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) February 7, 2007 (February
1, 2007)
ISORAY,
INC.
(Exact
name of registrant as specified in its charter)
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Minnesota
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000-14247
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41-1458152
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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350
Hills Street, Suite 106, Richland, Washington
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99354
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (509)
375-1202
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 (see
General
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry
Into a Material Definitive Agreement.
On
February 1, 2007, the Board of Directors of IsoRay, Inc. (the “Company”)
declared a dividend of one preferred share purchase right (a “Right”) for each
outstanding Common Share of the par value of $.001 per share (the “Common
Shares”) of the Company. The dividend is payable on February 16, 2007 (the
“Record Date”) to shareholders of record on that date.
Each
Right entitles the registered holder to purchase from the Company one
one-hundredth of a Series C Junior Participating Preferred Share of the par
value of $.001 per share (the “Preferred Shares”) of the Company at a price of
$25 per one one-hundredth of a Preferred Share (the “Purchase Price”), subject
to adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the “Rights Agreement”), dated as of February 1, 2007, between
the Company and Computershare Trust Company N.A., as Rights Agent (the “Rights
Agent”).
Initially,
the Rights will attach to all certificates representing Common Shares then
outstanding and no separate Right Certificates will be distributed. The Rights
will separate from the Common Shares and a Distribution Date for the Rights
will
occur upon the earlier of:
(i) the
close
of business on the fifteenth day following a public announcement that a person
or group of affiliated or associated persons has become an “Acquiring Person”
(i.e., has become, subject to certain exceptions, the beneficial owner of 15%
or
more of the voting power of the outstanding shares of voting capital stock
of
the Company in the election of directors), or
(ii) the
close
of business on the fifteenth day following the first public announcement
relating to a tender offer or exchange offer the consummation of which would
result in a person or group of affiliated or associated persons becoming,
subject to certain exceptions, the beneficial owner of 15% or more of the voting
power of the outstanding shares of voting capital stock of the Company in the
election of directors (or such later date as may be determined by the Board
of
Directors of the Company prior to a person or group of affiliated or associated
persons becoming an Acquiring Person).
Until
the
Distribution Date,
(i) the
Rights will be evidenced by the Common Share certificates and will be
transferred with and only with the Common Shares,
(ii) new
Common Share certificates issued after the Record Date upon transfer or new
issuance of the Common Shares will contain a notation incorporating the Rights
Agreement by reference, and
(iii) the
surrender for transfer of any Common Share certificate, even without such
notation or a copy of this Summary of Rights attached thereto, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
As
promptly as practicable following the Distribution Date, separate certificates
evidencing the Rights (“Right Certificates”) will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The
Rights are not exercisable until the Distribution Date. The Rights will expire
on February 16, 2017, unless extended or earlier redeemed or exchanged by the
Company as described below.
The
Purchase Price payable, and the number of Preferred Shares or other securities
or property issuable, upon exercise of the Rights are subject to adjustment
from
time to time to prevent dilution:
(i) in
the
event of a stock dividend on, or a subdivision, combination or reclassification
of, the Preferred Shares,
(ii) upon
the
grant to holders of the Preferred Shares of certain rights, options or warrants
to subscribe for or purchase Preferred Shares or convertible securities at
less
than the then current market price of the Preferred Shares, or
(iii) upon
the
distribution to holders of the Preferred Shares of evidences of indebtedness
or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Shares) or of subscription rights or warrants (other than those
described in clause (ii) hereof).
The
number of Preferred Shares issuable upon the exercise of a Right is also subject
to adjustment in the event of a dividend on Common Shares payable in Common
Shares, or a subdivision, combination or consolidation of the Common
Shares.
With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in the Purchase
Price. No fractional Preferred Shares will be issued (other than fractional
shares which are integral multiples of one one-hundredth (subject to adjustment)
of a Preferred Share, which may, at the election of the Company, be evidenced
by
depositary receipts) if in lieu thereof a payment in cash is made based on
the
closing price (pro-rated for the fraction) of the Preferred Shares on the last
trading date prior to the date of exercise.
In
the
event that any person or group of affiliated or associated persons becomes
an
Acquiring Person, proper provision shall be made so that each holder of a Right,
other than Rights that are or were beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right to receive
upon
exercise thereof at the then current exercise price of the Right that number
of
Common Shares having a market value of two times the exercise price of the
Right, subject to certain possible adjustments.
In
the
event that, after the Distribution Date or within 15 days prior thereto, the
Company is acquired in certain mergers or other business combination
transactions or 50% or more of the assets or earning power of the Company and
its subsidiaries (taken as a whole) are sold after the Distribution Date or
within 15 days prior thereto, each holder of a Right (other than Rights which
have become void under the terms of the Rights Agreement) will thereafter have
the right to receive, upon exercise thereof at the then current exercise price
of the Right, that number of common shares of the acquiring company (or, in
certain cases, one of its affiliates) having a market value of two times the
exercise price of the Right.
In
certain events specified in the Rights Agreement, the Company is permitted
to
temporarily suspend the exercisability of the Rights.
At
any
time after a person or group of affiliated or associated persons becomes an
Acquiring Person (subject to certain exceptions) and prior to the acquisition
by
a person or group of affiliated or associated persons of 50% or more of the
voting power of the outstanding shares of voting capital stock of the Company
in
the election of directors, the Board of Directors of the Company may exchange
all or part of the Rights (other than Rights which have become void under the
terms of the Rights Agreement) for Common Shares or equivalent securities at
an
exchange ratio per Right equal to the result obtained by dividing the exercise
price of a Right by the current per share market price of the Common Shares,
subject to adjustment.
At
any
time prior to such time as a person or group of affiliated or associated persons
becomes an Acquiring Person, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.001 per Right, subject
to
adjustment (the “Redemption Price”), payable in cash. The period of time during
which the Rights may be redeemed may be extended by the Board of Directors
of
the Company if no person has become an Acquiring Person. The redemption of
the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
The
Board of Directors and the Company shall not have any liability to any person
as
a result of the redemption or exchange of the Rights pursuant to the provisions
of the Rights Agreement.
The
terms
of the Rights may be amended by the Board of Directors of the Company, subject
to certain limitations after such time as a person or group of affiliated or
associated persons becomes an Acquiring Person, without the consent of the
holders of the Rights, including an amendment prior to the date a person or
group of affiliated or associated persons becomes an Acquiring Person to lower
the 15% threshold for exercisability of the Rights to not less than the greater
of (i) the sum of .001% and the largest percentage of the outstanding
shares of voting capital stock of the Company with voting power in the election
of directors then known by the Company to be beneficially owned by any person
or
group of affiliated or associated persons (subject to certain exceptions) or
(ii) 10%.
Until
a
Right is exercised, the holder thereof, as such, will have no rights as a
shareholder of the Company, including, without limitation, the right to vote
or
to receive dividends.
A
copy of
the Rights Agreement (including all exhibits thereto) is filed as Exhibit 4.1
to
this Current Report on Form 8-K, and is incorporated herein by reference. The
foregoing description of the Rights Agreement is qualified in its entirety
by
reference to the full text of the Rights Agreement.
Item
3.03 Material
Modifications to Rights of Security Holders.
The
information required by this item is included in Item 1.01
above.
Item
5.03 Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year.
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1.
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Filing
of Certificate of Designation of Rights, Preferences and Privileges
of
Series C Junior Participating Preferred Stock
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In
connection with its adoption of the Rights Agreement, the Company’s Board of
Directors approved the filing of a Certificate of Designation of Rights,
Preferences and Privileges of Series C Junior Participating Preferred Stock
of
the Company (the “Certificate of Designation”). The Company filed the
Certificate of Designation (which is filed as Exhibit 4.2 to this Current Report
on Form 8-K and incorporated by reference herein) with the Secretary of State
of
the State of Minnesota on February 2, 2007.
The
Series C Preferred Shares will not be redeemable. Each Series C Preferred Share
will be entitled to a minimum preferential quarterly dividend payment of the
greater of $1.00 per share or 100 times the dividend declared per Common Share,
subject to adjustment. In the event of liquidation, the holders of the Series
C
Preferred Shares will be entitled to a minimum preferential liquidation payment
of the greater of $100 per share or 100 times the payment made per Common Share,
subject to adjustment. Each 1/100th
of a
Series C Preferred Share will have one vote per share, voting together with
holders of Common Shares, subject to adjustment. In the event of any
consolidation, merger, combination, statutory share exchange or other
transaction in which Common Shares are exchanged, each Series C Preferred Share
will be entitled to receive 100 times the amount received per Common Share,
subject to adjustment. These rights are protected by customary antidilution
provisions. Outstanding Series B Preferred Shares are senior to the Series
C
Preferred Shares in terms of dividends and liquidation payments.
The
foregoing description of the rights of the Series C Preferred Shares is
qualified in its entirety by reference to the full text of the Certificate
of
Designation.
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2.
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Approval
of By-Law Amendments
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On
February 1, 2007, the Board of Directors of the Company adopted amendments
to
the Company’s Amended and Restated By-Laws (the “By-Laws”). With one exception,
described below, these amendments were effective immediately.
The
Board
of Directors amended and restated Section 2A. of Article II of the By-Laws
to
give the Board of Directors the right to determine how frequently
regularly-scheduled shareholders meetings would be held. Prior to the amendment,
shareholders had the ability to determine how frequently regularly-scheduled
shareholders meetings should be held (i.e., annually, quarterly or otherwise).
Shareholders still have the right to demand that special meetings be held,
as
described below.
The
Board
of Directors amended and restated Section 3A. and Section 3B. of Article II
of
the By-Laws to increase the percentage of the voting power of the outstanding
voting stock needed to demand a special meeting of shareholders from 10% to
25%
if the purpose of the meeting is to facilitate or effect a business combination,
including an action to change or otherwise affect the composition of the Board
of Directors for that purpose.
The
Board
of Directors added a new Section 9 to Article II of the By-Laws relating to
required advance notices by shareholders of business to be conducted and
directors to be nominated at annual meetings of shareholders of the Company
following the 2007 annual meeting of shareholders.
The
new
Section 9 of Article II of the By-Laws provides that such notices must generally
be received by the Secretary of the Company at least 90 days prior to the
anniversary date of the immediately preceding annual meeting. The requisite
period of notice is adjusted if the annual meeting is not within 30 days before
or after the anniversary date of the previous year’s annual meeting. Prior to
the effective time of this amendment, for annual meetings of shareholders prior
to and including the 2007 annual meeting of shareholders, no advance notice
was
required to nominate directors or bring business before the
meeting.
The
text
of the amendments to the By-Laws is filed as Exhibit 3.4 to this Current Report
on Form 8-K.
Item
9.01. Financial
Statements and Exhibits.
(d)
Exhibits.
The
following exhibits are filed herewith:
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3.4
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Text
of Amendments to the Amended and Restated By-Laws of the
Company.
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4.19
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Rights
Agreement, dated as of February 1, 2007, between the Computershare
Trust
Company N.A., as Rights Agent (incorporated
by reference to Exhibit 1 to the Company’s Registration Statement on Form
8-A filed on February 7, 2007).
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4.20
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Certificate
of Designation of Rights, Preferences and Privileges of Series C
Junior
Participating Preferred Stock (incorporated by reference to Exhibit
2 to
the Company’s Registration Statement on Form 8-A filed on February 7,
2007.
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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, thereunto
duly authorized.
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ISORAY,
INC.
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Date:
February 6, 2007
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/s/
David J. Swanberg
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David
J. Swanberg
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Executive
Vice President - Operations and
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Corporate
Secretary
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EXHIBIT
INDEX
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Exhibit
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Description
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Method
of
Filing
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3.4
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Text
of Amendments to the Amended and Restated By-Laws of IsoRay,
Inc.
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Filed
Electronically
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4.19
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Rights
Agreement, dated as of February 1, 2007, between the Company and
Computershare Trust Company N. A., as Rights Agent.
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Incorporated
by reference to Exhibit 1 to the Company’s Registration Statement on Form
8-A filed on February 7, 2007
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4.20
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Certificate
of Designation of Rights, Preferences and Privileges of Series C
Junior
Participating Preferred Stock of IsoRay, Inc.
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Incorporated
by reference to Exhibit 2 to the Company’s Registration Statement on Form
8-A filed on February 7, 2007
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