Stockholders Equity

12 Months Ended

Dec. 31, 2011

Stockholders Equity [Abstract]

Stockholders Equity

13.   Stockholders’ Equity

The Company's Restated Certificate of Incorporation provides for the issuance of up to 40 million shares of Class A Stock, par value $0.001 per share, and 160 million shares of Common Stock, par value $0.001 per share.  Shares of Class A Stock are convertible, at any time, at the option of the holder into shares of Common Stock on a share-for-share basis.   Holders of Class A Stock have rights and privileges identical to Common Stockholders except that each share of Class A is entitled to ten votes per share, while each share of Common Stock is entitled to one vote per share.  Class A Stock may only be transferred to specified Permitted Transferees, as defined.  Under the Company’s Restated Certificate of Incorporation, the Company’s board of directors is authorized to issue up to 30 million shares of preferred stock, in series, with rights, privileges, and qualifications of each series determined by the board of directors.

In September 2003, Sanofi purchased 2,799,552 newly issued, unregistered shares of the Company’s Common Stock for $45.0 million.  See Note 3.

In December 2007, Sanofi purchased 12 million newly issued, unregistered shares of the Company’s Common Stock for an aggregate cash price of $312.0 million.  As a condition to the closing of this transaction, Sanofi entered into an investor agreement with the Company, which was amended in November 2009.  Under the amended investor agreement, Sanofi has three demand rights to require the Company to use all reasonable efforts to conduct a registered underwritten public offering with respect to shares of the Company’s Common Stock beneficially owned by Sanofi immediately after the closing of the transaction.  Until the later of the fifth anniversaries of the expiration or earlier termination of the License and Collaboration Agreement, as amended in 2009, under the Company’s antibody collaboration with Sanofi (see Note 3) and the Company’s collaboration agreement with Sanofi for the development and commercialization of ZALTRAP® (see Note 3), Sanofi will be bound by certain “standstill” provisions.  These provisions include an agreement not to acquire more than a specified percentage of the outstanding shares of the Company’s Class A Stock and Common Stock.  The percentage increased from 25% to 30% as of December 20, 2011.  Under the amended investor agreement, Sanofi has also agreed not to dispose of any shares of the Company’s Common Stock that were beneficially owned by Sanofi immediately after the closing of the transaction until December 20, 2017, subject to certain limited exceptions.  Following December 20, 2017, Sanofi will be permitted to sell shares of the Company’s Common Stock (i) in a registered underwritten public offering undertaken pursuant to the demand registration rights granted to Sanofi and described above, subject to the underwriter's broad distribution of securities sold, (ii) pursuant to Rule 144 under the Securities Act and transactions exempt from registration under the Securities Act, subject to a volume limitation of one million shares of the Company’s Common Stock every three months and a prohibition on selling to beneficial owners, or persons that would become beneficial owners as a result of such sale, of 5% or more of the outstanding shares of the Company’s Common Stock, and (iii) into an issuer tender offer, or a tender offer by a third party that is recommended or not opposed by the Company’s board of directors.  Sanofi has agreed to vote, and cause its affiliates to vote, all shares of the Company’s voting securities they are entitled to vote, at Sanofi's election, either as recommended by the Company’s board of directors or proportionally with the votes cast by the Company’s other shareholders, except with respect to certain change of control transactions, liquidation or dissolution, stock issuances equal to or exceeding 10% of the then outstanding shares or voting rights of the Company’s Class A Stock and Common Stock, and new equity compensation plans or amendments if not materially consistent with the Company’s historical equity compensation practices.  The rights and restrictions under the investor agreement are subject to termination upon the occurrence of certain events.

In October 2010, the Company completed an underwritten public offering of 6,325,000 shares of Common Stock and received net proceeds of $174.8 million.  Sanofi purchased 1,017,401 shares of Common Stock in this offering.

In October 2011, the Company completed a private placement of $400.0 million aggregate principal amount of Notes, which are convertible into shares of the Company’s Common Stock.   In accordance with accounting guidance for debt with conversion and other options, the Company accounted for the liability and equity components of the Notes separately.   The equity component of the Notes was $120.6 million, net of issuance costs.  In connection with the offering of the Notes, the Company entered into convertible note hedge and warrant transactions.  The Company paid $117.5 million for the convertible note hedge, which was recorded as a reduction to additional paid-in capital.  The warrant transactions have an initial strike price of approximately $103.41 per share, and may be settled in cash or shares of the Company’s Common Stock, at the Company’s option.  Proceeds received from the warrant transactions totaled $93.8 million and were recorded as additional paid-in capital.  The warrants expire at various dates during 2017.  See Note 11.