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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): April 2, 1997
OraVax, Inc.
(Exact name of Registrant as specified in Charter)
Delaware
(State or other jurisdiction of incorporation)
0-26034 04-3085209
(Commission File Number) (IRS Employer Identification No.)
38 Sidney Street, Cambridge, MA 02139
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (617) 494-1339
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ITEM 5. OTHER EVENTS.
On April 2, 1997 the Board of Directors of OraVax, Inc. (the "Company"),
declared a dividend of one preferred stock purchase right (a "Right") for each
outstanding share of the Company's Common Stock to stockholders of record at the
close of business on April 15, 1997 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company a unit consisting of one
one-thousandth of a share (a "Unit") of Series A Junior Participating Preferred
Stock, $.001 par value per share (the "Preferred Stock"), at a purchase price of
$35.00 in cash 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 April 2, 1997 (the "Rights Agreement") between the Company and The First
National Bank of Boston, as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 business days (or such
later date as may be determined by the Board of Directors of the Company)
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 20% or more of the outstanding shares of
Common Stock (the "Stock Acquisition Date"), or (ii) 10 business days following
the commencement of a tender offer or exchange offer that would result in a
person or group beneficially owning 30% or more of such outstanding shares of
Common Stock. Until the Distribution Date (or earlier redemption or expiration
of the rights), (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding, even without such notation, will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
upon the earliest of the close of business on April 15, 2007 (the "Final
Expiration Date") or the redemption or exchange of the Rights as described
below.
As soon as practicable after 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, thereafter, such separate Rights Certificates alone will represent the
Rights. Except as otherwise determined by the Board of Directors and except in
connection with shares of Common Stock issued upon the exercise of employee
stock options, issuances under other employee stock benefit plans or the
conversion of convertible securities issued
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hereafter, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
In the event that any Person becomes an Acquiring Person, unless the event
causing the 20% threshold to be crossed is a Permitted Offer (as defined in the
Rights Agreement), then, promptly following the first occurrence of such event,
proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) of the Rights Agreement) shall thereafter
have the right to receive, upon exercise thereof at the then current Purchase
Price, in lieu of a number of one one-thousandths of a share of Preferred Stock,
such number of shares of Common Stock of the Company that equals the result
obtained by (x) multiplying the then current Purchase Price by the then number
of one one-thousandths of a share of Preferred Stock for which a Right is then
exercisable, and (y) dividing that product by 50% of the current market price
per share of Common Stock on the date of such first occurrence. Notwithstanding
any of the foregoing, following the occurrence of the event set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be null
and void. The event set forth in this paragraph is referred to as "Section
11(a)(ii) Event."
In the event that, at any time after any Person becomes an Acquiring
Person, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation or its Common
Stock is changed or exchanged (other than a merger which follows a Permitted
Offer), or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, that number of shares of common stock of the acquiring company which
equals the exercise price of the Right divided by one-half of the current market
price of such common stock at the date of the occurrence of the event. The
events set forth in this paragraph are referred to as "Section 13 Events."
Section 11(a)(ii) Events and Section 13 Events are collectively referred to as
"Triggering Events."
At any time after the occurrence of a Section 11(a)(ii) Event, subject to
certain conditions, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such Acquiring Person which have become
void), in whole or in part, at an exchange ratio of one share of Common Stock,
or one one-thousandth of a share of Preferred Stock (or of a share of a class or
series of the Company's preferred stock having equivalent rights, preferences
and privileges), per Right (subject to adjustment).
The Purchase Price payable, and the number of Units of 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
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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
then-current market price of the Preferred Stock, or (iii) upon the distribution
to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends paid out of earnings or retained
earnings) or of subscription rights or warrants (other than those referred to
above).
The number of Rights associated with each share of Common Stock is 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.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $10 per share and will be entitled to
an aggregate dividend of 1000 times the dividend declared per share of Common
Stock. In the event of liquidation, the holders of the Preferred Stock will be
entitled to a minimum preferential liquidation payment of $1000 per share and
will be entitled to an aggregate payment of 1000 times the payment made per
share of Common Stock. Each share of Preferred Stock will have 1000 votes,
voting together with the Common Stock. In the event of any merger, consolidation
or other transaction in which Common Stock is exchanged, each share of Preferred
Stock will be entitled to receive 1000 times the amount received per share of
Common Stock. These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of one one-thousandth of a share of Preferred Stock
purchasable upon exercise of each Right should approximate the value of one
share of Common Stock.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time prior to the earlier of (i) the close of business on the tenth
business day following the Stock Acquisition Date, or (ii) the Final Expiration
Date, the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"), payable in cash, provided, however,
that from and after the time that any Person shall become an Acquiring Person
(other than pursuant to a Permitted Offer), the Company may redeem the Rights
only if at the time of the
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action of the Board of Directors there are then in office not less than two
Continuing Directors (as defined in the Rights Agreement) and such redemption is
approved by a majority of the Continuing Directors then in office. Immediately
upon the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
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. 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 in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
Subject to certain exceptions, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company prior to such
time as the Rights are no longer redeemable.
A copy of the Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit A the Form of
Certificate of Designations, as Exhibit B the Form of Rights Certificate, and as
Exhibit C the Summary of Rights to Purchase Preferred Stock, is filed as Exhibit
1 to the Company's Registration Statement on Form 8-A filed with the Commission
on April 11, 1997 and is incorporated herein by reference. The foregoing
description of the Rights Agreement and the Rights does not purport to be
complete and is qualified in its entirety by reference to such Exhibit.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The exhibits listed in the Exhibit Index filed as part of this
report are filed as part of or are included in this report.
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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 thereunto duly authorized.
Date: April 11, 1997 ORAVAX, INC.
/s/ Lance K. Gordon
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By: Lance K. Gordon
Title: President and Chief Executive
Officer
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EXHIBIT INDEX
Exhibit No. Description
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4.1 Rights Agreement, dated as of April 2, 1997 between OraVax,
Inc. and The First National Bank of Boston, as Rights Agent,
which includes as Exhibit A the Form of Certificate of
Designations, as Exhibit B the Form of Rights Certificate, and
as Exhibit C the Summary of Rights to Purchase Preferred
Stock.(1)
99.1 Press Release, dated April 4, 1997, announcing adoption of the
Shareholder Rights Plan.
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(1) Incorporated by reference to the Registrant's Registration Statement on
Form 8-A, dated April 11, 1997 and filed by the Registrant with the
Commission (Commission File No. 0-26034).
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EXHIBIT 99.1
[LOGO]
ORAVAX, INC. ADOPTS SHAREHOLDER RIGHTS PLAN
CAMBRIDGE, MASSACHUSETTS, APRIL 4, 1997 -- OraVax, Inc. (Nasdaq: ORVX) announced
today that its Board of Directors has approved the adoption of a Shareholder
Rights Plan in which preferred stock purchase rights will be distributed on
April 15, 1997 as a dividend at the rate of one Right for each share of OraVax,
Inc. Common Stock outstanding as of the close of business on that date.
The Rights Plan is designed to enable all shareholders of OraVax, Inc. to
realize the long-term value of their investment in the Company. Specifically,
the Plan is designed to deter coercive or unfair takeover tactics. The Rights
will expire on April 15, 2007 unless earlier redeemed, exchanged or terminated.
Lance K. Gordon, Ph.D., President and Chief Executive Officer of OraVax, said
the Rights Plan "will not restrict consideration by the Board of any offer on
terms favorable to all shareholders, but is intended to protect the interests of
shareholders in the event the company is confronted with coercive or unfair
takeover tactics. Such tactics include a partial or two-tiered tender offer that
does not treat all shareholders equally, the acquisition in the open market or
otherwise of shares constituting control without offering fair value to all
shareholders, or other abusive takeover tactics. These tactics can unfairly
pressure shareholders, depriving them of the full value of their shares." Dr.
Gordon noted that similar plans are in effect at over 1,500 public companies.
Each Right will entitle the holders of Common Stock of OraVax, Inc. to purchase
one one-thousandth of a share of a new series junior participating preferred
stock of the Company at an exercise price of $35.00. The Rights will be
exercisable only if a person or group has acquired beneficial ownership of 20
percent or more of the Common Stock of the Company or announces a tender or
exchange offer that would result in such person or group owning 30 percent or
more of the Common Stock of the Company.
If any person becomes the beneficial owner of 20 percent or more of the shares
of Common Stock of the Company, except pursuant to a tender or exchange offer
for all shares at a fair price as determined by the Board, each Right not owned
by the 20 percent or more shareholder will enable its holder to purchase that
number of shares of the Company's Common Stock which equals the exercise price
of the Right divided by one-half of the current market price of such Common
Stock at the date of the occurrence of the event. In addition, if the Company is
involved in a merger or
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other business combination transaction with another person or group in which it
is not the surviving corporation or in connection with which its Common Stock is
changed or converted, or it sells or transfers 50 percent or more of its assets
or earning power to another person, each Right that has not previously been
exercised will entitle its holder to purchase that number of shares of Common
Stock of such other person which equals the exercise price of the Right divided
by one-half of the current market price of such Common Stock at the date of the
occurrence of the event. The purchase price of such shares of Common Stock would
be one-half of the then-current market price of the Common Stock.
The Company will generally be entitled to redeem the Rights at $0.01 per Right
at any time until the tenth day following the public announcement that a 20
percent stock position has been acquired and in certain other circumstances.
OraVax, based in Cambridge, Massachusetts, is a biopharmaceutical company
engaged in the discovery and development of oral vaccines and noninjected
antibody products to prevent or treat diseases which infect the human body at
its mucosal linings. The Company's largest program, which has completed a Phase
II trial, is a joint venture with Pasteur Merieux Connaught to develop vaccines
against H. pylori, the cause of peptic ulcers and stomach cancer. OraVax has
completed a Phase III trial of its HNK20 nosedrop for infant viral pneumonia
caused by respiratory syncytial virus (RSV). Research programs include CdAB, for
the prevention of antibiotic-associated diarrhea and colitis caused by C.
difficile, and a single-dose vaccine for Japanese Encephalitis (JE), a
potentially fatal neurotropic viral infection endemic in Japan, India, China and
other parts of the Far East.
