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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: October 24, 1997
Date of earliest event reported: September 26, 1997
DUSA PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
NEW JERSEY 0-19777 22-3103129
(State or other (IRS Employer
jurisdiction of (Commission Identification
incorporation) File Number) Number)
181 UNIVERSITY AVENUE
TORONTO, ONTARIO M5H 3M7 CANADA
(Address of principal executive offices, including ZIP code)
(416) 363-5059
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On September 26, 1997, the Board of Directors of DUSA Pharmaceuticals,
Inc., a New Jersey corporation (the "Company"), declared a dividend of one
common stock and note purchase right (a "Right") for each outstanding share of
Common Stock (the "Rights Dividend"). The Rights Dividend is payable on October
24, 1997 (the "Record Date") to stockholders of record at the close of business
on the Record Date, and with respect to all shares of Common Stock that become
outstanding after the Record Date and prior to the earliest of the Distribution
Date (as defined below), the redemption of the Rights and the expiration of the
Rights. As of the Record Date, the number of shares of Common Stock outstanding
is 9,365,950.
Except as set forth below and subject to adjustment as provided in the
Rights Agreement (as defined below), each Right entitles the registered holder
to purchase from the Company one Unit, consisting initially of a one-tenth share
of Common Stock and one Note in the principal amount equal to nine-tenths of the
current market price of the Common Stock on the date of exercise, at an exercise
price of $50 per Right (the "Purchase Price"). The description and terms of the
Rights are set forth in a Rights Agreement dated as of September 26, 1997 (the
"Rights Agreement"), between the Company and American Stock Transfer & Trust
Company, as Rights Agent (the "Rights Agent"). The Notes are issuable under, and
subject to the terms and conditions of, an Indenture (the "Indenture") between
the Company and American Stock Transfer and Trust Company.
The Rights will be evidenced by Common Stock certificates and not by
separate certificates until the tenth day following the earliest of (i) the date
of public disclosure that a person or group (an "Acquiring Person"), together
with persons affiliated or associated with it, has acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the outstanding Common
Stock (the "Stock Acquisition Date") and (ii) the commencement or disclosure of
an intention to commence, a tender offer or exchange offer by a person other
than the Company and certain related entities if upon consummation of the offer,
such person or group together with persons affiliated or associated with it,
could acquire beneficial ownership of 15% or more of the outstanding Common
Stock, (the earlier of such dates being called the "Distribution Date), and
(iii) the date a majority of the Independent Directors and a majority of the
Continuing Directors declare a person an "Adverse Person" upon a determination
that such person, alone or together with its affiliates or associates, has
become the beneficial owner of an amount of Common Stock which the Independent
Directors determine to be substantial (which amount shall in no event be less
than 10% of the shares of Common Stock then outstanding) and a determination by
a majority of the Independent Directors and the Continuing Directors, after
reasonable inquiry and investigation, including consultations with such persons
as such directors shall deem appropriate that (a) such ownership is detrimental
to the maintenance, renewal, or acquisition of the Company's governmental or
regulatory approvals, agreements, permits, licenses or registrations, or (b)
such persons were convicted in criminal proceedings or are named defendants of
pending criminal proceedings (excluding minor offenses) relating to the
pharmaceutical industry or any other business regulated by any federal, state or
local governmental agency, or (c) such persons are currently subject to any
order, judgment, decree or
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debarment of any court of competent jurisdiction or governmental or regulatory
authority permanently or temporarily enjoining them from any type of business
practice relating to the pharmaceutical industry or any other business regulated
by any state or local governmental agency.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferable with and only with the Common Stock
(except in connection with redemption of the Rights). Until the Distribution
Date (or earlier redemption of the Rights), new Common Stock certificates issued
after the Record Date upon transfer, replacement 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 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. From and after the Distribution Date, such separate Right
Certificates alone will evidence the Rights.
The Rights will first become exercisable on the Distribution Date
(unless sooner redeemed). The Rights will expire at the close of business on
October 24, 2007 (the "Expiration Date"), unless earlier redeemed by the Company
as described below.
The Purchase Price is subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend or distribution on, or a
subdivision, combination or reclassification of, the Common Stock, (ii) upon the
grant to holders of the Common Stock of certain rights, options, or warrants to
subscribe for Common Stock or securities convertible into Common Stock at less
than the current market price of the Common Stock, or (iii) upon the
distribution to holders of the Common Stock of other securities, cash, property,
evidences of indebtedness, or assets.
In the event that a majority of the Independent Directors and a
majority of the Continuing Directors declare that a person is an Adverse Person
(an "Adverse Person Event"), a person acquires beneficial ownership of 15% or
more of the Common Stock (and the Independent Directors do not thereafter redeem
the Rights in the time and manner permitted, such event, is referred to herein
as a "Triggering Event"), then the Rights will "flip-in" and entitle such holder
of a Right, except as provided below, to purchase, upon exercise at the
then-current Purchase Price, that number of shares of Common Stock having a
market value of two times such Purchase Price.
Any Rights beneficially owned at any time on or after the earlier of
the Distribution Date and the Stock Acquisition Date by an Acquiring Person or
Adverse Person, or an affiliate or associate of an Acquiring Person or Adverse
Person (whether or not such ownership is subsequently transferred) will become
null and void upon the occurrence of a Triggering Event or an Adverse Person
Event, and any holder of such Rights will have no right to exercise such Rights.
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In the event that, following the Stock Acquisition Date, the Company is
acquired in a merger or other business combination in which the Common Stock
does not remain outstanding or is changed or 50% or more of its consolidated
assets or earning power is sold, leased, exchanged, mortgaged, pledged or
otherwise transferred or disposed of (in one transaction or a series of related
transactions) the Rights will "flip-over" and entitle each holder of a Right
(except those Rights which have been voided as set forth above) to purchase,
upon the exercise of the Right at the then-current Purchase Price, that number
of shares of common stock of the acquiring company (or, in certain
circumstances, one of its affiliates) which at the time of such transaction
would have a market value of two times such Purchase Price.
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. Holders will have no right to receive fractional shares of
Common Stock or Notes (other than fractions which are in denominations of $10 or
integral multiples thereof) upon the exercise of Rights. In lieu of such
fractional shares or Notes, an adjustment in cash may be made based on the
market price of the Common Stock on the last trading date prior to the date of
exercise, or the Company may issue script, warrants or depository receipts.
At any time prior to the earlier of (i) ten days following the Stock
Acquisition Date, and (ii) the Expiration Date, the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right, subject to
adjustment. Under certain circumstances the decision to redeem shall require the
concurrence of a majority of the Continuing Directors and a majority of the
Independent Directors. The Company may not redeem the Rights if the Independent
Directors have declared a person an Adverse Person. Immediately upon the action
of the Company's Board of Directors electing to redeem the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
thereafter will be to receive the applicable redemption price.
The term "Continuing Directors" includes any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, an Adverse Person or an
affiliate or associate of an Acquiring Person or an Adverse Person, or any
representative of the foregoing entities. The term "Independent Directors"
includes any member of the Board, while such Person is a member of the Board,
who (i) is not an employee of the Company or (ii) does not receive compensation
from the Company for services, other than services as a director.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder or noteholder of the Company, including, without
limitation, the right to vote or to receive dividends or distributions of
payments of principal or interest.
At any time prior to ten days following the Stock Acquisition Date, the
Company may, without the approval of any holder of the Rights, supplement or
amend certain provisions of the Rights Agreement (including the date on which
the Distribution Date will occur). Thereafter, the Rights Agreement may be
amended only to cure ambiguities, to correct inconsistent provisions, or
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in ways that do not adversely affect the Rights holders. The Rights Agreement
may not be amended to change the Purchase Price, the number of shares of Common
Stock, other securities, cash or other property obtainable upon exercise of a
Right, the redemption price, or the Expiration Date, except that, prior to ten
days following the Triggering Event, the Rights Agreement may be amended to
substitute other securities for the Unit otherwise obtainable upon exercise of a
Right, provided the value of such securities is equal to the then current market
price of one share of Common Stock.
The Rights have certain anti-takeover effects. The Rights may 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
Company's Board of Directors prior to the time a person or group has acquired
beneficial ownership of 15% or more of the Common Stock, because until such time
the Rights may be redeemed by the Company.
The foregoing summary description of the Rights and the Notes does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement and the Indenture, copies of which are attached hereto as
Exhibits 4.1 and 4.2, respectively, and are incorporated herein by reference.
Copies of the Rights Agreement and the Indenture will be available free of
charge from the Company.
Also on September 26, 1997, the Company approved, subject to
shareholder approval, certain amendments, described below, to its Certificate of
Incorporation and adopted amendments to its By-Laws. The amendments to both the
Certificate of Incorporation and By-Laws will be submitted for shareholder
approval at the Company's Annual Meeting in June, 1998.
The Board approved an amendment to Article 3 of its Certificate of
Incorporation to increase the number of authorized shares from 20,000,000 to
100,000,000 shares and to further provide that the Board shall have the power to
divide the authorized and unissued shares of the Company into classes and series
of shares, and to determine the designation and the number of shares of any
series, and to determine the relative rights, preferences and limitations of any
class or series.
The Board approved the addition of Article 8 to the Company's
Certificate of Incorporation, and the amendment of Article II, Section 1,
Paragraph 5 of the Company's ByLaws to provide that any one or more of the
members of the Board may be removed with cause by a majority vote of the whole
Board, or upon the affirmative vote of the holders of record of at least a
majority of the shares of stock of the Company entitled to vote thereon. These
actions eliminate the right of shareholders to remove a member of the Board
without cause.
The Board also adopted an amendment to Article II, Section 1, Paragraph
1 of the Company's By-Laws to provide that the Board of Directors shall consist
of at least 5, and no more than 9 members, as determined from time to time by
the Board. The current By-Laws provide that the Board shall consist of at least
1 member, and up to any number that the Board may determine from time to time.
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ITEM 7. EXHIBITS
4.1 Rights Agreement dated September 26, 1997 between DUSA Pharmaceuticals,
Inc. and American Stock Transfer & Trust Company as Rights Agent,
incorporated by reference to Exhibit 1 to the Company's Registration
Statement on Form 8-A filed October 24, 1997.
4.2 Form of Indenture dated as of September 26, 1997 between DUSA
Pharmaceuticals, Inc. and American Stock Transfer & Trust Company,
incorporated by reference to Exhibit 2 to the Company's Registration
Statement on Form 8-A filed October 24, 1997.
28 Press Release, dated September 29, 1997.
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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.
DUSA PHARMACEUTICALS, INC.
By: /s/ D. Geoffrey Shulman
D. Geoffrey Shulman, MD, FRCPC
President and Chief Executive Officer
Dated: October 23, 1997
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EXHIBIT INDEX
Exhibit
4.1 Rights Agreement dated September 26, 1997 between DUSA Pharmaceuticals,
Inc. and American Stock Transfer & Trust Company as Rights Agent,
incorporated by reference to Exhibit 1 to the Company's Registration
Statement on Form 8-A filed
October 24, 1997.
4.2 Form of Indenture dated as of September 26, 1997 between DUSA
Pharmaceuticals, Inc. and American Stock Transfer & Trust Company,
incorporated by reference to Exhibit 2 to the Company's Registration
Statement on Form 8-A filed October 24, 1997.
28 Press Release, dated September 29, 1997.
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DUSA PHARMACEUTICALS, INC.
For Immediate Release
DUSA PHARMACEUTICALS ADOPTS SHAREHOLDER
RIGHTS PLAN
TORONTO, ONTARIO, SEPTEMBER 29, 1997 - DUSA Pharmaceuticals, Inc. (NASDAQ NMS:
DUSA) announced today that the Board of Directors adopted a Shareholder Rights
Plan at a Special Meeting of the Board of Directors on Friday, September 26,
1997. The Plan provides for the distribution of one right as a dividend for each
outstanding share of common stock of the Company to holders of record as of
October 24, 1997. Each Right entitles shareholders to purchase one unit at a
Purchase Price of $50.00. Each unit consists of one-tenth of a share of common
stock of the Company and a note equal to nine-tenths of a share of common stock
based on the fair market price of the Company's common stock on the date of
exercise. The Rights may be exercised only if a person or group either acquires
or announces a tender offer to acquire 15% or more of the Company's outstanding
common stock, or if a person or group is declared an Adverse Person, as such
term is defined in the Plan. The Rights may be redeemed by the Company at a
redemption price of one-tenth of a cent per right until 10 days following the
date a person acquires 15 percent or more of the Company, or until such later
date as may be determined by the Board.
Under the Plan, if a person or group acquires 15% or more of said common stock,
all holders of Rights (other than the acquiring shareholder) may, upon payment
of the Purchase Price then in effect, purchase shares of DUSA common stock
having a value of twice the Purchase Price. In the event that the Company is
involved in a merger or other similar transaction where it is not the surviving
corporation, all holders of Rights (other than the acquiring shareholder) shall
be entitled, upon payment of the then in effect Purchase Price, to purchase
common stock of the surviving corporation having a value of twice the Purchase
Price. The Rights will expire on September 26, 2007, unless previously redeemed.
Also, the Board adopted certain amendments to the Company's Certificate of
Incorporation and By-Laws consistent with the goals of the Plan. These
amendments will be submitted to the shareholders of the Company for approval at
the next Annual Meeting of Shareholders in
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June 1998.
Dr. Shulman stated, "While the Board is not aware of any takeover activity
involving DUSA, we believe the new Shareholder Rights Plan is appropriate given
the current takeover environment. The plan is designed to protect the long-term
interests of all stockholders of DUSA Pharmaceuticals, Inc."
DUSA Pharmaceuticals, Inc. is a development stage pharmaceutical company engaged
in the development of light-activated Levulan Photodynamic Therapy (PDT) and
Photodetection (PD) for multiple medical indications. DUSA is a world leader in
topically or locally applied PDT and PD. The Company is incorporated in New
Jersey, with executive offices in Toronto, Ontario, and R&D administration in
Tarrytown, New York.
Except for historical information, this news release contains certain
forward-looking statements that involve risk and uncertainties, which may cause
actual results to differ materially from the statements made. Such factors
include, but are not limited to, changing market conditions, the progress of
clinical trials and the results obtained, the impact of competitive products and
pricing, the timely development and availability of light devices/technology,
the reliance on third-party regulatory consultants, the FDA approval process,
market acceptance of the Company's products, and other risks detailed from time
to time in the Company's United States Securities and Exchange Commission (SEC)
filings.
For further information contact:
DUSA Pharmaceuticals, Inc. - D. Geoffrey Shulman, MD, President & CEO
Tel: 416.363.5059 Fax: 416.363.6602
Sunrise Financial Group - Derek Caldwell, Executive Vice President
Tel: 212.421.1616 Fax 212.421.5944
