Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
As of March 31, 2000, there were 19,573,677 shares of the Registrant's
Common Stock outstanding.
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PART I. FINANCIAL INFORMATION
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Page No.
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Item 1. Interim Consolidated Financial Statements
(unaudited):
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Consolidated Statements of Operations for the
three months ended March 31, 2000 and 1999
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Consolidated Balance Sheets at March 31, 2000 and
December 31, 1999
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Consolidated Statements of Cash Flows for the
three months ended March 31, 2000 and 1999
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Notes to Unaudited Consolidated Financial Statements
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
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PART II. OTHER INFORMATION
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Item 5. Other Information
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Item 6. Exhibits and Reports on Form 8-K
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Signatures
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PROTEIN DESIGN LABS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except net income (loss) per share data)
(unaudited)
Three Months Ended
March 31,
---------------------
2000 1999
---------- ----------
Revenues:
Revenue under agreements
with third parties $12,450 $6,462
Interest and other income 3,050 2,373
---------- ----------
Total revenues 15,500 8,835
---------- ----------
Costs and expenses:
Research and development 11,069 8,280
General and administrative 2,458 2,445
Interest expense 1,203 --
---------- ----------
Total costs and expenses 14,730 10,725
---------- ----------
Net income (loss) $770 ($1,890)
========== ==========
Net income (loss) per share:
Basic $0.04 ($0.10)
Diluted $0.04 ($0.10)
========== ==========
Weighted average number of shares:
Basic 19,460 18,618
Diluted 21,526 18,618
========== ==========
See accompanying notes
PROTEIN DESIGN LABS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value per share)
March 31, December 31,
2000 1999
------------ -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $177,188 $17,138
Marketable securities 114,438 120,098
Other current assets 6,290 6,719
------------ -----------
Total current assets 297,916 143,955
Property and equipment, net 37,998 38,047
Other assets 5,333 549
------------ -----------
$341,247 $182,551
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $541 $877
Accrued compensation 1,137 1,090
Accrued clinical trials 883 712
Other accrued liabilities 2,251 2,762
Deferred revenue 2,792 2,275
Current portion of long-term debt 377 368
Accured interest 1,007 --
------------ -----------
Total current liabilities 8,988 8,084
Convertible notes 150,000 --
Long-term debt 9,624 9,724
------------ -----------
Total liabilities 168,612 17,808
Stockholders' equity:
Preferred stock, par value $0.01 per
share, 10,000 shares authorized;
no shares issued and outstanding -- --
Common stock, par value $0.01 per share,
40,000 shares authorized; 19,574
and 19,281 issued and outstanding at
March 31, 2000 and December 31, 1999,
respectively 196 193
Additional paid-in capital 253,454 245,812
Accumulated deficit (78,447) (79,217)
Accumulated other comprehensive income (loss) (2,568) (2,045)
------------ -----------
Total stockholders' equity 172,635 164,743
------------ -----------
$341,247 $182,551
============ ===========
See accompanying notes
PROTEIN DESIGN LABS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
Three Months Ended
March 31,
----------------------
2000 1999
---------- ----------
Cash flows from operating activities:
Net income (loss) $770 ($1,890)
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Depreciation and amortization 761 857
Amortization of convertible debt offering costs 90 --
Other 301 185
Changes in assets and liabilities:
Other current assets (291) (827)
Accounts payable (337) 164
Accrued liabilities 714 (2,131)
Deferred revenue 517 1,791
---------- ----------
Total adjustments 1,755 39
---------- ----------
Net cash provided by (used in) operating activities 2,525 (1,851)
Cash flows from investing activities:
Purchases of marketable securities -- (59,500)
Maturities of marketable securities 5,000 61,400
Property, plant and equipment (876) (770)
Proceeds from sale of equipment -- --
Increase in other assets (4,154) (296)
---------- ----------
Net cash provided by (used in)
investing activities (30) 834
Cash flows from financing activities:
Proceeds from convertible debt 150,000 --
Proceeds from issuance of capital stock 7,645 462
Payments on long-term debt (90) --
---------- ----------
Net cash provided by financing activities 157,555 462
---------- ----------
Net increase (decrease) in cash and cash equivalents 160,050 (555)
Cash and cash equivalents at beginning of period 17,138 27,907
---------- ----------
Cash and cash equivalents at end of period $177,188 $27,352
========== ==========
See accompanying notes
PROTEIN DESIGN LABS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000
(unaudited)
Summary of Significant Accounting Policies
Organization and Business
Since our founding in 1986, a primary focus of our operations has been
research and development. Achievement of successful research and development
and commercialization of products derived from our efforts is subject to
high levels of risk and significant resource commitments. Our expenses have
generally exceeded revenues. As of March 31, 2000, we had an accumulated
deficit of approximately $78.4 million. We believe that our losses may
increase because of the extensive resource commitments required to achieve
regulatory approval and commercial success for any individual product. For
example, over the next several years, we will incur substantial additional
expenses as we continue to develop and manufacture our potential products,
invest in new research areas and improve and expand our manufacturing
capabilities. Since we or our collaborative partners or licensees may not be
able to successfully develop additional products, obtain required regulatory
approvals, manufacture products at an acceptable cost and with appropriate
quality, or successfully market such products with desired margins, we may
never achieve profitable operations. The amount of net losses and the time
required to reach sustained profitability are highly uncertain. We cannot
assure you that we will be able to achieve or sustain profitability.
Our commitment of resources to the development of Zenapax[R] and the humanized
anti-IL-4 antibody, two humanized antibodies with respect to which we
recently obtained development rights, taken together with the continued
development of our existing products, will require significant additional
funds for development. These operating expenses may also increase as some of
our earlier stage potential products move into later stage clinical
development, as additional potential products are selected as clinical
candidates for further development, as we invest in additional manufacturing
capacity, as we defend or prosecute our patents and patent applications, and
as we invest in research or acquire additional technologies, product
candidates or businesses.
In the absence of substantial revenues from new corporate collaborations or
patent licensing or humanization agreements, significant royalties on sales
of products licensed under our intellectual property rights, product sales
or other uncertain sources of revenue, we will incur substantial operating
losses.
Our revenues have varied in the past and will likely continue to fluctuate
considerably from quarter to quarter and from year to year. As a result, our
revenues in any period may not be predictive of revenues in any subsequent
period. Our royalty revenues may be unpredictable and may fluctuate since
they depend upon the seasonality of sales of licensed products, the
existence of competing products, the marketing efforts of our licensees,
potential reductions in royalties payable to us due to credits for prior
payments to us, the timing of royalty reports, some of which are required
quarterly and others semi-annually, our method of accounting for royalty
revenues from our licensees and our ability to successfully defend and
enforce our patents. Other revenue may also be unpredictable and may
fluctuate due to the timing of payments of non-recurring licensing and
signing fees and payments for manufacturing services and achievement of
milestones under new and existing collaborative, humanization, and patent
licensing agreements. Revenue historically recognized under our prior
agreements may not be an indicator of revenue from any future
collaborations.
In addition, our expenses may be unpredictable and may fluctuate from
quarter to quarter due to the timing of expenses, which may include payments
owed by us under licensing arrangements and due to our policy of recording
expenses under certain collaborative agreements during the quarter in which
such expenses are reported to us.
Basis of Presentation and Responsibility for Quarterly Financial Statements
The consolidated balance sheet as of March 31, 2000, and the consolidated
statements of operations and cash flows for the three month periods ended
March 31, 2000 and 1999 are unaudited, but include all adjustments
(consisting only of normal recurring adjustments) which we consider
necessary for a fair presentation of our financial position at such dates
and the operating results and cash flows for those periods. Although we
believe that the disclosures in our financial statements are adequate to
make the information presented not misleading, certain information and
footnote information normally included in financial statements prepared in
accordance with accounting principles generally accepted in the U.S. have
been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. The accompanying financial statements
should be read in conjunction with the our Annual Report on Form 10-K, filed
with the Securities and Exchange Commission, for the year ended December 31,
1999. The balance sheet as of December 31, 1999 is derived from audited
financial statements. Results for any quarterly period are not necessarily
indicative of results for any other quarterly period or for the entire year.
Cash Equivalents, Marketable Securities and Concentration of Credit Risk
We consider all highly liquid investments with a maturity of three months or
less at the date of purchase to be cash equivalents. The "Other" adjustments
line item in the Statements of Cash Flows represents the accretion of the
book value of certain debt securities. We place our cash, and marketable
securities with high-credit-quality financial institutions and in securities
of the U.S. government and U.S. government agencies and, by policy, limit
the amount of credit exposure in any one financial instrument. To date, we
have not experienced credit losses on investments in these instruments.
Revenue Recognition
Contract revenues from research and development arrangements are recorded as
earned based on the performance requirements of the contracts. Revenues
from achievement of milestone events are recognized when the funding party
agrees that the scientific or clinical results stipulated in the agreement
have been met. Deferred revenue arises principally due to timing of cash
payments received under research and development contracts.
Our collaborative, humanization and patent licensing agreements with third
parties provide for the payment of royalties to us based on net sales of the
licensed product under the agreement. The agreements generally provide for
royalty payments to us following completion of each calendar quarter or
semi-annual period and royalty revenue is recognized when royalty reports
are received from the third party. Non-refundable signing and licensing fees
under collaborative and humanization agreements are recognized over the
period in which performance obligations are achieved. Non-refundable signing
and licensing fees under patent licensing agreements are recognized as
revenue when there are no future performance obligations remaining with
respect to such fees.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
(SAB 101). We are evaluating the effects, if any, that the adoption of SAB
101 in the second quarter of 2000 may have on the results of our operations
or our financial position. We have been advised that the Securities and
Exchange Commission intends to provide additional guidance during the second
quarter of 2000 with respect to the implementation of SAB 101. It is
currently unknown whether such guidance and implementation of SAB 101 will
require us to revise our revenue recognition practices or to restate
revenues for the first quarter of 2000.
Net Income (Loss) Per Share
In accordance with Financial Accounting Standards Board Statement No. 128,
"Earnings Per Share" ("FAS 128"), basic and diluted net income (loss) per
share amounts have been computed using the weighted average number of shares
of common stock outstanding during the periods presented. Calculation of
diluted net income per share includes the dilutive effect of outstanding
stock options, but does not include outstanding convertible debt as its
effect is anti-dilutive. We incurred a net loss for the three month period
ended March 31, 1999, and as such, we did not include the effect of
outstanding stock options in the diluted net loss per share calculation as
their effect is anti-dilutive.
The following is a reconciliation of the numerators and denominators of the
basic and diluted net income (loss) per share computations for the periods
presented below:
(In thousands, except basic and diluted net income (loss) per share)
Three Months Ended
March 31,
-------------------
2000 1999
--------- ---------
Numerator:
Net income (loss) $770 ($1,890)
========= =========
Denominator:
Basic net income (loss) per share -
weighted-average shares 19,460 18,618
Dilutive potential common shares:
Stock Options 2,066 --
--------- ---------
Denominator for diluted net income
(loss) per share 21,526 18,618
========= =========
Basic net income (loss) per share $0.04 ($0.10)
========= =========
Diluted net income (loss) per share $0.04 ($0.10)
========= =========
Comprehensive Income (Loss)
During the three months ended March 31, 2000 and 1999, total comprehensive
income (loss) was $0.2 million and $(2.4) million, respectively. The
Company's other comprehensive income (loss) is comprised of unrealized gains
and losses on the Company's available-for-sale securities.
Derivative Instruments and Hedging Activities
In June 1998, the Financial Accounting Standards Board issued Statement No.
133 "Accounting for Derivative Instruments and Hedging Activities" ("FAS
133"). FAS 133 is not required to be adopted until 2001. However, the
Company has reviewed FAS 133 and because it does not use derivatives, the
adoption of FAS 133 is not expected to effect the results of operations or
the financial position of the Company.
Management Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires the use of
management's estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. For example, we have a
policy of recording expenses for clinical trials based upon pro rating
estimated total costs of a clinical trial over the estimated length of the
clinical trial and the number of patients anticipated to be enrolled in the
trial. Expenses related to each patient are recognized ratably beginning
upon entry into the trial and over the course of the trial. In the event of
early termination of a clinical trial, management accrues an amount based on
its estimate of the remaining non-cancellable obligations associated with
the winding down of the clinical trial. Our estimates and assumptions could
differ significantly from the amounts which may actually be realized.
Convertible Notes
In February 2000, we issued 5.50% Convertible Subordinated Notes due
February 15, 2007 with a principal amount of $150 million (the Convertible
Notes). The Convertible Notes are convertible into our common stock at a
conversion price of $151.00 per share, subject to adjustment as a result of
certain events and at the holders' option. Interest on the Convertible Notes
is payable semiannually in arrears on February 15 and August 15 of each
year. The Convertible Notes are unsecured and are subordinated to all our
existing and future Senior Indebtedness (as defined in the indenture
relating to the Convertible Notes). The Convertible Notes may be redeemed at
our option, in whole or in part, beginning on February 15, 2003 at the
redemption prices set forth in the Convertible Notes indenture. In May 2000,
we filed a shelf registration statement covering resales of the Convertible
Notes and the common stock issuable upon conversion of the Convertible
Notes. Issuance costs associated with the Convertible Notes are included in
other assets and are amortized to interest expense over the term of the
debt.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report contains forward-looking statements which
involve risks and uncertainties. The Company's actual results may differ
significantly from the results discussed in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to
those discussed in "Risk Factors" as well as those discussed elsewhere in
this document and the Company's Annual Report on Form 10-K, filed with the
Securities and Exchange Commission for the year ended December 31, 1999.
OVERVIEW
Since our founding in 1986, a primary focus of our operations has been
research and development. Achievement of successful research and development
and commercialization of products derived from our efforts is subject to
high levels of risk and significant resource commitments. Our expenses have
generally exceeded revenues. As of March 31, 2000, we had an accumulated
deficit of approximately $78.4 million. We believe that our losses may
increase because of the extensive resource commitments required to achieve
regulatory approval and commercial success for any individual product. For
example, over the next several years, we will incur substantial additional
expenses as we continue to develop and manufacture our potential products,
invest in new research areas and improve and expand our manufacturing
capabilities. Since we or our collaborative partners or licensees may not be
able to successfully develop additional products, obtain required regulatory
approvals, manufacture products at an acceptable cost and with appropriate
quality, or successfully market such products with desired margins, we may
never achieve profitable operations. The amount of net losses and the time
required to reach sustained profitability are highly uncertain. We cannot
assure you that we will be able to achieve or sustain profitability.
Our commitment of resources to the development of Zenapax[R] and the humanized
anti-IL-4 antibody, two humanized antibodies with respect to which we
recently obtained development rights, taken together with the continued
development of our existing products, will require significant additional
funds for development. These operating expenses may also increase as some of
our earlier stage potential products move into later stage clinical
development, as additional potential products are selected as clinical
candidates for further development, as we invest in additional manufacturing
capacity, as we defend or prosecute our patents and patent applications, and
as we invest in research or acquire additional technologies, product
candidates or businesses.
In the absence of substantial revenues from new corporate collaborations or
patent licensing or humanization agreements, significant royalties on sales
of products licensed under our intellectual property rights, product sales
or other uncertain sources of revenue, we will incur substantial operating
losses.
Our revenues have varied in the past and will likely continue to fluctuate
considerably from quarter to quarter and from year to year. As a result, our
revenues in any period may not be predictive of revenues in any subsequent
period. Our royalty revenues may be unpredictable and may fluctuate since
they depend upon the seasonality of sales of licensed products, the
existence of competing products, the marketing efforts of our licensees,
potential reductions in royalties payable to us due to credits for prior
payments to us, the timing of royalty reports, some of which are required
quarterly and others semi-annually, our method of accounting for royalty
revenues from our licensees and our ability to successfully defend and
enforce our patents. Other revenue may also be unpredictable and may
fluctuate due to the timing of payments of non-recurring licensing and
signing fees and payments for manufacturing services and achievement of
milestones under new and existing collaborative, humanization, and patent
licensing agreements. Revenue historically recognized under our prior
agreements may not be an indicator of revenue from any future
collaborations.
PDL has recognized revenue during the quarter ended March 31, 2000, in
accordance with its historical practice. In December 1999, the Securities
and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements" (SAB 101). We are evaluating the
effects, if any, that the adoption of SAB 101 in the second quarter of 2000
may have on the results of our operations or our financial position. We have
been advised that the Securities and Exchange Commission intends to provide
additional guidance during the second quarter of 2000 with respect to the
implementation of SAB 101. It is currently unknown whether such guidance
and the implementation of SAB 101 will require us to revise our revenue
recognition practices or to restate revenues for the first quarter of 2000.
In addition, our expenses may be unpredictable and may fluctuate from
quarter to quarter due to the timing of expenses, which may include payments
owed by us under licensing arrangements and due to our policy of recording
expenses under collaborative agreements during the quarter in which such
expenses are reported to us.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2000 and 1999
The Company's total revenues for the three months ended March 31, 2000
were $15.5 million compared to $8.8 million in the first quarter of 1999.
Total revenues recognized under agreements with third parties were $12.5
million in the first quarter of 2000 compared to $6.5 million in the
comparable period in 1999. Interest and other income was $3.0 million in the
first quarter of 2000 compared to $2.4 million in the comparable period in
1999, reflecting the increased interest earned on our cash, cash equivalents
and marketable securities balances as a result of our private placement of
$150 million in convertible subordinated notes in February 2000.
Revenues under agreements with third parties of $12.5 million for the
three months ended March 31, 2000 consisted principally of royalties,
signing and licensing fees, research and development reimbursement funding,
milestone payments earned under licensing agreements and a license
maintenance fee. In the first quarter of 1999, revenues of $6.5 million
under agreements with third parties consisted principally of a $3.0 million
non-refundable, non-creditable signing and licensing fee from Scil
Biomedicals GmbH (Scil) for rights to develop and market our SMART[TM]
(humanized) Anti-L-Selectin Antibody in Europe, royalties and research and
development reimbursement funding.
Total costs and expenses for the three months ended March 31, 2000
were $14.7 million compared with $10.7 million in the comparable period in
1999.
Research and development expenses for the three month period ended
March 31, 2000 were $11.1 million compared with $8.3 million in the year-
earlier quarter. Research and development costs increased primarily due to
the addition of staff, the expansion of clinical development programs,
research and pharmaceutical development capabilities, including support for
both clinical development and manufacturing process development and payments
related to manufacturing of humanized anti-IL-4.
General and administrative expenses for the three months ended March
31, 2000 increased to $2.5 million from $2.4 million in the comparable
period in 1999.
Interest expense for the three month period ended March 31, 2000
increased to $1.2 million primarily due to the interest expense associated
with our convertible subordinated notes issued on February 15, 2000.
LIQUIDITY AND CAPITAL RESOURCES
To date we have financed our operations primarily through public and
private placements of equity securities, research and development revenues,
interest income on invested capital and a private placement of $150 million
in convertible subordinated notes in February 2000. At March 31, 2000, we
had cash, cash equivalents and marketable securities in the aggregate of
$291.6 million, compared to $137.2 million at December 31, 1999.
As set forth in the Consolidated Statements of Cash Flows, net cash
provided by operating activities was $2.5 million for the three months ended
March 31, 2000 compared to net cash used in operating activities of $1.9
million in the same period in 1999. This change was primarily the result of
our net income for the first quarter of 2000 as compared to a net loss in
the comparable period of 1999.
As set forth in the Consolidated Statements of Cash Flows, net cash
provided by financing activities for the three months ended March 31, 2000
was $157.6 million, resulting primarily from the proceeds of a private
placement of $150 million in convertible subordinated notes in February 2000
and the exercise of outstanding stock options.
Our future capital requirements will depend on numerous factors,
including, among others, royalties from sales of products of third party
licensees, including Synagis[R], Herceptin[R] and Zenapax; our ability to enter
into additional collaborative, humanization and patent licensing
arrangements; progress of product candidates in clinical trials; the ability
of our licensees to obtain regulatory approval and successfully manufacture
and market products licensed under our patents; the continued or additional
support by our collaborative partners or other third parties of research and
development efforts and clinical trials; enhancement of existing and
investment in new research and development programs; time required to gain
regulatory approvals; resources we devote to self-funded products,
manufacturing facilities and methods and advanced technologies; our ability
to obtain and retain funding from third parties under collaborative
arrangements; our continued development of internal marketing and sales
capabilities; the demand for our potential products, if and when approved;
potential acquisitions of technology, product candidates or businesses by
us; and the costs of defending or prosecuting any patent opposition or
litigation necessary to protect our proprietary technology. In order to
develop and commercialize our potential products we may need to raise
substantial additional funds through equity or debt financings,
collaborative arrangements, the use of sponsored research efforts or other
means. No assurance can be given that such additional financing will be
available on acceptable terms, if at all, and such financing may only be
available on terms dilutive to existing stockholders. We believe that
existing capital resources including the proceeds of the issue and sale in
February 2000 of $150 million of our 5.50% Convertible Subordinated Notes
due February 15, 2007, will be adequate to satisfy our capital needs through
at least 2002.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company maintains a non-trading investment portfolio of investment
grade, highly liquid, debt securities which limits the amount of credit
exposure to any one issue, issuer, or type of instrument. The Company does
not use derivative financial instruments for speculative or trading
purposes. The securities in the Company's investment portfolio are not
leveraged and are classified as available for sale and therefore are subject
to interest rate risk. The Company does not currently hedge interest rate
exposure. As of March 31, 2000, there has been no material change in the
Company's interest rate exposure from that described in the Company's Annual
Report on Form 10-K for the year ended December 31, 1999.
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION - RISK FACTORS
This Quarterly Report contains, in addition to historical information,
forward-looking statements which involve risks and uncertainties. The
Company's actual results may differ significantly from the results discussed
in forward-looking statements. Factors that may cause such a difference
include those discussed in the material set forth in this document and in
the discussion captioned "Risk Factors" in the Company's Annual Report on
Form 10-K for the year ending December 31, 1999.
We have a history of operating losses and may not achieve profitability.
Our expenses have generally exceeded revenues. As of December 31, 1999, we
had an accumulated deficit of approximately $79.2 million. We believe that
our losses may increase because of the extensive resource commitments
required to achieve regulatory approval and commercial success for any
individual product. For example, over the next several years, we will incur
substantial additional expenses as we continue to develop and manufacture
our potential products, invest in new research areas and improve and expand
our manufacturing capabilities. Since we or our collaborative partners or
licensees may not be able to successfully develop additional products,
obtain required regulatory approvals, manufacture products at an acceptable
cost and with appropriate quality, or successfully market such products with
desired margins, we may never achieve profitable operations. The amount of
net losses and the time required to reach sustained profitability are highly
uncertain. We cannot assure you that we will be able to achieve or sustain
profitability.
Our commitment of resources to the development of Zenapax and the humanized
anti-IL-4 antibody, two humanized antibodies with respect to which we
recently obtained development rights, taken together with the continued
development of our existing products, will require significant additional
funds for development. Our operating expenses may also increase as:
- some of our earlier stage potential products move into later stage
clinical development
- additional potential products are selected as clinical candidates
for further development
- we invest in additional manufacturing capacity
- we defend or prosecute our patents and patent applications, and
- we invest in research or acquire additional technologies, product
candidates or businesses.
In the absence of substantial revenues from new corporate collaborations or
patent licensing or humanization agreements, significant royalties on sales
of products licensed under our intellectual property rights, product sales
or other uncertain sources of revenue, we will incur substantial operating
losses.
Our revenues, expenses and operating results will likely fluctuate in future
periods.
Our revenues have varied in the past and will likely continue to fluctuate
considerably from quarter to quarter and from year to year. As a result,
our revenues in any period may not be predictive of revenues in any
subsequent period. Our royalty revenues may be unpredictable and may
fluctuate since they depend upon:
- the seasonality of sales of licensed products
- the existence of competing products
- the marketing efforts of our licensees
- potential reductions in royalties payable to us due to credits for
prior payments to us
- the timing of royalty reports, some of which are required quarterly
and others semi-annually,
- our method of accounting for royalty revenues from our licensees,
and
- our ability to successfully defend and enforce our patents.
Other revenue may also be unpredictable and may fluctuate due to the timing
of payments of non-recurring licensing and signing fees and payments for
manufacturing services and achievement of milestones under new and existing
collaborative, humanization, and patent licensing agreements. Revenue
historically recognized under our prior agreements may not be an indicator
of non-royalty revenue from any future collaborations.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
(SAB 101). We are evaluating the effects, if any, that the adoption of SAB
101 in the second quarter of 2000 may have on the results of our operations
or our financial position. We have been advised that the Securities and
Exchange Commission intends to provide additional guidance during the second
quarter of 2000 with respect to the implementation of SAB 101. It is
currently unknown whether such guidance and the implementation of SAB 101
will require us to revise our revenue recognition practices or to restate
revenues for the first quarter of 2000.
In addition, our expenses may be unpredictable and may fluctuate from
quarter to quarter due to the timing of expenses, which may include payments
owed by us under licensing arrangements.
Our humanization patents are being opposed and a successful challenge could
limit our future revenues.
PDL's two humanization patents issued by the European Patent Office (EPO)
apply in the United Kingdom, Germany, France, Italy and eight other European
countries. The EPO procedures provide for an opposition period in which
other parties may submit arguments as to why a patent was incorrectly
granted and should be withdrawn or limited. Eighteen notices of opposition
to our first European patent were filed during the opposition period for the
patent, including oppositions by major pharmaceutical and biotechnology
companies. At an oral hearing in March 2000, the Opposition Division (OD)
of the EPO decided to revoke the broad claims in our first European patent
based on formal matters of European patent law, specifically that there had
been an impermissible addition of subject matter after the filing of the
original European patent application, but did not provide the rationale
behind its decision. The decision upheld claims that protect Zenapax. The
OD did not otherwise announce a decision on the issue of whether the claims
in our patent are inventive in light of the prior art or other issues of
patentability. We plan to appeal the OD's decision to the Technical Board
of Appeals at the EPO. The Technical Board of Appeals will consider all
issues anew. The appeal suspends the decision of the OD during the appeals
process, which is likely to take several years.
Until our appeal regarding our first European patent is resolved, we may be
limited in our ability to collect royalties or to negotiate future licensing
or collaborative research and development arrangements based on this and our
other humanization patents. Moreover, if our appeal is unsuccessful, our
ability to collect royalties on European sales of antibodies humanized by
others would depend on the scope and validity of our second European patent,
whether the antibodies are manufactured in a country outside of Europe where
they are covered by one of our patents, and in that case the terms of our
license agreements with respect to that situation. Also, the OD's decision
could encourage challenges of our related patents in other jurisdictions,
including the U.S. The OD's decision may lead some of our licensees to stop
making royalty payments or lead potential licensees not to take a license,
which might result in us initiating formal legal actions to enforce our
rights under our various humanization patents. In such a situation, a
likely defensive strategy to our action would be to challenge our patents in
that jurisdiction. During the appeals process with respect to our first
European patent, if we were to commence an infringement action to enforce
that patent, such an action would likely be stayed until the appeal is
decided by the EPO. We have no assurance that we will successfully enforce
our rights under our European or related U.S. and Japanese patents. The
nine month opposition period for our second European antibody humanization
patent ends in May 2000, and we expect that a significant number of notices
of opposition will be filed with respect to this patent. We have also been
advised that three opposition statements have been filed with the Japanese
Patent Office with respect to our humanization patent issued in Japan in
late 1998.
We intend to vigorously defend the European patents and the Japanese patent
in these proceedings; however, we may not prevail in the opposition
proceedings or any litigation contesting the validity of these patents. If
our appeal with respect to our first European patent is unsuccessful or if
the outcome of the other European or Japanese opposition proceedings or any
litigation involving our antibody humanization patents were to be
unfavorable, our ability to collect royalties on existing licensed products
and to license our patents relating to humanized antibodies may be
materially harmed. In addition, these proceedings or any other litigation
to protect our intellectual property rights or defend against infringement
claims by others, could result in substantial costs and diversion of
management's time and attention, which could materially harm our business
and financial condition.
If we are unable to protect our patents and proprietary technology, we may
not be able to compete successfully.
Our success depends significantly on our ability to obtain and maintain
patent protection for our products and technologies, to preserve our trade
secrets and to operate without infringing on the proprietary rights of third
parties. While we file and prosecute patent applications to protect our
inventions, our pending patent applications may not result in the issuance
of valid patents or our issued patents may not provide competitive
advantages. Also, our patent protection may not prevent others from
developing competitive products using related or other technology.
A number of companies, universities and research institutions have filed
patent applications or received patents in the areas of antibodies and other
fields relating to our programs. Some of these applications or patents may
be competitive with our applications or contain material that could prevent
the issuance of patents to us or result in a significant reduction in the
scope of our issued patents.
The scope, enforceability and effective term of patents issued to companies,
universities and research institutions can be highly uncertain and often
involve complex legal and factual questions. No consistent policy has
emerged regarding the breadth of claims in biotechnology patents, so that
even issued patents may later be modified or revoked by the relevant patent
authorities or courts. Moreover, the issuance of a patent in one country
does not assure the issuance of a patent with similar claims in another
country, and claim interpretation and infringement laws vary among
countries, so we are unable to predict the extent of any patent protection
in different countries.
In addition to seeking the protection of patents and licenses, we also rely
upon trade secrets, know-how and continuing technological innovation which
we seek to protect, in part, by confidentiality agreements with employees,
consultants, suppliers and licensees. If these agreements are not honored,
we might not have adequate remedies for any breach. Additionally, our trade
secrets might otherwise become known or patented by our competitors.
We may require additional patent licenses in order to manufacture or sell
our potential products.
Other companies, universities and research institutions may obtain patents
that could limit our ability to use, import, manufacture, market or sell our
products or impair our competitive position. As a result, we might be
required to obtain licenses from others before we could continue using,
importing, manufacturing, marketing, or selling our products. We may not be
able to obtain required licenses on terms acceptable to us, if at all. If
we do not obtain required licenses, we may encounter significant delays in
product development while we redesign potentially infringing products or
methods or may not be able to market our products at all.
Celltech Chiroscience plc has been granted a patent by the EPO covering
humanized antibodies (European Adair Patent), which we have opposed.
Celltech has also been issued a corresponding U.S. patent (U.S. Adair
Patent) that contains claims that may be considered broader in scope than
the European Adair Patent. Recently, we entered into an agreement with
Celltech providing each company with the right to obtain nonexclusive
licenses for up to three antibody targets under the other company's
humanization patents. Nevertheless, if our SMART antibodies were covered by
the European or U.S. Adair Patent and if we were to need more than the three
licenses under those patents currently available to us under the agreement,
we would be required to negotiate additional licenses under those patents or
to significantly alter our processes or products. We might not be able to
successfully alter our processes or products to avoid conflict with these
patents or to obtain the required additional licenses on commercially
reasonable terms, if at all.
In addition, if U.S. Adair Patent or any related patent applications
conflict with our U.S. patents or patent applications, we may become
involved in proceedings to determine which company was the first to invent
the products or processes contained in the conflicting patents. These
proceedings could be expensive, last several years and either prevent
issuance of additional patents to us relating to humanization of antibodies
or result in a significant reduction in the scope or invalidation of our
patents. Any limitation would reduce our ability to negotiate or collect
royalties or to negotiate future collaborative research and development
agreements based on these patents.
Lonza Biologics, Inc. has a patent issued in Europe to which we do not have
a license (although we have been advised by Roche that it has a license
covering Zenapax) that may cover a process that we use to produce our
potential products. If our processes were covered by this patent, we might
be required to obtain a license under this patent or to significantly alter
our processes or products in Europe. We might not be able to successfully
alter our processes or products to avoid conflict with this patent or to
obtain a license on commercially reasonable terms.
We do not have a license to an issued U.S. patent assigned to Stanford
University and Columbia University, which may cover a process we use to
produce our potential products. We have been advised that an exclusive
license has been previously granted to a third party under this patent. If
our processes were covered by this patent, we might be required to obtain a
license or to significantly alter our processes or products in the U.S. We
might not be able to successfully alter our processes or products to avoid
conflict with this patent or to obtain a license on acceptable terms.
Moreover, if we do not obtain the required licenses, any alteration of
processes or products to avoid conflict with a competitive patent could
result in a significant delay in our achieving regulatory approval for the
products affected by these alterations.
If we cannot successfully complete our clinical trials, we will be unable to
obtain regulatory approvals required to market our products.
To obtain regulatory approval for the commercial sale of any of our
potential products or to promote these products for expanded indications, we
must demonstrate through preclinical testing and clinical trials that each
product is safe and effective for use in indications for which approval is
requested. We have conducted only a limited number of clinical trials to
date. We may not be able to successfully commence and complete all of our
planned clinical trials without significant additional resources and
expertise. Our potential inability to commence or continue clinical trials,
to complete the clinical trials on a timely basis or to demonstrate the
safety and efficacy of our potential products, further adds to the
uncertainty of regulatory approval for our potential products.
Larger and later stage clinical trials may not produce the same results as
early stage trials. Many companies in the pharmaceutical and biotechnology
industries, including PDL, have suffered significant setbacks in clinical
trials, including advanced clinical trials, even after promising results had
been obtained in earlier trials.
Research, preclinical testing and clinical trials may take many years to
complete and the time required can vary depending on the indication being
addressed and the nature of the product. We may at times elect to use
aggressive clinical strategies in order to advance potential products
through clinical development as rapidly as possible. For example, we may
commence clinical trials without conducting preclinical animal testing,
where an appropriate animal testing model does not exist, or we may conduct
later stage trials based on limited early stage data. As a result, we
anticipate that only some of our potential products may show safety and
efficacy in clinical trials and some may encounter difficulties or delays
during clinical development.
For example, we have entered the SMART M195 Antibody into a Phase III
clinical trial in acute myelogenous leukemia with a clinical regimen that
has not been tested previously with this antibody. Results from our prior
Phase II and Phase II/III studies showed only a limited number of complete
and partial remissions. In addition, we initiated a Phase III study without
a meeting with the FDA or European regulatory authorities to discuss the
protocol and its adequacy to support approval of the SMART M195 Antibody.
We believe that our Phase III program is reasonable in view of the nature
and severity of the disease. We cannot assure you that the study will be
successful or that the FDA or European regulatory authorities will agree
that the study will be adequate to obtain regulatory approval, even if the
study is successful. In addition, the protocol for our Phase III trial
includes an interim review by an independent data safety monitoring board.
It is possible that the trial could be terminated upon such a review if the
interim data do not show a sufficient probability of the trial being
successful or if specified safety criteria are not met.
As a second example, the FDA recently placed a clinical hold on clinical
trials of our SMART Anti-CD3 Antibody for kidney transplant indications due
to their belief that we have not supplied adequate data from our prior
trials to support our proposed dosage modifications to the Phase II study
for prevention of kidney transplant rejection. Although our clinical trials
of this antibody in other indications, such as psoriasis, are not affected
by this hold, our clinical studies of this potential product for prevention
or treatment of kidney transplant rejection will be delayed in the U.S.
until we supply sufficient data to the FDA to justify our desired clinical
study designs. Also, we may be required to further modify our clinical
study designs to comply with FDA requirements and possibly to conduct
additional Phase I trials before proceeding with Phase II trials.
Accordingly, there can be no assurance that we will be able, or will choose,
to proceed with development of this antibody for either or both of the
transplant indications.
We may be unable to enroll sufficient patients to complete our clinical
trials.
The rate of completion of our clinical trials, and those of our
collaborators, is significantly dependent upon the rate of patient
enrollment. Patient enrollment is a function of many factors, including:
- the size of the patient population
- perceived risks and benefits of the drug under study
- availability of competing therapies
- availability of clinical trial sites
- design of the protocol
- proximity of and access by patients to clinical sites
- patient referral practices of physicians
- eligibility criteria for the study in question, and
- efforts of the sponsor of and clinical sites involved in the trial
to facilitate timely enrollment.
We may have difficulty obtaining sufficient patient enrollment or clinician
support to conduct our clinical trials as planned, and we may have to expend
substantial additional funds to obtain access to resources or delay or
modify our plans significantly. These considerations may lead us to
consider the termination of ongoing clinical trials or development of a
product for a particular indication.
We may be unable to obtain or maintain regulatory approval for our products.
The manufacturing, testing and marketing of our products are subject to
regulation by numerous governmental authorities in the U.S. and other
countries. In the U.S., pharmaceutical products are subject to rigorous FDA
regulation. Additionally, other federal, state and local regulations govern
the manufacture, testing, clinical and nonclinical studies to assess safety
and efficacy, approval, advertising and promotion of pharmaceutical
products. The process of obtaining approval for a new pharmaceutical
product or for additional therapeutic indications within this regulatory
framework requires a number of years and the expenditure of substantial
resources. Companies in the pharmaceutical and biotechnology industries,
including us, have suffered significant setbacks in various stages of
clinical trials, even in advanced clinical trials after promising results
had been obtained in earlier trials.
In addition to the requirement for FDA approval of each pharmaceutical
product, each pharmaceutical product manufacturing facility must be
registered with, and approved by, the FDA. The manufacturing and quality
control procedures must conform to rigorous guidelines in order to receive
FDA approval. Pharmaceutical product manufacturing establishments are
subject to inspections by the FDA and local authorities as well as
inspections by authorities of other countries. To supply pharmaceutical
products for use in the U.S., foreign manufacturing establishments must
comply with these FDA approved guidelines. These foreign manufacturing
establishments are subject to periodic inspection by the FDA or by
corresponding regulatory agencies in these countries under reciprocal
agreements with the FDA. Moreover, pharmaceutical product manufacturing
facilities may also be regulated by state, local and other authorities.
For the marketing of pharmaceutical products outside the U.S., we and our
collaborative partners are subject to foreign regulatory requirements and,
if the particular product is manufactured in the U.S., FDA and other U.S.
export provisions. Requirements relating to the manufacturing, conduct of
clinical trials, product licensing, promotion, pricing and reimbursement
vary widely in different countries. Difficulties or unanticipated costs or
price controls may be encountered by us or our licensees or marketing
partners in our respective efforts to secure necessary governmental
approvals. This could delay or prevent us or our licensees or our marketing
partners from marketing potential pharmaceutical products.
Both before and after approval is obtained, a pharmaceutical product, its
manufacturer and the holder of the Biologics License Application (BLA) for
the pharmaceutical product are subject to comprehensive regulatory
oversight. The FDA may deny a BLA if applicable regulatory criteria are not
satisfied. Moreover, even if regulatory approval is granted, such approval
may be subject to limitations on the indicated uses for which the
pharmaceutical product may be marketed. Further, marketing approvals may be
withdrawn if compliance with regulatory standards is not maintained or if
problems with the pharmaceutical product occur following approval. In
addition, under a BLA, the manufacturer continues to be subject to facility
inspection and the applicant must assume responsibility for compliance with
applicable pharmaceutical product and establishment standards. Violations
of regulatory requirements at any stage may result in various adverse
consequences, which may include, among other adverse actions, withdrawal of
the previously approved pharmaceutical product or marketing approvals and/or
the imposition of criminal penalties against the manufacturer and/or BLA
holder.
Our revenues from licensed technologies depend on the efforts and successes
of our licensees.
In those instances where we have licensed rights to our technologies, the
product development and marketing efforts and successes of our licensees
will determine the amount and timing of royalties we may receive, if any.
We have no assurance that any licensee will successfully complete the
product development, regulatory and marketing efforts required to sell
products. The success of products sold by licensees, such as Roche, will be
affected by competitive products, including potential competing therapies
that are marketed by the licensee or others.
If our collaborations are not successful, we may not be able to effectively
develop and market some of our products.
We have collaborative agreements with several pharmaceutical and other
companies to develop, manufacture and market Zenapax and some of our
potential products. In some cases, we are relying on our collaborative
partners to manufacture such products, to conduct clinical trials, to
compile and analyze the data received from these trials, to obtain
regulatory approvals and, if approved, to market these licensed products.
As a result, we may have little or no control over the manufacturing,
development and marketing of these potential products and little or no
opportunity to review clinical data prior to or following public
announcement.
Our collaborative agreements can generally be terminated by our partners on
short notice. A collaborator may terminate its agreement with us or
separately pursue alternative products, therapeutic approaches or
technologies as a means of developing treatments for the diseases targeted
by us or our collaborative effort. Even if a collaborator continues its
contributions to the arrangement, it may nevertheless determine not to
actively pursue the development or commercialization of any resulting
products. In these circumstances, our ability to pursue potential products
could be severely limited.
Continued funding and participation by collaborative partners will depend on
the timely achievement of our research and development objectives, the
retention of key personnel performing work under those agreements and on
each collaborative partner's own financial, competitive, marketing and
strategic considerations. Such considerations include:
the commitment of management of the collaborative partners to
the continued development of the licensed products or technology
the relationships among the individuals responsible for the
implementation and maintenance of the collaborative efforts, and
the relative advantages of alternative products or technology
being marketed or developed by the collaborators or by others,
including their relative patent and proprietary technology
positions, and their ability to manufacture potential products
successfully.
- the commitment of management of the collaborative partners to the
continued development of the licensed products or technology
- the relationships among the individuals responsible for the
implementation and maintenance of the collaborative efforts, and
- the relative advantages of alternative products or technology being
marketed or developed by the collaborators or by others, including
their relative patent and proprietary technology positions, and
their ability to manufacture potential products successfully.
Our ability to enter into new collaborations and the willingness of our
existing collaborators to continue development of our potential products
depends upon, among other things, our patent position with respect to such
products. If we are unable to successfully maintain our patents we may be
unable to collect royalties on existing licensed products or enter into
additional collaborations and agreements.
Our lack of experience in sales, marketing and distribution may hamper
market introduction and acceptance of our products.
We intend to market and sell a number of our products either directly or
through sales and marketing partnership arrangements with collaborative
partners. To market products directly, we must either establish a marketing
group and direct sales force or obtain the assistance of another company.
We may not be able to establish marketing, sales and distribution
capabilities or succeed in gaining market acceptance for our products. If
we were to enter into co-promotion or other marketing arrangements with
pharmaceutical or biotechnology companies, our revenues would be subject to
the payment provisions of these arrangements and dependent on the efforts of
third parties.
Manufacturing difficulties could delay commercialization of our products.
Of the products that we currently have in clinical development, Roche is
responsible for manufacturing Zenapax, SmithKline Beecham is responsible for
manufacturing the humanized anti-IL-4 antibody and Scil is responsible for
manufacturing the SMART Anti-L-Selectin Antibody. We are responsible for
manufacturing our other products for our own development. We intend to
continue to manufacture potential products for use in preclinical and
clinical trials using our manufacturing facility in accordance with standard
procedures that comply with appropriate regulatory standards. The
manufacture of sufficient quantities of antibody products that comply with
these standards is an expensive, time-consuming and complex process and is
subject to a number of risks that could result in delays. For example, we
and our collaborative partners have experienced some manufacturing
difficulties. Product supply interruptions could significantly delay
clinical development of our potential products, reduce third party or
clinical researcher interest and support of proposed clinical trials, and
possibly delay commercialization and sales of these products. Manufacturing
difficulties can even interrupt the supply of marketed products, thereby
reducing revenues and risking loss of market share. For example, Roche has
received a warning letter from the FDA regarding deficiencies in the
manufacture of various products. Although the letter primarily related to
products other than Zenapax, at least two deviations in the manufacture of
Zenapax were noted. If Roche were not able to correct these and any other
deficiencies in the manufacture of Zenapax in a timely manner, Zenapax
supplies could be interrupted, which could cause a delay or termination of
our clinical trials of Zenapax in autoimmune disease and could force Roche
to withdraw Zenapax from the market temporarily or permanently, resulting in
loss of revenue to us. These occurrences could materially impair our
competitive position.
We do not have experience in manufacturing commercial quantities of our
potential products, nor do we currently have sufficient capacity to
manufacture all of our potential products on a commercial scale. In order
to obtain regulatory approvals and to create capacity to produce our
products for commercial sale at an acceptable cost, we will need to improve
and expand our existing manufacturing capabilities. We are reviewing plans
to expand our manufacturing capacity, including possible acquisition and
conversion of an existing building into a manufacturing plant. If we
implement these plans we will incur substantial costs. Any construction
delays could impair our ability to produce adequate supplies of our
potential products for clinical use or commercial sale on a timely basis.
Further, we may be unable to improve and expand our manufacturing capability
sufficiently to obtain necessary regulatory approvals and to produce
adequate commercial supplies of our potential products on a timely basis.
Failure to do so could delay commercialization of these products and could
impair our competitive position.
Manufacturing changes may result in delays in obtaining regulatory approval
or marketing for our products.
Manufacturing of antibodies for use as therapeutics in compliance with
regulatory requirements is complex, time-consuming and expensive. If we
make changes in the manufacturing process, we may be required to demonstrate
to the FDA and corresponding foreign authorities that the changes have not
caused the resulting drug material to differ significantly from the drug
material previously produced. This is particularly important if we want to
rely on results of prior preclinical studies and clinical trials performed
using the previously produced drug material. Depending upon the type and
degree of differences between the newer and older drug material, we may be
required to conduct additional animal studies or human clinical trials to
demonstrate that the newly produced drug material is sufficiently similar to
the previously produced drug material. We have made manufacturing changes
and are likely to make additional manufacturing changes for the production
of our products currently in clinical development, such as the SMART M195
and SMART Anti-CD3 Antibodies. These manufacturing changes could result in
delays in development or regulatory approvals or in reduction or
interruption of commercial sales and could impair our competitive position.
Our business may be harmed if we cannot obtain sufficient quantities of raw
materials.
We depend on outside vendors for the supply of raw materials used to produce
our product candidates. Once a supplier's materials have been selected for
use in our manufacturing process, the supplier in effect becomes a sole or
limited source of that raw material due to regulatory compliance procedures.
If the third party suppliers were to cease production or otherwise fail to
supply us with quality raw materials and we were unable to contract on
acceptable terms for these services with alternative suppliers, our ability
to produce our products and to conduct preclinical testing and clinical
trials of product candidates would be adversely affected. This could impair
our competitive position.
Our revenue may be adversely affected by competition and rapid technological
change.
We are aware that potential competitors have developed and are developing
human and humanized antibodies or other compounds for treating autoimmune
diseases, transplantation, inflammatory conditions and cancers. In
addition, a number of academic and commercial organizations are actively
pursuing similar technologies, and several companies have developed or may
develop technologies that may compete with our SMART antibody technology.
Competitors may succeed in more rapidly developing and marketing
technologies and products that are more effective than our products or that
would render our products or technology obsolete or noncompetitive. Our
collaborative partners may also independently develop products that are
competitive with products that we have licensed to them. This could reduce
our revenues under our agreements with these partners.
Any product that we or our collaborative partners succeed in developing and
for which regulatory approval is obtained must then compete for market
acceptance and market share. The relative speed with which we and our
collaborative partners can develop products, complete the clinical testing
and approval processes, and supply commercial quantities of the products to
the market compared to competitive companies will affect market success.
For example, Novartis, which has a significant marketing and sales force
directed to the transplantation market, has received approval to market
Simulect[R], a product competitive with Zenapax, in the U.S. and Europe.
Since Novartis launched Simulect in the European Union earlier than Roche,
Zenapax may have a smaller market share than Simulect and other available
products.
Other competitive factors include:
- the capabilities of our collaborative partners
- product efficacy and safety
- timing and scope of regulatory approval
- product availability, marketing and sales capabilities
- reimbursement coverage
- the amount of clinical benefit of our products relative to their cost
- method of and frequency of administration of our products
- price of our products, and
- patent protection of our products.
If we do not attract and retain key employees, our business could be
impaired.
To be successful, we will have to retain our qualified clinical,
manufacturing, scientific and management personnel. Because we are located
in a high technology area, we face competition for personnel from other
companies, academic institutions, government entities and other
organizations. We are currently conducting a search for a chief financial
officer and a vice president of marketing, as well as other senior
management personnel. If we are unsuccessful in filling these positions or
retaining qualified personnel, our business could be impaired.
We may be subject to product liability claims, and our insurance coverage
may not be adequate to cover these claims.
We face an inherent business risk of exposure to product liability claims in
the event that the use of products during research and development efforts
or after commercialization results in adverse effects. This risk will exist
even with respect to any products that receive regulatory approval for
commercial sale. While we have obtained liability insurance for our
products, it may not be sufficient to satisfy any liability that may arise.
Also, adequate insurance coverage may not be available in the future at
acceptable cost, if at all.
We may require additional funds that may be difficult to obtain in order to
continue our business activities as planned.
Our operations to date have consumed substantial amounts of cash. We will
be required to spend substantial funds in conducting clinical trials, to
expand our marketing capabilities and efforts, to expand existing research
and development programs, to develop and expand our development and
manufacturing capabilities and to defend or prosecute our patents and patent
applications.
In order to develop and commercialize our products, we may need to raise
substantial additional funds through equity or debt financings,
collaborative arrangements, the use of sponsored research efforts or other
means. Additional financing may not be available on acceptable terms, if at
all, and may only be available on terms dilutive to existing stockholders or
that would increase the amount of our indebtedness. Our inability to secure
adequate funds on a timely basis could result in the delay or cancellation
of programs that we might otherwise pursue.
We may incur significant costs in order to comply with environmental
regulations or to defend claims arising from accidents involving the use of
hazardous materials.
We are subject to federal, state and local laws and regulations governing
the use, discharge, handling and disposal of materials and wastes used in
our operations. As a result, we may be required to incur significant costs
to comply with these laws and regulations. We cannot eliminate the risk of
accidental contamination or injury from these materials. In the event of
such an accident, we could be held liable for any resulting damages and
incur liabilities which exceed our resources. In addition, we cannot
predict the extent of the adverse effect on our business or the financial
and other costs that might result from any new government requirements
arising out of future legislative, administrative or judicial actions.
Changes in the U.S. and international health care industry could adversely
affect our revenues.
The U.S. and international health care industry is subject to changing
political, economic and regulatory influences that may significantly affect
the purchasing practices and pricing of pharmaceuticals. Cost containment
measures, whether instituted by health care providers or imposed by
government health administration regulators or new regulations, could result
in greater selectivity in the purchase of drugs. As a result, third-party
payors may challenge the price and cost effectiveness of our products. In
addition, in many major markets outside the U.S., pricing approval is
required before sales can commence. As a result, significant uncertainty
exists as to the reimbursement status of approved health care products.
We may not be able to obtain or maintain our desired price for our products.
Our products may not be considered cost effective relative to alternative
therapies. As a result, adequate third-party reimbursement may not be
available to enable us to maintain prices sufficient to realize an
appropriate return on our investment in product development. Also, the
trend towards managed health care in the U.S. and the concurrent growth of
organizations such as health maintenance organizations, as well as
legislative proposals to reform health care or reduce government insurance
programs, may all result in lower prices, reduced reimbursement levels and
diminished markets for our products. These factors will also affect the
products that are marketed by our collaborative partners.
Our common stock price is volatile and an investment in our company could
decline in value.
Market prices for securities of biotechnology companies (including PDL) have
been highly volatile so that investment in our securities involves
substantial risk. Additionally, the stock market from time to time has
experienced significant price and volume fluctuations that may be unrelated
to the operating performance of particular companies. The following are
some of the factors that may have a significant effect on the market price
of our common stock:
- developments or disputes as to patent or other proprietary rights
- disappointing sales of approved products
- approval or introduction of competing products and technologies
- results of clinical trials
- failures or unexpected delays in obtaining regulatory approvals or
FDA advisory panel recommendations
- delays in manufacturing or clinical trial plans
- fluctuations in our operating results
- disputes or disagreements with collaborative partners
- market reaction to announcements by other biotechnology or
pharmaceutical companies
- announcements of technological innovations or new commercial
therapeutic products by us or our competitors
- initiation, termination or modification of agreements with our
collaborative partners
- loss of key personnel
- litigation or the threat of litigation
- public concern as to the safety of drugs developed by us
- sales of our common stock held by collaborative partners or
insiders
- comments and expectations of results made by securities analysts,
and
- general market conditions.
If any of these factors causes us to fail to meet the expectations of
securities analysts or investors, or if adverse conditions prevail or are
perceived to prevail with respect to our business, the price of the common
stock would likely drop significantly. A significant drop in the price of a
company's common stock often leads to the filing of securities class action
litigation against the company. This type of litigation against us could
result in substantial costs and a diversion of management's attention and
resources.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
|
Exhibit Number
|
Description
|
|
3.1
|
Amended and Restated Bylaws
|
|
27.1
|
Financial Data Schedule
|
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K on February 14, 2000
(SEC File No. 000-19756) announcing:
Preliminary financial results for the quarter and year ended December
31, 1999.
The Company's intention to make a private offering of $100 million of
Convertible Subordinated Notes, due 2007, with an option to issue an
additional $25 million of notes.
The Company was delaying the pricing of its private offering of
Convertible Subordinated Notes in order to provide time to complete
quality control testing of a new lot of an antibody product.
The Company had been advised that an independent regulatory consultant
had approved the report of additional quality tests for the lot of
antibody product.
The private placement of $125 million principal amount of 5.5%
Convertible Subordinated Notes due 2007, and the granting to the
initial purchasers an option to purchase up to an additional $25
million in principal amount of notes.
The Company filed a Current Report on Form 8-K on March 1, 2000
(SEC File No. 000-19756) announcing the completion of the offering of
Convertible Subordinated Notes on February 15, 2000.
PROTEIN DESIGN LABS, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its be half by
the undersigned thereunto duly authorized.
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PROTEIN DESIGN LABS, INC.
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(Registrant)
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Dated: May 11, 2000
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By: |
/s/Laurence Jay Korn
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Laurence Jay Korn
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Chairperson of the
Board of Directors
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(Principal Executive Officer)
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By: |
/s/Robert Kirkman
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Robert Kirkman
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Vice President Corporate
Communications and Business
Development
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(Principal Accounting Officer)
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Exhibit 3.1
AMENDED AND RESTATED
BYLAWS
OF
PROTEIN DESIGN LABS, INC.
ARTICLE I
OFFICES
Section 1. Principal Executive Office. The Board of Directors
shall fix the location of the principal executive office of the
Corporation at any place within or outside the State of Delaware.
The Board of Directors shall fix and designate a registered business
office and registered agent in the State of Delaware regardless of
whether the Corporation maintains a place of business there.
Section 2. Other Offices. The Board of Directors may at any time
establish branch or subordinate offices at any place or places where
the Corporation is qualified to do business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of stockholders shall be
held at any place within or outside the State of Delaware designated
by the Board of Directors. In the absence of any such designation,
stockholders' meetings shall be held at the principal executive
office of the Corporation.
Section 2. Annual Meetings. The annual meetings of stockholders
shall be held on such day and at such hour as may be fixed by the
Board of Directors within thirteen months subsequent to the later of
the date of incorporation of the Corporation or the last annual
meeting of stockholders. At such meeting, directors shall be elected
and any other proper business may be transacted.
Section 3. Special Meeting. A special meeting of the
stockholders for any purpose or purposes described in the notice of
the meeting may be called at any time by a majority of the number of
authorized directors of the Board of Directors or the holders of not
less than a majority of the number of shares entitled to vote at the
meeting. Notice of such special meeting shall be given in the same
manner as for the annual meeting of stockholders.
Section 4. Notice of Stockholders' Meetings. All notices of
meetings of stockholders shall be sent or otherwise given in
accordance with Section 5 of this Article II not fewer than ten (10)
nor more than sixty (60) days before the date of the meeting. The
notice shall specify the place, date and hour of the meeting and (i)
in the case of a special meeting, the nature of the business to be
transacted, or (ii) in the case of the annual meeting, those matters
which the Board of Directors, at the time of giving the notice,
intends to present for action by the stockholders. The notice of any
meeting at which directors are to be elected shall include the name
of any nominee or nominees whom, at the time of the notice,
management intends to present for election.
Section 5. Manner of Giving Notice; Affidavit of Notice. Written
notice of any meeting of stockholders shall be given. If mailed,
notice shall be deemed to have been given at the time when delivered
personally or deposited in the United States mail, postage prepaid.
An affidavit of the mailing or other means of giving any notice of
any stockholders' meeting shall be executed by the secretary,
assistant secretary, or any transfer agent of the Corporation giving
the notice, and shall be filed and maintained in the minute book of
the Corporation.
Section 6. Quorum. The presence in person or by proxy of the
holders of a majority of the shares entitled to vote at any meeting
of stockholders shall constitute a quorum for the transaction of
business. If a quorum shall fail to attend any meeting, the
chairperson of the meeting or the holders of a majority of the shares
of stock entitled to vote who are present, in person or by proxy, may
adjourn the meeting to another place, date, or time.
Section 7. Conduct of the Stockholders' Meeting. At every
meeting of the stockholders, the Chairperson of the Board of
Directors, or in his or her absence, the Chief Executive Officer of
the Corporation, or in his or her absence, the person designated by
the Chairperson of the Board of Directors, or in the absence of such
designation, a chairperson chosen by the majority of the voting
shares represented in person or by proxy, shall act as Chairperson of
the meeting. The Secretary of the Corporation or a person designated
by the Chairperson of the meeting shall act as Secretary of the
meeting. Unless otherwise approved by the Chairperson, attendance at
the Stockholders' Meeting is restricted to stockholders of record,
persons authorized in accordance with Section 14 of this Article II
to act by proxy, and officers of the Corporation.
Section 8. Conduct of Business. The Chairperson of the meeting
shall call the meeting to order, establish the agenda, and conduct
the business of the meeting in accordance therewith or, at the
Chairperson's discretion, it may be conducted otherwise in accordance
with the wishes of the stockholders in attendance. The date and time
of the opening and closing of the polls for each matter upon which
the stockholders will vote at the meeting shall be announced at the
meeting.
The Chairperson of the meeting shall also conduct the meeting in
an orderly manner, rule on the precedence of, and procedure on,
motions and other procedural matters, and exercise discretion with
respect to such procedural matters with fairness and good faith
toward all those entitled to take part. The Chairperson may impose
reasonable limits on the amount of time taken up at the meeting on
discussion in general or on remarks by any one stockholder. Should
any person in attendance become unruly or obstruct the meeting
proceedings, the Chairperson shall have the power to have such person
removed from participation. Notwithstanding anything in the bylaws
to the contrary, no business shall be conducted at a meeting except
in accordance with the procedures set forth in this Section 8 and
Section 9, below. The Chairperson of a meeting shall, if the facts
warrant, determine and declare to the meeting that business was not
properly brought before the meeting and in accordance with the
provisions of this Section 8 and Section 9, and if he or she should
so determine, he or she shall so declare to the meeting and any such
business not properly brought before the meeting shall not be
transacted.
Section 9. Notice of Stockholder Business. At an annual or
special meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To
be properly brought before a meeting, business must be (a) specified
in the notice of meeting (or any supplement thereto) given by or at
the direction of the Board of Directors, (b) properly brought before
the meeting by or at the direction of the Board of Directors, (c)
properly brought before an annual meeting by a stockholder, or (d)
properly brought before a special meeting by a stockholder, but if,
and only if, the notice of a special meeting provides for business to
be brought before the meeting by stockholders. For business to be
properly brought before a meeting by a stockholder, the stockholder
must have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a stockholder proposal to be
presented at an annual meeting shall be received at the Corporation's
principal executive office not less than one hundred twenty (120)
calendar days in advance of the date that the Corporation's (or the
Corporation's predecessor's) proxy statement was released to
stockholders in connection with the previous year's annual meeting of
stockholders. However, if no annual meeting was held in the previous
year or the date of the annual meeting has been changed by more than
thirty (30) calendar days from the date contemplated at the time of
the previous year's proxy statement, or in the event of a special
meeting, notice by the stockholder to be timely must be received not
later than the close of business on the tenth (10th) day following
the day on which such notice of the date of the meeting was mailed or
such public disclosure was made. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder proposes
to bring before the annual or special meeting (a) a brief description
of the business desired to be brought before the annual or special
meeting and the reasons for conducting such business at the annual or
special meeting, (b) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business, (c)
the class and number of shares of the Corporation which are
beneficially owned by the stockholder, and (d) any material interest
of the stockholder in such business.
Section 10. Adjourned Meetings and Notice Thereof. When a
stockholders' meeting is adjourned to another time or place, notice
of the adjourned meeting need not be given if the time and place
thereof are announced at the meeting at which the adjournment is
taken; except that if the adjournment is for more than thirty (30)
days or if the Board of Directors shall set a new record date, notice
of any adjourned meeting shall be given to each stockholder of record
entitled to vote at the adjourned meeting in accordance with Sections
4 and 5 of this Article II.
At the adjourned meeting, the Corporation may transact any
business which might have been transacted at the original meeting.
Section 11. Voting. Except as otherwise required by the
Certificate of Incorporation or the General Corporation Law of
Delaware, each outstanding share, regardless of class, shall be
entitled to one vote on each matter submitted to a vote of
stockholders. All voting, including on the election of directors but
excepting where otherwise required by law, may be by a voice vote;
provided, however, that upon demand therefor by a stockholder
entitled to vote or his or her proxy, a stock vote shall be taken.
Every stock vote shall be taken by ballots, each of which shall state
the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for
the meeting. Every vote taken by ballots shall be counted by an
inspector or inspectors appointed by the chairperson of the meeting.
The Corporation may, and to the extent required by law, shall, in
advance of any meeting of stockholders, appoint one or more
inspectors to act at the meeting and make a written report thereof.
The Corporation may designate one or more persons as alternate
inspectors to replace any inspector who fails to act. If no
inspector or alternate is able to act at a meeting of stockholders,
the person presiding at the meeting may, and to the extent required
by law, shall, appoint one or more inspectors to act at the meeting.
Each inspector, before entering upon the discharge of his or her
duties, shall take and sign an oath faithfully to execute the duties
of inspector with strict impartiality and according to the best of
his or her ability. Each inspector shall:
(a) Determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the
existence of a quorum, and the authenticity, validity, and
effect of proxies;
(b) Receive votes, ballots, or consents;
(c) Hear and determine all challenges and questions in any way
arising in connection with the
right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the results; and
(g) Do any other acts that may be proper to conduct the
elections or votes with fairness to all stockholders.
Any holder of shares entitled to vote on any matter may vote part
of the shares in favor of the proposal and refrain from voting the
remaining shares or vote them against the proposal but if the
stockholder fails to specify the number of shares such stockholder is
voting affirmatively, it shall be conclusively presumed that the
stockholder's approving vote is with respect to all shares said
stockholder is entitled to vote.
All elections shall be determined by a plurality of the votes
cast, and except as otherwise required by law, all other matters
shall be determined by a majority of the votes cast affirmatively or
negatively.
Section 12. Waiver of Notice or Consent by Absent Stockholders.
The transactions of any meeting of stockholders, either annual or
special, however called and noticed, and wherever held, shall be as
valid as though had at a meeting duly held after regular call and
notice, if a quorum is present either in person or by proxy, and if,
either before or after the meeting, each person entitled to vote, not
present in person or by proxy, signs a written waiver of notice, or a
consent to the holding of such meeting, or an approval of the minutes
thereof. The waiver of notice or consent need not specify either the
business to be transacted or the purpose of any annual or special
meeting of stockholders. All such waivers, consents, or approvals
shall be filed with the corporate records or made a part of the
minutes of the meeting.
Attendance of a person at a meeting shall constitute a waiver of
notice of such meeting, except when a person objects, at the
beginning of the meeting, to the transaction of any business because
the meeting is not lawfully called or convened; and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters not included in the notice of the meeting if
that objection is expressly made at the meeting.
Section 13. Stockholder Action by Written Consent. Any action
which may be taken at any annual or special meeting of stockholders
may be taken without a meeting and without prior notice, if a consent
in writing, setting forth the actions so taken, is signed by the
holders of outstanding shares having not less than the minimum number
of votes which would be necessary to authorize or take such action at
a meeting at which all shares entitled to vote thereon were present
and voted. All such consents shall be filed with the Secretary of
the Corporation and shall be maintained in the corporate records.
Prompt notice of the taking of a corporate action without a meeting
by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
Section 14. Proxies. At any meeting of the stockholders, every
stockholder entitled to vote may vote in person or by proxy
authorized by an instrument in writing or by a transmission permitted
by law filed in accordance with the procedure established for the
meeting. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission created pursuant to this
paragraph may be substituted or used in lieu of the original writing
or transmission for any and all purposes for which the original
writing or transmission could be used, provided that such copy,
facsimile transmission or other reproduction shall be a complete
reproduction of the entire original writing or transmission. A
validly executed proxy which does not state that it is irrevocable
and is not coupled with an interest shall continue in full force and
effect unless (i) revoked by the person executing it, before the vote
pursuant to that proxy, by a writing delivered to the Corporation
stating that the proxy is revoked, or by a subsequent proxy executed
by, or attendance at the meeting and voting in person by, the person
executing the proxy; or (ii) written notice of the death or
incapacity of the maker of that proxy is received by the Corporation
before the vote pursuant to that proxy is counted; provided, however,
that no proxy shall be valid after the expiration of three years from
the date of the proxy, unless otherwise provided in the proxy.
Section 15. Stock List. A complete list of stockholders entitled
to vote at any meeting of stockholders, arranged in alphabetical
order for each class of stock and showing the address of each such
stockholder and the number of shares registered in his or her name,
shall be open to the examination of any such stockholder, for any
purpose germane to the meeting, during ordinary business hours for a
period of at least ten (10) days prior to the meeting, either at a
place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held.
The stock list shall also be kept at the place of the meeting
during the whole time thereof and shall be open to the examination of
any such stockholder who is present. This list shall presumptively
determine the identity of the stockholders entitled to vote at the
meeting and the number of shares held by each of them.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Powers. Subject to the limitations stated in the
Certificate of Incorporation, these bylaws, and the General
Corporation Law of Delaware as to actions which shall be approved by
the stockholders or by the affirmative vote of a majority of the
outstanding shares entitled to vote, all corporate powers shall be
exercised by, or under the direction of, and the business and affairs
of the Corporation shall be managed by, the Board of Directors.
Section 2. Number and Term of Office. The number of directors
shall be fixed from time to time exclusively by the Board of
Directors pursuant to a resolution adopted by a majority of the total
number of authorized directors (whether or not there exist any
vacancies in previously authorized directorships at the time any such
resolution is presented to the Board for adoption). The directors
shall be divided into three classes, as nearly equal in number as
reasonably possible, with the term of office of the first class to
expire at the 1993 annual meeting of stockholders, the term of office
of the second class to expire at the 1994 annual meeting of
stockholders and the term of office of the third class to expire at
the 1995 annual meeting of stockholders. At each annual meeting of
stockholders following such initial classification and election,
directors elected to succeed those directors whose terms expire shall
be elected for a term of office to expire at the third succeeding
annual meeting of stockholders after their election. All directors
shall hold office until the expiration of the term for which elected,
and until their respective successors are elected, except in the case
of the death, resignation or removal of any director.
Section 3. Vacancies and Newly Created Directorships. Subject to
the rights of the holders of any series of Preferred Stock then
outstanding, newly created directorships resulting from any increase
in the authorized number of directors or any vacancies in the Board
of Directors resulting from death, resignation, retirement, removal
from office, disqualification or other cause may be filled only by a
majority vote of the directors then in office, though less than a
quorum, and directors so chosen shall hold office for a term expiring
at the annual meeting of stockholders at which the term of office of
the class to which they have been elected expires. No decrease in
the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
Section 4. Resignations. Any director may resign effective on
giving written notice to the Chairperson of the Board, the Chief
Executive Officer, the Secretary, or the Board of Directors, unless
the notice specifies a later time for that resignation to become
effective. If the resignation of a director is effective at a future
time, the Board of Directors may elect a successor to take office
when the resignation becomes effective.
Section 5. Place of Meetings and Meetings by Telephone. Meetings
of the Board of Directors shall be held at any place within or
without the State of Delaware which may be designated in the notice
of the meeting, or, if not stated in the notice or there is no
notice, designated by resolution of the Board. In the absence of
such designation, meetings of the Board of Directors shall be held at
the principal executive office of the Corporation. Members of the
Board may participate in a regular or special meeting through use of
conference telephone or similar communications equipment, so long as
all members participating in such meeting can hear one another.
Participation in a meeting pursuant to this Section 5 of this Article
III constitutes presence in person at such meeting.
Section 6. Annual Meeting. Immediately following each annual
meeting of stockholders, the Board of Directors shall hold a regular
meeting for the purpose of organization, the election of officers and
the transaction of other business. No notice of such meeting need be
given.
Section 7. Other Regular Meetings. The Board of Directors may
provide by resolution the time and place for the holding of regular
meetings of the Board; provided, however, that if the date so
designated falls upon a legal holiday, then the meeting shall be held
at the same time and place on the next succeeding day which is not a
legal holiday. No notice of such regular meetings of the Board need
be given.
Section 8. Special Meetings. Special meetings of the Board of
Directors for any purpose or purposes may be called at any time by
the Chairperson of the Board or the Chief Executive Officer or the
President or any Vice President or the Secretary or any two
directors.
Notice of the time and place of special meetings shall be
delivered personally or by telephone to each director or sent by
first-class mail or telegram, charges prepaid, addressed to each
director at that director's address as it is shown on the records of
the Corporation. In case the notice is mailed, it shall be deposited
in the United States mail at least four (4) days before the time of
the holding of the meeting. In case the notice is delivered
personally, or by telephone or telegram, it shall be delivered
personally or by telephone or to the telegraph company at least
forty-eight (48) hours before the time of the holding of the meeting.
Any oral notice given personally or by telephone may be communicated
either to the director or to a person at the office of the director
who the person giving the notice has reason to believe will promptly
communicate it to the director. The notice need not specify the
purpose of the meeting nor the place if the meeting is to be held at
the principal executive office of the Corporation.
Section 9. Quorum. A majority of the total number of authorized
directors shall constitute a quorum for all purposes at any meeting
of the Board of Directors. If a quorum shall fail to attend any
meeting, a majority of those present may adjourn the meeting to
another place, date, or time, without further notice or waiver
thereof.
Section 10. Waiver of Notice. Notice of a meeting shall be
deemed given to any director who attends the meeting without
protesting before or at its commencement, the lack of notice to such
director.
The transactions of any meeting of the Board of Directors, however
called and noticed or wherever held, shall be as valid as though had
at a meeting duly held after regular call and notice if a quorum is
present and if, either before or after the meeting, each of the
directors not present signs a written waiver of notice, a consent to
holding the meeting or an approval of the minutes thereof. The
waiver of notice or consent need not specify the purpose of the
meeting. All such waivers, consents and approvals shall be filed
with the corporate records or made a part of the minutes of the
meeting.
Section 11. Adjournment. Any meeting of the Board of Directors,
whether or not a quorum is present, may be adjourned to another time
and place by the vote of a majority of the votes of the directors
present. If a meeting is adjourned for more than twenty-four (24)
hours, notice of the time and place of the reconvened adjourned
meeting shall be given to directors absent at the time of adjournment
before the time of the reconvened adjourned meeting.
Section 12. Conduct of Business and Action Without Meeting. At
any meeting of the Board of Directors, business shall be transacted
in such order and manner as the Board may from time to time
determine, and all matters shall be determined by the vote of a
majority of the directors then present, except as otherwise provided
herein or required by law. Any action required or permitted to be
taken at any meeting of the Board of Directors may be taken without a
meeting, if all members of the Board shall individually or
collectively consent in writing to such action. Such written consent
or consents shall be filed with the minutes of the proceedings of the
Board of Directors. Such action by written consent shall have the
same force and effect as a unanimous vote of such directors.
Section 13. Fees and Compensation of Directors. Directors shall
not receive any stated salary for their services as directors, but,
by resolution of the Board, a fixed fee, with or without expenses of
attendance, may be allowed for attendance at each meeting. Nothing
herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity as an officer, agent,
employee, member of a committee of the Board of Directors or
otherwise, and receiving compensation therefor.
Section 14. Nomination of Director Candidates. Subject to the
rights of holders of any Preferred Stock then outstanding,
nominations for the election of directors may be made by the Board of
Directors or a proxy committee appointed by the Board of Directors or
by any stockholder entitled to vote in the election of directors
generally. However, any stockholder entitled to vote in the election
of directors generally may nominate one or more persons for election
as directors at a meeting only if timely notice of such stockholder's
intent to make such nomination or nominations has been given in
writing to the Secretary of the Corporation. To be timely, a
stockholder nomination for a director to be elected at an annual
meeting shall be received at the Corporation's principal executive
offices not less than one hundred twenty (120) calendar days in
advance of the date that the Corporation's (or Corporation's
predecessor's) proxy statement was released to stockholders in
connection with the previous year's annual meeting of stockholders.
However, if no annual meeting was held in the previous year or the
date of the annual meeting has been changed by more than thirty (30)
calendar days from the date contemplated at the time of the previous
year's proxy statement, or in the event of a nomination for director
to be elected at a special meeting, notice by the stockholders to be
timely must be received not later than the close of business on the
tenth (10th) day following the day on which such notice of the date
of the special meeting was mailed or such public disclosure was made.
Each such notice shall set forth: (a) the name and address of the
stockholder who intends to make the nomination and of the person or
persons to be nominated; (b) a representation that the stockholder is
a holder of record of stock of the Corporation entitled to vote for
the election of directors on the date of such notice and intends to
appear in person or by proxy at the meeting to nominate the person or
persons specified in the notice; (c) a description of all
arrangements or understandings between the stockholder and each
nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be
made by the stockholder; (d) such other information regarding each
nominee proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of
the Securities and Exchange Commission, had the nominee been
nominated, or intended to be nominated, by the Board of Directors;
and (e) the consent of each nominee to serve as a director of the
Corporation if so elected.
In the event that a person is validly designated as a nominee in
accordance with this Section 14 and shall thereafter become unable or
unwilling to stand for election to the Board of Directors, the Board
of Directors or the stockholder who proposed such nominee, as the
case may be, may designate a substitute nominee upon delivery, not
fewer than thirty (30) days prior to the date of the meeting for the
election of such nominee, of a written notice to the Secretary
setting forth such information regarding such substitute nominee as
would have been required to be delivered to the Secretary pursuant to
this Section 14 had such substitute nominee been initially proposed
as a nominee. Such notice shall include a signed consent to serve as
a director of the Corporation, if elected, of each such substitute
nominee.
If the chairperson of the meeting for the election of directors
determines that a nomination of any candidate for election as a
director at such meeting was not made in accordance with the
applicable provisions of this Section 14, such nomination shall be
void.
ARTICLE IV
COMMITTEES
Section 1. Committees. The Board of Directors may, by resolution
adopted by a majority of the authorized number of directors,
designate such committees, each consisting of one or more directors,
as it may from time to time deem advisable to perform such general or
special duties as may from time to time be delegated to any such
committee by the Board of Directors, subject to the limitations
contained in the General Corporations Law of Delaware, or imposed by
the Certificate of Incorporation or by these bylaws. Any committee
so designated may exercise the power and authority of the Board of
Directors to declare a dividend, to authorize the issuance of stock
or to adopt a certificate of ownership and merger pursuant to Section
253 of the General Corporation Law of Delaware if the resolution
which designates the committees or a supplemental resolution of the
Board of Directors so provides. The Board may designate one or more
directors as alternate members of any committee, who may replace any
absent member at any meeting of the committee.
Section 2. Minutes. Each committee shall keep regular minutes of
its proceedings, which shall be filed with the Secretary.
Section 3. Conduct of Business. Each committee may determine the
procedural rules for meeting and conducting its business and shall
act in accordance therewith, except as otherwise provided herein or
required by law. Adequate provision shall be made for notice to
members of all meetings; one-third (1/3) of the authorized members
shall constitute a quorum unless the committee shall consist of one
or two members, in which event one member shall constitute a quorum;
and all matters shall be determined by a majority vote of the members
present. Action may be taken by any committee without a meeting if
all members thereof consent thereto in writing, and the writing or
writings are filed with the minutes of the proceedings of such
committee.
ARTICLE V
OFFICERS
Section 1. Officers. The officers of the Corporation shall be a
Chief Executive Officer, one or more Presidents, one or more Vice
Presidents, a Secretary, and a Chief Financial Officer of the
Corporation. The Corporation may also have, at the discretion of the
Board of Directors, a Chairperson of the Board, a Treasurer, one or
more Assistant Secretaries, a General Counsel and such other officers
as may be appointed in accordance with the provisions of Section 3 of
this Article V. The Chairperson of the Board, if there shall be such
an officer, shall be a member of the Board of Directors. One person
may hold two or more offices.
Section 2. Election. The officers of the Corporation, except
such officers as may be appointed in accordance with the provisions
of Sections 3 and 5 of this Article V, shall be chosen annually by
the Board of Directors and each shall hold office until such officer
shall resign or shall be removed or otherwise disqualified to serve,
or such officer's successor shall be elected and qualified.
Section 3. Subordinate Officers, etc. The Board of Directors may
appoint, or may empower the Chief Executive Officer to appoint, such
other officers as the business of the Corporation may require, each
of whom shall hold office for such period, have such authority and
perform such duties as are provided in these bylaws or as the Board
of Directors may from time to time determine.
Section 4. Removal and Resignation of Officers. Any officer may
be removed, either with or without cause, by a majority of the
directors at the time in office, at any regular or special meeting of
the Board, or by an officer upon whom such power of removal may be
conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the
Corporation. Any such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein;
and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 5. Vacancies in Office. A vacancy in any office because
of death, resignation, removal, disqualification or any other cause
shall be filled in the manner prescribed in these bylaws for regular
appointments to such office.
Section 6. Chairperson of the Board. The Chairperson of the
Board, if there shall be such an officer, shall, if present, preside
at all meetings of the Board of Directors, and exercise and perform
such other powers and duties as may be from time to time assigned to
him or her by the Board of Directors or prescribed by these bylaws.
He or she shall preside at all meetings of the stockholders.
Section 7. Chief Executive Officer. Subject to the powers, if
any, as may be given by the Board of Directors to the Chairperson of
the Board, if there be such an officer, the Chief Executive Officer
shall be the general manager and chief executive officer of the
Corporation and shall, subject to the control of the Board of
Directors, have general supervision, direction, and control of the
business and affairs of the Corporation. In the absence of a
Chairperson of the Board, he or she shall preside at all meetings of
the stockholders. He or she shall have the general powers and duties
of management usually vested in the office of Chief Executive Officer
of a corporation, and shall have such other powers and duties as may
be prescribed by the Board of Directors or by these bylaws.
Section 8. Presidents. Each President shall, subject to the
control of the Chief Executive Officer and the Board of Directors,
have the responsibility for the supervision, direction, and control
of such portions of the business and such officers of the Corporation
as report to him or her and shall exercise such powers and perform
such duties as may from time to time be assigned to him or her by the
Board of Directors, the Chairperson of the Board or the Chief
Executive Officer, or as may be prescribed by these bylaws.
Section 9. Vice Presidents. . Each Vice President shall ,
subject to the control of the Chief Executive Officer and the Board
of Directors and any officer to whom he or she reports, have the
responsibility for the supervision, direction, and control of such
portions of the business and such officers of the Corporation as
report to him or her and shall exercise such powers and perform such
duties as may from time to time be assigned to him or her by the
Board of Directors, the Chairperson of the Board or the Chief
Executive Officer or any officer to whom he or she reports, or as may
be prescribed by these bylaws. "Vice President(s)" as used in these
bylaws shall include Senior Vice President(s).
Section 10. Secretary. The Secretary shall keep, or cause to be
kept, a book of minutes in written form of the proceedings of the
Board of Directors, committees of the Board, and stockholders. Such
minutes shall include all waivers of notice, consents to the holding
of meetings, or approvals of the minutes of meetings executed
pursuant to these bylaws or the General Corporation Law of Delaware.
The Secretary shall keep, or cause to be kept at the principal
executive office or at the office of the Corporation's transfer agent
or registrar, a record of its stockholders, giving the names and
addresses of all stockholders and the number and class of shares held
by each.
The Secretary shall give or cause to be given, notice of all
meetings of the stockholders and of the Board of Directors required
by these bylaws or by law to be given, and shall keep the seal of the
Corporation in safe custody, and shall have such other powers and
perform such other duties as may be prescribed by the Board of
Directors or these bylaws.
Section 11. Chief Financial Officer. The Chief Financial Officer
shall keep and maintain, or cause to be kept and maintained, adequate
and correct books and records of account in written form or any other
form capable of being converted into written form.
The Chief Financial Officer shall deposit all monies and other
valuables in the name and to the credit of the Corporation with such
depositaries as may be designated by the Board of Directors. He or
she shall disburse all funds of the Corporation as may be ordered by
the Board of Directors, shall render to the Chief Executive Officer
and directors, whenever they request it, an account of all of his or
her transactions as Chief Financial Officer and of the financial
condition of the Corporation, and shall have such other powers and
duties as may be prescribed by the Board of Directors or by these
bylaws.
Section 12. Treasurer. The Treasurer shall have the powers and
duties prescribed by these bylaws, the Chief Executive Officer, the
Chief Financial Officer or by the Board of Directors. In the absence
or disability of the Chief Financial Officer, she or he shall have
all of her or his powers and duties.
Section 13. Assistant Treasurers. The Assistant Treasurers
shall have the powers and duties prescribed by these bylaws or
assigned by the Chief Financial Officer, if there be such
an officer, or the Treasurer. In the absence or disability of the
Treasurer, they shall have all of his or her powers and duties.
Section 14. Assistant Secretaries. The Assistant Secretaries
shall have the powers and duties prescribed by these bylaws or
assigned by these bylaws or assigned by the Secretary. In the
absence or disability of the Secretary, they shall have all of the
powers and duties of such officer.
Section 15. General Counsel. Subject to the control and
supervision by the Chief Executive Officer or such officer as the
Chief Executive Officer may designate, and by the Board of Directors,
the General Counsel shall be the chief legal officer of the Company,
and she or he shall have such other powers and duties as may be
prescribed by these bylaws or by the Board of Directors, the Chief
Executive Officeror such officer as the Chief Executive Officer may
designate, and the usual powers and duties pertaining to her or his
office.
Section 16. Compensation. The compensation of the officers shall
be fixed from time to time by the Board of Directors or by a
committee of the Board of Directors authorized to do so, and no
officer shall be prevented from receiving such compensation by reason
of the fact that he or she is also a director of the Corporation.
ARTICLE VI
INDEMNIFICATION
Section 1. Right to Indemnification. Each person who was or is
made a party or is threatened to be made a party to or is involved in
any action, suit or proceeding, whether civil, criminal,
administrative or investigative ("Proceeding"), by reason of the fact
that he or she, or a person of whom he or she is the legal
representative, is or was a director, officer or employee of the
Corporation or is or was serving at the request of the Corporation as
a director, officer or employee of another Corporation or of a
partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether the basis of
such Proceeding is alleged action in an official capacity as a
director, officer or employee or in any other capacity while serving
as a director, officer or employee, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the
General Corporation Law of Delaware, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to
the extent that such amendment permits the Corporation to provide
broader indemnification rights than said Law permitted the
Corporation to provide prior to such amendment) against all expenses,
liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in
settlement and amounts expended in seeking indemnification granted to
such person under applicable law, this bylaw or any agreement with
the Corporation) reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a
person who has ceased to be a director, officer or employee and shall
inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, except as provided in
Section 2 of this Article VI, the Corporation shall indemnify any
such person seeking indemnity in connection with an action, suit or
Proceeding (or part thereof) initiated by such person only if (a)
such indemnification is expressly required to be made by law, (b) the
action, suit or Proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation, (c) such indemnification is
provided by the Corporation, in its sole discretion, pursuant to the
powers vested in the Corporation under the General Corporation Law of
Delaware, or (d) the action, suit or Proceeding (or part thereof) is
brought to establish or enforce a right to indemnification under an
indemnity agreement or any other statute or law or otherwise as
required under Section 145 of the General Corporation Law of
Delaware. Such right shall be a contract right and shall include the
right to be paid by the Corporation expenses incurred in defending
any such Proceeding in advance of its final disposition; provided,
however, that, if required by the General Corporation Law of
Delaware, the payment of such expenses incurred by a director or
officer in his or her capacity as a director or officer (and not in
any other capacity in which service was or is rendered by such person
while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of
such Proceeding, shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced if it should be determined ultimately
that such director or officer is not entitled to be indemnified under
this Section or otherwise.
Section 2. Right of Claimant to Bring Suit. If a claim under
Section 1 of this Article VI is not paid in full by the Corporation
within ninety (90) days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim
and, if such suit is not frivolous or brought in bad faith, the
claimant shall be entitled to be paid also the expense of prosecuting
such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending
any Proceeding in advance of its final disposition where the required
undertaking, if any, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it
permissible under the General Corporation Law of Delaware for the
Corporation to indemnify the claimant for the amount claimed, but the
burden of proving such defense shall be on the Corporation. Neither
the failure of the Corporation (including its Board of Directors,
independent legal counsel, or it stockholders) to have made a
determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set
forth in the General Corporation Law of Delaware, nor an actual
determination by the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that claimant has not met the
applicable standard of conduct.
Section 3. Non-Exclusivity of Rights. The rights conferred on
any person by Sections 1 and 2 of this Article VI shall not be
exclusive of any other right which such person may have or hereafter
acquire under any statute, provision of the Certificate of
Incorporation or these bylaws, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 4. Indemnification Contracts. The Board of Directors is
authorized to enter into a contract with any director, officer,
employee or agent of the Corporation, or any person serving at the
request of the Corporation as a director, officer, employee or agent
of another Corporation, partnership, joint venture, trust or other
enterprise, including employee benefit plans, providing for
indemnification rights equivalent to or, if the Board of Directors so
determines, greater than, those provided for in this Article VI.
Section 5. Insurance. The Corporation may maintain insurance to
the extent reasonably available, at its expense, to protect itself
and any such director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or
not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the General Corporation
Law of Delaware.
Section 6. Effect of Amendment. Any amendment, repeal or
modification of any provision of this Article VI by the stockholders
or the directors of the Corporation shall not adversely affect any
right or protection of a director or officer of the Corporation
existing at the time of such amendment, repeal or modification.
Section 7. Savings Clause. In the event that a court of
competent jurisdiction should, by a decision which the Corporation
chooses not to appeal or which is beyond all right of review, declare
any portion or all of this Article VI invalid or unenforceable by
reason of the operation of California Corporations Code Section 2115,
or for any other reason, then the provisions of this Article VI and
the corresponding provisions of any indemnification contracts entered
into pursuant hereto shall be automatically amended and modified to
eliminate any provision thereof which is found to be invalid or
unenforceable and shall be deemed and construed to grant
indemnification to the fullest extent permitted by applicable law,
including the Corporations Code of the State of California if held to
be controlling.
ARTICLE VII
NOTICES
Section 1. Notices. Except as otherwise specifically provided
herein or required by law, all notices required to be given to any
stockholder, director, officer, employee or agent shall be in writing
and may in every instance be effectively given by hand delivery to
the recipient thereof, by depositing such notice in the mails,
postage paid, or by sending such notice by prepaid telegram,
mailgram, telecopy or commercial courier service. Any such notice
shall be addressed to such stockholder, director, officer, employee
or agent at his or her last known address as the same appears on the
books of the Corporation. The time when such notice shall be deemed
to be given shall be the time such notice is received by such
stockholder, director, officer, employee or agent, or by any person
accepting such notice on behalf of such person, if hand delivered, or
the time such notice is dispatched, if delivered through the mails or
by telegram or mailgram.
Section 2. Waivers. A written waiver of any notice, signed by a
stockholder, director, officer, employee or agent, whether before or
after the time of the event for which notice is to be given, shall be
deemed equivalent to the notice required to be given to such
stockholder, director, officer, employee or agent. Neither the
business nor the purpose of any meeting need be specified in such a
waiver.
ARTICLE VIII
STOCK
Section 1. Certificates of Stock. Each stockholder shall be
entitled to a certificate signed by, or in the name of the
Corporation by, the Chairperson of the Board, President or a Vice
President, and by the Secretary or an Assistant Secretary, or the
Treasurer or an Assistant Treasurer, certifying the number of shares
owned by him or her. Any of or all the signatures on the certificate
may be facsimile.
Section 2. Transfers of Stock. Transfers of stock shall be made
only upon the transfer books of the Corporation kept at an office of
the Corporation or by transfer agents designated to transfer shares
of the stock of the Corporation. Except where a certificate is
issued in accordance with Section 4 of this Article VIII of these
bylaws, an outstanding certificate for the number of shares involved
shall be surrendered for cancellation before a new certificate is
issued therefor.
Section 3. Record Date. The Board of Directors may fix a record
date, which shall not be more than sixty (60) nor fewer than ten (10)
days before the date of any meeting of stockholders, nor more than
sixty (60) days prior to the time for the other action hereinafter
described, as of which there shall be determined the stockholders who
are entitled: to notice of or to vote at any meeting of stockholders
or any adjournment thereof; to receive payment of any dividend or
other distribution or allotment of any rights; or to exercise any
rights with respect to any change, conversion or exchange of stock or
with respect to any other lawful action.
Section 4. Lost, Stolen or Destroyed Certificates. In the event
of the loss, theft or destruction of any certificate of stock,
another may be issued in its place pursuant to such regulations as
the Board of Directors may establish concerning proof of such loss,
theft or destruction and concerning the giving of a satisfactory bond
or bonds of indemnity.
Section 5. Regulations. The issue, transfer, conversion and
registration of certificates of stock shall be governed by such other
regulations as the Board of Directors may establish.
ARTICLE IX
GENERAL CORPORATE MATTERS
Section 1. Checks, Drafts, Evidences of Indebtedness. All
checks, drafts, or other orders for payment of money, notes, or other
evidences of indebtedness, issued in the name of or payable to the
Corporation, shall be signed or endorsed by such person or persons
and in such manner as, from time to time, shall be determined by
resolution of the Board of Directors.
Section 2. Corporate Contracts and Instruments; How Executed.
The Board of Directors, except as otherwise provided in these bylaws,
may authorize any officer or officers, agent or agents, to enter into
any contract or execute any instrument in the name of and on behalf
of the Corporation, and this authority may be general or confined to
specific instances; and, unless so authorized or ratified by the
Board of Directors or within the agency power of an officer, no
officer, agent, or employee shall have any power or authority to bind
the Corporation by any contract or engagement or to pledge its credit
or to render it liable for any purpose or for any amount.
Section 3. Representation of Shares of Other Corporations. The
Chairperson of the Board, the Chief Executive Officer, any President,
or any Vice President, or any other person authorized by resolution
of the Board of Directors or by any of the foregoing designated
officers, is authorized to vote on behalf of the Corporation, in
person or by proxy, at any meeting of stockholders of or with respect
to any action of stockholders of any other corporation, any and all
shares of any other corporation or corporations, foreign or domestic,
standing in the name of the Corporation. The authority granted to
these officers to vote or represent on behalf of the Corporation any
and all shares held by the Corporation in any other corporation or
corporations may be exercised by any of these officers in person or
by any person authorized to do so by a proxy duly executed by these
officers.
Section 4. Construction and Definitions. Unless the context
requires otherwise, the general provisions, rules of construction,
and definitions in the General Corporation Law of Delaware shall
govern the construction of these bylaws. Without limiting the
generality of this provision, the singular number includes the
plural, the plural number includes the singular, and the term
"person" includes both a corporation and a natural person.
Section 5. Maintenance and Inspection of Books and Records. The
Corporation shall keep at its principal executive office, or at the
office of its transfer agent or registrar, if either be appointed and
as determined by resolution of the Board of Directors, a record of
its stockholders, giving the names and addresses of all stockholders
and the number and class of shares held by each stockholder. The
Corporation shall also keep at its principal executive office the
original or a copy of the bylaws as amended to date and its other
books and records.
Any stockholder of the Corporation of record, in person or by
attorney or other agent shall, upon written demand under oath stating
the purpose thereof, have the right during the usual hours for
business to inspect for any proper purpose the Corporation's stock
ledger, a list of its stockholders, and its other books and records
and to make copies or extracts therefrom. A proper purpose shall
mean a purpose reasonably related to such person's interest as a
stockholder. In every instance where an attorney or other agent
shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other
writing which authorizes the attorney or other agent to so act on
behalf of the stockholder.
Section 6. Inspection by Directors. Any director shall have the
right to examine the Corporation's stock ledger, a list of its
stockholders and its other books and records for a purpose reasonably
related to his or her position as a director.
ARTICLE X
AMENDMENTS
Section 1. Amendments. The Board of Directors is expressly
empowered to adopt, amend or repeal bylaws of the Corporation. Any
adoption, amendment or repeal of bylaws of the Corporation by the
Board of Directors shall require the approval of a majority of the
total number of authorized directors (whether or not there exist any
vacancies in previously authorized directorships at the time any
resolution providing for adoption, amendment or repeal is presented
to the Board). The stockholders shall also have power to adopt,
amend or repeal the bylaws of the Corporation.
AMENDMENTS TO BYLAWS
July 24, 1986
Original bylaws were adopted by the Action of Sole Incorporator.
April 19, 1989
Board adopted amendments to Article II, Section 3, and Article VI,
Sections 1 and 2, to reflect comments received from the California
Department of Corporations in connection with qualification of the
1986 Stock Purchase Plan (see UWC dated 04-19-89).
October 27, 1989
Board adopted amendment to Article VI to add Section 7, entitled
"Savings Clause" (see 10-27-89 Minutes).
August 24, 1992
Board adopted amendments to Sections 2 and 3 of Article III to
provide for the establishment of a classified board of directors (see
UWC dated 08-24-92).
October 20, 1992
Amendments to Article III were adopted by the stockholders at the
1992 Annual Meeting (see 10-20-92 Minutes of Annual Meeting).
February 16, 1995
Board adopted amendments to Article V, including the addition of a
new Section 7 (Chief Executive Officer, 12 (Treasurer), 13 (Assistant
Treasurers), 14 (Assistant Secretaries), 15 (General Counsel), 16
(Controller) and the revision of Section 8 (President) as well as
certain other conforming changes throughout the text (see Minutes of
Meeting of 02-16-95).
February 11, 1999
Board adopted amendments removing Section 16 (Controller) of Article
V, and certain related conforming changes throughout the text (see
Minutes of Meeting February 11, 1999).
April 26, 2000
Board adopted amendments providing for one or more Presidents by
amending Article V, Section 8, and made certain related and
conforming changes throughout the text (see Unanimous Written Consent
dated April 26, 2000).
18
5
1,000
3-MOS
DEC-31-2000
Jan-01-2000
Mar-31-2000
177,188
114,438
6,290
0
0
297,916
37,998
0
341,247
8,988
0
0
0
196
172,439
341,247
12,450
15,500
0
0
14,730
0
0
770
0
770
0
0
0
770
0.04
0.04
