-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QAo+Eoa0QalNchZY1zvYyBDJv3rGVowcvbmyrHITQE6K0TdYurdS1Wgiw+OvCd3o sP+DUWX7FACTvlmQCK4+1A== 0000904440-98-000030.txt : 19980402 0000904440-98-000030.hdr.sgml : 19980402 ACCESSION NUMBER: 0000904440-98-000030 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980325 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980401 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHARMACEUTICAL RESOURCES INC CENTRAL INDEX KEY: 0000878088 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 223122182 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-10827 FILM NUMBER: 98584670 BUSINESS ADDRESS: STREET 1: ONE RAM RIDGE RD CITY: SPRING VALLEY STATE: NY ZIP: 10977 BUSINESS PHONE: 9144257100 MAIL ADDRESS: STREET 1: ONE RAM RIDGE RD CITY: SPRING VALLEY STATE: NY ZIP: 10977 8-K 1 8-K DATED MARCH 25, 1998 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 205497 ---------------------- 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): March 25, 1998 PHARMACEUTICAL RESOURCES, INC. (Exact name of registrant as specified in its charter) NEW JERSEY File Number 1-10827 22-3122182 - -------------------------------------------------------------------------------- (State or other jurisdiction of Commission File Number) (I.R.S. Employer incorporation or organization) Identification No.) One Ram Ridge Road, Spring Valley, New York 10977 - -------------------------------------------------------------------------------- (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (914)425-7100 TOTAL NUMBER OF PAGES -- 14 EXHIBIT INDEX IS LOCATED ON PAGE 4 Item 5. Other Events. - ------------------------ Stock Purchase Agreement. ------------------------- On March 25, 1998, the Registrant entered into a Stock Purchase Agreement (the "Agreement") with Lipha Americas, Inc., a Delaware corporation and an affiliate of Merck KGaA, Darmstadt, Germany ("Lipha"), as more fully described in a press release dated March 26, 1998, issued by the Registrant describing such transaction and certain related matters, which is attached as Exhibit 10.1 hereto. Rights Agreement. ----------------- In connection with the execution and delivery of the Agreement, the Registrant amended the Rights Agreement, dated August 6, 1991, as amended, between the Registrant and First City Transfer Company, as successor rights agent (the "Rights Agent"), (the "Rights Agreement"). The Amendment to the Rights Agreement, dated March 25, 1998, between the Registrant and the Rights Agent amended certain definitions in the Rights Agreement to exempt from operation of the Rights Agreement acquisitions of common stock and options to purchase common stock by Lipha and its affiliates and associates pursuant to the Agreement and other agreements contemplated thereby and to remove the exemptions previously granted to Clal Pharmaceutical Industries, Ltd. ("Clal"), which Amendment is attached as Exhibit 4.1 hereto. The Registrant and the Rights Agent also amended the Rights Agreement on September 30, 1997, to exempt from operation of the Rights Agreement certain permitted transferees of Clal, which amendment is attached as Exhibit 4.2 hereto. Item 7. Financial statements and Exhibits. - ------------------------------------------- (c) Exhibits. 4.1 Amendment to Rights Agreement, dated March 25, 1998, between the Registrant and First City Transfer Company. 4.2 Amendment to Rights Agreement, dated September 30, 1997, between the Registrant and First City Transfer Company. 10.1 Press Release of the Registrant, dated March 26, 1998 -2- SIGNATURES Pursuant to the requirements of the Securities Exchange of Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PHARMACEUTICAL RESOURCES, INC. (Registrant) March 31, 1998 ------------------------------ Dennis J. O'Connor Vice President and Chief Financial Officer -3- Exhibit Index Exhibit No. Description Seq. Page No. 4.1 Amendment to Rights Agreement, 5 dated March 25, 1998, between the Registrant and First City Transfer Company 4.2 Amendment to Rights Agreement, 9 dated September 30, 1997, between the Registrant and First City Transfer Company 10.1 Press Release of the 12 Registrant, dated March 26, 1998 -4- EX-4 2 AMEND TO RIGHTS AGMT 3/25/98 Exhibit 4.1 AMENDMENT TO RIGHTS AGREEMENT dated March 25, 1998, to the Rights Agreement dated August 6, 1991, as amended (the "Rights Agreement"), by and between Pharmaceutical Resources, Inc., a New Jersey corporation ("the "Company"), and First City Transfer Company (the "Rights Agent"). WHEREAS, the Board of Directors of the Company, on August 6, 1991, authorized and adopted a share purchase rights plan (the "Plan") to protect the Company's shareholders against unsolicited and hostile attempts to acquire control of the Company and, in connection therewith, executed and delivered the Rights Agreement to effectuate the terms of the Plan; WHEREAS, the Board of Directors of the Company, on March 25, 1998, approved and adopted an amendment to the Plan as described herein in contemplation of a certain negotiated transaction; WHEREAS, the Board of Directors of the Company authorized and directed the proper officers of the Company as well as the Rights Agent to execute and deliver this Amendment to the Rights Agreement in order to effectuate the foregoing amendments to the Plan; and WHEREAS, all capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Rights Agreement. NOW, THEREFORE, in consideration of the mutual premises, the Rights Agreement is hereby amended as follows: -5- Section 1. Effective Dates. (a) The amendment set forth in Section 2(a) hereof shall be effective upon the execution and delivery of the Stock Purchase Agreement, dated March 25, 1998, between the Company and Lipha Americas, Inc. (the "Stock Purchase Agreement"). (b) The amendments set forth in Sections 2(b), (c), (e) and (f) hereof shall be effective upon the consummation of the Stock Purchase Agreement. Section 2. Certain Definitions. (a) The definition of "Acquiring Person" as set forth in the first sentence in Section 1(a) shall be amended by deleting "or" before "(v)" and inserting in its stead "," and by inserting the following at the end of the first sentence thereof before the ".": "and (vi) Lipha Americas, Inc. ("Lipha"), Merck KGaA ("Merck") and Genpharm, Inc. ("Genpharm") under a stock purchase agreement and options approved by the Board of Directors of the Company, as amended from time to time, between the Company and Lipha, Merck and Genpharm, as the case may be, so long as any acquisition or tender or exchange offer is permitted under such stock purchase agreement or options" (b) The definition of "Acquiring Person" as set forth in the first sentence of Section 1(a) shall be amended by amending clause (v) in its entirety as follows: "(v) [intentionally omitted]," (c) The definition of "Permitted Offer" in Section 1(n) shall be amended in its entirety as follows: "(n) "Permitted Offer" shall mean the following tender offers made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder: (i) a tender offer for all outstanding Common Shares; provided, however, that such tender offer occurs at a time when Continuing Directors are in office and a majority of the Continuing Directors has determined that the offer is fair to, and otherwise in the best interests of, the Company and -6- its stockholders, and (ii) a tender offer for Common Shares as permitted by a stock purchase agreement approved by the Board of Directors of the Company, as amended from time to time, between the Company and Lipha." (d) The proviso in the definition of "Person" in Section 1(o) shall be amended in its entirety with the following: "; provided, however, that "Person" shall exclude Lipha and its associates and affiliates until such time as any acquisition of or tender offer for Common Shares by Lipha or any of its affiliates or associates shall not be permitted under a stock purchase agreement approved by the Board of Directors of the Company, as amended from time to time, between the Company and Lipha" (e) The proviso in the definition of "Section 11(a)(ii)(A) Event" in Section 1(v) shall be amended in its entirety as follows: "; provided, however, in no event shall any of the actions described in Section 11(a)(11)(A) by Lipha or any of its affiliates or associates constitute a Section 11(a)(ii)(A) Event to the extent that any such actions shall not be prohibited under a stock purchase agreement approved by the Board of Directors of the Company, as amended from time to time, between the Company and Lipha" (f) The proviso in the definition of "Section 13 Event" in Section 1(w) shall be amended in its entirety as follows: "; provided, however, in no event shall any of the actions described in Section 13(a) by Lipha or any of its affiliates or associates constitute a Section 13 Event to the extent that any such actions shall not be prohibited under a stock purchase agreement approved by the Board of Directors of the Company, as amended from time to time, between the Company and Lipha" Section 3. Authority for Amendment. This Amendment is being executed and delivered as of the date hereof by the Company and the Rights Agent pursuant to and in accordance with Section 27 of the Rights Agreement. By executing this Amendment, the Company hereby certifies to the Rights Agent that this Amendment is in compliance with Section 27 of the Rights Agreement. Except as -7- otherwise amended hereby, all the provisions of the Rights Agreement shall remain in full force and effect. This Amendment shall be deemed to be a part of, and shall be construed as part of, the Rights Agreement. IN WITNESS HEREOF, the parties hereby have caused this Amendment to be duly executed as of the date first above written. PHARMACEUTICAL RESOURCES, INC. By /s/ Kenneth I. Sawyer ----------------------------- Title: President FIRST CITY TRANSFER COMPANY By /s/ Kathleen M. Zaleske ----------------------------- Title: Kathleen M. Zaleske Assistant Vice President -8- EX-4 3 AMEND TO RIGHTS AGMT - 9-30-97 Exhibit 4.2 AMENDMENT TO RIGHTS AGREEMENT dated September 30, 1997, to the Rights Agreement dated August 6, 1991, as amended (the "Rights Agreement"), by and between Pharmaceutical Resources, Inc., a New Jersey corporation (the "Company"), and First City Transfer Company (the "Rights Agreement"), as successor to Midlantic Bank. WHEREAS, the Board of Directors of the Company, on August 6, 1991, authorized and adopted a share purchase rights plan (the "Plan") to protect the Company's shareholders against unsolicited and hostile attempts to acquire control of the Company and, in connection therewith, executed and delivered the Rights Agreement to effectuate the terms of the Plan; WHEREAS, the Plan was amended, on March 23, 1995, in contemplation of a certain negotiated transaction with Clal Pharmaceutical Industries Ltd.; WHEREAS, the Board of Directors of the Company, on July 28, 1997, approved an amendment to the Plan as described herein in contemplation of modifications to such negotiated transaction; WHEREAS, the Board of Directors of the Company authorized and directed the proper officers of the Company as well as the Rights Agent to execute and deliver this Amendment to the Rights Agreement in order to effectuate the foregoing amendments to the Plan; and WHEREAS, all capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Rights Agreement. NOW, THEREFORE, in consideration of the premises, the Rights Agreement is hereby amended as follows: Section (C) Certain Definitions. Section 1(a)(v) of the Rights Agreement shall be amended in its entirety as follows: "(v) Clal Pharmaceutical Industries Ltd. and its permitted assigns under Section 16 of the Stock Purchase Agreement, dated March 25, 1995, between the Company and Clal Pharmaceutical Industries Ltd., as amended (the "Stock Purchase Agreement") (Clal Pharmaceutical Industries Ltd. and its permitted assigns under such Section 16 shall be collectively referred to herein as "Clal"), so long as any acquisition or tender offer by Clal is permitted under the Stock Purchase Agreement" (A) The definition of "Permitted Offer" in Section 1(n) of the Rights Agreement shall be amended in its entirety as follows: "(n) "Permitted Offer" shall mean the following tender offers made in the manner prescribed by Section 14(d) of -9- the Exchange Act and the rules and regulations promulgated thereunder: (i) a tender offer for all outstanding Common Shares; provided, however, that such tender offer occurs at a time when Continuing Directors are in office and a majority of the Continuing Directors has determined that the offer is fair to, and otherwise in the best interests of, the Company and its stockholders, and (ii) a tender offer for Common Shares as permitted by the Stock Purchase Agreement." (B) The proviso in the definition of "Section 11(a)(ii)(A) Event" in Section 1(v) of the Rights Agreement shall be amended in its entirety as follows: "; provided, however, in no event shall an acquisition of or tender offer for Common Shares by Clal constitute a Section 11(a)(ii)(A) Event until such time as any such acquisition or tender offer by Clal shall no longer be permitted under the Stock Purchase Agreement" (C) The proviso in the definition of "Section 13 Event" in Section 1(w) of the Rights Agreement shall be amended in its entirety as follows: "; provided, however, in no event shall an acquisition of or tender offer for Common shares by Clal constitute a Section 13 Event until such time as any such acquisition or tender offer by Clal shall no longer be permitted under the Stock Purchase Agreement" Section (D) Authority for Amendment. This Amendment is being executed and delivered as of the date hereof by the Company and the Rights Agent pursuant to and in accordance with Section 27 of the Rights Agreement. By executing this Amendment, the Company hereby certifies to the Rights Agent that this Amendment is in compliance with Section 27 of the Rights Agreement. Except as otherwise amended hereby, all the provisions of the Rights Agreement shall remain in full force and effect. This Amendment shall be deemed to be a part of, and shall be construed as part of, the Rights Agreement. -10- IN WITNESS WHEREOF, the parties hereby have caused this Amendment to be duly executed as of the date first above written. PHARMACEUTICAL RESOURCES, INC. By: /s/ Kenneth I. Sawyer ------------------------------ Title: President FIRST CITY TRANSFER COMPANY By: /s/ Kathleen M. Zaleske ------------------------------ Title: Assistant Vice President -11- EX-10 4 PRESS RELEASE Exhibit 10.1 Contact: Kenneth I. Sawyer President Pharmaceutical Resources, Inc. (914) 573-0390 FOR IMMEDIATE RELEASE PHARMACEUTICAL RESOURCES, INC., ANNOUNCES STRATEGIC ALLIANCE WITH MERCK KGaA Spring Valley, New York, March 26, 1998 -- Pharmaceutical Resources, Inc. (NYSE/PSE:PRX) announced today that it has formed a strategic alliance with Merck KGaA, Darmstadt, Germany, a German pharmaceutical, laboratory and chemical company. Under the agreement, Merck KGaA, through its subsidiary Lipha Americas, Inc. ("Lipha"), will pay Resources cash for 10,400,000 newly-issued shares as well as give Resources the sole rights to market an important portfolio of products for the U.S. through Merck's Canadian subsidiary, Genpharm, Inc. ("Genpharm"). The cash purchase price of $2 per share will provide Resources $20.8 million for investment in its continuing business, and will give Merck KGaA a 36% stake in Resources. The Company intends to use a significant portion of the net proceeds of the stock sale to repay advances made to it under its existing line of credit and the remainder will be used for working capital, including business expansion. In addition, Merck KGaA agreed to purchase 1,813,272 shares of the Company's common stock from Clal Pharmaceutical Industries Ltd. ("Clal"), the Company's largest stockholder, and Merck KGaA and the Company acquired rights to purchase an additional 500,000 shares from Clal in three years. In connection with the transactions, Merck KGaA and Genpharm also agreed to provide certain consulting services to the Company in exchange for 5-year options to purchase an aggregate of 1,171,040 additional shares of the Company's common stock at $2 per share. The sole rights to the portfolio of products are covered by a distribution agreement with Genpharm, granting the Company exclusive U.S. distribution rights for up to 40 generic pharmaceuticals currently being developed, some of which have obtained U.S. FDA approval and others which have been or will be submitted to the FDA for approval. -more- -12- Genpharm will pay all of the research and development costs associated with the 40 products. In return, Resources will pay a certain percentage of gross margin to Genpharm on the sales of the products. Additionally, Merck KGaA will work with Resources on future opportunities with specific products to further enhance its North American generic business. Under the stock purchase agreement signed today, Lipha will have the right, subject to the closing of the sale transaction, to designate a majority of the Company's Board of Directors. The Company's current Board of Directors will designate three persons to continue as Directors of the Company, one of whom will be Kenneth I. Sawyer (the current Chairman, President and Chief Executive Officer of the Company). Lipha will designate Dr. Rudi D. Neirinckx as President and Chief Operating Officer of the Company. Dr. Neirinckx has been the Head of Business Development at Merck KGaA. Mr. Sawyer will remain the Chairman and Chief Executive Officer of the Company. Lipha and its affiliates have agreed to not engage in certain business combinations including the Company for a period of three years, unless a majority of the three directors designated by the Company's current board consent. Lipha will have certain rights of first refusal to acquire equity stock of the Company in the event of future equity offerings. Merck KGaA and its affiliates have, as a result of and subject to the closing of the transactions announced today, the right to purchase approximately 46% of the Company's common stock. The completion of the transactions with Lipha, Merck KGaA and Genpharm are subject to certain conditions in the stock purchase agreement, including the obtaining of all necessary government consents, approval by the Company's stockholders of the issuance of the common stock and the election of the designated directors. The distribution agreement is effective immediately, but is terminable by Genpharm if the stock transaction does not close by July 15, 1998 and is not subject to such conditions. Kenneth I. Sawyer, Chairman, Chief Executive Officer and President of Resources, commented, "The strategic alliance with Merck KGaA provides the Company with the opportunity to achieve our objective of building a profitable generic pharmaceutical business with the prospect of future growth. The alliance will immediately add a significant number of products to our product development pipeline, give the Company additional expertise in generic pharmaceutical marketing and manufacturing, and significantly reduce the Company's debt while providing capital to explore additional options to improve the Company's growth prospects. We believe in order to compete in today's intensely competitive generic drug market it is important to form strategic alliances and we feel extremely fortunate to form an alliance with a company of Merck's heritage, expertise and performance in the industry." -13- "This is a further step to implement our North-American strategy by increasing our presence in the world's largest pharmaceutical market" said Prof. Dr. Bernhard Scheuble, designated Head of Merck's Pharmaceutical Business and Deputy Member of the Executive Board. "In the US we have seen a very successful introduction of our betablocker Concor (bisoprolol) and the antidiabetic Glucophage (metformin) through licensees. This agreement now marks the start of becoming a major player in the US generics industry." -more- Merck KGaA is a German specialty pharmaceuticals, laboratory and chemicals company with sales of $4.4 billion, and 29,000 employees in 47 countries worldwide. Its pharmaceutical sales of $2.5 billion consists mainly of ethicals, generics, contrastmedia and OTC products. Within the Ethicals Division Merck spends more than 20% of its sales on R&D and has core research expertise in CV, CNS, oncology and metabolic disease. Merck KGaA owns Merck-Lipha S.A., a French ethical and generic pharmaceutical company, which owns Dey Laboratories, L.P., a U.S. generic pharmaceutical company located in Napa Valley, California. Pharmaceutical Resources, Inc. is a holding company with subsidiaries that develop manufacture and distribute generic pharmaceuticals products. PRI's principal subsidiary, Par Pharmaceutical, located in Spring Valley, New York, manufactures and distributes various dosage strengths of approximately 100 products. # # # -14- -----END PRIVACY-ENHANCED MESSAGE-----