<PAGE>
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 (date of earliest event reported): October 28, 1996
AKSYS, LTD.
(Exact name of registrant as specified in its charter)
Delaware 0-28290 36-3890205
- ---------------------------- ----------------------- ------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation Identification No.)
Two Marriott Drive, Lincolnshire, IL 60069
- ---------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 229-2020
---------------------
<PAGE>
ITEM 5. OTHER EVENTS
Adoption of Stockholder Rights Plan
On October 28, 1996, the Board of Directors of Aksys, Ltd. (the "Company")
authorized the issuance of one preferred share purchase right (a "Right") for
each outstanding share of common stock, par value $0.01 per share (the "Common
Stock"), of the Company. The distribution is payable to the stockholders of
record at the close of business on November 8, 1996 (the "Record Date") and with
respect to all shares of Common Stock that are issued after the Record Date and
prior to the earliest of the Distribution Date (as defined below), the
redemption of the Rights, the exchange of the Rights and the expiration of the
Rights (and, in certain cases, following the Distribution Date). Each Right
entitles the registered holder to purchase from the Company one one-thousandth
of a share of a Junior Participating Preferred Stock, Series A, par value $1.00
per share, of the Company (the "Preferred Shares") at a price of $85.00 per one
one-thousandth of a Preferred Share (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 First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agent").
Rights will be evidenced by Common Stock certificates and not by separate
certificates until the earlier to occur of (i) the expiration of the Company's
redemption right following the date of public disclosure that a person other
than certain exempt persons (an "Acquiring Person"), together with persons
affiliated or associated with such Acquiring Person, has acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of the outstanding
Common Stock (the "Stock Acquisition Date") or (ii) the tenth business day after
the date of commencement or public disclosure of an intention to commence a
tender offer or exchange offer by a person if, upon consummation of the offer,
such person could acquire beneficial ownership of 15% or more of the outstanding
Common Stock (the earlier of such dates being called the "Distribution Date").
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution Date (or
earlier redemption, exchange or expiration of the Rights), new Common Stock
certificates issued after November 8, 1996, upon transfer or new issuance of
Common Stock, will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights) the surrender for transfer of any certificate for
Common Stock, with or without such notation, 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 ("Right Certificates") will be mailed to holders of record
of the Common Stock as of the close of business on the Distribution Date, and
such separate Right Certificates alone will evidence the Rights.
The Rights will first become exercisable after the Distribution Date
(unless sooner redeemed or exchanged). The Rights will expire at the close of
business on October 28, 2006 (the "Expiration Date"), unless earlier redeemed or
exchanged by the Company as described below.
2
<PAGE>
The Purchase Price payable, and the number of Preferred Shares or other
securities, cash 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 or distribution on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to holders of the
Preferred Shares of certain rights, options or warrants to subscribe for
Preferred Shares or securities convertible into Preferred Shares at less than
the 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 out of earnings or retained earnings)
or of subscription rights or warrants (other than those referred to above). In
addition, the Purchase Price payable and the number of Preferred Shares
purchasable, on exercise of a Right is subject to adjustment in the event that
the Company should (i) declare or pay any dividend on the Common Stock payable
in Common Stock or (ii) effect a subdivision or combination of the Common Stock
into a different number of shares of Common Stock.
In the event that there is public disclosure that an Acquiring Person has
become such, proper provision will be made so that each holder of a Right, other
than Rights that are (or were under certain circumstances) beneficially owned by
the Acquiring Person and certain related persons and transferees (which will
thereafter be void), on or after the earlier of the Distribution Date and the
first public disclosure that an Acquiring Person has become such, will
thereafter have the right to receive upon exercise that number of shares of
Common Stock (or other securities) having (as of the date of occurrence of the
triggering event) a market value of two times the exercise price of a Right. In
addition, the Company's Board of Directors has the option of exchanging all or
part of the Rights (excluding void Rights) for Common Stock on a one-for-one
basis in the manner described in the Rights Agreement. In the event that, at any
time following public disclosure that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction where
the Company is not the surviving corporation or where Common Stock is changed or
exchanged or in a transaction or transactions where 50% or more of its
consolidated assets or earning power are sold, proper provision will be made so
that each holder of a Right (other than the Acquiring Person and certain related
persons or transferees) shall 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 or the Company, as the case may
be, which at the time of such transaction would have a market value of two times
the exercise price of the Right.
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 one one-thousandth of a Preferred Share, 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 date prior to the date of exercise.
At any time prior to public disclosure that an Acquiring Person has become
such, the Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $0.01 per Right (the "Redemption Price"), payable in
cash, shares (including fractional shares) of
3
<PAGE>
Common Stock or any other form of consideration deemed appropriate by the Board
of Directors. Immediately upon action of the Board of Directors ordering
redemption of the Rights, the ability of holders to exercise the Rights will
terminate and the only right of such holders will be to receive the Redemption
Price.
At any time prior to a public disclosure that an Acquiring Person has
become such, the Board of Directors of the Company may amend or supplement the
Rights Agreement, including without limitation, the beneficial ownership percent
at which a person becomes an Acquiring Person and the definition of exempt
person to include any person in addition to the persons described therein,
without the approval of the Rights Agent or any holder of the Rights, except for
an amendment or supplement which would change the Redemption Price, provide for
an earlier expiration date of the Rights or change the Purchase Price.
Thereafter, the Board of Directors of the Company may amend or supplement the
Rights Agreement without such approval only to cure ambiguity, correct or
supplement any defective or inconsistent provision or change or supplement the
Rights Agreement in any manner which will not adversely affect the interests of
the holders of the Rights (other than an Acquiring Person or an affiliate or
associate thereof). Immediately upon the action of the Board of Directors
providing for any amendment or supplement, such amendment or supplement will be
deemed effective.
The 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 equal to the greater of $25 per share and 1,000 times
the dividend declared per share of Common Stock. In the event of liquidation,
the holders of the Preferred Shares will be entitled to a minimum preferential
liquidation payment equal to the greater of $100 per share and 1,000 times the
payment made per share of Common Stock. Each Preferred Share will have 1,000
votes per share, voting together with the Common Stock. In the event of any
merger, consolidation or other transaction in which the Common Stock is
exchanged, each Preferred Share will be entitled to receive 1,000 times the
amount received per share of Common Stock. The rights described in this
paragraph are protected by customary antidilution provisions.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person that attempts to acquire the Company on terms
not approved by the Board of Directors of the Company, except pursuant to an
offer conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors prior to the time a person has acquired beneficial
ownership of 15% or more of the Common Stock, because until such time the Rights
may generally be redeemed by the Company at $0.01 per Right.
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.
4
<PAGE>
This summary description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement attached
hereto as Exhibit 4.1, which is incorporated by reference in this Current Report
on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not Applicable
(b) Not Applicable
(c) Exhibits
4.1 Rights Agreement, dated as of October 28, 1996, between
Aksys, Ltd. and First Chicago Trust Company of New York, as
Rights Agent (including the form of Certificate of
Designation, Preferences and Rights of Junior Participating
Preferred Stock, Series A attached thereto as Exhibit A, the
form of Rights Certificate attached thereto as Exhibit B and
the Summary of Rights attached thereto as Exhibit C),
incorporated by reference to the Company's Registration
Statement on Form 8-A, filed with the Commission on November
5, 1996.
99.1 Press Release, dated October 30, 1996, issued by the
Company.
5
<PAGE>
SIGNATURE
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.
AKSYS, LTD.
Dated: November 8, 1996 By: /s/ Dennis N. Cavender
-------------------------------------
Dennis N. Cavender
Vice President and Chief Financial Officer
6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
- --------------------------------------------------------------------------------
<S> <C> <C>
4.1 Rights Agreement, dated as of October 28, 1996, between *
Aksys, Ltd. and First Chicago Trust Company of New York,
including the form of Certificate of Designation, Preferences
and Rights of Junior Participating Preferred Stock, Series A
attached thereto as Exhibit A, the form of Rights Certificate
attached thereto as Exhibit B and the Summary of Rights
attached thereto as Exhibit C.
- --------------------------------------------------------------------------------
99.1 Press Release, dated October 30, 1996, issued by the Company. 8
- --------------------------------------------------------------------------------
</TABLE>
* Incorporated by reference to the Company's Registration Statement on Form 8-A,
filed with the Commission on November 5, 1996.
7
<PAGE>
EXHIBIT 99.1
Aksys, Ltd.
Two Marriott Drive
Lincolnshire, IL 60069
[LOGO OF AKSYS]
CONTACTS;
Lawrence II.N. Kinet Dennis N. Cavender
Chairman and CEO Vice President and CFO
Aksys, Ltd. Aksys, Ltd.
(847) 229-2222 (847) 229-2222
FOR IMMEDIATE RELEASE
- ---------------------
AKSYS, LTD. ADOPTS A PREFERRED SHARE PURCHASE RIGHTS PLAN
LINCOLNSHIRE, IL, OCTOBER 30, 1996--Aksys, Ltd. (Nasdaq/NNM: AKSY), a leader in
the development of personal hemodialysis products and services, today announced
that its Board of Directors, at an October 28, 1996 meeting, adopted a
stockholder rights plan and declared a dividend to be made to stockholders of
record on November 8, 1996 of one preferred share purchase right on each
outstanding share of the Company's common stock. Each such right will entitle a
stockholder to buy one one-thousandth of a share of a new series of junior
participating preferred stock for an exercise price of $85.00.
The stockholder rights plan was adopted to preserve for the stockholders of the
Company the long-term value of the Company in the event of a takeover of the
Company or the purchase of a significant block of common stock of the Company
and to protect the Company and its stockholders against coercive takeover
tactics.
The rights will become exercisable only if a person acquires, or announces a
tender offer for, 15% or more of the Company's common stock (with certain
exceptions). Prior to the time the rights become exercisable, the rights will be
evidenced by the certificates representing shares of common stock of the Company
and will be transferable only in connection with the transfer of shares of
common stock. If a person acquires 15% of the Company's common stock, each right
will entitle the holder thereof to purchase for an exercise price of $85.00
(subject to adjustment) shares of the Company's common stock having a market
value of twice such exercise price, valued as of the date of occurrence of such
triggering event, subject to the right of the Company to exchange the rights for
common stock of the Company on a one-for-one basis.
The Company will be entitled to redeem the rights at $0.01 per right at any time
before public disclosure that a 15% position has been acquired. The rights will
expire on October 28, 2006, unless previously redeemed or exercised. The
distribution of the rights will not be a taxable event to stockholders.
Aksys, Ltd. is developing hemodialysis products and services for patients
suffering from kidney failure. These products and services include the Company's
lead product in development, the Aksys PHD/TM/ Personal Hemodialysis System,
designed to improve clinical outcomes of patients, reducing mortality, morbidity
and the associated high cost of patient care. The PHD approach to the treatment
of kidney dialysis patients is simple: more dialysis is better than less; daily
treatment is better than less frequent treatment; and alternate sites, such as
the patient's home or a self-care clinic, are preferable locations to perform
chronic therapy.
###
Telephone:(847)229-2020 . Facsimile:(847)229-2080 . R&D Facsimile:(847)229-2081
