Pharmos
Corporation Adopts Stockholder Rights Plan and By-Law
Revisions
Iselin,
NJ, October 24, 2002 - Pharmos Corporation (Nasdaq:
PARS and Nasdaq Europe: PHRM) announced today that its
board of directors approved the adoption of a stockholder
rights plan as well as certain revisions to its By-Laws.
The
stockholder rights plan is designed to ensure that stockholders
realize fair value and equal treatment in the event of
an attempted takeover of the Corporation and to protect
the Corporation and its stockholders against coersive
takeover tactics. The plan was not adopted as a result
of any existing or proposed potential takeover threat.
Under
the terms of the plan, Pharmos is distributing one purchase
right for each share of common stock outstanding to stockholders
at the close of business on November 6, 2002. Pharmos
will not issue a separate certificate for the rights unless
and until they become exerciseable.
Each
right entitles the holder to purchase from the Corporation
one one-thousandth of a share of a new series of participating
preferred stock at an initial purchase price of $15.00.
The rights will become exerciseable and will detach from
the common stock for a specified period after any person
or group, without the approval of the Corporation’s board
of directors, has become the beneficial owner of, or commences
a tender offer or exchange offer for, 15% or more of the
then outstanding shares of Pharmos common stock (subject
to certain exceptions).
The
amendments to Pharmos’ By-Laws enable the board to maintain
an active role in maximizing stockholder value and in
participating on behalf of the stockholders in any negotiations
that might involve a potential change in control of the
Company or sale of the Company, its stock or its assets.
These amendments include the establishment of an advance
notice requirement for stockholder-initiated nominations
for directors or for other business to be brought before
annual meetings of stockholders, as well as the creation
of a classified, or “staggered,” board of directors.
Under applicable law, the term of all current members
of the board will continue to expire at the next annual
meeting of stockholders. At that point, however, the
board will be classified into three classes, each with
terms expiring in subsequent consecutive years.
Pharmos
has filed the necessary forms, which give complete details
of the stockholder rights plan and its revised By-Laws,
with the Securities and Exchange Commission.
Pharmos
discovers, develops, and commercializes novel therapeutics
to treat a range of indications, in particular neurological
and inflammation-based disorders. The Company’s first
neuroprotective product is dexanabinol, a tricyclic dextrocannabinoid,
currently undergoing clinical testing as a treatment for
TBI and as a preventive agent against post-surgical cognitive
impairment. Other dextrocannabinoid compounds and CB2
receptor agonist compounds from Pharmos’ proprietary synthetic
cannabinoid library are being studied in pre-clinical
programs targeting stroke, pain, multiple sclerosis and
other disorders.
Statements
made in this press release related to the business outlook
and future financial performance of the Company, to the
prospective market penetration of its drug products, to
the development and commercialization of the Company’s
pipeline products and to the Company’s expectations in
connection with any future event, condition, performance
or other matter, are forward-looking and are made pursuant
to the safe harbor provisions of the Securities Litigation
Reform Act of 1995. Such statements involve risks and
uncertainties which may cause results to differ materially
from those set forth in these statements. Additional economic,
competitive, governmental, technological, marketing and
other factors identified in Pharmos’ filings with the
Securities and Exchange Commission could affect such results.
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