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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): AUGUST 21, 1996
SONUS PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in charter)
DELAWARE 0-26866 95-4343413
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
22026 20TH AVENUE, S.E., SUITE 102, BOTHELL, WASHINGTON 98021
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (206) 487-9500
NOT APPLICABLE
(Former name or former address, if changed, since last report)
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ITEM 5. OTHER EVENTS
On July 29, 1996, the Board of Directors of SONUS Pharmaceuticals, Inc.
(the "Corporation") approved the adoption of a Shareholder Rights Plan and on
September 3, 1996 declared a dividend distribution of one Right for each
outstanding share of the Corporation's Common Stock to stockholders of record on
the close of business on August 23, 1996 (the "Dividend Date"). Each Right
entitles the registered holder to purchase from the Corporation a unit
consisting of one one-hundredth of a share (a "Unit") of Series A Junior
Participating Preferred Stock, par value $0.001 per share (the "Preferred
Stock"), at a purchase price of $140 per Unit, subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Corporation and U.S. Stock Transfer Corporation,
as Rights Agent.
CERTIFICATES. Initially, the Rights will be attached to all
Common Stock certificates representing shares then outstanding, and no separate
Rights Certificates will be distributed. Subject to extension by the Board of
Directors in certain circumstances, the Rights will separate from the Common
Stock and a distribution date (the "Distribution Date") will occur upon the
earlier of (i) 10 days 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 15% 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 15% or more of the
outstanding shares of Common Stock. Current 15% stockholders are excluded from
the definition of an Acquiring Person until their respective beneficial
ownership exceeds 30% or more of the outstanding shares of Common Stock. Until
the Distribution Date, (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 will contain a notation
incorporating the Rights Agreement by reference; and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
EXPIRATION AND EXERCISE. The Rights are not exercisable until
the Distribution Date and will expire at the close of business on August 23,
2006, unless earlier redeemed by the Corporation as described below.
As soon as practicable after the Distribution Date, 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, the separate Rights
Certificates will represent the Rights. Except as otherwise determined by the
Board of Directors, only shares of Common Stock issued prior to the Distribution
Date will be issued with Rights.
"FLIP-IN". In the event that, at any time following the
Dividend Date, (i) the Corporation is the surviving corporation in a merger with
an Acquiring Person and its Common Stock is not changed or exchanged; (ii) an
Acquiring Person becomes the beneficial owner of more than 15% of the
outstanding shares of Common Stock; (iii) an Acquiring Person engages in one or
more "self-dealing" transactions as set forth in the Rights Agreement; or (iv)
during such time as there is an Acquiring Person, an event occurs which results
in such Acquiring Person's
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ownership interest being increased by more than 1% (e.g., a reverse stock
split), each holder of a Right will thereafter have the right to receive, upon
exercise, Common Stock (or, in certain circumstances, cash, property or other
securities of the Corporation) having a value equal to two times the exercise
price of the Right. Notwithstanding any of the foregoing, following the
occurrence of any of the events 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. However,
Rights are not exercisable following the occurrence of any of the events set
forth above until such time as the Rights are no longer redeemable by the
Corporation as set forth below.
For example, at an exercise price of $140 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 $280 worth of Common Stock (or other consideration, as noted above) for
$140. Assuming that the Common Stock had a per share value of $40 at such time,
the holder of each valid Right would be entitled to purchase 7 shares of Common
Stock for $140.
PERMITTED OFFER. A tender or exchange offer for all
outstanding Common Stock at a price and on terms determined by the Board of
Directors prior to the purchase to be adequate and in the best interests of the
Corporation and its stockholders (other than the Acquiring Person) is a
Permitted Offer under the Rights Agreement. A Permitted Offer does not trigger
the exercisability of the Rights.
"FLIP-OVER". In the event that, at any time following the
Stock Acquisition Date, (i) the Corporation is acquired in a merger or other
business combination transaction in which the Corporation is not the surviving
corporation; or (ii) 50% or more of the Corporation'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, 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 third preceding paragraph are referred to as the "Triggering Events."
EXCHANGE FEATURE. At any time after any Person becomes an
Acquiring Person and prior to the acquisition by such person or group of 50% or
more of the outstanding Common Stock, the Board of Directors may exchange the
Rights (other than Rights owned by such Person or group which will have become
void), in whole or in part, at an exchange rate of one share of Common Stock (or
a combination of cash, property, Common Stock or other securities having an
equal value) per Right (subject to adjustment).
ADJUSTMENT FOR DILUTION. 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 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 holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to above).
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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.
REDEMPTION. At any time until ten days following the Stock
Acquisition Date (subject to extension by the Continuing Directors, as defined
below), the Corporation may redeem the Rights in whole, but not in part, at a
price of $.01 per Right. Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of a majority of
the Continuing Directors. After the redemption period has expired, the
Corporation's right of redemption may be reinstated if an Acquiring Person
reduces his beneficial ownership to 15% or less of the outstanding shares of the
Common Stock in a transaction or series of transactions not involving the
Corporation. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, with (where required) the concurrence of the
Continuing Directors, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.01 redemption price. Rights are not
exercisable while subject to redemption.
CONTINUING DIRECTORS. The term "Continuing Directors" means
any member of the Board of Directors of the Corporation 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,
or an affiliate or associate of an Acquiring Person, or any representative of
the foregoing entities.
STOCKHOLDER RIGHTS. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Corporation,
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
Corporation, 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 Corporation or for common stock of the acquiring
company as set forth above.
AMENDMENTS. Any of the provisions of the Rights Agreement may
be amended by the Board of Directors of the Corporation prior to the
Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended by the Board (in certain circumstances, with the
concurrence of the Continuing Directors) in order to cure any ambiguity, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to shorten or lengthen any
time period under the Rights Agreement; provided, however, that no amendment to
adjust the time period governing redemption shall be made at such time as the
Rights are not redeemable.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
4.1 Rights Agreement, dated as of August 23, 1996 between SONUS
Pharmaceuticals, Inc. and U.S. Stock Transfer Corporation, which
includes as Exhibit A thereto a form of Certificate of
Designation for the Preferred Stock, as Exhibit B thereto the
Form of Rights Certificate and as Exhibit C thereto a Summary of
Terms of Shareholder Rights Plan Rights Agreement, dated as of
August 23, 1996, between SONUS Pharmaceuticals, Inc., a Delaware
corporation and U.S. Stock Transfer Corporation (incorporated by
reference to Exhibit 1 to the Company's Registration Statement on
Form 8-A, dated August 23, 1996).
20.1 Form of letter to SONUS Pharmaceuticals, Inc. stockholders to be
dated September 3, 1996.
99.1 Press Release, dated August 21, 1996.
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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.
SONUS PHARMACEUTICALS, INC.
Date: August 23, 1996 By: /s/ Gregory Sessler
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Gregory Sessler,
Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
4.1 Rights Agreement, dated as of August 23, 1996 between
SONUS Pharmaceuticals, Inc. and U.S. Stock Transfer
Corporation, which includes as Exhibit A thereto a form of
Certificate of Designation for the Preferred Stock, as
Exhibit B thereto the Form of Rights Certificate and as
Exhibit C thereto a Summary of Terms of Shareholder Rights
Plan (incorporated by reference to Exhibit 1 to the Company's
Registration Statement on Form 8-A, dated August 23, 1996).
20.1 Form of letter to SONUS Pharmaceuticals, Inc. stockholders to
be dated September 3, 1996.
99.1 Press Release, dated August 21, 1996.
</TABLE>
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Exhibit 20.1
September 3, 1996
To Our Stockholders:
On July 29, 1996, the Board of Directors of SONUS Pharmaceuticals, Inc.
(the "Company") approved the adoption of a Shareholder Rights Plan for the
Company which is intended to protect stockholder interests in the event of an
unsolicited attempt to acquire the Company on terms that are not in the best
interests of the stockholders. I am enclosing a Summary which provides more
details about the Shareholder Rights Plan.
Shareholder rights plans are commonly adopted to assure that all
stockholders are treated fairly in the event of an attempted takeover of the
Company. The adoption of the Shareholder Rights Plan in no way weakens the
financial strength of the Company, does not have a dilutive effect and will not
affect reported earnings per share. Further, the adoption of the Plan does not
affect the way you now trade shares of the Company's stock.
The Plan provides for a dividend of one Right for each share of
outstanding common stock. Each Right entitles the holder, on the occurrence of
certain events, to purchase shares of a newly-created class of the Company's
preferred stock. The Company may redeem each Right, on terms spelled out in the
Plan, if approved by the Board of Directors. To implement the Plan, the Company
is distributing the non-cash Rights dividend to stockholders of record as of the
close of business on September 3, 1996. The Rights automatically attach to all
shares outstanding on August 23, 1996, and no separate certificates will be
issued.
I would like to emphasize that the Rights are not being distributed in
response to any effort to acquire control of the Company, nor is the Board aware
of any such attempt. The Shareholder Rights Plan was adopted to ensure the
Board's ability to protect stockholder interests against takeover strategies
that may not provide maximum stockholder value.
Moreover, the Plan is not intended to prevent all takeovers of the
Company. The Rights may be redeemed by the Company under certain circumstances
and therefore should not interfere with any merger or business combination which
is approved by the Board.
On behalf of the Board of Directors,
Steven C. Quay, M.D., Ph.D.,
President and Chief Executive Officer
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Exhibit 99.1
NEWS RELEASE
SONUS PHARMACEUTICALS, INC. ADOPTS SHAREHOLDER RIGHTS PLAN
Bothell, Wash., -- August 21, 1996 -- SONUS Pharmaceuticals, Inc. (Nasdaq NNM:
SNUS), announced today that its Board of Directors has approved the adoption of
a Shareholder Rights Plan. The Rights Plan, which is similar to rights plans
adopted by a number of other public companies, provides for the distribution to
SONUS Pharmaceuticals, Inc.'s shareholders of one preferred stock purchase
"Right" for each outstanding share of SONUS Pharmaceuticals's common stock. The
Rights have an exercise price of $140 per Right, subject to subsequent
adjustment. Initially, the Rights will trade with the Company's common stock,
and will not be exercisable until the occurrence of certain takeover-related
events.
Generally, the Rights Plan provides that if a person or group acquires 15% or
more of the Company's common stock without the approval of the Board, the
holders of the Rights, other than the acquiring person or group, would, under
certain circumstances, have the right to purchase additional shares of the
Company's common stock having a market value equal to two times the exercise
price of the Right. In addition, if the Company's consolidated assets or earning
power are sold, then the Right will entitle its holder, other than the acquiring
person or group, to buy common shares of the acquiring entity having a market
value equal to two times the exercise price of the Right.
The Rights will be distributed to holders of the Company's common stock of
record on August 23, 1996, as a dividend, and will expire, unless earlier
redeemed, on August 23, 2006. Further details relating to the Rights Plan will
be distributed in a mailing to the Company's stockholders in September 1996.
"The adoption of the stockholder rights plan is not a response to any current
effort to acquire control of the corporation," said Steven C. Quay, M.D., Ph.D.,
founder, president and chief executive officer. "While the stockholder rights
plan will not prohibit the acquisition of the company, it establishes certain
rights to ensure that should any unsolicited acquisition occur, it would be on
terms equitable to all stockholders," Dr. Quay further noted.
SONUS Pharmaceuticals, Inc., based in Bothell Wash., is engaged in the research
and development of proprietary contrast agents for use in ultrasound imaging.
More than 50 million ultrasound studies are performed annually in the U.S., of
which approximately 18 million are for radiology applications and approximately
14 million are for cardiology applications. The Company's products are being
investigated to improve the management of heart disease, cancer, infectious
diseases and other debilitating conditions.
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SONUS PHARMACEUTICALS, INC., SHAREHOLDER RIGHTS PLAN - PAGE 2
Contact: Gregory Sessler
SONUS Pharmaceuticals, Inc.
(206) 487-9500
NOTE: SONUS Pharmaceuticals' press releases are available via PR Newswire's
Company News on Call service. To receive previous SONUS press releases via fax,
dial 1-800-758-5804, ext. 108377. SONUS releases also can be accessed on the
Internet at http://www.prnewswire.com/ or at
http://www.shareholdernews.com/snus.
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