Summary
Amgen Inc. (AMGN) filed an 8-K on February 5, 2018, to report a potential temporary suspension of trading under its employee benefit plans, commonly known as a "blackout period." This arises due to the company's commencement of a significant tender offer to repurchase up to $10 billion of its own common stock. The tender offer, which began on February 5, 2018, allows participants in Amgen's 401(k) and AML Retirement Plans to tender their Amgen shares. If 50% or more of the plan participants elect to participate in the tender offer and are thus restricted from transferring shares held within the plans, a blackout period will be triggered under Sarbanes-Oxley Act regulations.
Key Highlights
- 1Amgen commenced a tender offer to repurchase up to $10 billion of its common stock, with a price range of $175 to $200 per share.
- 2A potential "blackout period" may be triggered for participants in Amgen's employee benefit plans (401(k) Plan and AML Retirement Plan).
- 3The blackout period is contingent on whether 50% or more of plan participants elect to tender shares, restricting their ability to trade those shares held within the plans.
- 4If a blackout period occurs, Amgen's directors and executive officers will be prohibited from buying or selling company stock acquired through employment or service.
- 5The potential blackout period is anticipated to start around March 5, 2018, and could last through March 8, 2018, if triggered.
- 6Amgen has provided notice to its directors and executive officers regarding the potential trading restrictions, in compliance with SEC regulations.
- 7The tender offer is scheduled to expire at midnight on March 5, 2018, unless extended.
Frequently Asked Questions
The main reason for this 8-K filing is to inform investors and relevant parties about Amgen's commencement of a tender offer to repurchase up to $10 billion of its common stock and the potential for a temporary blackout period on employee benefit plan transactions involving Amgen stock.
A blackout period, under Sarbanes-Oxley Act regulations, is a temporary restriction on trading for directors and executive officers. It is triggered if 50% or more of participants in an employee benefit plan are restricted from trading company stock held within that plan. Amgen is disclosing the possibility of this occurring due to their ongoing tender offer, which might restrict employee plan participants from selling their Amgen shares.
The blackout period could begin as soon as March 5, 2018, and potentially extend through March 8, 2018, if the conditions are met. This timeline is directly related to the expiration of the tender offer.
No, not necessarily. The filing indicates a *potential* blackout period. The restriction on directors and executives only applies if the 50% threshold for plan participant restriction is met, thereby triggering the formal blackout period. The company has provided notice to them about this possibility.