SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) MAY 21, 1998
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DURA PHARMACEUTICALS, INC.
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(Exact name of registrant as specified in charter)
DELAWARE 000-19809 95-3645543
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
7475 LUSK BLVD., SAN DIEGO, CA 92121
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619) 457-2553
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NONE
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(Former name or former address, if changed since last report.)
Item 5. OTHER EVENTS.
On May 21, 1998, the Board of Directors of Dura
Pharmaceuticals, Inc. (the "Company") declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of Common Stock
(the "Common Stock"), par value $.001 per share, of the Company. The
dividend is payable on June 5, 1998 (the "Record Date") to the stockholders
of record on that date. Each Right entitles the registered holder to
purchase from the Company one one-thousandth of a share (a "Unit") of Series
A Junior Participating Preferred Stock, par value $.001 per share (the
"Series A Preferred Stock"), of the Company at a price of $175.00 per Unit
(the "Purchase Price"), subject to adjustment. The description and terms of
the Rights are set forth in a Rights Agreement dated as of May 21, 1998 (the
"Rights Agreement") between the Company and ChaseMellon Shareholder Services,
L.L.C. as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) the close of business on the
first date of a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired beneficial ownership of
15% or more of the outstanding Common Stock or (ii) 10 business days (or such
later date as may be determined by action of the Continuing Directors prior to
such time as any Person becomes an Acquiring Person) 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 15% or more of such outstanding Common Stock (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificate with a copy of the Summary of Rights
attached thereto.
The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after the Record Date, upon transfer or new
issuance of Common Stock will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Stock, outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights 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 Rights Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire at the close of business on June 5, 2008 (the "Final
Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, in each case as
described below.
The Purchase Price payable, and the number of Units of Series A
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 Series A Preferred Stock, (ii) upon the grant to
holders of the Units of Series A Preferred Stock of certain rights or warrants
to subscribe for or purchase Units of Series A Preferred Stock at a price, or
securities convertible into Units of Series A Preferred Stock with a conversion
price, less than the then current market price of the Units of Series A
Preferred Stock or (iii) upon the distribution to holders of the Units of Series
A Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings or dividends
payable in Units of Series A Preferred Stock) or of subscription rights or
warrants (other than those referred to above).
The number of outstanding Rights and the number of Units of
Series A Preferred Stock issuable upon exercise of each Rights 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,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
2.
Units of Series A Preferred Stock purchasable upon exercise of
the Rights will not be redeemable. Each Unit of Series A Preferred Stock will
be entitled to an aggregate dividend of 1,000 times the dividend declared per
share of Common Stock. In the event of liquidation, the holders of the Units of
Series A Preferred Stock will be entitled to an aggregate payment of 1,000 times
the payment made per share of Common Stock. Each Unit of Series A Preferred
Stock will have 1,000 votes, voting together with the Common Stock. Finally, in
the event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged, each Unit of Series A Preferred Stock will be
entitled to receive 1,000 times the amount received per share of Common Stock.
These rights are protected by customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting
rights, the value of each Unit of Series A Preferred Stock purchasable upon
exercise of each Right should approximate the value of one share of Common
Stock.
In the event that, after the Rights become exercisable, the
Company is acquired in a merger or other business combination transaction with
an Acquiring Person or an affiliate thereof, or 50% or more of its consolidated
assets or earning power are sold to an Acquiring Person or an affiliate thereof,
proper provision will be made so that each holder of a Rights will thereafter
have the right to receive, upon exercise thereof at the then current exercise
price of the Rights, that number of shares of common stock of the acquiring
company which at the time of such transaction will have a market value of two
times the exercise price of the Rights.
In the event that any person or group of affiliated or associated
persons becomes the beneficial owner of 15% or more of the outstanding shares of
Common Stock, proper provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon exercise
that number of shares of Common Stock or Units of Series A Preferred Stock (or
cash, other securities or property) having a market value of two times the
exercise price of the Rights.
At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more of the
outstanding shares of Common Stock and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Stock, the Continuing
Directors of the Company may exchange the Rights (other than Rights owned by
such person or group which have become void), in whole or in part, at an
exchange ratio of one Unit of Series A Preferred Stock (subject to adjustment)
which shall equal, subject to adjustment to reflect stock splits, stock
dividends and similar transactions occurring after the date hereof, that number
obtained by dividing the Purchase Price by the then current per share market
price per Unit of Series A Preferred Stock on the earlier of (i) the date on
which any Person becomes an Acquiring Person and (ii) the date on which a tender
or exchange offer is announced by any Person, if upon consummation thereof such
Person would be the Beneficial Owner of 15% or more of the shares of Company
Common Stock then outstanding.
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 Series A Preferred Stock will be
issued (other than fractions which are integral multiples of one one-thousandth
of a share of Series A 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 Units of Series
A Preferred Stock on the last trading day prior to the date of exercise.
3.
At any time on or prior to the close of business on the first
date of a public announcement that a person or group of affiliated or associated
persons acquire beneficial ownership of 15% or more of the outstanding Common
Stock (unless the Continuing Directors extends such ten-day period), the 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"), upon the approval of a
majority of the Continuing Directors. The redemption of the rights may be made
effective at such time on such basis and with such conditions as the Board of
Directors, upon the approval of the Continuing 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. The Rights are also redeemable under
other circumstances as specified in the Rights Agreement.
The terms of the Rights may be amended by the Board of Directors
of the Company without the consent of the holders of the Rights upon the
approval of a majority of the Continuing Directors except that from and after a
Distribution Date no such amendment may adversely affect the interests of the
holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's 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 since the Rights may be redeemed
by the Company at the Redemption Price prior to the occurrence of a Distribution
Date.
The Rights Agreement, dated as of May 21, 1998, between the
Company and the Rights Agent, specifying the terms of the Rights, is attached
hereto as an exhibit and is incorporated herein by reference. The foregoing
description of the Rights is qualified in its entirety by reference to such
exhibit. The Certificate of Designation for the Series A Preferred Stock is
attached hereto as an exhibit. The foregoing description of the Series A
Preferred Stock is qualified in its entirety by reference to such exhibit.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit 4 Rights Agreement, dated as of May 21, 1998, between the
Company and ChaseMellon Shareholder Services, L.L.C.,
which includes the form of Certificate of Designation
for the Series A Junior Participating Preferred Stock
as Exhibit A, the form of Rights Certificate as Exhibit
B and the Summary of Rights to Purchase Series A
Preferred Shares as Exhibit C. Pursuant to the Rights
Agreement, printed Right Certificates will not be
mailed until as soon as practicable after the earlier
of (i) the close of business on the first date of a
public announcement that a person or group has acquired
beneficial ownership of 15% or more of the shares of
Common Stock or (ii) the tenth (10th) business day (or
such later date as may be determined by action of the
Board of Directors) after a person commences, or
announces its intention to commence, a tender offer or
exchange offer the consummation of which would result
in the beneficial ownership by a person or group of 15%
or more of the shares of Common Stock.
Exhibit 21(a) Press Release dated May 22, 1998.
Exhibit 21(b) Form of Letter to Stockholders of Dura Pharmaceuticals,
Inc. regarding the adoption of the Rights Plan pursuant
to the Rights Agreement.
4.
SIGNATURE
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 thereunto duly authorized.
DURA PHARMACEUTICALS, INC.
DATE: May 21, 1998 By: /s/ CAM L. GARNER
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Name: Cam L. Garner
Title: Chairman, President and Chief Executive
Officer
5.
EXHIBIT INDEX
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
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4. Rights Agreement, dated as of May 21, 1998, between the Company and
ChaseMellon Shareholder Services, L.L.C., which includes the form of
Certificate of Designation for the Series A Junior Participating
Preferred Stock as Exhibit A, the form of Rights Certificate as
Exhibit B and the Summary of Rights to Purchase Series A Preferred
Shares as Exhibit C. Pursuant to the Rights Agreement, printed Right
Certificates will not be mailed until as soon as practicable after
the earlier of (i) the close of business on the first date of a
public announcement that a person or group has acquired beneficial
ownership of 15% or more of the shares of Common Stock or (ii) the
tenth (10th) business day (or such later date as may be determined
by action of the Board of Directors) after a person commences, or
announces its intention to commence, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by
a person or group of 15% or more of the shares of Common Stock.
21(a) Press Release dated May 22, 1998.
21(b) Form of Letter to Stockholders of Dura Pharmaceuticals, Inc. regarding
the adoption of the Rights Plan pursuant to the Rights Agreement.
6.