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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
LIGAND PHARMACEUTICALS INCORPORATED
(Exact name of Registrant as specified in its charter)
Delaware 77-0160744
(State of incorporation or organization) (IRS Employer Identification No.)
9393 Towne Centre Drive
San Diego, California 92121
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS TO BE SO REGISTERED NAME OF EACH EXCHANGE ON WHICH EACH CLASS IS
TO BE REGISTERED
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Share Purchase Rights
(Title of Class)
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ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
Effective as of September 13, 1996, pursuant to a Preferred Shares
Rights Agreement (the "Rights Agreement") between Ligand Pharmaceuticals
Incorporated (the "Company") and Wells Fargo Bank N.A., as Rights Agent (the
"Rights Agent"), the Company's Board of Directors declared a dividend of one
right (a "Right") to purchase one one-thousandth share of the Company's Series
A Participating Preferred Stock ("Series A Preferred") for each outstanding
share of Common Stock, par value $0.001 per share ("Common Shares"), of the
Company. The dividend is payable on September 30, 1996 (the "Record Date") to
stockholders of record as of the close of business on that date. Each Right
entitles the registered holder to purchase from the Company one one-thousandth
of a share of Series A Preferred at an exercise price of $100 (the "Purchase
Price"), subject to adjustment in the event the Company declares a dividend on
the Common Stock payable in Common Stock, subdivides the number of outstanding
shares of Common Stock into a larger number of such shares or combines the
number of outstanding shares of Common Stock into a smaller number of such
shares, among other circumstances. In addition, under certain circumstances
described more fully herein, the Rights may become exercisable for a number of
Common Shares having a value equal to two times the Purchase Price and/or
Common Stock of certain acquiring companies having a value equal to two times
the Purchase Price.
The following summary of the principal terms of the Rights Agreement
is a general description only and is subject to the detailed terms and
conditions of the Rights Agreement. A copy of the Rights Agreement is attached
as Exhibit 99.1 to this Registration Statement and is incorporated herein by
reference; capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to them in the Rights Agreement.
CERTAIN ANTI-TAKEOVER EFFECTS
The Rights approved by the Board are designed to protect and maximize
the value of the outstanding equity interests in the Company in the event of an
unsolicited attempt by an acquiror to take over the Company, in a manner or on
terms not approved by the Board of Directors. Takeover attempts frequently
include coercive tactics to deprive the Company's Board of Directors and its
stockholders of any real opportunity to determine the destiny of the Company.
The Rights have been declared by the Board in order to deter such
tactics, including a gradual accumulation in the open market of a 20% or
greater position to be followed by a merger or a partial or two-tier tender
offer that does not treat all stockholders equally. These tactics can operate
to unfairly pressure stockholders, force them out of their investment and
deprive them of the full value of their shares.
The Rights are not intended to prevent a takeover of the Company and
will not do so. The Rights may be redeemed by the Company at $.01 per Right
within ten days (or on such later date as may be determined by a majority of
the Board of Directors, excluding directors affiliated with an Acquiring
Person) after the accumulation of 20% or more of the Company's shares by a
single acquiror or group. Accordingly, the Rights should not
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interfere with any merger or business combination approved by the Board of
Directors.
However, the Rights may have the effect of rendering more difficult or
discouraging an acquisition of the Company deemed undesirable by the Board of
Directors. The Rights may cause substantial dilution to a person or group that
attempts to acquire the Company on terms or in a manner not approved by the
Company's Board of Directors, except pursuant to an offer conditioned upon the
negation, purchase or redemption of the Rights. As a result, while the Rights
may provide the Board with leverage to obtain a higher price from a potential
acquiror, they may also prevent or deter offers not approved by the Board, and
therefore deprive stockholders, without providing them with the opportunity to
vote thereon, of the benefits of offers which may be at a higher price than the
current market price of the Company's Common Stock. In addition, assuming an
active trading market in the Rights themselves does not develop, stockholders
with lesser financial means might not be able to take full economic advantage
of the Rights. Further, the implementation of a rights plan may heighten the
susceptibility of the Company to greenmail by stockholders who threaten to
acquire a sufficient equity position to pass the Rights' triggering threshold,
although the Board can respond to any such action by redeeming the Rights at
$.01 per Right.
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. The issuance of
the Rights themselves has no dilutive effect, will not affect reported earnings
per share, should not be taxable to the Company or to its stockholders, and
will not change the way in which the Company's shares are presently traded.
The Company's Board of Directors believes that the Rights represent a sound and
reasonable means of addressing the complex issues of corporate policy created
by the current takeover environment.
RIGHTS EVIDENCED BY COMMON SHARE CERTIFICATES
The Rights will not be exercisable until the Distribution Date
(defined below). Prior to the Distribution Date, certificates for the Rights
("Rights Certificates") will not be sent to stockholders and the Rights will
attach to and trade only together with the Common Shares. Accordingly, Common
Share certificates outstanding on the Record Date will evidence the Rights
related thereto, and Common Share certificates issued after the Record Date but
prior to the Distribution Date will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender or transfer of any certificates for
Common Shares, even without notation or a copy of the Summary of Rights being
attached thereto (but as to certificates representing Common Shares issued
after the Record Date, only if they bear the legend required by the Rights
Agreement), will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate.
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DISTRIBUTION DATE
The Rights will separate from the Common Shares, Rights Certificates
will be issued and the Rights will become exercisable upon the earlier of: (i)
10 days (or such later date as may be determined by a majority of the Board of
Directors, excluding directors affiliated with the Acquiring Person, as defined
below (the "Continuing Directors")) following a public announcement that a
person or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 20% or more
of the outstanding Common Shares, or (ii) 10 days (or such later date as may be
determined by a majority of the Continuing Directors) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 20% or more of the outstanding Common Shares.
The earlier of such dates is referred to as the "Distribution Date."
ISSUANCE OF RIGHTS CERTIFICATES; EXPIRATION OF RIGHTS
As soon as practicable following the Distribution Date, separate
Rights Certificates will be mailed to holders of record of the Common Shares as
of the close of business on the Distribution Date and such separate Rights
Certificates alone will evidence the Rights from and after the Distribution
Date. All Common Shares issued prior to the Distribution Date will be issued
with Rights. Common Shares issued after the Distribution Date may be issued
with Rights if such shares are issued (i) upon the conversion of outstanding
convertible debentures or any other convertible securities issued after
adoption of the Rights Agreement or (ii) pursuant to the exercise of stock
options or under employee benefit plans or arrangements unless such issuance
would result in (or create a risk that) such options, plans or arrangements
would not qualify for otherwise available special tax treatment. Except as
otherwise determined by the Board of Directors, no other Common Shares issued
after the Distribution Date will be issued with Rights. The Rights will expire
on the earliest of (i) September 13, 2006 (the "Final Expiration Date"), (ii)
redemption or exchange of the Rights as described below, or (iii) consummation
of an acquisition of the Company satisfying certain conditions by a person who
acquired shares pursuant to a Permitted Offer as described below.
INITIAL EXERCISE OF THE RIGHTS
Following the Distribution Date, and until one of the further events
described below, holders of the Rights will be entitled to receive, upon
exercise and the payment of $100 per Right, one one-thousandth share of the
Series A Preferred, subject to adjustment in the event the Company declares a
dividend on the Common Shares payable in Common Shares, subdivides the number
of outstanding shares of Common Shares into a larger number of such shares or
combines the number of outstanding shares of Common Shares into a smaller
number of such shares, among other circumstances. In addition, under certain
circumstances described more fully herein, the Rights may become exercisable
for Common Shares having a value equal to two times the Purchase Price and/or
Common Stock of certain acquiring companies having a value equal to two times
the Purchase Price.
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RIGHT TO BUY COMPANY COMMON SHARES
Unless the Rights are earlier redeemed, in the event that an Acquiring
Person becomes the beneficial owner of 20% or more of the Company's Common
Shares then outstanding (other than pursuant to a Permitted Offer), then proper
provision will be made so that each holder of a Right which has not theretofore
been exercised (other than Rights beneficially owned by the Acquiring Person,
which will thereafter be void) will thereafter have the right to receive, upon
exercise and payment of the Purchase Price, Common Shares having a value equal
to two times the Purchase Price. For example, if the market price of Common
Shares on the Share Acquisition Date (as defined below) was $50.00, a person
holding one Right could purchase 4 Common Shares upon exercise of such Right
($100/25.00), whereas he could only purchase 2 Common Shares ($100/50.00) in
the absence of such Rights. Rights are not exercisable following the
occurrence of an event as described above until such time as the Rights are no
longer redeemable by the Company as set forth below.
In the event that the Company does not have sufficient Common Shares
available for all Rights to be exercised, or the Board decides that it is
necessary and not contrary to the interests of Rights holders to do so, the
Company may instead substitute cash, assets or other securities for the Common
Shares for which the Rights would have been exercisable under this provision.
RIGHT TO BUY ACQUIRING COMPANY STOCK
Similarly, unless the Rights are earlier redeemed, in the event that,
after the Share Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction, or (ii) 50% or more of the Company's
consolidated assets or earning power are sold (other than in transactions in
the ordinary course of business) (either of which event is referred to herein
as an "Acquisition"), proper provision must be made so that each holder of a
Right which has not theretofore been exercised (other than Rights beneficially
owned by the Acquiring Person, which will thereafter be void) will thereafter
have the right to receive, upon exercise, shares of Common Stock of the
acquiring company having a value equal to two times the Purchase Price (unless
the transaction satisfies certain conditions and is consummated with a person
who acquired shares pursuant to a Permitted Offer, in which case the Rights
will expire). So (assuming no satisfaction of such conditions) if for example
the market price of the acquiror's stock on the date of the Acquisition were
$25.00, a person holding one Right could purchase 8 shares of the acquiror's
Common Stock upon exercise of such Right ($100/$12.50), whereas he could only
purchase 4 shares of acquiror's Common Stock ($100/$25.00) in the absence of
such Rights.
PERMITTED OFFER
A Permitted Offer means a tender offer for all outstanding Common
Shares that has been determined by a majority of the Continuing Directors to be
adequate and otherwise in the best interests of the Company and its
stockholders. Where the Board of Directors has determined that a tender offer
constitutes a Permitted Offer, the Rights will not become
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exercisable to purchase Common Shares or shares of the acquiring company (as
the case may be) at the discounted price described above.
EXCHANGE PROVISION
At any time after the acquisition by an Acquiring Person of 20% or
more of the Company's outstanding Common Shares and prior to the acquisition by
such Acquiring Person of 50% or more of the Company's outstanding Common
Shares, the Board of Directors of the Company, following the approval of a
majority of the Board of Directors and a majority of the Continuing Directors,
may exchange the Rights (other than Rights owned by the Acquiring Person), in
whole or in part, at an exchange ratio of one Common Share per Right.
REDEMPTION
At any time on or prior to the close of business on the earlier of (i)
the 10th day following the acquisition by an Acquiring Person (the "Share
Acquisition Date") or such later date as may be determined by a majority of the
Continuing Directors and publicly announced by the Company, or (ii) the Final
Expiration Date of the Rights, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right.
ADJUSTMENTS TO PREVENT DILUTION
The Purchase Price payable, the number of Rights and the number of
Series A Preferred or Common Shares or other securities or property issuable
upon exercise of the Rights are subject to adjustment from time to time in
connection with the dilutive issuances by the Company as set forth in the
Rights Agreement. 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.
CASH PAID INSTEAD OF ISSUING FRACTIONAL SHARES
No fractional portion less than integral multiples of one
one-thousandth of a Preferred Share will be issued upon exercise of a Right and
in lieu thereof, an adjustment in cash will be made based on the market price
of the Common Shares on the last trading date prior to the date of exercise.
NO STOCKHOLDERS' RIGHTS PRIOR TO EXERCISE
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company (other than any rights resulting from
such holder's ownership of Common Shares), including, without limitation, the
right to vote or to receive dividends.
AMENDMENT OF RIGHTS AGREEMENT
The provisions of the Rights Agreement may be supplemented or amended by the
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Board of Directors in any manner prior to the close of business on the
Distribution Date without the approval of Rights holders. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency, to make changes
which do not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement; provided, however, that no amendment to adjust the
time period governing redemption shall be made at such time as the Rights are
not redeemable or there are not Continuing Directors, the majority of which
agree to such adjustment.
RIGHTS AND PREFERENCES OF THE SERIES A PREFERRED
Series A Preferred purchasable upon exercise of the Rights will not be
redeemable. Each share of Series A Preferred will be entitled to an aggregate
dividend of 1,000 times the dividend declared per Common Share. In the event
of liquidation, the holders of the Series A Preferred will be entitled to a
minimum preferential liquidation payment equal to $1,000 per share. Each share
of Series A Preferred will have 1,000 votes, voting together with the Common
Shares. In the event of any merger, consolidation or other transaction in
which the Common Shares are changed or exchanged, each share of Series A
Preferred will be entitled to receive 1,000 times the amount received per
Common Share. These rights are protected by customary anti-dilution
provisions.
Because of the nature of the dividend, liquidation and voting rights
of the shares of Series A Preferred, the value of the one one- thousandth
interest in a share of Series A Preferred purchasable upon exercise of each
Right should approximate the value of one Common Share.
ITEM 2. EXHIBITS.
EXHIBIT
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99.1 Preferred Shares Rights Agreement, dated as of
September 13, 1996 by and between Ligand
Pharmaceuticals Incorporated and Wells Fargo
Bank, N.A., including the Certificate of
Determination, the form of Rights Certificate and
the Summary of Rights attached thereto as
Exhibits A, B and C, respectively.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized.
LIGAND PHARMACEUTICALS
INCORPORATED
Date: September 30, 1996
By: /s/ PAUL V. MAIER
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Paul V. Maier
Vice President, Chief Financial Officer
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EXHIBIT INDEX
SEQUENTIAL
EXHIBIT PAGE
NO. EXHIBIT NO.
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99.1 Preferred Shares Rights Agreement, dated as of September 13, ____
1996 by and between Ligand Pharmaceuticals Incorporated and
Wells Fargo Bank N.A., including the Certificate of
Determination, the form of Rights Certificate and the Summary
of Rights attached thereto as Exhibits A, B and C,
respectively.