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Preview Full Doc	2003	King Pharmaceuticals Reports Third-Quarter 2003 Financial Results King Pharmaceuticals Reports Third-Quarter 2003 Financial Results (52K) Doc #281650: Click preview link for longer preview. {DOCUMENT} {TYPE}EX-99.1 {SEQUENCE}3 {FILENAME}g85429exv99w1.txt {DESCRIPTION}EX-99.1 PRESS RELEASE {TEXT} {PAGE} N E W S R E L E A S E [KING PHARMACEUTICALS LOGO] -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE KING PHARMACEUTICALS REPORTS THIRD-QUARTER 2003 FINANCIAL RESULTS BRISTOL, TENNESSEE, October 28, 2003 - King Pharmaceuticals, Inc. (NYSE:KG) announced today that total revenues increased 34% to $424.2 million during the third quarter ending September 30, 2003, compared to $315.7 million during the third quarter of 2002. Net earnings during the third quarter ending September 30, 2003, including special items, totaled $106.1 million, or $0.44 per diluted share, each increasing 26% in comparison to net earnings of $84.2 million and diluted earnings per share of $0.35 in the same period of the prior year. Excluding special items, net earnings increased 17% to $99.1 million and diluted earnings per share grew 17% to $0.41 during the third quarter ending September 30, 2003, from net earnings of $84.7 million and diluted earnings per share of $0.35 during the third quarter of 2002. For the nine months ending September 30, 2003, total revenues increased 33% to $1,138.8 million compared to $856.3 million during the first nine months of 2002. During the nine months ending September 30, 2003, including special items, net earnings equaled $63.9 million, or $0.26 per diluted share, each decreasing 70% in comparison to net earnings of $214.0 million and diluted earnings per share of $0.87 in the same period of the prior year. Excluding special items, net earnings increased 13% to $262.6 million and diluted earnings per share increased 16% to $1.09 during the nine months ending September 30, 2003, from net earnings of $233.1 million and diluted earnings per share of $0.94 during the first nine months of 2002. King recorded special items during the third quarter ending September 30, 2003, the net of which resulted in income totaling $11.1 million, or $7.0 million net of tax. More specifically, special items during the third quarter of 2003 include income in the amount of $10.3 million due to a gain on the sale of the Company's animal health products; income in the amount of $9.3 million due to a decrease in the valuation allowance for Novavax, Inc. convertible notes held by the Company resulting from an increase in the share price of Novavax common stock during the third quarter of 2003; and charges totaling $8.6 million, primarily related to professional fees associated with the ongoing Securities and Exchange Commission ("SEC") investigation of the Company and the completed internal review conducted by the Audit Committee of King's Board of Directors. King recorded special items totaling $0.7 million, or $0.5 million net of tax, during the third quarter ending September 30, 2002, primarily due to a charge related to an increase in the reserve for King's voluntary recall during 2001 of products manufactured for the Company by a contract manufacturer, offset by income resulting from a decrease in the valuation allowance for Novavax convertible notes held by the Company. During the first six months of 2003, King recorded special items totaling $308.4 million, or $205.7 million net of tax, primarily due to charges for acquired in-process research and development, professional fees associated with the previously mentioned SEC investigation and completed internal review, a product recall, and a decrease in the valuation allowance for Novavax convertible notes held by the Company; and an intangible asset impairment charge. During the six month period ending June 30, 2002, King recorded special charges totaling $29.8 million, or $18.7 million net of tax, that primarily related to an increase in the valuation allowance for Novavax convertible notes held by King and the Company's voluntary recall of two of its smaller products. (more) {PAGE} Under Generally Accepted Accounting Principles ("GAAP"), "net earnings" and "diluted earnings per share" include special items. In addition to the results determined in accordance with GAAP, King provides its net earnings and diluted earnings per share results for the third quarter and nine months ending September 30, 2003, excluding special items. King also provides below the Company's diluted earnings per share for the fourth quarter and year ending December 31, 2002, excluding special items. These non-GAAP financial measures exclude special items which are those particular material income or expense items that King considers to be unrelated to the Company's ongoing, underlying business, non-recurring, or not generally predictable. Such items include, but are not limited to, merger and restructuring expenses; non-capitalized expenses associated with acquisitions, such as in-process research and development charges and one-time inventory valuation adjustment charges; charges resulting from the early extinguishment of debt; asset impairment charges; expenses of drug recalls; and gains and losses resulting from the divestiture of assets. King believes the identification of special items enhances an analysis of the Company's ongoing, underlying business and an analysis of the Company's financial results when comparing those results to that of a previous or subsequent like period. However, it should be noted that the determination of whether to classify an item as a special item involves judgments by King's management. A reconciliation of non-GAAP financial measures referenced herein and King's financial results determined in accordance with GAAP is provided below. The 34% increase in King's revenues during the third-quarter ending September 30, 2003 in comparison to the same period of the prior year is attributable primarily to the acquisition of Sonata(R) and Skelaxin(R) (metaxolone) from Elan Corporation, plc on June 12, 2003, the acquisition of Meridian on January 8, 2003, and increased net sales of certain branded pharmaceutical products, in particular Thrombin-JMI(R) (thrombin, topical, bovine, USP). Net revenue from branded pharmaceuticals, including royalty income, totaled $380.2 million for the third quarter of 2003, a 23% increase over the third quarter of 2002. Meridian, our wholly-owned subsidiary, contributed $38.4 million of net revenue in the third quarter of 2003. Net revenue from contract manufacturing during the third quarter of 2003 equaled $5.7 million. Altace(R) (ramipril) net sales equaled $125.4 million in the third quarter of 2003, a 4% decrease from $130.5 million during the third quarter of 2002. Altace(R) new prescriptions totaled approximately 980,995 and total prescriptions equaled approximately 3,200,986 during the third quarter of 2003, increases of 9% and 15%, respectively, over the same period of the prior year, according to IMS America monthly prescription data. Moreover, Altace is now positioned as the leader in total prescription market share among branded ACE inhibitors according to IMS America weekly prescription data. Net sales of Skelaxin(R) totaled $87.9 million and Sonata(R) net sales equaled $20.5 million during the third quarter ending September 30, 2003. Net sales of Thrombin-JMI(R) totaled $40.4 million during the third quarter ending September 30, 2003, a 73% increase from $23.3 million during the third quarter of the prior year. Levoxyl(R) net sales equaled $26.3 million in the third quarter of 2003, down 45% from $47.8 million during the third quarter of 2002, while total prescriptions for the product were down 2% during the third quarter ending September 30, 2003, compared to the same period of the prior year according to IMS America monthly prescription data. Royalty revenues from Adenoscan(R) (adenosine) and Adenocard(R) (adenosine) totaled $16.3 million in the third quarter of 2003, a 9% increase over $15.0 million during the same period of the prior year. (more) {PAGE} Jefferson J. Gregory, Chairman and Chief Executive Officer of King, stated, "We are pleased to report King's positive financial results for the third quarter 281650	Eon Labs Eon Labs, Inc. ( Pharmaceutical Preparations ) As referenced in this King Pharmaceuticals Reports Third-Quarter 2003 Financial Results: Eon Labs, – any potential attempt to challenge the enforceability of U.S. Patent No. 6,407,128 related to Skelaxin(R), including the challenges by Eon Labs, Inc. and Corepharma LLC; dependence on King's ability to maintain effective patent protection for Sonata(R) and Skelaxin(R), including new _____________ dt 207007 ; Elan Elan Corp., plc ( Pharmaceutical Preparations ) As referenced in this King Pharmaceuticals Reports Third-Quarter 2003 Financial Results: Elan Corp – comparison to the same period of the prior year is attributable primarily to the acquisition of Sonata(R) and Skelaxin(R) (metaxolone) from Elan Corp oration, plc on June 12, 2003, the acquisition of Meridian on January 8, 2003, and increased net sales of certain branded pharmaceutical products, _____________ dt 206870 ; Eli Lilly Eli Lilly & Co. ( Pharmaceutical Preparations ) ;	King Pharma King Pharmaceuticals Inc. As referenced in this King Pharmaceuticals Reports Third-Quarter 2003 Financial Results: [KING PHARMACEUTICALS – 3 {FILENAME}g85429exv99w1.txt {DESCRIPTION}EX-99.1 PRESS RELEASE {TEXT} {PAGE} N E W S R E L E A S E [KING PHARMACEUTICALS LOGO] -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE KING PHARMACEUTICALS REPORTS THIRD-QUARTER 2003 FINANCIAL RESULTS BRISTOL, TENNESSEE, October 28, 2003 - King Pharmaceuticals, Inc. (NYSE:KG) announced _____________ KING PHARMACEUTICALS – 99.1 PRESS RELEASE {TEXT} {PAGE} N E W S R E L E A S E [KING PHARMACEUTICALS LOGO] -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE KING PHARMACEUTICALS REPORTS THIRD-QUARTER 2003 FINANCIAL RESULTS BRISTOL, TENNESSEE, October 28, 2003 - King Pharmaceuticals, Inc. (NYSE:KG) announced today that total revenues increased 34% _____________ King Pharmaceuticals, – E A S E [KING PHARMACEUTICALS LOGO] -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE KING PHARMACEUTICALS REPORTS THIRD-QUARTER 2003 FINANCIAL RESULTS BRISTOL, TENNESSEE, October 28, 2003 - King Pharmaceuticals, Inc. (NYSE:KG) announced today that total revenues increased 34% to $424.2 million during the third quarter ending September 30, 2003, _____________ King Pharmaceuticals – dependence on the high cost and uncertainty of research, clinical trials, and other development activities involving pharmaceutical products, including, but not limited to, King Pharmaceuticals Research and Development's pre-clinical and clinical pharmaceutical product development projects, including binodenoson and T-62; dependence on FDA approval of King' _____________ KING PHARMACEUTICALS, – the indicated results or events will not be realized. # # # CONTACT: James E. Green, Executive Vice President, Corporate Affairs - 423-989-8125 (more) {PAGE} KING PHARMACEUTICALS, INC. CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share data) {TABLE} {CAPTION} Three Months Ended Nine Months Ended September 30 September _____________ dt 221461 ; Novavax Novavax, Inc. ( Biological Products ) As referenced in this King Pharmaceuticals Reports Third-Quarter 2003 Financial Results: Novavax, – the Company's animal health products; income in the amount of $9.3 million due to a decrease in the valuation allowance for Novavax, Inc. convertible notes held by the Company resulting from an increase in the share price of Novavax common stock during the third _____________ Novavax – decrease in the valuation allowance for Novavax, Inc. convertible notes held by the Company resulting from an increase in the share price of Novavax common stock during the third quarter of 2003; and charges totaling $8.6 million, primarily related to professional fees associated with the ongoing _____________ Novavax – 2001 of products manufactured for the Company by a contract manufacturer, offset by income resulting from a decrease in the valuation allowance for Novavax convertible notes held by the Company. During the first six months of 2003, King recorded special items totaling $308.4 million, or $ _____________ Novavax – fees associated with the previously mentioned SEC investigation and completed internal review, a product recall, and a decrease in the valuation allowance for Novavax convertible notes held by the Company; and an intangible asset impairment charge. During the six month period ending June 30, 2002, King recorded _____________ Novavax – charges totaling $29.8 million, or $18.7 million net of tax, that primarily related to an increase in the valuation allowance for Novavax convertible notes held by King and the Company's voluntary recall of two of its smaller products. (more) {PAGE} Under Generally Accepted _____________ dt 215941 ; Wyeth Wyeth As referenced in this King Pharmaceuticals Reports Third-Quarter 2003 Financial Results: Wyeth – may differ materially from the forward-looking statements. Some important factors which may cause results to differ include: dependence on King's and Wyeth Pharmaceuticals' ability to successfully market Altace(R) under the co-promotion agreement between King and Wyeth; dependence on the development and implementation of _____________ Wyeth; – differ include: dependence on King's and Wyeth Pharmaceuticals' ability to successfully market Altace(R) under the co-promotion agreement between King and Wyeth; dependence on the development and implementation of successful marketing strategies for Altace(R) by King and Wyeth; dependence on the potential negative _____________ Wyeth; – co-promotion agreement between King and Wyeth; dependence on the development and implementation of successful marketing strategies for Altace(R) by King and Wyeth; dependence on the potential negative effect on sales of Levoxyl(R) as a result of the potential development and approval of (more) { _____________ dt 226999
Preview Full Doc	2003	King Pharmaceuticals Reaches Revised Agreement to Proceed with Acquisition of Elan's Primary Care Business King Pharmaceuticals Reaches Revised Agreement to Proceed with Acquisition of Elan's Primary Care Business (24K) Doc #281656: Click preview link for longer preview. {DOCUMENT} {TYPE}EX-99.1 {SEQUENCE}3 {FILENAME}g83077exv99w1.txt {DESCRIPTION}EX-99.1 PRESS RELEASE {TEXT} {PAGE} EXHIBIT 99.1 N E W S R E L E A S E (KING PHARMACEUTICALS LOGO) -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE KING PHARMACEUTICALS REACHES REVISED AGREEMENT TO PROCEED WITH ACQUISITION OF ELAN'S PRIMARY CARE BUSINESS PROVIDES REVISED FINANCIAL PROJECTIONS REFLECTING TRANSACTION BRISTOL, TENNESSEE, May 20, 2003 - King Pharmaceuticals, Inc. (NYSE:KG) announced today that the Company has reached an agreement with Elan Corporation, plc (NYSE:ELN) that restructures the terms of the Asset Purchase Agreement dated January 30, 2003. Pursuant to the revised terms of the agreement, the previously announced planned acquisition of Elan's primary care business in the United States and Puerto Rico is expected to close by the end of June 2003, subject to the satisfaction of certain contingencies, including approval by the holders of a majority of the outstanding common stock of Elan and other customary conditions. King and Elan have also agreed to suspend litigation between King and Elan relating to the original agreement until the closing of the transaction, at which time the litigation will be dismissed. Elan's primary care business includes two branded prescription pharmaceutical products, as well as rights to potential new formulations of the products, and Elan's experienced primary care field sales force consisting of approximately 375 individuals. The products include Sonata(R) (zaleplon), a nonbenzodiazepine treatment for insomnia, and Skelaxin(R) (metaxalone), a muscle relaxant, in the United States, its territories and possessions, and Puerto Rico ("Territories"), and related New Drug Applications ("NDAs"), trademarks, copyrights, patents, and licenses to certain patents associated with potential new formulations of such products. As part of the transaction, King will acquire certain intellectual property, regulatory filings, and other assets relating to Sonata(R) directly from Wyeth Pharmaceuticals. Under the restructured agreement, the total consideration paid by King at closing will equal approximately $750 million. King will deposit $400 million in escrow in anticipation of closing. The $750 million purchase price includes the transfer of inventory with a value of approximately $40 million. Net sales of Sonata(R) and Skelaxin(R) in the Territories totaled approximately $238 million during 2002. Jefferson J. Gregory, Chairman and Chief Executive Officer of King, stated, "We are pleased to announce that we have reached a new agreement that permits us to proceed with the acquisition of Elan's primary care business, which includes Sonata(R) and Skelaxin(R). The addition of Elan's dedicated primary care field sales force of approximately 375 individuals to our established sales and marketing capabilities should particularly well position Sonata(R) for long-term growth and significantly enhance the Company's ability to successfully promote and grow our other branded prescription pharmaceutical products." Sonata(R) is a nonbenzodiazepine short-acting treatment for insomnia, with most patients experiencing the onset of sleep within ten to twenty minutes of taking the drug. With a short half-life of approximately one hour and a four to five hour duration of action, the product can be taken in the middle of the night without residual side effects such as drowsiness, loss of memory, or impact on psychomotor skills. (more) {PAGE} Sonata(R) was developed by Wyeth and approved for marketing in the United States in 1999. Sonata(R) has Hatch-Waxman exclusivity through August 2004 and a composition of matter patent which the U.S. Patent and Trademark Office is expected to extend through June 2008. Net sales of Sonata(R) totaled approximately $93 million during 2002. In connection with the transaction, King and Elan will enter into a Reformulation Agreement whereby Elan will continue its ongoing development of new formulations of Sonata(R), including an extended release product. King will reimburse Elan for the direct costs incurred in connection with the formulation development program for Sonata(R), and will pay Elan potential payments totaling approximately $71 million upon the successful attainment of certain significant development milestones, including regulatory approval. Furthermore, King will pay Elan a reasonable royalty on net sales of each new formulation of Sonata(R), plus a potential one-time milestone payment of $15 million upon the achievement of a specified net sales threshold. Mr. Gregory commented, "With an excellent efficacy and safety profile, and as one of only two approved nonbenzodiazepines for the treatment of insomnia, we believe Sonata(R) provides King with a differentiated product among available insomnia treatments. Moreover, with a composition-of-matter patent expected to extend through June 2008, and the opportunity to potentially develop a new improved formulation with additional patent protection, we continue to believe that Sonata(R) provides King with another potential cornerstone product." Mr. Gregory added, "Elan has made significant strides in the development of new formulations of Sonata(R) utilizing their proprietary delivery technology. Phase II clinical studies involving an extended release formulation of Sonata(R) are expected to begin within a year. We believe the successful development of such a formulation should potentially provide Sonata(R) with additional long-term exclusivity." Kyle P. Macione, President of King, commented, "We continue to view our acquisition of Elan's primary care field sales force, which we plan to expand to over 400 individuals, as a transformational event for our Company. This dramatic expansion of our U.S. primary care field sales force by over 90 percent provides critical mass, growing our total sales force to approximately 1,200 individuals. This expansion significantly enhances our existing, proven sales and marketing capability and positions us to compete even more effectively in the primary care marketplace." Mr. Macione continued, "Moreover, this should allow us to more aggressively expand the representation of our branded prescription pharmaceutical products among primary care providers and strategically positions King to launch new products as they emerge from our growing product pipeline." Skelaxin(R) is a muscle relaxant indicated for the relief of discomforts associated with acute, painful musculoskeletal conditions and has a method-of-use patent through December 2021 claiming increased bioavailability when administered to a patient with food. Furthermore, the U.S. Food and Drug Administration ("FDA") now requires Abbreviated New Drug Applications ("ANDA") for generic equivalents to Skelaxin(R) to include in-vivo studies under both fed and fasted conditions that evaluate the products' comparability to Skelaxin(R). Eon Labs, Inc. and Corepharma LLC each have submitted to the FDA an ANDA for a generic equivalent to Skelaxin(R) 400mg, together with a paragraph IV certification pertaining to the Skelaxin(R) method-of-use patent, U.S. patent no. 6,407,128 ("the `128 Patent") that does not expire until December 2021. Elan has filed a patent infringement action against both Eon and Corepharma. In March 2003, Eon reported that the FDA has determined that Eon's ANDA is not (more) 281656	Eon Labs Eon Labs, Inc. ( Pharmaceutical Preparations ) As referenced in this King Pharmaceuticals Reaches Revised Agreement to Proceed with Acquisition of Elan's Primary Care Business: Eon Labs, – equivalents to Skelaxin(R) to include in-vivo studies under both fed and fasted conditions that evaluate the products' comparability to Skelaxin(R). Eon Labs, Inc. and Corepharma LLC each have submitted to the FDA an ANDA for a generic equivalent to Skelaxin(R) 400mg, together with _____________ dt 207009 ; Elan Elan Corp., plc ( Pharmaceutical Preparations ) As referenced in this King Pharmaceuticals Reaches Revised Agreement to Proceed with Acquisition of Elan's Primary Care Business: Elan Corp – PROJECTIONS REFLECTING TRANSACTION BRISTOL, TENNESSEE, May 20, 2003 - King Pharmaceuticals, Inc. (NYSE:KG) announced today that the Company has reached an agreement with Elan Corp oration, plc (NYSE:ELN) that restructures the terms of the Asset Purchase Agreement dated January 30, 2003. Pursuant to the revised terms of _____________ dt 206874 ; King Pharma King Pharmaceuticals Inc. As referenced in this King Pharmaceuticals Reaches Revised Agreement to Proceed with Acquisition of Elan's Primary Care Business: (KING PHARMACEUTICALS – txt {DESCRIPTION}EX-99.1 PRESS RELEASE {TEXT} {PAGE} EXHIBIT 99.1 N E W S R E L E A S E (KING PHARMACEUTICALS LOGO) -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE KING PHARMACEUTICALS REACHES REVISED AGREEMENT TO PROCEED WITH ACQUISITION OF ELAN'S PRIMARY CARE BUSINESS PROVIDES REVISED FINANCIAL PROJECTIONS _____________ KING PHARMACEUTICALS – RELEASE {TEXT} {PAGE} EXHIBIT 99.1 N E W S R E L E A S E (KING PHARMACEUTICALS LOGO) -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE KING PHARMACEUTICALS REACHES REVISED AGREEMENT TO PROCEED WITH ACQUISITION OF ELAN'S PRIMARY CARE BUSINESS PROVIDES REVISED FINANCIAL PROJECTIONS REFLECTING TRANSACTION BRISTOL, TENNESSEE, May 20, _____________ King Pharmaceuticals, – REVISED AGREEMENT TO PROCEED WITH ACQUISITION OF ELAN'S PRIMARY CARE BUSINESS PROVIDES REVISED FINANCIAL PROJECTIONS REFLECTING TRANSACTION BRISTOL, TENNESSEE, May 20, 2003 - King Pharmaceuticals, Inc. (NYSE:KG) announced today that the Company has reached an agreement with Elan Corporation, plc (NYSE:ELN) that restructures the terms _____________ King Pharmaceuticals – dependence on the high cost and uncertainty of research, clinical trials, and other development activities involving pharmaceutical products, including, but not limited to, King Pharmaceuticals Research and Development's pre-clinical and clinical pharmaceutical product development projects, including binodenoson, dependence on FDA approval of the ANDA now pending _____________ KING PHARMACEUTICALS – the indicated results or events will not be realized. # # # Contact: James E. Green, Executive Vice President, Corporate Affairs - 423-989-8125 EXECUTIVE OFFICES KING PHARMACEUTICALS * 501 FIFTH STREET, BRISTOL, TENNESSEE 37620 {/TEXT} {/DOCUMENT} _____________ dt 221467 ;	Novavax Novavax, Inc. ( Biological Products ) As referenced in this King Pharmaceuticals Reaches Revised Agreement to Proceed with Acquisition of Elan's Primary Care Business: Novavax' – AtroPen(R), dependence on King's ability to successfully launch and (more) {PAGE} market DiaJect(R) and AtroPen(R) once approved, dependence on Novavax' s ability to successfully develop and manufacture Estrasorb(TM), dependence on King's and Novavax's ability to successfully launch and market Estrasorb( _____________ Novavax' – R) and AtroPen(R) once approved, dependence on Novavax's ability to successfully develop and manufacture Estrasorb(TM), dependence on King's and Novavax' s ability to successfully launch and market Estrasorb(TM) once approved, dependence on the unpredictability of the duration and results of the FDA' _____________ Novavax – pharmaceutical products to be lower in a subsequent quarter than they would otherwise have been, dependence on changes in the share price of Novavax common stock which is the underlying collateral for the Novavax convertible notes held by the Company, dependence on the availability and cost of _____________ Novavax – they would otherwise have been, dependence on changes in the share price of Novavax common stock which is the underlying collateral for the Novavax convertible notes held by the Company, dependence on the availability and cost of raw materials, dependence on no material interruptions in supply by _____________ dt 215942 ; Wyeth Wyeth As referenced in this King Pharmaceuticals Reaches Revised Agreement to Proceed with Acquisition of Elan's Primary Care Business: Wyeth – products. As part of the transaction, King will acquire certain intellectual property, regulatory filings, and other assets relating to Sonata(R) directly from Wyeth Pharmaceuticals. Under the restructured agreement, the total consideration paid by King at closing will equal approximately $750 million. King will deposit $400 million _____________ Wyeth – night without residual side effects such as drowsiness, loss of memory, or impact on psychomotor skills. (more) {PAGE} Sonata(R) was developed by Wyeth and approved for marketing in the United States in 1999. Sonata(R) has Hatch-Waxman exclusivity through August 2004 and a composition of _____________ Wyeth. – In connection with the transaction, Elan will assign to King the Supply Agreement relating to the supply of Sonata(R) to Elan by Wyeth. Under the assigned Supply Agreement, Wyeth is obligated to supply King's requirements for Sonata(R) until April 2010. This transaction is _____________ Wyeth – will assign to King the Supply Agreement relating to the supply of Sonata(R) to Elan by Wyeth. Under the assigned Supply Agreement, Wyeth is obligated to supply King's requirements for Sonata(R) until April 2010. This transaction is expected to be immediately accretive to King' _____________ Wyeth – Levoxyl(R), Thrombin-JMI(R) (thrombin, topical, bovine, USP), Sonata(R), Skelaxin(R), and King's other branded prescription pharmaceutical products, dependence on Wyeth Pharmaceuticals' ability to continue to supply King's requirements for Sonata(R) through April 2010, dependence on the potential effect on sales _____________ dt 227002
Preview Full Doc	2003	King Pharmaceuticals Acquires Primary Care Business Unit from Elan King Pharmaceuticals Acquires Primary Care Business Unit from Elan (15K) Doc #281665: Click preview link for longer preview. {DOCUMENT} {TYPE}EX-99.1 {SEQUENCE}3 {FILENAME}g80411exv99w1.txt {DESCRIPTION}PRESS RELEASE {TEXT} {PAGE} EXHIBIT 99.1 N E W S R E L E A S E (KING PHARMACEUTICALS LOGO) -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE KING PHARMACEUTICALS ACQUIRES PRIMARY CARE BUSINESS UNIT FROM ELAN ACQUISITION INCLUDES SONATA(R) AND SKELAXIN(R) AND INCREASES KING'S PRIMARY CARE SALES FORCE BY NEARLY 70% BRISTOL, TENNESSEE, January 30, 2003 - King Pharmaceuticals, Inc. (NYSE:KG) announced today that the Company and Elan Corporation, plc (NYSE:ELN) have signed a definitive agreement for King to acquire Elan's primary care business unit in the United States and Puerto Rico, which includes two branded prescription pharmaceutical products, including rights to potential new formulations of the products, together with Elan's experienced primary care field sales force consisting of over 400 representatives. The products acquired include Sonata(R) (zaleplon), a nonbenzodiazepine treatment for insomnia, and Skelaxin(R) (metaxolone), a muscle relaxant, in the United States, its territories and possessions, and the Commonwealth of Puerto Rico, and related new drug applications, copyrights, patents, and licenses to certain patents associated with potential new formulations of such products. As part of the transaction, King will acquire certain intellectual property, regulatory, and other assets relating to Sonata(R) directly from Wyeth Pharmaceuticals. The total consideration paid by King at closing will equal $850 million. Net sales of Sonata(R) and Skelaxin(R) in the United States and Puerto Rico totaled approximately $238 million during 2002. Jefferson J. Gregory, Chairman and Chief Executive Officer of King, stated, "We are extremely pleased to announce our acquisition of Elan's primary care business which includes Sonata(R) and Skelaxin(R). The addition of Elan's dedicated primary care field sales force of over 400 representatives to our established sales and marketing capabilities should particularly well position Sonata(R) for strong long-term growth and significantly enhance the Company's ability to successfully promote and grow our other branded prescription pharmaceutical products." Sonata(R) is a nonbenzodiazepine short-acting treatment for insomnia, with most patients experiencing the onset of sleep within ten to twenty minutes of taking the drug. With a short half-life of approximately one hour and a four to five hour duration of action, the product can be taken in the middle of the night without residual side effects such as drowsiness, loss of memory, or impact on psychomotor skills. Sonata(R) was developed by Wyeth and approved for marketing in the United States in 1999. Sonata(R) has Hatch-Waxman exclusivity through August 2004 and a composition of matter patent which the U.S. Patent and Trademark Office is expected to extend through June 2008. Net sales of Sonata(R) totaled approximately $93 million during 2002. (MORE) {PAGE} In connection with the transaction, King and Elan have entered into a Reformulation Agreement whereby Elan will continue its ongoing development of new formulations of Sonata(R), including an extended release product. King will reimburse Elan for costs incurred in connection with the formulation development program for Sonata(R), and will pay Elan potential payments totaling over $70 million upon the successful attainment of certain significant development milestones, including regulatory approval. Furthermore, King will pay Elan a reasonable royalty on net sales of each new formulation of Sonata(R), plus a potential one-time milestone payment of $15 million upon the achievement of a specified net sales threshold. Mr. Gregory commented, "With an excellent efficacy and safety profile, and as one of only two approved nonbenzodiazepines for the treatment of insomnia, we believe Sonata(R) provides King with a differentiated product in the nonbenzodiazepine dominated insomnia market of approximately $2 billion, which is experiencing continued strong growth. Moreover, with a composition-of-matter patent expected to extend through June 2008, and the opportunity to potentially develop a new improved formulation with patent protection through 2018, we believe Sonata(R) provides King with another potential cornerstone product and a significant opportunity to drive growth for this Company well into the next decade." Mr. Gregory continued, "Elan has made significant strides in the development of new formulations of Sonata(R) utilizing their proprietary delivery technology. Phase II clinical studies involving an extended release formulation of Sonata(R) are expected to begin within a year. We believe the successful development of such a formulation should potentially protect Sonata(R) from generic competition beyond the expiration of the product's composition-of-matter patent and provide Sonata(R) with additional long-term exclusivity." Kyle P. Macione, President of King, added, "Our acquisition of Elan's primary care field sales force represents a transformational event for our Company by dramatically expanding our current number of sales representatives to a total of over 1,200 individuals. This significantly enhances our existing, proven sales and marketing capability and positions us to compete even more effectively in the primary care marketplace. Moreover, this should allow us to more aggressively expand the representation of our branded prescription pharmaceutical products among primary care providers." Skelaxin(R) is a muscle relaxant indicated for the relief of discomforts associated with acute, painful musculoskeletal conditions and has a method-of-use patent through December 2021 claiming increased bioavailability when administered to a patient with food. The U.S. Food and Drug Administration ("FDA") approved in 2002 a supplemental New Drug Application ("sNDA") for Skelaxin(R) recognizing the drug's increased bioavailability when taken with food. Furthermore, the FDA has approved a citizen's petition requiring Abbreviated New Drug Applications ("ANDA") for generic equivalents to Skelaxin(R) to include in-vivo studies that evaluate the products' comparability to Skelaxin(R) relative to food effects. Eon Labs and Corepharma LLC each recently submitted to the FDA an ANDA for a generic equivalent to Skelaxin(R) 400mg, with each application including a paragraph IV certification pertaining to the Skelaxin(R) method-of-use patent that does not expire until December 2021. Net sales of Skelaxin(R) totaled approximately $145 million during 2002. {PAGE} Mr. Macione said, "Skelaxin(R) is the only branded prescription pharmaceutical product without a generic substitute in the muscle relaxant market. As such, Skelaxin(R) is well positioned for growth as the product is promoted through the same proven sales force that has achieved an impressive 26% growth in total prescriptions during the twelve months ending September 30, 2002, as compared to the same period of the prior year. Total prescriptions for Skelaxin equaled approximately 4,805,000 during the twelve months ending September 30, 2002 according to NDC Health monthly prescription data." Mr. Macione further commented, "King intends to continue to defend the Skelaxin(R) patent. Furthermore, as part of this transaction, King and Elan plan to enter into an agreement relating to new formulation development for Skelaxin(R)." In connection with the transaction announced today, Elan will assign to King the Supply Agreement relating to the supply of Sonata(R) to Elan by Wyeth. Under the assigned Supply Agreement, Wyeth will supply King's requirements for Sonata(R) until April 2010. 281665	Eon Labs Eon Labs, Inc. ( Pharmaceutical Preparations ) ; Elan Elan Corp., plc ( Pharmaceutical Preparations ) As referenced in this King Pharmaceuticals Acquires Primary Care Business Unit from Elan: Elan Corp – PRIMARY CARE SALES FORCE BY NEARLY 70% BRISTOL, TENNESSEE, January 30, 2003 - King Pharmaceuticals, Inc. (NYSE:KG) announced today that the Company and Elan Corp oration, plc (NYSE:ELN) have signed a definitive agreement for King to acquire Elan's primary care business unit in the United States _____________ dt 206877 ;	King Pharma King Pharmaceuticals Inc. As referenced in this King Pharmaceuticals Acquires Primary Care Business Unit from Elan: (KING PHARMACEUTICALS – 3 {FILENAME}g80411exv99w1.txt {DESCRIPTION}PRESS RELEASE {TEXT} {PAGE} EXHIBIT 99.1 N E W S R E L E A S E (KING PHARMACEUTICALS LOGO) -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE KING PHARMACEUTICALS ACQUIRES PRIMARY CARE BUSINESS UNIT FROM ELAN ACQUISITION INCLUDES SONATA(R) AND SKELAXIN(R) AND INCREASES KING' _____________ KING PHARMACEUTICALS – RELEASE {TEXT} {PAGE} EXHIBIT 99.1 N E W S R E L E A S E (KING PHARMACEUTICALS LOGO) -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE KING PHARMACEUTICALS ACQUIRES PRIMARY CARE BUSINESS UNIT FROM ELAN ACQUISITION INCLUDES SONATA(R) AND SKELAXIN(R) AND INCREASES KING'S PRIMARY CARE SALES FORCE BY _____________ King Pharmaceuticals, – ACQUISITION INCLUDES SONATA(R) AND SKELAXIN(R) AND INCREASES KING'S PRIMARY CARE SALES FORCE BY NEARLY 70% BRISTOL, TENNESSEE, January 30, 2003 - King Pharmaceuticals, Inc. (NYSE:KG) announced today that the Company and Elan Corporation, plc (NYSE:ELN) have signed a definitive agreement for King to _____________ KING PHARMACEUTICALS – that the indicated results or events will not be realized. # # # Contact: James E. Green, Vice President, Corporate Affairs 423-989-8125 EXECUTIVE OFFICES KING PHARMACEUTICALS 501 FIFTH STREET, BRISTOL, TENNESSEE 37620 {/TEXT} {/DOCUMENT} _____________ dt 221476 ; Wyeth Wyeth As referenced in this King Pharmaceuticals Acquires Primary Care Business Unit from Elan: Wyeth – such products. As part of the transaction, King will acquire certain intellectual property, regulatory, and other assets relating to Sonata(R) directly from Wyeth Pharmaceuticals. The total consideration paid by King at closing will equal $850 million. Net sales of Sonata(R) and Skelaxin(R) in the _____________ Wyeth – of the night without residual side effects such as drowsiness, loss of memory, or impact on psychomotor skills. Sonata(R) was developed by Wyeth and approved for marketing in the United States in 1999. Sonata(R) has Hatch-Waxman exclusivity through August 2004 and a composition of _____________ Wyeth. – with the transaction announced today, Elan will assign to King the Supply Agreement relating to the supply of Sonata(R) to Elan by Wyeth. Under the assigned Supply Agreement, Wyeth will supply King's requirements for Sonata(R) until April 2010. The transaction is expected to _____________ Wyeth – will assign to King the Supply Agreement relating to the supply of Sonata(R) to Elan by Wyeth. Under the assigned Supply Agreement, Wyeth will supply King's requirements for Sonata(R) until April 2010. The transaction is expected to close before the end of April 2003, _____________ Wyeth – King's other branded {PAGE} prescription pharmaceutical products, statements pertaining to King's plan to defend the Skelaxin(R) patent, statements pertaining to Wyeth supplying King's requirements for Sonata(R) until April 2010, statements pertaining to the planned closing of this transaction, and statements pertaining to _____________ dt 227005
Preview Full Doc	2002	Agreement Agreement (64K) Doc #299769: Click preview link for longer preview. AGREEMENT made this 10th day of December, 1999, retroactive to and effective as of the 10th day of November, 1999, by and between EON LABS MANUFACTURING, INC., whose principal office is located at 227-15 North Conduit Avenue, Laurelton, New York 11413, hereinafter designated as the ("EMPLOYER"); and DRUG, CHEMICAL, COSMETIC, PLASTICS AND AFFILIATED INDUSTRIES WAREHOUSE EMPLOYEES LOCAL 815, AFFILIATED WITH THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA; whose office is located at 467 Sylvan Avenue, Englewood Cliffs, New Jersey 07632; hereinafter designated as the "UNION". IN CONSIDERATION of the premises and of the mutual and reciprocal promises herein made and obligations herein assumed, as more fully hereinafter set forth, the parties agree as follows: FIRST: The Employer recognizes the Union as the sole and exclusive collective bargaining agent for all employees, excluding executives, non-producing supervisors, office and clerical employees, salesmen, graduate chemists, and the employee listed on Schedule "A", which schedule is attached hereto and made a part hereof. Whenever the word "employees" is used in this Agreement, it shall refer to all such employees in the bargaining unit as defined above. {Page} - 2 - All employees shall, as a condition of continued employment, become and remain members of the Union in good standing after they have completed thirty days of employment or thirty days after execution of this Agreement, whichever is later; provided, however, that no employee shall be removed from his employ under this Paragraph so long as he continues to tender uniform dues and initiation fees to the Union after such thirty-day period. Any employee who fails to maintain his membership to the extent of not paying uniform dues and initiation fees after such thirty-day period, shall be discharged by the Employer within forty-eight hours after receipt of notice from the Union that such employee has not paid uniform dues and initiation fees. There shall be a trial period of thirty days for all new employees commencing with the first day of employment, and during such trial period the Employer may discharge such employee, and such discharge shall be final and shall not be subject to arbitration as provided herein. For skilled employees only, upon request by the Employer and with the approval of the Union, such period may be extended for an additional period not to exceed sixty (60) days. The Union shall not unreasonably withhold its consent to such a request. {Page} - 3 - SECOND: The Employer may discharge any employee at any time for just cause. In the event the employee is proven to have committed an act amounting to dishonesty or criminal negligence or violates any section of the Food, Drug and Cosmetic Act, or other similar Federal, State or Local Health Laws, the Employer may summarily discharge such employee. THIRD: (A) Seniority shall consist of length of continuous service with the Employer from the date of employment as an employee within the bargaining unit on a plant-wide basis, for the purpose of computing benefits of employment accruing to employees under this Agreement. Plant-wide seniority will be observed in layoffs, reduction of working forces and recall, providing and depending upon the skill and ability of an employee to perform the necessary and required duties of work to be performed. (B) Seniority shall cease and be ended: 1. If the employee shall voluntarily leave the service of the Employer; 2. If the employee is discharged from employment for just cause; {Page} - 4 - 3. If the employee, after being laid off, shall fail to report to the Employer's employment office within three working days after receipt of a notice in writing by the Employer, which notice shall be sent by registered mail to the employee's last post office address; 4. If the employee has been laid off for a continuous period of one year or more; 5. If the employee is granted a leave of absence by the Company and does not report back to work on the designated day. (C) The Employer may reduce the number of employees employed in the plant, or the number of employees in any particular operation, whenever it may deem it necessary in accordance with Paragraph Third as stated herein. FOURTH: The Employer shall deduct uniform membership dues and initiation fees from the employees' salaries, and make such deductions from the first full week's payroll in each month and transmit all such funds deducted no later than the fifteenth day of each month. All funds deducted from the employees' salaries for the payment of such dues and initiation fees shall be held in trust by the Employer and shall be considered at all times the property of the Union, provided, however, that prior to making such deductions the Employer has {Page} -5- received from each employee on whose account such deductions are made a written assignment, which shall not be irrevocable for a period of more than one year or beyond the termination date of this Agreement, whichever occurs sooner, and which may contain a clause that such assignment shall be automatically renewed for additional periods of one year, unless the employee shall terminate such assignment in writing within thirty days prior to any expiration date thereof. FTFTH: It is hereby agreed by and between the respective parties that, commencing with the week ending November 12, 1999 (being a continuation of contributions previously made), the Employer shall pay to the Allied Welfare Fund the sum of Sixty-Nine ($69.00) Dollars, and commencing with the week ending November 17, 2000 the sum of Seventy-one ($71.00) Dollars, and commencing with the week ending November 16, 2001 the sum of Seventy-three ($73.00) dollars each and every week for each employee who is employed within the bargaining unit, commencing with the first day of employment of such employee, regardless of whether such employee is a member of the Union and regardless of the number of hours worked during the week. The Employer shall submit to the Fund a list of the employees for whom such payments are made. Vacations, holidays and sick leave with pay shall be deemed time worked. The Employer's payroll records, social security records {Page} -6- or other pertinent data shall be open for inspection and audit by the Fund upon demand. Such payments shall be made directly to the Allied Welfare Fund and shall be held subject to the provisions of a trust indenture effective January 26, 1954 and any amendments, changes or additions thereto. The Fund shall be managed and administered by a board of trustees equally representative of the employers and the Union. In the event the Employer and the Union trustees deadlock on the administration of the Fund, they shall agree on an impartial umpire to decide such dispute; or in the event of their failure to agree within a reasonable length of time, an impartial umpire shall, on petition of either trustee, be appointed by the District Court of the United States for the district where the Fund has its principal office. The trustees shall make provisions for an annual audit of the Fund. A statement of the results shall be available for inspection by interested persons at the principal office of the Fund and at such other places as may be designated by the trustees. Such contributions shall be used for the purpose of providing insurance, welfare, major medical insurance and similar benefits for employees employed by the Employer, employees employed by all other employers similarly situated, their families, and the payment of reasonable administrative expenses of the Fund; and shall, in {Page} -7- addition, be used and disbursed by the trustees pursuant to the terms, conditions and provisions of the trust indenture or any amendments, changes or additions thereto; and the rules, regulations and resolutions adopted thereunder. Neither the Union, nor any member of the Union individually or collectively; nor any International Union, nor any body with which the Union nay be affiliated; nor any participating employer individually or collectively; nor any combination thereof; nor any association, corporation, group, entity, person or trust; nor any successor or assign thereof, either directly or indirectly, shall have any right, title, interest or claim in or to the Fund or any part thereof; nor to any accounting, supervision or control thereof, of whatsoever kind or nature. All monies, contributions, property, assets of the Fund and those hereafter acquired; and the ownership control and the administration of the Fund shall irrevocably, inseparably and forever remain vested exclusively in the trustees of the Fund. No employee of any participating employer; nor any employee of the Union; nor any person claiming by, through or under such employee, either directly or indirectly, shall have any right, title, interest or claim in or to the Fund or to any part thereof; nor to any accounting, supervision or control thereof of whatsoever kind or nature; nor any claim against the Union, participating employers, or the trustees, or to the contributions of his or her employer to the Fund or any assets or monies held by the {Page} -8- Fund except such benefits as are provided for by the plan and/or by the rules and regulations from time to time established and promulgated by the trustees in accordance with the powers granted by the trust indenture, as the same may be amended or modified from time to time. The discretion of the trustees as to the administration, use and disbursement of the Fund shall be final and conclusive. All payments shall be due and payable on the first day of each month, for the preceding month. If the Employer fails to make a payment or payments required hereunder, on or before the tenth day of the succeeding month, then the Trustees may require, and the Employer agrees to pay, interest on any unpaid balance at the applicable rate as permitted by law. In addition, the Employer specifically agrees that it shall be liable for all auditing expenses, collection costs and legal fees incurred by the Union or by the Trustees of the Fund for the collection of such payments. From and out of the contributions made to the Allied Welfare Fund as specified above, Eight Dollars per employee per week shall be unconditionally and irrevocably allocated and paid to the Union Mutual Medical Fund subject to the provisions of a trust indenture effective September 6, 1978 and any amendments, {Page} -9- changes or additions thereto, for the benefit of retired employees of the Employer and retired employees of all other employers similarly situated and their families who are receiving pension benefits from the Union Mutual Fund, and those employees of the Employer and of all other employers similarly situated whose pension benefits from the Union Mutual Fund have been vested and who, in either case, are and remain members in good standing of the Union Mutual Benefit Association. All sums contributed to the Union Mutual Medical Fund and the affairs of said Fund shall be managed and administered by a Board of Trustees equally representative of the employers and the participants. All of the foregoing conditions and provisions applicable to the Allied Welfare Fund shall be equally applicable to the Union Mutual Medical Fund. SIXTH: It is hereby agreed by and between the respective parties that, commencing with the effective date of this Agreement (being a continuation of contributions previously made), the Employer shall pay to the Union Mutual Fund the sun of Twenty-Four Dollars each and every week for each employee who is employed within the bargaining unit commencing with the first day of employment of such employee, regardless of whether such employee is a member of the Union and regardless of the number of hours worked during the week; and the Employer shall submit to the Fund a list of the {Page} -10- employees for whom such payments are made. Vacations, holidays and sick leave with pay shall be deemed time worked. The Employer's payroll records, social security records and other pertinent data shall be open for inspection and audit by the Fund upon demand. Such payments shall be made directly to the Union Mutual Fund and held subject to the provisions of a trust indenture effective November 1, 1955 and any amendments, changes, or additions thereto. The Fund shall be managed and administered by a board of trustees equally representative of the employers and the Union. In the event the Employer and the Union trustees deadlock on the administration of the Fund, the two shall agree on an impartial umpire to decide such dispute; or in the event of their failure to agree within a reasonable length of time, an impartial umpire shall, on petition of either trustee, be appointed by the District Court of the United States for the district where the Fund has its principal office. The trustees shall make provisions for an annual audit of the Fund, a statement of the result of which shall be available for inspection by interested persons at the principal office of the Fund and at such other places as may be designated by the trustees. The Fund shall be used for the purpose of providing pensions and/or annuities and similar benefits for employees employed by the Employer, employees {Page} -11- employed by all other employers similarly situated, the payment of reasonable administrative expenses of the Fund and shall, in addition, be used and disbursed by the trustees pursuant to the terms, conditions and provisions of the trust indenture, or any amendments, changes or additions thereto; and the rules, regulations and resolutions adopted thereunder. Neither the Union, nor any member of the Union individually or collectively; nor any International Union; nor any body with which the Union may be affiliated; nor any participating employer individually or collectively; nor any combination thereof; nor any association, corporation, group, entity, person or trust; nor any successor or assign thereof either directly or indirectly, shall have any right, title, interest or claim in or to the Fund, or any part thereof; nor to any accounting, supervision or control thereof of whatsoever kind or nature. It is understood and agreed that the Employer and all other employers similarly situated may have a continuing financial obligation pursuant to the provisions of the Employee Retirement Income Security Act of 1974, in the event of termination or partial termination of the Fund. All monies, contributions, property, assets of the Fund and those hereafter acquired; and the ownership, control and the administration of the Fund shall irrevocably, inseparably and forever remain vested exclusively in the trustees of the Fund. No employee of any participating employer; nor any employee of the Union; nor any person claiming by, through or under such {Page} -12- employee, either directly or indirectly, shall have any right, title, interest or claim in or to the Fund or any part thereof; nor to any accounting, supervision or control thereof of whatsoever kind or nature; nor any claim against the Union, participating employers or the trustees; nor to the contributions of his or her employer to the Fund; nor to any assets or monies held by the Fund except such benefits as are provided by the plan and/or by the rules and regulations from time to time established and promulgated by the trustees in accordance with the powers granted by the trust indenture, as the same may be amended or modified from time to time. The discretion of the trustees as to the administration, use and disbursement of the Trust Fund shall be final and conclusive. All payments shall be due and payable on the first day of each month, for the preceding month. If the Employer fails to make a payment or payments required hereunder, on or before the tenth day of the succeeding month, then the Trustees may require, and the Employer agrees to pay, interest on any unpaid balance at the applicable rate as permitted by law. In addition, the Employer specifically agrees that it shall be liable for all auditing expenses, collection costs and legal fees incurred by the Union or by the Trustees of the Fund for the collection of such payments. {Page} - 13 - SEVENTH: (A) For full time employees, forty hours shall constitute the normal work week, Monday through Friday inclusive, eight hours per day. The number of hours to be worked shall be designated by the Employer and may be varied from time to time as the Employer may find it necessary. (B) Hours worked in excess of forty hours in any workweek or eight hours in any one day shall be paid for at one and one-half times the regular straight-time rate of pay; it being specifically understood that there shall be no duplicate of pay for overtime work. Excused absences shall be deemed time worked insofar as the provisions of this Paragraph are concerned. (C) All hours worked on Sunday shall be paid for at the rate of double time. (D) Each employee shall be allowed three minutes at the start of his or her work shift for clocking-in, and said three minutes will not be deducted from the employee's pay. {Page} - 14 - (E) Each employee arriving more than three minutes late at the start of his or her work shift, shall clock-in at the next quarter hour immediately after their arrival. (F) Each employee shall receive a five minute wash-up period each day, at the conclusion of his or her work shift. EIGHTH: SHIFT DIFFERENTIAL (A) Shift designations will be based on an employee's regularly scheduled start time, as follows: {Table} {Caption} Regularly Scheduled Shift Start Time ----- ----------- {S} {C} First 6:00 a.m. - 10:00 a.m. Swing 10:01 a.m. - 2:00 p.m. Second 2:01 p.m. - 6:00 p.m. Third 6:01 p.m. - 5:59 a.m. {/Table} (B) Shift differential will be paid for time actually worked and paid time off (including holidays, vacations and sick days as follows: {Page} - 15 - {Table} {Caption} Shift Differential ----- ----------- {S} {C} First ----- Swing 5% Second 10% Third 15% {/Table} (C) Work performed at the end of an employee's regularly scheduled work shift will be deemed a continuation of the employee's shift and overtime shall be paid based on the employee's base rate of pay (including shift differential, if applicable) and will not be considered a new (later) shift. By way of example, an employee regularly scheduled to work 8:00 a.m. to 4:30 p.m. is first shift. If such employee continues and works from 4:30 p.m. until 6:30 p.m., such additional two hours will be paid at the rate of one and one-half times the first shift, and not the second shift, rate. (D) Work performed prior to an employee's regularly scheduled work shift will be paid at the rate applicable to the employee's regularly scheduled work shift. By way of example, an employee regularly scheduled to work 3:00 p.m. to 11:30 p.m. is second shift. If such employee {Page} - 16 - reports early and works from 1:00 p.m. to 11:30 p.m., such additional two hours (1:00 p.m. to 3:00 p.m.) will be paid at the rate of one and one-half times the second shift rate. NINTH: SHIFT ASSIGNMENTS AND STARTING TIMES (A) The Company has the absolute right to determine the number of employees and the work to be performed on any shift. (B) (1) In the event the Company seeks to fill positions on a particular shift, it will first seek volunteers from among those employees qualified to perform the work. Selections from an excess of qualified volunteers will be on the basis of greatest seniority. In the event of insufficient qualified volunteers, qualified employees will be re-assigned involuntarily on the basis of least seniority. No employee will be so involuntarily reassigned on less than five (5) working days' notice. (B) (2) The provisions of Sub-Section B(1) notwithstanding, the Company may involuntarily reassign qualified employees between shifts, out of seniority order, each for periods of up to two (2) months when, in the Company's good faith business judgment, such action {Page} -17- is necessary to allow the shifts in question to operate efficiently. No employee will be so involuntarily reassigned on less than five (5) working days' notice. (C) Within each shift, the Company may set and assign staggered or common scheduled starting times, the number of employees to be scheduled to start at any particular time, and each individual employee's starting time, regardless of seniority, provided, however, that the Company seeks first to fill particular start times with volunteers from among qualified employees before it assigns or re-assigns an employee a start time involuntarily. No employee will be so involuntarily reassigned on less than five (5) working days' notice. TENTH: (A) The Employer shall have the right to hire and utilize part-time employees to be assigned to the Employer's second or third shifts, as elsewhere defined. For purposes of this provision, "part-time" shall mean an employee generally assigned, on average, to one or more work days per week generally consisting, on average, of six (6) hours or fewer. {Page} -18- (B) Part-time employees shall accrue seniority on the same basis as, but be maintained on a separate seniority list from regular employees. The trial period shall be measured in terms of workdays for part-time employees. The Employer shall contribute to the Welfare, Pension and Vacation funds on behalf of part-time employees as for regular employees. Part-time employees shall earn vacation pay and receive holiday pay and other benefits on a pro rata basis based on their regularly assigned hours. Part-time employees shall receive premium, as opposed to straight time pay for overtime in excess of 8 hours per day. (C) Part time employees shall be laid off in reverse order of their part-time seniority. However, no full-time employee may be laid off if any part-time employee is then employed in the same department as then constituted by the Company. A full-time employee whose position is eliminated in a layoff may bump into a part-time position, providing and depending upon the skill and ability of the full-time employee to perform the necessary and required duties of work to be performed, and shall, for bumping purposes, be deemed to have greater part-time seniority than any part-time employee. A laid off full-time employee who bumps into a part-time position does not as a result forfeit his or her recall rights with respect to full-time employment pursuant to Article Third. {Page} -19- ELEVENTH: (A) Each full-time employee covered by this Agreement shall receive eight hours of straight-time pay at his or her regular hourly rate of pay (including shift differential, where applicable), for the following holidays: {Table} {Caption} 2000 ----- {S} {C} {C} New Year's Day Monday January 3 Martin Luther King Monday January 17 Presidents' Day Monday February 21 Good Friday Friday April 21 Memorial Day (Observed) Monday May 29 Floating Holiday in lieu of Birthday Monday July 3 July 4th Tuesday July 4 Labor Day Monday September 4 Columbus Day (Observed) Monday October 9 Thanksgiving Thursday November 23 Friday November 24 Christmas Monday December 25 Tuesday December 26 {Page} -20- {Caption} 2001 ---- {S} {C} {C} New Year's Day Monday January 1 Martin Luther King Monday January 15 Presidents' Day Monday February 19 Good Friday Friday April 13 Memorial Day (Observed) Monday May 28 July 4th Wednesday July 4 Labor Day Monday September 3 Columbus Day (Observed) Monday October 8 Thanksgiving Thursday November 22 Friday November 23 Christmas Monday December 24 Tuesday December 25 Floating Holiday in lieu of Birthday Monday December 31 {/Table} 20 {Page} - 21 - {Table} {Caption} 2002 ----- {S} {C} {C} New Year's Day Tuesday January 1 Martin Luther King Monday January 21 Presidents' Day Monday February 18 Good Friday Friday March 29 Memorial Day (observed) Monday May 27 July 4th Thursday July 4 Floating holiday in lieu of Birthday Friday July 5 Labor Day Monday September 2 Columbus Day (observed) Monday October 14 Thanksgiving Thursday November 28 Friday November 29 Christmas Tuesday December 24 Wednesday December 25 {/Table} provided, however, that the employee is not absent from work his or her regular working day preceding or his or her regular working day following the said holiday. It is to be understood that Friday is the regular working day preceding Monday and Monday is the regular working day following Friday. (B) The Employer may keep its plant closed on any Monday if any one of the above-listed {Page} - 22 - holidays falls on a Tuesday, or may keep its plant closed on any Friday if any one of the above listed holidays falls on a Thursday. Such action shall not deprive an employee of absolute pay for holidays listed herein. TWELFTH: (A) It is hereby agreed by and between the respective parties that effective as of November 10, 1999, (being a continuation of contributions previously made) the Employer shall contribute to the Vacation Fringe Benefit Fund the sum of Nine and Four-Tenths Per Cent (9.4%) and commencing with the week ending December 3, 1999, the sum of Ten and Four-Tenths Per Cent (10.4%) of the Employer's total, gross, straight-time payroll expense for each employee covered by the Agreement regardless of whether or not any such employee is a member of the Union and regardless of the number of hours worked during the week. Such payments shall be made weekly for the last preceding payroll week. A list containing the names and straight-time, weekly earnings of each employee in the bargaining unit shall accompany each such payment. The Employer's payroll records, social security records and other pertinent data shall be open for inspection and audit by the Fund upon demand. Such payments shall be made directly to the Vacation Fringe Benefit Fund and shall be held subject to the provisions of a trust indenture dated February 17, 1971 and any amendments, changes or additions thereto. {Page} - 23 - The Fund shall be managed and administered by a board of trustees equally representative of the employers and the Union. In the event the Employer and the Union trustees deadlock on the administration of the Fund, they shall agree on an impartial umpire to decide such dispute; or in the event of their failure to agree within a reasonable length of time, an impartial umpire shall, on petition of either trustee, be appointed by the District Court of the United States for the district where the Fund has its principal office. The trustees shall make provisions for an annual audit of the Fund. A statement of the results shall be available for inspection by interested persons at the principal office of the Fund and at such other places as may be designated by the trustees. The Fund shall be used for the purpose of providing annual and supplementary vacation benefits, jury duty reimbursement and for such approved similar and related purposes and benefits, and for the payment of the reasonable administrative expenses of the Fund, as the trustees may determine. By executing this Agreement, the Employer hereby authorizes the Trustees of the Vacation Fringe Benefit Fund, on its behalf, as its express agent, and in its name and stead, to remit to the appropriate Federal taxing authorities, the Employer's share of any FICA taxes owed by the Employer as a result of vacation and/or fringe benefit payments made by the {Page} - 24 - Fund to employees of the Employer, together with the employee's share of any such taxes, and, where applicable to remit to the appropriate State taxing authorities the disability taxes owed as a result of such payments. Similarly, by executing this Agreement, the Employer hereby authorizes the Trustees of the Fund on its behalf, as its express agent and in its name and stead, to issue to the appropriate governmental agencies and to its employees receiving vacation and/or fringe benefit payments through the Fund, Federal, State and City earnings statements showing gross wages, FICA tax withheld, FICA wages, State income tax withheld and local tax withheld as a result of such vacation and/or fringe benefit payments by the Fund. The Trustees of the Fund shall have no obligation to report wages earned by the Employer's employees, except such wages as are transmitted to the Employer's employees by the Fund. All monies paid to the Fund shall be used and disbursed by the trustees pursuant to the terms, conditions and provisions of the trust indenture or any amendments, changes or additions thereto; and the rules, regulations and resolutions adopted thereunder. Neither the Union, nor any member of the Union individually or collectively; nor any International Union; nor any body with which the Union may be affiliated; nor any participating Employer individually or collectively, nor any combination thereof; nor any {Page} - 25 - association, corporation, group, entity, person or trust; nor any successor or assign thereof either directly or indirectly, shall have any right, title, interest or claim in or to the Fund or any part thereof, nor to any accounting, supervision or control thereof, of whatsoever kind or nature. All monies, contributions, property, assets of the Fund and those hereafter acquired and the ownership, control and the administration of the Fund shall irrevocably, inseparably and forever remain vested exclusively in the trustees of the Fund. No employee of any participating employer; nor any employee of the Union; nor any person claiming by, through or under such employee, either directly or indirectly, shall have any right, title, interest or claim in or to the Fund or to any part thereof; nor to any accounting, supervision or control thereof, of whatsoever kind or nature; nor any claim against the Union, participating employers or the trustees, or to the contributions of his or her Employer to the Fund or any assets or monies held by the Fund except such benefits as are provided for by the Fund and/or by the rules and regulations from time to time established and promulgated by the trustees in accordance with the powers granted by the trust indenture as the same may be amended or modified from time to time. The discretion of the trustees as to the administration, use and disbursement of the Fund shall be final and conclusive. {Page} - 26 -