Sgx Pharmaceuticals, Inc. - Current report filing (8-K)
July 08 2008 - 4:52PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): July 8, 2008
SGX Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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000-51745
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06-1523147
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(State or other jurisdiction of
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(Commission File Number)
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(I.R.S. Employer
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incorporation)
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Identification No.)
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10505 Roselle Street, San Diego, California
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92121
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code:
(858) 558-4850
Not Applicable.
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
On July 8, 2008, SGX Pharmaceuticals, Inc., a Delaware corporation (SGX), entered into an
Agreement and Plan of Merger (the Merger Agreement) with Eli Lilly and Company, an Indiana
corporation (Lilly), and REM Merger Sub, Inc., a Delaware corporation and a wholly-owned
subsidiary of Lilly (Merger Sub). A copy of the joint press release announcing the execution of
the Merger Agreement is attached as Exhibit 99.1 and incorporated herein by reference.
Merger Agreement
Pursuant to the Merger Agreement, Merger Sub will merge with and into SGX (the Merger), with
SGX continuing as the surviving corporation and a wholly-owned subsidiary of Lilly. As a result of
the Merger, each share of SGX common stock issued and outstanding immediately prior to the
effective time of the Merger (other than shares held by Lilly or Merger Sub or by stockholders of
SGX who have validly exercised their appraisal rights under Delaware law) will be converted into
the right to receive $3.00 in cash, without interest.
Pursuant to the terms of the Merger Agreement and as permitted under the applicable SGX equity plans, all of SGXs unvested stock
options will vest prior to the effective time of the Merger. Any issued and outstanding stock options with an exercise price per share greater than or equal to $3.00 that are not exercised prior to the effective time
of the Merger will terminate. Any issued and outstanding stock options with an exercise price per share less than $3.00 will be converted into the right to receive a payment equal to the product of (1) the excess of $3.00
per share over the exercise price per share of such stock options and (2) the number of shares of SGX common stock subject to such stock options.
SGX has made various representations, warranties and covenants in the Merger Agreement,
including, among others, covenants (1) to carry on its business in the ordinary and usual course
during the period between the date of the Merger Agreement and the effective time of the Merger,
(2) not to engage in certain specified transactions or activities during such period, (3) to file a
proxy statement and cause a special stockholder meeting to be held regarding the adoption of the
Merger Agreement, (4) subject to certain exceptions, for the board of directors of SGX to recommend
that the stockholders adopt the Merger Agreement, (5) not to solicit, initiate or take any other
action to facilitate a third party in making an alternative takeover proposal and (6) subject to
certain exceptions, not to participate in any negotiations regarding, or approve or recommend, any
alternative takeover proposal.
The completion of the Merger is subject to the satisfaction or waiver of a number of closing
conditions, including, among others, (1) adoption of the Merger Agreement by the holders of a
majority of SGXs outstanding common stock, (2) subject to certain exceptions, the absence of any
material adverse effect on SGX from and after the date of the Merger Agreement, (3) the expiration
or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, (4) the absence of any legal prohibitions on the closing of the Merger and (5)
subject to certain exceptions, the continued accuracy of SGXs representations and warranties as of
the effective time of the Merger.
The Merger Agreement also includes termination provisions for both SGX and Lilly. In
connection with the termination of the Merger Agreement under specified circumstances involving
competing transactions or a change in SGXs board of directors recommendation of
the Merger to SGXs stockholders, SGX may be required to pay Lilly a termination fee of
$2,000,000 and up to an additional $250,000 to reimburse Lillys expenses.
The foregoing description of the Merger Agreement does not purport to be complete and is
qualified in its entirety by reference to the Merger Agreement, a copy of which is attached hereto
as Exhibit 2.1 and incorporated herein by reference.
The Merger Agreement has been included to provide investors and stockholders with information
regarding its terms. It is not intended to provide any other factual information about SGX. The
Merger Agreement contains representations and warranties that the parties to the Merger Agreement
made to and solely for the benefit of each other. The assertions embodied in such representations
and warranties are qualified by information contained in the confidential disclosure schedules that
SGX delivered to Lilly in connection with signing the Merger Agreement. Accordingly, investors and
stockholders should not rely on such representations and warranties as characterizations of the
actual state of facts or circumstances, since they were only made as of the date of the Merger
Agreement and are modified in important part by the underlying disclosure schedules. Moreover,
information concerning the subject matter of such representations and warranties may change after
the date of the Merger Agreement, which subsequent information may or may not be fully reflected in
SGXs public disclosures.
Voting Agreement
On July 8, in connection with the Merger Agreement, Lilly entered into a voting agreement with
certain of SGXs officers, directors and significant stockholders who together represented
approximately twenty-six percent (26%) of SGXs outstanding shares of common stock as of July
8, 2008. Under the terms of the voting agreement, each of the above stockholders agreed to vote,
and irrevocably appointed Lilly as its proxy to vote, all outstanding shares of SGX common stock
held by such stockholder as of the record date (1) in favor of the Merger and the adoption of the
Merger Agreement and the approval of the transactions contemplated by the Merger Agreement, and any
actions required in furtherance thereof, (2) against any action or agreement that would result in a
breach in any material respect of any covenant, representation or warranty or any other obligation
of SGX under the Merger Agreement, and (3) against (i) any extraordinary corporate transaction,
such as a merger, rights offering, reorganization, recapitalization or liquidation involving SGX
(other than the Merger), (ii) a sale or transfer of a material amount of SGXs assets or capital
stock, or (iii) any action that is intended, or would reasonably be expected, to impede, interfere
with, prevent, delay, postpone or adversely affect the transactions contemplated by the Merger
Agreement.
Under the terms of the voting agreement, each stockholder agrees not to exercise any appraisal
rights or any dissenters rights that such stockholder may have or could potentially have in
connection with the Merger Agreement and the transactions contemplated by the Merger Agreement.
A form of the Voting Agreement is attached as Exhibit A to the Merger Agreement.
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Important Additional Information
SGX intends to file with the Securities and Exchange Commission (the SEC) a preliminary
proxy statement and a definitive proxy statement and other relevant materials in connection with
the Merger. The definitive proxy statement will be sent or given to the stockholders of SGX. Before
making any voting or investment decision with respect to the Merger, investors and stockholders of
SGX are urged to read the proxy statement and the other relevant materials when they become
available because they will contain important information about the Merger. The proxy statement and
other relevant materials (when they become available), and any other documents filed by SGX with
the SEC, may be obtained free of charge at the SECs website at www.sec.gov. In addition, investors
and stockholders may obtain free copies of the documents filed with the SEC by going to SGXs
Investor Relations page on its corporate website at www.sgxpharma.com or by directing a written
request to SGX at 10505 Roselle Street, San Diego, California 92121 Attention: W. Todd Myers.
SGX and its directors and executive officers may be deemed to be participants in the
solicitation of proxies from SGX stockholders in connection with the Merger. Certain directors and
executive officers of SGX may have direct or indirect interests in the Merger due to, among other
things, securities holdings, pre-existing or future indemnification arrangements, vesting of equity
awards, or rights to severance payments in connection with the Merger. Additional information
regarding the directors and executive officers of SGX and their interests in the Merger will be
contained in the proxy statement that SGX intends to file with the SEC.
Item 9.01. Financial Statements and Exhibits.
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Number
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Description
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2.1
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Agreement and Plan of Merger, dated as of July 8, 2008, by and
among Eli Lilly and Company, REM Merger Sub, Inc. and SGX
Pharmaceuticals, Inc.
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99.1
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Press release dated July 8, 2008.
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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.
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SGX PHARMACEUTICALS, INC.
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Dated: July 8, 2008
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By:
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/s/ W. Todd Myers
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W. Todd Myers
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Chief Financial Officer
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EXHIBIT INDEX
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Number
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Description
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2.1
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Agreement and Plan of Merger, dated as of July 8, 2008, by and
among Eli Lilly and Company, REM Merger Sub, Inc. and SGX
Pharmaceuticals, Inc.
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99.1
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Press release dated July 8, 2008.
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