Exhibit 99(a)(1)(A)
COMPANY NOTICE
TO HOLDERS OF
ELAN FINANCE CORPORATION LTD.
LIQUID YIELD OPTION(TM) NOTES DUE 2018
(ZERO COUPON--SUBORDINATED)
CUSIP Nos.: 284129 AA1, 284129 AB9 and 284129 AC7
NOTICE IS HEREBY GIVEN to Holders of Liquid Yield Option(TM) Notes Due 2018
(Zero Coupon-Subordinated) issued by Elan Finance Corporation Ltd. and
guaranteed by Elan Corporation, plc (the "Securities"), pursuant to the terms
and conditions of the Indenture, dated as of December 14, 1998 (the
"Indenture"), by and among Elan Finance Corporation Ltd., a company organized
under the laws of Bermuda (the "Company"), Elan Corporation, plc, a public
limited company organized under the laws of Ireland (the "Guarantor"), and The
Bank of New York, a New York banking corporation, as trustee (the "Paying
Agent").
This notice is being sent to Holders pursuant to Section 3.08(e) of the
Indenture. Capitalized terms used in this Notice, unless otherwise defined
herein, shall have the meanings given such terms in the Indenture.
At your option (the "Put Option"), you may require the Company to purchase
your Securities, subject to the terms and conditions of the Indenture, on
Monday, December 15, 2003 (the "Purchase Date"). The purchase price payable in
respect of a Security is $616.57 per $1,000 Principal Amount at Maturity of the
Securities (the "Purchase Price"), subject to the terms and conditions of the
Indenture, the Securities and the Company Notice and related offer materials, as
amended and supplemented from time to time (the "Option Materials").
The Company shall pay the Purchase Price in cash.
If you elect to require the Company to repurchase your Securities at the
Purchase Price, you must do so by tendering a Purchase Notice to the Paying
Agent (and not withdrawing such Purchase Notice as provided below), according to
the terms of the Indenture, prior to 5:00 p.m., New York City time, on Monday,
December 15, 2003. The right of Holders to surrender Securities for purchase in
the Put Option expires at 5:00 p.m., New York City time on Monday, December 15,
2003.
Securities surrendered for purchase may be withdrawn at any time prior to
5:00 p.m., New York City time, on the Purchase Date by means of a written notice
of withdrawal delivered to the office of the Paying Agent, specifying: (i) the
certificate number of the Securities with respect to which such notice of
withdrawal is being submitted; (ii) the Principal Amount at Maturity of the
Securities with respect to which such notice of withdrawal is being submitted;
and (iii) the Principal Amount at Maturity, if any, of such Securities which
remains subject to the original Purchase Notice, and which has been or will be
delivered for purchase by the Company.
The Purchase Price for any Security as to which a Purchase Notice has been
given and not withdrawn will be paid promptly following the later to occur of
December 16, 2003 (the "Payment Date") or the Paying Agent's receipt of the
surrendered Securities.
The addresses for the Paying Agent are as follows:
By Registered or Certified Mail or By Hand: By Regular Mail or Overnight Courier:
------------------------------------------- -------------------------------------
The Bank of New York The Bank of New York
Corporate Trust Operations Corporate Trust Window
Reorganization Unit 101 Barclay Street
101 Barclay Street New York, NY 10286
Floor 7E Attention: Kin Lau
New York, NY 10286
Attention: Kin Lau
HOLDERS THAT SURRENDER THROUGH THE DEPOSITORY TRUST COMPANY ("DTC") NEED
NOT SUBMIT A PHYSICAL PURCHASE NOTICE TO THE PAYING AGENT IF SUCH HOLDERS COMPLY
WITH THE TRANSMITTAL PROCEDURES OF DTC.
If you do not elect to require the Company to purchase your Securities, you
will maintain the right to exchange your Securities into ADSs of the Guarantor
in accordance with and subject to the terms of the Indenture and paragraph 9 of
the Securities. The Exchange Rate for the Securities as of November 14, 2003 is
13.75 ADSs per $1,000 Principal Amount. Securities as to which a Purchase Notice
has been given may be exchanged only if the applicable Purchase Notice has been
withdrawn in accordance with the terms of the Indenture and paragraph 6 of the
Securities. If you desire to exchange your Securities, you may do so by
tendering your Securities to the Exchange Agent, according to the terms of the
Indenture, at the address of the Exchange Agent, which address is the same as
the address for the Paying Agent provided above.
Please direct any questions to The Bank of New York at (212) 815- 3750.
Additional copies of this Company Notice may be obtained from the Paying
Agent at its address set forth above.
The date of this Company Notice is November 14, 2003.
TABLE OF CONTENTS
Page
SUMMARY TERM SHEET...........................................................1
IMPORTANT INFORMATION CONCERNING THE PUT OPTION..............................4
1. Information Concerning the Guarantor and the Company..........4
2. Information Concerning the Securities.........................4
2.1. The Company's Obligation to Purchase the Securities;
Purpose of the
Transaction......................................4
2.2. Purchase Price......................................4
2.3. Exchange Rights of the Securities...................5
2.4. Market for the Securities and ADSs..................5
2.5. Redemption..........................................6
2.6. Change in Control...................................6
2.7. Ranking.............................................6
2.8. Conditions..........................................7
3. Procedures to Be Followed by Holders Electing to Surrender
Securities for
Purchase....................................................7
3.1. Method of Delivery..................................7
3.2. Purchase Notice.....................................7
3.3. Delivery of Securities..............................7
4. Right of Withdrawal...........................................8
5. Payment for Surrendered Securities............................8
6. Securities Acquired...........................................9
7. Plans or Proposals of the Guarantor and the Company...........9
8. Interests of Directors, Executive Officers and Affiliates of
the Guarantor or the Company in the Securities..............9
9. Purchases of Securities by the Guarantor, the Company and
their Respective Affiliates.................................10
10. Material United States Tax Considerations.....................10
11. Additional Information........................................12
12. No Solicitations..............................................12
13. Definitions...................................................12
14. Conflicts.....................................................13
No person has been authorized to give any information or to make any
representations other than those contained in this Company Notice and
accompanying Purchase Notice and, if given or made, such information or
representations must not be relied upon as having been authorized. This Company
Notice and accompanying Purchase Notice do not constitute an offer to buy or the
solicitation of an offer to sell securities in any circumstances or jurisdiction
in which such offer or solicitation is unlawful. The delivery of this Company
Notice shall not under any circumstances create any implication that the
information contained herein is current as of any time subsequent to the date of
such information. None of the Guarantor, the Company or their respective boards
of directors or employees is making any representation or recommendation to any
Holder as to whether or not to surrender such Holder's Securities. You should
consult your own financial and tax advisors and must make your own decision as
to whether to surrender your Securities for purchase and, if so, the amount of
Securities to surrender.
SUMMARY TERM SHEET
The following are answers to some of the questions that you may have about
the Put Option. To understand the Put Option fully and for a more complete
description of the terms of the Put Option, we urge you to read carefully the
remainder of this Company Notice and the accompanying Purchase Notice, because
the information in this summary is not complete and those documents contain
additional important information. We have included page references to direct you
to a more complete description of the topics in this summary.
1. Who is offering to purchase my Securities?
Elan Finance Corporation Ltd., a company organized under the laws of
Bermuda (the "Company"), is offering to purchase your validly surrendered Liquid
Yield Option(TM) Notes due 2018 (Zero Coupon-Subordinated) issued by the Company
and fully and unconditionally guaranteed by Elan Corporation, plc (the
"Guarantor"), a public limited company organized under the laws of Ireland (the
"Securities"). The obligation of the Company to pay the Purchase Price (as
defined below) for the Securities surrendered is fully and unconditionally
guaranteed by Elan under the Indenture (as defined below) (Page 4)
2. What securities are you seeking to purchase?
We are offering to purchase all of the Securities surrendered, at the
option of the holder thereof (the "Holder"). As of November 14, 2003, there was
approximately $801,246,000 aggregate principal amount at maturity of Securities
outstanding. The Securities were issued under an Indenture, dated as of December
14, 1998 (the "Indenture"), among the Company, as issuer, the Guarantor, as
guarantor, and The Bank of New York, a New York banking corporation, as trustee
(the "Paying Agent"). (Page 4)
3. How much are you offering to pay and what is the form of payment?
Pursuant to the terms of Section 3.08 of the Indenture and paragraph 6 of
the Securities, we will pay, in cash, a purchase price of $616.57 per $1,000
principal amount at maturity of the Securities (the "Purchase Price") with
respect to any and all Securities validly surrendered for purchase and not
withdrawn. Our obligation to pay the Purchase Price with respect to Securities
validly surrendered for purchase and not withdrawn is fully and unconditionally
guaranteed by the Guarantor. (Page 4)
4. How can I determine the market value of the Securities?
There is no established reporting system or market for trading in the
Securities. To the extent that the Securities are traded, prices of the
Securities may fluctuate widely depending on trading volume, the balance between
buy and sell orders, prevailing interest rates, the financial condition, results
of operations and prospects of the Guarantor and the market for similar
securities. To the extent available, you are urged to obtain current market
quotations for the Securities prior to making any decision with respect to the
Put Option. The American Depositary Shares ("ADSs"), each ADS representing one
Ordinary Share, par value 5 Euro cents ("Ordinary Shares"), evidenced by one
American Depositary Receipt, of the Guarantor, into which the Securities are
exchangeable are listed on the New York Stock Exchange ("NYSE") under the symbol
"ELN" and the Ordinary Shares are listed on the London Stock Exchange under the
symbol "ELA" and on the Irish Stock Exchange under the ISIN Number IE0003072950.
On November 11, 2003, the last reported sales price of the ADSs on the NYSE was
$5.12 per share. (Page 5)
5. Why are you making the offer?
We are required to make the offer pursuant to the terms of the Securities
and of the Indenture.
6. What does the board of directors of the Company and the Guarantor think of
the Put Option?
Although the board of directors of each of the Company and the Guarantor
has approved the terms of the Put Option included in the Indenture and the
Securities, neither board of directors has made any recommendation as
to whether you should surrender your Securities for purchase in the offer. You
must make your own decision whether to surrender your Securities for purchase in
the offer and, if so, the amount of Securities to surrender. (Page 5)
7. When does the Put Option expire?
The Put Option expires at 5:00 p.m., New York City time, on Monday,
December 15, 2003 (the "Purchase Date"). We will not extend the period Holders
have to accept the Put Option. We will pay for purchased Securities promptly
following the later to occur of Tuesday, December 16, 2003 (the "Payment Date")
and the Paying Agent's receipt of surrendered Securities. (Page 4)
8. What are the conditions to the purchase by the Company of the Securities?
The purchase by the Company of Securities as to which a Purchase Notice has
been delivered and not validly withdrawn is conditioned upon you delivering the
Security, together with necessary endorsements, to the Paying Agent at the same
time, or at any time after, delivery of the Purchase Notice. Additionally, the
purchase by the Company of the Securities under the Put Option is conditioned
upon there being no Event of Default under the Indenture that has occurred and
is continuing and upon the purchase being lawful. There is currently no Event of
Default under the Indenture. (Page 7)
9. How do I surrender my Securities?
To surrender your Securities for purchase pursuant to the Put Option, you
must deliver the Purchase Notice and related documents to the Paying Agent no
later than 5:00 p.m., New York City time, on December 15, 2003.
HOLDERS THAT SURRENDER THROUGH THE DEPOSITORY TRUST COMPANY ("DTC") NEED
NOT SUBMIT A PHYSICAL PURCHASE NOTICE TO THE PAYING AGENT IF SUCH HOLDERS COMPLY
WITH THE TRANSMITTAL PROCEDURES OF DTC.
A Holder whose Securities are held in certificated form must properly
complete and execute the Purchase Notice, and deliver such notice to the Paying
Agent, with any other required documents, on or before 5:00 p.m., New York City
time, on December 15, 2003. The Holder is required to deliver to the Paying
Agent the certificate representing the Securities surrendered prior to receiving
payment of the Purchase Price.
A Holder whose Securities are held by a broker, dealer, commercial bank,
trust company or other nominee must contact such nominee if such Holder desires
to surrender his or her Securities and instruct such nominee to surrender the
Securities on the Holder's behalf.
A Holder who is a DTC participant may elect to surrender their Securities
by delivering to the Paying Agent's account at DTC through DTC's book-entry
system his or her beneficial interest in the Securities on or before 5:00 p.m.,
New York City time, on December 15, 2003.
Holders who are DTC participants should surrender their Securities
electronically through DTC's Automated Tenders over the Participant Terminal
System ("PTS"), subject to the terms and procedures of that system on or before
5:00 p.m., New York City time, on December 15, 2003. (Page 7)
10. If I surrender, when will I receive payment for my Securities?
We will accept for payment all validly surrendered Securities promptly upon
expiration of the Put Option. We will promptly forward to the Paying Agent on
December 16, 2003 the appropriate amount of funds required to pay the Purchase
Price for the surrendered Securities. The Paying Agent will promptly distribute
the funds to the Holders on the later to occur of the Payment Date or the date
on which the Paying Agent receives the certificate representing the surrendered
Securities. (Page 8)
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11. Until what time can I withdraw previously surrendered Securities?
You can withdraw Securities previously surrendered for purchase at any time
until 5:00 p.m., New York City time, on December 15, 2003. You may also withdraw
previously surrendered Securities at any time after the expiration of 40
business days from the date of this Company Notice, if your Securities have not
yet been accepted for payment by the Company. (Page 8)
12. How do I withdraw previously surrendered Securities?
To withdraw previously surrendered Securities, you must deliver an executed
written notice of withdrawal substantially in the form attached, or a facsimile
of one, to the Paying Agent prior to 5:00 p.m., New York City time, on December
15, 2003.
HOLDERS THAT WITHDRAW THROUGH DTC NEED NOT SUBMIT A PHYSICAL NOTICE OF
WITHDRAWAL TO THE PAYING AGENT IF SUCH HOLDERS COMPLY WITH THE WITHDRAWAL
PROCEDURES OF DTC. (Page 8)
13. Do I need to do anything if I do not wish to surrender my Securities for
purchase?
No. If you do not deliver a properly completed and duly executed Purchase
Notice before the expiration of the Put Option, we will not purchase your
Securities and such Securities will remain outstanding subject to their existing
terms. (Page 7)
14. If I choose to surrender my Securities for purchase, do I have to surrender
all of my Securities?
No. You may surrender all of your Securities, a portion of your Securities
or none of your Securities for purchase. If you wish to surrender a portion of
your Securities for purchase, however, you must surrender your Securities in a
principal amount at maturity of $1,000 (the "$1,000 principal amount") or an
integral multiple thereof.
15. If I do not surrender my Securities for purchase, will I continue to be
able to exercise my exchange rights?
If you do not surrender your Securities for purchase, your exchange rights
will not be affected. You will continue to have the right to exchange each
$1,000 principal amount at maturity of a Security into ADSs of the Guarantor
(13.75 ADSs of the Guarantor as of November 14, 2003), subject to the terms,
conditions and adjustments specified in the Indenture and paragraph 9 of the
Securities. (Page 7)
16. If I am a U.S. resident for U.S. federal income tax purposes, will I have
to pay taxes if I surrender my Securities for purchase in the Put Option?
The receipt of cash in exchange for Securities pursuant to the Put Option
will be a taxable transaction for U.S. federal income tax purposes and you may
recognize gain, income, loss or deduction. You should consult with your own tax
advisor regarding the actual tax consequences to you. (Page 10)
17. Who is the Paying Agent?
The Bank of New York, the trustee for the Securities, is serving as Paying
Agent in connection with the Put Option. Its address and telephone number are
set forth on the front cover page of this Company Notice.
18. Who can I ask if I have questions about the Put Option?
Questions and requests for assistance in connection with the surrender of
Securities for purchase in this Put Option may be directed to The Bank of New
York, at (212) 815-3750.
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IMPORTANT INFORMATION CONCERNING THE PUT OPTION
1. Information Concerning the Guarantor and the Company. Elan Finance
Corporation Ltd., a company organized under the laws of Bermuda (the "Company"),
is a wholly-owned subsidiary of Elan Corporation, plc, a public limited company
organized under the laws of Ireland (the "Guarantor"). The Company is offering
to purchase its Liquid Yield Option(TM) Notes due 2018 (Zero
Coupon--Subordinated), which have been fully and unconditionally guaranteed by
the Guarantor (the "Securities"). The Company is a special purpose finance
subsidiary of the Guarantor organized solely for the purpose of issuing the
Securities. It conducts no independent business.
The Guarantor is a worldwide biopharmaceutical company headquartered in
Dublin, Ireland. The Guarantor focuses on three core therapeutic areas:
neurology, pain management and autoimmune diseases. The Guarantor is organized
into two units: Core Elan and Elan Enterprises.
Core Elan is engaged in pharmaceutical commercial activities and
biopharmaceutical research and development activities. Core Elan is also engaged
in pharmaceutical manufacturing activities at its facility located in Athlone,
Ireland. The Guarantor's pharmaceutical commercial activities include the
marketing of products in the therapeutic areas of neurology, pain management and
infectious diseases. Biopharmaceutical research and development activities
include the discovery and development of products in the therapeutic areas of
neurology, pain management and autoimmune diseases.
Elan Enterprises is mainly comprised of the Guarantor's drug delivery
businesses and other assets such as business ventures and non-core
pharmaceutical products. Drug delivery activities have historically included the
development, licensing and marketing of drug delivery products, technologies and
services to pharmaceutical industry clients on a worldwide basis.
The Company maintains its registered offices at Clarendon House, 2 Church
Street, Hamilton HM 11, Bermuda. The Company's principal executive offices are
located at 102 St. James Court, Flatts, Smiths Parish, Bermuda FL 04 and its
telephone number is (441) 292-9169. The Guarantor's principal executive offices
are located at Lincoln House, Lincoln Place, Dublin 2, Ireland and its telephone
number is 353-1-709-4000.
2. Information Concerning the Securities. The Securities were issued under
an Indenture, dated as of December 14, 1998 (the "Indenture"), among the
Company, the Guarantor and The Bank of New York, a New York banking corporation,
as trustee (the "Paying Agent"). The Securities mature on December 14, 2018.
2.1. The Company's Obligation to Purchase the Securities; Purpose of the
Transaction. Pursuant to the terms of the Indenture and the Securities, unless
earlier redeemed, the Company is obligated to purchase all Securities validly
surrendered for purchase and not withdrawn, at the option of the holders of the
Securities (the "Holders"), on December 14, 2003, December 14, 2008 and December
14, 2013. The purchase price will be $616.57 per $1,000 principal amount at
maturity ("$1000 principal amount") on December 14, 2003; $724.42 per $1000
principal amount on December 14, 2008; and $851.13 per $1000 principal amount on
December 14, 2013.
This Put Option will expire at 5:00 p.m., New York City time, on Monday,
December 15, 2003 (the "Purchase Date"), and the purchase will be made promptly
following the Company's delivery of funds to the Paying Agent on December 16,
2003 (the "Payment Date"). The payment by the Company for validly surrendered
Securities is subject to the Paying Agent's receipt of the certificate(s)
representing the surrendered Securities.
The Company's obligation to pay the Purchase Price for validly surrendered
Securities is guaranteed by the Guarantor pursuant to the terms of the
Indenture.
2.2. Purchase Price. Pursuant to the terms of the Securities, the purchase
price to be paid by the Company for the Securities on the Payment Date is
$616.57 per $1,000 principal amount of the Securities (the "Purchase Price").
The Purchase Price will be paid in cash with respect to any and all Securities
validly surrendered for purchase on or before 5:00 p.m., New York City time, on
December 15, 2003 and not withdrawn prior to that time. Securities surrendered
for purchase will be accepted only in $1,000 principal amount or integral
multiples
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thereof. The Original Issue Discount (as defined in the Indenture) will cease to
accrue on the Purchase Date unless the Company defaults in making payment on
Securities validly surrendered for purchase and not withdrawn.
The Purchase Price is based solely on the requirements of the Indenture and
the Securities and bears no relationship to the market price of the Securities
or the ADSs (as defined below) into which the Securities may be exchanged. Thus,
the Purchase Price may be significantly higher or lower than the current market
price of the Securities. Holders of Securities are urged to obtain the best
available information as to potential current market prices of the Securities,
to the extent available, and the ADSs before making a decision whether to
surrender their Securities for purchase.
None of the Company, the Guarantor or their respective boards of directors
or employees is making any recommendation to Holders as to whether to surrender
or refrain from surrendering Securities for purchase pursuant to this Company
Notice. Each Holder must make his or her own decision whether to surrender his
or her Securities for purchase and, if so, the principal amount of Securities to
surrender based on such Holder's assessment of current market value of the
Securities and the ADSs and other relevant factors.
2.3. Exchange Rights of the Securities. The Securities are exchangeable
into American Depositary Shares ("ADSs"), each ADS representing one Ordinary
Share, par value 5 Euro cents ("Ordinary Shares"), evidenced by one American
Depositary Receipt, of the Guarantor, in accordance with and subject to the
terms of the Indenture and paragraph 9 of the Securities. The Exchange Rate of
the Securities as of November 14, 2003 is 13.75 ADSs per $1,000 principal amount
of the Securities. This Exchange Rate is subject to change pursuant to the terms
set forth in the Indenture. The Paying Agent is currently acting as Exchange
Agent for the Securities.
Holders that do not surrender their Securities for purchase pursuant to the
Option Materials will maintain the right to exchange their Securities into ADSs.
Any Securities as to which a Purchase Notice has been given may be exchanged in
accordance with the terms of the Indenture only if the applicable Purchase
Notice has been validly withdrawn prior to 5:00 p.m., New York City time, on the
Purchase Date, as described in Section 4 hereto.
2.4. Market for the Securities and ADSs . There is no established reporting
system or trading market for trading in the Securities. To the extent that the
Securities are traded, prices of the Securities may fluctuate widely depending
on trading volume, the balance between buy and sell orders, prevailing interest
rates, the financial condition, results of operations and prospects of the
Guarantor and the market for similar securities. To the extent available,
Holders are urged to obtain current market quotations for the Securities prior
to making any decision with respect to the Put Option. The Securities are held
through The Depository Trust Company ("DTC"). As of November 14, 2003, there was
approximately $801,246,000 aggregate principal amount at maturity of Securities
outstanding and DTC was and is the sole record holder of the Securities.
The ADSs into which the Securities are exchangeable are listed on the NYSE
under the symbol "ELN" and the Ordinary Shares are listed on the London Stock
Exchange under the symbol "ELA" and on the Irish Stock Exchange under the ISIN
Number IE0003072950. The following table sets forth, for the fiscal quarters
indicated, the high and low sales prices of the ADSs as reported on the NYSE.
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High Low
================================================================================
2003
First Quarter $4.98 $2.25
Second Quarter 9.02 2.70
Third Quarter 6.46 4.05
Fourth Quarter (through November 11, 2003) 5.97 4.72
2002
First Quarter $45.18 $12.01
Second Quarter 13.97 5.30
Third Quarter 5.65 1.31
Fourth Quarter 3.09 1.03
2001
First Quarter $57.80 $42.75
Second Quarter 65.00 47.85
Third Quarter 62.85 41.50
Fourth Quarter 52.00 39.35
On November 11, 2003, the last reported sales price of the Guarantor's ADSs
on the NYSE was $5.12 per share. As of November 11, 2003, there were
approximately 386,052,505 Ordinary Shares outstanding. We urge you to obtain
current market information for the Securities, to the extent available, and the
ADSs before making any decision to surrender your Securities pursuant to the Put
Option.
The Guarantor has not paid cash dividends on its Ordinary Shares (whether
or not represented by ADSs) in the past. Pursuant to the terms of the indenture
(the "Convertible Notes Indenture") governing the 6.50% Guaranteed Convertible
Notes issued by the Guarantor's subsidiary, Elan Capital Corp., Ltd., and
guaranteed by the Guarantor (the "Convertible Notes"), the Guarantor is
prohibited from paying any dividends on its Ordinary Shares on or prior to March
15, 2005. The declaration of cash dividends after that date will be at the
recommendation of the Guarantor's board of directors. The recommendations of the
Guarantor's board of directors will depend upon the earnings, capital
requirements and financial condition of the Guarantor and other factors.
2.5. Redemption. No sinking fund is provided for the Securities. We may
redeem the Securities for cash in whole at any time, or in part from time to
time. We will give not less than 15 days' nor more than 60 days' notice of
redemption by mail to Holders of Securities. Holders may exchange Securities or
portions of Securities called for redemption, until the close of business on the
redemption date. The redemption price is equal to the Issue Price (as defined in
the Indenture) plus accrued Original Issue Discount (as defined in the Indenture
and as provided for in the Securities) to the date of redemption. Pursuant to
the Convertible Notes Indenture, the Guarantor and its subsidiaries, including
the Company, will be prohibited from redeeming the Securities at any time on or
prior to March 15, 2005.
2.6. Change in Control. Subject to the terms of the Indenture, the Holder
may require the Company to redeem his or her Securities if there is a Change in
Control (as defined in the Indenture) occurring on or prior to December 14,
2003, at a redemption price equal to the Issue Price (as defined in the
Securities) plus accrued Original Issue Discount (as defined in the Indenture)
to the date of redemption.
2.7. Ranking. The Securities are subordinated obligations of the Company
and are fully and unconditionally guaranteed on a subordinated basis by the
Guarantor. The Securities and the Guarantor's guarantee are subordinated to all
existing and future senior debt of the Company and the Guarantor, respectively.
The Guarantor's guarantee is effectively subordinated to all existing and future
indebtedness and other liabilities of the Guarantor's subsidiaries.
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2.8. Conditions. The purchase by the Company of Securities as to which a
Purchase Notice has been delivered and not validly withdrawn is conditioned upon
the Holder delivering the Securities, together with necessary endorsements, to
the Paying Agent at the same time, or at any time after, delivery of the
Purchase Notice. Additionally, the purchase by the Company of the Securities
under the Put Option is conditioned upon there being no Event of Default under
the Indenture that has occurred and is continuing and upon the purchase being
lawful. There is currently no Event of Default under the Indenture.
3. Procedures to Be Followed by Holders Electing to Surrender Securities
for Purchase. Holders will not be entitled to receive the Purchase Price for
their Securities unless they validly deliver a Purchase Notice and related
materials to the Paying Agent on or prior to 5:00 p.m., New York City time, on
December 15, 2003 and do not withdraw such Purchase Notice on or before 5:00
p.m., New York City time, on December 15, 2003. Additionally, Holders will not
be eligible to receive the Purchase Price until the later of December 16, 2003
and such time as any certificates representing the surrendered Securities are
delivered to the Paying Agent. Only registered Holders are authorized to
surrender their Securities for purchase. Holders may surrender some or all of
their Securities; however, any Securities surrendered must be in $1,000
principal amount or an integral multiple thereof.
If Holders do not validly deliver a Purchase Notice to the Paying Agent on
or before 5:00 p.m., New York City time, on December 15, 2003, their Securities
will remain outstanding subject to the existing terms of the Securities.
3.1. Method of Delivery. The method of delivery of Securities, the related
Purchase Notice and all other required documents, including delivery through DTC
and acceptance through DTC's Automatic Tenders over the Participant Terminal
System ("PTS"), is at the election and risk of the person surrendering such
Securities and delivering such Purchase Notice and, except as expressly
otherwise provided in the Purchase Notice, delivery will be deemed made only
when actually received by the Paying Agent. The date of any postmark or other
indication of when a Security or the Purchase Notice was sent will not be taken
into account in determining whether such materials were timely received. If such
delivery is by mail, it is suggested that Holders use properly insured,
registered mail with return receipt requested, and that Holders mail the
required documents sufficiently in advance of December 15, 2003 to permit
delivery to the Paying Agent prior to 5:00 p.m., New York City time, on December
15, 2003.
3.2. Purchase Notice. Pursuant to the Indenture, the Purchase Notice must
contain:
o the certificate number(s) of the Securities being delivered for
purchase;
o the portion of the principal amount at maturity of the Securities to
be purchased, which portion must be in principal amounts of $1,000 at
maturity or an integral multiple thereof; and
o a statement that such Securities shall be purchased by the Company
pursuant to the terms and conditions specified in the Indenture and
paragraph 6 of the Securities.
3.3. Delivery of Securities.
Securities in Certificated Form. To receive the Purchase Price, Holders
of Securities in certificated form regarding which a Purchase Notice has been
timely delivered and received, must deliver to the Paying Agent such
certificate. The Holder may surrender his Securities without delivering such
certificates. However, no Purchase Price will be paid until the Paying Agent
receives such certificate.
Securities Held Through a Custodian. A Holder whose Securities are held
by a broker, dealer, commercial bank, trust company or other nominee must
contact such nominee if such Holder desires to surrender his or her Securities
and instruct such nominee to surrender the Securities for purchase on the
Holder's behalf.
Securities in Global Form. A Holder who is a DTC participant, may elect
to surrender to the Company his or her beneficial interest in the Securities by:
-7-
o delivering to the Paying Agent's account at DTC through DTC's
book-entry system his or her beneficial interest in the Securities on
or prior to 5:00 p.m., New York City time, on December 15, 2003; and
o electronically transmitting his or her acceptance through DTC's PTS,
subject to the terms and procedures of that system, on or prior to
5:00 p.m., New York City time, on December 15, 2003. In surrendering
through PTS, the electronic instructions sent to DTC by the Holder,
and transmitted by DTC to the Paying Agent will acknowledge, on behalf
of DTC and the Holder, receipt by the Holder of and agreement to be
bound by the Purchase Notice.
Securities and the Purchase Notice must be delivered to the Paying Agent to
collect payment. Delivery of documents to DTC or the Company or the Guarantor
does not constitute delivery to the Paying Agent.
HOLDERS THAT SURRENDER THROUGH DTC NEED NOT SUBMIT A PHYSICAL PURCHASE
NOTICE TO THE PAYING AGENT IF SUCH HOLDERS COMPLY WITH THE TRANSMITTAL
PROCEDURES OF DTC.
4. Right of Withdrawal. Securities surrendered for purchase may be
withdrawn at any time prior to 5:00 p.m., New York City time, on December 15,
2003. Holders may also withdraw surrendered Securities at any time after the
expiration of 40 business days from the date of this Company Notice if their
Securities have not yet been accepted for payment. In order to withdraw
Securities, Holders must deliver to the Paying Agent written notice,
substantially in the form enclosed herewith, containing:
o the certificate number(s) and principal amount at maturity of the
Securities with respect to which such notice of withdrawal is being
submitted;
o the principal amount at maturity, if any, of such Securities which
remain subject to the original Purchase Notice and which have been or
will be delivered for purchase by the Company; and
o the Holder's signature, in the same manner as the original signature
on the Purchase Notice by which such Securities were surrendered for
purchase.
The signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (as defined in Rule 17Ad-15 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), unless such Securities have been surrendered
for purchase for the account of an Eligible Institution. Any properly withdrawn
Securities will be deemed not validly surrendered for purposes of the Put
Option. Securities withdrawn from the Put Option may be resurrendered on or
before 5:00 p.m., New York City time, on December 15, 2003 by following the
surrender procedures described in Section 3 above.
HOLDERS THAT WITHDRAW THROUGH DTC NEED NOT SUBMIT A PHYSICAL NOTICE OF
WITHDRAWAL TO THE PAYING AGENT IF SUCH HOLDERS COMPLY WITH THE WITHDRAWAL
PROCEDURES OF DTC.
5. Payment for Surrendered Securities. We will promptly forward to the
Paying Agent, no later than 1:00 p.m., New York City time, on December 16, 2003
(the "Payment Date") the appropriate amount of funds required to pay the
Purchase Price for the surrendered Securities. The Paying Agent will promptly
distribute the cash to each Holder who validly surrendered Securities on the
later to occur of the Payment Date or the date on which the Paying Agent
receives the certificate representing the surrendered Securities.
The total amount of funds required by the Company to purchase all of the
Securities is approximately $494 million (assuming all of the Securities are
validly surrendered for purchase and accepted for payment). In the event any
Securities are surrendered and accepted for payment, the Company intends to use
available cash to purchase the Securities.
-8-
6. Securities Acquired. Any Securities purchased by the Company pursuant to
the Put Option will be cancelled by the Trustee, pursuant to the terms of the
Indenture.
7. Plans or Proposals of the Guarantor and the Company. Other than as
described herein, the Guarantor and the Company currently have no plans which
would be material to a Holder's decision to surrender Securities for purchase in
the Put Option, which relate to or which would result in:
o any extraordinary transaction, such as a merger, reorganization or
liquidation, involving the Guarantor or any of its subsidiaries
(including the Company);
o except as previously disclosed in connection with the execution of the
Guarantor's recovery plan, any purchase, sale or transfer of a
material amount of assets of the Guarantor or any of its subsidiaries
(including the Company);
o any material change in the present dividend rate or policy, or
indebtedness or capitalization of the Guarantor or the Company;
o any change in the present board of directors or management of the
Guarantor or the Company, including, but not limited to, any plans or
proposals to change the number or the term of directors or to fill any
existing vacancies on the board or to change any material term of the
employment contract of any executive officer;
o any other material change in the corporate structure or business of
the Guarantor or the Company;
o any class of equity securities of the Guarantor to be delisted from a
national securities exchange or to cease to be authorized to be quoted
in an automated quotation system operated by a national securities
association;
o any class of equity securities of the Guarantor or the Company
becoming eligible for termination of registration under Section
12(g)(4) of the Exchange Act;
o the suspension of the obligation of the Guarantor to file reports
under Section 15(d) of the Exchange Act;
o the acquisition by any person of additional securities of the
Guarantor or the Company, or the disposition of securities of the
Guarantor or the Company; or
o any changes in the charter, bylaws or other governing instruments of
the Guarantor or the Company, or other actions that could impede the
acquisition of control of the Guarantor or the Company.
8. Interests of Directors, Executive Officers and Affiliates of the
Guarantor or the Company in the Securities. To the knowledge of each of the
Guarantor and the Company:
o none of the Guarantor, the Company, or their respective executive
officers, directors, subsidiaries or other affiliates has any
beneficial interest in the Securities;
o none of the officers or directors of the subsidiaries of the Guarantor
has any beneficial interest in the Securities;
o neither the Company nor the Guarantor will purchase any Securities
from such persons; and
-9-
o during the 60 days preceding the date of this Company Notice, none of
such officers, directors or affiliates has engaged in any transactions
in the Securities.
A list of the directors and executive officers of each of the Guarantor and
the Company is attached to this Company Notice as Annex A.
Except as described above, none of the Guarantor, the Company or, to their
knowledge, any of their respective affiliates, directors or executive officers,
is a party to any contract, arrangement, understanding or agreement with any
other person relating, directly or indirectly, to the Put Option or with respect
to any of its securities, including, but not limited to, any contract,
arrangement, understanding or agreement concerning the transfer or the voting of
the 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.
9. Purchases of Securities by the Guarantor, the Company and their
Respective Affiliates. Each of the Guarantor, the Company, and their respective
affiliates, including their respective executive officers and directors, are
prohibited under applicable United States federal securities laws from
purchasing Securities (or the right to purchase Securities) other than through
the Put Option until the expiration of at least the tenth business day after the
Purchase Date. Following such time, if any Securities remain outstanding, the
Guarantor, the Company and their respective affiliates may purchase Securities
in the open market, in private transactions, through a subsequent tender offer,
or otherwise, any of which may be consummated at purchase prices higher or lower
than the Purchase Price. Any decision to purchase Securities after the Put
Option, if any, will depend upon many factors, including the market price of the
Securities, the amount of Securities surrendered for purchase pursuant to the
Put Option, the market price of the ADSs, the financial condition, results of
operations and prospects of the Guarantor, and general economic and market
conditions. Pursuant to the Convertible Notes Indenture, except in connection
with the Put Option, the Guarantor and its subsidiaries, including the Company,
will be prohibited from purchasing the Securities at any time on or after
December 14, 2003 and on or prior to March 15, 2005.
10. Material United States Tax Considerations. The following discussion
summarizes certain United States federal income tax consequences resulting from
the surrender of the Securities for purchase pursuant to the Put Option. It is
provided for general informational purposes only and is not tax advice. It is
based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations promulgated thereunder, Internal Revenue Service ("IRS") rulings,
and judicial decisions, all as currently in effect, and all of which are subject
to change, possibly with retroactive effect. The discussion assumes that the
Securities are held as "capital assets" within the meaning of section 1221 of
the Code. The discussion does not address all of the federal income tax
consequences that may be relevant to you in light of your particular tax
situation or to certain classes of Holders subject to special treatment under
the federal income tax laws, (including, without limitation, certain financial
institutions, brokers, dealers or traders in securities or commodities,
insurance companies, "S" corporations, expatriates, individual retirement
accounts and other tax-deferred accounts, tax-exempt organizations, persons who
are subject to alternative minimum tax, persons who hold Securities as a
position in a "straddle" or as part of a "hedging" or "conversion" transaction,
or persons that have a functional currency other than the United States dollar).
THIS SUMMARY OF UNITED STATES FEDERAL TAX CONSEQUENCES IS PROVIDED FOR
GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. WE URGE YOU TO CONSULT YOUR TAX
ADVISOR CONCERNING THE TAX CONSEQUENCES OF THE PUT OPTION, INCLUDING THE UNITED
STATES FEDERAL, STATE, LOCAL AND OTHER TAX CONSEQUENCES AND POTENTIAL CHANGES IN
THE TAX LAWS.
As used herein, a U.S. Holder means a beneficial owner of Securities that
is, for U.S. federal income tax purposes: (i) a citizen or resident of the
United States, (ii) a corporation, or other entity taxable as a corporation for
United States federal income tax purposes, created or organized in or under the
laws of the United States, any state thereof, or the District of Columbia, (iii)
an estate the income of which is subject to United States federal income
taxation regardless of its source or (iv) a trust (a) if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more U.S. persons have the authority to control all
substantial decisions of the trust or (b) that has a valid election in effect
under applicable Treasury Regulations to be treated as a U.S. person. As used
herein, the term "Non-U.S. Holder" means a beneficial owner of Securities, other
than a partnership, that is not a U.S. Holder as defined above.
-10-
The tax treatment of a partnership that holds Securities will generally
depend on the status of the partners and the activities of the partnership.
Holders that are partnerships should consult their own tax advisors about the
U.S. federal income tax consequences of surrendering Securities pursuant to the
Put Option.
Sale of Securities Pursuant to the Put Option by U.S. Holders. A U.S.
Holder's receipt of cash in exchange for Securities pursuant to the Put Option
will be a taxable transaction for U.S. federal income tax purposes. Subject to
the market discount rules described below, a U.S. Holder will generally
recognize capital gain or loss on the sale of a Security in an amount equal to
the difference between the amount of cash received for the Security (except for
any amount attributable to interest, including OID (defined below), that such
Holder has not already taken into income, which amount will continue to be
taxable to as interest otherwise would be) and their "adjusted tax basis" in the
Security at the time of the sale. The capital gain or loss will be long-term if
a surrendering U.S. Holder held the Security for more than one year at the time
of the sale. Long-term capital gains of non-corporate U.S. Holders are generally
taxable at lower rates than those applicable to ordinary income or short-term
capital gains. Capital gains of corporate U.S. Holders are generally taxable at
the regular tax rates applicable to corporations. A Holder's ability to deduct
capital losses may be limited.
Generally, a U.S. Holder will have an adjusted tax basis in the Securities
equal to the amount paid for the Security, increased by the amount of Original
Issue Discount ("OID") previously accrued by the U.S. Holder and, if the
election described below has been made, market discount previously included in
the U.S. Holder's income and decreased by any acquisition premium in respect of
the Securities that has been previously taken into account as an offset to OID
income. OID generally is the excess of the stated redemption price at maturity
of a Security over its issue price and a ratable daily portion of the amount
allocable to each accrual period (each of which must be no longer than one year)
must be included in income by a Holder, where the amount allocable to each
accrual period is determined on a constant yield basis.
An exception to the capital gain treatment described above may apply if you
purchased a Security at a "market discount." If you acquired a Security at a
cost that is less than its adjusted issue price, the amount of such difference
is treated as market discount for U.S. federal income tax purposes, unless such
difference is less than .0025 multiplied by the adjusted issue price multiplied
by the number of complete years to maturity from the date of acquisition. In
general, any gain realized by a U.S. Holder on the sale of a Security having
market discount will be treated as ordinary income to the extent of the market
discount that you have accrued (on a straight line basis or, at your election,
on a constant yield basis), unless such Holder has elected to include market
discount in income currently as it accrues.
Sale of Securities Pursuant to the Put Option by Non-U.S. Holders. A
Non-U.S. Holder who receives cash in exchange for Securities pursuant to the Put
Option generally will not be subject to U.S. federal income tax on any gain
recognized, unless: (i) such gain is effectively connected with the conduct by
such Non-U.S. Holder of a trade or business in the United States or (ii) such
Non-U.S. Holder is an individual who is present in the United States for 183
days or more in the taxable year of disposition and certain other conditions are
met.
If a Non-U.S. Holder is engaged in a trade or business in the United
States, and if the gain on the Securities is effectively connected with the
conduct of such trade or business, the Non-U.S. Holder will generally be subject
to regular U.S. federal income tax on any gain realized on the sale or exchange
of the Securities in the same manner as if it were a U.S. Holder. In addition,
if such Non-U.S. Holder is a foreign corporation, such Holder may be subject to
a branch profits tax equal to 30% (or such lower rate provided by an applicable
treaty) of its effectively connected earnings and profits for the taxable year,
subject to certain adjustments.
Information Reporting and Backup Withholding. The Code and the Treasury
Regulations require those who make specified payments to report the payments to
the IRS. Among the specified payments are interest and proceeds paid by brokers
to their customers. Payments made to U.S. Holders will generally be subject to
such "information reporting," unless the U.S. Holder is an exempt recipient,
such as a corporation and certain tax-exempt organizations.
The "backup withholding" rules generally require payors to withhold tax at
a rate of 28% from payments subject to information reporting if the recipient
fails to furnish its taxpayer identification number to the payor or fails to
certify that payments received by such Holder are not subject to backup
withholding. In order to satisfy these
-11-
requirements, U.S. Holders electing to surrender Securities should complete the
Form W-9 which is part of the Purchase Notice and provide it with the Securities
being surrendered. A U.S. Holder exempt from backup withholding and information
reporting should so indicate in Part 2 of the Form W-9.
If a Non-U.S. Holder holds Securities through the non-U.S. office of a
non-U.S. related broker or financial institution, backup withholding and
information reporting generally will not apply. Information reporting, and
possibly backup withholding, may apply if the Securities are held by a Non-U.S.
Holder through a U.S. broker or financial institution or the U.S. office of a
non-U.S. broker or financial institution and the Non-U.S. Holder fails to
provide appropriate information (on Form W-8BEN or other applicable form) to the
payor. Non-U.S. Holders should consult their tax advisors with respect to the
application of U.S. information reporting and backup withholding rules to the
disposition of Securities pursuant to the Put Option.
11. Additional Information. The Guarantor is subject to the reporting and
other informational requirements of the Exchange Act and, in accordance
therewith, files reports and other information with the SEC. Such reports and
other information can be inspected and copied at the Public Reference Section of
the SEC located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington D.C. 20549. Copies of such material can be obtained from the Public
Reference Section of the SEC at prescribed rates. Such material may also be
accessed electronically by means of the SEC's home page on the Internet at
www.sec.gov. Such reports and other information concerning the Guarantor may
also be inspected at the offices of the NYSE located at 20 Broad Street, New
York, New York 10005.
The Guarantor and the Company have filed with the SEC a Tender Offer
Statement on Schedule TO-I, pursuant to Section 13(e)(4) of the Exchange Act and
Rule 13e-4 promulgated thereunder, furnishing certain information with respect
to the Put Option. The Tender Offer Statement on Schedule TO-I, together with
any exhibits and any amendments thereto, may be examined and copies may be
obtained at the same places and in the same manner as set forth above.
The documents listed below contain important information about the
Guarantor and its financial condition.
o the Guarantor's Annual Report on Form 20-F for the fiscal year ended
December 31, 2002, filed with the Securities and Exchange Commission
on September 4, 2003;
o All other reports filed with the Securities and Exchange Commission
pursuant to Section 13 or 15(d) of the Exchange Act since the end of
the fiscal year covered by the Form 20-F mentioned above;
o All documents filed with the Securities and Exchange Commission by the
Guarantor pursuant to Sections 13(a), 13(c) and 15(d) of the Exchange
Act subsequent to the date of this Company Notice and prior to 5:00
p.m., New York City time, on the Purchase Date; and
o The description of the Guarantor's Ordinary Shares and ADS's set forth
in the Guarantor's Form 8-A filed with the Securities and Exchange
Commission on October 30, 1990, as amended by the Guarantor's Form
8-A/A2, filed with the Securities and Exchange Commission on June 4,
1999.
In the event of conflicting information in these documents, the information
in the latest filed documents should be considered correct.
12. No Solicitations. Neither the Company nor the Guarantor has employed
any persons to make solicitations or recommendations in connection with the Put
Option.
13. Definitions. All capitalized terms used but not specifically defined
herein shall have the meanings given to such terms in the Indenture.
-12-
14. Conflicts. In the event of any conflict between this Company Notice and
the accompanying Purchase Notice on the one hand and the terms of the Indenture
or any applicable laws on the other hand, the terms of the Indenture or
applicable laws, as the case may be, will control.
None of the Guarantor, the Company or their respective boards of directors
or employees is making any recommendation to any Holder as to whether to
surrender or refrain from surrendering Securities for purchase pursuant to this
Company Notice. Each Holder must make his or her own decision whether to
surrender his or her Securities for purchase and, if so, the principal amount of
Securities to surrender based on their own assessment of current market value
and other relevant factors.
ELAN CORPORATION, PLC
ELAN FINANCE CORPORATION LTD.
November 14, 2003
-13-
ANNEX A
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names of each of the members of the
Guarantor's board of directors and executive officers:
Name Positions Held
- -------------------------------------- ---------------------------------------------------------
Garo H. Armen, Ph.D. Director
Brendan E. Boushel Director
Shane Cooke Executive Vice President and Chief Financial Officer
Laurence G. Crowley Director
William F. Daniel Director, Executive Vice President and Company Secretary
Jean Duvall Executive Vice President and General Counsel
Alan R. Gillespie, C.B.E., Ph.D. Director
Ann Maynard Gray Director
John Groom Director
Kelly Martin Director, President and Chief Executive Officer
Kieran McGowan Director
Kevin M. McIntyre, M.D. Director
Kyran McLaughlin Director
Dennis J. Selkoe, M.D. Director
The Honorable Richard L. Thornburgh Director
Daniel P. Tully Director
The Guarantor's principal executive offices are located at Lincoln House,
Lincoln Place, Dublin 2, Ireland and its telephone number is 353-1-709-4000.
The following table sets forth the names of each of the members of the
Company's board of directors and executive officers:
Name Positions Held
- ------------------------------------- ---------------------------------------------------------
Debra Moore Buryj Director and Vice President
David J. Doyle Director
Kevin Insley Director, President and Chief Financial Officer
Richard A. Jenkyn Assistant Secretary
Wayne Morgan Secretary
The Company maintains its registered offices at Clarendon House, 2 Church
Street, Hamilton HM 11, Bermuda. The Company's principal executive offices are
located at 102 St. James Court, Flatts, Smiths Parish, Bermuda FL 04 and its
telephone number is (441) 292-9169.
A-1