SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 9, 2001
ATHEROGENICS, INC.
(Exact Name of Registrant as Specified in its Charter)
GEORGIA 0-31261 58-210832
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8995 WESTSIDE PARKWAY
ALPHARETTA, GA 30004
(Address of principal executive offices)
Registrant's telephone number, including area code (678) 336-2500
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ITEM 5. OTHER EVENTS
On November 9, 2001, the Board of Directors of AtheroGenics declared a
dividend distribution of one "Right" for each outstanding share of common stock
to shareholders of record as of the close of business on November 19, 2001 (the
"Record Date"). Each "Right" includes an "Initial Right" and "Subsequent
Rights," each of which entitles the registered holder to purchase from
AtheroGenics a number of shares of common stock equal to eight shares of common
stock multiplied by a fraction, the numerator of which is the number of shares
of common stock outstanding on the "Initial Stock Acquisition Date" in the case
of the Initial Rights and a "Subsequent Stock Acquisition Date" in the case of
Subsequent Rights, and the denominator of which is the number of shares of
common stock outstanding on the respective Stock Acquisition Date that are not
beneficially owned by an "Acquiring Person" or its affiliates or associates.
The purchase price for each share of common stock is 20% of Current Market
Price for such stock, measured as of the respective Stock Acquisition Date. The
description and terms of the Rights are set forth in a Rights Agreement between
AtheroGenics and American Stock Transfer & Trust Company, as Rights Agent dated
as of November 9, 2001.
The summary description of the Rights set out below does not purport
to be complete, and is qualified in its entirety by reference to the Rights
Agreement, as it may be amended from time to time, which is attached hereto as
an exhibit and incorporated herein by reference.
Until the Rights are triggered, they are evidenced by the certificates
representing the shares of AtheroGenics common stock. Initial Rights are
triggered upon the earlier to occur of (i) 10 business days following a public
announcement that a person or a group of affiliated or associated persons has
acquired beneficial ownership of 15% or more of the outstanding shares of
AtheroGenics common stock, (ii) 10 business days following the date on which
the Board of Directors first learns that such a person or group has acquired
beneficial ownership of 15% or more of the outstanding common stock, or (iii)
10 business days following the commencement of a tender offer or an exchange
offer that would result in a person or group beneficially owning 15% or more of
such outstanding shares of common stock (the earlier of such dates being called
the "Initial Distribution Date"). Subsequent Rights are triggered after a
previous Distribution Date upon the earlier to occur of (i) 10 business days
following a public announcement that a person or a group of affiliated or
associated persons has acquired beneficial ownership of 15% or more of the
outstanding shares of AtheroGenics common stock, (ii) 10 business days
following the date on which the Board of Directors first learns that such a
person or group has acquired beneficial ownership of 15% or more of the
outstanding common stock, (iii) 10 business days following the commencement of
a new tender offer or exchange offer that would result in such a person or
group beneficially owning 15% or more of such outstanding shares of common
stock, or (iv) 10 business days following the date upon which a person or a
group of affiliated or associated persons who previously had acquired and still
retains beneficial ownership of 15% or more of the outstanding shares of common
stock of AtheroGenics acquires an additional 10% or more of the
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outstanding shares of common stock (the earlier of such dates being called a
"Subsequent Distribution Date"). Subsequent Rights can be triggered any number
of times following previous Distribution Dates and prior to the redemption of
the Rights. The person or group triggering the Subsequent Rights need not be
the same person or group who triggered the previous Rights. Any person who is
the beneficial owner or 17% or more of our common stock on the Record Date,
however, will not be deemed an Acquiring Person and therefore will not trigger
the Rights unless that person subsequently becomes the beneficial owner of an
aggregate of 20% or more of our common stock.
Until the Initial Distribution Date, (i) the Rights will be evidenced
by the common stock certificates and will be transferred only with such common
stock certificates, (ii) new common stock certificates issued after November
19, 2001 will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for common
stock will also constitute the transfer of the Rights associated with the
common stock represented by such certificate. Following the Initial
Distribution Date and until a Subsequent Distribution Date, (i) Subsequent
Rights will be evidenced by the common stock certificates and by previously
issued Rights Certificates with respect to those Rights that remain unexercised
at a Subsequent Distribution Date, and will be transferred only with such
common stock certificates or previously issued Rights Certificates, (ii) new
common stock certificates issued after November 19, 2001 will contain a
notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for common stock or previously
issued Rights Certificates will also constitute the transfer of the Rights
associated with the common stock represented by such certificate or with that
previously issued Rights Certificate.
The Rights are not exercisable until the Initial Stock Acquisition
Date in the case of the Initial Rights and a Subsequent Stock Acquisition Date
in the case of Subsequent Rights. The Rights will expire at the close of
business on November 8, 2011, unless earlier redeemed by the Board as described
below.
As soon as practicable after the respective Distribution Date, we will
mail Rights Certificates evidencing the Initial Rights or the Subsequent
Rights, as the case may be, to holders of record of the common stock, and, in
the case of Subsequent Rights, holders of record of unexercised previously
issued Rights Certificates, as of the close of business on the respective
Distribution Date. Thereafter, the separate Rights Certificates alone will
represent the respective Rights. Except as otherwise determined by the Board of
Directors, only shares of common stock issued prior to the respective
Distribution Date will be issued with Rights, provided, however, that
Subsequent Rights also will be issued with the shares of common stock issuable
upon exercise of Rights evidenced by previously issued Rights Certificates.
These Subsequent Rights may not be exercised until the previous Rights are
exercised.
If at any time a person causes an Initial Stock Acquisition Date or a
Subsequent Stock Acquisition Date to occur (the "Acquiring Person"), following
the close of business on the tenth business day after the respective Stock
Acquisition Date each holder of a Right will thereafter have the right to
receive, upon exercise, a number of shares of common stock equal to eight
shares of common stock multiplied by a fraction, the numerator of which is the
number of shares of common stock outstanding on the Stock Acquisition Date, and
the denominator of which is the number of shares of
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common stock outstanding on the Stock Acquisition Date that are not
beneficially owned by the Acquiring Person or its affiliates or associates. The
price for the exercise of each Right shall be equal to (x) 20% of the Current
Market Price of the common stock on the Stock Acquisition Date, multiplied by
(y) the number of shares of common stock to be received upon exercise.
Notwithstanding any of the foregoing, following the occurrence of any event
which causes a Stock Acquisition Date, 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.
In the event that, at any time following the respective Stock
Acquisition Date, (i) we are acquired in a merger or other business combination
in which we are not the surviving corporation, or (ii) all of our shares are
acquired in a share exchange or we engage in a merger or consolidation in which
all or part of our outstanding shares of common stock are changed into or
exchanged for stock, other securities or assets of any other person or (iii)
50% or more of our assets or earning power is sold or transferred, each holder
of a Right (except Rights which previously have been voided as set forth above)
will thereafter have the right to receive, upon exercise, a number of shares of
common stock of the acquiring company equal to the product of eight times the
result obtained by dividing the current market price of our common stock by the
current market price of the common stock of the acquiring corporation or, if
such stock is not traded in public markets, of its parent corporation,
multiplied by a fraction, the numerator of which is the number of shares of
common stock outstanding on the Stock Acquisition Date with respect to the
exercised Right and the denominator of which is the number of shares of common
stock not owned by the Acquiring Person or its affiliates or associates. The
purchase price will be calculated on the same basis as if the Rights holder
were exercising a Right to purchase our common stock at that time.
With certain exceptions, the Rights Agreement does not require an
adjustment in the purchase price until cumulative adjustments amount to at
least 1% of the purchase price. We will not issue any fractional Rights, and,
in lieu thereof, we will make an adjustment in cash based on the market price
of the Rights on the last trading date prior to the date of adjustment. We will
not issue fractional shares upon exercise of the Rights, and, in lieu thereof,
we will make an adjustment in cash based on the market price of the common
stock on the last trading date prior to the date of exercise.
In general, the Board of Directors may redeem the Initial Rights or
the Subsequent Rights, at a price of $.0001 per Right, at any time before the
close of business on the tenth business day following a respective Stock
Acquisition Date with respect to the Rights (subject to extension under certain
circumstances). Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the holders of Rights
to be redeemed will only be entitled to receive the $.0001 per Right redemption
price.
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Until a Right is exercised, the holder of that Right, as such, will
have no rights as a shareholder of AtheroGenics, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to AtheroGenics, shareholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for our common stock (or other consideration) or
for common stock of an acquiring company as set forth above.
The Board of Directors may amend the provisions of the Rights
Agreement prior to the close of business on the tenth business day following
the Initial Stock Acquisition Date, in the case of the Initial Rights, and a
Subsequent Stock Acquisition Date, in the case of Subsequent Rights. After such
dates, the Board of Directors may amend the provisions of the Rights Agreement
in order to cure any ambiguity, to make changes which do not adversely affect
the interests of holders of Rights, or to shorten or lengthen any time period
under the Rights Agreement. However, the Board may not amend the Rights
Agreement to adjust the time period governing redemption at any time that the
Rights are not redeemable.
As of the close of business on November 9, 2001, 27,793,173 shares of
our common stock were outstanding, and options and warrants to purchase an
aggregate of 3,191,950 shares of our common stock were outstanding.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire AtheroGenics
in a manner which causes the Rights to become exercisable, unless the Board
first approves the terms of an offer for all shares and redeems the Rights. The
Rights, however, should not affect any prospective offeror willing to negotiate
with the Board or willing to make an offer at a fair price and otherwise in the
best interests of AtheroGenics and its shareholders, as determined by the
Board. The Rights should not interfere with any merger or other business
combination approved by the Board since the Board may, at its option, before
the merger or business combination, redeem all, but not less than all, of the
then-outstanding Rights at the redemption price or amend the Rights Agreement
to permit the transaction.
ITEM 7. EXHIBITS
The following exhibits are filed with this report.
EXHIBIT NO. DESCRIPTION
4.4 - Rights Agreement dated as of November 9, 2001 between AtheroGenics, Inc. and
American Stock Transfer & Trust Company, as Rights Agent.
99.1 - Press Release dated November 9, 2001.
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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.
ATHEROGENICS, INC.
Date: November 19, 2001 By: /s/ RUSSELL M. MEDFORD
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RUSSELL M. MEDFORD, M.D., PH.D.
President and Chief Executive Officer
(Principal Executive Officer)
Date: November 19, 2001 By: /S/ MARK P. COLONNESE
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MARK P. COLONNESE
Vice President of Finance and
Administration and Chief Financial
Officer (Principal Accounting and
Financial Officer)
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