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
Date of report (date of earliest event reprted): April 3, 2000
NEXMED, INC.
(Exact name of registrant as specified in its charter)
Nevada 870449967
(State of incorporation or organization) (I.R.S. Employer Identification No.)
350 Corporate Boulevard, Robbinsville, New Jersey 08691
(Address of principal executive offices)
(609) 203-9688
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events
On April 3, 2000, the Board of Directors of NexMed, Inc., a Nevada
corporation (the "Company"), declared a dividend distribution of one preferred
share purchase right (the "Right") for each outstanding share of the Company's
common stock, $.001 par value per share (the "Common Stock"), to shareholders of
record at the close of business on April 21, 2000. One Right will also be
distributed for each share of Common Stock issued after April 21, 2000, until
the Distribution Date (which is described in the next paragraph). Each Right
entitles the registered holder to purchase from the Company a unit consisting of
one one-hundredths of a share (a "Unit") of Series A Junior Participating
Preferred Stock, $.001 par value per share (the "Preferred Stock"), at a
Purchase Price of $100.00 per Unit, subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement dated as of April 3,
2000 (the "Rights Agreement") between the Company and Norwest Bank Minnesota,
N.A., as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) ten (10) business days
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 15% or more of the outstanding shares of
Common Stock (the "Stock Acquisition Date"), or (ii) ten (10) business days
following the public announcement of a tender offer or exchange offer that
would, if consummated, result in a person or group beneficially owning 15% or
more of such outstanding shares of Common Stock, subject to certain limitations.
Under the terms of the Rights Agreement, Dr. Y. Joseph Mo ("Dr. Mo"), who
beneficially owns approximately 12.12% of the outstanding shares of the
Company's Common Stock as of the date hereof, and certain of his affiliates and
associates (collectively, with Dr. Mo, the "Mo Entities"), will be permitted to
continue to own such shares, and to increase such ownership to up to 25% of the
outstanding shares of Common Stock, without becoming an Acquiring Person and
triggering a Distribution Date.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (i) the Rights will be evidenced by the Common Stock certificates and
will be transferred with and only with such Common Stock certificates, (ii) new
Common Stock certificates issued after April 21, 2000 will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding, even without such
notation, will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable after the
Distribution Date, Rights Certificates will be mailed to holders of record of
the Common Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent the Rights.
The Rights are
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not exercisable until the Distribution Date and will expire at the close of
business on April 3, 2010, subject to extension by the Board of Directors,
unless earlier redeemed by the Company as described below.
In the event that any person becomes an Acquiring Person, each holder of a
Right will thereafter have the right (the "Flip-In Right") to receive, at the
time specified in the Rights Agreement, (x) upon exercise and payment of the
Purchase Price, Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to two times the Purchase
Price of the Right or (y) at the discretion of the Board of Directors, upon
exercise and without payment of the Purchase Price, Common Stock (or, in certain
circumstances, cash, property or other securities of the Company) having a value
equal to the difference between the Purchase Price of the Right and the value of
the consideration which would be payable under clause (x). Notwithstanding any
of the foregoing, following the occurrence of any of the events set forth in
this paragraph, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any Acquiring Person will
be null and void. Rights are not exercisable following the occurrence of the
event set forth above until such time as the Rights are no longer redeemable by
the Company as set forth below.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger, statutory share exchange or other business
combination in which the Company is not the surviving corporation, (ii) the
Company is the surviving party in a merger, statutory share exchange or other
business combination and all or part of the Company's Common Stock is exchanged
for stock or other securities of another corporation, or (iii) 50% or more of
the Company's assets or earning power is sold or transferred, each holder of a
Right (except Rights which previously have been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to receive, upon exercise,
common stock of the acquiring corporation having a value equal to two times the
Purchase Price of the Right. The holders of a Right will continue to have the
Flip-Over Right whether or not such holder exercises or surrenders the Flip-In
Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units 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) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the 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 quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above). The number of outstanding Rights
and the number of one one-hundredths of a share of Preferred Stock issuable upon
exercise of each Right are also subject to adjustment in the event of a stock
split of the Common Stock or a stock dividend on the Common Stock payable in
Common Stock or subdivisions,
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consolidations or combinations of the Common Stock occurring, in each such case,
prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time after any person becomes an Acquiring Person, the Company may
exchange all or part of the Rights for shares of Common Stock at an exchange
ratio of one share per Right, as appropriately adjusted to reflect any stock
dividend, stock split or similar transaction.
In general, the Company may redeem the Rights in whole, but not in part,
at a price of $0.001 per Right, at any time until 10 business days following the
Stock Acquisition Date. After the redemption period has expired, the Company's
right of redemption may be reinstated if an Acquiring Person reduces his
beneficial ownership to less than 15% (or, in the case of the Mo Entities, 25%
or less) of the outstanding shares of Common Stock in a transaction or series of
transactions not involving the Company and there are no other Acquiring Persons.
Immediately upon the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the $0.001 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for stock (or other consideration) of the Company or for common
stock of the acquiring company as set forth above.
Prior to the Distribution Date, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, 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 when the Rights are not redeemable.
The Rights Agreement between the Company and the Rights Agent specifying
the terms of the Rights, which includes the Form of the Rights Certificate, the
Summary of Rights and the Form of Certificate of Designation of the Series A
Junior Participating Preferred Stock, is attached as an exhibit to this Form 8-K
and incorporated herein by reference. The foregoing is qualified in its entirety
by reference thereto.
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In connection with the foregoing, the Company hereby files the documents
listed below.
Exhibit Document
4 Shareholder Rights Agreement, dated as of April 3, 2000, between
NexMed, Inc. and Norwest Minnesota Bank, N.A., as Rights Agent
(including the Form of Rights Certificate as Exhibit A thereto, the
Summary of Rights as Exhibit B thereto, and the Form of Certificate
of Designation of Series A Junior Participating Preferred Stock as
Exhibit C thereto).
20 Press Release of NexMed, Inc. dated April 3, 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.
NEXMED, INC.
Date: April 7, 2000 By: /s/ Vivian H. Liu
----------------------------
Vivian H. Liu
Vice President and Secretary
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EXHIBIT INDEX
Exhibit Document
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4. Shareholder Rights Agreement, dated as of April 3, 2000, between
NexMed, Inc. and Norwest Minnesota Bank, N.A., as Rights Agent
(including the Form of Rights Certificate as Exhibit A thereto, the
Summary of Rights as Exhibit B thereto, and the Form of Certificate
of Designation of Series A Junior Participating Preferred Stock as
Exhibit C thereto).
20 Press Release of NexMed, Inc. dated April 3, 2000.
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