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 18, 2002
ELITE PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
State or other jurisdiction of incorporation: Delaware
Commission File No.: 333-45241
I.R.S. Employer Identification No.: 22-3542636
Address of principal executive offices: 165 Ludlow Avenue
Northvale, New Jersey 07647
Registrant's telephone number, including area code: 201 750-2646
ITEM 5. OTHER EVENTS
(a) SETTLEMENT OF ELECTION CONTEST
On August 5, 2002, Harris Freedman, Sharon Will, Michael H. Freedman and certain
of their respective affiliates (the "Freedman Group") commenced a consent
solicitation (the "Consent Solicitation") to solicit consents in favor of the
removal of Harmon Aronson, Donald S. Pearson and Eric L. Sichel as directors of
Elite and in favor of the election of Harris Freedman, Sharon Will and Michael
H. Freedman as directors. Elite opposed the Consent Solicitation as not being in
Elite's best interests. The Consent Solicitation ended on October 4, 2002 with
the Freedman Group failing to obtain the approval of Elite stockholders who held
a majority of Elite's common stock.
Following the Consent Solicitation, the Freedman Group filed a preliminary proxy
statement with the Securities and Exchange Commission (the "Commission") and
expressed an intention to solicit proxies in favor of its nominees for director
and to contest the election of directors at Elite's annual meeting of
stockholders. The Freedman Group terminated its proxy solicitation on October
23, 2002 pursuant to the terms of a Settlement Agreement among Elite and the
Freedman Group (the "Settlement Agreement"). A copy of the Settlement Agreement
is attached hereto as Exhibit 10.1. Pursuant to the Settlement Agreement
(i) the Freedman Group agreed to terminate its proxy solicitation immediately
and to support the election of the seven nominees for director recommended by
Elite's Board of Directors for election at the annual meeting of stockholders
scheduled for December 12, 2002 (the "Annual Meeting"). The Freedman Group also
agreed not to:
(a) become a participant in any solicitation of proxies for the Annual
Meeting or assist any third party in any solicitation of proxies for the Annual
Meeting;
(b) advise or influence any third party or assist any third party in so
advising or influencing any person or entity with respect to the giving or
withholding of any proxy or vote at the Annual Meeting, other than in favor of
the election of the Company Nominees (as defined in the Settlement Agreement);
(c) commence any action or assist any third party in commencing any
action to delay, accelerate or enjoin the Annual Meeting, to enjoin Elite's
solicitation of proxies for the Annual Meeting or to question whether Elite's
proxy statement for the Annual Meting violates Rule 14a-9 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statement contained therein, in light of the circumstances under which they
were made, not misleading;
(d) other than as expressly provided in the Settlement Agreement, grant
any proxy with respect to the Annual Meeting or deposit any of the Elite
securities held by the
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Freedman Group in a voting trust or subject them to a voting agreement or other
arrangement of similar effect with respect to the Annual Meeting;
(e) make any proposal for consideration at the Annual Meeting; or
(f) participate in or assist any third party in any solicitation of
written consents with regard to Elite prior to the Annual Meeting.
(ii) Elite agreed to commence an exchange offer (the "Exchange Offer") pursuant
to which holders of Elite's Class A Warrants which expire on November 30, 2002
(the "Old Warrants") will have the opportunity to exchange those warrants for
new warrants (the "New Warrants") upon payment to Elite of $0.10 per share of
common stock issuable upon the exercise of the Old Warrants. The New Warrants
will
(a) be exercisable for the same number of shares of common stock as the
Old Warrants,
(b) have an exercise price of $5.00 per share (subject to adjustment in
certain circumstances),
(c) expire on November 30, 2005, and
(d) except as set forth in the Settlement Agreement will have
substantially all of the same other terms and conditions as the Old Warrants.
The Exchange Offer will be made to eligible warrantholders irrespective of
whether the Old Warrants have expired by their terms when the Exchange Offer is
consummated. The New Warrants will not be transferable except pursuant to
operation of law. The Exchange Offer must be registered under applicable federal
and state securities laws and will only be made pursuant to an effective
registration statement meeting applicable legal requirements.
(iii) Elite dismissed the lawsuit that it had commenced against the Freedman
Group for alleged violations of, among other things, Sections 13(d) and 14(a) of
the Exchange Act, and the rules and regulations of the Commission promulgated
thereunder in connection with the Consent Solicitation (the "New Jersey
Action").
(iv) Elite agreed not to withdraw the nomination for directors for election at
the Annual Meeting of Richard A. Brown, John A. Moore or John P. de Neufville
unless any of such nominees dies, resigns or refuses to stand for election.
(v) Elite and the Freedman Group exchanged releases regarding the Consent
Solicitation, the New Jersey Action and other matters related thereto.
Because this section is a summary, it does not describe every aspect of the
Settlement Agreement. This summary is subject to and qualified in its entirety
by reference to all of
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the provisions of the Settlement Agreement which is attached as an Exhibit to
this Form 8-K.
(b) APPOINTMENT OF CHRIS C. DICK TO THE POSITION OF VICE PRESIDENT, BUSINESS
DEVELOPMENT
Elite has appointed Chris C. Dick to the position of Vice President of Business
Development for Elite Laboratories, Inc., a wholly owned subsidiary of Elite
Pharmaceuticals, Inc effective November 1, 2002. The press release issued
October 31, 2002 by Elite Pharmaceuticals, Inc. regarding such appointment is
attached hereto as Exhibit 99.1 and is incorporated herein.
(c) OFFER TO PLACEMENT AGENTS
In 1997, Elite undertook a private placement of its securities. In connection
with the private placement, Elite issued Placement Agent Warrants (the
"Placement Agent Warrants") exercisable for 200,000 shares of Elite's common
stock and 100,000 of its Class A Warrants to those placement agents assisting in
the private placement. The Placement Agent Warrants were exercisable at $3.60
for one share of common stock and one-half a Class A Warrant. The Placement
Agent Warrants expired November 1, 2002. As of October 31, 2002, Placement Agent
Warrants exercisable for 64,786 shares of common stock and 32,393 Class A
Warrants had been exercised, leaving Placement Agent Warrants exercisable for
135,214 shares of common stock and 67,607 Class A Warrants outstanding in the
hands of placement agents.
On October 31, 2002, the Board of Directors of Elite approved the issuance to
the placement agents still holding unexercised Placement Agent Warrants,
effective November 1, 2002, Class A Warrants exercisable for the same aggregate
number of shares of common stock as the Class A Warrants that were underlying
the unexercised Placement Agent Warrants.
(d) AMENDMENT OF DR. MEHTA'S EMPLOYMENT CONTRACT
On July 18, 2002 the registrant and its president and chief executive officer,
Dr. Atul M. Mehta, agreed to an amendment to his employment agreement. Attached
hereto as Exhibit 10.2 is Dr. Mehta's Amended and Restated Employment Agreement,
dated March 31, 2000, and attached hereto as Exhibit 10.3 is the Amendment to
Dr. Mehta's Amended and Restated Employment Agreement.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
10.1 Settlement Agreement, dated October 23, 2002, among Elite
Pharmaceuticals, Inc. and the members of the Freedman Group as described above.
10.2 Amended and Restated Employment Agreement, dated
March 31, 2000 between Atul M. Mehta and Elite Pharmaceuticals, Inc.
10.3 Amendment, dated July 18, 2002, to Amended and Restated
Employment Agreement, dated March 31, 2000, between Atul M. Mehta and Elite
Pharmaceuticals, Inc.
99.1 Press Release of Elite Pharmaceuticals, Inc., dated
October 31, 2002.
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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.
Date: November 1, 2002 ELITE PHARMACEUTICALS, INC.
By: /s/ Atul M. Mehta
-------------------------------
Atul M. Mehta
President
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EXHIBIT INDEX
Item No.
10.1 Settlement Agreement, dated October 23, 2002, among Elite
Pharmaceuticals, Inc. and the members of the Freedman Group as described above.
10.2 Amended and Restated Employment Agreement, dated
March 31, 2000 between Atul M. Mehta and Elite Pharmaceuticals, Inc.
10.3 Amendment, dated July 18, 2002, to Amended and Restated
Employment Agreement, dated March 31, 2000, between Atul M. Mehta and Elite
Pharmaceuticals, Inc.
99.1 Press Release of Elite Pharmaceuticals, Inc., dated
October 31, 2002.
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