SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 27, 2004
PAR PHARMACEUTICAL COMPANIES, INC.
----------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE FILE NUMBER 1-10827 22-3122182
-------- ------------------- ----------
(STATE OR OTHER (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
JURISDICTION OF IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
ONE RAM RIDGE ROAD, SPRING VALLEY, NEW YORK 10977
- ------------------------------------------- -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (845) 425-7100
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
SECTION 2 - SECURITIES AND TRADING MARKETS
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
ITEM 3.03. MATERIAL MODIFICATIONS TO RIGHTS OF SECURITY HOLDERS.
On October 26, 2004 the Board of Directors (the "Board of Directors") of
Par Pharmaceutical Companies, Inc., a Delaware corporation (the "Company"),
declared a dividend of one preferred share purchase right (a "Right") for each
outstanding share of common stock, par value $0.01 per share, of the Company
(the "Common Stock"). The dividend is payable on November 8, 2004 to the
stockholders of record on as of the close of business on such date (the "Record
Date"). Each Right entitles the registered holder to purchase from the Company
one one-thousandth of a share of Series A Junior Participating Preferred Stock,
par value $0.0001 per share (the "Preferred Stock"), of the Company at a price
of $225.00 per one one-thousandth of a share of Preferred Stock (as the same may
be adjusted, the "Purchase Price"). The description and terms of the Rights are
set forth in a Rights Agreement, dated as of October 27, 2004 (as the same may
be amended from time to time, the "Rights Agreement"), between the Company and
American Stock Transfer & Trust Company, a New York corporation, as Rights Agent
(the "Rights Agent").
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired. The rights should
not interfere with any merger or other business combination approved by the
Board of Directors because of the Board of Directors' ability to redeem the
Rights, as discussed below.
Until the close of business on the earlier of (i) the tenth day after the
first date of a public announcement that a person (other than an Exempted Entity
(as defined below)) or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 15% or more of the shares of
Common Stock then outstanding or (ii) the tenth business day (or such later date
as may be determined by action of a majority of the entire Board of Directors
prior to such time as any person or group of affiliated persons becomes an
Acquiring Person) after the date of commencement of a tender offer or exchange
offer the consummation of that would result in the beneficial ownership by a
person (other than an Exempted Entity) or group of 15% or more of the shares of
Common Stock then outstanding (the earlier of such dates being herein referred
to as the "Distribution Date"), the Rights will be evidenced by the shares of
Common Stock represented by certificates for Common Stock outstanding as of the
Record Date, together with a copy of the summary of rights disseminated in
connection with the original dividend of Rights.
"Exempted Entity" shall mean (1) the Company, (2) any Subsidiary (as
defined below) of the Company (in the case of subclauses (1) and (2) including
in its fiduciary capacity), (3) any employee benefit plan of the Company or of
any Subsidiary of the Company and (4) any entity or trustee holding Common Stock
2
for or pursuant to the terms of any such plan or for the purpose of funding any
such plan or funding other employee benefits for employees of the Company or of
any Subsidiary of the Company.
The Rights Agreement provides that, until the Distribution Date (or the
earlier redemption, exchange or expiration of the Rights), the Rights will be
transferable only in connection with the transfer of Common Stock. Until the
Distribution Date (or the earlier redemption, exchange or expiration of the
Rights), the surrender for transfer of any certificates for shares of Common
Stock outstanding as of the Record Date, even without a notation incorporating
the Rights Agreement by reference or a copy of this Summary of Rights, will also
constitute the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on October 27, 2014, unless (i) the Rights Agreement is
extended by the Board of Directors by the amendment of the Rights Agreement or
(ii) the Rights are earlier redeemed or exchanged by the Company as described
below.
The Purchase Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for or purchase Preferred Stock at a price, or
securities convertible into Preferred Stock with a conversion price, less than
the then-current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The Rights are also subject to adjustment in the event of a stock dividend
on the Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights will be
redeemable. Each share of Preferred Stock will be entitled, when, as and if
declared, to a minimum preferential quarterly dividend payment of the greater of
(a) $1.00 per share and (b) an amount equal to 1,000 times the dividend declared
per share of Common Stock. In the event of liquidation, dissolution or winding
up of the Company, the holders of the Preferred Stock will be entitled to a
minimum preferential liquidation payment of $1,000 per share (plus any accrued
but unpaid dividends) but will be entitled to an aggregate 1,000 times the
payment made per share of Common Stock. Each share of Preferred Stock will have
1,000 votes, voting together with the Common Stock, with specified exceptions.
Finally, in the event of any merger, consolidation or other transaction in which
shares of Common Stock are converted or exchanged, each share of Preferred Stock
will be entitled to receive 1,000 times the amount received per share of Common
Stock. These rights are protected by anti-dilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
3
In the event that any person or group of affiliated or associated persons
shall become an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right and payment
of the Purchase Price, that number of shares of Common Stock having a market
value of two times the Purchase Price.
In the event that, after a person or group shall become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold,
proper provision will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become void) will
thereafter have the right to receive, upon the exercise thereof at the
then-current exercise price of the Right, that number of shares of common stock
of the entity with which the Company has engaged in the foregoing transaction
(or its parent), which number of shares at the time of such transaction will
have a market value of two times the Purchase Price.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock or the occurrence of an event described in
the prior paragraph, a majority of the entire Board of Directors of the Company
may exchange the Rights (other than Rights owned by such person or group that
shall have become void), in whole or in part, at an exchange ratio of one share
of Common Stock, or a fractional share of Preferred Stock (or of a share of a
similar class or series of the Company's preferred stock having similar rights,
preferences and privileges) of equivalent value, per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
At any time prior to the earlier of (i) the close of business on the tenth
(10th) calendar day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close of the
business on the tenth (10th) calendar day following the Record Date) or (ii) the
Final Expiration Date, a majority of the entire Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon any redemption
of the Rights, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, the Company may, except
with respect to the Redemption Price, amend the Rights Agreement in any manner.
After the Rights are no longer redeemable, the Company may, except with respect
to the Redemption Price, amend the Rights Agreement in any manner that does not
adversely affect the interests of holders of the Rights.
Until a Right is exercised or exchanged, the holder thereof, as such, will
have no rights as a stockholder of the Company, including the right to vote or
to receive dividends.
The form of Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit A the form of
Certificate of Designations of the Series A Junior Participating Preferred Stock
4
of the Company, as Exhibit B the form of Summary of Rights to Purchase Shares of
Preferred Stock and as Exhibit C the form of Right Certificate, and a press
release issued by the Company on October 27, 2004 with respect to the Rights,
are attached hereto as exhibits and incorporated herein by reference. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to such exhibit.
As of October 25, 2004, there were 34,678,839 shares of the Company's
Common Stock issued and outstanding, and an additional 12,674,633 shares of the
Company's Common Stock reserved for issuance. 1,000,000 shares of the Company's
Preferred Stock have been reserved for issuance upon the exercise of the Rights.
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated as of: October 27, 2004
PAR PHARMACEUTICAL COMPANIES, INC.
------------------------------------------
(Registrant)
/s/ Dennis J. O'Connor
------------------------------------------
Dennis J. O'Connor
Vice President and Chief Financial Officer
6
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.1 Rights Agreement, dated as of October 27, 2004, between Par
Pharmaceutical Companies, Inc. and American Stock Transfer & Trust
Company, as Rights Agent, which includes the Form of Certificate
of Designations of Series A Junior Participating Preferred Stock
as Exhibit A, the Form of Summary of Rights to Purchase Shares of
Preferred Stock as Exhibit B and the Form of Right Certificate as
Exhibit C.
99.1 Press Release dated October 27, 2004