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UNITED STATES
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: May 6, 1998
(Date of earliest event reported)
LIDAK PHARMACEUTICALS
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of incorporation)
0-18734 33-0314804
(Commission File Number) (IRS Employer Identification No.)
11077 North Torrey Pines Road, La Jolla, California 92037
(Address of principal executive offices) (Zip code)
(619) 558-0364
(Registrants telephone number, including area code)
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Item 5. OTHER EVENTS
On April 30, 1998, Dr. Katz filed a complaint in the California State
Superior Court in San Diego against the Company, Stuart A. Samuels, Sidney N.
Towle, Jr., Helmer P.K. Agersborg, Jr., Dr. Gerald Yakatan and unnamed other
parties. (The complaint is referred to, below, as the "Katz Complaint" and the
related litigation is referred to as the "Katz/LIDAK Litigation".) Each of these
individuals are currently directors of the Company and Dr. Yakatan also serves
as Chief Executive Officer (CEO) and President of the Company. The Katz
Complaint alleges, among other things, (1) that Dr. Katz was wrongfully excluded
from discussions between directors in meetings of the Executive Committee of the
Board of Directors and the Special Committee of the Board of Directors which was
constituted to evaluate the HealthMed financing proposal, and (2) that there was
(a) no discussion at the full Board meetings at which Dr. Yakatan was appointed
director in February 1998 and at which Dr. Katz was terminated and Dr. Yakatan
was appointed as President and CEO in March 1998, and (b) no advance notice that
such actions were to be considered by the directors at the board meetings in
question. The Katz Complaint seeks declaratory relief that (1) the termination
of Dr. Katz be declared null and void, (2) the election of Dr. Yakatan both as a
director and as the President and CEO of the Company be declared null and void,
(3) the Settlement Agreement between the Company, HealthMed and others described
in the Company's Form 8-K filed March 27, 1998 be declared null and void, (4) an
accounting and repayment to Dr. Katz in excess of $1,500,000 allegedly advanced
by Dr. Katz to the Company, (5) Dr. Katz be reinstated to five votes per share
with respect to those shares of Class B Common Stock shares of Dr. Katz which
Dr. Katz (a) sold to HealthMed Inc. ("HealthMed"), and (b) transferred into the
voting trust in January 1998 described in Dr. Katz' Schedule 13-D dated January
12, 1998, as amended by Amendment No. 1 dated March 27, 1998, in the event that
Dr. Katz is successful in rescinding such transaction pursuant to litigation
currently filed by Dr. Katz against HealthMed, and (6) the termination of Dr.
Katz (if the court holds such did occur) be declared to be "not for cause," that
Dr. Katz be entitled to the previously agreed upon severance payments under his
employment agreement, and that Dr. Katz not be obliged to sign a release
pursuant to his employment contract in order to receive such severance pay. The
Katz Complaint also seeks injunctive relief to prevent the termination of Dr.
Katz' rights to exercise certain stock options which, by their terms, expire
within a specified time period after his termination as an employee pending
resolution of the issue of Dr. Katz' termination in March 1998. The Company
believes that the claims in the Katz Complaint are without merit and intends to
vigorously defend the litigation. Dr. Katz has additionally advised the Company
that he intends to sue both William N. Jenkins and Kenneth E. Olson (both
current directors of the Company) with identical causes of action but, to the
Company's knowledge, no such complaint has been filed as of the date of this
Report.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
LIDAK PHARMACEUTICALS
Date: May 6, 1998 By: \s\Jeffery B. Weinress
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Jeffery B. Weinress
Vice President & Chief Financial
Officer
