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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
RELATING TO ADOPTION OF A RIGHTS PLAN
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 8, 2000
ISIS PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-19125 330336973
(Commission File No.) (IRS Employer Identification No.)
2292 FARADAY AVENUE
CARLSBAD, CA 92008
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (760) 931-9200
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ITEM 5. OTHER EVENTS.
On December 8, 2000, the Board of Directors of Isis Pharmaceuticals,
Inc. (the "Company") approved the adoption of a Preferred Share Purchase Rights
Plan (the "Plan"). Terms of the Plan provide for a dividend distribution of one
preferred share purchase right (a "Right") for each outstanding share of common
stock, par value $0.001 per share (the "Common Shares"), of the Company. The
dividend is payable on January 10, 2001 (the "Record Date") to the stockholders
of record on that date. Each Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series C Junior Participating
Preferred Stock, par value $0.001 per share (the "Preferred Shares"), at a price
of $85 per one one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. Each one one-hundredth of a share of Preferred Shares has
designations and powers, preferences and rights, and the qualifications,
limitations and restrictions which make its value approximately equal to the
value of a Common Share. The description and terms of the Rights are set forth
in a Rights Agreement (the "Rights Agreement"), dated as of December 8, 2000,
entered into between the Company and American Stock Transfer & Trust Company, as
rights agent (the "Rights Agent").
Initially, the Rights will be evidenced by the stock certificates
representing the Common Shares then outstanding, and no separate Right
Certificates, as defined, will be distributed. Until the earlier to occur of
(i) the date of a public announcement that a person, entity or group of
affiliated or associated persons have acquired beneficial ownership of 20% or
more of the outstanding Common Shares after the date of the adoption of the
Rights Agreement, subject to certain exceptions set forth in the Rights
Agreement (an "Acquiring Person"), or (ii) 10 business days (or such later
date as may be determined by action of the Board of Directors prior to such
time as any person or entity becomes an Acquiring Person) following the
commencement of, or announcement of an intention to commence, a tender offer
or exchange offer the consummation of which would result in any person or
entity becoming an Acquiring Person (the earlier of such dates being called
the "Distribution Date"), the Rights will be evidenced, with respect to any
of the Common Share certificates outstanding as of the Record Date, by such
Common Share certificate with or without a copy of the Summary of Rights,
which is included in the Rights Agreement as Exhibit C thereof (the "Summary
of Rights").
Until the Distribution Date, the Rights will be transferable with and
only with the Common Shares. Until the Distribution Date (or earlier redemption
or expiration of the Rights), new Common Share certificates issued after the
Record Date, upon transfer or new issuance of Common Shares, 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 outstanding as of the Record
Date, even without such notation or a copy of the Summary of Rights being
attached thereto, will also constitute the transfer of the Rights associated
with the Common Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Right 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 Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on December 7, 2010 (the "Final Expiration Date"), unless the Rights
are earlier redeemed or exchanged by the Company, in each case, as described
below.
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The Purchase Price payable, and the number of Preferred Shares or other
securities or other 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
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above). The exercise of Rights
for Preferred Shares is at all times subject to the availability of a sufficient
number of authorized but unissued Preferred Shares.
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidation or combinations of the Common Shares occurring, in any case, prior
to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00, but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares would be entitled to a minimum
preferential liquidation payment of $100 per share, but would be entitled to
receive an aggregate payment equal to 100 times the payment made per Common
Share. Each Preferred Share will have 100 votes, voting together with the Common
Shares. Finally, in the event of any merger, consolidation or other transaction
in which Common Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount of consideration received per Common Share. These
rights are protected by customary anti-dilution provisions. Because of the
nature of the Preferred Shares' dividend and liquidation rights, the value of
one one-hundredth of a Preferred Share should approximate the value of one
Common Share. The Preferred Shares rank junior to any other series of the
Company's preferred stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
and its associates and affiliates (which will thereafter be void), will for a
60-day period (or such longer period as necessary to register the Company's
securities) have the right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the Right (or, if such
number of shares is not and cannot be authorized, the Company may issue cash,
debt, other securities or a combination thereof in exchange for the Rights).
This right will terminate 60 days after the date on which the Rights become
nonredeemable (as described below), unless there is an injunction or similar
obstacle to exercise of the Rights, in which event this right will terminate 60
days after the date on which the Rights again become exercisable (or such longer
period as set forth in the Rights Agreement).
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Generally, under the Plan, an "Acquiring Person" shall not be deemed
to include (i) the Company, (ii) any subsidiary of the Company, (iii) any
employee benefit or compensation plan of the Company or any subsidiary of the
Company, (iv) any entity holding Common Shares for or pursuant to the terms
of any such employee benefit or compensation plan or (v) any person, together
with all affiliates and associates of such person, who is the beneficial
owner of 20% or more of the Common Shares outstanding as of the date of the
Rights Agreement until such time after the date of the Rights Agreement that
such person, together with all affiliates and associates of such Person,
shall become the beneficial owner of 25% or more of the Common Shares
outstanding without the prior written consent of the Company. In addition,
except under limited circumstances, no person or entity shall become an
Acquiring Person as the result of the acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such person or entity to
20%, or in the case of (v) above, to 25% or more, of the Common Shares then
outstanding. Further, except under certain circumstances, no person shall
become an Acquiring Person due to the acquisition of Common Shares directly
from the Company.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold to an Acquiring Person, its associates or affiliates or certain
other persons in which such persons have an interest, proper provision will be
made so that each holder of a Right will thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the Right, 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
Right.
At any time after an Acquiring Person becomes an Acquiring Person and
prior to the acquisition by such Acquiring Person of 50% or more of the
outstanding Common Shares, the Board of 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 Common Share per Right
(or, at the election of the Company, the Company may issue cash, debt, stock or
a combination thereof in exchange for the Rights), subject to adjustment.
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 Preferred Shares will be issued (other than
fractions which are integral multiples of the number of one one-hundredths of a
Preferred Share issuable upon the exercise of one Right, 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
Preferred Shares on the last trading day prior to the date of exercise.
At any time prior to the earliest of (i) the day that a person has
become an Acquiring Person or (ii) the Final Expiration Date, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $0.001 per Right (the "Redemption Price"). Following the expiration of
the above periods, the Rights become nonredeemable, except that after the
expiration of the period during which the Rights are exercisable for Common
Stock, then the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at the Redemption Price in connection with a sale or
merger of the Company or its assets to a party which is unrelated to the
Acquiring Person. 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 terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from and
after such time as the
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rights are distributed no such amendment may adversely affect the interest of
the holders of the Rights, excluding the interests of an Acquiring Person.
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. The Rights should not
interfere with any merger or other business combination approved by the Board of
Directors, since the Rights may be amended to permit such acquisition or may be
redeemed by the Company at $0.001 per Right, as set forth above.
ITEM 7. EXHIBITS.
4.1 Restated Certificate of Incorporation. (1)
4.2 Certificate of Designation of Series C Junior Participating
Preferred Stock.
99.1 Press Release, dated as of December 8, 2000, entitled "Isis
Pharmaceuticals, Inc. Adopts Stockholder Rights Plan."
99.2 Rights Agreement dated as of December 8, 2000 between Isis
Pharmaceuticals, Inc. and American Stock Transfer & Trust
Company.
99.3 Form of Right Certificate.
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(1) Filed as an exhibit to the Registration Statement on Form S-1 (No.
33-39649) or amendments thereto and incorporated herein by
reference.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
ISIS PHARMACEUTICALS, INC.
Dated: December 12, 2000 By: /s/ B. LYNNE PARSHALL
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B. LYNNE PARSHALL
Executive Vice President,
Chief Financial Officer and Secretary
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INDEX TO EXHIBITS
4.1 Restated Certificate of Incorporation. (1)
4.2 Certificate of Designation of Series C Junior Participating
Preferred Stock.
99.1 Press Release, dated as of December 8, 2000, entitled "Isis
Pharmaceuticals, Inc. Adopts Stockholder Rights Plan."
99.2 Rights Agreement dated as of December 8, 2000 between Isis
Pharmaceuticals, Inc. and American Stock Transfer & Trust
Company.
99.3 Form of Right Certificate.
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(1) Filed as an exhibit to the Registration Statement on Form S-1 (No.
33-39649) or amendments thereto and incorporated herein by reference.
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