UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
Tender
Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
Theravance, Inc.
(Name of Subject
Company (issuer))
Theravance, Inc.
(Names of Filing
Persons (identifying status as offeror, issuer or other person))
Common
Stock, par value $0.01 per Share
(Title of Class of
Securities)
88338T 10 4
(CUSIP Number of Class of
Securities)
Rick E
Winningham
Chief Executive Officer
Theravance, Inc.
901 Gateway Boulevard
South San Francisco, CA 94080
(650) 808-6000
(Name,
address, and telephone numbers of person authorized to receive
notices and communications on behalf of filing persons)
With a
copy to:
Christopher D. Dillon, Esq.
John Dietz, Esq.
Gunderson Dettmer Stough Villenueve Franklin & Hachigian, LLP
155 Constitution Drive
Menlo Park, CA 94025
(650) 321-2400
Calculation of Filing Fee:
Transaction valuation(1) |
Amount of filing fee(2) |
$525,000,000 |
$16,117.50 |
(1) The transaction valuation is estimated solely for purposes of calculating the filing fee pursuant to Rule 0-11(d). The calculation assumes the purchase of 50% of all outstanding shares of Theravance, Inc. common stock, par value $0.01 (the Common Shares) at a purchase price of $19.375 per Share, in cash, for up to a maximum of $525,000,000 in the aggregate.
(2) The amount of the filing fee is calculated in accordance with Regulation 240.0-11 of the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory No. 6 issued by the Securities and Exchange Commission on February 16, 2007. Such fee is equal to 0.00307 percent of the value of the transaction.
o Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing
Amount Previously Paid: |
N/A |
Form or Registration No.: |
N/A |
Filing Party: |
N/A |
Date Filed: |
N/A |
o Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the statement relates:
o third-party tender offer subject to Rule 14d-1.
x issuer tender offer subject to Rule 13e-4.
o going-private transaction subject to Rule 13e-3.
o amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results of the tender offer: o
Reference is made to the information set forth under Summary Term Sheet and Questions and Answers About the Put Right in the Notice of Put Right attached hereto as Exhibit (a)(1)(i), which is incorporated herein by reference.
Item 2. Subject Company Information
(a) Reference is made to the information set forth under Certain Information Concerning Theravance in the Notice of Put Right, which is incorporated herein by reference.
(b) Reference is made to the information set forth under Background of Theravance in the Notice of Put Right, which is incorporated herein by reference.
(c) Reference is made to the information set forth under Certain Information Concerning TheravancePrice Range of Common Shares; Dividends in the Notice of Put Right, which is incorporated herein by reference.
Item 3. Identity and Background of Filing Person
(a) Reference is made to the information set forth under Certain Information Concerning Theravance in the Notice of Put Right, which is incorporated herein by reference.
Item 4. Terms of the Transaction
(a) Reference is made to the information set forth under Summary Term Sheet, Background of Theravance, The Put Right, Miscellaneous Provisions Related to the Put Right, Procedures for Exercising the Put Right, Treatment of Special Categories of Theravance Securities and Special Factors in the Notice of Put Right, which is incorporated herein by reference.
(b) Theravance, after making reasonable inquiry of its executive officers, directors and affiliates, has no information that any of its executive officers, directors or affiliates intend to exercise the Put Right and cause Theravance to purchase his, her or its Common Shares.
Item 5. Past Contacts, Transactions, Negotiations and Agreements
(e) Reference is made to the information set forth under Background of GSKs Investment in Theravance, Governance Agreement, Purpose of the Put Right, and GSKs Obligation to Provide Funds to Purchase Common Shares in the Notice of Put Right, which is incorporated herein by reference. Reference is made to the Amended and Restated Governance Agreement attached hereto as Exhibit (d)(1), which is incorporated herein by reference.
Item 6. Purposes of the Transaction and Plans or Proposals
(a), (b) and (c) Reference is made to the information set forth under Summary Term Sheet, Background of Theravance, Special Factors, Background of GSKs Investment in Theravance, Purpose of the Put Right, Certain Effects of the Exercise of the Put Right and Certain Legal Matters in the Notice of Put Right, which is incorporated herein by reference.
Item 7. Source and Amount of Funds or Other Consideration
(a) and (b) Reference is made to the information set forth under The Put RightGSKs Obligation to Provide Funds to Purchase Common Shares and Source and Amount of Funds in the Notice of Put Right, which is incorporated herein by reference.
(d) None.
2
Item 8. Interest in Securities of the Subject Company
(a) and (b) Reference is made to the information set forth under Special FactorsBackground of GSKs Investment in Theravance and Certain Information Concerning Theravance in the Notice of Put Right, which is incorporated herein by reference.
Item 9. Persons/Assets, Retained, Employed, Compensated or Used
(a) Reference is made to the information set forth under Fees and Expenses; Persons Used and Certain Information Concerning Theravance in the Notice of Put Right, which is incorporated by reference.
(a) and (c) Reference is made to the information set forth under Certain Information Concerning Theravance in the Notice of Put Right, which is incorporated by reference.
(b) None.
Item 11. Additional Information
(a)(1) Reference is made to the information set forth under Special FactorsOther Agreements Between Theravance and GSK.
(a)(2) Reference is made to the information under The Put Right, Procedures for Exercising the Put Right, Treatment of Special Categories of Theravance Securities, Fees and Expenses; Persons Used and Certain Legal Matters in the Notice of Put Right, which is incorporated herein by reference.
(a)(3) Reference is made to the information set forth under Certain Legal MattersAntitrust Compliance and State Takeover Laws in the Notice of Put Right, which is incorporated herein by reference.
(a)(4) None.
(a)(5) None.
(b) Reference is made to the Letter of Transmittal attached hereto as Exhibit (a)(1)(ii), which is incorporated herein by reference.
(a)(1)(i) |
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Notice of Put Right dated August 1, 2007. |
(a)(1)(ii) |
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Letter of Transmittal. |
(a)(1)(iii) |
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Notice of Guaranteed Delivery. |
(a)(1)(iv) |
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Substitute W-9 Guidelines. |
(a)(1)(v) |
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Summary Advertisement to be published on August 1, 2007. |
(a)(2) |
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None. |
(a)(3) |
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None. |
(a)(4) |
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None. |
(a)(5) |
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None. |
(b) |
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None. |
(c) |
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None. |
(d)(i) |
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Amended and Restated Governance Agreement, dated as of June 4, 2004 by and among SmithKline Beecham Corporation, Theravance, GlaxoSmithKline plc and Glaxo Group Limited.(1) |
3
(d)(ii) |
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Amendment to the Amended and Restated Governance Agreement, dated as of May 11, 2007 by and among SmithKline Beecham Corporation, Theravance, GlaxoSmithKline plc and Glaxo Group Limited |
(d)(iii) |
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Restated Certificate of Incorporation of Theravance, Inc.(2) |
(d)(iv) |
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Certificate of Amendment of the Restated Certificate of Incorporation of Theravance, Inc.(3) |
(d)(v) |
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Amended and Restated Investors Rights Agreement by and among the registrant and the parties listed therein, dated as of May 11, 2004(4) |
(d)(vi) |
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Class A Common Stock Purchase Agreement between the Theravance and SmithKline Beecham Corporation dated March 30, 2004(5) |
(d)(vii) |
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Class A Common Stock Purchase Agreement between the Theravance and SmithKline Beecham Corporation dated October 4, 2004(6) |
(d)(viii) |
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Form of Lock-up Agreement among Theravance, SmithKline Beecham Corporation and each of P. Roy Vagelos, Rick E Winningham and Patrick P.A. Humphrey, respectively, dated May 11, 2004 |
(d)(ix) |
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Grant of proxy to Rick E Winningham and Michael W. Aguiar by SmithKline Beecham Corporation in connection with Theravances 2005 Annual Meeting of Stockholders |
(d)(x) |
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Grant of proxy to Rick E Winningham and Michael W. Aguiar by Glaxo Group Limited in connection with Theravances 2005 Annual Meeting of Stockholders |
(d)(xi) |
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Grant of proxy to Rick E Winningham and Michael W. Aguiar by SmithKline Beecham Corporation in connection with Theravances 2006 Annual Meeting of Stockholders |
(d)(xii) |
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Grant of proxy to Rick E Winningham and Michael W. Aguiar by Glaxo Group Limited Corporation in connection with Theravances 2006 Annual Meeting of Stockholders |
(d)(xiii) |
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Grant of proxy to Rick E Winningham and Michael W. Aguiar by SmithKline Beecham Corporation in connection with Theravances 2007 Annual Meeting of Stockholders |
(d)(xiv) |
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Grant of proxy to Rick E Winningham and Michael W. Aguiar by Glaxo Group Limited Corporation in connection with Theravances 2007 Annual Meeting of Stockholders |
(g) |
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None. |
(h) |
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None. |
(1) Incorporated by reference to exhibit 10.14 in Theravances Registration Statement on Form S-1 (No. 333-116384).
(2) Incorporated by reference to exhibit 3.3 in Theravances Registration Statement on Form S-1 (No. 333-116384).
(3) Incorporated herein by reference to exhibit 3.4 in the Companys Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
(4) Incorporated by reference to exhibit 10.13 in Theravances Registration Statement on Form S-1 (No. 333-116384).
(5) Incorporated by reference to exhibit 10.12 in Theravances Registration Statement on Form S-1 (No. 333-116384).
(6) Incorporated by reference to exhibit 10.28 in Theravances Registration Statement on Form S-1 (No. 333-116384).
Item 13. Information Required by Schedule 13E-3
None.
4
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
THERAVANCE, INC. |
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By: |
/s/ Rick E Winningham |
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Name: |
Rick E Winningham |
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Title: |
Chief Executive Officer |
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Dated: August 1, 2007 |
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5
(a)(1)(i) |
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Notice of Put Right dated August 1, 2007. |
(a)(1)(ii) |
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Letter of Transmittal. |
(a)(1)(iii) |
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Notice of Guaranteed Delivery. |
(a)(1)(iv) |
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Substitute W-9 Guidelines. |
(a)(1)(v) |
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Summary Advertisement to be published on August 1, 2007 |
(d)(i) |
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Amended and Restated Governance Agreement, dated as of June 4, 2004 by and among SmithKline Beecham Corporation, Theravance, GlaxoSmithKline plc and Glaxo Group Limited(1) |
(d)(ii) |
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Amendment to the Amended and Restated Governance Agreement, dated as of May 11, 2007 by and among SmithKline Beecham Corporation, Theravance, GlaxoSmithKline plc and Glaxo Group Limited |
(d)(iii) |
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Restated Certificate of Incorporation of Theravance, Inc.(2) |
(d)(iv) |
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Certificate of Amendment of the Restated Certificate of Incorporation of Theravance, Inc.(3) |
(d)(v) |
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Amended and Restated Investors Rights Agreement by and among the registrant and the parties listed therein, dated as of May 11, 2004(4) |
(d)(vi) |
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Class A Common Stock Purchase Agreement between the Theravance and SmithKline Beecham Corporation dated March 30, 2004(5) |
(d)(vii) |
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Class A Common Stock Purchase Agreement between the Theravance and SmithKline Beecham Corporation dated October 4, 2004(6) |
(d)(viii) |
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Form of Lock-up Agreement among Theravance, SmithKline Beecham Corporation and each of P. Roy Vagelos, Rick E Winningham and Patrick P.A. Humphrey, respectively, dated May 11, 2004 |
(d)(ix) |
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Grant of proxy to Rick E Winningham and Michael W. Aguiar by SmithKline Beecham Corporation in connection with Theravances 2005 Annual Meeting of Stockholders |
(d)(x) |
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Grant of proxy to Rick E Winningham and Michael W. Aguiar by Glaxo Group Limited in connection with Theravances 2005 Annual Meeting of Stockholders |
(d)(xi) |
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Grant of proxy to Rick E Winningham and Michael W. Aguiar by SmithKline Beecham Corporation in connection with Theravances 2006 Annual Meeting of Stockholders |
(d)(xii) |
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Grant of proxy to Rick E Winningham and Michael W. Aguiar by Glaxo Group Limited Corporation in connection with Theravances 2006 Annual Meeting of Stockholders |
(d)(xiii) |
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Grant of proxy to Rick E Winningham and Michael W. Aguiar by SmithKline Beecham Corporation in connection with Theravances 2007 Annual Meeting of Stockholders |
(d)(xiv) |
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Grant of proxy to Rick E Winningham and Michael W. Aguiar by Glaxo Group Limited Corporation in connection with Theravances 2007 Annual Meeting of Stockholders |
(1) Incorporated by reference to exhibit 10.14 in Theravances Registration Statement on Form S-1 (No. 333-116384).
(2) Incorporated by reference to exhibit 3.3 in Theravances Registration Statement on Form S-1 (No. 333-116384).
(3) Incorporated herein by reference to exhibit 3.4 in the Companys Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
(4) Incorporated by reference to exhibit 10.13 in Theravances Registration Statement on Form S-1 (No. 333-116384).
(5) Incorporated by reference to exhibit 10.12 in Theravances Registration Statement on Form S-1 (No. 333-116384).
(6) Incorporated by reference to exhibit 10.28 in Theravances Registration Statement on Form S-1 (No. 333-116384).
6
Exhibit (a)(1)(i)
Notice of Put Right for up
to 50% of the
Outstanding Shares of Common Stock
of
Theravance, Inc.
at
$19.375 per Common Share
THIS
PUT RIGHT EXPIRES AT 5:00 P.M.,
EASTERN DAYLIGHT TIME, ON WEDNESDAY, SEPTEMBER 12, 2007.
To holders of shares of common stock (the Common Shares) of Theravance, Inc., a Delaware corporation (Theravance):
This notice (this Notice of Put Right) is being sent to you pursuant to Section (C)(5)(b) of Article IV of the Restated Certificate of Incorporation of Theravance, as amended (the Restated Certificate).
Under Section (C)(5) of Article IV of the Restated Certificate, you have the right to require Theravance to purchase up to fifty percent (50%) of the Common Shares (the Put Right) held by you subject to the terms and conditions of the Restated Certificate. The purchase price is $19.375 in cash per Common Share (the Purchase Price). If you elect to require Theravance to purchase your Common Shares at the Purchase Price, you must do so by delivering a Letter of Transmittal and your Common Shares to The Bank of New York (BNY), Depositary for the Put Right, prior to 5:00 p.m. Eastern Daylight Time on September 12, 2007, or such later date to which the initial expiration time for the exercise of the Put Right may be extended by Theravance through public announcement to the extent required to comply with United States federal securities laws (the Expiration Time).
ON JULY 30, 2007, THE REPORTED CLOSING PRICE OF THE COMMON SHARES ON THE NASDAQ GLOBAL MARKET WAS $27.77. HOLDERS OF COMMON SHARES ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE COMMON SHARES BEFORE THEY MAKE THEIR DECISION WHETHER OR NOT TO EXERCISE THE PUT RIGHT.
This Notice of Put Right relates to the put period, which will begin on August 1, 2007 and will end at the Expiration Time (the Put Period).
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE PUT RIGHT OR PASSED UPON THE MERITS OR FAIRNESS OF THE PUT RIGHT OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Stockholders who desire to exercise the Put Right should do the following, as applicable:
(1) complete and sign the Letter of Transmittal which will be mailed to stockholders at the commencement of the Put Period and enclose all documents required by it and its instructions; or
(2) follow the procedures for book entry transfer of Common Shares held in book entry form by the Depository Trust Company, as set forth in Procedures for Exercising the Put RightValid Delivery Through Book Entry Delivery of Common Shares from the Depository Trust Company to BNY on page 24; or
(3) request your broker, dealer, commercial bank, trust company or other nominee to effect the transaction for you.
If you have Common Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact such broker, dealer, commercial bank, trust company or other nominee if you desire to exercise the Put Right for those Common Shares.
Stockholders who desire to deliver Common Shares and whose certificates for such Common Shares are not immediately available, or who cannot comply with the procedure for book entry transfer on a timely basis, may deliver such Common Shares by following the procedures for guaranteed delivery set forth in Procedures for Exercising the Put RightGuaranteed Delivery on page 26.
Questions and requests for assistance may be directed to Investor Relations at Theravance by telephone at (650) 808-4100, by e-mail at investor.relations@theravance.com, or by mail at Theravance, Inc., 901 Gateway Boulevard, South San Francisco, California 94080 Attn: Investor Relations. Requests for additional copies of this Notice of Put Right may be directed to BNY or to brokers, dealers, commercial banks or trust companies. The Letter of Transmittal will be sent to stockholders at the commencement of the Put Period.
This summary highlights important and material information contained in this Notice of Put Right but is intended to be an overview only. To fully understand the Put Right described in this Notice of Put Right and for a more complete description of the terms of the Put Right, you should read carefully this entire Notice of Put Right, the appendices to this Notice of Put Right, documents incorporated by reference or otherwise referred to herein and the Letter of Transmittal, which will be sent to stockholders at the commencement of the Put Period. Section and heading references are included only to direct you to a more complete description of the topics contained in this summary.
· Holders of common stock (together with the associated preferred stock purchase rights, the Common Shares) of Theravance, Inc. (Theravance) have the right under Theravances Restated Certificate of Incorporation, as amended (the Restated Certificate) to require Theravance to purchase up to fifty percent (50%) of the Common Shares (the Put Right) held by them for $19.375 in cash per Common Share during the period from August 1, 2007 until 5:00 p.m. Eastern Daylight Time on September 12, 2007 (the Put Period). The term Expiration Time used herein refers to 5:00 p.m. Eastern Daylight Time on September 12, 2007, provided that such date may be extended through public announcement by Theravance to the extent required to comply with United States federal securities laws.
· The amount to be paid by Theravance for the Common Shares for which the Put Right is properly exercised is $19.375 per Common Share (the Purchase Price). On July 30, 2007, the reported closing price of the Common Shares on The Nasdaq Global Market was $27.77. Holders of Common Shares are urged to obtain a current market quotation for the Common Shares before they make their decision whether or not to exercise the Put Right.
· SmithKline Beecham Corporation, a Pennsylvania corporation (SB Corp.), and GlaxoSmithKline plc, an English public limited company (GlaxoSmithKline), are contractually obligated to provide, or have their affiliates provide, the funds to pay the Purchase Price for the Common Shares for which the Put Right is properly exercised; provided, however, that SB Corp.s maximum obligation for the Common Shares subject to the Put is capped at $525 million. The term GSK is used throughout this Notice of Put Right to refer collectively to SB Corp. and GlaxoSmithKline or their affiliates.
· In exchange for providing the funds to pay the Purchase Price, Theravance will issue to GSK an equal number of shares of Class A common stock (the Class A Shares) and Common Shares such that the aggregate number of shares issued to GSK is equal to the number of Common Shares that are purchased by Theravance. All Common Shares that are purchased by Theravance will be retired and cancelled.
· The Put Right is required under Theravances Restated Certificate. No approval of either the board of directors or stockholders of Theravance or GSK is required under Delaware law with respect to the Put Right. Accordingly, neither the members of the Theravance or GSK boards of directors, nor the stockholders of Theravance or GSK have approved or recommended the Put Right.
2
Table of Contents
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10 |
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Material United States Federal Income Tax Consequences
of the Purchase of Common |
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23 |
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23 |
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Valid Delivery Through Book Entry Delivery of Common Shares from the Depository Trust Company to BNY |
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24 |
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Treatment of Preferred Stock Purchase Rights Under the Put Right |
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Appendix A Information concerning the Executive Officers and Directors of Theravance |
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A-1 |
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B-1 |
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Security Ownership of Certain Beneficial Owners And Management |
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B-1 |
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Agreements between Theravance and its Executive Officers and Directors |
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B-4 |
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Plans that would Result in a Change in the Present Management of Theravance |
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B-4 |
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B-4 |
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C-1 |
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4
QUESTIONS AND ANSWERS ABOUT THE PUT RIGHT
The following are answers to some of the questions that you may have about the Put Right. To fully understand the Put Right and for a more complete description of the terms of the Put Right, you should read carefully this entire Notice of Put Right, the appendices to this Notice of Put Right, documents incorporated by reference or otherwise referred to herein and the Letter of Transmittal, which will be sent to stockholders at the commencement of the Put Period. Section and heading references are included only to direct you to a more complete description of the topics contained in this summary.
What securities have a Put Right?
Holders of Common Shares may exercise the Put Right to require Theravance to purchase up to fifty percent (50%) of the Common Shares during the Put Period. For information about the terms of the Put Right, please see The Put Right on page 17 and Procedures for Exercising the Put Right on page 23.
Does the Put Right not apply to any Common Shares?
Under the Restated Certificate, holders of Common Shares that are subject to repurchase by Theravance under any employee, officer, director or consultant compensation plan as of the final day of the Put Period may not exercise the Put Right. There are very few Common Shares subject to a right of repurchase. If you are not sure whether or not any of your Common Shares are subject to such a repurchase right, you may contact Theravance at the number below for confirmation:
Theravance, Inc.
(650) 808-6000
Attn: Stock Plan Administrator
Who is purchasing my Common Shares?
Under the Restated Certificate, Theravance will purchase your Common Shares. GSK is obligated to provide the funds to purchase the Common Shares in accordance with the Amended and Restated Governance Agreement dated as of June 4, 2004 by and among Theravance, SmithKline Beecham Corporation, GlaxoSmithKline plc, and Glaxo Group Limited, as amended (the Governance Agreement). Please see Background of the Put RightBackground of GSKs Investment in Theravance on page 10 and Certain Information Concerning GlaxoSmithKline on page 32 for further information about GSK. Common Shares that are tendered for purchase will be retired and cancelled, and GSK will be issued an equal number of Class A Shares and Common Shares such that the aggregate number of shares issued to GSK is equal to the number of Common Shares that are purchased by Theravance.
How much will I receive for each Common Share?
Holders of Common Shares will receive the Purchase Price ($19.375) for each Common Share for which the Put Right is properly exercised, subject to withholding for applicable taxes. Please see The Put Right on page 17 for information about the terms of the Put Right.
Does GSK have the financial resources to fund the Purchase Price?
Yes. Funds for the Purchase Price will be deposited by GSK with BNY, which is acting as Depositary for the Put Right. Please see Source and Amount of Funds on page 34 for more information about how GSK will fund the Purchase Price for the Common Shares.
5
When do I have to decide whether or not to exercise my Put Right during the Put Period?
In order to exercise your Put Right during the Put Period, your Common Shares, together with a properly completed Letter of Transmittal, must be validly delivered to BNY prior to the Expiration Time. Please see Procedures for Exercising the Put Right on page 23 for more information about what must be delivered to BNY.
Has the Put Right been approved or recommended by the stockholders or directors of either Theravance or GSK?
No approval of either the board of directors or stockholders of Theravance or GSK is required under Delaware law with respect to the Put Right. Accordingly, neither the members of the Theravance or GSK boards of directors, nor the stockholders of Theravance or GSK have approved or recommended the Put Right.
Because the Put Right is required under Theravances Restated Certificate, the Theravance board of directors has authorized Theravance to take the necessary actions to facilitate your right to require Theravance to purchase up to 50% of your Common Shares. However, the Theravance board of directors is not making any recommendation as to whether or not you should exercise your Put Right. You must make your own decision whether or not to exercise your Put Right and, if you choose to exercise, how many Common Shares you tender in connection with the exercise of your Put Right. You should consult your own investment and tax advisors and read carefully and evaluate the information in this Put Notice and in the related Letter of Transmittal, which will be sent to stockholders at the commencement of the Put Period.
What is the market value of my Common Shares as of a recent date?
On July 30, 2007, the reported closing price for the Common Shares on The Nasdaq Global Market was $27.77 per share. You should obtain a recent market quotation for the Common Shares in deciding whether to exercise the Put Right for your Common Shares. Please see Certain Information Concerning TheravancePrice Range of Common Shares; Dividends on page 30 for recent high and low sales prices for the Common Shares.
Why is Theravance making this out-of-the-money offer?
Theravance is required under its Restated Certificate to offer to purchase Common Shares under the Put Right regardless of the current trading price of the Common Shares.
When will payment of the Purchase Price by made?
Holders of Common Shares that are validly delivered upon exercise of the Put Right to BNY prior to the Expiration Time will be sent the aggregate Purchase Price, subject to withholding for applicable taxes, promptly after the Expiration Time, without interest.
Is the Put Right subject to a minimum condition?
There is no condition that the Put Right must be exercised for a specified number, or a certain percentage, of the issued and outstanding Common Shares. As long as you comply with the instructions set forth in this Notice of Put Right and the Letter of Transmittal to exercise the Put Right for your Common Shares, you will have obtained the right to receive the Purchase Price for each Common Share for which the Put Right has been properly exercised, subject to withholding of applicable taxes as described below.
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How do I exercise the Put Right and deliver my Common Shares?
Please refer to Procedures for Exercising the Put Right on page 23 for detailed instructions on how to exercise your Put Right and how to validly deliver your Common Shares. In summary:
· Holders of certificates representing Common Shares: Return a properly completed Letter of Transmittal and all stock certificates held by you representing Common Shares, to BNY. You must send in all of your certificates for Common Shares. It is important to note that the Common Shares with respect to which you exercise your Put Right will be taken pro-rata from each of the stock certificates held by you.
· Holders of Common Shares held in book entry form (also known as street name) through a brokerage or other securities account maintained by a commercial institution: Contact your broker, dealer, commercial bank, trust company or other nominee for their assistance in exercising your Put Right.
· Holders of Common Shares held in book entry form (also known as street name) directly with the Depository Trust Company (such holders generally are commercial institutions such as brokers, dealers, commercial banks and trust companies): Follow the procedures for book entry transfer of the Common Shares, as described in Procedures for Exercising the Put Right on page 23.
For holders of Common Shares in street name, it is important to note that you must surrender two times (2X) the number of Common Shares for which you wish to exercise the Put Right.
In order to exercise your Put Right during the Put Period, you must validly deliver your Common Shares, together with a properly completed Letter of Transmittal to BNY, no later than 5:00 p.m. Eastern Daylight Time on September 12, 2007.
May I withdraw my exercise of the Put Right after I have validly delivered my Common Shares to BNY?
Yes. Your election to exercise the Put Right may be withdrawn at any time prior to the Expiration Time. See Procedures for Exercising the Put RightRight of Withdrawal for the Put Period on page 26 for more information.
How do I withdraw my exercise of the Put Right?
You (or your broker if your Common Shares are held in street name) must notify BNY at the address set forth on the back cover of this Notice of Put Right if you wish to withdraw your exercise of the Put Right. The notice must include the name of the stockholder that exercised the Put Right, the number of Common Shares for which the exercise is being withdrawn and the name in which the Common Shares are registered. BNY must receive any withdrawal for the exercise of the Put Right prior to the Expiration Time. For complete information about the procedures for withdrawing your exercise of the Put Right, see Procedures for Exercising the Put RightRight of Withdrawal for the Put Period on page 26.
What are the associated preferred stock purchase rights?
Each Common Share and Class A Share has associated with it one preferred stock purchase right. Each of these rights entitles its holder to purchase, at a price of $209.25 for each, one one-thousandth of a share of Series A junior participating preferred stock, (each subject to adjustment) under certain circumstances provided for in Theravances rights agreement. The purpose of the rights agreement is to: give the Board of Directors of Theravance the opportunity to negotiate with any persons seeking to obtain control of Theravance; deter acquisitions of voting control of Theravance without assurance of fair and equal treatment of all of its stockholders; and prevent a person from acquiring in the market a sufficient amount of voting power over Theravance to be in a position to block an action sought to be taken by its stockholders. The exercise of the purchase rights would cause substantial dilution to a person attempting to acquire Theravance on terms not approved by its Board of Directors, and therefore would significantly
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increase the price that such person would have to pay to complete the acquisition. The rights agreement may deter a potential acquisition of Theravance or tender offer for Theravance shares. Until a distribution date under the rights plan occurs, the rights are not be exercisable, are represented by the same certificate that represents the shares with which the rights are associated and trade together with such shares.
If I decide not to exercise my Put Right, how will my Common Shares be affected?
Your Common Shares will not be affected other than your Put Right will expire if not exercised before the Expiration Time.
Will Theravance continue to be a public company following the Put Period?
Yes. The exercises of the Put Right during the Put Period will not affect Theravances continued listing on its stock exchange, The Nasdaq Global Market. Theravance will continue to be subject to periodic reporting requirements of the Securities Exchange Act of 1934, as amended.
I hold vested options to purchase Common Shares: Am I eligible to exercise the Put Right?
No. Holders of vested options to purchase Common Shares issued under stock option plans maintained by Theravance (the Stock Options) are not eligible to participate in the Put Right unless such holders first exercise the applicable Stock Options on or before September 3, 2007. It is important to note that you must exercise a number of options equal to at least two times (2X) the number of Common Shares for which you wish to exercise the Put Right. On July 11, 2007, Theravance posted a notice on its internal company website, and filed the same notice on a Current Report on Form 8-K, advising holders of Stock Options of this deadline to enable them to exercise their Stock Options and exercise their Put Right with respect to the Common Shares issued thereunder.
Must I exercise the Put Right for all of my Common Shares?
No. The decision to exercise the Put Right with respect to your Common Shares, and the number of shares you wish to tender pursuant to any exercise of your Put Right, is at your individual discretion. Accordingly, you may exercise the Put Right for none or a portion of your Common Shares (but not more than fifty percent (50%) of the Common Shares held by you) during the Put Period. Please remember that the Put Right only applies to up to fifty percent (50%) of the Common Shares held by each stockholder.
Will I have to pay brokerage commissions if I tender my shares?
If you are a registered stockholder and you tender your shares directly to BNY, you will not incur any brokerage commissions. If you hold shares through a broker, bank or other nominee, we urge you to consult your broker, bank or other nominee to determine whether any transactions costs are applicable.
What are the material United States federal income tax considerations with respect to my exercise of the Put Right?
Generally, you will be subject to United States federal income taxation when you receive cash from us in exchange for the Common Shares you sell pursuant to the exercise of the Put Right, and such sales may also be taxable under applicable state, local and other tax laws. The cash you receive in exchange for such shares will generally be treated either as (1) proceeds from the sale or exchange of such shares eligible for capital gains treatment, or (2) a dividend to the extent of our available current or accumulated earnings and profits, and thereafter first as a non-taxable return of capital (to the extent of your tax basis in our stock) and then as capital gain. In the case of non-United States holders, because it is unclear which characterization applies, we intend to withhold 30% of the gross proceeds paid, or such lesser percentage
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as may be available under an applicable treaty provision as applied to dividend income. As individual tax situations differ, stockholders should consult with their individual tax and legal advisors concerning the tax consequences of the exercise of the Put Right. Please see Miscellaneous Provisions Related to the Put RightMaterial United States Federal Income Tax Consequences of the Purchase of Common Shares on page 20 for more information.
To whom may I direct questions about the Put Right?
If you have questions or need assistance, you should contact Investor Relations at Theravance, Inc. by phone at (650) 808-4100, by e-mail at investor.relations@theravance.com, or by mail at Theravance, Inc., 901 Gateway Boulevard, South San Francisco, California 94080 Attn: Investor Relations.
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To the Holders of Shares of
Common Stock of
Theravance, Inc.
This Notice of Put Right pertains to the right of the holders of shares of common stock, par value $0.01 per share (together with the preferred stock purchase rights, the Common Shares), of Theravance, Inc. (Theravance) to require, pursuant to Theravances Restated Certificate of Incorporation, as amended (the Restated Certificate), Theravance to purchase up to fifty percent (50%) of the Common Shares (the Put Right) held by them upon the terms and subject to the conditions set forth in this Notice of Put Right and the Letter of Transmittal, which will be sent to stockholders at the commencement of the Put Period. The Purchase Price is $19.375 in cash per Common Share.
On July 30, 2007, the reported closing price of the Common Shares on The Nasdaq Global Market was $27.77. Holders of Common Shares are urged to obtain a current market quotation for the Common Shares before they make their decision whether or not to exercise the Put Right.
THIS NOTICE OF PUT RIGHT AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE PUT RIGHT.
Theravance is a biopharmaceutical company with a pipeline of product candidates that it discovered and expects to develop in collaboration with partners or on its own. Theravance plans to commercialize its medicines primarily through partnerships with global pharmaceutical companies. Theravance is focused on the discovery, development and commercialization of small molecule medicines for unmet medical needs across a number of therapeutic areas including respiratory disease, bacterial infections and gastrointestinal motility dysfunction.
Theravances strategy focuses on the discovery, development and commercialization of medicines with superior efficacy, convenience, tolerability and/or safety. By primarily focusing on biological targets that have been either clinically validated by existing medicines or by potential medicines in late-stage clinical trials, Theravance can leverage years of available knowledge regarding a targets activity and the animal models used to test potential medicines against such targets. Theravance moves a product candidate into development after it demonstrates superiority to such medicines in animal models that it believes correlate to human clinical experience. This strategy is designed to reduce technical risk and increase productivity. Theravance believes that it can enhance the probability of successfully developing and commercializing medicines by identifying at least two structurally different product candidates, whenever practicable, for development in each therapeutic program.
As of June 30, 2007, there were 51,211,521 Common Shares and 9,401,498 shares of Class A common stock outstanding, outstanding options to purchase 11,280,918 Common Shares, of which 4,158,472 were vested and exercisable, at a weighted average exercise price of $6.92 per share, and an outstanding warrant to purchase 18,064 shares at an exercise price of $1.94 per share.
Background of GSKs Investment in Theravance
Collaboration Agreement
In November 2002, Theravance entered into a collaboration agreement with Glaxo Group Limited, a pharmaceutical company with substantial capabilities in respiratory drug development, formulation and commercialization, to develop and commercialize product candidates for the treatment of asthma and
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chronic obstructive pulmonary disease (Glaxo Group Limited, together with GlaxoSmithKline plc and SmithKline Beecham Corporation and their affiliates are hereinafter referred to as GSK). In connection with this collaboration, Theravance sold GSK shares of its (then) Series E Preferred Stock. These shares were later converted to common stock and then exchanged for Class A common stock in connection with Theravances March 2004 sale of Class A common stock to GSK (as described below).
Strategic Alliance with GSK and Sale of Class A Common Stock
In March 2004, Theravance entered into a strategic alliance agreement with GSK whereby, among other things, GSK received an option to license product candidates from all of Theravances current and future full drug discovery programs initiated prior to September 1, 2007, on pre-determined terms and on an exclusive, worldwide basis. Concurrent with entering into the strategic alliance agreement, Theravance sold $108.9 million of Class A common stock to GSK. As part of the sale of the Class A common stock, Theravance amended its certificate of incorporation to provide for a right held by GSK to call in July 2007 50% of the Common Shares held by Theravances stockholders and 50% of the Common Shares underlying vested and exercisable options and warrants at $54.25 per share (the Call). The restated certificate further provided that if the Call was not exercised by GSK, holders of Theravances Common Shares would have the Put Right. GSK did not exercise the Call, which right has now expired.
Upon the closing of the Class A common stock purchase, Theravance entered into a governance agreement with GSK (since amended) (the Governance Agreement), which is described below.
Pursuant to its rights under the Governance Agreement, GSK purchased 433,757 shares of Class A common stock in connection with Theravances initial public offering in October 2004. As of June 30, 2007, GSK owned 100% of Theravances outstanding Class A common stock, which constitutes approximately 15.5% of Theravances outstanding capital stock.
The provisions in the Governance Agreement relating to the Put Right have been set forth in other sections of this Notice of Put Right. A summary of the other significant terms of the Governance Agreement is provided below.
Rights of GSK Prior to the Expiration Time
Composition of Theravances Board of Directors: GSK has the right to either: (i) nominate an individual to serve as a member of Theravances board of directors (the Board); or (ii) designate an individual to serve as an observer at Board meetings. GSK has this right until such time as GSKs percentage ownership of Theravances outstanding securities having the right to vote generally in any election of Theravances directors, referred to as Theravances Voting Stock, (a) has fallen below 15%, or (b) directly as a result of any sale or other disposition by GSK of Voting Stock, has fallen below 19%.
GSK Approval of Certain Issuances of Theravances Equity Securities: Without the prior written consent of GSK, Theravance may not issue any equity securities (as defined below) other than shares of common stock, options to acquire common stock and permitted indebtedness (as defined below). Theravance may issue these equity securities only if, as a consequence of such issuance, the aggregate number of shares of its common stock subject to the Put Right would not exceed 54.2 million (as adjusted for stock splits, stock dividends, combinations and other recapitalizations). In the context of the Governance Agreement, the term equity securities means (i) any of Theravances Voting Stock, (ii) securities convertible into or exchangeable for Voting Stock, and (iii) options, rights and warrants issued by Theravance to acquire Voting Stock. In the context of the Governance Agreement, the term permitted indebtedness means any indebtedness that Theravance issues prior to the Expiration Time in an amount equal to or less than $100.0 million and, if the indebtedness may be converted or exchanged
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into Voting Stock, then the terms of the indebtedness must provide that it may not be converted or exchanged prior to the Expiration Time.
Limitations on Indebtedness: Theravance may not borrow money or otherwise incur indebtedness that would cause it, on a consolidated basis, to have financial indebtedness that exceeds its cash and cash equivalents, except that it may incur permitted indebtedness.
Limitation on Acquisition of Equity Securities by GSK: Except as agreed to by Theravance in writing following approval by a majority of its independent directors, GSK may not, directly or indirectly: (i) acquire any of Theravances equity securities; (ii) make or participate in any solicitation of proxies to vote from any holders of Theravances equity securities; (iii) form or participate in a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, with any person not bound by the terms of the Governance Agreement with respect to any Voting Stock; (iv) acquire any of Theravances assets or rights to purchase any of Theravances assets except for assets offered for sale by Theravance or the acquisition or purchase of Theravances assets pursuant to the existing agreements that Theravance has in place with GSK; (v) enter into any arrangement or understanding with others to do any of the actions listed in (i)(iv) above; (vi) act together with others to offer to Theravance or any of Theravances stockholders any business combination, restructuring, recapitalization or similar transaction involving Theravance or otherwise seek together with others to control, change or influence the management, Board or Theravances policies or nominate any person as a director who is not nominated by the then incumbent directors of Theravance, or propose any matter to be voted upon by Theravances stockholders; and (vii) prior to August 31, 2007, request that Theravance or its Board amend or waive the restrictions set forth in (i)(vi) above.
Limitations on Dispositions of Theravances Equity Securities by GSK: GSK may not sell or transfer any of its Voting Stock without the prior approval of the Board (not including any director nominated by GSK) except for transfers: (i) to any other affiliate of GSK; or (ii) in connection with a change in control of Theravance approved by the Board (not including any director nominated by GSK) and completed prior to August 1, 2007.
Voting Arrangements: GSK shall vote its Voting Stock (at GSKs election) either (i) in accordance with the recommendation of Theravances independent directors (as defined below); or (ii) in proportion to the votes cast by the other holders of Voting Stock. In the context of the Governance Agreement, independent director means a director that complies with the independence requirements for directors with respect to Theravance for companies listed on The Nasdaq National Market and has business or technical experience, stature and character as is commensurate with service on the board of directors of a publicly traded enterprise. GSK can vote as it chooses on any proposal to: (a) amend the Restated Certificate to amend the provisions related to the put and call; (b) issue equity securities of Theravance to one or more parties (other than in a public offering) that would result in that party or parties holding 20% or more of the Voting Stock; or (c) effect a change in control of Theravance. If a person or group acting in concert acquires 20% or more of the Voting Stock, GSK may vote its Voting Stock without any restrictions. GSK has granted an irrevocable proxy coupled with an interest in all Voting Stock owned by GSK to the Board. This proxy will enable the proxyholder to vote or otherwise act with respect to all of GSKs Voting Stock in the manner required by the Governance Agreement.
Rights of GSK After the Expiration Time
If GSKs Ownership of Theravance Voting Stock is Greater than 50.1%
Composition of the Board of Directors: The Board will include: (i) a number of nominees designated by GSK equal to one-third of the aggregate number of directors comprising the Board at that time; (ii) two of Theravances officers nominated by the nominating committee of the Board; and (iii) the remaining members of the Board will be independent directors. In addition, so long as GSKs percentage ownership
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of Voting Stock is 50.1% or greater, upon its request, GSK may designate nominees for half of the total number of independent directors. These nominees to be independent directors must be reasonably acceptable to the directors not nominated by GSK. Each GSK nominee to be an independent director must meet the qualifications of an independent director both with respect to Theravance and with respect to GSK. An equal number of independent directors will be nominated by the directors of the Board (excluding the directors nominated by GSK). If GSKs percentage ownership of Voting Stock falls below 50.1% (subject to certain limitations), then the term of each director nominated by GSK pursuant to this provision will automatically cease.
Committees of the Board of Directors: Any committee of the Board must contain at least one director nominated by GSK except for: (i) a committee representing the interests of the holders of common stock; (ii) a committee of independent directors constituted for the purposes of making any determination that is to be made under the terms of the Governance Agreement or Restated Certificate; or (iii) a committee in which membership of a director nominated by GSK would be prohibited by applicable law, regulation or stock exchange or trading system listing requirement.
Approval by a Majority of GSK Nominated Directors of Certain Actions: The approval of a majority of the directors nominated by GSK will be required to approve any of the following: (i) Thervances acquisition of any business or assets that would constitute a substantial portion of Theravances business or assets; (ii) the sale, lease, license, transfer or other disposal of a substantial portion of Theravances business or assets, tangible or intangible, other than dispositions of assets over which GSK has no contractual rights pursuant to agreements with Theravance or in the ordinary course of business; or (iii) the repurchase or redemption of any of equity securities other than (A) redemptions required by the terms of the Voting Stock, (B) purchases made at fair market value in connection with any deferred compensation plan that Theravance maintains and (C) repurchases of unvested or restricted stock at or below cost pursuant to a compensation plan.
GSK Approval of Certain Issuances of Theravances Equity Securities: If GSKs percentage ownership of Voting Stock is 50.1% or greater on the Expiration Time or if GSKs percentage ownership of Voting Stock is 35.1% or greater, but less than 50.1% on the Expiration Time, and exceeds 50.1% at any time on or prior to December 31, 2008, Theravance may not issue any Equity Security on or prior to September 1, 2012 other than (i) equity securities issued pursuant to any employee, officer, director or consultant compensation plan that has been approved by the Board; and (ii) equity securities issued by Theravance to third parties, provided that the aggregate number of shares of any such equity securities issued to such third parties during the period described above may not exceed the equivalent of approximately 16.1 million shares of common stock (on an as converted to common stock basis and as adjusted for stock splits, stock dividends, combinations and other recapitalizations).
Limitation on Acquisition of Theravances Equity Securities by GSK: Except as agreed to by Theravance in writing following approval by a majority of the independent directors, GSK will have the same limitations on the acquisition of equity securities as GSK did prior to the Expiration Time. These limitations are described above.
Limitations on Disposition of Theravances Equity Securities by GSK: GSK may not sell or transfer any of its Voting Stock without the prior approval of a majority of the independent directors until September 1, 2012 if GSKs percentage ownership of Voting Stock is 50.1% or greater on the Expiration Time. If GSKs percentage ownership of Voting Stock becomes 50.1% or greater after the Expiration Time and before September 1, 2012, then GSK may not sell or transfer any of its Voting Stock without the prior approval of a majority of the independent directors until September 1, 2012. GSK is permitted to sell or transfer its Voting Stock in connection with a change in control of Theravance that is approved by a majority of the independent directors. In the event that the prohibition on the disposition of Voting Stock by GSK expires on September 1, 2012, if GSK disposes of any Voting Stock, GSK shall not be able to purchase any Voting
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Stock for one year after such disposition without the prior approval of a majority of the independent directors.
Voting Arrangements: GSK shall vote its Voting Stock (at GSKs election) either (i) in accordance with the recommendation of the independent directors or (ii) in proportion to the votes cast by the other holders of Voting Stock. GSK can vote as it chooses on any proposal to: (a) effect a change in control of Theravance; (b) effect the acquisition by Theravance of any business or assets that would constitute a substantial portion of Theravances business or assets; (c) effect the sale, license or transfer of all or a substantial portion of Theravances business or assets unless GSK has no contractual rights over the business or assets in question pursuant to Theravances strategic alliance agreement with GSK, and such sale, license or transfer occurs in the ordinary course of business; or (d) issue equity securities to one or more parties (other than in a public offering) that would result in that party or parties holding 20% or more of the Voting Stock. If a person or group acting in concert acquires 20% or more of the Voting Stock, GSK may vote its Voting Stock without any restrictions. GSK has granted an irrevocable proxy coupled with an interest in all Voting Stock owned by GSK to the Board. This proxy will enable the proxyholder to vote or otherwise act with respect to all of GSKs Voting Stock in the manner required by the Governance Agreement.
If GSKs Ownership of Theravances Voting Stock is Less than 35.1%
Composition of Theravances Board of Directors: GSKs rights to nominate Board members and designate observers to the Board are identical to GSKs rights prior to the Expiration Time. These rights are described above.
Board Approval Matters: The approval of a majority of the directors nominated by GSK will not be required for the matters set forth above in Approval by a Majority of GSK Nominated Directors of Certain Actions.
GSK Approval of Certain Issuances of Theravances Equity Securities and Debt: GSK approval will not be required for issuances of Theravances Equity Securities or for Theravance to incur indebtedness.
Limitation on Acquisition of Theravances Equity Securities by GSK: Except as agreed to by Theravance in writing following approval by a majority of the independent directors, GSK will have the same limitations on the acquisition of Theravances equity securities as GSK did prior to the Expiration Time. These limitations are described above.
Limitation on Disposition of Theravances Equity Securities by GSK: GSK may not sell or transfer any of its Voting Stock without the prior approval of a majority of the independent directors until September 1, 2008. GSK is permitted to sell or transfer its Voting Stock in connection with a change in control of Theravance that is approved by a majority of the independent directors. In the event that the prohibition on the disposition of Voting Stock by GSK expires on September 1, 2008 as set forth above, GSK shall be able to dispose of its Voting Stock after such date and prior to September 1, 2012 only through either a public offering or pursuant to Rule 144 under the Securities Act of 1933, as amended.
Voting Arrangements: The voting arrangements are identical to GSKs voting arrangement prior to the Effective Time. These voting arrangements are described above.
Rights of GSK during the Interim Period
The Interim Period is referred to as the time period between the Expiration Time and September 1, 2008, or, if on or after September 1, 2008 GSK offers to purchase additional shares of Voting Stock that would cause GSKs percentage ownership of Theravance to equal 60%, then the expiration date of that offer (which may be no later than October 15, 2008).
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If GSKs Ownership of Theravance Voting Stock is Between 35.1% and 50.1% during the Interim Period
Composition of Theravances Board of Directors: GSK shall have the right to (i) nominate a director, and (ii) upon its request, GSK may during this time period designate a number of nominees to be independent directors equal to GSKs percentage ownership of Voting Stock multiplied by the total number of independent directors. GSKs nominees to be independent directors must be reasonably acceptable to the directors not nominated by GSK. GSKs right to nominate a director and independent directors pursuant to this provision and the term of any director and independent director nominated by GSK pursuant to these provisions will automatically cease upon the expiration of the Interim Period.
Approval by a Majority of the Independent Directors of Certain Actions: The approval of a majority of Theravances independent directors will be required to approve any of the following: (i) Theravances acquisition of any business or assets that would constitute a substantial portion of Theravances business or assets; (ii) the sale, lease, license, transfer or other disposal of a substantial portion of Theravances business or assets, tangible or intangible, other than dispositions of assets over which GSK has no contractual rights pursuant to agreements with Theravance or in the ordinary course of business; or (iii) the repurchase or redemption of any of equity securities other than (A) redemptions required by the terms of the Voting Stock, (B) purchases made at fair market value in connection with any deferred compensation plan that Theravance maintains and (C) repurchases of unvested or restricted stock at or below cost pursuant to a compensation plan.
GSK Approval of Certain Issuances of Theravances Equity Securities: Theravance may not issue any equity security at any time on or prior to December 31, 2008 other than: (i) equity securities issued pursuant to any employee, officer, director or consultant compensation plan that has been approved by the Board; and (ii) equity securities issued by Theravance to third parties provided that the aggregate number of shares of any such equity securities issued to such third parties during the period described above may not exceed the equivalent of 16.1 million shares of common stock (on an as converted to common stock basis and as adjusted for stock splits, stock dividends, combinations and other recapitalizations).
Limitation on Acquisition of Theravances Equity Securities by GSK: Except as agreed to by Theravance in writing following approval by a majority of the independent directors, GSK will have the same limitations on the acquisition of Theravances equity securities as GSK did prior to the Expiration Time. These limitations are described above.
Limitation on Disposition of Theravances Equity Securities by GSK: GSK may not sell or transfer any of its Voting Stock without the prior approval of a majority of the independent directors until September 1, 2008. GSK is permitted to sell or transfer its Voting Stock in connection with a change in control of Theravance that is approved by a majority of the independent directors. In the event that the prohibition on the disposition of Voting Stock by GSK expires on September 1, 2008 as set forth above, GSK shall be able to dispose of its Voting Stock after such date and prior to September 1, 2012 only through either a public offering or pursuant to Rule 144 under the Securities Act of 1933, as amended.
Voting Arrangements: The voting arrangements are identical to GSKs voting arrangements after the Effective Time if GSKs Ownership of Theravance Voting Stock is Greater than 50.1%. These voting arrangements are described above.
Other Agreements Between Theravance and GSK
Theravance is also a party to the following agreements with GSK:
Collaboration Agreement between Theravance and Glaxo Group Limited, dated as of November 14, 2002
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Class A Common Stock Purchase Agreement between Theravance and SmithKline Beecham Corporation, dated as of March 30, 2004
Strategic Alliance Agreement between Theravance and Glaxo Group Limited, dated as of March 30, 2004
Amended and Restated Investors Rights Agreement by and among the registrant and the parties listed therein, dated as of May 11, 2004
Class A Common Stock Purchase Agreement between the Theravance and SmithKline Beecham Corporation dated October 4, 2004
Lock-up Agreement among Theravance, SmithKline Beecham Corporation and P. Roy Vagelos dated May 11, 2004
Lock-up Agreement among Theravance, SmithKline Beecham Corporation and Rick E Winningham dated May 11, 2004
Lock-up Agreement among Theravance, SmithKline Beecham Corporation and Patrick P.A. Humphrey dated May 11, 2004
Pursuant to the three above-listed Lock-up Agreements, each of Dr. Vagelos, Mr. Winningham and Dr. Humphrey agreed not to sell or transfer 50% of the shares (including shares underlying stock options) held by him as of May 11, 2004 (the Restricted Shares) until on or after the Expiration Time and agreed not to exercise the put right with respect to the Restricted Shares during the Put Period.
Grant of proxy to Rick E Winningham and Michael W. Aguiar by SmithKline Beecham Corporation and Glaxo Group Limited in connection with Theravances 2005 and 2006 Annual Meetings of Stockholders. With these documents, SmithKline Beecham Corporation and Glaxo Group Limited provided authority for their proxies to vote for all proposals and elect all directors on the ballot at those Annual Meetings of Stockholders.
Summary of Payments Between Theravance and GSK
The following summarizes payments during Theravances six months ended June 30, 2007 and preceding two fiscal years between Theravance and GSK (and its affiliates):
· Milestone payments: No milestone payments were received from GSK for the six months ended June 30, 2007. Theravance received $8.0 million in milestone payments under the Strategic Alliance with GSK in 2006 and 2005, respectively.
· Reimbursements: For certain costs that were reimbursable by GSK, Theravance received from GSK $0.5 million for the six months ended June 30, 2007, and $0.9 million and $4.8 million in 2006 and 2005, respectively.
The Put Right allows holders of Common Shares to cause Theravance to purchase up to fifty percent (50%) of their Common Shares as provided in the Restated Certificate. Theravance and GSK will cause this Notice of Put Right to be sent to the holders of Common Shares as required under the terms of the Restated Certificate and the Governance Agreement.
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Certain Effect of the Exercise of the Put Right
The exercise of the Put Right and the expiration of the Put Period will affect Theravance and its stockholders in several ways:
· to the extent the Put Right is exercised, GSK will hold a greater percentage of the Voting Stock;
· the applicable governance changes described above will go into effect based on GSKs ownership of the Voting Stock after the Expiration Time; and
· following the Expiration Time, stockholders will no longer have the Put Right.
Under Section (C)(5) of Article IV of the Restated Certificate, each holder of shares of common stock (the Common Shares) has the right to require Theravance to redeem, out of legally available funds, up to fifty percent (50%) of the holders Common Shares (the Put Right) at a price of $19.375 in cash per Common Share (the Purchase Price) during the period beginning on August 1, 2007 and ending at 5:00 p.m. Eastern Daylight Time on September 12, 2007 (the Put Period). GSK is contractually obligated to provide the funds necessary for Theravance to redeem the Common Shares from its stockholders; however, GSKs maximum obligation for the Common Shares subject to the Put is capped at $525 million. Theravance is under no obligation to redeem any Common Shares that are Put until GSK provides the funds necessary to redeem such shares.
At least ten, but not more than thirty (30), days prior to the beginning of the Put Period, Theravance is required to mail to each holder of Common Shares a put notification. At the commencement of the Put Period, Theravance will send to each holder of Common Shares this Notice of Put Right and a Letter of Transmittal to be used in exercising the Put Right.
The Expiration Time means 5:00 p.m. Eastern Daylight Time on September 12, 2007, provided that such date may be extended through public announcement by Theravance to the extent required to comply with United States federal securities laws.
Additionally, at least ten (10), but not more than thirty (30), days prior to the beginning of the Put Period, Theravance was required to publish a notice similar to this Notice of Put Right in the Wall Street Journal and such notice was published on July 20, 2007.
Theravance may delay the dates to take the actions described above to the extent necessary to comply with the United States federal securities laws. To the extent that there are any delays, the dates on which payments would otherwise be required to be made will be extended by the same number of days of the delay.
GSKs Obligation to Provide Funds to Purchase Common Shares
Under the terms of the Governance Agreement, GSK is obligated to provide to The Bank of New York (BNY) in its capacity as Depositary for the Put Right, immediately prior to the time that any amounts are required to be deposited with BNY for payment to the holders of Common Shares pursuant to the Restated Certificate, funds in an amount equal to the product of the number of Common Shares with respect to which the Put Right has been properly exercised multiplied by the Purchase Price, provided, however, that GSKs maximum obligation for these shares is capped at $525 million. In exchange for such payment, The Bank of New York, as Theravances transfer agent with respect to its common stock, and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP, Theravances transfer agent with respect to its Class A common stock, will issue to GSK within five (5) business days following the end
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of the Put Period an equal number of shares of Class A common stock and common stock such that the aggregate number of shares issued to GSK is equal to the number of Common Shares that are purchased and cancelled by Theravance in accordance with the Put Right.
The Restated Certificate provides that payment of an amount of $19.375 in cash per Common Share is to be made promptly after September 12, 2007 for Common Shares that have been surrendered with a properly executed Letter of Transmittal on or before September 12, 2007.
However, the Restated Certificate also states that the dates on which Theravance is required to take actions with respect to payment of the Purchase Price for the Common Shares may be delayed to such later dates as may be necessary in order to comply with United States federal securities laws. United States federal securities laws do not permit Theravance to pay the Purchase Price prior to the Expiration Time to holders of Common Shares who have properly exercised the Put Right. Consequently, irrespective of when during the Put Period holders of Common Shares exercise the Put Right, payment of the Purchase Price for all Common Shares for which the Put Right is exercised during the Put Period will be made after September 12, 2007, or such later date to which the Expiration Time may be extended by Theravance through public announcement to the extent required to comply with United States federal securities laws.
Therefore, each holder of Common Shares that has:
· properly executed and returned the Letter of Transmittal prior to 5:00 p.m. Eastern Daylight Time on September 12, 2007, or such later date to which the Expiration Time may be extended by Theravance through public announcement to the extent required to comply with United States federal securities laws; and
· surrendered Common Shares equal to at least two times (2X) the number of Common Shares for which a holder wishes to exercise the Put Right (or followed instructions in the Letter of Transmittal for the guaranteed delivery of such shares either in certificate or book entry form) with respect to which the Put Right has been exercised during the Put Period
will be paid the Purchase Price, subject to withholding for applicable taxes, promptly after the Expiration Time, without interest. If the Common Shares delivered to BNY were represented on a physical stock certificate, BNY will also send such holder a Direct Registration Transaction Advice representing the balance of such holders Common Shares for which the Put Right was not exercised. The Direct Registration Transaction Advice represents shares held in your name and tracked electronically (in book-entry form) on Theravances records, which are maintained by The Bank of New York as its transfer agent. Theravance has initiated Direct Registration with The Bank of New York effective September 13, 2007. Additional information about Direct Registration will be sent to all stockholders of record, but briefly, holding your shares in the Direct Registration System relieves you from the responsibility of keeping track of physical stock certificates, while retaining full ownership of your shares, including voting rights and all other privileges of being a stockholder.
Notwithstanding the foregoing, GSKs maximum obligation for the Common Shares subject to the Put is capped at $525 million. Theravance is under no obligation to redeem any Common Shares until GSK provides the funds to redeem such shares.
Certain Conditions of the Put Right
Notwithstanding any other provision of the Put Right, Theravance will not be required to accept for payment nor pay the Purchase Price for any Common Shares, may postpone the acceptance for payment of the Purchase Price or payment for delivered Common Shares, and may, in its sole discretion, terminate or amend the Put Right as to any Common Shares for which the Purchase Price has not been paid if prior to
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5:00 p.m. Eastern Daylight Time on September 12, 2007, a court or governmental entity shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and which has the effect of making the Put Right illegal or otherwise prohibiting consummation of the Put Right.
The condition described above is for the sole benefit of Theravance and may be asserted by Theravance or may be waived by Theravance as a whole or in part at any time and from time to time in its sole discretion, provided that, unless Theravance extends the Put Period to the extent necessary to ensure that there are five (5) business days remaining prior to the expiration of the Put Period, any waiver must occur on or before September 5, 2007 and all of the foregoing conditions which are not waived by Theravance must be satisfied prior to 5:00 p.m. Eastern Daylight Time on September 12, 2007. The determination as to whether such condition has occurred will be in the sole judgment of Theravance, whose determination must be reasonable using good faith judgment, and will be final and binding on all parties. The failure by Theravance at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right and each such right will be deemed an ongoing right which may be asserted from time to time and at any time prior to 5:00 p.m. Eastern Daylight Time on September 12, 2007.
Theravance may extend the Put Period at any time in order to comply with United States federal securities laws. If Theravance decides to extend the Put Period, Theravance will inform BNY of that fact, and will make a public announcement of the extension, not later than 9:00 a.m. Eastern Daylight Time on September 12, 2007. The term Expiration Time means 5:00 p.m., Eastern Daylight Time, on September 12, 2007, unless and until Theravance will have extended the Put Period, in which event the term Expiration Time will mean the latest time and date at which the Put Period, as so extended by Theravance, expires.
Notwithstanding anything else in this Notice of Put Right, if an Insolvency Event (as defined below) occurs during the Put Period, then the Put Right shall be held open for an additional sixty (60) business days after the date of such Insolvency Event.
The term insolvency event means the occurrence of any of the following events:
· the filing by Theravance of a voluntary petition in bankruptcy, or seeking a reorganization, in order to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform Act, Title 11 of the United States Code, as amended or recodified from time to time (the Bankruptcy Code), or under any state or federal law granting relief to debtors; or
· the filing or commencement of any involuntary petition or proceeding pursuant to the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization or other relief for debtors is filed or commenced against Theravance and the same is not dismissed within thirty (30) days; or
· the filing by Theravance of an answer admitting the jurisdiction of the court and the material allegations of any involuntary petition; or
· the adjudication of Theravance as bankrupt, or an order for relief shall be entered by any court of competent jurisdiction under the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization or other relief for debtors.
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Miscellaneous Provisions Related to the Put Right
If Theravance effects a subdivision or combination of the Common Shares, whether by reclassification or otherwise, into a greater or lesser number of Common Shares, then the Purchase Price will be adjusted by multiplying the Purchase Price in effect immediately prior to the event by the ratio of the number of Common Shares outstanding immediately prior to the event to the number of Common Shares outstanding immediately after the event. Additionally, if Theravance pays any dividend on Common Shares in common stock, then the Purchase Price will be adjusted based on this same formula. Theravance does not currently intend to pay a dividend during the Put Period.
Enforcement of GSKs Obligations
Under the Governance Agreement, Theravance is required to take the actions as may be necessary to cause the performance by GSK of its obligations under the Governance Agreement. All determinations on behalf of Theravance with respect to GSKs performance under the Governance Agreement will be made by a majority of Theravances directors who are not designees of GSK.
All Common Shares purchased by Theravance under the Put Right will be retired and certificates representing the Common Shares will be cancelled promptly after the purchase thereof. The Bank of New York, as Theravances transfer agent with respect to its common stock, and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP, Theravances transfer agent with respect to its Class A common stock, will issue to GSK within five (5) business days following the end of the Put Period an equal number of shares of Class A common stock and common stock such that the aggregate number of shares issued to GSK is equal to the number of Common Shares that are purchased and cancelled by Theravance, in accordance with the Put Right.
The Bank of New York has provided a list of stockholders and security positions for the purpose of disseminating this Notice of Put Right to holders of record of Common Shares as of July 20, 2007. This Notice of Put Right and the related Letter of Transmittal will be mailed to record holders of Common Shares and will be furnished to brokers, banks and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agencys security position listing for subsequent transmittal to beneficial owners of Common Shares.
Material United States Federal Income Tax Consequences of the Purchase of Common Shares
Overview
The following is a general discussion of certain of the material United States federal income tax consequences of a redemption effected pursuant to the exercise by a holder of Common Shares of the Put Right. This discussion is based on the Internal Revenue Code of 1986, as amended (which we refer to as the Code), final, temporary and proposed Treasury regulations (which we refer to as the Treasury regulations) promulgated thereunder by the Internal Revenue Service (which we refer to as the IRS), and administrative and judicial interpretations thereof, each as in effect and available on the date of this Put Notice, all of which are subject to change. Any such change, which may or may not be retroactive, could alter the tax consequences to stockholders. You should note that, due to a lack of definitive judicial or administrative interpretation, uncertainties exist with respect to many of the tax consequences described below.
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You should also be aware that this discussion is addressed only to those holders of Common Shares who are United States citizens and residents and who hold our Common Shares as capital assets. This discussion does not address all of the United States federal income tax consequences that may be relevant to particular stockholders in light of their individual circumstances, such as stockholders who are subject to the alternative minimum tax provisions of the Code, who are dealers in securities or foreign currency, who are financial institutions or insurance companies, who are corporations, who are investors in pass-through entities, who are tax-exempt organizations, who hold their Common Shares as qualified small business stock pursuant to Section 1202 of the Code, whose shares constitute Section 306 stock under Section 306 of the Code, who are foreign persons or entities, who do not hold their Common Shares as capital assets, who acquired their Common Shares in connection with stock option or stock purchase plans or in other compensatory transactions, who hold Common Shares as part of an integrated investment (including a hedge or a straddle) comprised of Common Shares and one or more other positions, or who have previously entered into a conversion transaction or constructive sale of Common Shares under the constructive sale provisions of the Code. In addition, the following discussion does not address (i) the tax consequences of a redemption to any person under foreign, state or local tax laws, or (ii) the tax consequences of transactions effectuated prior or subsequent to, or concurrently with, the transactions described in this information statement (whether or not any such transactions are undertaken in connection with such transactions).
We have not requested a ruling from the IRS in connection with the tax consequences described herein. Accordingly, the discussion below neither binds the IRS nor precludes it from adopting a contrary position.
In view of the foregoing and because the following discussion is intended as a general summary only, you are urged to consult your own tax advisors as to the specific tax consequences of your exercise of the Put Right, including the applicable federal, state, local and foreign tax consequences, in light of your own particular tax situations.
General Consequences of the Exercise of the Put Right
The purchase by Theravance of up to 50% of the Common Shares held by a stockholder under the exercise of the Put Right by such stockholder is expected to be subject to the stock redemption rules of Section 302 of the Code. Under the rules of Section 302 of the Code, the entire cash proceeds from the redemption received will be treated as a distribution taxable as a dividend (to the extent of Theravances available earnings and profits), unless the redemption is substantially disproportionate with respect to the stockholder or is not essentially equivalent to a dividend with respect to the stockholder. To the extent a redemption is not substantially disproportionate or is essentially equivalent to a dividend with respect to a stockholder, amounts received in connection with the redemption which exceed a stockholders allocable share of our current and accumulated earnings and profits will first be treated as a non-taxable return of capital, causing a reduction in the adjusted tax basis of such stockholders shares, and any amounts in excess of such stockholders adjusted tax basis will constitute capital gain. Any remaining adjusted tax basis in the redeemed shares will be transferred to any remaining shares held by such stockholder.
In the event the redemption is substantially disproportionate or not essentially equivalent to a dividend with respect to the stockholder, the redemption should qualify for sale treatment (i.e., the stockholder will recognize long- or short-term (depending upon the stockholders holding period for the redeemed shares) capital gain or loss upon the redemption equal to the difference between its adjusted tax basis in the redeemed shares and the amount of cash received in exchange for such shares in the redemption).
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In determining whether a redemption is substantially disproportionate or not essentially equivalent to a dividend with respect to a stockholder, the stockholder must take into account its shares of stock actually owned as well as the shares of stock constructively owned by reason of certain constructive ownership rules set forth in the Code. Under these constructive ownership rules, a stockholder will be deemed to own any shares of stock that are either actually or constructively owned by certain related individuals or entities and any shares of stock that the stockholder has a right to acquire by exercise of an option or by conversion or exchange of a security. In addition, in applying the substantially disproportionate and not essentially equivalent to a dividend tests, a stockholder must also take into account acquisitions or dispositions of stock that are treated for United States federal income tax purposes as integrated with the redemption.
The redemption of Theravance Common Shares from a Theravance stockholder will be substantially disproportionate with respect to the stockholder if, among other things, the percentage of Common Shares actually and constructively owned by the stockholder immediately following the redemption is less than 80% of the percentage of shares of stock actually and constructively owned by the stockholder immediately prior to the redemption. For this purpose, a stockholder will compare its percentage interest in Theravance represented by its shares actually and constructively owned (including stock constructively owned by reason of the ownership of stock options) immediately prior to the redemptions with its percentage interest in Theravance represented by shares actually and constructively owned immediately after the redemptions (including stock constructively owned by reason of the ownership of stock options) and any issuance of additional stock to GSK in exchange for funding Theravances obligation to redeem shares pursuant to any exercises of the Put Right. The redemption of a stockholders Common Shares will be treated as not essentially equivalent to a dividend with respect to the stockholder if the stockholder experiences a meaningful reduction in its percentage interest as a result of the redemption. Depending on a particular stockholders facts and circumstances, even a small reduction in the stockholders proportionate equity interest may satisfy the meaningful reduction test. For example, the IRS has held that any reduction in the percentage interest of a stockholder whose relative stock interest in a publicly held corporation is minimal (e.g., an interest of less than 1%) and who exercises no control over corporate affairs constitutes a meaningful reduction.
There is a risk that a redemption of a stockholders Common Shares pursuant to the exercise of the Put Right could be treated as a recapitalization under Section 368(a)(1)(E) of the Code in which such stockholder is deemed to exchange its Common Shares for shares of Theravance common stock and cash. It is not expected that a redemption of Common Shares should be treated in such a manner; however, due to a lack of definitive judicial or administrative interpretation, this conclusion is not free from doubt. In the event that a redemption of Common Shares does result in such recapitalization treatment, a stockholder would recognize gain but not loss in the exchange equal to the lesser of:
the amount of cash received in the redemption; and
the excess of:
(1) the amount of cash and the fair market value of the Common Shares retained by the stockholder, over
(2) the stockholders adjusted tax basis in all of the Common Shares held immediately prior to the redemption.
In general any such gain or loss would be treated as dividend income or capital gain under rules similar to those described above with respect to redemptions (i.e., such gain will generally be treated as capital gain if the redemption was substantially disproportionate with respect to a shareholder or otherwise not essentially equivalent to a dividend as described above).
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In the event the Put Right were considered a separate property right, it is also possible that Common Shares (or at least 50% of such shares) and the put right may be treated as a straddle under Section 1092 of the Code, in which case the holders holding period would never have increased for various purposes under the Code. The Put Right is expected to be treated as an integral and incidental part of the Common Shares, and therefore not as a separate property right; however, due to a lack of definitive judicial or administrative guidance, this issue is not free from doubt.
In addition, under certain circumstances, where a taxpayer has an option to sell stock (such as through the exercise of the put right), Section 1233 of the Code prevents a taxpayers holding period from increasing (for purposes of obtaining long-term capital gain). The terms of the Common Shares are not expected to cause Section 1233 of the Code to apply to Common Shares. Section 1233 of the Code is not expected to apply since the Put Right was acquired on the same day as the Common Shares and can be used to put only Common Shares to Theravance. Due to a lack of definitive judicial or administrative interpretation, this issue is not free from doubt, however. Holders of Common Shares are urged to consult their tax advisors concerning the identification requirement contained in Code Section 1233(c).
Certain non-corporate stockholders may be subject to backup withholding at a 28% rate on the redemption payments made to such stockholders. In order to avoid backup withholding, a stockholder must complete Form W-8IMY or Form W-8BEN (if the stockholder is a nonresident alien individual or foreign entity) or Form W-9 (if the stockholder is a United States resident or domestic entity). Forms W-8IMY, W-8BEN and W-9 are available on the Internal Revenue Services web site, www.irs.gov.
Generally, BNY will withhold United States federal income tax at a rate of 30% from the gross proceeds paid to a foreign stockholder (as defined in Procedures for Exercising the Put RightFederal Income Tax Withholding on Foreign Stockholders on page 28 below) or his agent in connection with the exercise of the Put Right, unless BNY determines that an exemption from, or a reduced rate of, withholding tax is available under a tax treaty or that an exemption from withholding otherwise applies or that proceeds received by the foreign stockholder are entitled to capital gains treatment. See Procedures for Exercising the Put RightFederal Income Tax Withholding on Foreign Stockholders on page 28 for information.
CIRCULAR 230 DISCLOSURE: THE FOREGOING INFORMATION ADDRESSING OR OTHERWISE RELATING TO THE TAX CONSEQUENCES OF THE ACTIONS AND TRANSACTIONS DESCRIBED HEREIN (THE TAX INFORMATION) IS NEITHER INTENDED NOR PROVIDED TO BE USED, AND CANNOT BE USED BY ANY TAXPAYER, FOR THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED ON SUCH TAXPAYER. ADDITIONALLY, THE TAX INFORMATION WAS PREPARED, AND IS BEING PROVIDED, TO SUPPORT THE PROMOTION OF THE TRANSACTIONS DESCRIBED HEREIN. THE TAX CONSEQUENCES OF THE TRANSACTIONS DESCRIBED HEREIN WILL VARY IN ACCORDANCE WITH THE SPECIFIC CIRCUMSTANCES OF EACH TAXPAYER; ACCORDINGLY, EACH TAXPAYER SHOULD CONSULT HIS OR HER OWN INDEPENDENT TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF THE TRANSACTIONS DESCRIBED HEREIN.
Procedures for Exercising the Put Right
Acceptance for Payment and Payment for Common Shares
Payment for the Common Shares delivered and accepted for payment pursuant to the exercise of the Put Right will be made only after timely receipt by BNY of certificates evidencing such Common Shares or a confirmation of a book entry transfer of such Common Shares (a Book Entry Confirmation) into BNYs account at the Depository Trust Company a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other required documents prior to the Expiration Time. The Letter of Transmittal will be sent to stockholders at the commencement of the Put Period.
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Payment of the Purchase Price for Common Shares accepted for payment pursuant to the exercise of the Put Right will be made by BNY, which will act as agent for the holders of Common Shares that properly exercise their Put Right for the purpose of transmitting the Purchase Price to such stockholders. Under no circumstances will interest on the Purchase Price be paid, regardless of any delay in making such payment.
To the extent the delivering stockholder delivered a physical stock certificate in the exercise of the Put Right, BNY will send such stockholder a Direct Registration Transaction Advice representing the balance of such holders Common Shares for which the Put Right has not been exercised or any delivered Common Shares that are not accepted for payment pursuant to the terms and conditions of the Put Right for any reason. The Direct Registration Transaction Advice represents shares held in your name and tracked electronically (in book-entry form) on Theravances records, which are maintained by The Bank of New York as its transfer agent. Theravance has initiated Direct Registration with The Bank of New York effective September 13, 2007. Additional information about Direct Registration will be sent to all stockholders of record, but briefly, holding your shares in the Direct Registration System relieves you from the responsibility of keeping track of physical stock certificates, while retaining full ownership of your shares, including voting rights and all other privileges of being a stockholder.
Procedure for Validly Delivering Common Shares
For Common Shares to be deemed Validly Delivered pursuant to the exercise of the Put Right, one of the following must occur:
· For Common Shares represented by physical certificates: a properly completed and duly executed Letter of Transmittal in accordance with the instructions of the Letter of Transmittal, with any required signature guarantees, all stock certificates representing Common Shares held by such holder, and any other documents required by the Letter of Transmittal, must be received by BNY prior to the Expiration Time at one of its addresses set forth on the back cover of this Notice of Put Right; or
· For Common Shares held in book entry form at the Depository Trust Company: such Common Shares equal to two times (2X) the number of Common Shares for which a holder wants to exercise the Put Right must be delivered pursuant to the procedures for book entry transfer described below (and the Book Entry Confirmation of such delivery received by BNY, including an Agents Message (as defined herein) if the delivering stockholder has not delivered a Letter of Transmittal), prior to the Expiration Time; or
· Guaranteed Delivery: the delivering stockholder must comply with the guaranteed delivery procedures set forth below.
The term Agents Message means a message transmitted by the Depository Trust Company to, and received by, BNY and forming a part of a Book Entry Confirmation, which states that the Depository Trust Company has received an express acknowledgment from the participant in the Depository Trust Company delivering the Common Shares which are the subject of such Book Entry Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Theravance may enforce such agreement against the participant.
Valid Delivery Through Book Entry Delivery of Common Shares from the Depository Trust Company to BNY
BNY has established an account with respect to the Common Shares at the Depository Trust Company for purposes of the exercise of the Put Right. Any financial institution that is a participant in the Depository Trust Companys systems may make a book entry transfer of Common Shares by causing the
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Depository Trust Company to transfer such Common Shares into BNYs account in accordance with the Depository Trust Companys procedures for such transfer. However, although delivery of Common Shares may be effected through book entry transfer, either the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agents Message in lieu of the Letter of Transmittal, and any other required documents, must, in any case, be transmitted to and received by BNY at one of the addresses set forth on the back cover of this Notice of Put Right by the Expiration Time, or the delivering stockholder must comply with the guaranteed delivery procedures described below.
Delivery of documents to the Depository Trust Company in accordance with its procedures does not constitute delivery to BNY.
The method of delivery of Common Shares, the Letter of Transmittal and all other required documents, including delivery through the Depository Trust Company, is at the election and risk of the delivering stockholder. Common Shares will be deemed Validly Delivered only when actually received by BNY (including, in the case of a book entry transfer, by Book Entry Confirmation).
If delivery is by mail, it is recommended that the delivering stockholder use properly insured registered mail with return receipt requested. In all cases, sufficient time should be allowed to ensure timely delivery prior to the Expiration Time.
Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a financial institution that is a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program or by any other Eligible Guarantor Institution (each, an Eligible Institution), as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the Exchange Act). Most commercial banks, savings and loans associations and brokerage houses participate in a medallion signature guarantee program.
Signatures on a Letter of Transmittal need not be guaranteed if:
· the Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this section, includes any participant in the Depository Trust Companys systems whose name appears on a security position listing as the owner of the Common Shares) of the Common Shares delivered therewith and such registered holder has not completed Box #5 entitled Special Transfer Instructions on the Letter of Transmittal; or
· such Common Shares are delivered for the account of an Eligible Institution.
If the certificates for Common Shares are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made, or certificates for Common Shares not delivered or not accepted for payment are to be returned, to a person other than the registered holder of the certificates surrendered, then the delivered certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holders or owners appear on the certificates, with the signatures on the certificates or stock powers guaranteed as described above.
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A stockholder who desires to exercise the Put Right and who cannot comply with the procedures for book entry transfer on a timely basis, or who cannot deliver all required documents to BNY prior to the Expiration Time, may be deemed to have Validly Delivered such Common Shares by following all of the procedures set forth below:
· such delivery of the Common Shares is made by or through an Eligible Institution;
· a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by Theravance, is received by BNY, prior to the Expiration Time; and
· the certificates for all delivered Common Shares, in proper form for transfer (or a Book Entry Confirmation with respect to all such Common Shares), together with a properly completed and duly executed Letter of Transmittal, with any required signature guarantees (or, in the case of a book entry transfer, an Agents Message in lieu of the Letter of Transmittal), and any other required documents, are received by BNY within three (3) trading days after the date of execution of such Notice of Guaranteed Delivery. A trading day is any day on which The Nasdaq Global Market is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to BNY or transmitted by facsimile transmission or mail to BNY and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery.
Right of Withdrawal for the Put Period
An exercise of the Put Right is revocable only if proper notice of such withdrawal, as set forth below, is received by BNY prior to the Expiration Time, which is 5:00 p.m. Eastern Daylight Time on September 12, 2007, or such later date to which the initial Expiration Time for the exercise of the Put Right may be extended by Theravance through public announcement to the extent required to comply with United States federal securities laws.
For a withdrawal of the exercise to be effective, a signed written or facsimile transmission notice of withdrawal must be timely received by BNY at the one of the addresses set forth on the back cover of this Notice of Put Right. Any such notice of withdrawal must specify the name of the stockholder having Validly Delivered the Common Shares to be withdrawn, the number or amount of Common Shares to be withdrawn and the names in which the certificate(s) evidencing the Common Shares to be withdrawn are registered, if different from that of the person who Validly Delivered such Common Shares. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Common Shares have been Validly Delivered for the account of any Eligible Institution.
If the Common Shares have been Validly Delivered pursuant to the procedures for book entry transfer, any notice of withdrawal must specify the name and number of the account at the Depository Trust Company to be credited with the withdrawn Common Shares. If certificates for Common Shares to be withdrawn have been Validly Delivered or otherwise identified to BNY, the name of the registered holder and the serial numbers of the particular certificates evidencing the Common Shares to be withdrawn must also be furnished to BNY prior to the physical release of such certificates.
All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by Theravance, in its sole discretion, which determination shall be final and binding. None of Theravance, GSK, BNY, or any of their affiliates will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of the exercise of the Put Right for Common Shares may not be rescinded, and any Common Shares for which the exercise of the Put Right is properly withdrawn will be deemed not to have been
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Validly Delivered for purposes of the Put Right. However, Common Shares for which the exercise of the Put Right has been withdrawn may be Validly Delivered again by submitting a properly completed Letter of Transmittal along with Common Shares equal to at least two times (2X) the number of Common Shares for which the Put Right is being exercised (if applicable) to BNY prior to 5:00 p.m. Eastern Daylight Time on September 12, 2007.
Lost, Missing or Destroyed Certificates
Any holder of Common Shares in certificated form may claim that some or all of their stock certificates are lost, missing or destroyed by checking the appropriate box in Box #3 of the Letter of Transmittal, completing the remainder of the Letter of Transmittal and submitting it to BNY, which will then forward to such holder the documentation necessary to be completed in order for such holder to receive the Purchase Price. Holders of Common Shares claiming lost, missing or destroyed certificates(s) must also designate their intention to exercise the Put Right to receive the Purchase Price for a specific portion, up to a maximum of 50%, of the total certificated shares in their account as of the Effective Time.
Each holder of Common Shares that has properly executed and delivered the Letter of Transmittal and certificates for Common Shares or Book Entry Confirmations with respect to Common Shares to BNY prior to the Expiration Time will be paid the Purchase Price, subject to withholding for applicable taxes, promptly after the end of the Put Period. However, there could be delays in delivery of the Purchase Price due to circumstances beyond the control of Theravance, GSK, or BNY. Under no circumstances will interest on the Purchase Price for the Validly Delivered Common Shares be paid, regardless of any delay in making such payment.
Exercise of Put Right Constitutes an Agreement
The Valid Delivery of Common Shares pursuant to one of the procedures described above will constitute a binding agreement between the delivering stockholder and Theravance for the exercise of the Put Right, upon the terms and subject to the conditions of the Put Right.
All questions as to the validity, form, eligibility (including time of receipt) and acceptance of delivery of Common Shares will be determined by Theravance in its sole discretion, which determination will be final and binding. Theravance reserves the absolute right to reject any and all deliveries of Letters of Transmittal and Common Shares determined by it not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of Theravances counsel, be unlawful. Theravance also reserves the absolute right to waive any defect or irregularity in the delivery of any Letter of Transmittal or Common Shares by any particular stockholder whether or not similar defects or irregularities are waived in the case of other stockholders. No Common Shares will be deemed to have been Validly Delivered until all defects and irregularities relating to the delivery thereof have been cured or waived. None of Theravance, GSK, or BNY or any other person will be under any duty to give notification of any defects or irregularities in deliveries or incur any liability for failure to give any such notification. Theravances interpretation of the terms and conditions of the Put Right (including the Letter of Transmittal and Instructions thereto) will be final and binding.
In order to avoid backup withholding of federal income tax on payments of cash pursuant to the exercise of the Put Right, a stockholder surrendering Common Shares must, unless an exemption applies,
27
provide BNY with such stockholders correct taxpayer identification number (TIN) on a Substitute Form W-9 and certify under penalties of perjury that such TIN is correct and that such stockholder is not subject to backup withholding. If a stockholder does not provide such stockholders correct TIN or fails to provide the certifications described above, the Internal Revenue Service (the IRS) may impose a penalty on such stockholder and payment of cash to such stockholder pursuant to the exercise of the Put Right may be subject to backup withholding of 28%. All stockholders who are United States taxpayers surrendering Common Shares pursuant to the exercise of the Put Right should complete and sign the main signature form and the Substitute Form W-9 included as Box #2 on the Letter of Transmittal to provide the information and certification necessary to avoid backup withholding (unless an applicable exemption exists and is proved in a manner satisfactory to Theravance and BNY). Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding. Non-corporate foreign stockholders should complete and sign the main signature form and a Form W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, a copy of which may be obtained from BNY, in order to avoid backup withholding.
Federal Income Tax Withholding on Foreign Stockholders
Even if a foreign stockholder has provided the required certification as described in the preceding paragraph to avoid backup withholding, BNY will withhold United States federal income taxes at a rate of 30% of the gross payment payable to a foreign stockholder or his or her agent unless BNY determines that an exemption from, or a reduced rate of, withholding tax is available under a tax treaty or that an exemption from withholding is applicable because such gross proceeds are effectively connected with the conduct of a trade or business of the foreign stockholder within the United States or that such proceeds are subject to capital gains treatment.
For this purpose, a foreign stockholder is any stockholder that is not (i) a citizen or resident of the United States, (ii) a corporation or other entity created or organized in the United States or under the laws of the United States or any political subdivision thereof, (iii) an estate, the income of which is includible in gross income for United States federal income tax purposes regardless of its source, or (iv) a trust whose administration is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all of its substantial decisions. In order to obtain a reduced rate of withholding under a tax treaty, a foreign stockholder must deliver to BNY before the payment a properly completed and executed IRS Form W-8BEN or any other equivalent form. In order to obtain an exemption from withholding on the grounds that the gross proceeds paid under the tender offer are effectively connected with the conduct of a trade or business within the United States, a foreign stockholder must deliver to BNY a properly completed and executed IRS Form W-8ECI or any other equivalent form. A foreign stockholder may be eligible to obtain a refund of all or a portion of any tax withheld if such stockholder satisfies one of the Section 302 tests for capital gain treatment described in Miscellaneous Provisions Related to the Put RightMaterial United States Federal Income Tax Consequences of the Purchase of Common Shares on page 20, if Theravance has no current or accumulated earnings and profits, or if the such stockholder is otherwise able to establish that no withholding or a reduced amount of withholding is due. Federal backup withholding generally will not apply to amounts subject to the 30% or a treaty-reduced rate of federal income tax withholding.
Foreign stockholders are urged to consult their tax advisors regarding the application of U.S. federal income tax withholding, including eligibility for a reduction of or an exemption from withholding tax, and the refund procedure.
28
Treatment of Special Categories of Theravances Securities
Treatment of Stock Options Under the Put Right
Holders of vested and exercisable options to purchase Common Shares issued under stock option plans maintained by Theravance (the Stock Options) are not eligible to participate in the Put Right unless such holder first exercised the applicable Stock Options on or prior to September 4, 2007. On July 11, 2007, Theravance posted a notice on its internal company website, and filed the same notice on a Current Report on Form 8-K, advising holders of Stock Options of this deadline to enable them to exercise their Stock Options and exercise their Put Right with respect to the Common Shares issued thereunder.
Treatment of Warrants Under the Put Right
There is only one warrant outstanding exercisable for Common Shares. The holder of this warrant is not eligible to participate in the Put Right unless such holder first exercised the warrant on or prior to the September 4, 2007.
Treatment of Preferred Stock Purchase Rights Under the Put Right
The preferred stock purchase rights associated with Common Shares will be purchased for no additional consideration to the extent the Common Share to which the right is associated is repurchased pursuant to an exercise of Put Rights.
Certain Information Concerning Theravance
Theravance is a Delaware corporation with its principal executive offices located at 901 Gateway Boulevard, South San Francisco, California, 94080. Theravances business telephone number is (650) 808-6000. Theravance is a biopharmaceutical company with a pipeline of product candidates that it discovered and expects to develop in collaboration with partners or on its own. Theravance plans to commercialize its medicines primarily through partnerships with global pharmaceutical companies. Theravance is focused on the discovery, development and commercialization of small molecule medicines for unmet medical needs across a number of therapeutic areas including respiratory disease, bacterial infections and gastrointestinal motility dysfunction.
Except as otherwise set forth herein, the information concerning Theravance contained in this Notice of Put Right, including in APPENDIX A and APPENDIX B hereto, has been provided by Theravance or taken from or based upon publicly available documents and records on file with the SEC and other public sources and is qualified in its entirety by reference thereto. Although GSK has no knowledge that would indicate that any statements contained herein based on such documents and records are untrue, GSK cannot take responsibility for the accuracy or completeness of the information contained in such documents and records, or for any failure by Theravance to disclose events which may have occurred or may affect the significance or accuracy of any such information but which are unknown to GSK.
As of the date hereof,
(a) Theravance has informed GSK that, after making reasonable inquiry of its executive officers, directors and affiliates, Theravance has been informed that none of these parties intend to exercise the Put Right and cause Theravance to purchase their Common Shares.
(b) None of Theravance executive officers, directors or affiliates have made any public recommendation with respect to the Put Right; and
29
(c) Theravance has not received any appraisal, report or opinion on the fairness of the Put Right.
Information regarding beneficial ownership of the Common Shares as well as agreements between Theravance and its executive officers are set forth in APPENDIX B to this Notice of Put Right.
Price Range of Common Shares; Dividends
The Common Shares are quoted on The Nasdaq Global Market under the symbol THRX. The following table sets forth, for the fiscal quarters indicated, the high and low closing sales prices for the Common Shares on The Nasdaq Global Market based upon public sources:
|
|
|
Sales Price |
|
|||||||
Fiscal Year |
|
|
|
|
|
High |
|
Low |
|
||
2005 |
|
First Quarter |
|
$ |
18.86 |
|
$ |
16.53 |
|
||
|
Second Quarter |
|
$ |
18.31 |
|
$ |
16.55 |
|
|||
|
Third Quarter |
|
$ |
21.57 |
|
$ |
16.98 |
|
|||
|
Fourth Quarter |
|
$ |
23.50 |
|
$ |
20.86 |
|
|||
2006 |
|
First Quarter |
|
$ |
29.88 |
|
$ |
20.43 |
|
||
|
|
Second Quarter |
|
$ |
29.90 |
|
$ |
22.06 |
|
||
|
|
Third Quarter |
|
$ |
28.02 |
|
$ |
22.40 |
|
||
|
|
Fourth Quarter |
|
$ |
32.83 |
|
$ |
27.02 |
|
||
2007 |
|
First Quarter |
|
$ |
32.66 |
|
$ |
27.38 |
|
||
|
Second Quarter |
|
$ |
36.81 |
|
$ |
28.74 |
|
|||
|
Third Quarter (through July 30) |
|
$ |
33.13 |
|
$ |
27.70 |
|
|||
On July 30, 2007, the reported closing price of the Common Shares on The Nasdaq Global Market was $27.77 per share. Stockholders are urged to obtain a current market quotation for the Common Shares.
The Theravance board of directors has not declared any cash dividends.
30
Selected Consolidated Financial Information
The following table sets forth summary historical consolidated financial data for Theravance as of and for the three months ended March 31, 2007 and March 31, 2006 and as of and for each of the years ended December 31, 2006 and December 31, 2005.
This data and the comparative per share data set forth below are extracted from, and should be read in conjunction with, the audited consolidated financial statements and other financial information contained in Theravances Annual Report on Form 10-K for the year ended December 31, 2006 and the unaudited consolidated interim financial statements and other financial information contained in Theravances Quarterly Report on Form 10-Q for the quarterly period ended on March 31, 2007 including the notes thereto. More comprehensive financial information is included in such reports (including managements discussion and analysis of financial condition and results of operation) and other documents filed by Theravance with the SEC, and the following summary is qualified in its entirety by reference to such reports and other documents and all of the financial information and notes contained therein. The financial statements included as Item 8 in Theravances Annual Report on Form 10-K for the year ended December 31, 2006 and Item 1 in Theravances Quarterly Report on Form 10-Q for the quarterly periods ended on March 31, 2007 and March 31, 2006 are hereby incorporated herein by this reference. Copies of such reports and other documents may be examined at or obtained from the SEC in the manner set forth below.
|
|
As of and For the |
|
As of and For the |
|
||||||||
|
|
2007 |
|
2006 |
|
2006 |
|
2005 |
|
||||
|
|
(In Thousands, except per share amounts) |
|
||||||||||
Statement of Operations Data |
|
|
|
|
|
|
|
|
|
||||
Revenues |
|
$ |
5,398 |
|
$ |
4,296 |
|
$ |
19,587 |
|
$ |
12,054 |
|
Loss from operations |
|
(52,258 |
) |
(51,686 |
) |
(179,170 |
) |
(149,556 |
) |
||||
Net loss |
|
(49,450 |
) |
(48,952 |
) |
(166,044 |
) |
(143,164 |
) |
||||
Basic and diluted net loss per common share |
|
(0.82 |
) |
(0.86 |
) |
(2.81 |
) |
(2.69 |
) |
||||
Balance Sheet Data |
|
|
|
|
|
|
|
|
|
||||
Current assets |
|
$ |
190,685 |
|
|
|
$ |
207,191 |
|
$ |
166,850 |
|
|
Non-current assets |
|
56,974 |
|
|
|
55,233 |
|
57,985 |
|
||||
Current liabilities |
|
62,886 |
|
|
|
59,609 |
|
48,173 |
|
||||
Non-current liabilities |
|
164,429 |
|
|
|
139,505 |
|
117,078 |
|
||||
Total stockholders equity |
|
20,344 |
|
|
|
63,310 |
|
59,584 |
|
||||
Total shares outstandingcommon stock |
|
50,864 |
|
|
|
50,746 |
|
44,475 |
|
||||
Total shares outstandingClass A common stock |
|
9,402 |
|
|
|
9,402 |
|
9,402 |
|
||||
31
Ratio of Earnings to Fixed Charges
The following table sets forth certain historical information regarding the ratio of earnings to fixed charges for Theravance for the three months ended March 31, 2007 and March 31, 2006 and for the years ended December 31, 2006 and December 31, 2005.
Ratio
of Earnings to Fixed Charges
(Unaudited)
|
|
For the Three Months Ended |
|
For the Years Ended |
|
|||||||||||
|
|
March 31, 2007 |
|
December 31, 2006 |
|
December 31, 2005 |
|
|||||||||
|
|
(in thousands, except ratio) |
|
|||||||||||||
Earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Loss before income taxes |
|
|
$ |
(49,450 |
) |
|
|
$ |
(166,044 |
) |
|
|
$ |
(143,164 |
) |
|
Fixed charges |
|
|
454 |
|
|
|
1,881 |
|
|
|
1,818 |
|
|
|||
Total Earnings |
|
|
$ |
(48,996 |
) |
|
|
$ |
(164,163 |
) |
|
|
$ |
(141,346 |
) |
|
Fixed charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interest expense |
|
|
$ |
30 |
|
|
|
$ |
193 |
|
|
|
$ |
309 |
|
|
Estimated interest
component of rent |
|
|
424 |
|
|
|
1,688 |
|
|
|
1,509 |
|
|
|||
Total fixed charges |
|
|
$ |
454 |
|
|
|
$ |
1,881 |
|
|
|
$ |
1,818 |
|
|
Ratio of Earnings to Fixed Charges |
|
|
Note 1 |
|
|
|
Note 1 |
|
|
|
Note 1 |
|
|
Note 1: Total earnings were insufficient to cover fixed charges by $49.4 million for the three months ended March 31, 2007 and $166.0 million and $143.2 million for the years ended December 31, 2006 and 2005, respectively.
Book value per share as of March 31, 2007 was $0.34. Book value per share is not a term defined by generally accepted accounting principles. Book value per share is calculated by dividing stockholders equity by the total number of Common Shares and Class A common stock outstanding.
On July 26, 2007, Theravance reported its financial results for the quarter ended June 30, 2007. Net loss for the second quarter of 2007 was $45.1 million, compared with $41.5 million for the same period of 2006, an increase of $3.6 million. Net loss per share was $0.75 for the second quarter 2007 compared with a net loss per share of $0.70 for the second quarter 2006. Cash, cash equivalents and marketable securities totaled $177.7 million as of June 30, 2007, a decrease of $42.0 million during the quarter. This decrease was primarily due to cash used in operations. This financial update information is extracted from, and should be read in conjunction with, Theravances Report on Form 8-K filed with the SEC on July 26, 2007, which is hereby incorporated herein by this reference.
Theravance is subject to the information and reporting requirements of the Exchange Act, and in accordance therewith is obligated to file reports and other information with the SEC relating to its business, financial condition and other matters. Such reports, proxy statements and other information is available for inspection at the public reference room at the SECs offices at 450 Fifth Street, N.W., Washington, D.C. 20549 and also is available for inspection and copying at the regional offices of the SEC located at the SEC address above and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60611. Copies may be obtained, by mail, upon payment of the SECs customary charges, by writing
32
to its principal office at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and can be obtained electronically on the SECs website at http://www.sec.gov.
CERTAIN INFORMATION CONCERNING GLAXOSMITHKLINE
GlaxoSmithKline is a public limited company organized under the laws of England and Wales. Its shares are listed on the London Stock Exchange and the New York Stock Exchange. GlaxoSmithKline is a major global healthcare group engaged in the creation, discovery, development, manufacture and marketing of pharmaceutical and consumer health-related products. The principal executive offices of GlaxoSmithKline are located at 980 Great West Road, Brentford, Middlesex TW8 9GS England, and GlaxoSmithKlines telephone number at such principal executive offices is +44 20 8047 5000.
The name, business address, citizenship, present principal occupation and employment history for the past five years of each of the members of the board of directors and the executive officers of GlaxoSmithKline are set forth in APPENDIX C to this Notice of Put Right.
None of GlaxoSmithKline or, to the knowledge of GlaxoSmithKline after reasonable inquiry, any of the persons listed in APPENDIX C, has during the last five years (a) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws or a finding of any violation of U.S. federal or state securities laws.
Except pursuant to the agreements and relationships described above under Background of the Put Right, or as otherwise set forth elsewhere in this Notice of Put Right: (a) none of GlaxoSmithKline or, to the knowledge of GlaxoSmithKline after reasonable inquiry, any of the persons listed in APPENDIX C or any associate or majority-owned subsidiary of GlaxoSmithKline or any of the persons so listed, beneficially owns or has a right to acquire any Common Shares or any other equity securities of Theravance; (b) none of GlaxoSmithKline or, to the knowledge of GlaxoSmithKline after reasonable inquiry, any of the persons referred to in clause (a) above or any of their executive officers, directors, affiliates or subsidiaries has effected any transaction in Common Shares or any other equity securities of Theravance during the past 60 days; (c) none of GlaxoSmithKline, its subsidiaries or, to the knowledge of GlaxoSmithKline after reasonable inquiry, any of the persons listed in APPENDIX C, has any agreement, arrangement, or understanding, whether or not legally enforceable, with any other person with respect to any securities of Theravance (including, but not limited to, any agreement, arrangement, or understanding concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations); (d) in the past two years, there have been no transactions that would require reporting under the rules and regulations of the Securities and Exchange Commission between any of GlaxoSmithKline, its subsidiaries or, to the knowledge of GlaxoSmithKline after reasonable inquiry, any of the persons listed in APPENDIX C, on the one hand, and Theravance or any of its executive officers, directors or affiliates, on the other hand; and (e) in the past two years, there have been no negotiations, transactions or material contacts between any of GlaxoSmithKline, its subsidiaries or, to the knowledge of GlaxoSmithKline after reasonable inquiry, any of the persons listed in APPENDIX C, on the one hand, and Theravance or any of its affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of Theravances securities, an election of Theravances directors or a sale or other transfer of a material amount of assets of Theravance.
GlaxoSmithKline does not believe that its financial condition is relevant to the decision to exercise the Put Right because (a) the Put Right entitles holders of Common Shares solely to cash consideration, (b) the Put Right is not subject to any financing condition and (c) GlaxoSmithKline is a public reporting company under the Exchange Act that files reports electronically on EDGAR.
33
The maximum amount that Theravance and GSK will be required to pay pursuant to the exercise of the Put Right is $525 million, with the actual amount being equal to the Purchase Price multiplied by the number of Common Shares for which the Put Right is properly exercised.
As of the date of this Notice of Put Right, GSK has, and, as of the date on which it intends to deposit funds with the depositary under the terms of the Governance Agreement and as of the Expiration Time GSK expects to have, cash and marketable securities in an aggregate amount substantially in excess of the amount of cash necessary to fund the Purchase Price for all Common Shares for which the Put Right is exercised.
FEES AND EXPENSES; PERSONS USED
Theravance has retained BNY to act as the Depositary with respect to the Put Right. In addition, BNY continues to serve in its capacity as Transfer Agent for the Common Shares as provided for in an agreement previously entered into by and between Theravance and BNY. Theravance has agreed to pay BNY reasonable and customary compensation for its services in connection with the Put Right. Theravance has also agreed to reimburse BNY for its reasonable out-of-pocket expenses, including the fees and expenses of its counsel, in connection with the Put Right, and has agreed to indemnify BNY against certain liabilities and expenses in connection with the Put Right.
Brokers, dealers, commercial banks and trust companies will be reimbursed by Theravance for customary mailing and handling expenses incurred by them in forwarding material to their customers.
Various officers and employees in the finance, human resources, investor relations and legal departments at Theravance have participated, and are anticipated to continue to participate, in the administration of the Put Right.
The following is an estimate of the external fees and expenses to be incurred by GSK and Theravance in connection with the Put Right, which have been mutually determined upon consultation between GSK and Theravance:
|
$ |
16,117.50 |
|
|
Legal Fees and Expenses |
|
$ |
220,000 |
|
Accounting Fees and Expenses |
|
$ |
20,000 |
|
Depositary Fees |
|
$ |
10,000 |
|
Printing and Mailing Costs |
|
$ |
70,000 |
|
Miscellaneous |
|
$ |
75,000 |
|
GSK has not made any provisions in connection with the Put Right for Theravance stockholders to access its files. Neither GSK nor Theravance has made any provision to provide counsel, legal advice or tax advice to Theravance stockholders at either GSKs or Theravances expense.
Statements that GSK or Theravance may publish, including those included in this Notice of Put Right, that are not purely historical and that relate to the Put Right, GSK, Theravance or their businesses or proposals are forward-looking statements. These statements are based on GSKs and Theravances current expectations and involve risks and uncertainties which include (i) general economic factors and capital market conditions and (ii) general industry trends (including trends relating to Theravance product candidates or prospects). GSK and Theravance wish to caution the reader that these factors are among the
34
factors that could cause actual results to differ materially from the expectations described in the forward-looking statements.
GSK and Theravance are not aware of any licenses or other regulatory permits which are material to the business of Theravance and which might be adversely affected by the Put Right or of any approval or other action by any governmental, administrative or regulatory agency or authority which would be required for the Put Right. Should any such approval or other action be required, it is currently contemplated that such approval or action would be sought or taken.
The Put Right is not effective in (nor will deliveries be accepted from or on behalf of holders of Common Shares in) any jurisdiction in which the Put Right, or the acceptance and purchase of Common Shares thereunder, would not be in compliance with the laws of such jurisdiction. GSK and Theravance are not aware of any jurisdiction in which the Put Right or the acceptance of Common Shares in connection therewith would not be in compliance with the laws of such jurisdiction. GSK and Theravance may, however, in their sole discretion, take such action as they may deem necessary to make the Put Right legal in any jurisdiction where it is not in compliance with the laws of such jurisdiction and to extend the Put Right to holders of Common Shares in such jurisdiction.
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act), certain transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice and the Federal Trade Commission and certain waiting period requirements have been satisfied. GSK and Theravance furnished such information in February 2007 and the applicable waiting period expired on March 2, 2007.
Federal Reserve Board Regulations
Regulations G, T, U and X (the Margin Regulations) promulgated by the Federal Reserve Board place restrictions on the amount of credit that may be extended for the purpose of purchasing margin stock (including the Common Shares) if such credit is secured directly or indirectly by margin stock. GSK is not providing funds for the purchase of Common Shares pursuant to the Put Right through any credit that is secured directly or indirectly by margin stock. Therefore, the Margin Regulations are inapplicable to the fulfillment of GSKs obligations under the Put Right.
Section 203 of the Delaware General Corporation Law
In general, Section 203 of the DGCL is an anti-takeover statute that prevents an Interested Stockholder (defined generally as a person with 15% or more of a corporations outstanding voting stock) of a Delaware corporation from engaging in a Business Combination (defined as a variety of transactions, including mergers) with such corporation for three years following the date such person became an Interested Stockholder unless:
· before such person became an Interested Stockholder, the board of directors of the corporation approved either the Business Combination or the transaction which resulted in such person becoming an Interested Stockholder;
· upon consummation of the transaction which resulted in such person becoming an Interested Stockholder, the Interested Stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding stock held by directors who are also officers of the corporation and by employee stock ownership plans that do not provide employees
35
with the rights to determine confidentially whether shares held subject to the plan will be delivered or exchanged pursuant to the Put Right); or
· following the transaction in which such person became an Interested Stockholder, the Business Combination is approved by the board of directors of the corporation and authorized at a meeting of stockholders by the affirmative vote of the holders of two-thirds of the outstanding voting stock of the corporation not owned by the Interested Stockholder.
Section 203 provides that during such three-year period the corporation may not merge or consolidate with an Interested Stockholder or any affiliate or associate thereof, and also may not engage in certain other transactions with an Interested Stockholder or any affiliate or associate thereof, including without limitation:
· any sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets (except proportionately as a stockholder of the corporation) having an aggregate market value equal to 10% or more of the aggregate market value of all assets of the corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of a corporation;
· any transaction which results in the issuance or transfer by the corporation or by certain subsidiaries thereof of any stock of the corporation or such subsidiaries to the Interested Stockholder, except pursuant to a transaction which effects a pro rata distribution to all stockholders of the corporation;
· any transaction involving the corporation or certain subsidiaries thereof which has the effect of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the corporation or any such subsidiary which is owned directly or indirectly by the Interested Stockholder (except as a result of immaterial changes due to fractional share adjustments); or
· any receipt by the Interested Stockholder of the benefit (except proportionately as a stockholder of such corporation) of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
In connection with entering into the Governance Agreement, Theravance took all necessary corporate action to exempt GSK and its affiliates from the provisions of Section 203. Thus, GSK and Theravance believe that the restrictions in Section 203 do not apply to any business combination between GSK (or one of its affiliates) and Theravance.
A number of states have adopted laws and regulations applicable to acquiring securities of corporations which are incorporated in such states and/or which have substantial assets, stockholders, principal executive offices or principal places of business therein. In Edgar v. MITE Corporation, the Supreme Court of the United States held that the Illinois Business Takeover Statute, which made the takeover of certain corporations more difficult, imposed a substantial burden on interstate commerce and was therefore unconstitutional. In CTS Corporation v. Dynamics Corporation of America, the Supreme Court held that as a matter of corporate law, and in particular, those laws concerning corporate governance, a state may constitutionally disqualify an acquiror of Control Common Shares (ones representing ownership in excess of certain voting power thresholds e.g. 20%, 33% or 50%) of a corporation incorporated in its state and meeting certain other jurisdictional requirements from exercising voting power with respect to those shares without the approval of a majority of the disinterested stockholders.
GSK and Theravance do not believe that any state takeover laws purport to apply to the Put Right. GSK and Theravance have not currently complied with any state takeover statute or regulation. GSK and
36
Theravance reserve the right to challenge the applicability or validity of any state law purportedly applicable to the Put Right and nothing in this Notice of Put Right or any action taken in connection with the Put Right is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Put Right and if an appropriate court does not determine that it is inapplicable or invalid as applied to the Put Right, Theravance might be required to file certain information with, or to receive approvals from, the relevant state authorities, and Theravance might be unable to accept for payment or pay for Common Shares delivered pursuant to the exercise of the Put Right, or be delayed in consummating the purchase of Common Shares pursuant to the exercise of the Put Right. In such case, Theravance may not be obliged to accept for payment or pay for any Common Shares delivered pursuant to the Put Right.
Each of GSK and Theravance has filed a Statement on Schedule TO (collectively, the Statements) with the SEC. Such Statements were filed under the General Rules and Regulations under the Exchange Act and furnish information with respect to the Put Right. Each of GSK and Theravance may file amendments to their respective Statements. Such Statements and any amendments thereto, including exhibits, may be examined and copies may be obtained from the principal office of the SEC in Washington, D.C.
No person has been authorized to give any information or make any representation on behalf of GSK or Theravance not contained in this Notice of Put Right or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized.
37
Information
concerning the
Executive Officers and Directors of Theravance
Theravance,
Inc
Executive Officers and Directors
Name |
|
|
|
Present Business Address |
|
Present Principal Occupation |
|
Citizenship |
DIRECTOR |
|
|
|
|
|
|
||
P. Roy Vagelos |
|
Theravance, Inc. |
|
Chairman of the Board of Directors |
|
United States |
||
DIRECTOR and EXECUTIVE OFFICER |
|
|
|
|
|
|
||
Rick E Winningham |
|
Theravance, Inc. |
|
Chief Executive Officer |
|
United States |
||
EXECUTIVE OFFICERS |
|
|
|
|
|
|
||
Patrick P.A. Humphrey |
|
Theravance, Inc. |
|
Executive Vice President, Research |
|
United Kingdom |
||
Michael W. Aguiar |
|
Theravance, Inc. |
|
Senior Vice President and Chief Financial Officer |
|
United States |
||
Leonard Blum |
|
Theravance, Inc. |
|
Senior Vice President and Chief Commercial Officer |
|
United States |
||
David L. Brinkley |
|
Theravance, Inc. |
|
Senior Vice President, Commercial Development |
|
United States |
||
Arthur L. Campbell |
|
Theravance, Inc. |
|
Senior Vice President, Technical Operations |
|
United States |
||
Michael M. Kitt |
|
Theravance, Inc. |
|
Senior Vice President, Development |
|
United States |
||
Bradford J. Shafer |
|
Theravance, Inc. |
|
Senior Vice President, General Counsel and Secretary |
|
United States |
A-1
DIRECTORS |
|
|
|
|
|
|
Jeffrey M. Drazan |
|
Theravance, Inc. |
|
Managing Director of Bertram Capital |
|
United States |
Robert V. Gunderson, Jr. |
|
|
|
|
|
|
Arnold J. Levine |
|
Theravance, Inc. |
|
Professor at Princeton University |
|
United States |
Burton G. Malkiel |
|
Theravance, Inc. |
|
Chemical Bank Chairmans Professor of Economics at Princeton University |
|
United States |
William H. Waltrip |
|
Theravance, Inc. |
|
Retired |
|
United States |
George M. Whitesides |
|
Theravance, Inc. |
|
Woodford L. and Ann A. Flowers University Professor at Harvard University |
|
United States |
William D. Young |
|
Theravance, Inc. |
|
Chairman of the Board and Chief Executive Officer of Monogram Biosciences, Inc. |
|
United States |
A-2
Certain Additional Information About Theravance
Security Ownership of Certain Beneficial Owners And Management
The following table sets forth certain information known to us regarding beneficial ownership of our voting securities as of June 30, 2007 by:
· each person known by us to be the beneficial owner of more than 5% of any class of our voting securities;
· our executive officers;
· each of our directors; and
· all executive officers and directors as a group.
Unless otherwise indicated, to our knowledge, each stockholder possesses sole voting and investment power over the shares listed, except for shares owned jointly with that persons spouse. The table below is based upon information supplied by officers, directors and principal stockholders and Schedules 13G filed with the Securities and Exchange Commission (the SEC).
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as noted by footnote, and subject to community property laws where applicable, the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.
B-1
This table lists applicable percentage ownership based on 60,613,019 shares of common stock (including 9,401,498 shares of Class A common stock beneficially owned by affiliates of GlaxoSmithKline plc) outstanding as of June 30, 2007. Options and warrants to purchase shares of our common stock that are exercisable within 60 days of June 30, 2007, are deemed to be beneficially owned by the persons holding these options for the purpose of computing percentage ownership of that person, but are not treated as outstanding for the purpose of computing any other persons ownership percentage.
|
Beneficial Ownership |
|
|||||||||
Name and Address of Beneficial Owner(1) |
|
|
|
Number of |
|
Percent of Total |
|
||||
5% Stockholders |
|
|
|
|
|
|
|
|
|
||
GlaxoSmithKline plc(2) |
|
|
9,401,498 |
|
|
|
15.5 |
% |
|
||
980 Great West Road |
|
|
|
|
|
|
|
|
|
||
Brentford |
|
|
|
|
|
|
|
|
|
||
Middlesex |
|
|
|
|
|
|
|
|
|
||
TW8 9GS |
|
|
|
|
|
|
|
|
|
||
United Kingdom |
|
|
|
|
|
|
|
|
|
||
Sierra Ventures VI, L.P. |
|
|
2,688,754 |
|
|
|
4.4 |
%(3) |
|
||
2884 Sand Hill Road, Suite 100 |
|
|
|
|
|
|
|
|
|
||
Menlo Park, CA 94025 |
|
|
|
|
|
|
|
|
|
||
Chesapeake Partners Management Co., Inc. |
|
|
2,622,122 |
|
|
|
4.3 |
%(4) |
|
||
1829 Reisterstown Road, Suite 220 |
|
|
|
|
|
|
|
|
|
||
Baltimore, MD 21208 |
|
|
|
|
|
|
|
|
|
||
FMR Corp. |
|
|
5,336,067 |
|
|
|
8.8 |
%(5) |
|
||
82 Devonshire Street |
|
|
|
|
|
|
|
|
|
||
Boston, MA 02109 |
|
|
|
|
|
|
|
|
|
||
Sowood Capital Management L.P. |
|
|
2,824,608 |
|
|
|
4.7 |
%(6) |
|
||
500 Boylston Street, 17th Floor |
|
|
|
|
|
|
|
|
|
||
Boston, MA 02116 |
|
|
|
|
|
|
|
|
|
||
T. Rowe Price Associates, Inc. |
|
|
4,014,200 |
|
|
|
6.6 |
%(7) |
|
||
100 East Pratt Street |
|
|
|
|
|
|
|
|
|
||
Baltimore, MD 21202 |
|
|
|
|
|
|
|
|
|
||
Executive Officers and Directors |
|
|
|
|
|
|
|
|
|
||
Rick E Winningham(8) |
|
|
951,611 |
|
|
|
1.5 |
% |
|
||
Michael W. Aguiar |
|
|
50,000 |
|
|
|
* |
|
|
||
Patrick P.A. Humphrey, Ph.D., D.Sc.(9) |
|
|
457,610 |
|
|
|
* |
|
|
||
Leonard Blum(10) |
|
|
|
|
|
|
* |
|
|
||
David L. Brinkley(11) |
|
|
205,475 |
|
|
|
* |
|
|
||
Arthur L. Campbell, Ph.D.(12) |
|
|
123,290 |
|
|
|
* |
|
|
||
Michael Kitt, M.D.(13) |
|
|
262,417 |
|
|
|
* |
|
|
||
Bradford J. Shafer(14) |
|
|
316,641 |
|
|
|
* |
|
|
||
P. Roy Vagelos, M.D.(15) |
|
|
1,725,175 |
|
|
|
2.8 |
% |
|
||
Jeffrey M. Drazan(16) |
|
|
2,775,660 |
|
|
|
4.6 |
% |
|
||
Robert V. Gunderson, Jr.(17) |
|
|
53,105 |
|
|
|
* |
|
|
||
Arnold J. Levine, Ph.D. |
|
|
63,967 |
|
|
|
* |
|
|
||
Burton G. Malkiel, Ph.D.(18) |
|
|
|
|
|
|
* |
|
|
||
Eve E. Slater, M.D., F.A.C.C.(19) |
|
|
|
|
|
|
* |
|
|
||
William H. Waltrip(20) |
|
|
32,258 |
|
|
|
* |
|
|
||
George M. Whitesides, Ph.D.(21) |
|
|
707,737 |
|
|
|
1.2 |
% |
|
||
William D.Young(22) |
|
|
32,258 |
|
|
|
* |
|
|
||
All executive officers and directors as a group (17 persons)(23) |
|
|
7,757,204 |
|
|
|
|
|
|
||
B-2
* Less than one percent.
(1) Unless otherwise indicated, the address for each beneficial owner is c/o Theravance, Inc., 901 Gateway Boulevard, South San Francisco, California 94080.
(2) Includes 2,580,645 shares of Class A common stock held of record by Glaxo Group Limited. Also includes 6,820,853 shares of Class A common stock held of record by SmithKline Beecham Corporation. Glaxo Group Limited and SmithKline Beecham Corporation each are wholly-owned subsidiaries of GlaxoSmithKline plc. The percentage of shares beneficially owned by GlaxoSmithKline plc is based on its beneficial ownership of 9,401,498 shares of Class A common stock.
(3) Based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 13, 2007. Constitutes 5.3% of our outstanding common stock as a class. Includes 2,688,754 shares held of record by Sierra Ventures VI, L.P. SV Associates VI, L.P. is the general partner of Sierra Ventures VI, L.P. Management of the business affairs of SV Associates VI, L.P., including the decisions respecting disposition and voting of investments held by Sierra Ventures VI, L.P., is by majority decision of the general partners of SV Associates VI, L.P., Jeffrey M. Drazan, David C. Schwab and Peter C. Wendell.
(4) Based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2007. Constitutes 5.1% of our outstanding common stock as a class. Each of Chesapeake Partners Management Co., Inc., Mark D. Lerner and Traci Lerner may be deemed to have voting and investment power over the shares held by Chesapeake Partners Management Co., Inc.
(5) The various individuals, funds and entities that are deemed to be the beneficial owners of these shares, and the individuals, funds and entities having sole and shared voting power over these shares, are set forth in the Schedule 13G/A filed on May 10, 2007 and on which the information reported herein is based. Constitutes 10.4% of our outstanding common stock as a class.
(6) The various individuals, funds and entities that are deemed to be the beneficial owners of these shares are set forth in the Schedule 13G/A filed on February 14, 2007 and on which the information reported herein is based. Constitutes 5.5% of our outstanding common stock as a class.
(7) Based on a Schedule 13G filed with the Securities and Exchange Commission on February 14, 2007. Constitutes 7.8% of our outstanding common stock as a class. These securities are owned by various individual and institutional investors for which T. Rowe Price Associates, Inc. (Price Associates) serves as investment advisor with power to direct investments and/or sole power to vote the securities. For purposes of the Securities Exchange Act of 1934, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such securities.
(8) Includes 951,611 shares subject to options exercisable within 60 days of June 30, 2007.
(9) Includes 11,000 shares held by Dr. Humphreys spouse and 446,610 shares subject to options exercisable within 60 days of June 30, 2007.
(10) Mr. Blum joined Theravance on July 30, 2007.
(11) Includes 178,416 shares subject to options exercisable within 60 days of June 30, 2007.
(12) Includes 123,290 shares subject to options exercisable within 60 days of June 30, 2007.
(13) Includes 235,055 shares subject to options exercisable within 60 days of June 30, 2007.
(14) Includes 271,735 shares held of record by the Bradford J. Shafer Revocable Living Trust dated 10/30/97, of which 147,670 shares are pledged as security. Also includes 14,701 shares held in trust for the benefit of Mr. Shafers children and 30,205 shares subject to options exercisable within 60 days of June 30, 2007.
(15) Includes 96,774 shares held of record by the Marianthi Foundation, of which Dr. Vagelos is a founder and current director. Also includes 12,981 shares held of record by the Vagelos 2005 Grantor Retained Annuity Trust, 753,751 shares held of record by the Vagelos 2006 Grantor Retained Annuity Trust, 38,709 shares held of record by the Cara Diana Roberts Trust, 38,709 shares held of record by the Olivia Sophia Vagelos Trust, 38,709 shares held of record by the Lydia Joan Roberts Trust, 38,709 shares held of record by the Alexa E. Masseur Irrevocable Trust, 38,709 shares held of record by the 2004 Vagelos Grandchild Irrevocable Trust and 38,709 shares held of record by the Emma B. Vagelos Irrevocable Trust, each of which Dr. Vagelos is the trustee. Includes 354,838 shares subject to options exercisable within 60 days of June 30, 2007.
B-3
(16) Includes 2,688,754 shares held of record by Sierra Ventures VI, L.P. and 59,040 shares held of record by SV Associates VI, L.P. as nominee for Mr. Drazan. SV Associates VI, L.P. is the general partner of Sierra Ventures VI, L.P. Mr. Drazan is one of the general partners, in addition to David C. Schwab and Peter C. Wendell, of SV Associates VI, L.P. and exercises shared voting and investment power over the shares held by Sierra Ventures VI, L.P. Mr. Drazan disclaims beneficial ownership of the shares held by Sierra Ventures VI, L.P.
(17) Includes 6,451 shares held by Marshall & Ilsley for the benefit of Mr. Gunderson and 5,709 shares held by Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP (GD). Mr. Gunderson disclaims beneficial ownership of the shares held by GD except to the extent of his pecuniary interest therein.
(18) Dr. Malkiel joined Theravances board of directors on July 3, 2007.
(19) Dr. Slater resigned from our Board of Directors effective July 31, 2007.
(20) Includes 32,258 shares subject to stock options exercisable within 60 days of June 30, 2007.
(21) Includes 170,318 shares held of record by the Deborah L. Anderson, Trustee, Whitesides Family 1998 Irrevocable Trust.
(22) Includes 32,258 shares subject to stock options exercisable within 60 days of June 30, 2007.
(23) Includes an aggregate of 2,384,541 shares subject to options exercisable within 60 days of June 30, 2007.
Agreements between Theravance and its Executive Officers and Directors
Agreements between Theravance and its executive officers and directors are described in Theravances proxy statement for its 2007 annual meeting of stockholders under the sections entitled Proposal 1 Election of Directors - Compensation of Directors, Proposal 2 Approval of Amendment to the Theravance, Inc. 2004 Equity Incentive Plan and Compensation of Executive Officers. Theravances definitive proxy statement was filed with the Securities and Exchange Commission on March 12, 2007 pursuant to Schedule 14A.
Plans that would Result in a Change in the Present Management of Theravance
Both Dr. Patrick Humphrey, Executive Vice President, Research, and David Brinkley, Senior Vice President, Business Development, have indicated that they plan to transition out of their positions at Theravance in late 2007 or early 2008.
Recent Transactions by Directors and Officers
On June 15, 2007, David L. Brinkley, Senior Vice President, Business Development of Theravance, sold 2,986 shares of Common Stock, at a weighted average price of $33.56 per share.
On July 3, 2007, in connection with his election to the Theravance board of directors, Burton G. Malkiel, Ph.D., received an option grant of 30,000 shares of Common Stock, with an exercise price of $33.13 per share.
B-4
INFORMATION CONCERNING MEMBERS OF THE BOARD OF DIRECTORS AND
THE EXECUTIVE OFFICERS OF GLAXOSMITHKLINE
Set forth below are the name, business address and current principal occupation or employment, and material occupations, positions, offices or employment for the past five years of each director and executive officer of GlaxoSmithKline. Except as otherwise noted, positions specified are positions with GlaxoSmithKline.
Name |
|
|
|
Business Address |
|
Principal
Occupation or |
|
Citizenship |
Board of Directors |
|
|
|
|
|
|
||
Dr. Jean-Pierre |
|
|
|
|
|
|
||
Julian Heslop |
|
980 Great West
Road |
|
Chief Financial Officer since April 2005; prior thereto Senior Vice President, Operations Controller since January 2001 |
|
British |
||
Dr. Moncef Slaoui |
|
709 Swedeland
Road |
|
Chairman, Research & Development since June 2006; prior thereto Senior Vice President, Worldwide Business DevelopmentR&D since May 2003; prior thereto Senior Vice President, Business & New Product Development since March 2001 |
|
Belgian |
||
Sir Christopher |
|
|
|
|
|
|
C-1
Dr. Stephanie |
|
|
|
|
|
|
Lawrence Culp |
|
980 Great West
Road |
|
President and Chief Executive Officer of Danaher Corporation since 2001 |
|
USA |
Sir Crispin Davis |
|
980 Great West
Road |
|
Chief Executive of Reed Elsevier PLC since 1999 |
|
British |
Tom de Swaan |
|
980 Great West
Road |
|
Non-Executive Director of the Financial Services Authority since 2001; member of the managing board and Chief Financial Officer of ABN AMRO from 1999 to May 2006 |
|
Dutch |
Sir Deryck |
|
|
|
|
|
|
Dr. Daniel |
|
|
|
|
|
|
C-2
Sir Ian Prosser |
|
980 Great West Road |
|
Non-Executive Deputy Chairman of BP plc since 1999 and Non-Executive Director of Sara Lee Corporation since 2004; formerly Chairman of Intercontinental Hotels Group PLC (retired in 2003) |
|
British |
Dr. Ronaldo |
|
|
|
|
|
|
Sir Robert Wilson |
|
980 Great West Road |
|
Non-Executive Chairman of BG Group plc since 2004 and the Economist Group since 2003; Executive Chairman of Rio Tinto plc from 1997 to 2003 |
|
British |
Executive Officers |
|
|
|
|
|
|
Dr. Jean-Pierre |
|
|
|
|
|
|
Julian Heslop |
|
980 Great West Road |
|
Chief Financial Officer since April 2005; prior thereto Senior Vice President, Operations Controller since January 2001 |
|
British |
Rupert Bondy |
|
980 Great West Road |
|
Senior Vice President and General Counsel since June 2001 |
|
British |
John Clarke |
|
One Franklin
Plaza |
|
President, Consumer Healthcare since February 2006; President, Futures Group, Consumer Healthcare since January 2004; prior thereto President, Consumer Healthcare Europe from 1998 to 2003 |
|
New Zealand |
Marc Dunoyer |
|
GSK Building |
|
President, Pharmaceuticals Japan since March 2003; prior thereto Senior Vice President and Regional Director, Japan since March 2000 |
|
French |
C-3
Russell Greig |
|
980 Great West Road |
|
President, Pharmaceuticals International since March 2003; prior thereto Senior Vice President, Worldwide Business Development for R&D since January 2000 |
|
British |
Duncan |
|
|
|
|
|
|
William Louv |
|
One Franklin
Plaza |
|
Chief Information Officer since February 2007; prior thereto Senior Vice President, Information Technology for Research & Development since April 2005; prior thereto, Senior Vice President, Information Technology for US Pharmaceuticals since January 2001 |
|
USA |
Daniel Phelan |
|
One Franklin
Plaza |
|
Senior Vice President, Human Resources since January 2001 |
|
USA |
David Pulman |
|
Five Moore Drive |
|
President, Global Manufacturing and Supply since December 2002; prior thereto Senior Vice President, Strategy and Logistics and North American Supply since August 2002; prior thereto Senior Vice President, Europe GMS since January 2001 |
|
British |
C-4
Dr. Moncef Slaoui |
|
709 Swedeland Road |
|
Chairman, Research & Development since June 2006; prior thereto Senior Vice President, Worldwide Business DevelopmentR&D since May 2003; prior thereto Senior Vice President, Business & New Product Development since March 2001 |
|
Belgian |
David Stout |
|
One Franklin
Plaza |
|
President, Pharmaceutical Operations since January 2003; prior thereto President, US Pharmaceuticals since 1999 |
|
USA |
Christopher |
|
|
|
|
|
|
Andrew Witty |
|
980 Great West Road |
|
President, Pharmaceuticals Europe since January 2003; prior thereto Senior Vice President, Asia Pacific, Pharmaceuticals International since January 2001 |
|
British |
Simon Bicknell |
|
980 Great West Road |
|
Company Secretary since January 2001 |
|
British |
C-5
Exhibit (a)(1)(ii)
LETTER OF TRANSMITTAL FOR EXERCISE OF THE PUT RIGHT ATTACHED TO SHARES OF THERAVANCE, INC. COMMON STOCK
Under Section (C)(5)(b) of Article IV of the Restated Certificate of Incorporation (the Restated Certificate) of Theravance, Inc., a Delaware corporation (Theravance or the Company), each holder of shares of Theravances Common Stock (together with the associated preferred stock purchase rights, the Common Shares) has the option to require Theravance to purchase up to fifty percent (50%) of his, her, or its Common Shares (the Put Right), subject to the terms and conditions of the Restated Certificate, for $19.375 per Common Share (the Purchase Price) during the period between August 1, 2007 and September 12, 2007 (the Put Period).
If you elect to exercise your Put Right for any of the Common Shares that you hold, you must properly complete, execute and deliver this Letter of Transmittal, along with all stock certificates you hold representing Common Shares, to The Bank of New York, the Depositary for the Put Right, prior to the expiration of the Put Period at 5:00 p.m. Eastern Daylight Time on September 12, 2007, or such later date as may be publicly announced by Theravance in order to comply with United States federal securities laws (the Expiration Time). If you hold shares in book-entry form (also known as street name) through a brokerage or other commercial institution or directly with the Depository Trust Company, you must surrender two times (2X) the number of Common Shares for which you wish to exercise the Put Right. You may withdraw your exercise of the Put Right on or before the Expiration Time only if you comply with the instructions in the Notice of Put Right.
I/we certify that I/we have complied with all requirements as stated in the instructions on the reverse side, am/are the registered holder(s) of the Common Shares represented by the enclosed certificates, have full authority to surrender these certificate(s) and give the instructions in this Letter of Transmittal and warrant that the Common Shares represented by these certificates are free and clear of all liens, restrictions, adverse claims and encumbrances.
Please complete the back if you would like to request special transfer instructions.
Box (1) Signature: This form must be signed by the registered holder(s) exactly as the name(s) appears on the certificate(s) or by person(s) authorized to sign on behalf of the registered holder(s) by documents transmitted herewith.
X |
|
|
|
|
Signature of Stockholder |
|
Date |
|
Daytime Telephone # |
X |
|
|
|
|
Signature of Stockholder |
|
Date |
|
Daytime Telephone # |
PLEASE CERTIFY YOUR TAXPAYER ID OR SOCIAL SECURITY NUMBER BY SIGNING BELOW.
SUBSTITUTE FORM W-9
If the Taxpayer ID Number printed above is INCORRECT OR if the space is BLANK write in the CORRECT number here:
|
|
|
Under penalties of perjury. I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and 2. I am not subject to backup
withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3. I am a U.S. person (including a U.S. resident alien).
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return.
Signature: |
|
|
|
||
Date: |
|
|
|
||
Box (3) TOTAL SHARES HELD IN CERTIFICATED SHARES
I elect to exercise the Put Right only for this amount of my certificated shares: |
|
|
Check here to exercise the Put Right for the maximum number (50%) of certificated shares o
(YOU MUST SEND IN ALL OF YOUR STOCK CERTIFICATES)
o Check here if some or all of your certificate(s) has/have been lost, stolen or destroyed. See Instruction 3.
Number of shares represented by lost, stolen or destroyed certificate(s) |
|
. |
Box (4) Total Number of Certificated Shares Presented: |
|
|
Box (5)
Special Transfer Instructions
If you want your check for cash to be issued in |
|
Signature Guarantee Medallion |
|
|
|
Name (Please Print First, Middle & Last Name) |
|
(Title of Officer Signing this Guarantee) |
|
|
|
Address (Number and Street) |
|
(Name of GuarantorPlease Print) |
|
|
|
(City, State & Zip Code) |
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(Address of Guarantor Firm) |
In order to exercise the Put Right for your Common Shares, you must follow the instructions in this Letter of Transmittal regarding delivery of Common Shares and ensure that such shares, along with this executed Letter of Transmittal, are received by The Bank of New York by 5:00 PM Eastern Daylight Time on Wednesday, September 12, 2007.
INSTRUCTIONS FOR COMPLETING THIS LETTER OF TRANSMITTAL
1. Sign, date and include your daytime telephone number in this Box #1 of this Letter of Transmittal.
2. PLEASE SIGN IN BOX 2 TO CERTIFY YOUR TAXPAYER ID OR SOCIAL SECURITY NUMBER if you are a U.S. Taxpayer. If the Taxpayer ID or Social Security Number is incorrect or blank, write the corrected number in Box 2 and sign to certify. Please note that The Bank of New York may withhold 28% of your proceeds as required by the IRS if the Taxpayer ID or Social Security Number is not certified on our records. If you are a nonU.S. Taxpayer, please complete and return form W-8BEN.
3. If you choose to exercise the Put Right for the maximum amount (50%) of the Common Shares that you hold, mark an X in the appropriate box. If you choose to exercise the Put Right only for a smaller portion of these Common Shares, please write in that number of shares on the space provided. You must send all of your certificates representing Common Shares to The Bank of New York along with this executed Letter of Transmittal if you exercise the Put Right. You will be paid the Purchase Price of $19.375 per Common Share for only those Common Shares for which you have exercised the Put Right. As noted above, you must send in all of your certificates representing Common Shares. It is important to note that the Common Shares that you choose to put will be taken pro-rata from each of the stock certificates held by you. If you hold shares in book-entry form (also known as street name) through a brokerage or other commercial institution or directly with the Depository Trust Company, you must surrender two times (2X) the number of Common Shares for which you wish to exercise the Put Right.
If your Common Shares are held as certificates, but some or all of them have been lost, destroyed or stolen, please check the appropriate box in Box 3 above, complete this Letter of Transmittal, and deliver it to The Bank of New York at one of the addresses set forth below. The Bank of New York will then forward to you the documentation necessary to be completed in order for you to receive the Purchase Price.
4. If your Common Shares are held as certificates and you elect to exercise the Put Right for any amount of these Common Shares, please enter the number of shares represented by certificates that you are returning to The Bank of New York along with this Letter of Transmittal in Box #4. As this number will be more than the total number of Common Shares for which you wish to exercise the Put Right, The Bank of New York will send you a Direct Registration Transaction Advice representing the balance of your Common Shares for which the Put Right has not been exercised. The Direct Registration Transaction Advice represents shares held in your name and tracked electronically (in book-entry form) on Theravances records, which are maintained by The Bank of New York as its transfer agent.
5. If you would like your check to be issued in any name other than the name on your current account, please fill in Box #5. Any such instructions from you in Box #5 must be Medallion Guaranteed by a participating financial institution.
Questions and requests for assistance may be directed to Investor Relations at Theravance by telephone at (650) 808-4100, by e-mail at investor.relations@theravance.com, or by mail at Theravance, Inc., 901 Gateway Boulevard, South San Francisco, California 94080 Attn: Investor Relations. Questions and requests for assistance may also be directed to The Bank of New York at 1-800-507-9357.
WHERE TO FORWARD YOUR TRANSMITTAL MATERIALS
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By Hand: |
The Bank of New York |
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The Bank of New York |
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The Bank of New York |
Tender & Exchange Department |
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Tender & Exchange Department |
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Tender & Exchange Department |
P.O. Box 11248 |
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101 Barclay Street |
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101 Barclay Street |
Church Street Station |
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Receive and Deliver Window |
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Receive and Deliver Window |
New York, New York 10286-1248 |
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New York, New York 10286 |
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New York, New York 10286 |
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE BANK OF NEW YORK.
Exhibit (a)(1)(iii)
NOTICE OF GUARANTEED DELIVERY
FOR PUT RIGHT FOR
THERAVANCE, INC. COMMON STOCK
Under Section (C)(5)(b) of Article IV of the Restated Certificate of Incorporation (the Restated Certificate) of Theravance, Inc., a Delaware corporation (Theravance), each holder of shares of Theravances Common Stock (together with the associated preferred stock purchase rights, the Common Shares) has the option to require Theravance to purchase up to fifty percent (50%) of his, her, or its Common Shares (the Put Right), subject to the terms and conditions of the Restated Certificate, for $19.375 per Common Share (the Purchase Price) during the period between August 1, 2007 and September 12, 2007 (the Put Period).
This form (this Notice of Guaranteed Delivery), must be used to exercise the Put Right if a holder of Common Shares cannot deliver the certificates evidencing such Common Shares (the Share Certificates) to The Bank of New York, in its capacity as the depositary (the Depositary) prior to 5:00 p.m. Eastern Daylight Time, on Wednesday, September 12, 2007, or such later date as may be publicly announced by Theravance in order to comply with United States federal securities laws (the Expiration Time). In such case, this form, together with a properly completed Letter of Transmittal, must be delivered by hand or mail to the Depositary, and must be received by the Depositary, prior to the Expiration Time.
The address of the Depositary is:
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The Bank of New York |
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The Bank of New York |
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The Bank of New York |
DELIVERY OF THIS
INSTRUMENT TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
The undersigned hereby represents that he or she is the holder of certificates representing Common Shares and that such certificates cannot be delivered to the Depositary before the Expiration Time. Upon the terms and subject to the conditions set forth in the Notice of Put Right, receipt of which is hereby acknowledged, the undersigned hereby elects to exercise the Put Right with respect to of such Common Shares (which does not exceed 50% of the Common Shares held by the undersigned). The undersigned understands that a properly completed Letter of Transmittal for such Common Shares must be received by The Bank of New York prior to the Expiration Time.
Name of undersigned:
All authority conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall not be affected by, and shall survive, the death or incapacity of the undersigned, and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal and legal representatives, successors and assigns of the undersigned.
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GUARANTEE OF DELIVERY
(NOT TO BE USED FOR CERTIFICATE SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities exchange or member of the National Association of Securities Dealers, Inc., commercial bank or trust company having an office or correspondent in the United States, or another Eligible Guarantor Institution as defined in Rule 17A(d)-15 under the Securities Exchange Act of 1934, as amended, hereby guarantees that within three business days from the date of receipt by the Depositary of this Notice of Guaranteed Delivery, the undersigned will deliver to the Depositary the certificates representing the Common Shares for which the Put Right is being exercised hereby, with any required signature guarantees and any other required documents.
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The institution which completes this form must communicate the guarantee to the Depositary and must deliver the share certificates to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such institution.
Exhibit (a)(1)(iv)
Under the Federal income tax law, you are subject to certain penalties as well as withholding of tax at the applicable rate if you have not provided us with your correct social security number or other taxpayer identification number. Please read this notice carefully.
You (as a payee) are required by law to provide us (as payer) with your correct taxpayer identification number. If you are an individual, your taxpayer identification number is your social security number. Otherwise, your taxpayer identification number is the employer identification number issued by the IRS. If you have not provided us with your correct taxpayer identification number, you may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, interest, dividends, and other payments that we make to you may be subject to backup withholding.
If backup withholding applies, a payor is required to withhold at the IRS mandated applicable rate from interest, dividends and other payments made to you. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained.
Enclosed is a reply envelope in which you must return the enclosed Form W-9 to furnish us your correct name and taxpayer identification number. Please read the instructions below, sign and date the Form W-9 and return to us.
INSTRUCTIONS FOR SUBSTITUTE FORM W-9 FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
(Selection references to the Internal Revenue Code.)
Purpose of Form.A person who is required to file an information return with the IRS must obtain your correct TIN to report income paid to you, real estate transactions, mortgage interest you paid, the acquisition or abandonment of secured property, or contributions you made to an IRA. Use Form W-9 to furnish your correct TIN to the requester (the person asking you to furnish your TIN) and, when applicable, (1) to certify that the TIN you are furnishing is correct (or that you are waiting for a number to be issued), (2) to certify that you are not subject to backup withholding, and (3) to claim exemption from backup withholding if you are an exempt payee. Furnishing your correct TIN and making the appropriate certifications will prevent certain payments from being subject to backup withholding.
Note: If a requester gives you a form other than a W-9 to request your TIN, you must use the requesters form.
How To Obtain a TIN.If you do not have a TIN, apply for one immediately. To apply, get Form SS-5, Application for a Social Security Number Card (for individuals), from your local office of the Social Security Administration, or Form SS-4, Application for Employer Identification Number (for businesses and all other entities), from your local IRS office.
To complete Form W-9 if you do not have a TIN, write Applied for in the space for the TIN, sign and date the form, and give it to the requester. Generally, you will then have 60 days to obtain a TIN and furnish it to the requester. If the requester does not receive your TIN within 60 days, backup withholding, if applicable, will begin and continue until you furnish your TIN to the requester. For reportable interest or dividends payments, the payer must exercise one of the following options concerning backup withholding during this 60-day period. Under option (1), a payer must backup withhold on any withdrawals you make from your account after 7 business days after the requester receives this form back from you. Under option (2), the payer must backup withhold on any reportable interest or dividend payments made to your account, regardless of whether you make any withdrawals. The backup withholding under option (2) must begin no later than 7 business days after the requester receives this form back. Under
option (2), the payer is required to refund the amounts withheld if your certified TIN is received within the 60-day period and you were not subject to backup withholding during that period.
Note: Writing Applied for on the form means that you have already applied for a TIN OR that you intend to apply for one in the near future.
As soon as you receive your TIN, complete another Form W-9, include your TIN, sign and date the form, and give it to the requester.
What is Backup Withholding?Persons making certain payments to you are required by the IRS to withhold at the applicable rate from payments that meet certain conditions. This is called backup withholding. Payments that could be subject to backup withholding include interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee compensation, and certain payments from fishing boat operators, but do not include real estate transactions.
If you give the requester your correct TIN, make the appropriate certifications, and report all your taxable interest and dividends on your tax return, your payments will not be subject to backup withholding. Payments you receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS notifies the requester that you furnished an incorrect TIN, or
3. You are notified by the IRS that you are subject to backup withholding because you failed to report all your interest and dividends on your tax return (for reportable interest and dividends only), or
4. You fail to certify to the requester that you are not subject to backup withholding under (3) above (for reportable interest and dividend accounts opened after 1983 only), or
5. You fail to certify your TIN. This applies only to reportable interest, dividend, broker, or barter exchange accounts opened after 1983, or broker accounts considered inactive in 1983.
Except as explained in (5) above, other reportable payments are subject to backup withholding only if (1) or (2) above applied. Certain payees and payments are exempt from backup withholding and information reporting. See Payees and Payments Exempt From Backup Withholding, below and Exempt Payees and Payments under Specific Instructions, below, if you are an exempt payee.
Payees and Payments Exempt From Backup WithholdingThe following is a list of payees exempt from backup withholding and for which no information reporting is required. For interest and dividends, all listed payees are exempt except item (9). For broker transactions, payees listed in (1) through (13) and a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker as exempt. Payments subject to reporting under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees described in items (1) through (7), except a corporation that provides medical and health care services or bills and collects payments for such services is not exempt from backup withholding or information reporting. Only payees described in items (2) through (6) are exempt from backup withholding for barter exchange transactions, patronage dividend, and payments by certain fishing boat operators.
(1) A corporation. (2) An organization exempt from tax under section 501(a), or an IRA, or a custodial account under section 403(b)(7). (3) The United States or any of its agencies or instrumentalities. (4) A state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities. (5) A foreign government or any of its political subdivisions, agencies, or instrumentalities. (6) An international organization or any of its agencies or instrumentalities. (7) A foreign central bank of issue. (8) A dealer in securities or commodities required to register in the United States or a possession of the United States. (9) A futures commission merchant registered with the Commodity Futures Trading Commission. (10) A real estate investment trust. (11) An entity registered at all times during the tax year under the Investment Company Act of 1940. (12) A common trust fund operated by a bank under section 584(a). (13) A financial institution. (14) A middleman known in the investment
community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List. (15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends generally not subject to backup withholding include the following:
· Payments to nonresident aliens subject to withholding under section 1441.
· Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident partner.
· Payments of patronage dividends not paid in money.
· Payments made by certain foreign organizations.
· Payments of interest generally not subject to backup withholding include the following:
· Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payers trade or business and you have not provided your correct TIN to the payer.
· Payments of tax-exempt interest (including exempt-interest dividends under section 852).
· Payments described in section 6049(b)(5) to nonresident aliens.
· Payments on tax-free covenant bonds under section 1451.
· Payments made by certain foreign organizations.
· Mortgage interest paid by you.
Payments that are not subject to information reporting are also not subject to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A, and 6050N, and their regulations.
Failure To Furnish TIN.If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.
Civil Penalty for False Information With Respect to Withholding.If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.
Criminal Penalty for Falsifying Information.Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.
Name.If you are an individual, you must generally provide the name shown on your social security card. However, if you have changed your last name, for instance, due to marriage, without informing the Social Security Administration of the name change, please enter your first name, the last name shown on your social security card and your new last name.
If you are a sole proprietor, you must furnish your individual name and either your SSN or EIN. You may also enter your business name on Form W-9. Enter your name(s) as shown on your social security card and/or as it was used to apply for your EIN on Form SS-4.
(1) Interest, Dividend, and Barter Exchange Accounts Opened Before 1984 and Broker Accounts Considered Active During 1983.You are required to furnish your correct TIN, but you are not required to sign the certification.
(2) Interest, Dividend, Broker and Barter Exchange Accounts Opened After 1983 and Broker Accounts Considered Inactive During 1983.You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out item (2) in the certification before signing the form.
(3) Real Estate Transactions.You must sign the certification. You may cross out item (2) of the certification.
(4) Other Payments.You are required to furnish your correct TIN, but you are not required to sign the certification unless you have been notified of an incorrect TIN. Other payments include payments made in the course of
the requesters trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services, payments to a nonemployee for services (including attorney and accounting fees), and payments to certain fishing boat crew members.
(5) Mortgage Interest Paid by You, Acquisition or Abandonment of Secured Property, or IRA Contributions.You are required to furnish your correct TIN, but you are not required to sign the certification.
(6) Exempt Payees and Payments.If you are exempt from backup withholding, you should complete this form to avoid possible erroneous backup withholding. Enter your correct TIN write EXEMPT on Form W-9, sign and date the form. If you are a nonresident alien or foreign entity not subject to backup withholding, give the requester a completed Form W-8, Certificate of Foreign Status.
(7) TIN Applied For.Follow the instructions under How To Obtain a TIN, on page 1, sign and date this form.
Signature.For a joint account, only the person whose TIN is shown in Part I should sign the form.
Privacy Act Notice.Section 6109 requires you to furnish your correct TIN to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, or contributions you made to an IRA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. You must provide your TIN whether or not you are required to file a tax return. Payers must generally withhold the applicable taxable interest, dividend, and certain other payments to a payee who does not furnish a TIN to a payer. Certain penalties may also apply.
What Name and Number To Give the Requester
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Give name and SSN of: |
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The individual |
2. Two or more individuals (joint account) |
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The actual owner of the account or, if combined funds, the first individual on the account |
3. The Custodian account of a minor (Uniform Gift to Minors Act) |
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The minor(2) |
4. a. The usual revocable savings trust (grantor is also trustee) |
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7. A valid trust, estate, or pension trust |
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9. Association, club religious, charitable, educational, or other tax-exempt organization |
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12. Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments |
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(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minors name and furnish the minors social security number.
(3) Show the individuals name. See item 5 or 6. You may also enter your business name.
(4) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)
Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.
Revised Dec, 2001
Exhibit (a)(1)(v)
This announcement is neither an offer nor a solicitation of an offer to sell Common Shares (as defined below). The availability of the Put Right (as defined below) is made only through the Notice of Put Right (as defined below) and the related Letter of Transmittal and any amendments or supplements thereto, and is being made to all holders of Common Shares. The Put Right is not available to (nor will Common Shares be accepted from or on behalf of) holders of Common Shares in any jurisdiction in which the Put Right would not be in compliance with the securities, blue sky or other laws of such jurisdiction.
Notice of Put Right
For up to 50% of outstanding shares of Common
Stock
of
Theravance, Inc.
at
$19.375 in cash per share
THE PUT PERIOD AND WITHDRAWAL RIGHTS ASSOCIATED THEREWITH
WILL EXPIRE AT 5:00 P.M. EASTERN
DAYLIGHT TIME ON WEDNESDAY, SEPTEMBER 12, 2007 UNLESS EXTENDED BY THERAVANCE,
INC.
Each holder of shares of the Common Stock (together with the associated preferred stock purchase rights, the Common Shares) of Theravance, Inc. (Theravance) has the right under Theravances Amended and Restated Certificate of Incorporation (the Restated Certificate) to require Theravance to purchase up to fifty percent (50%) of such holders Common Shares for $19.375 in cash per Common Share (the Purchase Price) during the period starting August 1, 2007 and ending 5:00 p.m. Eastern Daylight Time on September 12, 2007 (the Put Period), on the terms and subject to the conditions set forth in the Notice of Put Right (the Notice of Put Right) and in the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the Put Right), which will be sent to holders of Common Shares at the beginning of the Put Period. This notice pertains exclusively to the Put Period, which expires at 5:00 p.m. Eastern Daylight Time on September 12, 2007, unless extended by Theravance in order to comply with United States federal securities laws (the Expiration Time).
GlaxoSmithKline plc, a public limited company organized under the laws of the United Kingdom (GlaxoSmithKline) and SmithKline Beecham Corporation, a Delaware corporation and wholly owned subsidiary of GlaxoSmithKline (SmithKline), are contractually obligated to provide, or have one of their affiliates provide, the funds to pay the Purchase Price for which the Put Right is properly exercised; provided, however, that GSKs maximum obligation for the Common Shares subject to the Put is capped at $525 million. The term GSK is used throughout this notice to refer collectively to GlaxoSmithKline, SmithKline, or one of their affiliates. GSK has notified Theravance that it will provide the funds to pay the Purchase Price for the Common Shares for which a Put Right is properly exercised. In exchange for providing the funds to pay the Purchase Price, Theravance will issue to GSK an equal number of shares of its Class A Common Stock (the Class A Shares) and Common Shares such that the aggregate number of shares issued to GSK is equal to the number of Common Shares that are purchased by Theravance. All Common Shares that are purchased by Theravance pursuant to exercise of the Put Right will be retired and cancelled.
Because the Put Right is required under Theravances Restated Certificate, the Theravance Board of Directors has authorized Theravance to take all necessary actions to facilitate the Put Right. However, neither Theravance nor its Board of Directors, GSK or The Bank of New York makes any recommendation to any stockholder as to whether to tender or refrain from tendering any shares. Theravance has not authorized any person to make any recommendation. Stockholders must make their own decision as to whether to tender their shares and, if so, how many shares to tender. In doing so, a stockholder should read carefully the information in the Notice of Put Right and in the related Letter of Transmittal.
On July 30, 2007, the reported closing price of the Common Shares on The Nasdaq Global Market was $27.77. Holders of Common Shares are urged to obtain a current market quotation for the Common Shares before they make their decision whether or not to exercise the Put Right during the Put Period.
Each holder of Common Shares that has properly executed and delivered the Letter of Transmittal and all certificates for Common Shares, or book entry confirmations reflecting two times (2X) the number of Common Shares for which the holder wishes to exercise the Put Right, to The Bank of New York prior to 5:00 p.m. Eastern Daylight Time on September 12, 2007 will be paid the Purchase Price along with either a Direct Registration Transaction Advice, or a book entry confirmation, representing the balance of such holders Common Shares for which the Put Right was not exercised, as soon as practicable thereafter. However, there could be delays in delivery of the Purchase Price due to circumstances beyond the control of Theravance, GSK, or The Bank of New York, which is acting as the Depositary. Under no circumstances will interest on the Purchase Price for the validly delivered Common Shares be paid, regardless of any delay in making such payment. Registered holders of Common Shares who validly deliver their stock certificates representing Common Shares directly to The Bank of New York will not be charged brokerage fees or commissions on the purchase of Common Shares pursuant to the Put Right. Holders of Common Shares who hold such shares through a broker or bank should consult such institution as to whether it charges any service fees. Theravance will pay all charges and expenses of The Bank of New York incurred in connection with the Put Right.
Theravance may extend the Put Period at any time in order to comply with United States federal securities laws. If Theravance decides to extend the Put Period, Theravance will inform The Bank of New York of that fact, and will make a public announcement of the extension, not later than 9:00 a.m. Eastern Daylight Time on September 12, 2007.
An exercise of the Put Right is revocable only if proper notice of such withdrawal, as set forth below, is received by The Bank of New York prior to 5:00 p.m. Eastern Daylight Time on September 12, 2007. For a withdrawal of the exercise to be effective, a signed written notice of withdrawal must be timely received by The Bank of New York at one of its addresses set forth on the back cover of the Notice of Put Right. Any such notice of withdrawal must specify the name of the stockholder having validly delivered the Common Shares to be withdrawn, the number or amount of Common Shares to be withdrawn and the names in which the certificate(s) evidencing the Common Shares to be withdrawn are registered, if different from that of the person who validly delivered such Common Shares. The signature(s) on the notice of withdrawal must be guaranteed by a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program or by any other Eligible Guarantor Institution (each, an Eligible Institution), as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the Exchange Act), unless such Common Shares have been validly delivered for the account of any Eligible Institution. If Common Shares have been validly delivered pursuant to the procedures for book entry transfer, any notice of withdrawal must specify the name and number of the account at the Depository Trust Company to be credited with the withdrawn Common Shares. If certificates for Common Shares to be withdrawn have been validly delivered or otherwise identified to The Bank of New York, the name of the registered holder and the serial numbers of the particular certificates evidencing the Common Shares to be withdrawn must also be furnished to The Bank of New York prior to the physical release of such certificates. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by Theravance, in its sole discretion, which determination shall be final and binding. None of Theravance, GSK, The Bank of New York, or any of their affiliates will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give such notification.
Sales of Common Shares pursuant to the exercise of the Put Right will be taxable transactions for federal income tax purposes and may also be taxable under applicable state, local and other tax laws. As individual tax situations differ, stockholders should consult with their individual tax and legal advisors concerning the tax consequences of the exercise of the Put Right.
The information required to be disclosed by paragraph (d)(l) of Rule 14d-6 under the Exchange Act is contained in the Notice of Put Right and is incorporated herein by reference.
The Notice of Put Right, the related Letter of Transmittal and other relevant materials will be mailed to stockholders of record at the commencement of the Put Period and will be furnished, for subsequent transmittal to beneficial
owners of Common Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agencys security position listing.
The Notice of Put Right and the related Letter of Transmittal contain important information that should be read carefully before any decision is made with respect to the Put Right. Copies of the Notice of Put Right and the related Letter of Transmittal are available via the Securities and Exchange Commissions website at www.sec.gov and for free from The Bank of New York.
Questions and requests for assistance and copies of the Notice of Put Right, the Letter of Transmittal and all other Put Right materials should be directed to Investor Relations at Theravance by telephone at (650) 808-4100, by e-mail at investor.relations@theravance.com, or by mail at Theravance, Inc., 901 Gateway Boulevard, South San Francisco, California 94080 Attn: Investor Relations. Theravance will not pay any fees or commissions to any broker or dealer or any other person (other than The Bank of New York) in connection with the acceptance of Common Shares pursuant to the Put Right.
August 1, 2007
Exhibit (d)(ii)
AMENDMENT TO
AMENDED AND RESTATED GOVERNANCE AGREEMENT
This Amendment to the Amended and Restated Governance Agreement (this Amendment) is entered into effective as of April 25, 2007, by and among SmithKline Beecham Corporation, a Pennsylvania corporation (GSK), Theravance, Inc., a Delaware corporation (the Company), GlaxoSmithKline plc, an English public limited company (GlaxoSmithKline) and Glaxo Group Limited, a limited liability company organized under the laws of England and Wales (GGL and with each of GSK, GlaxoSmithKline and the Company, a Party) and amends the Amended and Restated Governance Agreement (the Governance Agreement) entered into as of June 4, 2004, by and among the Parties. All defined terms not defined in this Amendment shall have the meaning ascribed to them in the Governance Agreement.
WHEREAS, the Companys Restated Certificate of Incorporation (the Restated Certificate) and the Governance Agreement contain provisions relating to the redemption of the Companys Common Stock and a simultaneous issuance of Class A Common Stock to GSK pursuant to the mechanics of a call right and a put right;
WHEREAS, the Companys stockholders, including GSK and GGL have approved a Certificate of Amendment to the Companys Restated Certificate of Incorporation (the Certificate Amendment) to allow the Company to issue a combination of Class A Common Stock and Common Stock to GSK in connection with the exercise of the call right or the put right;
WHEREAS, contemporaneous with the filing of the Certificate Amendment, the Parties desire to amend provisions of the Governance Agreement to provide consistency between the Restated Certificate, as amended by the Certificate Amendment, and the Governance Agreement as it relates to the issuance of Class A Common Stock and Common Stock to GSK upon the exercise of the call right or the put right;
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises and covenants contained herein, the parties agree as follows:
In exchange for such payment, the Company will issue to GSK (or to its designated Affiliate), within five business days following the end of the Put Period, an equal number of duly authorized and validly issued shares of Class A Common Stock and Common Stock, such that the aggregate number of shares issued is equal to the number of shares of Common Stock acquired thereby by the Company (provided that if the aggregate number of shares to be issued is an odd number, then one more share of Class A Common Stock shall be issued than of Common Stock).
In exchange for the payment by GSK or GlaxoSmithKline or any of their Affiliates of the amount specified in clause (x) of the immediately preceding sentence (which amount shall be invested by the Company in a money market fund which holds primarily U.S. government obligations until such time as any amounts are paid to creditors or stockholders (it being specified that the returns on such investment shall be paid to GSK or GlaxoSmithKline upon demand)), the Company will issue to GSK (or its designated Affiliate), an equal number of duly authorized and validly issued shares of Class A Common Stock and Common Stock, such that the aggregate number of shares issued is equal to 50% of the Callable/Puttable Shares (provided that if the aggregate number of shares to be issued is an odd number, then one more share of Class A Common Stock shall be issued than of Common Stock). Immediately following the expiration of the Put Period, if the Put has not been exercised with respect to 50% of the then Callable/Puttable Shares and if GSK or GlaxoSmithKline shall have complied with clause (x) of the first sentence of this Section 3.4(b), (1) the Company shall refund to GSK or GlaxoSmithKline, as the case may be, (or their designated Affiliate) an amount (together with any interest actually earned thereon) equal to the product of the Put Price times the number of Callable/Puttable Shares with respect to which the Put has not been exercised and (2) GSK (or by its designated Affiliate) shall, in exchange for such payment by the
2
Company, contribute to the Company an equal number of duly authorized and validly issued shares of Class A Common Stock and Common Stock, such that the aggregate number of shares contributed is equal to the number of Callable/Puttable Shares with respect to which the Put has not been exercised (provided that if the aggregate number of shares to be contributed is an odd number, then one more share of Class A Common Stock shall be contributed than of Common Stock).
3
IN WITNESS WHEREOF, the parties hereby have executed this Agreement on the date first written below.
THERAVANCE, INC. |
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Date: |
April 25, 2007 |
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By: |
/s/ Rick E Winningham |
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Name: |
Rick E Winningham |
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Title: |
Chief Executive Officer |
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SMITHKLINE BEECHAM CORPORATION |
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Date: |
May 4, 2007 |
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By: |
/s/ Donald F. Parman |
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Name: |
Donald F. Parman |
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Title: |
Vice President & Secretary |
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GLAXOSMITHKLINE plc |
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Date: |
May 11, 2007 |
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By: |
/s/ Julian Heslop |
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Name: |
Julian Heslop |
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Title: |
Chief Financial Officer |
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GLAXO GROUP LIMITED |
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Date: |
May 10, 2007 |
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By: |
/s/ Victoria Whyte |
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Name: |
Victoria Whyte |
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Title: |
Assistant Secretary |
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SIGNATURE PAGE TO AMENDMENT TO AMENDED AND RESTATED GOVERNANCE AGREEMENT
Exhibit (d)(viii)
LOCK-UP AGREEMENT
This LOCK-UP AGREEMENT (this Agreement) is made and entered into as of May 11, 2004, by and among Theravance, Inc., a Delaware corporation (the Company), (Stockholder), and SmithKline Beecham Corporation, a Pennsylvania corporation (GSK). The Company, Stockholder and GSK are individually referred to herein as a Party and are collectively referred to herein as the Parties. The Companys Board of Directors is referred to herein as the Board.
WITNESSETH:
WHEREAS, the Company and GSK have entered into that certain Class A Common Stock Purchase Agreement dated as of March 30, 2004 (the Purchase Agreement), which provides for, among other things, the purchase by GSK of shares of the Companys Class A Common Stock (the Class A Stock);
WHEREAS, the Company and Glaxo Group Limited, a limited liability company organized under the laws of England and Wales (GGL) have entered into that certain Strategic Alliance Agreement dated as of March 30, 2004 (the Alliance Agreement) pursuant to which, among other things, the Company will grant GGL an option to develop and commercialize certain therapeutic compounds on an exclusive, worldwide basis;
WHEREAS, the Companys Restated Certificate of Incorporation (the Restated Certificate) and that certain Governance Agreement by and between the Company, GGL, GSK and GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales, of even date herewith (the Governance Agreement) provides for (i) a redemption of 50% of certain outstanding Common Stock of the Company (the Call) or, in the alternative, (ii) the right of certain holders of Common Stock to require the Company to redeem up to 50% of the shares of Common Stock held by such holder (the Put); and
WHEREAS, to induce GSK to enter into the Purchase Agreement and the Governance Agreement and to induce GGL to enter into the Alliance Agreement and the Governance Agreement, the Company and Stockholder desire to enter into this Agreement with GSK.
NOW, THEREFORE, in consideration of the foregoing premises and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Restrictions on Sales.
a. For purposes of this Agreement, the term Stockholder Shares shall include shares of the Companys Common Stock (the Common Stock) and options to purchase shares of the Companys Common Stock and the shares issued upon exercise thereof, owned as of the date of this Agreement directly by Stockholder (including holding as a custodian) or with respect to which Stockholder has beneficial ownership within the rules and regulations of the United States Securities and Exchange Commission.
b. Subject to Sections 2 and 3 below, Stockholder hereby agrees on behalf of himself and any transferee or assignee of any Stockholder Shares, during the period beginning from the Effective Date (as such term is defined in the Alliance Agreement) and ending on the Call/Put Termination Date (as such term is defined in the Governance Agreement), not to offer, sell, contract to sell, pledge, grant any option, right or warrant to purchase, sell any option or contract to purchase, purchase any option or contract to sell, make any short sale, otherwise dispose of, directly or indirectly, 50% of the Stockholder Shares (the Restricted Stockholder Shares) (or any security that includes, relates to, or derives any significant part of its value from the Stockholder Shares or from the class(es) of shares of which the Stockholder Shares form a part), or enter into any swap or similar agreement that transfers, in whole or in part, the economic risk or benefit of ownership of the Restricted Stockholder Shares, whether any of the foregoing transactions is to be settled by delivery of shares, in cash or otherwise. The foregoing restrictions are expressly agreed to preclude the Stockholder from engaging in any hedging or other transaction that is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Restricted Stockholder Shares (even if such shares would be disposed of by someone other than the Stockholder).
c. For the avoidance of doubt, the Parties hereby acknowledge and agree that, notwithstanding anything to the contrary herein, Stockholder shall be subject to having the Stockholder Shares held by Stockholder redeemed pursuant to the Call provisions of the Restated Certificate and the Governance Agreement. Stockholder hereby agrees, however, not to exercise Stockholders Put right pursuant to the Restated Certificate and the Governance Agreement with respect to the Restricted Stockholder Shares.
2. Permitted Transfers. Notwithstanding anything to the contrary in the foregoing, Stockholder may, transfer Restricted Stockholder Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or (iii) with the prior written consent of GSK; provided, however, that the Stockholder Shares will remain subject to any restrictions on transfer set forth in the agreement pursuant to which such Stockholder Shares were originally issued. For purposes of this Agreement, immediate family shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. The undersigned Stockholder also agrees and consents to the entry of stop transfer instructions with the Companys transfer agent and registrar against the transfer of Restricted Stockholder Shares except in compliance with the foregoing restrictions.
3. Termination of Restrictions. The obligations of and restrictions upon Stockholder pursuant to this Agreement shall no longer apply in the event of (i) Stockholders Involuntary Termination (as such term is defined below) or (ii) a Change in Control (as such term is defined in the Governance Agreement) of the Company approved by a majority of the Independent Directors (as defined in the Governance Agreement) and consummated prior to July 1, 2007 that results in payment or issuance prior to such date of cash or securities with a fair market value prior to such date (as determined in good faith by a majority of the Board) equal to or greater than $12.50 per share of Common Stock (appropriately adjusted to take into account
stock dividends, stock splits, recapitalization and the like). For purposes of this Section 3, Involuntary Termination shall mean the termination of Stockholders service as an employee, consultant or member of the Board which occurs by reason of: (i) his involuntary dismissal or discharge by the Company for reasons other than Misconduct (as such term is defined below), or (ii) his voluntary resignation following (A) a change in his position with the Company which materially reduces his level of responsibility, (B) a material reduction in his level of compensation (including base salary, fringe benefits and participation in bonus or incentive programs) or (C) a relocation of his place of employment by more than fifty (50) miles, provided and only if such change, reduction or relocation is effected by the Company without the individuals consent. Misconduct shall mean the commission of any material act of fraud, embezzlement or dishonesty by Stockholder, any material unauthorized use or disclosure by such person of confidential information or trade secrets of the Company, or any other intentional material misconduct by such person adversely affecting the business or affairs of the Company.
4. Legend on Share Certificates. Each certificate representing any Restricted Stockholder Shares shall be endorsed by the Company with a legend reading substantially as follows:
THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A LOCK-UP AGREEMENT (A COPY OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST FROM THE ISSUER), AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID LOCK-UP AGREEMENT.
If to the Company:
Theravance, Inc.
901 Gateway Boulevard
South San Francisco, CA 94080
Facsimile:
Attn: General Counsel
With a copy to:
Gunderson Dettmer et al.
155 Contitution Drive
Menlo Park, CA 94025
Facsimile:
Attn: Christopher D. Dillon
Jay K. Hachigian
If to Stockholder:
Rick E Winningham
c/o Theravance, Inc.
901 Gateway Boulevard
South San Francisco, CA 94080
Facsimile:
If to GSK:
SmithKline Beecham Corporation
One Franklin Plaza (FP2355)
200 N. 16th Street
Philadelphia, PA 19102
Attn: Company Secretary
Facsimile:
With a copy to:
GlaxoSmithKline
One Franklin Plaza (FP2355)
200 N. 16th Street
Philadelphia, PA 19102
Facsimile:
Attn: Corporate Law
and with a copy to:
GlaxoSmithKline
Greenford Road
Greenford
Middlesex
UB6 0HE
United Kingdom
Attn: Vice President, Worldwide Business Development
Facsimile:
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
THERAVANCE, INC. |
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By: |
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Name: |
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Title: |
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SMITHKLINE BEECHAM CORPORATION |
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By: |
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Name: |
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Title: |
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STOCKHOLDER |
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Exhibit (d)(ix)
THERAVANCE, INC.
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 30, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Rick E Winningham and Michael W. Aguiar as proxies, each will full power of substitution, to represent and vote as designated on the reverse side, all the shares of Class A Common Stock of Theravance, Inc. held of record by the undersigned on May 3, 2005, at the Annual Meeting of Stockholders to be held at the Presidio Room, Embassy Suites Hotel, 250 Gateway Boulevard, South San Francisco, California 94080, at 1:00 p.m. local time on June 30, 2005 or any adjournment or postponement thereof.
(Continued and to be signed on next page)
ANNUAL MEETING OF STOCKHOLDERS OF
THERAVANCE, INC.
June 30, 2005
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided. |
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES AND FOR PROPOSALS 2 THROUGH 4. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x |
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1. Election of Directors. |
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NOMINEES: |
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x FOR ALL NOMINEES |
o P. Roy Vagelos. M.D. |
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o Rick E Winningham |
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o WITHHOLD AUTHORITY FOR ALL NOMINEES |
o Julian C. Baker |
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o Jeffrey M. Drazan |
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o FOR
ALL EXCEPT |
o Robert V. Gunderson, Jr. |
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o Arnold J. Levine, Ph.D. |
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o Ronn C. Loewenthal |
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o William H. Waltrip |
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o George M.Whitesides, Ph.D. |
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o William D. Young |
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INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark FOR ALL EXCEPT and fill in the circle next to each nominee you wish to withhold, as shown here: x |
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FOR |
AGAINST |
ABSTAIN |
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2. To approve the Theravance, Inc. 2004 Equity Incentive Plan. |
x |
o |
o |
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3. To approve an amendment to the Theravance, Inc. Employee Stock Purchase Plan Increasing the aggregate number of shares of Common Stock authorized for issuance under the plan by 300,000 shares. |
x |
o |
o |
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4. To ratify the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as the independent registered public accounting firm of Theravance, Inc. for its fiscal year ending 2005. |
x |
o |
o |
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5. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting. |
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This proxy is solicited on behalf of the Board of Directors of Theravance, Inc. This proxy, when properly executed, will be voted in accordance with the instructions given above. If no instructions are given, this proxy will be voted FOR all nominees and FOR proposals 2, 3, and 4. |
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To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. |
o |
SmithKline Beecham Corporation
Signature of Stockholder |
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Date: |
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Signature of Stockholder |
/s/ Donald F. Parman Secretary |
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Date: |
6/17/05 |
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Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
Exhibit (d)(x)
THERAVANCE, INC.
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 30,
2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Rick E Winningham and Michael W. Aguiar as proxies, each will full power of substitution, to represent and vote as designated on the reverse side, all the shares of Class A Common Stock of Theravance, Inc. held of record by the undersigned on May 3, 2005, at the Annual Meeting of Stockholders to be held at the Presidio Room, Embassy Suites Hotel, 250 Gateway Boulevard, South San Francisco, California 94080, at 1:00 p.m. local time on June 30, 2005 or any adjournment or postponement thereof.
(Continued and to be signed on next page)
ANNUAL MEETING OF STOCKHOLDERS OF
THERAVANCE, INC.
June 30, 2005
Please date, sign and
mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided. |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES AND FOR PROPOSALS 2 THROUGH 4. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x |
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1. Election of Directors. |
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NOMINEES: |
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x FOR ALL NOMINEES |
o P. Roy Vagelos, M.D. |
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o Rick E Winningham |
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o WITHHOLD AUTHORITY FOR ALL NOMINEES |
o Julian C. Baker |
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o Jeffrey M. Drazan |
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o FOR
ALL EXCEPT |
o Robert V. Gunderson, Jr. |
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o Arnold J. Levine, Ph.D. |
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o Ronn C. Loewenthal |
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o William H. Walt |
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o George M.Whitesides, Ph.D. |
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o William D. Young |
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INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark FOR ALL EXCEPT and fill in the circle next to each nominee you wish to withhold, as shown here: x |
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FOR |
AGAINST |
ABSTAIN |
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2. To approve the Theravance, Inc. 2004 Equity Incentive Plan. |
x |
o |
o |
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3. To approve an amendment to the Theravance, Inc. Employee Stock Purchase Plan Increasing the aggregate number of shares of Common Stock authorized for issuance under the plan by 300,000 shares. |
x |
o |
o |
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4. To ratify the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as the Independent registered public accounting firm of Theravance, Inc. for its fiscal year ending 2005. |
x |
o |
o |
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5. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting. |
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This proxy is solicited on behalf of the Board of Directors of Theravance, Inc. This proxy, when properly executed, will be voted in accordance with the instructions given above. If no instructions are given, this proxy will be voted FOR all nominees and FOR proposals 2, 3, and 4. |
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||||
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. |
o |
Signature of Stockholder |
/s/ Richard Stephens |
Date: |
21 JUN 05 |
Signature of Stockholder |
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Date: |
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Assistant Secretary |
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Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
Exhibit (d)(xi)
THERAVANCE, INC.
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 26, 2006
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Rick E Winningham and Michael W. Aguiar as proxies, each will full power of substitution, to represent and vote as designated on the reverse side, all the shares of Class A Common Stock of Theravance, Inc. held of record by the undersigned on March 1, 2006, at the Annual Meeting of Stockholders to be held at the Presidio Room, Embassy Suites Hotel, 250 Gateway Boulevard, South San Francisco, California 94080, at 1:00 p.m. local time on April 26, 2006 or any adjournment or postponement thereof.
(Continued and to be signed on next page)
ANNUAL MEETING OF STOCKHOLDERS OF
THERAVANCE, INC.
April 26, 2006
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided. |
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES AND FOR PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x |
1. Election of Directors: |
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|
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NOMINEES: |
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x FOR ALL NOMINEES |
o P. Roy Vagelos, M.D. |
|
o Rick E Winningham |
o WITHHOLD AUTHORITY FOR ALL NOMINEES |
o Julian C. Baker |
|
o Jeffrey M. Drazan |
o FOR
ALL EXCEPT |
o Robert V. Gunderson, Jr. |
o Arnold J. Levine, Ph.D. |
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o Ronn C. Loewenthal |
|
o Eve E. Slater, M.D., F.A.C.C. |
|
o William H. Waltrip |
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o George M. Whitesides, Ph.D. |
|
o William D. Young |
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark FOR ALL EXCEPT and fill in the circle next to each nominee you wish to withhold, as shown here: x
|
FOR |
AGAINST |
ABSTAIN |
|
2. |
To ratify the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as the independent registered public accounting firm of Theravance, Inc. for its fiscal year ending December 31, 2006. |
x |
o |
o |
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In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting. |
||||
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This proxy is solicited on behalf of the Board of Directors of Theravance, Inc. This proxy, when properly executed, will be voted in accordance with the instructions given above. If no instructions are given, this proxy will be voted FOR all nominees and FOR proposal 2. |
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. |
o |
SmithKline Beecham Corporation by Donald F. Parman, VP & Secretary
Signature of Stockholder |
/s/ Donald F. Parman Secretary |
Date: |
4/3/06 |
Signature of Stockholder |
|
Date: |
|
Note: |
|
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. |
Exhibit (d)(xii)
THERAVANCE, INC.
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 26, 2006
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Rick E Winningham and Michael W. Aguiar as proxies, each will full power of substitution, to represent and vote as designated on the reverse side, all the shares of Class A Common Stock of Theravance, Inc. held of record by the undersigned on March 1, 2006, at the Annual Meeting of Stockholders to be held at the Presidio Room, Embassy Suites Hotel, 250 Gateway Boulevard, South San Francisco, California 94080, at 1:00 p.m. local time on April 26, 2006 or any adjournment or postponement thereof.
(Continued and to be signed on next page)
ANNUAL MEETING OF STOCKHOLDERS OF
THERAVANCE, INC.
April 26, 2006
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES AND FOR PROPOSAL 2. |
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x |
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1. Election of Directors: |
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NOMINEES: |
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x FOR ALL NOMINEES |
o P. Roy Vagelos, M.D. |
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o Rick E Winningham |
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o WITHHOLD AUTHORITY FOR ALL NOMINEES |
o Julian C. Baker |
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o Jeffrey M. Drazan |
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o FOR
ALL EXCEPT |
o Robert V. Gunderson, Jr. |
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o Arnold J. Levine, Ph.D. |
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o Ronn C. Loewenthal |
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o Eve E. Slater, M.D., F.A.C.C. |
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o William H. Waltrip |
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o George M. Whitesides, Ph.D. |
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o William D. Young |
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INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark FOR ALL EXCEPT and fill in the circle next to each nominee you wish to withhold, as shown here: x |
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FOR |
AGAINST |
ABSTAIN |
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2. To ratify the selection by the Audit committee of the Board of Directors of Ernst & Young LLP as the independent registered public accounting firm of Theravance, Inc. for its fiscal year ending December 31, 2006. |
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In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting. |
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This proxy is solicited on behalf of the Board of Directors of Theravance, Inc. This proxy, when properly executed, will be voted in accordance with the instructions given above. If no instructions are given, this proxy will be voted FOR all nominees and FOR proposal 2. |
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To change the address on your account, please check the box at right and indicate your new address in the address space above. |
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Please note that changes to the registered name(s) on the account may not be submitted via this method. |
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Signature of Stockholder |
/s/ Richard Stephens for and on behalf of Glaxo Group Limited |
Date: |
03/04/06 |
Signature of Stockholder |
Date: |
Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
Exhibit (d)(xiii)
THERAVANCE, INC.
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 25, 2007
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Rick E Winningham and Michael W. Aguiar as proxies, each will full power of substitution, to represent and vote as designated on the reverse side, all the shares of Class A Common Stock of Theravance, Inc. held of record by the undersigned on March 1, 2007, at the Annual Meeting of Stockholders to be held at the Presidio Room, Embassy Suites Hotel, 250 Gateway Boulevard, South San Francisco, California 94080, at 1:00 p.m. local time on April 25, 2007 or any adjournment or postponement thereof.
(Continued and to be signed on next page)
Mark, Sign, Date and Return |
x |
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The Board of Directors recommends a vote FOR All Nominees And FOR Proposals 2, 3 and 4 below. |
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1. The Election of Directors: |
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FOR |
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WITHHOLD |
o |
EXCEPTIONS* |
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Nominees: |
01- P. Roy Vagelos. M.D., 02 - Rick E Winningham, 03 - Jeffrey M. Drazan, 04 - Robert V. Gunderson, Jr., 05 - Arnold J. Levine, Ph.D., 06 - Eve E. Slater, M.D., F.A.C.C., 07 - William H. Waltrip, 08 - George M. Whitesides, Ph.D., 09 - William D. Young |
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(INSTRUCTION: To withhold authority to vote for any individual nominee, mark the Exceptions box and write that nominees name on the space provided.) |
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*Exceptions: |
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FOR |
AGAINST |
ABSTAIN |
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2. Approve an amendment to the Theravance, Inc. 2004 Equity Incentive Plan (the Incentive Plan) to, among other things, increase the number of shares authorized for issuance under the Incentive Plan from 3,700,000 to 7,200,000 shares, as described in the Proxy Statement. |
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3. Approve an amendment to the Companys Restated Certificate of Incorporation to enable the Company to issue shares of Class A Common Stock and Common Stock to GlaxoSmithKline plc or its designated affiliate in the event of the call or the put and to issue Common Stock with respect to any stock dividends on Class A Common Stock after the call and put dates. |
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4. Ratify the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2007. |
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o |
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SCAN LINE
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee, or guardian, please give full title as such. |
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Smithkline Beecham Corporation |
4/3/07 |
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/s/ Donald F. Parman |
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VP & Secretary |
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Date |
Share Owner sign here |
Co-Owner sign here |
Exhibit (d)(xiv)
THERAVANCE, INC.
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 25, 2007
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Rick E Winningham and Michael W. Aguiar as proxies, each will full power of substitution, to represent and vote as designated on the reverse side, all the shares of Class A Common Stock of Theravance, Inc. held of record by the undersigned on March 1, 2007, at the Annual Meeting of Stockholders to be held at the Presidio Room, Embassy Suites Hotel, 250 Gateway Boulevard, South San Francisco, California 94080, at 1:00 p.m. local time on April 25, 2007 or any adjournment or postponement thereof.
(Continued and to be signed on next page)
Mark, Sign, Date and Return |
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The Board of Directors recommends a vote FOR All Nominees and FOR Proposals 2, 3 and 4 below. |
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1. The Election of Directors: |
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FOR |
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WITHHOLD |
o |
EXCEPTIONS* |
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Nominees: |
01 - P. Roy Vagelos, M.D., 02 - Rick E Winningham, 03 - Jeffrey M. Drazan, 04 - Robert V. Gunderson, Jr., 05 - Arnold J. Levine, Ph.D., 06 - Eve E. Slater, M.D., F.A.C.C., 07 - William H. Waltrip, 08 - George M. Whitesides, Ph.D., 09 - William D. Young |
(INSTRUCTION: To withhold authority to vote for any individual nominee, mark the Exceptions box and write that nominees name on the space provided.)
* Exceptions: |
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FOR |
AGAINST |
ABSTAIN |
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2. Approve an amendment to the Theravance, Inc. 2004 Equity Incentive Plan (the Incentive Plan) to, among other things, increase the number of shares authorized for issuance under the Incentive Plan from 3,700,000 to 7,200,000 shares, as described in the Proxy Statement. |
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o |
o |
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3. Approve an amendment to the Companys Restated Certificate of Incorporation to enable the Company to issue shares of Class A Common Stock and Common Stock to GlaxoSmithKline plc or its designated affiliate in the event of the call or the put and to issue Common Stock with respect to any stock dividends on Class A Common Stock after the call and put dates. |
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o |
o |
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4. Ratify the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2007. |
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o |
o |
SCAN LINE
Note: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee, or guardian, please give full title as such. |
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For and on behalf of Edinburgh Pharmaceutical Industries Limited Corporate Director of Glaxo Group Limited |
04 APR 2007 |
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/s/ Balbir-Kelly Bisla |
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Date |
Balbir-Kelly Bisla |
Co-Owner sign here |
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Share Owner sign here |
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