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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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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 7, 1998
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BIO-TECHNOLOGY GENERAL CORP.
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(Exact name of registrant as specified in charter)
DELAWARE 0-15313 13-3033811
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
70 WOOD AVENUE SOUTH, ISELIN, NEW JERSEY 08830
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 632-8800
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NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
(a) Adoption of Rights Plan.
On October 7, 1998, the Board of Directors of Bio-Technology General Corp.
(the "Company") adopted a Shareholder Rights Plan (the "Rights Plan"). The
purpose of the Rights Plan is to deter certain coercive takeover tactics and
enable the Board of Directors to represent effectively the interests of
stockholders in the event of a takeover attempt. The Rights Plan does not deter
negotiated mergers or business combinations that the Board of Directors
determines to be in the best interests of the Company and its stockholders.
To implement the Rights Plan the Board of Directors declared a dividend of
one preferred share purchase right (a "Right") for each outstanding share of
common stock, par value $.01 per share (the "Common Shares"), of the Company.
The dividend is payable on October 22, 1998 (the "Record Date") to the
stockholders of record at 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 Junior Participating Cumulative Preferred Stock, par
value $.01 per share (the "Preferred Shares"), of the Company at a price of
$45.00 per one one-thousandth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and American
Stock Transfer & Trust Company, as Rights Agent (the "Rights Agent").
RIGHTS ATTACH TO COMMON SHARES INITIALLY
Initially and until a Distribution Date (as defined below) occurs, the
Rights are attached to all Common Shares and no separate Rights certificates
will be issued. During this initial period,
o the Rights are not exercisable;
o the Rights are transferred with the Common Shares and are not
transferable separately from the Common Shares;
o new Common Share certificates issued will contain a notation
incorporating the Rights Agreement by reference; and
o the transfer of any Common Shares will also constitute the transfer of
the Rights associated with those Common Shares.
DISTRIBUTION OF RIGHTS
Separate certificates evidencing the Rights will be mailed to holders of
record of the Common Shares on the "Distribution Date." The Distribution Date is
the earlier to occur of the following two events:
o the tenth day after a public announcement that a person or group of
affiliated or associated persons has acquired 20% or more of the
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outstanding Common Shares (thereby becoming an "Acquiring Person"
under the Rights Plan); or
o the tenth business day (or such later date as may be determined by
action of the Board of Directors prior to such time as any person or
group of affiliated or associated persons becomes an Acquiring Person)
after the commencement or announcement of a tender or exchange offer
by a person or group for 20% or more of the outstanding Common Shares.
Acquisitions by the Company, any subsidiary or employee benefit plan of the
Company or any other person approved in advance by the Board of Directors will
not result in such person becoming an Acquiring Person.
After the Distribution Date, the Rights will be tradable separately from
the Common Shares. After the Distribution Date and after the Company's right to
redeem (as described below) has expired, the Rights will be exercisable in two
different ways depending on the circumstances as set forth below.
RIGHT TO PURCHASE COMPANY STOCK
If a person or group acquires 20% or more of the outstanding Common Shares
(thereby becoming an Acquiring Person) and the Company's redemption right has
expired, each holder of a Right (except those held by the Acquiring Person and
its affiliates and associates) will have the right to purchase, upon exercise,
Common Shares (or, in certain circumstances, Preferred Shares or other similar
securities of the Company) having a value equal to two times the exercise price
of the Right. In other words, the Rights holders other than the Acquiring Person
may purchase Common Shares at a 50% discount.
For example, at the exercise price of $45 per Right, each Right not owned
by an Acquiring Person would entitle its holder to purchase $90 worth of Common
Shares (or other consideration, as noted above) for $45. Assuming a value of $9
per Common Share at such time, the holder of each valid Right would be entitled
to purchase ten Common Shares for $45.
RIGHT TO PURCHASE ACQUIRING PERSON STOCK
Alternatively, if, in a transaction not approved by the Board of Directors,
the Company is acquired in a merger or other business combination or 50% or more
of its assets or earning power are sold after a person or group has become an
Acquiring Person, and the Company's redemption right has expired, proper
provision will be made so that each holder of a Right will thereafter have the
right to purchase, upon exercise, that number of shares of common stock of the
acquiring company as have a market value of two times the exercise price of the
Right. In other words, a Rights holder may purchase the acquiring company's
common stock at a 50% discount.
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EXCHANGE OF COMPANY STOCK FOR RIGHTS
At any time after any person or group becomes an Acquiring Person and
before the Acquiring Person acquires 50% or more of the outstanding Common
Shares, the Board of Directors may exchange the Rights (other than Rights owned
by the Acquiring Person which will have become void), in whole or in part, at an
exchange ratio of one Common Share, or one one-thousandth of a Preferred Share
(or of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right (subject to
adjustment).
REDEMPTION
The Rights are redeemable by the Company in whole but not in part at a
price of $.01 per Right at any time up to and including the tenth day after the
time that a person or a group has become an Acquiring Person, subject to
extension of this redemption period by the Board of Directors. Immediately upon
redemption the right to exercise will terminate and the only right of holders
will be to receive the redemption price.
EXPIRATION OF RIGHTS
The Rights will expire on October 6, 2008 unless the expiration date is
extended by amendment as described below or unless the Rights are earlier
redeemed or exchanged by the Company as described above.
AMENDMENTS
As long as the Rights are redeemable, the terms of the Rights may be
amended by the Board of Directors in its discretion without the consent of the
Rights holders. After that time, no amendment may adversely affect the interests
of the Rights holders (other than the Acquiring Person).
MISCELLANEOUS
The number of outstanding Rights and the number of one one-thousandths of a
Preferred Share issuable upon exercise of each Right are subject to adjustment
under certain circumstances.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a Preferred Share
that may be purchased upon exercise of each Right should approximate the value
of one Common Share.
Until a Right is exercised, a Rights holder, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
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A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to this current report on Form 8-K. A copy of
the Rights Agreement is available to Rights holders free of charge upon request
to the Corporate Secretary of the Company.
This summary description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
CERTAIN ANTI-TAKEOVER EFFECTS
The Rights approved by the Board of Directors of the Company 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 of Directors
in order to deter such tactics, including a gradual accumulation of shares 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 unfairly pressure stockholders, squeeze them out of their
investment without giving them any real choice 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 $0.01 per Right within
ten days after the accumulation of 20% or more of the Company's shares by a
single acquiror or group. Accordingly, the Rights should not interfere with any
merger or business combination approved by the Board of Directors.
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.
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.
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(b) Amendment to By-Laws.
In connection with the adoption of the Rights Plan, the Company amended its
By-laws to establish an advance notice procedure with regard to the nomination,
other than by or at the direction of the Board of Directors or a committee
thereof, of candidates for election as directors (the "Nomination Procedure")
and with regard to other matters to be brought by stockholders before an annual
meeting of the Company's stockholders (the "Business Procedure").
The By-laws provide that nominations of persons for election to the Board
of Directors may be made by any stockholder entitled to vote for the election of
directors at the applicable meeting of stockholders only if written notice to
the Secretary of the Company of such stockholder's intent to make such
nomination or nominations is given, either by personal delivery or by U.S.
certified mail, postage pre-paid, and received (i) not less than 120 days nor
more than 150 days before the first anniversary of the date of the Company's
proxy statement in connection with the last annual meeting of stockholders, or
(ii) if the applicable annual meeting has been changed by more than 30 days from
the date contemplated at the time of the previous year's proxy statement, not
less than 60 days before the date of the applicable annual meeting, or (iii)
with respect to any special meeting of stockholders called for the election of
directors, not later than the close of business on the seventh day following the
date on which notice of such meeting is first given to stockholders. Each such
notice shall set forth (a) as to the stockholder giving the notice, (i) the name
and address, as they appear on the Company's stock transfer books, of such
stockholder, (ii) a representation that such stockholder is a stockholder of
record and intends to appear in person or by proxy at such meeting to nominate
the person or persons specified in the notice, (iii) the class and number of
shares of the Company's stock beneficially owned by such stockholder, and (iv) a
description of all arrangements or understandings between such stockholder and
each nominee and any other person or persons naming such person or persons
pursuant to which the nomination or nominations are to be made by such
stockholder; and (b) as to each person whom the stockholder proposes to nominate
for election as a director, (i) the name, age, business address and, if known,
residence address of such person, (ii) the principal occupation or employment of
such person, (iii) the class and number of shares of the Company's stock which
are beneficially owned by such person, (iv) any other information relating to
such person that is required to be disclosed in solicitations of proxies for the
election of directors or is otherwise required by the rules and regulations of
the Securities and Exchange Commission promulgated under the Securities Exchange
Act of 1934, as amended, and (v) the written consent of such person to be named
in the proxy statement as a nominee and to serve as a director if elected.
The By-laws provide that at an annual meeting of the stockholders, only
such business shall be conducted as shall have been properly brought before the
meeting. For business to be properly brought before an annual meeting by a
stockholder, written notice thereof to the Secretary of the Company must be
given, either by personal delivery or by U.S. certified mail, postage prepaid,
and received at the principal
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executive offices of the Company (i) not less than 120 pays nor more than 150
days before the first anniversary of the date of the Company's proxy statement
in connection with the last annual meeting of stockholders or (ii) if no annual
meeting was held in the previous year or the date of the applicable annual
meeting has been changed by more than 30 days from the date contemplated at the
time of the previous year's proxy statement, not less than 60 days before the
date of the applicable annual meeting. Each such notice shall set forth as to
each matter: (a) the description of the business desired to be brought before
the annual meeting, including the complete text of any resolutions to be
presented at the annual meeting, (b) the name and address, as they appear on the
Company's stock transfer books, of such stockholder proposing such business, (c)
a representation that such stockholder is a stockholder of record and intends to
appear in person or by proxy at such meeting to bring the business before the
meeting specified in the notice, (d) the class and number of shares of the
Company's stock beneficially owned by the stockholder, (e) a description of all
arrangements or understandings between the stockholder and any other person or
persons (naming such person or persons) in connection with the proposing of such
business by the stockholder and (f) any material interest of the stockholder in
such business.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(C) EXHIBITS.
3. By-laws of Bio-Technology General Corp., as amended.
4.1 Rights Agreement, dated as of October 7, 1998, by and
between Bio-Technology General Corp. and American Stock
Transfer & Trust Company, as Rights Agent, which
includes the form of Certificate of Designations setting
forth the terms of the Series A Junior Participating
Cumulative Preferred Stock, par value $0.01 per share,
as Exhibit A, the form of Right Certificate as Exhibit B
and the Summary of Rights to Purchase Preferred Shares
as Exhibit C.
4.2 Certificate of Designations of the Series A Junior Participating
Cumulative Preferred Stock.
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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.
BIO-TECHNOLOGY GENERAL CORP.
Date: October 8, 1998 By: /s/ SIM FASS
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Sim Fass
Chairman of the Board,
President and
Chief Executive
Officer
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