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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
TO
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
August 15, 2001 0-23252
Date of Report (Date of earliest event reported) Commission File Number
IGEN INTERNATIONAL, INC.
(Exact name of registrant)
Delaware 94-2852543
(State of organization) (I.R.S. Employer Identification Number)
16020 Industrial Drive, Gaithersburg Maryland 20877
(Address of principal executive offices and zip code)
(301) 869-9800
(Registrant's telephone Number)
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ITEM 5. OTHER EVENTS
IGEN International, Inc. ("IGEN" or the "Company") has entered into
agreements with Meso Scale Technologies, LLC. ("MST") continuing Meso Scale
Diagnostics, LLC. ("MSD"), a joint venture formed solely by the Company and MST
in 1995. The amended agreements were negotiated by an independent committee of
IGEN's board of directors acting on IGEN's behalf. The independent committee was
comprised of three members of IGEN's board of directors -- Joop Sistermans,
Robert Salsmans and Anthony Rees -- who are not members of IGEN's management and
who are not related to any member of IGEN's management. The independent
committee was formed by unanimous action of the Board in August 2000. The
resolutions adopted by the Board delegated to the committee the exclusive power
and authority to review and investigate the matters identified in certain demand
letters and to determine what measures or actions, if any, should be undertaken
on behalf of the Company in response to the demand letters. The committee was
also authorized to address any other issues raised as a result of the
committee's investigation and to effect any such measures or actions on behalf
of the Company with the full power and authority of the Board, subject only to
the requirements of Delaware law and the Company's governing documents. The
committee's mandate specifically included the power and authority to negotiate,
approve, execute and deliver any documents that the committee deemed necessary
to respond to the demand letters and address the results of the committee's
investigation.
Under the amended agreements, IGEN holds a 31% voting equity
interest in the joint venture. In addition, IGEN is entitled to a preferred
return, payable out of a portion of both future profits and certain third-party
financings before any payments are made to other equity holders, on $21 million
of the funds it has previously invested in the venture and on additional funds
it invests. The preferred return is 5% on investments made prior to January 1,
2001 and the prime rate plus 0.5% on investments made after January 1, 2001.
IGEN and MST each hold one seat on MSD's two-member board of
managers. IGEN's representative on the board is Richard J. Massey, IGEN's
President and Chief Operating Officer, and MST's representative is Jacob
Wohlstadter, who is the sole owner of MST and serves as President and Chief
Executive Officer of MSD. Under most circumstances, significant governance
matters require the approval of both IGEN and MST (and/or their representatives
on the Board of Managers of MSD). Neither Dr. Massey nor any other executive
officer or director of IGEN has any ownership interest in MST or MSD, other than
through ownership of interests in IGEN.
Under the terms of the revised joint venture agreement, IGEN agreed,
subject to certain conditions, to fund the joint venture through November 30,
2003. IGEN's funding commitment may be satisfied in part through in-kind
contributions of scientific and administrative personnel and shared facilities.
The Company's funding commitment for the next 12 months is $19.5 million and may
not be increased without the Company's consent. Thereafter, the Company's
funding commitment would be determined on the basis of an annual budget prepared
by MSD and submitted to a committee of IGEN's board of directors for approval.
If the committee fails to approve the annual budget submitted by MSD, IGEN would
still be required to provide MSD with transitional funding for an additional six
months. If the committee fails to approve a budget submitted by MSD, MSD and MST
have the right to terminate the joint venture unless the budget calls for
funding that exceeds 110% of the prior 12
months' funding and the committee makes a reasonable good faith determination
for the rejection.
The term of the joint venture is through November 30, 2003. MST and
MSD will have the right to terminate the joint venture under other circumstances
including (1) breach of IGEN's obligations, including its funding obligations to
MSD, (2) MSD's termination of Jacob Wohlstadter's employment (other than for
cause or disability), (3) if Mr. Wohlstadter is entitled to terminate his
employment agreement for good reason (as defined in the agreement), or (4) upon
a change in control of IGEN as defined in the joint venture agreement. Change in
control includes, among other things, the acquisition, by any person or group
(other than Samuel Wohlstadter and his affiliates), of 30% or more of the
beneficial ownership of any class of voting securities of IGEN, or 15% or more
of the beneficial ownership if combined with the right to nominate one or more
directors of IGEN. Upon termination, expiration or non-renewal of the joint
venture agreement, MSD and MST jointly have the right to repurchase IGEN's
interest in MSD at its fair market value, less a discount of 7.5% to 15%
depending on the cause of termination or non-renewal.
Under the terms of the revised agreements, MSD has a worldwide,
perpetual, exclusive license (with certain exceptions) to IGEN's technology for
use in MSD's programs. If IGEN ceases to be a member of the joint venture, IGEN
will receive royalty payments from MSD on all products developed and sold by MSD
using IGEN's technology. MST holds a worldwide, perpetual, non-exclusive license
for certain non-diagnostic applications of IGEN's technology. IGEN will receive
royalty payments from MST on any products developed and sold by MST that use
this technology.
Under the revised agreements, IGEN and Jacob Wohlstadter revised the
terms of his consulting arrangement with IGEN to provide for a term running
through August 15, 2004. Pursuant to the consulting agreement, Mr. Wohlstadter
will be entitled to receive such fees as the Company and Mr. Wohlstadter agree
to when particular services are requested by the Company. In addition, MSD
entered into an employment contract with Mr. Wohlstadter that provides for a
term running concurrent with the joint venture agreement. Mr. Wohlstadter has
agreed to serve as President and CEO of MSD for an initial annual salary of
$250,000. Mr. Wohlstadter will be eligible to receive, at the discretion of an
independent committee of the IGEN Board, an annual cash bonus in an amount not
to exceed 20% of his annual salary. If MSD terminates the employment agreement
without cause, or Mr. Wohlstadter terminates the employment agreement for good
reason (which includes a change in control of IGEN as described above), Mr.
Wohlstadter shall be entitled to receive, in addition to salary and pro rata
bonus and adjustments earned through the 60th day following the notice of
termination, an amount equal to from 3 to 12 times (depending on the reason for
the termination) the monthly pro rata salary, bonus and adjustments in effect at
the time of the termination. In addition, upon such a termination, MSD and MST
shall have a joint right to repurchase IGEN's interest in MSD on the terms
described above. IGEN is responsible for all amounts payable, costs incurred and
other obligations under the employment agreement, which is expected to be paid
out of IGEN's capital contribution to MSD. The Company has also agreed to
indemnify Mr. Wohlstadter against certain liabilities, including liability from
the joint venture.
The independent committee has also issued a report dated August 24,
2001, summarizing its findings with respect to the demand letters and derivative
lawsuits subsequently filed by Brown Simpson Strategic Growth Fund L.P. and
Lawrence Paskowitz. The independent committee concluded that the actions
undertaken by the committee completely address the demands made in the demand
letters and by the complaints as they relate to the derivative actions,
including those claims directed at the MSD joint venture. In particular, with
respect to the MSD joint venture, in the committee's view, certain terms in the
original 1995 joint venture documents exceeded the board mandate but Dr. Massey,
who negotiated and executed the agreements on behalf of the Company, acted in
good faith and with the subjective belief that his actions were duly authorized
and in the best interests of the Company and its stockholders. The committee
also concluded that, notwithstanding any errors that may or may not have
occurred in this regard, Dr. Massey has provided critical direction for and
management of the Company's business. The committee found that it is not in the
best interest of the Company or its stockholders to pursue any of the demands
contained in the demand letters and, on behalf of the Company, refused the
demands made in the demand letters and the lawsuits and urged the court to
dismiss the derivative claims in the lawsuits.
ITEM 7. EXHIBITS
Exhibit 99.1 Amendment No. 1 to Joint Venture Agreement, by and among
Meso Scale Diagnostics, LLC., Meso Scale Technologies, LLC.
and IGEN International, Inc., dated as of August 15, 2001
(portions of this exhibit have been omitted pursuant to a
request for confidential treatment filed with the
Commission)
Exhibit 99.2 Amendment No. 1 to IGEN/MSD License Agreement, by and among
Meso Scale Technologies, LLC. and IGEN International, Inc.,
dated as of August 15, 2001 (portions of this exhibit have
been omitted pursuant to a request for confidential
treatment filed with the Commission)
Exhibit 99.3 Amendment No. 1 to MSD/MST Sublicense Agreement, by and
among Meso Scale Diagnostics, LLC., Meso Scale Technologies,
LLC. and IGEN International, Inc., dated as of August 15,
2001 (portions of this exhibit have been omitted pursuant to
a request for confidential treatment filed with the
Commission)
Exhibit 99.4 MSD/MST Sublicense Agreement, by and among Meso Scale
Diagnostics, LLC., Meso Scale Technologies, LLC. and IGEN
International, Inc., dated as of November 30, 1995
Exhibit 99.5 First Amendment of Limited Liability Company Agreement of
Meso Scale Diagnostics LLC., dated August 15, 2001
Exhibit 99.6 Consulting Agreement, by and between IGEN International, Inc.
and Jacob N. Wohlstadter, made effective as of November 30,
1996
Exhibit 99.7 Indemnification Agreement, by and between IGEN International,
Inc., Jacob N. Wohlstadter and JW Consulting Services,
L.L.C., made effective as of November 30, 1996
Exhibit 99.8 Employment Agreement, by and among Meso Scale Diagnostics,
LLC., Meso Scale Technologies, LLC., IGEN International, Inc.
and Jacob Wohlstadter, dated as of August 15, 2001 (portions
of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Commission)
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IGEN INTERNATIONAL, INC.
By: /s/ Samuel J. Wohlstadter
_____________________________
Name: Samuel J. Wohlstadter
Title: Chief Executive Officer
Dated: September 4, 2001