EXHIBIT 10.1
FIRST AMENDMENT TO THE PREFERRED SHARES RIGHTS AGREEMENT AND
CERTIFICATION OF COMPLIANCE WITH SECTION 27 THEREOF
Pursuant to Section 27 of the Preferred Shares Rights Agreement, dated
as of September 13, 1996, as amended through March 22, 2004 (the "Agreement"),
between Ligand Pharmaceuticals Incorporated, a Delaware corporation (the
"Company"), and Mellon Investor Services LLC (as successor to ChaseMellon
Shareholder Services, L.L.C., the successor to and acquiror of Xxxxx Fargo Bank,
N.A., the original agent for the Company) (the "Rights Agent"), the Company and
the Rights Agent hereby amend the Agreement as of December 8, 2005, as provided
below. Defined terms used and not otherwise defined herein shall have the
meaning given them in the Agreement.
RECITALS
A. The Company and the Rights Agent are parties to the Rights
Agreement.
B. Third Point LLC, a Delaware limited liability company ("Third
Point"), and Third Point Offshore Fund, Ltd., a Cayman Islands limited liability
exempted company, Third Point Partners LP, a Delaware limited partnership, Third
Point Ultra Ltd., a British Virgin Islands limited liability company,
Lyxor/Third Point Fund Ltd., a Jersey public company with limited liability, and
Third Point Partners Qualified LP, a Delaware limited partnership (collectively,
with Third Point, the "Third Point Entities"), and the Company have entered into
that certain Stockholders Agreement, dated December 2, 2005 (the "Stockholders
Agreement"), by and among the Company and the Third Point Entities, pursuant to
which the Company agreed to expand its Board of Directors by December 8, 2005,
the next regularly scheduled Board meeting, from eight to eleven members, by
adding the following Third Point designees, Xxxxxx X. Xxxx, Xxxxxxx X. Xxxxx,
and Xxxxxxxx Xxxxxxx, M.D. (the "Third Point Designees").
C. The Board of Directors of the Company has approved the Stockholders
Agreement and intends to elect the Third Point Designees at its December 8, 2005
meeting of the Board of Directors. Pursuant to Article Four of the Company's
2002 Stock Incentive Plan, each such Third Point Designee, upon his or her
election as a non-employee member of the Board of Directors will automatically
be granted on the date of such election an option to purchase 20,000 Common
Shares, which shall become fully vested and exercisable upon the optionee's
completion of the one-year period of continued service on the Board of Directors
measured from the grant date (the "Initial Option Grant").
D. Pursuant to Section 27 of the Rights Agreement, the Board of
Directors of the Company has determined that an amendment to the Rights
Agreement as set forth herein is necessary and desirable to reflect the
foregoing and certain other matters and the Company and the Rights Agent desire
to evidence such amendment in writing.
Accordingly, the parties agree as follows:
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1. Amendment to definition of "Acquiring Person" set forth in Section
1(a). The definition of "Acquiring Person" set forth in Section 1(a) of the
Rights Agreement is amended to add the following sentence at the end thereof:
"Notwithstanding anything in this Agreement to the
contrary, neither the Third Point Entities nor any Affiliates or
Associates of Third Point Entities, including, without limitation, the
Third Point Designees, shall be deemed to be an Acquiring Person by
virtue of the beneficial ownership by Third Point Entities or such
Affiliates or Associates on or after December 8, 2005 of outstanding
Common Shares acquired solely as a result of the Third Point Designees'
service as members of the Company's Board of Directors, including
without limitation the Initial Option Grants."
2. Amendment to definition of "Distribution Date" set forth in
Section 1(g). The definition of "Distribution Date" set forth in Section 1(g) of
the Rights Agreement is amended to add the following sentence at the end
thereof.
"Notwithstanding anything in this Agreement to the
contrary, a Distribution Date shall not be deemed to have occurred by
virtue of the beneficial ownership by Third Point Entities on or after
December 8, 2005 of outstanding Common Shares acquired solely as a
result of the Third Point Designees' service as members of the
Company's Board of Directors, including without limitation the Initial
Option Grants."
3. Effectiveness. This Amendment shall be deemed effective as of
December 8, 2005, as if executed on such date. Except as amended hereby, the
Rights Agreement shall remain in full force and effect and shall be otherwise
unaffected hereby.
4. Miscellaneous. This Amendment shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State. This Amendment
may be executed in any number of counterparts, each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. If any term, provision,
covenant or restriction of this Amendment is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Amendment
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
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The undersigned officer of the Company, being an appropriate officer of
the Company and authorized to do so by resolution of the Board of Directors of
the Company dated as of December 8, 2005, hereby certifies to the Rights Agent
that these amendments are in compliance with the terms of Section 27 of the
Agreement.
LIGAND PHARMACEUTICALS INCORPORATED
By:
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Xxxxx X. Xxxxxxxx, President and
Chief Executive Officer
Acknowledged and Agreed:
MELLON INVESTOR
SERVICES LLC, as Rights Agent
By:
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Name:
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Title:
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[SIGNATURE PAGE TO FIRST AMENDMENT TO THE PREFERRED SHARES RIGHTS
AGREEMENT AND CERTIFICATION OF COMPLIANCE WITH SECTION 27 THEREOF]
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