Amgen 2000 Annual Report Download - page 35

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The provision for income taxes varies from income taxes provided
based on the federal statutory rate as follows:
Years ended December 31, 2000 1999 1998
Statutory rate applied
to income before
income taxes 35.0% 35.0% 35.0%
Benefit of Puerto Rico
operations, net
of Puerto Rico
income taxes (2.0)% (2.3)% (3.2)%
Utilization of tax credits,
primarily research and
experimentation (1.4)% (2.1)% (2.4)%
Other, net 0.4% (0.6)% 0.1%
32.0% 30.0% 29.5%
Income taxes paid during the years ended December 31, 2000,
1999 and 1998, totaled $141.3 million, $318.7 million and $251.3
million, respectively.
Note 6
Stockholders’ Equity
Stockholder Rights Agreement
On February 18, 1997, the Board of Directors of the Company
redeemed the rights under the Company’s former common stock
rights plan and declared a dividend of one preferred share pur-
chase right (a “Right”) for each then outstanding share of common
stock of the Company and authorized the distribution of one Right
with respect to each subsequently issued share of common
stock. The Rights were distributed to stockholders of record on
March 21, 1997. On December 12, 2000, the Board of Directors
of the Company amended and restated the preferred stock rights
plan governing the Rights (the “Amended and Restated Rights
Plan”) to, among other things: (i) provide that, as a result of
two-for-one splits of the Company’s common stock effected in
February and November 1999 (the “Stock Splits”), each Right
shall represent the right to purchase one four-thousandth of a
share of Series A Junior Participating Preferred Stock (“Series A
Preferred Stock”) of the Company (which one four-thousandth
gives effect to the Stock Splits); (ii) increase the exercise price of
each Right to $350.00 from $56.25 (as adjusted for the Stock
Splits); (iii) extend the term of the rights agreement to December
12, 2010 from March 21, 2007 and (iv) amend the definition of
“Outside Director”.
Pursuant to the Amended and Restated Rights Plan, each share
of common stock outstanding has attached to it one whole Right.
One Right represents the right to purchase one four-thousandth
(1/4000) of a share of Series A Preferred Stock of the Company at
$350.00. The Rights will expire on December 12, 2010.
Under certain circumstances, if an acquiring person or group
acquires 10% or more of the Company’s outstanding common
stock, an exercisable Right will entitle its holder (other than the
acquirer) to buy shares of common stock of the Company having
a market value of two times the exercise price of one Right.
However, in limited circumstances approved by the outside direc-
tors of the Board of Directors, a stockholder who enters into an
acceptable standstill agreement may acquire up to 20% of the
outstanding shares without triggering the Rights. If an acquirer
acquires at least 10%, but less than 50%, of the Company’s com-
mon stock, the Board of Directors may exchange each Right
(other than those of the acquirer) for one share of common stock
per Right. In addition, under certain circumstances, if the
Company is involved in a merger or other business combination
where it is not the surviving corporation, an exercisable Right will
entitle its holder to buy shares of common stock of the acquiring
company having a market value of two times the exercise price of
one Right. The Company may redeem the Rights at $0.00025 per
Right at any time prior to the public announcement that a 10%
position has been acquired.
Stock Repurchase Program
The Company has a stock repurchase program primarily to
reduce the dilutive effect of its employee stock option and stock
purchase plans. Stock repurchased under the program is intend-
ed to be retired. The amount the Company spends on and the
number of shares repurchased varies based on a variety of fac-
tors, including the stock price and blackout periods in which the
Company is restricted from repurchasing shares. In December
2000, the Board of Directors authorized the Company to repur-
chase up to $2 billion of common stock between January 1, 2001
and December 31, 2002.
Other Comprehensive Income/(Loss)
SFAS No. 130, “Reporting Comprehensive Income”, requires
unrealized gains and losses on the Company’s available-for-
sale securities and foreign currency translation adjustments to be
included in other comprehensive income/(loss).
Notes to Consolidated Financial Statements