UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
January 31, 2000
(Date of earliest event reported)
SCIOS INC.
(Exact name of registrant as specified in its charter)
Delaware 0-11749 95-3701481
(State of other (Commission file number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
820 West Maude Avenue
Sunnyvale, California 94086
(Address of principal executive offices and zip code)
(408) 616-8200
(Registrant's telephone number)
ITEM 5. OTHER EVENTS
On January 31, 2000, Scios Inc. (the "Company") entered into a
Settlement Agreement (the "Settlement Agreement") with Randal J. Kirk and
certain entities controlled by him (the "Stockholders") that had nominated (the
"Nomination") an alternate slate of Mr. Kirk and six other nominees (the
"Stockholder Nominees") for election to the Company's Board of Directors (the
"Company Board") at the 2000 annual meeting of stockholders of the Company (the
"2000 Annual Meeting").
The Settlement Agreement terminates the proxy contest between the
parties. Under the Settlement Agreement, Mr. Kirk has been added to the Company
Board's slate of nominees for election to a one-year term at the 2000 Annual
Meeting, increasing the total number of Company Board nominees to eight
(including the seven existing nominees of the Company Board, who are all current
members of the Company Board). The Company Board has agreed to recommend the
election of all eight nominees. The Stockholders have withdrawn the Nomination
and have agreed to discontinue all efforts (direct and indirect) to solicit
votes for the Stockholder Nominees or otherwise to pursue the Nomination.
The Settlement Agreement provides that the Stockholders will vote their
Company shares in favor of the Company Board's nominees and against the removal
of any director, and not pursue any unsolicited acquisition attempts or engage
in any proxy contest, for a specified period (the "Term"). The length of the
Term will depend on whether Mr. Kirk is elected at the 2000 Annual Meeting and,
if he is, on whether the Company Board chooses to re-nominate Mr. Kirk for the
2001 annual meeting of stockholders of the Company (the "2001 Annual Meeting").
If Mr. Kirk is not elected at the 2000 Annual Meeting, the Term will expire at
the conclusion of that meeting. If he is elected at that meeting, the Term will
expire at the earliest to occur of:
o Mr. Kirk's resignation from the Company Board within 15 days of
the Company Board deciding, at a meeting required to be held no
later than 90 days before the 2001 Annual Meeting, that he will
not be re-nominated at that meeting, in which event the
provisions of the Company's Bylaws requiring advance notice to be
given, by a specified date, of a stockholder's intention to
nominate directors, or propose other business, at an annual
meeting of stockholders (the "Advance Notice Bylaws") will be
waived to the extent necessary to permit any or all of the
Stockholders (but no other person) to nominate one or more of
their own candidates for election to the Company Board at the
2001 Annual Meeting;
o the conclusion of the 2001 Annual Meeting if Mr. Kirk is
re-nominated for election at that meeting but is not elected; or
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o the later of (i) the 30th day prior to the deadline established
by the Advance Notice Bylaws for nominations of candidates for
election to the Company Board at the 2002 annual meeting of
stockholders of the Company (the "2002 Annual Meeting") or (ii)
the date of Mr. Kirk's resignation from the Company Board, but in
no event beyond the conclusion of the 2002 Annual Meeting.
In addition, during the Term (or until Mr. Kirk resigns from the
Company Board before the end of the Term, if he is elected), the Stockholders:
o must vote all of their Company shares on all matters other than
the election or removal of directors either (as they choose in
their sole discretion) in accordance with the recommendation of a
majority of the Company Board or in the same proportion as shares
held by the other Company stockholders are voted;
o may not increase their aggregate ownership of Company shares
above 7.2% and must effect all purchases in compliance with all
then-applicable Company policies regarding compliance with the
federal securities laws and transactions in Company voting
securities by members of the Company Board and their affiliates
(the "Company Policies"); and
o must give the Company prior notice if they intend to dispose of
any of their Company shares (except that open-market sales of
less than 1%, in the aggregate, in any 90-day period are not
subject to this notice requirement) and must effect all sales in
compliance with the Company Policies.
The Settlement Agreement contains certain other provisions, including
restrictions on public announcements, mutual releases of claims in connection
with the proxy contest and related covenants not to sue, certain representations
and warranties, and the Company's agreement to reimburse 50% of certain of the
Stockholders' actual documented out-of-pocket costs in connection with the proxy
contest. In addition, the Company has agreed that, without Mr. Kirk's prior
consent (not to be unreasonably withheld), it will not change the date of the
2000 Annual Meeting, hold the 2001 Annual Meeting later than June 1, 2001, or
amend the Advance Notice Bylaws during the Term.
The Settlement Agreement permits Mr. Kirk to exercise his rights, and
fulfill his obligations, as a member of the Company Board while he is serving on
it, and to make confidential proposals to the Company Board, without violating
any of the provisions summarized above.
THE FOREGOING SUMMARY OF CERTAIN PROVISIONS OF THE SETTLEMENT AGREEMENT
IS QUALIFIED BY THE FULL TEXT THEREOF, WHICH IS FILED HEREWITH AS EXHIBIT 99.1
(SEE ITEM 7(C)).
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ITEM 7(C) EXHIBITS
Exhibit 99.1 The Settlement Agreement (excluding Exhibit 4.1
thereto, which is the form of joint press
release; see Exhibit 99.2)
Exhibit 99.2 Joint press release issued on January 31, 2000
SIGNATURES
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.
SCIOS INC.
(Registrant)
/s/ John H. Newman
Date: February 1, 2000 _____________________________
John H. Newman
Senior Vice President,
General Counsel and Secretary
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