-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
OPFfLwZv8VnVhuzWOGPr6SCcyJgQawbsjNt5AUGdAelPLpn6kk+SLw71n/gtrtfc
+BYRENHGO6vdMqJ1Z8GcTQ==
UNITED
STATES SCHEDULE TO TENDER
OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1) Regeneron
Pharmaceuticals, Inc. Regeneron
Pharmaceuticals, Inc. Options
to Purchase Common Stock, Par Value $.001 Per Share 00075886F1 Stuart
Kolinski, Esq. Copy to: Kent
A. Coit CALCULATION
OF FILING FEE
No filing fee is required because this filing contains only preliminary
communications made before the commencement of a tender offer.
Check
the following box if the filing is a final amendment reporting the results of
the tender offer: o 2 Explanatory
Note On
November 17, 2004, Regeneron Pharmaceuticals, Inc. (the Company)
filed with the Securities and Exchange Commission on Schedule 14A preliminary
forms of a letter to shareholders, Notice of Special Meeting of Shareholders and
Proxy Statement (collectively the Preliminary Proxy Materials) in
connection with a Special Meeting of Shareholders at which the Companys
shareholders will vote on a proposal to approve an amendment to the
Companys 2000 Long-Term Incentive Plan to expressly authorize an option
exchange program described in the Preliminary Proxy Materials (the Option
Exchange Program). The Preliminary Proxy Materials are attached as Exhibit
99.1 hereto. On
November 17, 2004, the Company disseminated to employees by e-mail a
communication from Ross Grossman, Vice President of Human Resources regarding the Option Exchange Program, which is attached as
Exhibit 99.2 hereto (the Employee Communication). Additional
Information About the Option Exchange Program and Where to Find It None
of the above information, the Preliminary Proxy Materials nor the Employee
Communication constitutes an offer to holders of options to exchange their
options. At the time the Option Exchange Program is commenced, we will provide
eligible employees with written materials, including an Offer to Exchange,
explaining the precise terms, conditions and timing of, and procedures for
accepting, such offer, and will file those materials with the Securities and
Exchange Commission (SEC). Eligible employees should carefully read those
materials, when they become available, because they will contain important
information about the Option Exchange Program. Free
copies of the Offer to Exchange and related materials (when they are available),
and any other materials filed by Regeneron Pharmaceuticals, Inc. with the SEC,
may be obtained free of charge at www.sec.gov and on our internet website
(www.regeneron.com) or by contacting our Investor Relations Department at 777 Old
Saw Mill River Road, Tarrytown, New York 10591. 3 Exhibit
Index
Preliminary forms of letter to shareholders, Notice of Special Meeting
of Shareholders and Proxy Statement filed on Schedule 14A with the Securities
and Exchange Commission on November 17, 2004.
Communication from Ross Grossman, Vice President of Human Resources to all employees sent on November 17, 2004. 4 777 Old Saw Mill River Road
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
(Rule
13e-4)
OF
THE SECURITIES EXCHANGE ACT OF 1934
(Amendment
No. )
(Name of Subject
Company (Issuer))
(Name of Filing
Person (Offeror))
granted under
the Companys 1990 Long-Term Incentive Plan
and
2000 Long-Term Incentive Plan
Having
an Exercise Price Per Share of $18.00 or More
(Title of
Class of Securities)
(CUSIP Number
of Class of Securities)
(Underlying
Common Stock)
Vice
President, General Counsel and Secretary
Regeneron
Pharmaceuticals, Inc.
777
Old Saw Mill River Road
Tarrytown,
New York 10591-6707
(914)
347-7000
(Name,
Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Filing Person)
Skadden, Arps, Slate, Meagher & Flom LLP
One
Beacon Street
Boston, MA 02108
Telephone:
(617) 573-4800
Facsimile: (617) 573-4822
Transaction Valuation*Amount of Filing
Fee
Not applicableNot applicable
*
o
Check the box if any
part of the fee is offset as provided by Rule 0-11(a)(2) and identify the
filing with which the offsetting fee was previously paid. Identify the previous
filing by registration statement number, or the Form or Schedule and the
date of its filing.
Amount
Previously Paid: Not applicable.
Filing
Party: Not applicable.
Form or Registration
No.: Not applicable.
Date Filed: Not applicable.
x
Check the box if the filing
relates solely to preliminary communications made before the commencement
of a tender offer.
Check
the appropriate boxes below to designate any transactions to which the statement
relates:
o
third-party
tender offer subject to Rule 14d-1.
x
issuer tender offer
subject to Rule 13e-4.
o
going-private transaction
subject to Rule 13e-3.
o
amendment to Schedule
13D under Rule 13d-2.
Exhibit
No.
99.1
99.2
Tarrytown, New York 10591-6707
Dear Fellow Shareholder:
REGENERON PHARMACEUTICALS, INC.
777 Old Saw Mill River Road
Tarrytown,
New York 10591
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
(1) |
to amend the 2000 Long-Term Incentive Plan to expressly authorize the Option Exchange Program described in this proxy statement; and |
(2) |
to act upon such other matters as may properly come before the meeting and any adjournment or postponement thereof. |
November , 2004
IMPORTANT
* * * * *
Additional Information About the Option Exchange Program and Where to Find It
REGENERON PHARMACEUTICALS, INC.
777 Old Saw Mill River Road
Tarrytown,
New York 10591
November , 2004
PROXY STATEMENT
Why are you receiving these proxy materials?
Who is entitled to vote at the Special Meeting?
What are you being asked to vote on?
How can you vote?
1
How do you vote by proxy?
Can you change your vote or revoke your proxy?
What constitutes a quorum?
What vote is required to approve the proposal?
What is the Boards recommendation?
2
PROPOSAL NO. 1:
AMENDMENT TO THE 2000 LONG-TERM INCENTIVE PLAN TO
EXPRESSLY AUTHORIZE THE OPTION EXCHANGE PROGRAM
Option Exchange Program
Background
3
Details of the Option Exchange Program
4
5
Exercise
Price of Eligible Options
|
Number of Shares Underlying Eligible Options as of November 3, 2004 |
Weighted Average Exercise Price of Eligible Options |
Remaining Weighted Average Life of Eligible Options (Years) |
||
---|---|---|---|---|---|
$18.00 $28.00 | 2,188,294 | $21.28 | 7.46 | ||
$28.01 $37.00 | 1,386,437 | $28.78 | 6.97 | ||
$37.01 and up | 1,272,850 | $40.43 | 5.96 | ||
Total
Number of Shares Underlying Options Eligible for Exchange |
4,847,581 | $28.46 | 6.93 |
Exercise Price Range
|
Exchange Ratio (number of eligible options to be surrendered and cancelled for each replacement option) |
|||||
---|---|---|---|---|---|---|
$18.00 $28.00 |
1.50 | |||||
$28.01 $37.00 |
2.00 | |||||
$37.01 and
up |
3.00 |
6
7
Participation in the Option Exchange Program
Effect on Shareholders
8
The 2000 Long-Term Incentive Plan
Description of the Material Terms of the 2000 Plan
9
10
addition, such performance goals may be based upon the attainment of specified levels of Company performance under one or more of the measures described above relative to the performance of other corporations. To the extent permitted under Section 162(m) of the Internal Revenue Code of 1986, as amended (including, without limitation, compliance with any requirements for shareholder approval), the Compensation Committee may designate additional business criteria on which the performance goals may be based or adjust, modify, or amend the aforementioned business criteria.
Certain Federal Income Tax Consequences
11
New Plan Benefits
Name and Position
|
Number of Shares Subject to Replacement Options Expected to Be Granted Pursuant to Option Exchange Program (1) |
|||||
---|---|---|---|---|---|---|
Leonard S.
Schleifer, M.D., Ph.D. President and Chief Executive Officer |
Not
Eligible to Participate in Option Exchange Program |
|||||
George D.
Yancopoulos, M.D., Ph.D. Executive Vice President, Chief Scientific Officer and President, Regeneron Research Laboratories |
701,000 |
|||||
Murray A.
Goldberg Senior Vice President, Finance & Administration, Chief Financial Officer, Treasurer and Assistant Secretary |
78,333 |
|||||
Randall G.
Rupp, Ph.D. Senior Vice President, Manufacturing and Process Sciences |
58,333 |
|||||
Neil Stahl,
Ph.D. Senior Vice President, Preclinical Development and Biomolecular Science |
133,334 |
|||||
Executive
Group (7 persons) |
1,063,500 (6 persons eligible to participate) |
|||||
Non-Executive
Director Group |
Not
Eligible to Participate in Option Exchange Program |
|||||
Non-Executive
Officer Employee Group (511 persons) |
1,512,864 |
(1) | Assumes all eligible employees participate in the Option Exchange Program with respect to all of their eligible options. The aggregate number of options that will be required to be surrendered in order for the above-noted groups to receive the number of replacement options pursuant to the Option Exchange Program as set forth in the table are as follows: Executive Group2,085,000; Non-Executive Officer Employee Group2,762,581. |
12
Options Previously Received Under the 2000 Plan
Name and Position
|
Number of Shares Subject to Options Previously Granted Pursuant to the 2000 Plan |
|||||
---|---|---|---|---|---|---|
Leonard S.
Schleifer, M.D., Ph.D. President and Chief Executive Officer |
950,000 |
|||||
George D.
Yancopoulos, M.D., Ph.D. Executive Vice President, Chief Scientific Officer and President, Regeneron Research Laboratories |
1,337,000 |
|||||
Murray A.
Goldberg Senior Vice President, Finance & Administration, Chief Financial Officer, Treasurer and Assistant Secretary |
225,000 |
|||||
Randall G.
Rupp, Ph.D. Senior Vice President, Manufacturing and Process Sciences |
160,000 |
|||||
Neil Stahl,
Ph.D. Senior Vice President, Preclinical Development and Biomolecular Science |
350,000 |
|||||
All Current
Executive Officers as a Group |
3,317,000 |
|||||
All Current
Directors who are not Executive Officers as a Group |
1,617,500 |
|||||
Each
Associate of any Director or Executive Officer |
100,000 |
|||||
Each Person
who has Received 5% or more of the Options Issued Under the 2000 Plan |
3,474,500 |
|||||
All Employees
(including Non-Executive Officers) as a Group |
4,455,729 |
13
Equity Compensation Plan Information
(a) |
(b) |
(c) |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Plan
Category
|
Number
of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted-average exercise price of outstanding options, warrants and rights |
Number
of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|||||||||
Equity
Compensation plans approved by security holders (1) |
13,113,299 shares of Common Stock |
$20.38 |
1,653,642 shares of Common Stock (3) |
|||||||||
Equity
compensation plans not approved by security holders (2) |
0 |
$ 0.00 |
44,246 shares of Class A Stock |
|||||||||
Total |
13,113,299 shares of Common Stock |
$20.38 |
1,697,888 shares of Common Stock and Class A Stock |
(1) | The equity compensation plans approved by the security holders are the 2000 Plan and the Companys 1990 Long-Term Incentive Plan. |
(2) | The equity compensation plan not approved by the security holders is the Executive Stock Purchase Plan which is described in note 12(b) to the Companys audited financial statements for the year ended December 31, 2003. |
(3) | There is no restriction on the number of shares that may be issued under the 2000 Plan in the form of Restricted Stock. |
14
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AS OF NOVEMBER 3, 2004
Name and Address of Beneficial Owner
|
Number of Shares of Class A Stock Beneficially Owned (1) |
Number of Shares of Common Stock Beneficially Owned (1) |
Percentage of Common Stock and Class A Stock Beneficially Owned (2) |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Leonard S.
Schleifer, M.D., Ph.D. c/o Regeneron, Inc. 777 Old Saw Mill River Road Tarrytown, NY 10591 |
1,769,340 | (3) | 1,138,877 | (4) | 5.1 | % | ||||||||
Novartis
Pharma AG Lichstrasse 35 CH-4002 Basel, Switzerland |
0 | 7,527,050 | (5) | 13.5 | % | |||||||||
FMR Corp. 82 Devonshire Street Boston, Massachusetts 02109 |
0 | 6,381,228 | (6) | 11.4 | % | |||||||||
Kedge Capital
Funds Limited, Special Situations 1 Fund Lord Coutanche House 66-68 Esplanade St. Helier Jersey (channel Islands JE4 5YQ |
0 | 4,000,000 | (7) | 7.2 | % | |||||||||
Amgen
Inc. One Amgen Center Drive Thousand Oaks, California 91320 |
0 | 3,181,309 | (8) | 5.7 | % | |||||||||
Aventis
Pharmaceuticals Inc. 300 Somerset Corporate Boulevard Bridgewater, New Jersey 08807 |
0 | 2,799,552 | (9) | 5.0 | % |
(1) | We calculated beneficial ownership in accordance with the rules of the Security and Exchange Commission. The calculation includes shares subject to options held by the person or entity in question that are exercisable currently or with in sixty days of November 3, 2004. |
(2) | To calculate percentage, number of shares outstanding includes 55,741,696 shares of Common Stock outstanding as of November 3, 2004, plus any shares subject to options held by the person or entity in question that are currently exercisable or exercisable within sixty days after November 3, 2004. |
(3) | Includes 58,550 shares of Class A Stock held directly by, or in trust for the benefit of, Dr. Schleifers two sons, of which Dr. Schleifer disclaims beneficial ownership. Excludes 6,500 shares of Class A Stock held by the Schleifer Family Foundation, a charitable foundation, of which Dr. Schleifer disclaims beneficial ownership. |
(4) | Includes 1,025,380 shares of Common Stock purchasable upon the exercise of options granted pursuant to the Stock Incentive Plans which are exercisable or become so within sixty days from November 3, 2004 and 2,293 shares of Common Stock held in an account under the Companys 401(k) Savings Plan. Includes 1,800 shares of Common Stock held directly by, or in trust for the benefit of, Dr. Schleifers two sons, of which Dr. Schleifer disclaims beneficial ownership. Excludes |
15
10,000 shares of Common Stock held by the Schleifer Family Foundation, a charitable foundation, of which Dr. Schleifer disclaims beneficial ownership. |
(5) | Based on Schedule 13G filed by Novartis Pharma AG with the Securities and Exchange Commission on April 8, 2003. |
(6) | Based on Schedule 13G/A filed by FMR Corp. with the Securities and Exchange Commission on February 14, 2004. |
(7) | Based on Schedule 13G/A filed by Kedge Capital Funds Limited Special Situations 1 Fund with the Securities and Exchange Commission on February 13, 2004. |
(8) | Based on Schedule 13G/A filed by Amgen Inc. with the Securities and Exchange Commission on May 5, 2004. |
(9) | Based on Schedule 13G filed by Aventis Pharmaceuticals Inc. with the Securities and Exchange Commission on September 12, 2003. |
16
SECURITY OWNERSHIP OF MANAGEMENT
Management and Directors Stock Ownership Table as of November 3, 2004
Name and Address of Beneficial Owner (1)
|
Number of Shares of Class A Stock Beneficially Owned (2, 3) |
Number of Shares of Common Stock Beneficially Owned (2, 3) |
Percentage of Common Stock and Class A Stock Beneficially Owned (4) |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Leonard S. Schleifer, M.D., Ph.D. | 1,769,340 | (5) | 1,138,877 | (10) | 5.1 | % | ||||||||
P. Roy Vagelos, M.D. | 0 | 2,499,509 | (11) | 4.4 | % | |||||||||
Charles A. Baker | 62,384 | (6) | 110,590 | (12) | * | |||||||||
Michael S. Brown, M.D. | 58,049 | (7) | 148,258 | (13) | * | |||||||||
Alfred G. Gilman, M.D., Ph.D. | 76,237 | 168,975 | (14) | * | ||||||||||
Joseph L. Goldstein, M.D. | 52,000 | 135,000 | (15) | * | ||||||||||
Arthur F. Ryan | 0 | 13,334 | (15) | * | ||||||||||
Eric M. Shooter, Ph.D. | 79,911 | (8) | 100,000 | (15) | * | |||||||||
George L. Sing | 0 | 172,772 | (16) | * | ||||||||||
George D. Yancopoulos, M.D., Ph.D. | 42,750 | (9) | 1,319,084 | (17) | 2.4 | % | ||||||||
Murray A. Goldberg | 0 | 276,108 | (18) | * | ||||||||||
Randall G. Rupp, Ph.D. | 0 | 215,391 | (19) | * | ||||||||||
Neil Stahl, Ph.D. | 0 | 355,482 | (20) | * | ||||||||||
All Directors
and Executive Officers as a Group (15 persons) |
2,140,671 | 6,900,692 | 14.7 | % |
* | Represents less than 1% |
(1) | Unless otherwise stated, the address for each beneficial owner is c/o Regeneron Pharmaceuticals, Inc., 777 Old Saw Mill River Road, Tarrytown, NY 10591. |
(2) | We calculated beneficial ownership in accordance with the rules of the Securities and Exchange Commission. The inclusion herein of any Class A Stock or Common Stock, as the case may be, deemed beneficially owned does not constitute an admission of beneficial ownership of those shares. Unless otherwise indicated, each person listed has sole voting and investment power with respect to the shares listed. |
(3) | Number of shares includes number of options held by the person or entity in question that are currently exercisable or excisable within 60 days after November 3, 2004. |
(4) | To calculate percentage, number of shares outstanding includes 55,741,696 shares outstanding as of November 3, 2004 plus any shares subject to options held by the person or entity in question that are currently exercisable or exercisable within sixty days after November 3, 2004. |
(5) | Includes 58,550 shares of Class A Stock held directly by, or in trust for the benefit of, Dr. Schleifers two sons, of which Dr. Schleifer disclaims beneficial ownership. Excludes 6,500 shares of Class A Stock held by the Schleifer Family Foundation, a charitable foundation, of which Dr. Schleifer disclaims beneficial ownership. |
(6) | All shares of Class A Stock are held by a limited partnership. |
(7) | Includes 2,700 shares of Class A stock held in trust for the benefit of Dr. Browns daughter. |
17
(8) | All shares of Class A Stock are held in trust for the benefit of Dr. Shooters children (the Shooter Family Trust). |
(9) | Includes 19,383 shares of Class A Stock held in trust for the benefit of Dr. Yancopouloss children and excludes 205 shares held by Dr. Yancopouloss wife. Dr. Yancopoulos disclaims beneficial ownership of all such shares. |
(10) | Includes 1,025,380 shares of Common Stock purchasable upon the exercise of options granted pursuant to the Stock Incentive Plans which are exercisable or become so within sixty days from November 3, 2004 and 2,293 shares of Common Stock held in an account under the Companys 401(k) Savings Plan. Includes 1,800 shares of Common Stock held directly by, or in trust for the benefit of, Dr. Schleifers two sons, of which Dr. Schleifer disclaims beneficial ownership. Excludes 10,000 shares of Common Stock held by the Schleifer Family Foundation, a charitable foundation, of which Dr. Schleifer disclaims beneficial ownership. |
(11) | Includes 1,514,999 shares of Common Stock purchasable upon exercise of options granted pursuant to the Stock Incentive Plans which are exercisable or become so within sixty days from November 3, 2004 and 851 shares of Common Stock held in an account under the Companys 401(k) Savings Plan. Includes 527,322 shares of Common Stock held in a charitable trust and 456,337 shares of Common Stock held in three separate grantor trusts. Excludes 203,199 shares of Common Stock held by the Marianthi Foundation, and 161,443 shares of Common Stock held by the Pindaros Foundation, both charitable foundations, of which Dr. Vagelos disclaims beneficial ownership. |
(12) | Includes 110,000 shares of Common Stock purchasable upon exercise of options granted pursuant to the Stock Incentive Plans which are exercisable or become so within sixty days from November 3, 2004. |
(13) | Includes 143,000 shares of Common Stock purchasable upon exercise of options granted pursuant to the Stock Incentive Plans which are exercisable or become so within sixty days from November 3, 2004. |
(14) | Includes 145,000 shares of Common Stock purchasable upon exercise of options granted pursuant to the Stock Incentive Plans which are exercisable or become so within sixty days from November 3, 2004. |
(15) | All shares of Common Stock beneficially owned represent shares of Common Stock purchasable upon the exercise of options granted pursuant to the Stock Incentive Plans which are exercisable or become so within sixty days from November 3, 2004. |
(16) | Includes 100,000 shares of Common Stock purchasable upon exercise of options granted pursuant to the Stock Incentive Plans which are exercisable or become so within sixty days from November 3, 2004. |
(17) | Includes 1,255,200 shares of Common Stock purchasable upon exercise of options granted pursuant to the Stock Incentive Plans which are exercisable or become so within sixty days from November 3, 2004 and 2,266 shares of Common Stock held in an account under the Companys 401(k) Savings Plan. |
(18) | Includes 246,781 shares of Common Stock purchasable upon exercise of options granted pursuant to the Stock Incentive Plans which are exercisable or become so within sixty days from November 3, 2004 and 2,293 shares of Common Stock held in an account under the Companys 401(k) Savings Plan. |
(19) | Includes 204,000 shares of Common Stock purchasable upon exercise of options granted pursuant to the Stock Incentive Plans which are exercisable or become so within sixty days from November 3, 2004 and 2,248 shares of Common Stock held in an account under the Companys 401(k) Savings Plan. |
(20) | Includes 340,000 shares of Common Stock purchasable upon exercise of options granted pursuant to the Stock Incentive Plans which are exercisable or become so within sixty days from November 3, 2004 and 2,211 shares of Common Stock held in an account under the Companys 401(k) Savings Plan. |
18
OTHER MATTERS
When are shareholder proposals due for the 2005 Annual Meeting of Shareholders?
What happens if multiple shareholders share an address?
Are there any other matters to be addressed at the Special Meeting?
19
Who will pay the costs related to this proxy statement and the Special Meeting?
20
Appendix A
AMENDMENT NO. 4
TO THE
REGENERON PHARMACEUTICALS, INC.
2000
LONG-TERM INCENTIVE PLAN
1. |
The Plan is hereby amended to expressly authorize the Option Exchange Program. |
2. |
The Plan is hereby ratified and confirmed in all other respects. |
A-1
9"H]7U4P6=%!$Y+5QCNX.Z4A&A3)B\@"9\@
MQE!HX^TS8R;1OE)SYY6P^2F+GB4-\-Q9+DG,PL,E4&UDB,?0N#@_FN0ANA9E
MBW1)4#^4?[`FJ%3(HP(8<8,+,"`6F[Q]/V/ZJ:^M>W<7GL[VA+JF'*K]DA?]
M?C4F/M9S:4[G-&M"CK:9,$&RVQM[6&MJ4YM2%)U*=(`[_&(P0Q!H9XFY^MG)
M-KY@\6N:2IZ%WPUSG%)1ME:9<
MY$2L;EN;"((DO"$@!!W(1CU'V)&V'B1*R"C\&I@94@ZM6=:.CN_T3V@V2YS4
M[I!%-.M
^]_0)KN%1#[2J74[0=YI"DWO2C./RB"UW7F[^P+7LW6E6;@51STD%9V)7ZZ8RY3K+;TX
MB]O4&K%\A+.E>X);S\^+[K9U+F@4)#'%B1M*+_)5&A-]Z(M,X!
.OB?TD@O
MV^6O7*96LH
6[)<:;C+PZMOP M$8QJ_P!GE5T=M6M$)&CY6@P4NUBNX.1?[+5[E37SL*)!8V`[W#VR_%3B+%;U MQ41\V&9;IDHI(ST+GNK5G"L@XC&.U7.F*![[^7W';U[KJ7\+?=OPX_!GWOY; M6LZ*Q0/6\:/[KF]8#_$O;O\`6]V]'[?_`+CR/`$'X"Q'1Q;T]/5Y MGEHX>9T_]?E=/UY]/#[.'@()[B/RP_!H/YLOP&_#3Y.*]M_,1^'WP;YGY,[V M/T/XE?\`@/D_I_4^D\O_`'71YOE\NKP$XQ?3>EC>BRQB'Y#/I/2^7Z;TO0GR M,1_*XM>GRUPZ.G^WIX`9'#ZYY\_P!>?\,?3'@!7G:Y[5:?M\59KL3I\_ N6-P[/GW4^/V,Q3TQ)4;M_J.S[8=BZV,)H2$XE0:1"%>?`QEY]I>% M*<4!48SQQC//GSYXSC/[\9X9QGP`Z4:#VIQ-\;C?UVO1J^YDD\-F[V362-*G M;M;PFF:U@B4;%CPI4B[BAWP:%4U,1YJ68V82ASR4=+K*UAB[0I/;#8[-J&R; M/FT:.OLO4D8IL!VK")E/)B:RQL%#55A6017+[3&Q$83F LJ?_`,7,1@K=]12^S]=2,;%'@I<*BWC6TW33.[1( LP5)8?%Z^#V!_4H/>[H":-Q*(PAL>U31R8*)#[L=J(E`=$.?Z8S]?\O`?_]D_ ` end
E-MAIL
COMMUNICATION FROM ROSS
GROSSMAN,
VICE PRESIDENT OF HUMAN
RESOURCES, TO
ALL EMPLOYEES, SENT ON
NOVEMBER 17,
2004
Over the last several months, Regeneron management and the Compensation Committee of the Board of Directors have worked together to evaluate the Companys long-term incentive compensation programs. Following this evaluation, the Compensation Committee recommended, and the Board of Directors approved, subject to shareholder approval, a Stock Option Exchange Program which would provide an opportunity for eligible employees who hold stock options with a per share exercise price of at least $18 to exchange those options for a lesser number of replacement stock options based on the exchange ratios described below. The replacement stock options would have a per share exercise price equal to the fair market value of Regeneron Common Stock on the date that the replacement options are granted. That date will be at least twenty business days after the Company formally commences an Offer to Exchange to implement the Stock Option Exchange Program.
The Company has filed preliminary proxy materials with the Securities and Exchange Commission (the SEC) relating to the proposal to have shareholders approve this program. You can read the full proxy statement in its preliminary form on our website (www.regeneron.com) under the Investor Relations page. The proposal is expected to be voted on by Regenerons shareholders at a special shareholder meeting that will be scheduled once the timing of our mailing of definitive proxy materials is known. Since that timing will depend on the duration of any SEC review process, we cannot predict now when the special shareholder meeting will be convened. However, we hope to be able to hold the meeting in December 2004 or January 2005. If the shareholders approve the exchange program, we would expect to grant replacement options under the program in January 2005 with an exercise price equal to the fair market value of Regeneron Common Stock on the grant date. This program was proposed because we and the Board of Directors recognize that the talent and dedicated efforts of our employees are critical to the Companys long-term success, and stock options have proven to be an effective tool to retain, motivate, and reward employees.
Regeneron has not commenced the Stock Option Exchange Program referred to both in this e-mail and the preliminary proxy materials referred to above. When we commence the exchange program, we will distribute to each eligible employee appropriate materials describing the program in detail in order to help you decide whether you want to participate in the exchange program. Eligible option holders should read these written materials carefully because they will contain important information about the program. The Stock Option Exchange Program will remain open for at least twenty business days and, of course, will be contingent upon the approval of the shareholders at the special shareholders meeting and other terms and conditions.
I know that, as you think about the Stock Option Exchange Program, you will have many questions. Following the commencement of the exchange program, we plan to communicate further in writing and at meetings in Tarrytown and Rensselaer. At this point, however, we want to provide answers to some of your likely questions:
How do I participate in the exchange program?
We have not commenced the exchange program. Once the exchange program is commenced, eligible employees will receive additional information, including an Offer to Exchange, which will set forth the procedures for tendering your options and participating in the exchange program.
Who will be eligible for the exchange program if shareholders approve it?
Regular Regeneron employees, other than the Chief Executive Officer, who work an average of at least 20 hours per week and who are actively employed by the Company on the date the Offer to Exchange expires will be eligible to participate in the exchange once it is commenced. Participation in the exchange program will be subject to the conditions specified in the Offer to Exchange, including obtaining shareholder approval. Employees who meet the eligibility requirements at the commencement of the exchange program but do not satisfy these requirements on the expiration date will not be eligible to exchange their options. The expiration date of the Offer to Exchange is currently expected to be some time in January 2005, but it could change. Of course, if on the expiration date you are not actively at work because of illness, vacation, short-term leave, or other similar reasons, that will not disqualify you from participating in the program.
What if the shareholders do not approve the exchange program?
The exchange program is contingent upon the approval of the shareholders at the special meeting of shareholders. If the shareholders do not approve the exchange program and you previously elected to participate in the program, that election will have no effect and your old stock options will continue under their existing terms and conditions.
If I have options that are eligible for exchange, do I have to exchange them for replacement options?
No. The program is completely voluntary. Once the program is commenced, and assuming shareholder approval of the program, you may exchange all of your eligible options, some grants but not others, or no options. However, if you choose to exchange options from a particular grant, you must exchange all options in that grant.
Will I receive one option for every option I exchange?
No. Options will be exchanged according to exchange ratios that are intended to reflect the lower value of the existing eligible options, which have per share exercise prices
2
above the current stock price of Regenerons Common Stock, and the higher value of the replacement options, which will have a per share exercise price equal to the fair market value of Regenerons Common Stock on the date of the grant of the replacement options. Since options with a lower exercise price have a higher value than similar options with higher exercise prices, the higher the exercise price of the options exchanged, the fewer replacement options you will receive. The exchange ratios (that is, how many old options you need to surrender to get one replacement option) for options with various exercise prices are shown in the following table.
Exercise Price | Exchange Ratio (# of existing eligible options/# of replacement options) |
$18.00-$28.00 | 1.5 to 1 |
$28.01-$37.00 | 2 to 1 |
Above $37 | 3 to 1 |
Will my replacement options have the same vesting schedule as the options I exchange?
No. All replacement options issued in the exchange program, including replacement options exchanged for old, fully vested options, will have a new vesting period. Replacement options for employees other than the Senior and Executive Vice Presidents will vest in equal installments over four years (i.e., 25% on each of the first, second, third, and fourth anniversaries of the replacement options grant date). Replacement options for the Senior and Executive Vice Presidents will vest the first time the Company records twelve-month worldwide gross sales of Company products of at least $100 million, but no earlier than three years from the grant date. Of course, vesting for all replacement options will be subject to the option holders continued employment on the applicable vesting date.
Will the replacement options have a 10 year life?
No. Replacement options generally will have the same life as the life remaining on the exchanged option you turn in. However, if the life remaining on the options you turn in as part of the exchange is less than 6 years, the term of the replacement option will be 6 years. For example, if you exchange options granted in January 2001, which expire in December 2011, your new replacement option issued in January 2005 will also expire in December 2011. On the other hand, if you exchange options granted in January 2000, which expire in January 2010, your new replacement options issued in January 2005 will expire in January 2011 (i.e., 6 years from the date of grant of the replacement options).
I currently have incentive stock options. Will my new options be incentive stock options?
If you surrender incentive stock options for exchange, the replacement options you receive will be incentive stock options to the extent permitted by IRS rules. Otherwise, the replacement options will be non-qualified stock options.
3
If I elect to exchange options, will the exchange itself subject me to any income taxes?
No. The exchange of options under the exchange program should be treated as a non-taxable exchange.
When will I know the exercise price of my replacement option grants?
The exercise price of the replacement options will equal the fair market value of Regeneron Common Stock on the expiration date of the exchange program. The fair market value is calculated as the average of the high and low share price on that date.
How do I know if I am eligible to participate? How do I find out how many eligible options I have and what their exercise prices are?
We will provide you with this information when we commence the option exchange program. You can at any time confirm what options you have, their grant dates, exercise prices, vesting dates, and other information by going to www.optionslink.com <http://www.optionslink.com/>. Employees who do not have their optionslink password should send an email to optionslink@etrade.com <mailto:optionslink@etrade.com> and request their Regeneron logon information. You may also call 1-800-838-0908, press 0 to speak to a customer service agent, and ask for your Regeneron logon information.
What will happen if I do nothing in response to the exchange offer?
Nothing will change. All of your current stock options will continue to be valid and will continue to vest with continued service. Their exercise price, vesting schedule, and other terms will not change.
While many of you may have additional questions at this time, we ask that you please not contact Human Resources with questions about the exchange program until you have had the opportunity to read the written materials that will be sent to your attention concerning the Stock Option Exchange Program, including the Offer to Exchange. In addition, we plan to schedule meetings in Tarrytown and Rensselaer to review the exchange program once it is commenced.
* * * * *
Additional Information About the Stock Option Exchange Program and Where to Find It
This does not constitute an offer to holders of options to exchange their options. At the time the Stock Option Exchange Program is commenced, we will provide eligible
4
employees with written materials, including an Offer to Exchange, explaining the precise terms, conditions and timing of, and procedures for accepting, such offer, and will file those materials with the Securities and Exchange Commission (the SEC). Eligible employees should carefully read those materials, when they become available, because they will contain important information about the Stock Option Exchange Program.
The exchange of options contemplated by the Stock Option Exchange Program is also subject to shareholder approval of an amendment to our 2000 Long-Term Incentive Plan to expressly authorize the program. In connection with seeking such shareholder approval at a special meeting of shareholders to be convened as soon as practicable, on November 17, 2004 we filed with the SEC preliminary forms of, and expect to file with the SEC definitive forms of, a proxy statement and other relevant materials. Shareholders should carefully read the applicable proxy statement and other relevant materials, when they become available, because they contain or will contain important information concerning the Stock Option Exchange Program and the proposed amendment to our 2000 Long-Term Incentive Plan to expressly authorize the program. Regeneron Pharmaceuticals, Inc. and its directors, executive officers, and certain of its employees may be deemed to be participants in the solicitation of proxies from our shareholders with respect to approval of such proposed amendment. Information regarding the names, affiliations, and interests of the participants in the solicitation is included in the preliminary form of, and will be included in the definitive form of, the proxy statement filed or to be filed with the SEC.
Free copies of the preliminary proxy statement, and the definitive proxy statement, the Offer to Exchange and related materials (when they are available), and any other materials filed by Regeneron Pharmaceuticals, Inc. with the SEC, may be obtained at the SECs website at http://www.sec.gov or from Regeneron at our website www.regeneron.com, or by directing a request to our Investor Relations Department at 777 Old Saw Mill River Road, Tarrytown, New York 10591.
5