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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
April 1, 1997
Date of Report
(Date of earliest event reported)
GUILFORD PHARMACEUTICALS INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 0-23736 52-1841960
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
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6611 TRIBUTARY STREET
BALTIMORE, MARYLAND
(Address of principal executive offices)
21224
(Zip Code)
(410) 631-6300
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
The purpose of this amendment is to further update the description of
Guilford Pharmaceuticals Inc.'s Common Stock contained in its Form 8-A filed
under the Securities Exchange Act of 1934, as revised and supplemented by
amendments or reports filed for the purpose of updating that description.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 40,000,000 shares of the
Common Stock, par value $0.01 per share, and 4,700,000 shares of undesignated
preferred stock, par value $0.01 per share and 300,000 shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share. As of December 31,
1996, there were 13,979,490 shares of Common Stock (reflecting the 3-for-2 stock
split effective as of November 12, 1996) and no shares of preferred stock
outstanding. As of December 31, 1996, there were outstanding options to purchase
approximately an additional 2,494,756 shares of the Company's Common Stock and
warrants to purchase 312,934 additional shares of Common Stock.
COMMON STOCK
Holders of shares of Common Stock are entitled to one vote for each share
held of record on matters to be voted on by the stockholders of the Company.
Stockholders do not have cumulative voting rights in the election of directors.
Holders of shares of Common Stock will be entitled to receive dividends, subject
to the superior rights of preferred stockholders, if any, when, as and if
declared by the Board of Directors. The Company currently intends to retain all
future earnings for use in the operation of its business and, therefore, does
not anticipate paying any case dividends on its Common Stock in the foreseeable
future. Upon the dissolution, liquidation or sale of substantially all of the
assets of the Company, after payment in full of all amounts required to be paid
to creditors and subject to the rights, if any, of the holders of any preferred
stock, the holders of the Common Stock are entitled to share ratably in the
assets of the Company legally available for distribution to its stockholders.
Holders of Common Stock have no preemptive, subscription, redemption or
conversion rights. The Company has the right to repurchase certain shares of
Common Stock issued to certain officers and other employees of the Company in
the event of termination of employment. All of the issued and outstanding
shares of Common Stock are, and all shares of Common Stock to be sold in this
offering will be, duly authorized, validly issued, fully paid and non-
assessable.
PREFERRED STOCK
The Company's Board of Directors may without further action by the
Company's stockholders, from time to time, direct the issuance of shares of
preferred stock in series and may, at the time of issuance, determine the
rights, preferences and limitation of each series. The holders of preferred
stock would normally be entitled to receive a preference payment in the event of
any liquidation, dissolution or winding-up of the Company before any payment is
made to the holders of Common Stock.
The ability of the Company's Board of Directors to issue preferred stock
may delay or prevent a takeover or change in control of the Company. To the
extent that this ability has this effect, removal of the Company's incumbent
Board of Directors and management may be rendered more difficult. Further, this
may have an adverse impact on the ability of stockholders of the Company to
participate in a tender or exchange offer for the Common Stock and in so doing
diminish the market value of the Common Stock.
RIGHTS PLAN
On September 26, 1995, the Board of Directors of the Company approved a
stockholder rights plan (the "Rights Plan") designed to protect stockholders in
the event of an unsolicited attempt to acquire the Company, including a gradual
accumulation of shares in the open market, a partial or two-tier tender offer
that does not treat all stockholders equally, and other takeover tactics which
the Board of Directors believes may be abusive and not in the best interests of
stockholders. The implementation of the Rights Plan increases the Board of
Director's power in the event of an unsolicited proposal by giving the Board of
Directors more time and the opportunity to evaluate an offer and exercise its
good faith business judgment to take appropriate steps to protect and advance
stockholders' interests by negotiating with the bidder, auctioning the Company,
implementing a recapitalization or restructuring designed as an alternative to
the offer, or taking other action.
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In connection with the Rights Plan, the Company designated 300,000 shares of
Series A Junior Participating Preferred
Stock, par value $0.01 per share.
Under the Rights Plan, each holder of the Company's Common Stock is
entitled to purchase 1/1,000th of a share of Series A Junior Participating
Preferred Stock. Currently, the Rights are neither exercisable nor traded
separately from the Common Stock. The Rights will be exercisable only if a
person or group in the future becomes the beneficial owner of 20% or more of the
Common Stock or announces a tender or exchange offer which would result in its
ownership of 20% or more of the Common Stock. Ten days after a public
announcement that a person has become the beneficial owner of 20% or more of the
Common Stock, each holder of a Right, other than the acquiring person, would be
entitled to purchase one share of Common Stock of the Company for each Right at
one-half of the then-current price. If the Company is acquired in a merger, or
50% or more of the Company's assets are sold in one or more related
transactions, each Right would entitle the holder thereof to purchase common
stock of the acquiring company at half of the then-current market price of such
common stock. At any time after a person or group of persons becomes the
beneficial owner of 20% or more of the Common Stock, the Board of Directors may
exchange one share of Common Stock for each Right, other than Rights held by the
acquiring person.
The Board of Directors generally may redeem the Rights at any time until
ten days following the public announcement that person or group of persons has
acquired beneficial ownership of 20% or more of the outstanding Common Stock.
The redemption price is $0.01 per Right.
LIMITATION OF LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Amended and Restated Certificate of Incorporation, as amended
(the "Certificate"), provides that a director shall not be personally
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except: (i) for any breach of the director's duty
of loyalty to the Company or its stockholders; (ii) for acts or omissions not
in good faith or which involve intentional misconduct or knowing violations of
law; (iii) for liability under Section 174 of the Delaware General Corporation
Law (relating to certain unlawful dividends, stock repurchases or stock
redemptions); or (iv) for any transaction from which the director derived an
improper personal benefit.
The Company's Certificate also provides that directors and officers are to
be indemnified to the fullest extent permitted under Delaware law. The Company
has entered into indemnification agreements with each of its current directors
and officers and will enter into such agreements with future directors and
officers, which agreements provide for indemnification of, and advancement of
expenses to such persons to the greatest extent permitted by Delaware law,
including by reason of action or inaction occurring in the past and
circumstances in which indemnification and the advancement of expenses are
discretionary under Delaware law. The Company believes that the limitation of
liability provision in its Certificate, its Amended and Restated By-laws and the
indemnification agreements will facilitate the Company's ability to continue to
attract and retain qualified individuals to serve as directors of the Company.
The Certificate authorizes the Company to purchase and maintain insurance
for the purposes of indemnification. The Company maintains a standard form of
directors' and officers' liability insurance policy, which provides coverage to
the Company's officers and directors for certain liabilities. At present, there
is no pending litigation or proceeding involving any director, officer, employee
or agent for which indemnification will be required or permitted under the
Certificate, Amended and Restated By-laws or indemnification agreements. The
Company is not aware of any threatened litigation or proceeding which may result
in a claim for such indemnification.
SECTION 203 OF THE DELAWARE CORPORATION LAW
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law ("Section 203"). Under Section 203, certain "business
combinations" between a Delaware corporation whose stock generally is publicly
traded or held of record by more than 2,000 stockholders and an "interested
stockholder" are prohibited for a three-year period following the date that such
stockholder became an interested stockholder, unless: (i) the corporation has
elected in its original certificate of incorporation not to
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be governed by Section 203 (the Company did not make such an election); (ii)
the business combination was approved by the Board of Directors of the
corporation before the other party to the business combination became an
interested stockholder; (iii) upon consummation of the transaction that made it
an interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the commencement of the
transaction (excluding voting stock owned by directors who are also officers or
held in employee benefit plans in which the employees do not have a
confidential right to tender or vote stock held by the plan); or (iv) the
business combination was approved by the Board of Directors of the corporation
and ratified by two-thirds of the voting stock which the interested stockholder
did not own. The three-year prohibition also does not apply to certain business
combinations proposed by an interested stockholder following the announcement
or notification of certain extraordinary transactions involving the corporation
and a person who had not been an interested stockholder during the previous
three years or who became an interested stockholder with the approval of the
majority of the corporation's directors. The term "business combination" is
defined generally to include mergers or consolidations between a Delaware
corporation and an "interested stockholder," transactions with an "interested
stockholder" involving the assets or stock of the corporation or its
majority-owned subsidiaries and transactions which increase an interested
stockholder's percentage ownership of stock. The term "interested stockholder"
is defined generally as a stockholder who, together with affiliates and
associates, owns (or, within three years prior, did own) 15% or more of a
Delaware corporation's voting stock. Section 203 could prohibit or delay a
merger, takeover or other change in control of the Company and therefore could
discourage attempts to acquire the Company.
STOCKHOLDER MEETINGS AND OTHER PROVISIONS
Under the Amended and Restated By-laws, special meetings of the
stockholders of the Company may be called only by a majority of the members of
the Board of Directors, the Chairman or holders of 30% of the voting stock of
the Company. Stockholders are required to comply with certain advance notice
provisions with respect to any nominations of candidates for election to the
Company's Board of Directors or other proposals submitted for stockholder vote.
The Company's Certificate provides that the authorized number of directors may
be changed only by resolution of the Board of Directors. These provisions may
have the effect of deterring hostile takeovers or delaying changes in control or
management of the Company.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
EXHIBIT INDEX
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Number Description
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3.03 Certificate of Amendment of Amended and
Restated Certificate of Incorporation
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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.
GUILFORD PHARMACEUTICALS INC.
Date: April 4, 1997 By: /s/ Thomas C. Seoh
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Thomas C. Seoh, Vice President, General
Counsel and Secretary
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EXHIBIT 3.03
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
GUILFORD PHARMACEUTICALS INC.
The undersigned, a corporation duly organized and existing under the
laws of the State of Delaware, in accordance with the provisions of Section 242
of Title 8 of the Delaware Code, does hereby certify:
1. The name of the corporation as it appears on the records of the
Secretary of State of Delaware is Guilford Pharmaceuticals Inc. (the
"Corporation").
2. The Corporation's Amended and Restated Certificate Incorporation was
filed with the Secretary of State on June 24, 1994.
3. The Amended and Restated Certificate of Incorporation of the
Corporation is hereby amended by deleting the first sentence of Article FOURTH
of the Amended and Restated Certificate of Incorporation of the Corporation and
replacing it with the following:
FOURTH: The total number of shares of all classes of stock the
Corporation shall have authority to issue is Forty-Five Million
(45,000,000) shares consisting of Forty Million (40,000,000) shares of
common stock, par value $.01 per share, and Five Million (5,000,000)
shares of preferred stock, par value $.01 per share.
4. Pursuant to Section 242 of the General Corporation Law of the State
of Delaware, the Corporation has adopted resolutions setting forth the
above-referenced amendment at a meeting of its Board of Directors held on
February 18, 1997.
5. At least a majority of the outstanding stock of the Corporation
entitled to vote thereon duly approved said proposed amendments at the special
meeting of the stockholders of the Corporation held on April 1, 1997 in
accordance with Sections 211, 222 and 242 of the General Corporation Law of the
State of Delaware.
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IN WITNESS WHEREOF, said Corporation has caused this certificate to be
signed on its behalf by Thomas C. Seoh, its Vice President and Secretary, and
attested by Jordan P. Karp, its Assistant Secretary, this 1st day of April,
1997.
GUILFORD PHARMACEUTICALS INC.
/s/Thomas C. Seoh
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Thomas C. Seoh, Vice President and
Secretary
ATTEST:
/s/Jordan P. Karp
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Jordan P. Karp, Assistant Secretary
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