EXHIBIT 4.7
FOURTH AMENDMENT TO PREFERRED SHARES RIGHTS AGREEMENT
AND CERTIFICATION OF COMPLIANCE WITH SECTION 27 THEREOF
THIS FOURTH AMENDMENT (the "Amendment"), dated as of October 3, 2002, is
made by and between Ligand Pharmaceuticals Incorporated, a Delaware corporation
(the "Company"), and Mellon Investor Services LLC (as successor to ChaseMellon
Shareholder Services, L.L.C.), as Rights Agent (the "Rights Agent").
RECITALS
A. The Company and the Rights Agent are parties to a Preferred Shares
Rights Agreement dated as of September 13, 1996, as amended (the "Rights
Agreement").
B. Pursuant to Section 27 of the Rights Agreement, the Board of Directors
of the Company has determined that the amendments to the Rights Agreement set
forth herein are necessary and desirable, and the Company and the Rights Agent
desire to evidence such amendment in writing.
Accordingly, the parties agree as follows:
1. AMENDMENT TO SECTION 1(A). Section 1(a) of the Rights Agreement is
hereby amended and restated to read in its entirety as follows:
"Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 10% or more of the Common Shares then outstanding, but shall not include
the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, or any entity holding
Common Shares for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring
Person either (i) as the result of an acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 10% or
more of the Common Shares of the Company then outstanding; PROVIDED,
HOWEVER, that if a Person shall become the Beneficial Owner of 10% or more
of the Common Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional Common Shares of the
Company, then such Person shall be deemed to be an Acquiring Person.
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person", as defined pursuant to this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be
an "Acquiring Person", as defined pursuant to this paragraph (a), then such
Person shall not be deemed to be an "Acquiring Person" for any purposes of
this Agreement. Notwithstanding anything in this Agreement to the contrary,
neither Elan
Corporation, plc, a public limited company organized under the laws of
Ireland ("Elan"), nor Elan International Services, Ltd., a Bermuda
corporation ("EIS"), nor any Affiliates of Elan or EIS shall be deemed to
be an Acquiring Person by virtue of (i) their beneficial ownership on or
before November 9, 2005 of an aggregate of up to twenty-five percent (25%)
of the outstanding capital stock of the Company on a fully diluted basis,
or (ii) their beneficial ownership after November 9, 2005 of a percentage
of the then outstanding Common Shares equal to the percentage of the then
outstanding Common Shares of the Company beneficially owned by Elan, EIS
and their Affiliates on November 9, 2005, to the extent their beneficial
ownership exceeds 10% on such date. In determining whether Elan, EIS or any
of their respective Affiliates shall be deemed to be an Acquiring Person,
shares of Common Stock that are beneficially owned by such Person and
acquired pursuant to the Securities Purchase Agreement, entered into as of
November 6, 1998, between the Company, Elan and EIS, as it may be amended
or supplemented from time to time (the "Securities Purchase Agreement"),
the Development, License and Supply Agreement, entered into as of November
9, 1998, between the Company and Elan, as it may be amended or supplemented
from time to time (the "License Agreement") or upon conversion of the
Company's Zero Coupon Convertible Senior Notes due 2008 (the "Notes"), or
which are beneficially owned by such Person as a result of the ownership by
such Person of the Notes, shall not be counted unless such Person shall
beneficially own additional shares of Common Stock that are acquired by
such Person other than pursuant to the Stock Purchase Agreement, entered
into as of September 30, 1998, between the Company and EIS, as it may be
amended or supplemented from time to time (the "Stock Purchase Agreement"),
the Securities Purchase Agreement, the License Agreement or the Notes.
2. AMENDMENT TO DEFINITION OF DISTRIBUTION DATE. The definition of
"Distribution Date" in Section 1 of the Rights Agreement is hereby amended and
restated to read in its entirety as follows:
"Distribution Date" shall mean the earlier of (i) the Close of
Business on the tenth day (or such later date as may be determined by
action of the Company's Board of Directors) after the Shares Acquisition
Date (or, if the tenth day after the Shares Acquisition Date occurs before
the Record Date, the Close of Business on the Record Date) or (ii) the
Close of Business on the tenth day (or such later date as may be determined
by action of a majority of the Company's Board of Directors) after the date
that a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person or entity organized, appointed
or established by the Company for or pursuant to the terms of any such
plan) is first published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the Exchange Act, if,
assuming the successful consummation thereof, such Person would be the
Beneficial Owner of 10% or more of the shares of Common Stock then
outstanding. Notwithstanding anything in this Agreement to the contrary, a
Distribution Date shall not be deemed to have occurred by virtue of (i) the
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beneficial ownership by Elan or EIS or any of their Affiliates on or before
November 9, 2005, of an aggregate of up to twenty-five percent (25%) of the
outstanding capital stock of the Company on a fully diluted basis pursuant
to the terms of the Stock Purchase Agreement, the Securities Purchase
Agreement and the License Agreement, or (ii) their beneficial ownership
after November 9, 2005 of a percentage of the then outstanding Common
Shares equal to the percentage of the then outstanding Common Shares of the
Company beneficially owned by Elan, EIS and their Affiliates on November 9,
2005, to the extent their beneficial ownership exceeds 10% on such date.
3. AMENDMENT TO EXHIBIT C. Exhibit C to the Rights Agreement is hereby
amended and restated to read in full as set forth on Attachment A hereto.
4. EFFECTIVENESS. This Amendment shall be deemed effective as of October 3,
2002, as if executed on such date. Except as amended hereby, the Rights
Agreement shall remain in full force and effect and shall be otherwise
unaffected hereby.
5. MISCELLANEOUS. This Amendment shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State. This Amendment
may be executed in any number of counterparts, each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. If any term, provision,
covenant or restriction of this Amendment is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Amendment
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
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The undersigned officer of the Company, being an appropriate officer of the
Company and authorized to do so by resolution of the Board of Directors of the
Company, hereby certifies to the Rights Agent that the foregoing amendments are
made in compliance with Section 27 of the Rights Agreement.
LIGAND PHARMACEUTICALS
INCORPORATED, a Delaware corporation
/s/David E. Robinson
------------------------------------------------
David E. Robinson, President and Chief Executive
Officer
Acknowledged and agreed:
MELLON INVESTOR SERVICES LLC, as Rights Agent
/s/James Kirkland
- ------------------------------------
Name: James Kirkland
Title: Assistant Vice President
[SIGNATURE PAGE TO FOURTH AMENDMENT TO
PREFERRED SHARES RIGHTS AGREEMENT]
ATTACHMENT A
EXHIBIT C
LIGAND PHARMACEUTICALS INCORPORATED
SHAREHOLDER RIGHTS PLAN
Summary of Rights
DISTRIBUTION TRANSFER OF RIGHTS; The Board of Directors has declared
RIGHTS CERTIFICATE: a dividend of one Right for each share
of Ligand Pharmaceuticals Incorporated
Common Stock outstanding. Prior to the
Distribution Date referred to below,
the Rights will be evidenced by, and
trade with, the certificates for the
Common Stock. After the Distribution
Date, Ligand Pharmaceuticals
Incorporated (the "Company") will mail
Rights certificates to the Company's
stockholders and the Rights will become
transferable apart from the Common
Stock.
DISTRIBUTION DATE: Rights will separate from the Common
Stock and become exercisable on the
tenth day (or such later date as may be
determined by the Company's Board of
Directors) after a person or group
(a) acquires beneficial ownership of
10% or more of the Company's Common
Stock or (b) announces a tender or
exchange offer, the consummation of
which would result in ownership by a
person or group of 10% or more of the
Company's Common Stock.
PREFERRED STOCK PURCHASABLE After the Distribution Date, each
UPON EXERCISE OF RIGHTS: Right will entitle the holder to
purchase, for $100.00 a fraction of a
share of the Company's Preferred Stock
with economic terms similar to that of
one share of the Company's Common Stock.
FLIP-IN: If an acquiror (an "Acquiring Person")
obtains 10% or more of the Company's
Common Stock, then each Right (other
than Rights owned by an Acquiring
Person or its affiliates) will entitle
the holder thereof to purchase, for the
exercise price, a number of shares of
the Company's Common Stock having a
then current market value of twice the
exercise price.
FLIP-OVER: If, after the Shares Acquisition Date
(defined below), (a) the Company
merges into another entity, (b) an
acquiring entity merges into the
Company or (c) the Company sells more
than 50% of the Company's assets or
earning power, then each Right (other
than Rights owned by an Acquiring
Person or its affiliates) will entitle
the holder thereof to purchase, for
the exercise price, a number of shares
of Common Stock of the person
engaging in the transaction having a
then current market value of twice
the exercise price.
EXCHANGE PROVISION: At any time after an event triggering
the flip-in or flip-over rights and
prior to the acquisition by the
Acquiring Person of 50% or more of
the outstanding Common Stock, the
Board of Directors of the Company
may exchange the Rights (other than
Rights owned by the Acquiring Person
or its affiliates), in whole or in
part, at an exchange ratio of one
Common Share per Right (subject to
adjustment).
REDEMPTION OF THE RIGHTS: Rights will be redeemable at the
Company's option for $0.01 per Right
at any time on or prior to the tenth
day (or such later date as may be
determined by the Company's Board of
Directors) after public announcement
that a person has acquired beneficial
ownership of 10% or more of the
Company's Common Stock (the "Shares
Acquisition Date").
EXPIRATION OF THE RIGHTS: The Rights expire on the earliest of (a)
September 13, 2006, (b) exchange or
redemption of the Rights as described
above, or (c) consummation of a merger
or consolidation resulting in expiration
of the Rights as described above.
AMENDMENT OF TERMS OF RIGHTS: The terms of the Rights and the Rights
Agreement may be amended in any respect
without the consent of the Rights
holders on or prior to the
Distribution Date; thereafter, the
terms of the Rights and the Rights
Agreement may be amended without the
consent of the Rights holders in order
to cure any ambiguities or to make
changes which do not adversely
affect the interests of Rights holders
(other than the Acquiring Person).
VOTING RIGHTS: Rights will not have any voting rights.
ANTI-DILUTION PROVISIONS: Rights will have the benefit of
certain customary anti-dilution
provisions.
TAXES: The Rights distribution should not be
taxable for federal income tax
purposes. However, following an
event which renders the Rights
exercisable or upon redemption of the
Rights, stockholders may recognize
taxable income.
The foregoing is a summary of certain principal terms of the Stockholder Rights
Plan only and is qualified in its entirety by reference to the detailed terms of
the Rights Agreement dated as of September 13, 1996, as amended, between the
Company and the Rights Agent. Further details of the Rights are contained in a
letter that will be mailed to all the Company's stockholders.