Item 1.01. Entry into a Material Definitive Agreement.
On December 2, 2008, La Jolla Pharmaceutical Company (the "Company") renewed
its stockholder rights plan for an additional ten years and made certain
amendments to the plan, as set forth in the Amended and Restated Rights
Agreement, dated December 2, 2008, between the Company and American Stock
Transfer & Trust Company, LLC, as Rights Agent (the "Agreement"). The original
plan was set to expire as of December 2, 2008. The following description of the
terms of the Agreement does not purport to be complete and is qualified in its
entirety by reference to the Agreement, which was filed as an exhibit to the
Company's Amended Registration Statement on Form 8-A/A, which was filed with the
Securities and Exchange Commission on December 4, 2008, and which is
incorporated herein by reference.
Pursuant to the terms of the Agreement, the Board of Directors declared a
dividend distribution of one Preferred Stock Purchase Right (a "Right") for each
outstanding share of Common Stock of the Company (the "Common Stock") to
stockholders of record as of the close of business on December 2, 2008 (the
"Record Date"). In addition, one Right will automatically attach to each share
of Common Stock issued between the Record Date and the earlier of the
Distribution Date (as hereinafter defined) or Expiration Date (as hereinafter
defined). Each Right entitles the registered holder thereof to purchase from the
Company a unit consisting of one ten-thousandth of a share (a "Unit") of
Series A Junior Participating Cumulative Preferred Stock, par value $0.01 per
share, of the Company (the "Preferred Stock") at a cash exercise price of $30.00
per Unit (the "Exercise Price"), subject to adjustment, under certain conditions
specified in the Agreement and summarized below.
Initially, the Rights are not exercisable and are attached to and trade with
all shares of Common Stock outstanding as of, and issued subsequent to, the
Record Date. The Rights will separate from the Common Stock and will become
exercisable upon the earlier of (i) the close of business on the tenth calendar
day following the first public announcement that a person or group of affiliated
or associated persons (an "Acquiring Person") has acquired beneficial ownership
of 15% or more of the outstanding shares of Common Stock, other than as a result
of repurchases of stock by the Company or certain inadvertent actions by a
shareholder (the date of said announcement being referred to as the "Stock
Acquisition Date"), or (ii) the close of business on the tenth business day (or
such later day as the Board of Directors may determine) following the
commencement of a tender offer or exchange offer that could result, upon its
consummation, in a person or group becoming the beneficial owner of 15% or more
of the outstanding shares of Common Stock (the earlier of such dates being
herein referred to as the "Distribution Date").
Notwithstanding the foregoing, with respect to any Grandfathered Person (as
defined in the Agreement), the Distribution Date will not occur unless such
Grandfathered Person has acquired beneficial ownership of shares of Common Stock
representing more than an additional 1/2% of the outstanding shares of Common
Stock.
In the event that a Stock Acquisition Date occurs, proper provision will be
made so that each holder of a Right (other than an Acquiring Person or its
associates or affiliates, whose Rights shall become null and void) will
thereafter have the right to receive upon exercise, in lieu of a number of Units
of Preferred Stock, that number of shares of Common Stock of the Company (or, in
certain circumstances, including if there are insufficient shares of Common
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Stock to permit the exercise in full of the Rights, Units of Preferred Stock,
other securities, cash or property, or any combination of the foregoing) having
a market value of two times the exercise price of the Right (such right being
referred to as the "Subscription Right"). In the event that, at any time
following the Stock Acquisition Date, (i) the Company consolidates with, or
merges with and into, any other person, and the Company is not the continuing or
surviving corporation, (ii) any person consolidates with the Company, or merges
with and into the Company and the Company is the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of
the shares of Common Stock are changed into or exchanged for stock or other
securities of any other person or cash or any other property, or (iii) 50% or
more of the Company's assets or earning power is sold, mortgaged or otherwise
transferred, each holder of a Right (other than an Acquiring Person or its
associates or affiliates, whose Rights shall become null and void) will
thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a market value equal to two times the exercise price of
the Right (such right being referred to as the "Merger Right"). The holder of a
Right will continue to have the Merger Right whether or not such holder has
exercised the Subscription Right. Rights that are or were beneficially owned by
an Acquiring Person may (under certain circumstances specified in the Agreement)
become null and void.
The Rights may be redeemed in whole, but not in part, at a price of $0.01 per
Right (payable in cash, Common Stock or other consideration deemed appropriate
by the Board of Directors) by the Board of Directors only until the earlier of
(i) the time at which any person becomes an Acquiring Person or (ii) the
expiration date of the Agreement. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate and
thereafter the only right of the holders of Rights will be to receive the
redemption price.
The Agreement may be amended by the Board of Directors in its sole discretion
until the time at which any person becomes an Acquiring Person. After such time,
the Board of Directors may, subject to certain limitations set forth in the
Agreement, amend the Agreement only to cure any ambiguity, defect or
inconsistency, to shorten or lengthen any time period, or to make changes that
do not adversely affect the interests of Rights holders (excluding the interests
of an Acquiring Person or its associates or affiliates). In addition, the Board
of Directors may at any time prior to the time at which any person becomes an
Acquiring Person, amend the Agreement to lower the threshold at which a person
becomes an Acquiring Person to not less than the greater of (i) the sum of .001%
and the largest percentage of the outstanding Common Stock then owned by any
person and (ii) 10%.
Until a Right is exercised, the holder will have no rights as a stockholder
of the Company (beyond those as an existing stockholder), including 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 Units, other securities of the Company, other consideration or
for common stock of an acquiring company.
The Rights are not exercisable until the Distribution Date and will expire at
the close of business on December 2, 2018 (the "Expiration Date"), unless
previously redeemed or exchanged by the Company as described above.
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Item 3.03. Material Modification to Rights of Security Holders.
Please see the disclosure set forth under Item 1.01, which is incorporated by
reference into this Item 3.03.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On December 2, 2008, the Company filed a Certificate of Elimination to
eliminate the previously designated Series A Junior Participating Cumulative
Preferred Stock that was designated in connection with the rights plan
originally adopted in December 1998. Following the elimination of this series of
stock, the Company filed a new Certificate of Designations classifying and
designating the new Series A Junior Participating Cumulative Preferred Stock
(the "Certificate of Designations") in connection with entering into the
Agreement. Please see the disclosure set forth under Item 1.01, which is
incorporated by reference into this Item 5.03.
A copy of the Certificate of Designations has been filed as an exhibit to the
Company's Amended Registration Statement on Form 8-A/A, which was filed with the
Securities and Exchange Commission on December 4, 2008, and which is
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed with this report on Form 8-K:
Exhibit
Number Description of Exhibit
3.1 Certificate of Designations classifying and designating the Series A
Junior Convertible Preferred Stock of La Jolla Pharmaceutical
Company. (1)
4.1 Amended and Restated Rights Agreement, dated as of December 2, 2008,
by and between the Company and American Stock Transfer & Trust
Company, LLC. (1)
|
(1) Filed with
the
Company's
Amended
Registration
Statement on
Form 8-A/A,
filed with
the
Securities
and Exchange
Commission
on
December 4,
2008, and
incorporated
by reference
herein.
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