SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
ELI LILLY AND COMPANY
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(Exact name of registrant as specified in its charter)
Indiana 35-0470950
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(State of incorporation (I.R.S. Employer
or organization) Identification No.)
Lilly Corporate Center
Indianapolis, Indiana 46285
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(Address of principal executive (Zip Code)
offices)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
to be so registered which each class is to be
listed
Preferred Stock Purchase New York Stock Exchange
Rights Pacific Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
Item 1. Description of Registrant's Securities to be Registered.
On July 20, 1998, the Board of Directors of Eli Lilly and Company
(the "Company") adopted a Shareholder Rights Plan (the "Rights Plan") to replace
the expiring 1988 rights plan. The purpose of the Rights Plan is to deter
certain coercive takeover tactics and enable the Board of Directors to represent
effectively the interest of shareholders in the event of a takeover attempt. The
Rights Plan does not deter negotiated mergers or business combinations that the
Board of Directors determines to be in the best interests of the Company and its
shareholders.
To implement the Rights Plan the Board of Directors declared a dividend of
one preferred share purchase right (a "Right") for each outstanding share of
common stock (the "Common Shares") of the Company. The dividend was paid on July
28, 1998 to the shareholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series B Junior Participating Preferred Stock of the Company, without par value
(the "Preferred Shares"), at a price of $325 per one one-thousandth of a
Preferred Share, subject to adjustment. The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement") between the Company
and First Chicago Trust Company of New York, as Rights Agent.
Rights Attach to Common Shares Initially
Initially and until a Distribution Date (as defined below) occurs, the
Rights are attached to all Common Shares and no separate Rights certificates
will be issued. During this initial period,
the Rights are not exercisable;
the Rights are transferred with the Common Shares and are not transferable
separately from the Common Shares;
new Common Share certificates or book entry shares issued will contain a
notation incorporating the Rights Agreement by reference; and
the transfer of any Common Shares will also constitute the transfer of the
Rights associated with those Common Shares.
Distribution of Rights
Separate certificates evidencing the Rights will be mailed to holders of
record of the Common Shares on the "Distribution Date." The Distribution Date is
the earlier to occur of the following two events (or such later date as may be
determined by the Board of Directors, upon approval by a majority of Continuing
Directors as defined below):
the tenth day after a public announcement that a person or group of
affiliated or associated persons has acquired 15% or more of the
outstanding Common Shares (thereby becoming an "Acquiring Person" under
the Rights Plan); or
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such date as may be determined by the Board of Directors of the Company,
upon approval of a majority of the Continuing Directors after the
commencement or announcement of a tender or exchange offer by a person or
group for 15% or more of the outstanding Common Shares.
Acquisitions by the following persons will not result in the person
becoming an Acquiring Person: The Company, any subsidiary or employee benefit
plan of the Company, Lilly Endowment, Inc., or any other person approved in
advance by the Board of Directors and the Continuing Directors.
After the Distribution Date, the Rights will be tradable separately from
the Common Shares. After the Distribution Date and after the Company's right to
redeem (as described below) has expired, the Rights will be exercisable in two
different ways depending on the circumstances as set forth below.
Right to Purchase Lilly Stock
If a person or group acquires 15% or more of the outstanding Common Shares
(thereby becoming an Acquiring Person) and the Company's redemption right has
expired, each holder of a Right (except those held by the Acquiring Person and
its affiliates and associates) will have the right to purchase, upon exercise,
Common Shares (or, in certain circumstances, Preferred Shares or other similar
securities of the Company) having a value equal to two times the exercise price
of the Right. In other words, the Rights holders other than the Acquiring Person
may purchase Common Shares at a 50% discount.
For example, at the exercise price of $325 per Right, each Right not owned
by an Acquiring Person would entitle its holder to purchase $650 worth of Common
Shares (or other consideration, as noted above) for $325. Assuming a value of
$65 per Common Share at such time, the holder of each valid Right would be
entitled to purchase ten Common Shares for $325.
Right to Purchase Acquiring Person Stock
Alternatively, if, in a transaction not approved by the Board of Directors
and the Continuing Directors, the Company is acquired in a merger or other
business combination or 50% or more of its assets or earning power are sold
after a person or group has become an Acquiring Person, and the Company's
redemption right has expired, proper provision will be made so that each holder
of a Right will thereafter have the right to purchase, upon exercise, that
number of shares of common stock of the acquiring company as have a market value
of two times the exercise price of the Right. In other words, a Rights holder
may purchase the acquiring company's common stock at a 50% discount.
Exchange of Lilly Stock for Rights
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At any time after any person or group becomes an Acquiring Person and
before the Acquiring Person acquires 50% or more of the outstanding Common
Shares, the Board of Directors may exchange the Rights (other than Rights owned
by the Acquiring Person which will have become void), in whole or in part, at an
exchange ratio of one Common Share, or one one-thousandth of a Preferred Share
(or of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right (subject to
adjustment).
Redemption
The Rights are redeemable by the Company in whole but not in part at a
price of $.005 per Right at any time up to and including the tenth day after the
time that a person or a group has become an Acquiring Person, subject to
extension of this redemption period by the Board of Directors. Immediately upon
redemption the right to exercise will terminate and the only right of holders
will be to receive the redemption price.
Expiration of Rights
The Rights will expire on July 28, 2008 unless the expiration date is
extended by amendment as described below or unless the Rights are earlier
redeemed or exchanged by the Company as described above.
Amendments
As long as the Rights are redeemable, the terms of the Rights may be
amended by the Board of Directors (upon the approval of a majority of the
Continuing Directors) in its discretion without the consent of the Rights
holders. After that time, no amendment may adversely affect the interests of the
Rights holders (other than the Acquiring Person).
Miscellaneous
"Continuing Director" means a member of the Board of Directors, who is not
an Acquiring Person or a representative or nominee of an Acquiring Person, and
who either (i) was a member of the Board of Directors on the date of the Rights
Agreement or (ii) thereafter became a member of the Board of Directors, and
whose nomination for election or election to the Board of Directors was
recommended or approved by a majority of the Continuing Directors then on the
Board of Directors.
The number of outstanding Rights and the number of one one-thousandths of
a Preferred Share issuable upon exercise of each Right are subject to adjustment
under certain circumstances.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a Preferred Share
that may be
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purchased upon exercise of each Right should approximate the value of one Common
Share.
A copy of the Rights Agreement is included as Exhibit 1 hereto. A copy of
the Rights Agreement is available free of charge from the Company to any
stockholder of the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
Item 2. Exhibits.
Exhibit No. Description
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1 Rights Agreement, dated as of July 20, 1998, between Eli
Lilly and Company and First Chicago Trust Company of New
York, as Rights Agent. The Rights Agreement includes the
Form of Articles of Amendment setting forth terms of
Certificate of Designations of Series B Junior Preferred
Stock as Exhibit A, Form of Rights Certificate as
Exhibit B, and the Summary of Rights as Exhibit C
(incorporated by reference to Exhibit 1 to the Company's
Current Report on Form 8-K dated July 20, 1998).
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Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereto duly authorized.
ELI LILLY AND COMPANY
By: /s/ Edwin W. Miller
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Name: Edwin W. Miller
Title: Vice President and Treasurer
Date: July 21, 1998
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EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
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1 Rights Agreement, dated as
of July 20, 1998, between
Eli Lilly and Company and
First Chicago Trust
Company of New York, as
Rights Agent. The Rights
Agreement includes the
Form of of Articles of
Amendment setting forth
terms of Series B Junior
Preferred Stock as Exhibit
A, the Form of Rights
Certificate as Exhibit B,
and the Summary of Rights
as Exhibit C (incorporated
by reference to Exhibit 1
to the Company's Current
Report on Form 8-K dated
July 20, 1998).
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