recombinant production of G-CSF and analogs
of G-CSF. We also have been granted or obtained rights to a patent in the EU
relating to erythropoietin and a patent in the EU relating to G-CSF, two
patents in the EU relating to darbepoetin alfa and hyperglycosylated
erythropoietic proteins, and a patent in the U.S. and a patent in the EU
relating to anakinra.
WE FACE SUBSTANTIAL COMPETITION, AND OTHERS MAY DISCOVER, DEVELOP, ACQUIRE OR
COMMERCIALIZE PRODUCTS BEFORE OR MORE SUCCESSFULLY THAN WE DO.
We operate in a highly competitive environment. Our products compete with
other products or treatments for diseases for which our products may be
indicated. For example, although we maintain a substantial share of the
chemotherapy induced neutropenia market, NEUPOGEN(R) competes in some
circumstances against a product marketed by Immunex. EPOGEN(R) faces
competition from other treatments for anemia in end stage renal disease
patients in the U.S. Further, we believe that some of our newly approved
products and late stage product candidates may face competition when and as
they are approved and marketed. For example, Aranesp(TM) competes with an
Epoetin alfa product marketed by Johnson & Johnson in certain anemia markets
and Kineret(TM) competes in some circumstances with rheumatoid arthritis
products marketed by Immunex/Wyeth (formerly
12
American Home Products Corporation), Centocor Inc./Johnson & Johnson, and
others. Additionally, some of our competitors, including biotechnology and
pharmaceutical companies, market products or are actively engaged in research
and development in areas where we are developing product candidates. Large
pharmaceutical corporations may have greater clinical, research, regulatory,
and marketing resources than we do. In addition, some of our competitors may
have technical or competitive advantages over us for the development of
technologies and processes. These resources may make it difficult for us to
compete with them to successfully discover, develop, and market new products.
OUR OPERATING RESULTS MAY FLUCTUATE, AND THIS FLUCTUATION COULD CAUSE FINANCIAL
RESULTS TO BE BELOW EXPECTATIONS.
Our operating results may fluctuate from period to period for a number of
reasons. In budgeting our operating expenses, we assume that revenues will
continue to grow; however, some of our operating expenses are fixed in the
short term. Because of this, even a relatively small revenue shortfall may
cause a period's results to be below our expectations or projections. A revenue
shortfall could arise from any number of factors, some of which we cannot
control. For example, we may face:
. lower than expected demand for our products
. changes in the government's or private payors' reimbursement policies
for our products
. changes in wholesaler buying patterns
. increased competition from new or existing products
. fluctuations in foreign currency exchange rates
. changes in our product pricing strategies
Of these, we would only have control over changes in our product pricing
strategies and, of course, there may be other factors that affect our revenues
in any given period.
WE PLAN TO GROW RAPIDLY, AND IF WE FAIL TO ADEQUATELY MANAGE THAT GROWTH OUR
BUSINESS COULD BE ADVERSELY IMPACTED.
We have an aggressive growth plan that includes substantial and
increasing investments in research and development, sales and marketing and
facilities. Our plan has a number of risks, some of which we cannot control.
For example:
. we may need to generate higher revenues to cover a higher level of
operating expenses, and our ability to do so may depend on factors
that we do not control
. we may need to attract and assimilate a large number of new employees
. we may need to manage complexities associated with a larger and
faster growing organization
. we will need to accurately anticipate demand for the products we
manufacture and maintain adequate manufacturing capacity, and our
ability to do so may depend on factors that we do not control
Of course, there may be other risks and we cannot guarantee that we will
be able to successfully manage these or other risks.
13
RISKS RELATED TO THE IMMUNEX ACQUISITION
THE VALUE OF OUR COMMON STOCK TO BE ISSUED TO IMMUNEX SHAREHOLDERS IN THE
MERGER WILL FLUCTUATE.
In the pending merger with Immunex Corporation, Immunex shareholders will
receive .44 of a share of our stock and $4.50 in cash for each share of Immunex
common stock they own. As a result of Immunex shareholders receiving a portion
of the merger consideration in shares of our stock, the value of the merger
consideration to be received by Immunex shareholders will depend on the market
price of our stock at the time the merger is completed. The market price of our
stock at the closing of the merger will likely vary from time to time. These
variations may be caused by a number of factors, including changes in the
businesses, operations or prospects of Amgen or Immunex, the timing of the
merger, regulatory considerations, and general market and economic conditions.
See "--Our stock price is volatile, which could adversely affect your
investment." Additionally, the payment of our common stock to Immunex
shareholders in connection with the merger would dilute the share ownership of
our existing common stock holders and may affect the value of both our common
stock and the LYONs. The merger consideration will not be adjusted for any
increase or decrease in the market price of our stock or Immunex common stock.
WE MAY NOT REALIZE ALL OF THE ANTICIPATED BENEFITS OF THE MERGER.
The success of the merger will depend, in part, on our ability to realize
the anticipated synergies, cost savings, and growth opportunities from
integrating the businesses of Immunex with the businesses of Amgen. Our success
in realizing these benefits and the timing of this realization depend upon the
successful integration of the operations of Immunex. The integration of two
independent companies is a complex, costly, and time-consuming process. The
difficulties of combining the operations of the companies include, among others:
. consolidating research and development and manufacturing operations
. retaining key employees
. consolidating corporate and administrative infrastructures
. coordinating sales and marketing functions
. preserving our and Immunex's research and development, distribution,
marketing, promotion, and other important relationships
. minimizing the diversion of management's attention from ongoing
business concerns
. coordinating geographically separate organizations
We cannot assure you that the integration of Immunex with us will result
in the realization of the full benefits anticipated by us to result from the
merger.
OUR BUSINESS AND STOCK PRICE MAY BE ADVERSELY AFFECTED IF THE MERGER WITH
IMMUNEX IS NOT COMPLETED.
Our acquisition of Immunex is subject to several customary conditions,
including obtaining clearance from governmental entities. If our acquisition of
Immunex is not completed, we could be subject to a number of risks that may
adversely affect our business and stock price, including:
. the diversion of our management's attention from our day-to-day
business and the disruption to our employees and our relationships
with customers and joint venture partners as a result of efforts
relating to the acquisition
. the market price of shares of our stock may decline to the extent
that the current market price reflects a market assumption that the
acquisition will be completed
14
. under certain circumstances, we could be required to pay Immunex a
$475 million termination fee
. we must pay costs related to the merger, such as legal and accounting
fees and a portion of the investment banking fees, and, under certain
circumstances, could be required to reimburse Immunex for up to $15
million of costs
. we would not realize the benefits we expect by acquiring Immunex
15
USE OF PROCEEDS
We will not receive any proceeds from the sale of the LYONs or the shares
of common stock offered by this prospectus. See "Selling Security Holders."
DIVIDEND POLICY
No cash dividends have been paid on our common stock to date and we
intend to utilize any earnings for the development of our business, including
acquisitions, and for repurchases of our common stock. We have not paid, and we
do not in the future intend to pay, dividends on our common stock. The payment
of dividends by us is subject to the discretion of our board of directors and
will depend on our and our subsidiaries' financial position, capital
requirements and liquidity, contractual and legal requirements, results of
operations and other factors.
RATIO OF EARNINGS TO FIXED CHARGES
Amgen's ratio of earnings to fixed charges for each of the periods
indicated is as follows:
FISCAL YEAR ENDED DECEMBER 31, THREE MONTHS
----------------------------- ENDED MARCH 31,
1997 1998 1999 2000 2001 2002
----- ----- ----- ----- ----- ---------------
Ratio of earnings to fixed charges 45.1x 34.8x 45.3x 46.5x 46.3x 44.2x
These computations include Amgen and its consolidated subsidiaries. For
these ratios, "earnings" is computed by adding income before income taxes and
fixed charges (excluding capitalized interest) and excluding Amgen Inc.'s share
of income/losses in its equity method affiliates. Fixed charges consist of
interest expense on indebtedness, capitalized interest, and an interest factor
attributable to rentals.
16
DESCRIPTION OF LYONS
We issued the LYONs under an indenture between us and LaSalle Bank
National Association, as trustee. The following summary is not complete, and is
subject to, and qualified by reference to, all of the provisions of the LYONs
and the indenture. As used in this description, the words "we," "us," or "our"
refer only to Amgen Inc., and do not include any current or future subsidiaries
of Amgen Inc.
GENERAL
The LYONs are limited to $3,950,000,000 aggregate principal amount at
maturity. The LYONs will mature on March 1, 2032. The principal amount at
maturity of each LYON is $1,000. The LYONs are payable at the office of the
paying agent, which initially will be an office or agency of the trustee, or an
office or agency maintained by us for such purpose.
The LYONs are being offered at a substantial discount from their
principal amount at maturity. We will not make periodic payments of interest on
the LYONs, other than contingent interest payments, if any, and semiannual
interest payments upon a Tax Event as described below. Each LYON was issued at
an issue price of $714.23 per LYON. However, the LYONs will accrue original
issue discount while they remain outstanding. Original issue discount is the
difference between the issue price and the principal amount at maturity of a
LYON. The calculation of the accrual of original issue discount will be on a
semiannual bond equivalent basis using a 360-day year comprised of twelve
30-day months. The commencement date for the accrual of original issue discount
was March 1, 2002.
The LYONs are debt instruments subject to the contingent payment debt
regulations. The LYONs were issued with original issue discount for United
States federal income tax purposes, referred to herein as tax original issue
discount. Even if we do not pay any cash interest (including any contingent
interest) on the LYONs, holders are required to include accrued tax original
issue discount in their gross income for United States federal income tax
purposes. The rate at which the tax original issue discount will accrue will
exceed the stated yield of 1.125% for the accrued original issue discount
described above. See "Certain United States Federal Income Tax Considerations."
Maturity, conversion, purchase by us at the option of a holder or
redemption of a LYON will cause original issue discount, and contingent
interest and semiannual interest, if any, to cease to accrue on such LYON. We
may not reissue a LYON that has matured or been converted, purchased by us at
the option of a holder, redeemed or otherwise cancelled, except for
registration of transfer, conversion or replacement of such LYON.
LYONs may be presented for conversion at the office of the conversion
agent, and for exchange for LYONs in other denominations or registration of
transfer at the office of the registrar, each such agent initially being the
trustee. No service charge will be made for any registration of transfer of
LYONs or exchange of LYONs for LYONs in other denominations. However, we may
require the holder to pay any tax, assessment or other governmental charge
payable as a result of such transfer or exchange.
RANKING OF LYONS
The LYONs are unsecured and unsubordinated obligations of ours. The LYONs
rank equal in right of payment to all of our existing and future unsecured and
unsubordinated indebtedness. However, the LYONs are effectively subordinated to
all existing and future obligations of our subsidiaries.
In addition, if a holder surrenders LYONs for conversion and we fail to
deliver the common stock we are required to deliver upon such conversion, and
we then become the subject of bankruptcy proceedings, a holder's claim in
respect of the LYONs could be subordinated to all of our existing and future
obligations. Furthermore, it is unclear how such a subordinated claim would be
valued. If a holder requires us to purchase all
17
or a portion of its LYONs and we elect to deliver common stock in satisfaction
of our obligations but fail to deliver such common stock, if we become the
subject of bankruptcy proceedings, a holder may not be able to rescind its
notice obligating us to purchase all or a portion of its LYONs, and a holder's
claim may be subordinated to all of our existing and future obligations.
As of May 15, 2002, we had approximately $3,151 million of senior
indebtedness outstanding.
CONVERSION RIGHTS
A holder may convert a LYON, in multiples of $1,000 principal amount at
maturity, into common stock at any time before the close of business on March
1, 2032. However, if we call a LYON for redemption, a holder may convert a LYON
only until the close of business on the second business day immediately
preceding the redemption date. A LYON for which a holder has delivered a
purchase notice or a change in control purchase notice requiring us to purchase
the LYON may be converted only if such notice is withdrawn in accordance with
the indenture.
The initial conversion rate is 8.8601 shares of our common stock per
LYON, subject to adjustment upon the occurrence of certain events described
below. A holder of a LYON otherwise entitled to a fractional share will receive
cash in an amount equal to the value of such fractional share based on the sale
price, as defined below, on the trading day immediately preceding the
conversion date.
On conversion of a LYON, a holder will not receive any cash payment of
interest representing accrued original issue discount or accrued tax original
issue discount or, except as described below, contingent interest or semiannual
interest. Our delivery to the holder of the full number of shares of our common
stock for which the LYON is convertible, together with any cash payment for
such holder's fractional shares, or cash in lieu of shares as described below,
will be deemed:
. to satisfy our obligation to pay the principal amount at maturity of
the LYON;
. to satisfy our obligation to pay accrued original issue discount
attributable to the period from the issue date through the conversion
date; and
. to satisfy our obligation to pay accrued semiannual interest, if any,
attributable to the period from the most recent interest payment date
(or, if no interest payment date has occurred, from the Option
Exercise Date) and accrued contingent interest, if any, attributable
to the most recent accrual date.
As a result, accrued original issue discount is deemed to be paid in full
rather than cancelled, extinguished or forfeited.
If contingent or semiannual interest is payable to holders of LYONs
during any particular six-month period, and such LYONs are converted after the
applicable accrual or record date therefor and prior to the next succeeding
interest payment date, holders of such LYONs at the close of business on the
accrual or record date will receive the contingent or semiannual interest
payable on such LYONs on the corresponding interest payment date
notwithstanding the conversion and such LYONs upon surrender must be
accompanied by funds equal to the amount of contingent or semiannual interest
payable on the principal amount of LYONs so converted, unless such LYONs have
been called for redemption, in which case no such payment shall be required.
To convert a LYON, a holder must:
. complete and manually sign the conversion notice on the back of the
LYON (or a facsimile thereof) and deliver the conversion notice to
the conversion agent;
. surrender the LYON to the conversion agent;
18
. if required by the conversion agent, furnish appropriate endorsements
and transfer documents; and
. if required, pay all transfer or similar taxes.
Pursuant to the indenture, the date on which all of the foregoing
requirements have been satisfied is the conversion date.
The conversion rate will not be adjusted for accrued original issue
discount or any contingent interest. A certificate for the number of full
shares of our common stock into which any LYON is converted, together with any
cash payment for fractional shares, will be delivered through the conversion
agent as soon as practicable following the conversion date. For a discussion of
the tax treatment of a holder receiving shares of our common stock upon
conversion, see "Certain United States Federal Income Tax Considerations--Sale,
Exchange, Conversion or Redemption."
The conversion rate will be adjusted for:
. dividends or distributions on shares of our common stock payable in
shares of common stock or other capital stock of ours;
. subdivisions, combinations or certain reclassifications of shares of
our common stock;
. distributions to all holders of shares of our common stock of certain
rights to purchase shares of our common stock for a period expiring
within 60 days after the record date for such distribution at less
than the sale price at the time; and
. distributions to all holders of shares of our common stock of our
assets (including shares of any subsidiary or business unit of ours)
or debt securities or certain rights to purchase our securities
(excluding cash dividends or other cash distributions from current or
retained earnings unless the annualized amount thereof per share
exceeds 5% of the sale price of the shares of our common stock on the
day preceding the date of declaration of such dividend or other
distribution).
In the event we elect to make a distribution described in the third or
fourth bullet of the preceding paragraph which, in the case of the fourth
bullet, has a per share value equal to more than 15% of the sale price of
shares of our common stock on the day preceding the declaration date for such
distribution, we will be required to give notice to the holders of LYONs at
least 20 days prior to the ex-dividend date for such distribution.
In the event that we pay a dividend or make a distribution on shares of
our common stock consisting of 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
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 dividend or distribution on the principal United States securities
exchange or market on which the securities are then listed or quoted.
No adjustment to the conversion rate will be made if holders of LYONs
will participate in the transaction without conversion or in certain other
cases.
If the shareholders rights plan under which any rights are issued
provides that each share of common stock issued upon conversion of LYONs (or
cash in lieu thereof) at any time prior to the distribution of separate
certificates representing such rights will be entitled to receive such rights,
there shall not be any adjustment to the conversion privilege or conversion
rate as a result of:
. the issuance of the rights;
19
. the distribution of separate certificates representing the rights;
. the exercise or redemption of such rights in accordance with any
rights agreement; or
. the termination or invalidation of the rights.
The indenture permits us to increase the conversion rate from time to
time.
If we are party to a consolidation, merger or binding share conversion or
a transfer of all or substantially all of our assets, the right to convert a
LYON into common stock will be changed into a right to convert it into the kind
and amount of securities, cash or other assets of Amgen Inc. or another person
which the holder would have received if the holder had converted the holder's
LYON immediately prior to the transaction.
In the event of:
. a taxable distribution to holders of shares of our common stock which
results in an adjustment of the conversion rate; or
. an increase in the conversion rate at our discretion,
the holders of LYONs may, in certain circumstances, be deemed to have received
a distribution subject to United States federal income tax as a dividend. See
"Certain United States Federal Income Tax Considerations--Constructive
Dividends."
If we exercise our option to have interest instead of original issue
discount accrue on a LYON following a Tax Event, the holder will be entitled on
conversion to receive the same number of shares of common stock the holder
would have received if we had not exercised such option.
If we exercise this option, LYONs surrendered for conversion by a holder
during the period from the close of business on any regular record date to the
opening of business of the next interest payment date, except for LYONs to be
redeemed on a date within this period, must be accompanied by payment of an
amount equal to the interest that the registered holder is to receive on the
LYON.
Except where LYONs surrendered for conversion must be accompanied by
payment as described above, we will not pay interest on converted LYONs on any
interest payment date subsequent to the Option Exercise Date. See "--Optional
Conversion to Semiannual Coupon Note Upon Tax Event."
CONTINGENT INTEREST
Subject to the accrual and record date provisions described below, we
will pay contingent cash interest to the holders of LYONs during any six-month
period from March 2 to September 1 and from September 2 to March 1 commencing
on or after March 2, 2007, if the average market price of a LYON for the
Applicable Five Trading Day Period equals 120% or more of the sum of the issue
price and accrued original issue discount for such LYON to the day immediately
preceding the relevant six-month period. See "--Redemption of LYONs at the
Option of Amgen Inc." for some of these values. "Applicable Five Trading Day
Period" means the five trading days ending on the second trading day
immediately preceding the first day of the relevant six-month period, unless we
declare a regular cash dividend for which the record date falls prior to the
first day of a six-month period but the payment date falls within such
six-month period, in which case the "Applicable Five Trading Day Period" means
the five trading days ending on the second trading day immediately preceding
such record date.
The amount of contingent interest payable per LYON in respect of any
quarterly period within a six-month period in which contingent interest is
payable will equal the greater of (1) regular cash dividends paid by us per
share on our common stock during that quarterly period multiplied by the number
of shares of our
20
common stock deliverable upon conversion of a LYON at the then applicable
conversion rate or (2) .0625% of the average market price of a LYON for the
Applicable Five Trading Day Period, provided that if we do not pay a regular
cash dividend during a semiannual period, we will pay contingent interest
semiannually at a rate of .125% of the average market price of a LYON for the
Applicable Five Trading Day Period.
Contingent interest, if any, will accrue and be payable to holders of
LYONs as of the record date for the related regular cash dividend or, if no
regular cash dividend is paid by us during a quarter within the relevant
six-month period, to holders of LYONs as of the fifteenth day preceding the
last day of the relevant six-month period. Such payments will be paid on the
payment date of the related regular cash dividend or, if no cash dividend is
paid by us during a quarter within the relevant six-month period, on the last
day of the relevant six-month period. The original issue discount will continue
to accrue at the yield to maturity whether or not contingent interest is paid.
Regular cash dividends are quarterly or other periodic cash dividends on
our common stock as declared by our board of directors as part of its cash
dividend payment practices and that are not designated by them as extraordinary
or special or other nonrecurring dividends. We have not paid, and we do not
intend in the future to pay, dividends on our common stock.
The market price of a LYON on any date of determination means the average
of the secondary market bid quotations per LYON obtained by the bid
solicitation agent for $10 million principal amount at maturity of LYONs at
approximately 4:00 p.m., New York City time, on such determination date from
three unaffiliated securities dealers we select, provided that if:
. at least three such bids are not obtained by the bid solicitation
agent, or
. in our reasonable judgment, the bid quotations are not indicative of
the secondary market value of the LYONs,
then the market price of a LYON will equal (1) the then applicable conversion
rate of the LYONs multiplied by (2) the average sale price of our common stock
on the five trading days ending on such determination date, appropriately
adjusted.
The bid solicitation agent will initially be LaSalle Bank National
Association. We may change the bid solicitation agent, but the bid solicitation
agent will not be our affiliate. The bid solicitation agent will solicit bids
from securities dealers that are believed by us to be willing to bid for the
LYONs.
Upon determination that LYON holders will be entitled to receive
contingent interest which may become payable during a relevant six-month
period, on or prior to the start of such six-month period, we will issue a
press release or publish such information on our web site on the World Wide Web
or through such other public medium as we may use at that time.
REDEMPTION OF LYONS AT THE OPTION OF AMGEN INC.
No sinking fund is provided for the LYONs. Prior to March 1, 2007, we
will not have the option to redeem the LYONs. Beginning on March 1, 2007 we may
redeem the LYONs for cash as a whole at any time, or in part from time to time.
We will give not less than 15 days nor more than 60 days notice of redemption
by mail to holders of LYONs. LYONs or portions of LYONs called for redemption
will be convertible by the holder until the close of business on the second
business day prior to the redemption date.
21
The table below shows redemption prices of a LYON on March 1, 2007, at
each March 1 thereafter prior to maturity and at maturity on March 1, 2032.
These prices reflect the accrued original issue discount calculated to each
such date. The redemption price of a LYON redeemed between such dates would
include an additional amount reflecting the additional original issue discount
accrued since the next preceding date in the table and until, but not
including, the redemption date.
(2)
(1) ACCRUED
LYON ORIGINAL (3)
ISSUE ISSUE REDEMPTION
REDEMPTION DATE PRICE DISCOUNT PRICE (1)+(2)
--------------- ------- -------- -------------
March 1:
2007......................................... $714.23 $ 41.21 $ 755.44
2008......................................... 714.23 49.73 763.96
2009......................................... 714.23 58.35 772.58
2010......................................... 714.23 67.06 781.29
2011......................................... 714.23 75.88 790.11
2012......................................... 714.23 84.79 799.02
2013......................................... 714.23 93.81 808.04
2014......................................... 714.23 102.92 817.15
2015......................................... 714.23 112.14 826.37
2016......................................... 714.23 121.46 835.69
2017......................................... 714.23 130.89 845.12
2018......................................... 714.23 140.43 854.66
2019......................................... 714.23 150.07 864.30
2020......................................... 714.23 159.82 874.05
2021......................................... 714.23 169.68 883.91
2022......................................... 714.23 179.65 893.88
2023......................................... 714.23 189.73 903.96
2024......................................... 714.23 199.93 914.16
2025......................................... 714.23 210.25 924.48
2026......................................... 714.23 220.68 934.91
2027......................................... 714.23 231.22 945.45
2028......................................... 714.23 241.89 956.12
2029......................................... 714.23 252.68 966.91
2030......................................... 714.23 263.58 977.81
2031......................................... 714.23 274.61 988.84
At Stated Maturity........................... 714.23 285.77 1,000.00
If the LYONs are converted to semiannual coupon notes following the
occurrence of a Tax Event, the notes will be redeemable at the restated
principal amount plus accrued and unpaid interest from the date of such
conversion to but not including the redemption date. However, in no event will
we have the option to redeem the LYONs or notes prior to March 1, 2007. See
"--Optional Conversion to Semiannual Coupon Note Upon Tax Event."
If we redeem less than all of the outstanding LYONs, the trustee shall
select the LYONs to be redeemed in principal amounts at maturity of $1,000 or
integral multiples of $1,000 by lot, pro rata or by any other method selected
by the Trustee in its sole discretion. If a portion of a holder's LYONs is
selected for partial redemption and the holder converts a portion of the LYONs,
the converted portion shall be deemed to be the portion selected for redemption.
22
PURCHASE OF LYONS BY AMGEN INC. AT THE OPTION OF THE HOLDER
On the purchase dates of March 1, 2005, March 1, 2007, March 1, 2012 and
March 1, 2017, holders may require us to purchase any outstanding LYON for
which a written purchase notice has been properly delivered by the holder and
not withdrawn, subject to certain additional conditions. We may, in our sole
discretion, provide the holders with additional rights to require us to
purchase the LYONs on additional purchase dates. We will notify the holders if
we elect to provide any such additional rights. Holders may submit their LYONs
for purchase to the paying agent at any time from the opening of business on
the date that is 20 business days prior to such purchase date until the close
of business on such purchase date.
The purchase price of a LYON will be:
. $738.68 per LYON on March 1, 2005;
. $755.44 per LYON on March 1, 2007;
. $799.02 per LYON on March 1, 2012; and
. $845.12 per LYON on March 1, 2017.
These purchase prices equal the issue price plus accrued original issue
discount to the purchase dates. We may, at our option, elect to pay the
purchase price in cash, shares of our common stock, or any combination thereof.
For a discussion of the tax treatment of a holder receiving cash, shares of
common stock or any combination thereof, see "Certain United States Federal
Income Tax Considerations--Sale, Exchange, Conversion or Redemption."
If, prior to a purchase date, the LYONs have been converted to semiannual
coupon notes following the occurrence of a Tax Event, the purchase price will
be equal to the restated principal amount plus accrued and unpaid interest from
the date of the conversion to the purchase date. See "--Optional Conversion to
Semiannual Coupon Note Upon Tax Event."
We are required to give notice on a date not less than 20 business days
prior to each purchase date to all holders at their addresses shown in the
register of the registrar, and to beneficial owners as required by applicable
law, stating among other things:
. whether we will pay the purchase price of LYONs in cash or our common
stock or any combination thereof, specifying the percentages of each;
. if we elect to pay in our common stock, the method of calculating the
market price of the our common stock; and
. the procedures that holders must follow to require us to purchase
their LYONs.
The purchase notice given by each holder electing to require us to
purchase LYONs shall be given to the paying agent no later than the close of
business on the purchase date and must state:
. the certificate numbers of the holder's LYONs to be delivered for
purchase;
. the portion of the principal amount at maturity of LYONs to be
purchased, which must be $1,000 or an integral multiple of $1,000;
. that the LYONs are to be purchased by us pursuant to the applicable
provisions of the LYONs; and
23
. in the event we elect, pursuant to the notice that we are required to
give, to pay the purchase price in our common stock, in whole or in
part, but the purchase price is ultimately to be paid to the holder
entirely in cash because any of the conditions to payment of the
purchase price or portion of the purchase price in such common stock
is not satisfied prior to the close of business on the purchase date,
as described below, whether the holder elects:
(1)to withdraw the purchase notice as to some or all of the LYONs to
which it relates, or
(2)to receive cash in respect of the entire purchase price for all
LYONs or portions of LYONs subject to such purchase notice.
If the holder fails to indicate the holder's choice with respect to the
election described in the final bullet point above, the holder shall be deemed
to have elected to receive cash in respect of the entire purchase price for all
LYONs subject to the purchase notice in these circumstances.
Any purchase notice may be withdrawn by the holder by a written notice of
withdrawal delivered to the paying agent prior to the close of business on the
purchase date. The notice of withdrawal shall state:
. the principal amount at maturity of the LYONs being withdrawn;
. the certificate numbers of the LYONs being withdrawn; and
. the principal amount at maturity, if any, of the LYONs that remain
subject to the purchase notice.
If we elect to pay the purchase price, in whole or in part, in shares of
our common stock, the number of shares of our common stock to be delivered by
us shall be equal to the portion of the purchase price to be paid in our common
stock divided by the market price of one share of our common stock. We will pay
cash based on the market price for all fractional shares of our common stock in
the event we elect to deliver our common stock in payment, in whole or in part,
of the purchase price.
The "market price" means the average of the sale prices of our common
stock for the five trading day period ending on the third business day prior to
the applicable purchase date. If the third business day prior to the applicable
purchase date is not a trading day, the five trading day period shall end on
the last trading day prior to such third business day. We will appropriately
adjust the market price to take into account the occurrence, during the period
commencing on the first of such trading days during such five trading day
period and ending on such purchase date, of certain events that would result in
an adjustment of the conversion rate with respect to the common stock.
The "sale price" of our common stock on any date means the closing per
share sale price (or if no closing sale price is reported, the average of the
bid and ask prices or, if more than one in either case, the average of the
average bid and the average ask prices) on such date as reported in composite
transactions for the principal United States securities exchange on which our
common stock is traded or, if our common stock is not listed on a United States
national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System or by the National
Quotation Bureau Incorporated. In the absence of a quotation, we will determine
the sale price on the basis of such quotation as we consider appropriate in our
reasonable discretion.
Because the market price of the common stock is determined prior to the
applicable purchase date, holders of LYONs bear the market risk with respect to
the value of our common stock to be received from the date such market price is
determined to such purchase date. We may pay the purchase price or any portion
of the purchase price in our common stock only if the information necessary to
calculate the market price is published in a daily newspaper of national
circulation.
24
Upon determination of the actual number of shares of our common stock to
be delivered for each $1,000 principal amount at maturity of LYONs in
accordance with the foregoing provisions, we will issue a press release or
publish such information on our web site on the World Wide Web or through such
other public medium as we may use at that time.
In addition to the above conditions, our right to purchase LYONs, in
whole or in part, with our common stock is subject to our satisfying various
conditions, including:
. listing such common stock on the principal United States securities
exchange on which our common stock is then listed;
. the registration of our common stock under the Securities Act and the
Exchange Act, if required; and
. any necessary qualification or registration under applicable state
securities law or the availability of an exemption from such
qualification and registration.
If such conditions are not satisfied with respect to a holder prior to
the close of business on the purchase date, we will pay the purchase price of
the LYONs to the holder entirely in cash. We may not change the form or
components or percentages of components of consideration to be paid for the
LYONs once we have given the notice that we are required to give to holders of
LYONs, except as described in the first sentence of this paragraph.
In connection with any purchase offer, to the extent required by
applicable law, we will:
. comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act which may then apply;
. file a Schedule TO or any other required schedule under the Exchange
Act; and
. otherwise comply with all federal and state securities laws as
necessary under the indenture to effect a purchase of LYONs by us at
the option of a holder.
Our obligation to pay the purchase price for a LYON for which a purchase
notice has been delivered and not validly withdrawn is conditioned upon
delivery of the LYON, together with all necessary endorsements, to the paying
agent at any time after delivery of the purchase notice. Payment of the
purchase price, plus accrued and unpaid contingent interest or semiannual
interest, if any, for the LYON will be made promptly following the later of the
purchase date or the time of delivery of the LYON.
If the paying agent holds money or securities sufficient to pay the
purchase price of and any accrued and unpaid contingent interest on the LYON on
the business day following the purchase date in accordance with the terms of
the indenture, then, immediately after the purchase date, the LYON will cease
to be outstanding and original issue discount, and semiannual and contingent
interest, if any, on such LYON will cease to accrue, whether or not the LYON is
delivered to the paying agent. Thereafter, all other rights of the holder shall
terminate, other than the right to receive the purchase price and any accrued
and unpaid contingent interest upon delivery of the LYON.
Our ability to purchase LYONs with cash may be limited by the terms of
our then existing borrowing agreements, as well as the amount of funds
available to us to fund any such purchases.
No LYONs may be purchased for cash at the option of holders if there has
occurred and is continuing an event of default with respect to the LYONs, other
than a default in the payment of the purchase price with respect to such LYONs.
25
CHANGE IN CONTROL PERMITS PURCHASE OF LYONS BY AMGEN INC. AT THE OPTION OF THE
HOLDER
In the event of any change in control, as defined below, occurring on or
prior to March 1, 2007, each holder will have the right, at the holder's
option, subject to the terms and conditions of the indenture, to require us to
purchase for cash all or any portion of the holder's LYONs in integral
multiples of $1,000 principal amount at maturity at a price for each $1,000
principal amount at maturity of such LYONs equal to the issue price of such
LYON plus the accrued original issue discount to the purchase date.
We are required to purchase the LYONs as of the date that is no later
than 35 business days after the occurrence of such change in control (a "change
in control purchase date") at a cash price equal to the issue price plus
accrued original issue discount to the change of control purchase date.
If prior to a change in control purchase date the LYONs have been
converted to semiannual coupon notes following the occurrence of a Tax Event,
we are required to purchase the notes at a cash price equal to the restated
principal amount plus accrued and unpaid interest from the Option Exercise Date
to the change in control purchase date.
Within 15 business days after the occurrence of a change in control, we
are obligated to mail to the trustee and to all holders of LYONs at their
addresses shown in the register of the registrar, and to beneficial owners as
required by applicable law, a notice regarding the change in control, which
notice shall state, among other things:
. the events causing a change in control;
. the date of such change in control;
. the last date on which the purchase right may be exercised;
. the change in control purchase price;
. the change in control purchase date;
. the name and address of the paying agent and the conversion agent;
. the conversion rate and any adjustments to the conversion rate;
. that LYONs with respect to which a change in control purchase notice
is given by the holder may be converted only if the change in control
purchase notice has been withdrawn in accordance with the terms of
the indenture; and
. the procedures that holders must follow to exercise these rights.
To exercise this right, the holder must deliver a written notice to the
paying agent prior to the close of business on the change in control purchase
date. The required purchase notice upon a change in control shall state:
. the certificate numbers of the LYONs to be delivered by the holder;
. the portion of the principal amount at maturity of LYONs to be
purchased, which portion must be $1,000 or an integral multiple of
$1,000; and
. that we are to purchase such LYONs pursuant to the applicable
provisions of the LYONs.
26
A holder may withdraw any change in control purchase notice by delivering
to the paying agent a written notice of withdrawal prior to the close of
business on the change in control purchase date. The notice of withdrawal shall
state:
. the principal amount at maturity being withdrawn;
. the certificate numbers of the LYONs being withdrawn; and
. the principal amount at maturity, if any, of the LYONs that remain
subject to a change in control purchase notice.
Our obligation to pay the change in control purchase price for a LYON for
which a change in control purchase notice has been delivered and not validly
withdrawn is conditioned upon delivery of the LYON, together with all necessary
endorsements, to the paying agent at any time after the delivery of such change
in control purchase notice. Payment of the change in control purchase price
plus accrued and unpaid contingent interest and semiannual interest, if any,
for such LYON will be made promptly following the later of the change in
control purchase date or the time of delivery of such LYON.
If the paying agent holds money sufficient to pay the change in control
purchase price of and any accrued and unpaid contingent interest and semiannual
interest on the LYON on the business day following the change in control
purchase date in accordance with the terms of the indenture, then, immediately
after the change in control purchase date, original issue discount, and
semiannual and contingent interest, if any, on such LYON will cease to accrue,
whether or not the LYON is delivered to the paying agent, and all other rights
of the holder shall terminate, other than the right to receive the change in
control purchase price and any accrued and unpaid contingent interest and
semiannual interest upon delivery of the LYON.
Under the indenture, a "change in control" occurs in the following
situations:
. any person or group, other than Amgen Inc., its subsidiaries or any
employee benefit plan of Amgen Inc. or its subsidiaries, files a
Schedule 13D or Schedule TO (or any successor schedule, form or
report) pursuant to the Exchange Act disclosing that such person has
become the beneficial owner of 50% or more of the voting power of our
common stock then outstanding or other capital stock into which our
common stock is reclassified or changed, with certain exceptions; or
. Amgen Inc. consolidates with or merges with or into another person
(other than a subsidiary of Amgen Inc.), or sells, conveys, transfers
or leases all or substantially all of its properties and assets to
any person (other than a subsidiary of Amgen Inc.), or any person
(other than a subsidiary of Amgen Inc.) consolidates with or merges
with or into Amgen Inc., and the outstanding voting common stock of
Amgen Inc. is reclassified into, converted for or converted into the
right to receive any property or security, provided that none of
these circumstances will be a change in control if the persons that
beneficially own the voting stock of Amgen Inc. immediately prior to
the transaction own, directly or indirectly, shares with a majority
of the total voting power of all outstanding voting securities of the
surviving or transferee person that are entitled to vote generally in
the election of that person's board of directors, managers or
trustees immediately after the transaction.
For purposes of defining a change in control:
. the term "person" and the term "group" have the meanings given by
Section 13(d) and 14(d) of the Exchange Act or any successor
provisions;
. the term "group" includes any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act or any successor provision;
and
27
. the term "beneficial owner" is determined in accordance with Rules
13d-3 and 13d-5 under the Exch ange Act or any successor provisions,
except that a person will be deemed to have beneficial ownership of
all shares that person has the right to acquire irrespective of
whether that right is exercisable immediately or only after the
passage of time.
The indenture does not permit us to waive our obligation to purchase
LYONs at the option of holders in the event of a change in control.
In connection with any purchase offer in the event of a change in
control, to the extent required by applicable law, we will:
. comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act which may then be
applicable;
. file a Schedule TO or any other required schedule under the Exchange
Act; and
. otherwise comply with all federal and state securities laws as
necessary under the indenture to effect a change in control purchase
of LYONs by us at the option of a holder.
The change in control purchase feature of the LYONs may in certain
circumstances make more difficult or discourage a takeover of Amgen Inc. The
change in control purchase feature, however, is not part of a plan by our
management to adopt anti-takeover provisions nor is it the result of such
management's knowledge of any specific effort:
. to accumulate shares of Amgen Inc. common stock; or
. to obtain control of Amgen Inc. by means of a merger, tender offer,
solicitation or otherwise that is part of a plan by management to
adopt a series of anti-takeover power provisions.
Instead, the change in control purchase feature is a standard term
contained in other LYONs offerings that have been marketed by Merrill Lynch.
The terms of the change in control purchase feature resulted from negotiations
between Merrill Lynch and us.
We could, in the future, enter into certain transactions, including
certain recapitalizations, that would not constitute a change in control with
respect to the change in control purchase feature of the LYONs, but that would
increase the amount of our outstanding indebtedness or the outstanding
indebtedness of our subsidiaries.
No LYONs may be purchased by us at the option of holders upon a change in
control if there has occurred and is continuing an event of default with
respect to the LYONs, other than a default in the payment of the change in
control purchase price with respect to the LYONs.
OPTIONAL CONVERSION TO SEMIANNUAL COUPON NOTE UPON TAX EVENT
From and after the date of the occurrence of a Tax Event, we will have
the option to elect to pay interest in lieu of future accrual of original issue
discount at a rate of 1.125% per year, compounded semiannually, on a principal
amount per LYON (the "restated principal amount") equal to the issue price plus
original issue discount accrued to the Option Exercise Date.
Such interest shall accrue from the Option Exercise Date and will be
payable semiannually on the interest payment dates of March 1 and September 1
of each year to holders of record at the close of business on February 14 or
August 17 immediately preceding the interest payment date. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
Interest will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from the Option Exercise Date. In the event
that we
28
exercise our option to pay interest in lieu of accruing original issue
discount, the redemption price, purchase price and change in control purchase
price on the LYONs will be adjusted, and no future contingent interest payments
will be made. However, there will be no changes in the holder's conversion
rights.
A "Tax Event" means that we shall have received an opinion from
independent tax counsel experienced in such matters to the effect that, on or
after the date of this prospectus, as a result of:
. any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or
therein, or
. any amendment to, or change in, an interpretation or application of
such laws or regulations by any legislative body, court, governmental
agency or regulatory authority,
in each case which amendment or change is enacted, promulgated, issued or
announced or which interpretation is issued or announced or which action is
taken on or after the date of this prospectus, there is more than an
insubstantial risk that amounts that we are treating as interest on the LYONs
for United States federal income tax purposes as described under "Certain
United States Federal Income Tax Considerations" (including tax original issue
discount and contingent interest, if any) either:
(1)would not be deductible on a current accrual basis, or
(2)would not be deductible under any other method,
in either case in whole or in part, by us (by reason of deferral, disallowance,
or otherwise) for United States federal income tax purposes.
If a proposal were ever enacted and made applicable to the LYONs in a
manner that would limit our ability to deduct such amounts on a current accrual
basis under any other method for United States federal income tax purposes,
such enactment would result in a Tax Event and the terms of the LYONs would be
subject to modification at our option as described above.
The modification of the terms of LYONs by us upon a Tax Event as
described above could alter the timing of income recognition by holders of the
LYONs with respect to the semiannual payments of interest due on the LYONs
after the Option Exercise Date. See "Certain United States Federal Income Tax
Considerations."
MERGER AND SALES OF ASSETS BY AMGEN INC.
The indenture provides that we may consolidate with or merge into any
other person or convey, transfer or lease our properties and assets
substantially as an entirety to another person, provided that:
. the resulting, surviving or transferee person (if other than Amgen
Inc.) is organized and existing under the laws of the United States,
any state thereof or the District of Columbia;
. such person assumes all obligations of Amgen Inc. under the LYONs and
the indenture; and
. Amgen Inc. or such successor person is not immediately thereafter in
default under the indenture.
Upon the assumption of the obligations of Amgen Inc. by such a person in
such circumstances, subject to certain exceptions, Amgen Inc. will be
discharged from all obligations under the LYONs and the indenture. Although
such transactions are permitted under the indenture, certain of the foregoing
transactions occurring on or prior to March 1, 2007 could constitute a change
in control of Amgen Inc. permitting each holder to require Amgen Inc. or such
successor person to purchase the LYONs of such holder as described above.
29
EVENTS OF DEFAULT
The following are events of default for the LYONs:
. default in payment of the principal amount at maturity (or if the
LYONs have been converted to semiannual coupon notes following a Tax
Event, the restated principal amount), accrued original issue
discount, redemption price, purchase price or change in control
purchase price with respect to any LYON when such becomes due and
payable;
. default in payment of any contingent interest or of interest which
becomes payable after the LYONs have been converted to semiannual
coupon notes following the occurrence of a Tax Event, which default,
in either case, continues for 30 days;
. our failure to comply with any of our other agreements in the LYONs
or the indenture upon receipt by us of notice of such default by the
trustee or by holders of not less than 25% in aggregate principal
amount at maturity of the LYONs then outstanding and our failure to
cure (or obtain a waiver of) such default within 60 days after we
receive such notice;
. (A) our failure to make any payment by the end of any applicable
grace period after maturity of indebtedness, which term as used in
the indenture means obligations (other than nonrecourse obligations)
of Amgen Inc. for borrowed money or evidenced by bonds, debentures,
notes or similar instruments ("Indebtedness") in an amount in excess
of $50,000,000 and continuance of such failure, or (B) the
acceleration of Indebtedness in an amount in excess of $50,000,000
because of a default with respect to such Indebtedness without such
Indebtedness having been discharged or such acceleration having been
cured, waived, rescinded or annulled in case of (A) above, for a
period of 30 days after written notice to us by the trustee or to us
and the trustee by the holders of not less than 25% in aggregate
principal amount at maturity of the LYONs then outstanding. However,
if any such failure or acceleration referred to in (A) or (B) above
shall cease or be cured, waived, rescinded or annulled, then the
event of default by reason thereof shall be deemed not to have
occurred; or
. certain events of bankruptcy or insolvency affecting us or any of our
"significant subsidiaries" (as such term is defined under Regulation
S-X under the Securities Act).
If an event of default shall have happened and be continuing, either the
trustee or the holders of not less than 25% in aggregate principal amount at
maturity of the LYONs then outstanding may declare the issue price of the LYONs
plus the original issue discount on the LYONs accrued through the date of such
declaration, and any accrued and unpaid contingent interest or semiannual
interest through the date of such declaration, to be immediately due and
payable. In the case of certain events of bankruptcy or insolvency, the issue
price of the LYONs plus the original issue discount and any unpaid contingent
or semiannual interest accrued thereon through the occurrence of such event
shall automatically become and be immediately due and payable. If the LYONs
have been converted to semiannual coupon notes following the occurrence of a
Tax Event, the amount due on an acceleration will be the restated principal
amount plus accrued and unpaid interest.
BOOK-ENTRY SYSTEM
The LYONs are only issued in the form of global securities held in
book-entry form. DTC or its nominee is the sole registered holder of the LYONs
for all purposes under the indenture. Owners of beneficial interests in the
LYONs represented by the global securities hold their interests pursuant to the
procedures and practices of DTC. As a result, beneficial interests in any such
securities are shown on, and transfers are effected only through, records
maintained by DTC and its direct and indirect participants and any such
interest may not be converted for certificated securities, except in limited
circumstances. Owners of beneficial interests must exercise any rights in
respect of their interests, including any right to convert or require purchase
of their interests in the LYONs, in accordance with the procedures and
practices of DTC. Beneficial owners are not holders and will not
30
be entitled to any rights provided to the holders of LYONs under the global
securities or the indenture. Amgen Inc. and the trustee, and any of their
respective agents, may treat DTC as the sole holder and registered owner of the
global securities.
ISSUANCE OF CERTIFICATED SECURITIES FOR GLOBAL SECURITIES
LYONs represented by one or more global securities are exchangeable for
LYONs represented by certificated securities in registered form with the same
terms only if:
. DTC is unwilling or unable to continue as depositary or if DTC ceases
to be a clearing agency registered under the Exchange Act and a
successor depositary is not appointed by us within 90 days;
. we decide to discontinue use of the system of book-entry transfer
through DTC (or any successor depositary); or
. a default under the indenture occurs and is continuing.
DTC has advised us as follows: DTC is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
facilitates the settlement of transactions among its participants through
electronic computerized book-entry changes in participants' accounts,
eliminating the need for physical movement of securities certificates. DTC
participants include securities brokers and dealers, including Merrill Lynch,
banks, trust companies, clearing corporations and other organizations, some of
whom and/or their representatives own DTC. Access to DTC's book-entry system is
also 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.
MODIFICATION
We and the trustee may enter into supplemental indentures that add,
change or eliminate provisions of the indenture or modify the rights of the
holders of the LYONs with the consent of the holders of at least a majority in
principal amount at maturity of the LYONs then outstanding. However, without
the consent of each holder affected thereby, no supplemental indenture may:
. alter the manner of calculation or rate of accrual of original issue
discount or interest (including semiannual or contingent interest) on
any LYON or extend the time of payment;
. make any LYON payable in money or securities other than that stated
in the LYON;
. change the stated maturity of any LYON;
. reduce the principal amount at maturity, issue price, restated
principal amount, redemption price, purchase price or change in
control purchase price with respect to any LYON;
. make any change that adversely affects the right of a holder to
convert any LYON;
. make any change that adversely affects the right to require us to
purchase a LYON;
. impair the right to convert or receive payment with respect to the
LYONs or the right to institute suit for the enforcement of any
payment with respect to, or conversion of, the LYONs; or
. change the provisions in the indenture that relate to modifying or
amending the indenture.
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Without the consent of any holder of LYONs, we and the trustee may enter
into supplemental indentures for any of the following purposes:
. to evidence a successor to us and the assumption by that successor of
our obligations under the indenture and the LYONs;
. to add to our covenants for the benefit of the holders of the LYONs
or to surrender any right or power conferred upon us;
. to secure our obligations in respect of the LYONs and the indenture;
. to make any changes or modifications to the indenture necessary in
connection with the registration of the LYONs under the Securities
Act and the qualification of the LYONs under the Trust Indenture Act
as contemplated by the indenture;
. to cure any ambiguity, defect or inconsistency in the indenture; and
. to provide the holders with additional rights to require us to
purchase the LYONs on additional purchase dates.
Notwithstanding the foregoing, no supplemental indenture entered into
pursuant to the second, third, fourth or fifth bullets of the preceding
paragraph may be entered into without the consent of the holders of a majority
in principal amount at maturity of the LYONs, however, if such supplemental
indenture may materially and adversely affect the interests of the holders of
the LYONs.
The holders of a majority in principal amount at maturity of the
outstanding LYONs may, on behalf of the holders of all LYONs, (i) waive
compliance by us with restrictive provisions of the indenture, as detailed in
the indenture; and (ii) waive any past default under the indenture and its
consequences, except a default in the payment of the principal amount at
maturity, issue price, accrued and unpaid semiannual or contingent interest,
accrued original issue discount, redemption price, purchase price or change in
control purchase price or obligation to deliver shares of common stock upon
conversion with respect to any LYON or in respect of any provision which under
the indenture cannot be modified or amended without the consent of the holder
of each outstanding LYON affected.
DISCHARGE OF THE INDENTURE
We may satisfy and discharge our obligations under the indenture by
delivering to the trustee for cancellation all outstanding LYONs or by
depositing with the trustee, the paying agent or the conversion agent, if
applicable after the LYONs have become due and payable, whether at stated
maturity, or any redemption date, any purchase date, or a change in control
purchase date, or upon conversion or otherwise, cash or shares of our common
stock or government obligations (as applicable under the terms of the
indenture) sufficient to pay all of the outstanding LYONs and paying all other
sums payable under the indenture by us.
CALCULATIONS IN RESPECT OF LYONS
We are responsible for making all calculations called for under the
LYONs. These calculations include, but are not limited to, determination of the
market prices of the LYONs and of our common stock and amounts of contingent
interest payments, if any, payable on the LYONs. We make all these calculations
in good faith and, absent manifest error, our calculations are final and
binding on holders of LYONs. We will provide a schedule of our calculations to
the trustee, and the trustee is entitled to rely upon the accuracy of our
calculations without independent verification.
32
LIMITATIONS OF CLAIMS IN BANKRUPTCY
If a bankruptcy proceeding is commenced in respect of Amgen Inc., the
claim of the holder of a LYON is, under Title 11 of the United States Code,
limited to the issue price of the LYON plus that portion of the original issue
discount that has accrued from the date of issue to the commencement of the
proceeding, plus contingent interest and semiannual interest, if any, accrued
after a Tax Event. In addition, the holders of the LYONs are effectively
subordinated to the indebtedness and other obligations of our subsidiaries.
INFORMATION CONCERNING THE TRUSTEE
LaSalle Bank National Association is the trustee, registrar, paying agent
and conversion agent under the indenture. We may maintain deposit accounts and
conduct other banking transactions with the trustee in the normal course of
business.
GOVERNING LAW
The indenture and the LYONs are governed by, and construed in accordance
with, the law of the State of New York.
33
DESCRIPTION OF OUR CAPITAL STOCK
The following description of our capital stock is summarized from, and
qualified in its entirety by reference to, Amgen's certificate of
incorporation, as amended, which has been publicly filed with the SEC. See
"Where You Can Find More Information."
Our authorized capital stock consists of:
. 2,750,000,000 shares of common stock, $0.0001 par value; and
. 5,000,000 shares of preferred stock, $0.0001 par value of which
687,500 shares are designated as Series A Junior Participating
Preferred Stock.
The only equity securities currently outstanding are shares of common
stock. As of March 31, 2002, there were 1,038,989,468 shares of common stock
issued and outstanding.
COMMON STOCK
Each holder of our common stock is entitled to one vote per share on all
matters to be voted upon by our stockholders. Upon any liquidation, dissolution
or winding up of our business, the holders of our common stock are entitled to
share equally in all assets available for distribution after payment of all
liabilities, subject to the liquidation preference of shares of preferred
stock, if any, then outstanding. Our common stock has no preemptive or
conversion rights. All outstanding shares of common stock are fully paid and
non-assessable. Our common stock is listed on the Nasdaq National Market System
under the symbol "AMGN."
PREFERRED STOCK
Pursuant to our certificate of incorporation, our board of directors may,
by resolution and without further action or vote by our stockholders, provide
for the issuance of up to 5,000,000 shares of preferred stock from time to time
in one or more series having such voting powers, and such designations,
preferences, and relative, participating, optional, or other special rights and
qualifications, limitations, or restrictions thereof, as the board of directors
may determine.
The issuance of preferred stock may have the effect of delaying or
preventing a change in control of us without further action by our
stockholders. The issuance of shares of preferred stock with voting and
conversion rights may adversely affect the voting power of the holders of our
common stock.
RIGHTS AGREEMENT AND SERIES A JUNIOR PARTICIPATORY PREFERRED STOCK
Each share of our common stock, including those that may be issued upon
conversion of the LYONs, carries with it one preferred share purchase right. If
the rights become exercisable, each right entitles the registered holder to
purchase from us one four-thousandth of a share of Series A Junior
Participatory Preferred Stock at a fixed price, subject to adjustment. Until a
right is exercised, the holder of the right has no right to vote or receive
dividends or any other rights as a stockholder as a result of holding the right.
The rights trade automatically with shares of our common stock, and may
only be exercised in connection with certain attempts to take over our company.
The rights are designed to protect the interests of our company and our
stockholders against coercive takeover tactics and encourage potential
acquirors to negotiate with our board of directors before attempting a
takeover. The rights may, but are not intended to, deter takeover proposals
that may be in the interests of our stockholders. The description and terms of
the rights are set forth in an amended and restated rights agreement, dated as
of December 12, 2000, as the same may be amended from time to time, between us
and the American Stock Transfer & Trust Company, as rights agent.
34
DIVIDENDS
Subject to preferences that may be applicable to any outstanding
preferred stock, the holders of common stock are entitled ratably to receive
dividends, if any, declared by our board of directors out of funds legally
available for the payment of dividends. We have not paid dividends to date and
do not expect to pay any dividends in the foreseeable future.
ANTI-TAKEOVER EFFECTS OF DELAWARE LAW
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. Under Section 203, we would generally be prohibited from
engaging in any business combination with any interested stockholder for a
period of three years following the time that this stockholder became an
interested stockholder unless:
. prior to this time, the board of directors of the corporation
approved either the business combination or the transaction that
resulted in the stockholder becoming an interested stockholder;
. upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at
the time the transaction commenced, excluding shares owned by persons
who are directors and also officers, and by employee stock plans in
which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or
. at or subsequent to such time, the business combination is approved
by the board of directors and authorized at an annual or special
meeting of stockholders, and not by written consent, by the
affirmative vote of at least 66?% of the outstanding voting stock
that is not owned by the interested stockholder.
Under Section 203, a "business combination" includes:
. any merger or consolidation involving the corporation and the
interested stockholder;
. any sale, transfer, pledge or other disposition of 10% or more of the
assets of the corporation involving the interested stockholders;
. any transaction that results in the issuance or transfer by the
corporation of any stock of the corporation to the interested
stockholders, subject to limited exceptions;
. any transaction involving the corporation that has the effect of
increasing the proportionate share of the stock of any class or
series of the corporation beneficially owned by the interested
stockholder; or
. the receipt by the interested stockholder of the benefit of any
loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation.
In general, Section 203 defines an interested stockholder as an entity or
person beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.
TRANSFER AGENT
The transfer agent and registrar for our common stock is the American
Stock Transfer & Trust Company.
35
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
This is a summary of certain United States federal income tax
consequences relevant to holders of LYONs. This summary is based upon laws,
regulations, rulings and decisions now in effect, all of which are subject to
change (including retroactive changes) or possible differing interpretations.
The discussion below deals only with LYONs held as capital assets for United
States federal income tax purposes and does not purport to deal with persons in
special tax situations, such as financial institutions, insurance companies,
regulated investment companies, dealers in securities or currencies, tax-exempt
entities, persons holding LYONs in a tax-deferred or tax-advantaged account, or
persons holding LYONs as a hedge against currency risks, as a position in a
"straddle" or as part of a "hedging" or "conversion" transaction for tax
purposes.
We do not address all of the tax consequences that may be relevant to an
investor in LYONs. In particular, we do not address:
. the United States federal income tax consequences to shareholders in,
or partners or beneficiaries of, an entity that is a holder of LYONs;
. the United States federal estate, gift or alternative minimum tax
consequences of the purchase, ownership or disposition of LYONs;
. U.S. holders (as defined below) whose functional currency is not the
United States dollar;
. any state, local or foreign tax consequences of the purchase,
ownership or disposition of LYONs; or
. any United States federal, state, local or foreign tax consequences
of owning or disposing of Amgen Inc.'s common stock.
Persons considering the purchase of the LYONs should consult their own
tax advisors concerning the application of the United States federal income tax
laws to their particular situations as well as any consequences of the
purchase, ownership and disposition of the LYONs arising under the laws of any
other taxing jurisdiction.
A U.S. holder is a beneficial owner of the LYONs who or which is:
. a citizen or individual resident of the United States, as defined in
Section 7701(b) of the Internal Revenue Code of 1986, as amended
(which we refer to as the Code);
. a corporation, including any entity treated as a corporation for
United States federal income tax purposes, created or organized in or
under the laws of the United States, any state thereof or the
District of Columbia;
. an estate if its income is subject to United States federal income
taxation regardless of its source; or
. a trust if (1) a United States court can exercise primary supervision
over its administration and (2) one or more United States persons
have the authority to control all of its substantial decisions.
Notwithstanding the preceding sentence, certain trusts in existence on
August 20, 1996, and treated as U.S. persons prior to such date, may also be
treated as U.S. holders. A Non-U.S. holder is a beneficial owner of LYONs other
than a U.S. holder or a partnership.
No statutory or judicial authority directly addresses the treatment of
the LYONs or instruments similar to the LYONs for United States federal income
tax purposes. The Internal Revenue Service (which we refer to as the IRS) has
recently issued a revenue ruling with respect to instruments similar to the
LYONs. To the extent it addresses the issue, this ruling supports certain
aspects of the treatment described below. No ruling has been or is
36
expected to be sought from the IRS with respect to the United States federal
income tax consequences of the issues that are not addressed in the recently
released revenue ruling. The IRS would not be precluded from taking contrary
positions. As a result, no assurance can be given that the IRS will agree with
all of the tax characterizations and the tax consequences described below.
WE URGE PROSPECTIVE INVESTORS TO CONSULT THEIR OWN TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE LYONS AND AMGEN INC.'S COMMON STOCK IN LIGHT OF THEIR OWN
PARTICULAR CIRCUMSTANCES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES
FEDERAL OR OTHER TAX LAWS.
CLASSIFICATION OF THE LYONS
We have received an opinion from our special tax counsel, Shearman &
Sterling, that the LYONs will be treated as indebtedness for United States
federal income tax purposes and that the LYONs will be subject to the special
regulations governing contingent payment debt instruments (which we refer to as
the CPDI regulations). Pursuant to the terms of the indenture, we and each
holder of the LYONs agree, for United States federal income tax purposes, to
treat the LYONs as debt instruments that are subject to the CPDI regulations.
In addition, under the indenture, each holder will be deemed to have
agreed to treat the fair market value of our common stock received by such
holder upon conversion as a contingent payment and to accrue interest with
respect to the LYONs as original issue discount for United States federal
income tax purposes according to the "noncontingent bond method," set forth in
section 1.1275-4(b) of the Treasury Regulations, using the comparable yield (as
defined below) compounded semiannually and the projected payment schedule (as
defined below) determined by us. The application of the CPDI regulations to
instruments such as the LYONs is uncertain in several respects, and, as a
result, no assurance can be given that the IRS or a court will agree with the
treatment described herein. Any differing treatment could affect the amount,
timing and character of income, gain or loss in respect of an investment in the
LYONs. In particular, a holder might be required to accrue interest income at a
higher or lower rate, might not recognize income, gain or loss upon conversion
of the LYONs into common stock, and might recognize capital gain or loss upon a
taxable disposition of the LYONs. Holders should consult their tax advisors
concerning the tax treatment of holding the LYONs.
ACCRUAL OF INTEREST ON THE LYONS
Pursuant to the CPDI regulations, a U.S. holder will be required to
accrue interest income on the LYONs, in the amounts described below, regardless
of whether the U.S. holder uses the cash or accrual method of tax accounting.
Accordingly, U.S. holders will be required to include interest in taxable
income in each year in excess of the accruals on the LYONs for non-tax purposes
and in excess of any contingent interest payments actually received in that
year.
If a U.S. holder purchases a LYON for a price equal to the adjusted issue
price (as defined below) of the LYON, such holder must accrue an amount of
ordinary interest income, as original issue discount for United States federal
income tax purposes, for each accrual period prior to and including the
maturity date of the LYON that equals:
(1) the product of (i) the adjusted issue price of the LYON as of the
beginning of the accrual period, and (ii) the comparable yield to
maturity (as defined below) of the LYON, adjusted for the length of
the accrual period;
(2) divided by the number of days in the accrual period; and
(3) multiplied by the number of days during the accrual period that the
U.S. holder held the LYON.
37
A LYON's issue price is the first price at which a substantial amount of
the LYONs is sold to the public, excluding sales to bond houses, brokers or
similar persons or organizations acting in the capacity of underwriters,
placement agents or wholesalers. The adjusted issue price of a LYON is its
issue price increased by any interest income previously accrued, determined
without regard to any adjustments to interest accruals described below, and
decreased by the projected amount of any payments on the LYON for previous
accrual periods.
Shearman & Sterling, our special tax counsel, has advised us that the
term "comparable yield" means the annual yield we would pay, as of the initial
issue date, on a fixed-rate, nonconvertible debt security with no contingent
payments, but with terms and conditions otherwise comparable to those of the
LYONs. Based in part on that advice, we intend to take the position that the
comparable yield for the LYONs is 5.63%, compounded semiannually. The precise
manner of calculating the comparable yield is not entirely clear.
The CPDI regulations require that we provide to U.S. holders, solely for
United States federal income tax purposes, a schedule of the projected amounts
of payments, which we refer to as projected payments, on the LYONs. This
schedule must produce the comparable yield. The projected payment schedule
includes estimates for certain contingent interest payments and an estimate for
a payment at maturity taking into account the conversion feature. In this
connection, the fair market value of any common stock (and cash, if any)
received by a holder upon conversion will be treated as a contingent payment.
The comparable yield and the schedule of projected payments is set forth
in the indenture. U.S. holders may also obtain the projected payment schedule
by submitting a written request for such information to: Amgen Inc., One Amgen
Center Drive, Thousand Oaks, California 91320-1799; Attention: Corporate
Secretary.
THE COMPARABLE YIELD AND THE SCHEDULE OF PROJECTED PAYMENTS ARE NOT
DETERMINED FOR ANY PURPOSE OTHER THAN FOR THE DETERMINATION OF A U.S. HOLDER'S
INTEREST ACCRUALS AND ADJUSTMENTS THEREOF IN RESPECT OF THE LYONS FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES AND DO NOT CONSTITUTE A PROJECTION OR
REPRESENTATION REGARDING THE ACTUAL AMOUNTS PAYABLE ON THE LYONS.
Amounts treated as interest under the CPDI regulations are treated as
original issue discount for all purposes of the Code.
ADJUSTMENTS TO INTEREST ACCRUALS ON THE LYONS
If, during any taxable year, a U.S. holder receives actual payments with
respect to the LYONs for that taxable year that in the aggregate exceed the
total amount of projected payments for that taxable year, the U.S. holder will
incur a "net positive adjustment" under the CPDI regulations equal to the
amount of such excess. The U.S. holder will treat a "net positive adjustment"
as additional interest income. For this purpose, the payments in a taxable year
include the fair market value of property received in that year, including the
fair market value of our common stock received upon conversion.
If a U.S. holder receives in a taxable year actual payments with respect
to the LYONs for that taxable year that in the aggregate were less than the
amount of projected payments for that taxable year, the U.S. holder will incur
a "net negative adjustment" under the CPDI regulations equal to the amount of
such deficit. This adjustment will (a) reduce the U.S. holder's interest income
on the LYONs for that taxable year, and (b) to the extent of any excess after
the application of (a), give rise to an ordinary loss to the extent of the U.S.
holder's interest income on the LYONs during prior taxable years, reduced to
the extent such interest was offset by prior net negative adjustments. Any
excess negative adjustments will be treated as a negative adjustment in the
succeeding taxable year.
A U.S. holder that purchases LYONs at a discount or premium to the
adjusted issue price of the LYONs on the acquisition date must, upon acquiring
the debt instrument, reasonably allocate the difference between such holder's
tax basis and the adjusted issue price to daily portions of interest or
projected payments over the remaining term of the LYONs. U.S. holders should
consult their tax advisors regarding these allocations.
38
If a U.S. holder's basis is greater than the adjusted issue price, the
amount of the difference allocated to a daily portion of interest or to a
projected payment is treated as a negative adjustment on the date the daily
portion accrues or the payment is made. On the date of the adjustment, such
holder's adjusted basis in the debt instrument is reduced by the amount such
holder treats as a negative adjustment.
If a U.S. holder's basis is less than the adjusted issue price, the
amount of the difference allocated to a daily portion of interest or to a
projected payment is treated as a positive adjustment on the date the daily
portion accrues or the payment is made. On the date of the adjustment, such
holder's adjusted basis in the debt instrument is increased by the amount such
holder treats as a positive adjustment.
SALE, EXCHANGE, CONVERSION OR REDEMPTION
Generally, the sale or exchange of a LYON, or the redemption of a LYON
for cash, will result in taxable gain or loss to a U.S. holder. As described
above, our calculation of the comparable yield and the schedule of projected
payments for the LYONs includes the receipt of common stock upon conversion as
a contingent payment with respect to the LYONs. Accordingly, we intend to treat
the receipt of our common stock by a U.S. holder upon the conversion of a LYON,
or upon the U.S. holder's exercise of a put right where we elect to pay in
common stock, as a contingent payment under the CPDI regulations. Under this
treatment, conversion or such an exercise of the U.S. holder's put right also
would result in taxable gain or loss to the U.S. holder. As described above,
holders will be deemed to have agreed to be bound by our determination of the
comparable yield and the schedule of projected payments.
The amount of gain or loss on a taxable sale, exchange, conversion or
redemption would be equal to the difference between (a) the amount of cash plus
the fair market value of any other property received by the U.S. holder,
including the fair market value of any of our common stock received, and (b)
the U.S. holder's adjusted tax basis in the LYON. A U.S. holder's adjusted tax
basis in a LYON will generally be equal to the U.S. holder's original purchase
price for the LYON, increased by any interest income previously accrued by the
U.S. holder (determined without regard to any adjustments to interest accruals
described above, other than adjustments to reflect discount or premium to the
adjusted issue price, if any), and decreased by the amount of any projected
payments that have been previously scheduled to be made in respect of the LYONs
(without regard to the actual amount paid). Gain recognized upon a sale,
exchange, conversion or redemption of a LYON will generally be treated as
ordinary interest income; any loss will be ordinary loss to the extent of
interest previously included in income, and thereafter, capital loss (which
will be long-term if the LYON is held for more than one year). The
deductibility of net capital losses by individuals and corporations is subject
to limitations.
A U.S. holder's tax basis in our common stock received upon a conversion
of a LYON or upon a U.S. holder's exercise of a put right that we elect to pay
in our common stock will equal the then current fair market value of such
common stock. The U.S. holder's holding period for the common stock received
will commence on the day immediately following the date of conversion or
redemption.
CONSTRUCTIVE DIVIDENDS
If at any time we were to make a distribution of property to our
stockholders that would be taxable to the stockholders as a dividend for United
States federal income tax purposes and, in accordance with the antidilution
provisions of the LYONs, the conversion rate of the LYONs were increased, such
increase might be deemed to be the payment of a taxable dividend to holders of
the LYONs.
For example, an increase in the conversion rate in the event of
distributions of our evidences of indebtedness or assets or an increase in the
event of an extraordinary cash dividend may result in deemed dividend treatment
to holders of the LYONs, but generally an increase in the event of stock
dividends or the distribution of rights to subscribe for common stock would not
be so treated.
39
TREATMENT OF NON-U.S. HOLDERS
Absent further relevant guidance from the IRS, we intend to treat
payments of contingent interest made to Non-U.S. holders as subject to United
States withholding tax. Therefore, we intend to withhold on such payments at a
rate of 30%, subject to reduction by an applicable treaty or upon the receipt
of a Form W-8ECI from a Non-U.S. holder claiming that such payments are
effectively connected with the conduct of a United States trade or business. A
Non-U.S. holder that is subject to the withholding tax should consult its own
tax advisors as to whether it can obtain a refund for all or a portion of the
withholding tax on the grounds that (i) the contingent interest payment up to
the floor amount (i.e., the amount based on the average market price of the
LYONs) qualifies for the "portfolio interest exemption" because it is not based
on our dividends or (ii) some portion of the contingent interest payment
represents a return of principal under the CPDI regulations.
All other payments on the LYONs made to a Non-U.S. holder, including a
payment in common stock pursuant to a conversion, and any gain realized on a
sale, exchange or conversion of the LYONs (other than gain attributable to
accrued contingent interest payments), will be exempt from United States income
or withholding tax PROVIDED that: (i) such Non-U.S. holder does not own,
actually, indirectly or constructively, 10% or more of the total combined
voting power of all classes of our stock entitled to vote, and is not a
controlled foreign corporation related, directly or indirectly, to us through
stock ownership, (ii) the statement requirement set forth in section 871(h) or
section 881(c) of the Code has been fulfilled with respect to the beneficial
owner, as discussed below; (iii) such payments and gain are not effectively
connected with the conduct by such Non-U.S. holder of a trade or business in
the United States; (iv) our common stock continues to be actively traded within
the meaning of section 871(h)(4)(C)(v)(I) of the Code (which, for these
purposes and subject to certain exceptions, includes trading on the Nasdaq
National Market); and (v) we are not a "United States real property holding
corporation." We believe that we are not and do not anticipate becoming a
"United States real property holding corporation." However, if a Non-U.S.
holder were deemed to have received a constructive dividend (see
"--Constructive Dividends" above), the Non-U.S. holder will generally be
subject to United States federal withholding tax at a 30% rate, subject to a
reduction by an applicable treaty, on the taxable amount of such dividend.
The statement requirement referred to in the preceding paragraph will be
fulfilled if the beneficial owner of a LYON certifies on IRS Form W-8BEN, under
penalties of perjury, that it is not a United States person and provides its
name and address or otherwise satisfies applicable documentation requirements.
If a Non-U.S. holder of the LYONs is engaged in a trade or business in the
United States, and if interest on the LYONs is effectively connected with the
conduct of such trade or business, the Non-U.S. holder, although exempt from
the withholding tax discussed in the preceding paragraphs, will generally be
subject to regular United States federal income tax on interest and on any gain
realized on the sale, exchange or conversion of the LYONs in the same manner as
if it were a U.S. holder. In lieu of the certificate described in the preceding
paragraph, such a Non-U.S. holder would be required to provide to the
withholding agent a properly executed IRS Form W-8ECI (or successor form) in
order to claim an exemption from withholding tax. In addition, if such a
Non-U.S. holder is a foreign corporation, such holder may be subject to a
branch profits tax equal to 30% (or such lower rate provided by an applicable
treaty) of its effectively connected earnings and profits for the taxable year,
subject to certain adjustments.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Payments of principal, premium, if any, and interest (including original
issue discount and a payment in common stock pursuant to a conversion of the
LYONs) on, and the proceeds of dispositions of, the LYONs may be subject to
information reporting and United States federal backup withholding tax if the
U.S. holder thereof fails to supply an accurate taxpayer identification number
or otherwise fails to comply with applicable United States information
reporting or certification requirements. A Non-U.S. holder may be subject to
United States backup withholding tax on payments on the LYONs and the proceeds
from a sale or other disposition of the
40
LYONs unless the Non-U.S. holder complies with certification procedures to
establish that it is not a United States person. Any amounts so withheld will
be allowed as a credit against a U.S. holder's United States federal income tax
liability and may entitle a holder to a refund, provided the required
information is timely furnished to the IRS.
TAX EVENT AND ADDITIONAL PUT RIGHTS
The modification of the terms of the LYONs by us upon a Tax Event as
described in "Description of LYONs--Optional Conversion to Semiannual Coupon
Note Upon Tax Event," could alter the timing and the amount of income
recognition by the holders with respect to periods after the option exercise
date. Although not free from doubt, if we provide holders with additional
rights to require us to purchase the LYONs on additional purchase dates as
described under "Description of LYONs--Purchase of LYONs by Amgen Inc.," the
provision of such additional put rights may, in certain limited circumstances,
result in a "deemed exchange" of the LYONs for new securities of ours for
United States federal income tax purposes. In such event, among other things,
holders may be required to recognize gain or loss and we may be required to
determine a new comparable yield and projected payment schedule. U.S. holders
should consult their own tax advisors regarding the tax consequences with
respect to such deemed exchange, if any.
41
SELLING SECURITY HOLDERS
The LYONs were originally issued by us to Merrill Lynch in a transaction
exempt from the registration requirements of the Securities Act and were
immediately resold by Merrill Lynch in reliance on Rule 144A to persons who
represented to Merrill Lynch that they were qualified institutional buyers.
Each institution that purchased the LYONs from Merrill Lynch and who has
provided us with a questionnaire setting forth the information specified below
and that selling security holder's transferees, pledgees, donees and successors
(collectively, the "selling security holders"), may from time to time offer and
sell pursuant to this prospectus or a supplement hereto any or all of the LYONs
held by that selling security holder and common stock into which the LYONs are
convertible.
The following table sets forth information as of May 21, 2002, with
respect to the selling security holders and the principal amounts of LYONs
beneficially owned by each selling security holder that may be offered under
this prospectus. This information is based on information provided by or on
behalf of the selling security holders pursuant to the questionnaires referred
to above. No holder of the LYONs may sell the LYONs or shares without
furnishing to us a questionnaire setting forth the information specified below.
However, as of the date of this prospectus, not every holder has provided to us
a questionnaire. Therefore, the heading "Other" in the "Name" column below
represents the LYONs and shares held by holders who have not yet returned to us
their questionnaire.
The selling security holders may offer all, some or none of the LYONs or
common stock into which the LYONs are convertible. In addition, the selling
security holders 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 LYONs in transactions exempt from the registration requirements
of the Securities Act. No selling security holder beneficially owns one percent
or more of our common stock assuming conversion of the selling security
holders' LYONs.
Information concerning the selling security holders 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 conversion rate and,
therefore, the number of shares of common stock issuable upon conversion of the
LYONs, is subject to adjustment under certain circumstances.
COMMON
PRINCIPAL LYONS STOCK
AMOUNT OF SHARES OF OWNED OWNED
LYONS COMMON AFTER AFTER
BENEFICIALLY STOCK COMMON COMPLETION COMPLETION
OWNED AND BENEFICIALLY STOCK OF OF MATERIAL
NAME OFFERED OWNED OFFERED(1) OFFERING(2) OFFERING(2) RELATIONSHIP(3)
---- ------------ ------------ ---------- ----------- ----------- ---------------
Aid Association for Lutherans, as
successor to Lutheran
Brothershood................... 11,000,000 97,461.1 97,461.1 -0- -- None
Akela Capital Master Fund, LLC... 2,000,000 17,720.2 17,720.2 -0- -- None
Alpha U.S. Sub Fund VIII, LLC.... 2,300,000 20,378.2 20,378.2 -0- -- None
Amerisure Mutual Insurance
Company........................ 975,000 8,638.6 8,638.6 -0- -- None
Argent Classic Convertible
Arbitrage Fund (Bermuda)
Ltd............................ 6,000,000 53,160.6 53,160.6 -0- -- None
Argent Classic Convertible
Arbitrage Fund L.P............. 4,500,000 39,870.5 39,870.5 -0- -- None
Argent LowLev Convertible
Arbitrage Fund Ltd............. 11,000,000 97,461.1 97,461.1 -0- -- None
Aristeia International Limited... 26,950,000 238,779.7 238,779.7 -0- -- None
Aristeia Trading LLC............. 8,050,000 71,323.8 71,323.8 -0- -- None
42
COMMON
PRINCIPAL LYONS STOCK
AMOUNT OF SHARES OF OWNED OWNED
LYONS COMMON AFTER AFTER
BENEFICIALLY STOCK COMMON COMPLETION COMPLETION
OWNED AND BENEFICIALLY STOCK OF OF MATERIAL
NAME OFFERED OWNED OFFERED(1) OFFERING(2) OFFERING(2) RELATIONSHIP(3)
---- ------------ ------------ ----------- ----------- ----------- ---------------
Associated Electric & Gas
Insurance Services
Limited.................. 3,000,000 26,580.3 26,580.3 -0- -- None
Banc of America Securities
LLC...................... 6,281,000 55,650.3 55,650.3 -0- -- None
Bank Austria Cayman
Islands, Ltd............. 4,500,000 39,870.5 39,870.5 -0- -- None
Bank of America Pension
Plan..................... 2,500,000 22,150.3 22,150.3 -0- -- None
Bear, Stearns & Co. Inc.... 9,500,000 84,171.0 84,171.0 -0- -- None
Black Diamond Capital I,
Ltd...................... 2,432,000 21,547.8 21,547.8 -0- -- None
Black Diamond Convertible
Offshore LDC............. 15,296,000 135,524.1 135,524.1 -0- -- None
Black Diamond Offshore
Ltd...................... 8,647,000 76,613.3 76,613.3 -0- -- None
Canyon Capital Arbitrage
Masterfund, Ltd.......... 3,750,000 33,225.4 33,225.4 -0- -- None
Canyon Mac 18, Ltd.
(RMF).................... 625,000 5,537.6 5,537.6 -0- -- None
Canyon Value Realization
Fund (Cayman), Ltd....... 5,625,000 49,838.1 49,838.1 -0- -- None
Canyon Value Realization
Fund, L.P................ 2,500,000 22,150.3 22,150.3 -0- -- None
CDC Ixis Paris............. 15,000,000 132,901.5 132,901.5 -0- -- None
Cobra Master Fund, Ltd..... 500,000 4,430.1 4,430.1 -0- -- None
Continental Assurance
Company on behalf of its
Separate Account E....... 7,200,000 63,792.7 63,792.7 -0- -- None
Continental Casualty
Company.................. 44,800,000 396,932.5 396,932.5 -0- -- None
Credit Lyonnais SEC USA.... 20,000,000 177,202.0 177,202.0 -0- -- None
Deephaven Domestic
Convertible Trading Ltd.. 165,850,000 1,469,447.6 1,469,447.6 -0- -- None
DKR Fixed Income Holding
Fund Ltd................. 3,000,000 26,580.3 26,580.3 -0- -- None
Double Black Diamond
Offshore LDC............. 50,469,000 447,160.4 447,160.4 -0- -- None
First Union Securities Inc. 20,000,000 177,202.0 177,202.0 -0- -- None
Gain Offshore Master Fund
Ltd...................... 6,450,000 57,147.6 57,147.6 -0- -- None
Global Bermuda Limited
Partnership.............. 4,000,000 35,440.4 35,440.4 -0- -- None
Goldman Sachs and
Company.................. 745,000 6,600.8 6,600.8 -0- -- None
HBK Master Fund, L.P....... 17,000,000 172,821.7 150,621.7 -0- 22,200 None
43
COMMON
PRINCIPAL LYONS STOCK
AMOUNT OF SHARES OF OWNED OWNED
LYONS COMMON AFTER AFTER
BENEFICIALLY STOCK COMMON COMPLETION COMPLETION
OWNED AND BENEFICIALLY STOCK OF OF MATERIAL
NAME OFFERED OWNED OFFERED(1) OFFERING(2) OFFERING(2) RELATIONSHIP(3)
---- ------------ ------------ ----------- ----------- ----------- ---------------
Highbridge International
LLC...................... 148,150,000 1,312,623.8 1,312,623.8 -0- -- None
ING VP Convertible Fund.... 40,000 354.4 354.4 -0- -- None
ING Convertible Fund....... 3,960,000 35,086.0 35,086.0 -0- -- None
Jersey (IMA) Ltd........... 3,000,000 26,580.3 26,580.3 -0- -- None
Lakeshore International,
Ltd...................... 16,000,000 141,761.6 141,761.6 -0- -- None
Liberty View Fund LLC...... 2,000,000 17,720.2 17,720.2 -0- -- None
Liberty View Funds L.P..... 9,000,000 79,740.9 79,740.9 -0- -- None
Liberty View Global
Volatility Fund.......... 26,000,000 230,362.6 230,362.6 -0- -- None
Lyxor Master Fund.......... 1,550,000 13,733.2 13,733.2 -0- -- None
Lyxor Master Fund Ref:
Argent/LowLev CB......... 3,000,000 26,580.3 26,580.3 -0- -- None
Merrill Lynch International
Limited.................. 6,000,000 232,719.6 53,160.6 -0- 179,559 None
Merrill Lynch, Pierce,
Fenner & Smith, Inc...... 77,983,000 690,937.2 690,937.2 -0- -- None
Nicholas Applegate
Investment Grade
Convertible.............. 37,000 327.8 327.8 -0- -- None
NMS Services (Cayman)
Inc...................... 50,000,000 443,005.0 443,005.0 -0- -- None
Peoples Benefit Life
Insurance Company
Teamsters................ 7,500,000 66,450.8 66,450.8 -0- -- None
Ramius Capital Group....... 500,000 4,430.1 4,430.1 -0- -- None
RCG Halifax Master Fund,
Ltd...................... 1,500,000 13,290.2 13,290.2 -0- -- None
RCG Latitude Master Fund,
Ltd...................... 2,500,000 22,150.3 22,150.3 -0- -- None
RCG Multi Strategy, LP..... 3,000,000 26,580.3 26,580.3 -0- -- None
SAC Capital Associates,
LLC...................... 22,500,000 199,352.3 199,352.3 -0- -- None
St. Albans Partners Ltd.... 5,000,000 44,300.5 44,300.5 -0- -- None
State of Mississippi Health
Care Trust Fund.......... 825,000 7,309.6 7,309.6 -0- -- None
Susquehanna Capital Group.. 5,000,000 44,300.5 44,300.5 -0- -- None
44
COMMON
PRINCIPAL LYONS STOCK
AMOUNT OF SHARES OF OWNED OWNED
LYONS COMMON AFTER AFTER
BENEFICIALLY STOCK COMMON COMPLETION COMPLETION
OWNED AND BENEFICIALLY STOCK OF OF MATERIAL
NAME OFFERED OWNED OFFERED(1) OFFERING(2) OFFERING(2) RELATIONSHIP(3)
---- ------------- ------------ ------------ ----------- ----------- ---------------
Teachers Insurance & Annuity Association..... 16,000,000 141,761.6 141,761.6 -0- -- None
Tribecca Investments, LLC.................... 60,000,000 531,606.0 531,606.0 -0- -- None
UBS O'Connor LLC F/B/O
O'Connor Global Convertible Portfolio...... 750,000 6,645.1 6,645.1 -0- -- None
UBS O'Connor LLC F/B/O UBS Global Equity
Arbitrage Master Ltd....................... 35,000,000 310,103.5 310,103.5 -0- -- None
UFJ Investments Asia Ltd..................... 25,000,000 221,502.5 221,502.5 -0- -- None
Wachovia Bank National Association........... 20,000,000 177,202.0 177,202.0 -0- -- None
Wachovia Securities International Ltd........ 31,000,000 274,663.1 274,663.1 -0- -- None
White River Securities LLC................... 9,500,000 84,171.0 84,171.0 -0- -- None
Worldwide Transactions Ltd................... 2,156,000 19,102.4 19,102.4 -0- -- None
Yield Strategies Fund I, L.P................. 5,000,000 44,300.5 44,300.5 -0- -- None
Yield Strategies Fund II, L.P................ 5,000,000 44,300.5 44,300.5 -0- -- None
Other........................................ 2,853,104,000 25,278,785.9 25,278,785.9 -0- -- None
- --------
(1)Represents shares of common stock issuable upon conversion of LYONs that are
beneficially owned and offered by the selling security holder.
(2)Assumes that all of the LYONs and/or all of the common stock into which the
LYONs are convertible are sold.
(3)Includes any position, office or other material relationship which the
selling security holder has had within the past three years with Amgen or
any of its predecessors or affiliates.
45
PLAN OF DISTRIBUTION
The LYONs and the common stock are being registered to permit resale of
these securities by the selling security holders from time to time after the
date of this prospectus. We have agreed, among other things, to bear the
expenses (other than underwriting discounts and selling commissions) incurred
in connection with the registration and sale of the LYONs and the common stock
covered by this prospectus. We will not receive any of the proceeds from the
offering of the LYONs or the common stock by the selling security holders.
The selling security holders and their successors, including their
transferees, pledgees or donees or their successors, may sell the LYONs and the
common stock into which the LYONs are convertible directly to purchasers or
through underwriters, broker-dealers or agents, who may receive compensation in
the form of discounts, concessions or commissions from the selling security
holders or the purchasers. These discounts, concessions or commissions as to
any particular underwriter, broker-dealer or agent may be in excess of those
customary in the types of transactions involved.
The LYONs and the common stock into which the LYONs are convertible may
be sold in one or more transactions at fixed prices, at prevailing market
prices, at prices related to the prevailing market prices, at varying prices
determined at the time of sale, or at negotiated prices. These sales may be
effected in cross, block or other types of transactions:
. on any national securities exchange or U.S. inter-dealer system of a
registered national securities association on which the LYONs or the
common stock may be listed or quoted at the time of sale;
. in the over-the-counter market;
. in transactions otherwise than on these exchanges or systems or in
the over-the-counter market;
. through the writing of options, whether the options are listed on an
options exchange or otherwise;
. through the settlement of short sales; or
. through any other legally available means.
Our common stock is listed for trading on the Nasdaq National Market
under the symbol "AMGN."
In connection with the sale of the LYONs and the common stock into which
the LYONs are convertible, the selling security holders may enter into hedging
transactions with broker-dealers or other financial institutions, which may in
turn engage in short sales of the LYONs or the common stock into which the
LYONs are convertible in the course of hedging the positions they assume. The
selling security holders may also sell the LYONs or the common stock into which
the LYONs are convertible short and deliver these securities to close out their
short positions, or loan or pledge the LYONs or the common stock into which the
LYONs are convertible to broker-dealers that in turn may sell these securities.
The aggregate proceeds to the selling security holders from the sale of
the LYONs or common stock into which the LYONs are convertible offered by them
will be the purchase price of the LYONs or common stock less discounts and
commissions, if any. Each of the selling security holders reserves the right to
accept and, together with their agents from time to time, to reject, in whole
or in part, any proposed purchase of LYONs or common stock to be made directly
or through agents. We will not receive any of the proceeds from the sale of the
LYONs or the common stock issuable upon conversion of the LYONs.
In order to comply with the securities laws of some states, if
applicable, the LYONs and common stock into which the LYONs are convertible may
be sold in these jurisdictions only through registered or licensed brokers or
dealers. In addition, in some states the LYONs and common stock into which the
LYONs are convertible may not be sold unless they have been registered or
qualified for sale or an exemption from registration or qualification
requirements is available and is complied with.
46
The selling security holders and any underwriters, broker-dealers or
agents that participate in the sale of the LYONs and common stock into which
the LYONs are convertible may be "underwriters" within the meaning of Section
2(11) of the Securities Act. Any discounts, commissions, concessions or profit
they earn on any resale of the shares may be underwriting discounts and
commissions under the Securities Act. Selling security holders who are
"underwriters" within the meaning of Section 2(11) of the Securities Act will
be subject to the prospectus delivery requirements of the Securities Act. The
selling security holders have acknowledged that they understand their
obligations to comply with the provisions of the Exchange Act and the rules
thereunder relating to stock manipulation, particularly Regulation M.
In addition, any securities 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.
To the extent required, the specific LYONs or common stock to be sold,
the names of the selling security holders, the respective purchase prices and
public offering prices, the names of any agent, dealer or underwriter, and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement of which this prospectus
is a part.
We entered into a registration rights agreement for the benefit of
holders of the LYONs to register their LYONs and common stock under applicable
federal and state securities laws under specific circumstances and at specific
times. The registration rights agreement provides for cross-indemnification of
the selling security holders and us and their and our respective directors,
officers and controlling persons against specific liabilities in connection
with the offer and sale of the LYONs and the common stock, including
liabilities under the Securities Act.
VALIDITY OF THE SECURITIES
The validity of the LYONs and shares of common stock issuable upon
conversion of the LYONs has been passed upon for us by Latham & Watkins, Los
Angeles, California. Certain matters relating to United States federal taxation
have been passed upon for us by Shearman & Sterling, Washington, D.C., our
special tax counsel.
EXPERTS
The consolidated financial statements of Amgen Inc. as of December 31,
2000 and 2001, and for each of the fiscal years in the three-year period ended
December 31, 2001, included in Amgen Inc.'s annual report on Form 10-K for the
fiscal year ended December 31, 2001, filed with the SEC and incorporated by
reference in this prospectus, have been audited by Ernst & Young, independent
auditors, as set forth in their report and incorporated herein by reference in
this prospectus. Such consolidated financial statements are incorporated herein
by reference in reliance upon such report given on the authority of such firm
as experts in accounting and auditing.
The consolidated financial statements of Immunex Corporation as of
December 31, 2000 and 2001, and for each of the fiscal years in the three-year
period ended December 31, 2001, included in our Current Report on Form 8-K
dated May 16, 2002, filed with the SEC and incorporated by reference in this
prospectus, have been audited by Ernst & Young, independent auditors, as set
forth in their report included therein incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
47
[LOGO] AMGEN
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by the registrant in connection with the
sale of the securities being registered. All the amounts shown are estimates
except for the registration fee.
SEC Registration Fee............... $249,620
Legal Fees and Expenses............ 35,000
Accounting Fees and Expenses....... 50,000
Printing Expenses.................. 8,000
Miscellaneous Expenses............. 10,000
--------
Total....................... $352,620
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law, the Restated
Certificate of Incorporation, as amended, and the Amended and Restated Bylaws
of the Company contain provisions covering indemnification of corporate
directors and officers against certain liabilities and expenses incurred as a
result of proceedings involving such persons in their capacities as directors
and officers, including proceedings under the Securities Act of 1933, as
amended (the "Securities Act") and the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
The Registrant has authorized the entering into of indemnity contracts
and provides indemnity insurance pursuant to which officers and directors are
indemnified or insured against liability or loss under certain circumstances
which may include liability or related loss under the Securities Act and the
Exchange Act.
ITEM 16. EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- -----------
2.1 Agreement and Plan of Merger, dated as of December 16, 2001, by and among Amgen Inc., AMS
Acquisition Inc., and Immunex Corporation.(1)
4.1 Form of stock certificate for the common stock, par value $.0001, of the Company.(2)
4.2 Amended and Restated Rights Agreement, dated as of December 12, 2000 between Amgen Inc. and
American Stock Transfer & Trust Company, as Rights Agent.(3)
4.3 Stockholders' Rights Agreement, dated as of December 16, 2001, by and among Amgen Inc.,
American Home Products Corporation, MDP Holdings, Inc. and Lederle Parenterals, Inc.(4)
4.4 Indenture, dated as of March 1, 2002, by and between the Company and LaSalle Bank National
Association with respect to $3.95 billion aggregate principal amount at maturity of Liquid Yield
Option(TM) Notes due 2032.(5)
4.5 Form of Liquid Yield Option(TM) Note due 2032.(5)
4.6 Registration Rights Agreement, dated as of March 1, 2002, by and between the Company and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.(5)
5.1 Opinion of Latham & Watkins as to the legality of the securities being offered.(6)
8.1 Opinion of Shearman & Sterling as to the tax consequences of the securities being offered.(6)
II-1
EXHIBIT
NO. DESCRIPTION
- ------- -----------
12.1 Statement regarding Computation of Ratio of Earnings to Fixed Charges.(6)
23.1 Consent of Ernst & Young LLP, Independent Auditors.(6)
23.2 Consent of Ernst & Young LLP, Independent Auditors (Immunex Corporation).(6)
23.3 Consent of Latham & Watkins (included in exhibit 5.1).
23.4 Consent of Shearman & Sterling (included in exhibit 8.1).
24.1 Power of Attorney (included on signature page).
25.1 Statement of Eligibility and Qualification on Form T-1 of LaSalle Bank National Association, as
trustee, of the Company's Liquid Yield Option(TM) Notes due 2032.(6)
- --------
(1) Filed as an exhibit to the Form 8-K Current Report dated December 16, 2001
on December 17, 2001 and incorporated herein by reference.
(2) Filed as an exhibit to the Form 10-Q for the quarter ended March 31, 1997
on May 13, 1997 and incorporated herein by reference.
(3) Filed as an exhibit to the Form 8-K Current Report dated December 13, 2000
on December 18, 2000 and incorporated herein by reference.
(4) Filed as an exhibit to the Form S-4 Registration Statement dated January
31, 2002 and incorporated herein by reference.
(5) Filed as an exhibit to the Form 8-K Current Report dated and filed on March
1, 2002 and incorporated herein by reference.
(6) Filed herewith.
ITEM 17. UNDERTAKINGS
(a) 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, as amended (the
"Securities Act");
(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 and 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;
(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 paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the Registration Statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act, that are incorporated by reference in the Registration Statement.
II-2
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(b) The undersigned registrant hereby undertakes, that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) 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.
(c) 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 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 and will be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Thousand Oaks, State of California, on the 22nd
day of May, 2002.
AMGEN INC.
By: /s/ KEVIN W. SHARER
__________________________________
Kevin W. Sharer
CHAIRMAN OF THE BOARD, CHIEF
EXECUTIVE
OFFICER AND PRESIDENT
S-1
POWER OF ATTORNEY
We, the undersigned officers and directors of Amgen Inc., and each of us,
do hereby constitute and appoint each and any of Kevin W. Sharer, Richard D.
Nanula and Steven M. Odre, our true and lawful attorney and agent, with full
power of substitution and resubstitution, to do any and all acts and things in
our name and behalf in any and all capacities and to execute any and all
instruments for us in our names, in connection with this Registration Statement
or any registration statement for the same offering that is to be effective
upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as
amended, and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, including
specifically, but without limitation, power and authority to sign for us or any
of us in our names in the capacities indicated below, any and all amendments
(including post-effective amendments) hereto; and we hereby ratify and confirm
all that said attorney and agent, or his substitute, shall do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ KEVIN W. SHARER Chairman, Chief Executive Officer, May 22, 2002
_____________________________ President and Director
KEVIN W. SHARER
/s/ RICHARD D. NANULA Executive Vice President, Finance, May 22, 2002
_____________________________ Strategy and Communication, and
RICHARD D. NANULA Chief Financial Officer
/s/ BARRY D. SCHEHR Vice President, Financial May 22, 2002
_____________________________ Operations, and Chief Accounting
BARRY D. SCHEHR Officer
/s/ DAVID BALTIMORE Director May 22, 2002
_____________________________
DAVID BALTIMORE
_____________________________ Director
FRANK J. BIONDI, JR.
/s/ WILLIAM K. BOWES, JR. Director May 22, 2002
_____________________________
WILLIAM K. BOWES, JR.
/s/ JERRY D. CHOATE Director May 22, 2002
_____________________________
JERRY D. CHOATE
/s/ FREDERICK W. GLUCK Director May 22, 2002
_____________________________
FREDERICK W. GLUCK
/s/ FRANKLIN P. JOHNSON, JR. Director May 22, 2002
_____________________________
FRANKLIN P. JOHNSON, JR.
/s/ STEVEN LAZARUS Director May 22, 2002
_____________________________
STEVEN LAZARUS
/s/ GILBERT S. OMENN Director May 22, 2002
_____________________________
GILBERT S. OMENN
S-2
SIGNATURE TITLE DATE
--------- ----- ----
/s/ JUDITH C. PELHAM Director May 22, 2002
_____________________
JUDITH C. PELHAM
/s/ J. PAUL REASON Director May 22, 2002
_____________________
J. PAUL REASON
/s/ DONALD B. RICE Director May 22, 2002
_____________________
DONALD B. RICE
_____________________ Director
PATRICIA C. SUELTZ
S-3
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- -----------
2.1 Agreement and Plan of Merger, dated as of December 16, 2001, by and among Amgen Inc., AMS
Acquisition Inc., and Immunex Corporation.(1)
4.1 Form of stock certificate for the common stock, par value $.0001, of the Company.(2)
4.2 Amended and Restated Rights Agreement, dated as of December 12, 2000 between Amgen Inc. and
American Stock Transfer & Trust Company, as Rights Agent.(3)
4.3 Stockholders' Rights Agreement, dated as of December 16, 2001, by and among Amgen Inc.,
American Home Products Corporation, MDP Holdings, Inc. and Lederle Parenterals, Inc.(4)
4.4 Indenture, dated as of March 1, 2002, by and between the Company and LaSalle Bank National
Association with respect to $3.95 billion aggregate principal amount at maturity of Liquid Yield
Option(TM) Notes due 2032.(5)
4.5 Form of Liquid Yield Option(TM) Note due 2032.(5)
4.6 Registration Rights Agreement, dated as of March 1, 2002, by and between the Company and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.(5)
5.1 Opinion of Latham & Watkins as to the legality of the securities being offered.(6)
8.1 Opinion of Shearman & Sterling as to the tax consequences of the securities being offered.(6)
12.1 Statement regarding Computation of Ratio of Earnings to Fixed Charges.(6)
23.1 Consent of Ernst & Young LLP, Independent Auditors.(6)
23.2 Consent of Ernst & Young LLP, Independent Auditors (Immunex Corporation).(6)
23.3 Consent of Latham & Watkins (included in exhibit 5.1).
23.4 Consent of Shearman & Sterling (included in exhibit 8.1).
24.1 Power of Attorney (included on signature page).
25.1 Statement of Eligibility and Qualification on Form T-1 of LaSalle Bank National Association, as
trustee, of the Company's Liquid Yield Option(TM) Notes due 2032.(6)
- --------
(1)Filed as an exhibit to the Form 8-K Current Report dated December 16, 2001
on December 17, 2001 and incorporated herein by reference.
(2)Filed as an exhibit to the Form 10-Q for the quarter ended March 31, 1997 on
May 13, 1997 and incorporated herein by reference.
(3)Filed as an exhibit to the Form 8-K Current Report dated December 13, 2000
on December 18, 2000 and incorporated herein by reference.
(4)Filed as an exhibit to the Form S-4 Registration Statement dated January 31,
2002 and incorporated herein by reference.
(5)Filed as an exhibit to the Form 8-K Current Report dated and filed on March
1, 2002 and incorporated herein by reference.
(6)Filed herewith.
EXHIBIT 5.1
[Latham & Watkins Letterhead]
May 22, 2002
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, California 91320-1789
Re: $3,950,000,000 Aggregate Principal Amount at Maturity of Liquid Yield
Option(TM) Notes due 2032 of Amgen Inc.
Ladies and Gentlemen:
In connection with the registration of $3,950,000,000 aggregate principal
amount at maturity of Liquid Yield Option(TM) Notes due 2032 (the "LYONs") and
the shares of common stock initially issuable upon conversion of the LYONs (the
"Common Stock" and, together with the LYONs, the "Securities") by Amgen Inc., a
Delaware corporation (the "Company"), under the Securities Act of 1933, as
amended (the "Act"), on Form S-3 filed with the Securities and Exchange
Commission to be filed on May 22, 2002 (the "Registration Statement"), you have
requested our opinion with respect to the matters set forth below.
In our capacity as your special counsel in connection with such
registration, we are familiar with the proceedings taken and proposed to be
taken by the Company in connection with the authorization and issuance of the
Securities, and for the purposes of this opinion, have assumed such proceedings
will be timely completed in the manner presently proposed. In addition, we have
made such legal and factual examinations and inquiries, including an
examination of originals or copies certified or otherwise identified to our
satisfaction of such documents, corporate records and instruments, as we have
deemed necessary or appropriate for purposes of this opinion.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies.
We are opining herein as to the effect on the subject transaction only of
the internal laws of the State of New York and the General Corporation Law of
the State of Delaware, and we express no opinion with respect to the
applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or, in the case of Delaware any other laws, or as to any matters
of municipal law or the laws of any local agencies within any state.
Capitalized terms used herein without definition have the meanings
ascribed to them in the Registration Statement.
May 22, 2002
Page 2
Subject to the foregoing and the other matters set forth herein, it is
our opinion that as of the date hereof:
1. The LYONs have been duly authorized by all necessary
corporate action of the Company, and constitute legally valid and
binding obligations of the Company, enforceable against the
Company in accordance with their terms.
2. The shares of Common Stock issuable upon conversion of
the LYONs have been duly authorized, and when issued upon
conversion of the LYONs in accordance with the terms of the
Indenture, will be validly issued, fully paid and nonassessable.
The opinions rendered in paragraph 1 relating to the enforceability of
the LYONs are subject to the following exceptions, limitations and
qualifications: (i) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights and remedies of creditors and (ii) the effect of general
principles of equity, whether enforcement is considered in a proceeding in
equity or law, and the discretion of the court before which any proceeding
therefor may be brought.
In addition, we express no opinion with respect to whether acceleration
of the LYONs may affect the collectibility of that portion of the stated
principal amount thereof that might be determined to constitute unearned
interest thereon.
We have not been requested to express, and with your knowledge and
consent, do not render any opinion as to the applicability to the obligations
of the Company under the Indenture and the LYONs under the Indenture of Section
548 of the United States Bankruptcy Code or applicable state law (including,
without limitation, Article 10 of the New York Debtor and Creditor Law)
relating to fraudulent transfers and obligations.
To the extent that the obligations of the Company under the Indenture may
be dependent upon such matters, we assume for purposes of this opinion that the
Trustee is duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization; that the Trustee is duly qualified to
engage in the activities contemplated by the Indenture; that the Indenture has
been duly authorized, executed and delivered by the Trustee and constitutes the
legally valid, binding and enforceable obligation of the Trustee enforceable
against the Trustee in accordance with its terms; that the Trustee is in
compliance, generally and with respect to acting as a trustee under the
Indenture, with all applicable laws and regulations; and that the Trustee has
the requisite organizational and legal power and authority to perform its
obligations under the Indenture.
We consent to your filing this opinion as an exhibit to the Registration
Statement and to the reference to our firm contained under the heading
"Validity of the Securities."
Very truly yours,
/s/ LATHAM & WATKINS
EXHIBIT 8.1
[SHEARMAN & STERLING LETTERHEAD]
May 22, 2002
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, CA 91320-1799
Liquid Yield Option(TM) Notes Due 2032
Ladies and Gentlemen:
We have acted as special tax counsel for Amgen Inc. (the "Company") in
connection with the preparation and filing of a Registration Statement on Form
S-3 (the "Registration Statement") pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), relating to the registration for resale under
the Securities Act of $2,821,208,500 aggregate issue price of the Company's
Liquid Yield Option(TM) Notes due 2032 (the "LYONs") which may be converted in
certain cases into shares of the Company's common stock. The LYONs were issued
under an Indenture, dated as of March 1, 2002 (the "Indenture"), between the
Company and LaSalle Bank National Association, as indenture trustee.
In preparing this opinion, we have examined and relied on such documents
as we have deemed appropriate, including INTER ALIA, the Registration
Statement, the Indenture, and the originals or copies, certified or otherwise
identified to our satisfaction, of all such corporate records of the Company
and such other instruments, certificates and other documents of public
officials and such other persons, and we have made such investigations of law
as we have deemed appropriate as a basis for the opinion expressed below.
Based on (i) the foregoing; (ii) a sensitivity analysis prepared by
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") showing that,
under reasonable assumptions regarding future growth rates in the market
trading price of the LYONs, the dividend yield on the Company's common stock
and other relevant factors, contingent interest would become payable over the
term of the LYONs; and (iii) on certain estimates made by MLPF&S regarding the
present value of these contingent interest payments, we are of the opinion that:
1. the LYONs will be treated as indebtedness for United States federal
income tax purposes;
2. the LYONs will be subject to the regulations governing contingent
payment debt instruments contained in section 1.1275-4(b) of the Treasury
Regulations; and
3. the term "comparable yield" means the annual yield the Company would
pay, as of the initial issue date, on a fixed-rate, nonconvertible debt
security, with no contingent payments, but with terms and conditions otherwise
comparable to those of the LYONs.
Depending on the identity of the persons to whom the LYONs were marketed or
sold, there may be a presumption that the comparable yield is the applicable
federal rate based on the overall maturity of the LYONs. This presumption may
only be overcome with clear and convincing evidence that the comparable yield
should be some yield other than the applicable federal rate.
We confirm that the statements in the Registration Statement under the
captions "Summary--The Offering--Tax Original Issue Discount" and "Certain
United States Federal Income Tax Considerations," insofar as such statements
constitute a summary of the legal matters referred to therein, have been
reviewed by us and are correct in all material respects.
- --------
(TM) Trademark of Merrill Lynch & Co., Inc.
Amgen Inc. May 22, 2002
2
We express no opinions other than those expressed herein. We hereby
consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of our name under the heading "Legal Matters" in the
Registration Statement. In giving this consent, we do not thereby admit that we
are included in the category of persons whose consent is required under Section
7 of the Securities Act or the rules and regulations promulgated thereunder.
Very truly yours,
/s/ SHEARMAN & STERLING
EXHIBIT 12.1
AMGEN INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
YEAR ENDED DECEMBER 31, THREE MONTHS
- - -------------------------------------------- ENDED MARCH 31,
1997 1998 1999 2000 2001 2002
------ -------- -------- -------- -------- ---------------
COMPUTATION OF EARNINGS:
Income before taxes................. $861.4 $1,224.4 $1,566.2 $1,674.3 $1,686.3 $494.1
Net interest expense................ 3.6 10.0 15.2 15.9 13.6 7.0
Interest portion of operating lease
expense........................... 5.0 6.5 7.9 8.5 10.3 2.6
Equity in (earnings) losses of
50%-or-less owned companies
accounted for under the equity
method............................ (9.0) 2.5 (17.4) 7.8 (16.1) (8.7)
------ -------- -------- -------- -------- ------
Earnings........................ $861.0 $1,243.4 $1,571.9 $1,706.5 $1,694.1 $495.0
------ -------- -------- -------- -------- ------
COMPUTATION OF FIXED CHARGES:
Net interest expense................ $ 3.6 $ 10.0 $ 15.2 $ 15.9 $ 13.6 $ 7.0
Capitalized interest................ 10.5 19.2 11.6 12.3 12.7 1.6
Interest portion of operating lease
expense........................... 5.0 6.5 7.9 8.5 10.3 2.6
------ -------- -------- -------- -------- ------
Fixed Charges................... $ 19.1 $ 35.7 $ 34.7 $ 36.7 $ 36.6 $ 11.2
------ -------- -------- -------- -------- ------
RATIO OF EARNINGS TO FIXED CHARGES..... 45.1 34.8 45.3 46.5 46.3 44.2
====== ======== ======== ======== ======== ======
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Amgen Inc. for
the registration of $3.95 billion zero coupon senior Liquid Yield Option Notes
due 2032 (the "LYONS") and the registration of 34,997,395 shares of its common
stock issuable upon conversion of the LYONS and to the incorporation by
reference therein of our report dated January, 22, 2002, with respect to the
consolidated financial statements and schedule of Amgen Inc. included in its
Annual Report (Form 10-K) for the year ended December 31, 2001, filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Los Angeles, California
May 21, 2002
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Amgen Inc. for
the registration of $3.95 billion zero coupon senior Liquid Yield Option Notes
due 2032 (the "LYONS") and the registration of 34,997,395 shares of its common
stock issuable upon conversion of the LYONS and to the incorporation by
reference of our report dated January 22, 2002 (except for Note 16 as to which
the date is March 8, 2002), with respect to the consolidated financial
statements of Immunex Corporation included in the Current Report (Form 8-K)
dated May 16, 2002 of Amgen Inc., filed with Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Seattle, Washington
May 21, 2002
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
----------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(B)(2)
LASALLE BANK NATIONAL ASSOCIATION
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
36-0884183
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
135 SOUTH LASALLE STREET, CHICAGO, ILLINOIS 60603
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------
WILLIE J. MILLER, JR.
GROUP SENIOR VICE PRESIDENT
CHIEF LEGAL OFFICER AND SECRETARY
TELEPHONE: (312) 904-2018
135 SOUTH LASALLE STREET, SUITE 925
CHICAGO, ILLINOIS 60603
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------
AMGEN INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-3540776
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
ONE AMGEN CENTER DRIVE 91320-1789
THOUSAND OAKS, CALIFORNIA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------
LIQUID YIELD OPTION NOTES
(TITLE OF THE INDENTURE SECURITIES)
ITEM 1. GENERAL INFORMATION*
Furnish the following information as to the trustee:
(a)Name and address of each examining or supervising authority to which
it is subject.
1. Comptroller of the Currency, Washington D.C.
2. Federal Deposit Insurance Corporation, Washington, D.C.
3. The Board of Governors of the Federal Reserve Systems, Washington,
D.C.
(b)Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
NotApplicable
- --------
* Pursuant to General Instruction B, the trustee has responded only to items
1, 2 and 16 of this form since to the best knowledge of the trustee the
obligor is not in default under any indenture under which the trustee is a
trustee.
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this statement of eligibility
and qualification.
1. A copy of the Articles of Association of LaSalle Bank National
Association now in effect. (incorporated herein by reference to
Exhibit 1 filed with Form T-1 filed with the Current Report on Form
8-K, dated June 29, 2000, in File No. 333-61691).
2. A copy of the certificate of authority to commence business
(incorporated herein by reference to Exhibit 2 filed with Form T-1
filed with the Current Report on Form 8-K, dated June 29, 2000, in
File No. 333-61691).
3. A copy of the authorization to exercise corporate trust powers
(incorporated herein by reference to Exhibit 3 filed with Form T-1
filed with the Current Report on Form 8-K, dated June 29, 2000, in
File No. 333-61691).
4. A copy of the existing By-Laws of LaSalle Bank National Association
(incorporated herein by reference to Exhibit 4 filed with Form T-1
filed with the Current Report on Form 8-K, dated June 29, 2000, in
File No. 333-61691).
5. Not applicable.
6. The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939 (incorporated herein by reference to Exhibit 6
filed with Form T-1 filed with the Current Report on Form 8-K, dated
June 29, 2000, in File No. 333-61691).
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, LaSalle Bank National Association, a corporation organized and
existing under the laws of the United States of America, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Chicago, State of Illinois, on
the 15th day of May, 2002.
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ JOHN W. PORTER
-----------------------------
JOHN W. PORTER
VICE PRESIDENT
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND
STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 2002
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------
ASSETS
1. RCFD
Cash and balances due from depository institutions (from Schedule RC-A): ----
a. Noninterest-bearing balances and currency and coin (1) 0081 1,333,143 1.a
b. Interest-bearing balances (2) 0071 78,729 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 395,373 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 18,927,357 2.b
3. Federal funds sold and securities purchased under agreements to resell
a. Federal funds sold in domestic offices B987 180,465 3.a
b. Securities purchased under agreements to resell (3) B989 84,754 3.b
4. Loans and lease financing receivables (from schedule RC-C)
a. Loans and leases held for sale 5369 199,270 4.a
b. Loans and leases, net of unearned income B528 31,674,538
c. LESS: Allowance for loan and lease losses 3123 446,500 4.c
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) B529 31,228,038 4.d
5. Trading assets (from Schedule RC-D) 3545 482,147 5.
6. Premises and fixed assets (including capitalized leases) 2145 263,683 6.
7. Other real estate owned (from Schedule RC-M) 2150 14,407 7.
8. Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-M) 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding 2155 10,088 9.
10. Intangible assets (from Schedule RC-M)
a. Goodwill 3163 181,613 10.a
b. Other Intangible assets 0426 220,918 10.b
11. Other assets (from Schedule RC-F) 2160 2,515,210 11.
12. Total assets (sum of items 1 through 11) 2170 56,115,195 12. 56,115,195
- --------
(1)Includes cash items in process of collection and unposted debits.
(2)Includes time certificates of deposit not held for trading.
(3)Includes all securities resale agreements in domestic and foreign offices,
regardless of maturity.
SCHEDULE RC--CONTINUED
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of RCON
----
columns A and C from Schedule RC-E, part I) 2200 24,583,164 13.a
RCON
----
(1) Noninterest-bearing (1) 6631 4,075,357 13.a.1
(2) Interest-bearing 6636 20,507,807 13.a.2 24,583,164
RCFN
----
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from
Schedule RC-E, part II) 2200 4,602,816 13.b
RCFN
----
(1) Noninterest-bearing 6631 0 13.b.1
(2) Interest-bearing 6636 4,602,816 13.b.2
RCON
----
14. Federal funds purchased and securities sold under agreements to repurchase:
a. Federal funds purchased in domestic offices (2) B993 3,533,571 14.a
RCFD
----
b. Securities sold under agreements to repurchase (3) B995 4,596,088 14.b
15. Trading liabilities (from Schedule RC-D) 3548 203,410 15.
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases): From schedule RC-M 3190 10,867,041 16.
17. Not applicable.
18. Bank's liability on acceptances executed and outstanding 2920 10,088 18.
19. Subordinated notes and debentures (4) 3200 734,000 19.
20. Other liabilities (from Schedule RC-G) 2930 2,728,895 20.
21. Total liabilities (sum of items 13 through 20) 2948 51,859,073 21. 51,859,073
22. Minority Interest in consolidated subsidiaries 3000 18,784 22.
EQUITY CAPITAL
RCFD
----
23. Perpetual preferred stock and related surplus 3838 635,410 23.
24. Common stock 3230 41,234 24.
25. Surplus (exclude all surplus related to preferred stock) 3839 1,905,825 25.
26. a. Retained Earnings 3632 1,673,276 26.a
b. Accumulated Other Comprehensive income.(5) B530 (18,407) 26.b
27. Other Equity capital components (6) 3284 0 27.
28. Total equity capital (sum of items 23 through 27) 3210 4,237,338 28. 4,237,338
29. Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28) 3300 56,115,195 29.
MEMORANDUM
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below that best describes RCFD NUMBER
the most comprehensive level of auditing work performed for the bank by independent ---- ------
external auditors as of any date during 2001 6724 2 M.1
1 =Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 =Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 =Attestation on bank managements assertion on the effectiveness of the banks
internal control over financial reporting by a certified public accounting
firm. with generally accepted auditing standards by a certified public
accounting firm
4 =Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified accounting firm. (may be required
by state chartering authority)
5 =Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
6 =Review of the bank's financial statements by external auditors
7 =Compilation of the bank's financial statements by external auditors
8 =Other audit procedures (excluding tax preparation work)
9 =No external audit work
- --------
(1)Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2)Report overnight Federal Home Loan Bank advances in Schedule RC, item 16
"other borrowed money."
(3)Includes all securities repurchased agreements in domestic and foreign
offices, regardless of maturity.
(4)Includes limited-life preferred stock and related surplus.
(5)Includes net unrealized holding gains (losses) on available for sale
securities, accumulated net gains (losses) on cash flow hedges, cumulative
foreign currency translation adjustments, and minimum pension liability
adjustments.
(6)Includes treasury stock and unearned Employee Stock Ownership plan shares.
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND
STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31 , 2001
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin (1) 0081 1,638,703 1.a
b. Interest-bearing balances (2) 0071 171,868 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 467,230 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 18,113,967 2.b
3. Federal funds sold and securities purchased under agreements to resell 1350 323,194 3.
4. Loans and lease financing receivables:
a. Loans and leases held for sale 5369 323,888 4.a
b. Loans and leases, net of unearned income (from
Schedule RC-C) 2122 31,080,207 4.b
c. LESS: Allowance for loan and lease losses 3128 443,495 4.c
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) 2125 30,636,712 4.d
5. Trading assets (from Schedule RC-D) 3545 380,868 5.
6. Premises and fixed assets (including capitalized leases) 2145 276,863 6.
7. Other real estate owned (from Schedule RC-M) 2150 13,202 7.
8. Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-M) 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding 2155 11,927 9.
10. Intangible assets (from Schedule RC-M)
a. Goodwill 3163 181,636 10.a
b. Other Intangible assets 0426 260,655 10.b
11. Other assets (from Schedule RC-F) 2160 1,929,950 11.
12. Total assets (sum of items 1 through 11) 2170 54,730,663 12. 54,730,663
- --------
(1)Includes cash items in process of collection and unposted debits.
(2)Includes time certificates of deposit not held for trading.
SCHEDULE RC--CONTINUED
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of RCON
----
columns A and C from Schedule RC-E, part I) 2200 24,962,920 13.a
RCON
----
(1) Noninterest-bearing (1) 6631 4,809,578 13.a.1
(2) Interest-bearing 6636 20,153,342 13.a.2 24,962,920
RCFN
----
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs
(from Schedule RC-E, part II) 2200 4,225,541 13.b
RCFN
----
(1) Noninterest-bearing 6631 0 13.b.1
(2) Interest-bearing 6636 4,225,541 13.b.2
RCFD
----
14. Federal funds purchased and securities sold under agreements
to repurchase 2800 5,838,350 14.
15. (from Schedule RC-D) 3548 136,157 15
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases): From schedule RC-M 3190 12,238,951 16
17. Not applicable.
18. Bank's liability on acceptances executed and outstanding 2920 11,927 18.
19. Subordinated notes and debentures (2) 3200 896,000 19.
20. Other liabilities (from Schedule RC-G) 2930 2,303,386 20.
21. Total liabilities (sum of items 13 through 20) 2948 50,613,232 21. 50,613,232
22. Minority Interest in consolidated subsidiaries 3000 18,446 22.
EQUITY CAPITAL
RCFD
----
23. Perpetual preferred stock and related surplus 3838 635,410 23.
24. Common stock 3230 41,234 24.
25. Surplus (exclude all surplus related to preferred stock) 3839 1,903,169 25.
26. a. Retained Earnings 3632 1,621,745 26.a
b. Accumulated Other Comprehensive income.(3) B530 (102,573) 26.b
27. Other Equity capital components (4) 3284 0 27.
28. Total equity capital (sum of items 23 through 27) 3210 4,098,985 28. 4,098,985
29. Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28) 3300 54,730,663 29.
MEMORANDUM
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below that best describes RCFD NUMBER
the most comprehensive level of auditing work performed for the bank by independent ---- ------
external auditors as of any date during 1999 6724 N/A M.1
1 =Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 =Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 =Attestation on bank managements assertion on the effectiveness of the banks
internal control over financial reporting by a certified public accounting
firm.with generally accepted auditing standards by a certified public
accounting firm
4 =Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified accounting firm. (may be required
by state chartering authority)
5 =Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
6 =Review of the bank's financial statements by external auditors
7 =Compilation of the bank's financial statements by external auditors
8 =Other audit procedures (excluding tax preparation work)
9 =No external audit work
- --------
(1)Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2)Includes limited-life preferred stock and related surplus.
(3)Includes net unrealized holding gains(losses) on available for sale
securities, accumulated net gains (losses) on cash flow hedges, cumulative
foreign currency translation adjustments, and minimum pension liability
adjustments.
(4)Includes treasury stock and unearned Employee Stock Ownership plan shares.
