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 REPORTED): NOVEMBER 8, 1996
NAPRO BIOTHERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of Incorporation or Organization)
0-24320
(Commission File Number)
84-1187753
(I.R.S. Employer Identification No.)
6304 SPINE ROAD, UNIT A
BOULDER, COLORADO 80301
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 530-3891
ITEM 5. OTHER EVENTS.
General. On November 8, 1996 the Board of Directors of NaPro
BioTherapeutics, Inc. (the "Company") declared a dividend of one Right
for each outstanding share of the Company's common stock, par value
$.0075 per share (the "Common Stock"). The distribution is payable on
November 26, 1996, to holders of record of Common Stock on that date.
In addition, until the Rights become exercisable as described below
and in certain limited circumstances thereafter, the Company will
issue one Right for each share of Common Stock issued after November
26, 1996. Each Right, when it becomes exercisable, will entitle its
registered holder to purchase from the Company one one-hundredth of a
share (a "Unit") of the Company's Series B Junior Participating
Preferred Stock, par value $.001 ("Preferred Stock") at a price of
$60.00 (the "Purchase Price") subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and American Stock Transfer
and Trust Company, as Rights Agent.
Distribution Date. The Rights will not be exercisable until the
Distribution Date (as defined below). Prior to the Distribution Date,
they will be evidenced by the certificates for Common Stock and will
be transferred with and only with the Common Stock. In general, the
Rights will separate from the Common Stock and the "Distribution Date"
will occur upon the earlier of the following: (1) the tenth day after
the first public disclosure that a person or group (an "Acquiring
Person") has acquired beneficial ownership of 20% or more of the
outstanding Common Stock (the "Stock Acquisition Date"), or (ii) the
tenth business day after the commencement of a tender or exchange
offer that, if consummated, would result in one person or group
beneficially owning 20% or more of the outstanding Common Stock. A
person or group will not be an Acquiring Person, however, by acquiring
beneficial ownership of 20% or more of the outstanding shares of
Common Stock pursuant to a Qualifying Offer (as defined below), and no
Distribution Date will occur following the commencement of a tender
offer or exchange offer that is a Qualifying Offer.
A "Qualifying Offer" means a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined
by at least a majority of the Continuing Directors (as defined below)
who are not officers or employees of the Company and who are not
related (as specified in the Rights Agreement) to the person making
such offer, after receiving advice from one or more investment banking
firms, to be fair to and in the best interests of the Company and its
stockholders.
On the Distribution Date, each Right will become exercisable to
purchase one one hundredth share of Preferred Stock until November 8,
2006 (the "Expiration Date"), except as described below, unless the
Rights are earlier redeemed. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights (the
"Rights Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date.
The separate Rights Certificates will thereafter evidence ownership of
the Rights, which will then trade separately from the Common Stock.
Issuance of Preferred Shares. The Preferred Stock will have a
liquidation preference of $1.00 per hundredth of a share. Dividends
on the Preferred Stock will be payable quarterly in an amount for each
one-hundredth of a share of Preferred Stock equal to the greater of
$.01 or the amount per share of any dividend paid on the Company's
Common Stock for such quarter. Unpaid dividends will cumulate. The
Preferred Stock will not be redeemable. Each one-hundredth share of
Preferred Stock will have the same voting rights as one share of
Common Stock.
Pursuant to the Rights Agreement, the purchase price payable, and the
number of Units of Preferred Stock or other securities or property
issuable, upon the 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 the holders of the
Preferred Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends), assets or subscription rights or
warrants (other than those referred to above).
The Preferred Stock may be issued in fractions that are integral
multiples of one one-hundredth of a share. No fractional Units will
be issued upon any exercise of Rights, and in lieu thereof, an
adjustment in cash will be made based on the market price of the
Preferred Stock on the then-current market price of such shares.
Effects of "Triggering Events." Under certain circumstances, the
Rights will entitle their holders to purchase securities other than
Preferred Stock. If any person becomes an Acquiring Person other than
pursuant to a Qualifying Offer, each holder of a Right (except Rights
that are void as set forth below) will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value
equal to two times the exercise price of the Right. However, Rights
are not exercisable in any event until such time as the Rights are no
longer redeemable by the Company as set forth below.
For example, at an exercise price of $60 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following
an event set forth in the preceding paragraph would entitle its holder
to purchase $120 worth of Common Stock (or other consideration, as
noted above) for $60. Assuming that the Common Stock had a per share
value of $30 at such time, the holder of each valid Right would be
entitled to purchase four shares of Common Stock for $60.
"Continuing Directors" includes any member of the Board of Directors
of the Company who was a member of the Board prior to the Stock
Acquisition Date, 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 does not include an Acquiring Person, or an
affiliate or associate of an Acquiring Person, or any representative
of the foregoing entities.
If at any time following the Stock Acquisition Date (i) the Company is
acquired in a merger or other business combination transaction in
which the Common Stock is changed or exchanged or in which the Company
is not the surviving corporation (other than a merger that follows a
Qualifying Offer and satisfies certain other requirements), or (ii)
50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights that are void as
set forth below) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal
to two times the exercise price of the Right. The events set forth in
this paragraph and in the fourth preceding paragraph are referred to
as the "Triggering Events."
Any Rights that are beneficially owned by a person who is or who later
becomes an Acquiring Person (or any affiliate or associate of an
Acquiring Person) or are owned by certain transferees of an Acquiring
Person shall become void from and after the time such person becomes
an Acquiring Person. Thus, any holder of such a Right (including any
subsequent holder) may be unable to exercise the Right after the
occurrence of a Triggering Event.
Redemption. At any time before the earlier of (i) the tenth day
following the Stock Acquisition Date, or (ii) November 8, 2006, the
Board of Directors of the Company may redeem the Rights in whole, but
not in part, for $.01 per Right (the "Redemption Price"). However,
any such redemption may be made only with the concurrence of a
majority of the Continuing Directors if it occurs (i) on or after the
time that any person becomes an Acquiring Person or (ii) on or after
the date of a change (resulting from a proxy or consent solicitation)
in a majority of the directors in office at the commencement of such
solicitation if any person who is a participant in such solicitation
has stated (or if the Board believes) that such person may take action
to become an Acquiring Person or otherwise to cause a Triggering
Event. The redemption period may be extended if it has not yet
expired at the time of the extension.
If the Board of Directors elects to redeem the Rights, the Company
will announce the redemption, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Amendments. At any time before the Distribution Date, the Company
may, without the approval of any holder of the Rights, amend any
provision of the Rights Agreement, except that the Company cannot
change the Redemption Price, the Expiration Date, the Purchase Price
or the number of one-hundredths of a share of Preferred Stock for
which a Right is exercisable. At any time after the Distribution
Date, the Company may amend the Rights Agreement without the approval
of the holders of the Rights to cure any ambiguity, to correct any
defective or inconsistent provision, subject to certain exceptions, to
shorten or lengthen any time period (which may require the concurrence
of a majority of the Continuing Directors) or to change a provision in
any manner the Company deems necessary and that does not adversely
affect the interests of the holders of the Rights. However, the
Company can extend the redemption period only if the Rights are
redeemable at the time of the extension.
Other Considerations. Until a Right is exercised, its holder, as
such, will have no rights as a stockholder of the Company, such as the
right to vote or to receive dividends. While the distribution of the
Rights will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize taxable
income if the Rights become exercisable upon the occurrence of a
Triggering Event as set forth above.
The Rights have certain anti-takeover effects. They may cause
substantial dilution to a person or group that attempts to acquire the
Company without conditioning the offer on a substantial number of
Rights being acquired. However, as described above, no such event
will occur in connection with a Qualifying Offer. Moreover, the
Rights should not interfere with a merger or other business
combination approved by the Board of Directors of the Company, because
the Board of Directors (under certain circumstances, with the
concurrence of the Continuing Directors) may redeem the Rights for
$.01 per Right as described above.
As of November 11, 1996, there were 12,377,972 shares of Common Stock
outstanding. Each such share outstanding as of November 26, 1996 will
receive one Right. Prior to the Distribution Date, the Company will
issue one Right for each such share of Common Stock issued after
November 26, 1996. One hundred and ninety thousand shares of
Preferred Stock will initially be reserved for issuance upon exercise
of the Rights.
The terms of the Rights are set forth in the Rights Agreement. The
form of Rights Agreement, which includes, as Exhibit A, the form of
Certificate of Designations of the Preferred Stock and, as Exhibit B,
the form of Rights Certificate, is included as Exhibit 1 to this
Current Report on Form 8-K and is incorporated herein by reference.
The foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit 1. Rights Agreement dated as of November 8, 1996, between the
Company and American Stock Transfer and Trust Company as Rights Agent.
(incorporated by reference from the Company's Registration Statement
on Form 8-A dated November 25, 1996).
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, thereto duly authorized.
NAPRO BIOTHERAPEUTICS, INC.
By: /s/Sterling K. Ainsworth
Sterling K. Ainsworth
President and Chief Executive
Offficer
Date: November 25, 1996
