Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
On December 3, 2019, Merrimack Pharmaceuticals, Inc., a Delaware corporation (the Company) entered into a Section 382 Rights Agreement (the Rights Agreement), between the Company and Computershare Trust Company, N.A., a federally chartered trust company, as Rights Agent. to the Rights Agreement, the Company will issue a dividend of one preferred share purchase right (a Right) for each share of the Companys common stock, par value $0.01 per share (each, a Common Share), payable on December 13, 2019 (the Record Date) to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series Z Junior Preferred Stock, par value $0.01 per share (the Preferred Shares), of the Company, at a price of $18.00 per one one-thousandth of a Preferred Share represented by a Right (the Purchase Price), subject to adjustment. The description and terms of the Rights are set forth in the Rights Agreement.
A summary of the terms of the Rights Agreement follows. This description is only a summary. This description is not complete and should be read together with the entire Rights Agreement, which has been filed as an exhibit to this Form 8-K. Capitalized terms used but not defined in this summary have the meanings ascribed to such terms in the Rights Agreement.
The Rights
The Rights are not exercisable until the Distribution Date. The Distribution Date will be the earlier of (i) the Close of Business on the 10th day following a public announcement that an Acquiring Person (as defined below) has become such (or, in the event an exchange is effected in accordance with Section 24 of the Rights Agreement and the Board determines that a later date is advisable, then such later date) or (ii) the Close of Business on the 10th Business Day (or such later date as may be determined by action of the Board prior to such time as any Person becomes an Acquiring Person) following the commencement of a tender offer or exchange offer, the consummation of which would result in the Beneficial Ownership by a Person or group of 4.9% or more of the then outstanding Common Shares.
Until the Distribution Date, the Rights will be transferred with and only with the Common Shares, and (unless the Rights are redeemed or expire) the surrender or transfer of any Common Shares outstanding on or after the Record Date will constitute the transfer of the Rights associated with such Common Shares. Upon the Distribution Date, the Rights may be transferred separately from the Common Shares, and each Right, other than Rights held by an Acquiring Person, will entitle its holder to purchase from the Company one one-thousandth of a Preferred Share in exchange for the Purchase Price.
The Rights will be evidenced, with respect to any of the Common Share certificates outstanding as of the Record Date, by such Common Share certificate with a copy of the Summary of Rights to Purchase Preferred Shares substantially in the form attached as Exhibit C to the Rights Agreement (unless such Rights are recorded in book entry).
Acquiring Person
An Acquiring Person is any Person or group of Affiliated or Associated Persons that has acquired Beneficial Ownership (as defined below) of 4.9% or more of the Common Shares then outstanding. However, a Person shall not be deemed to be an Acquiring Person if such Person, at the time of the first public announcement of the Rights Agreement, is a Beneficial Owner of 4.9% or more of the Common Shares then outstanding (a Grandfathered Stockholder); provided, however, that if a Grandfathered Stockholder increases its Beneficial Ownership of the Common Shares of the Company as of any date on or after the date of the public announcement of this Agreement, then such Grandfathered Stockholder shall no longer be deemed to be a Grandfathered Stockholder unless, upon such acquisition of Beneficial Ownership of additional Common Shares of the Company, such Person is not then the Beneficial Owner of 4.9% or more of the Common Shares of the Company then outstanding; provided,further, that upon the first decrease of a Grandfathered Stockholders Beneficial Ownership below 4.9% of the Common Shares of the Company then outstanding, such Grandfathered Stockholder shall no longer be deemed to be a Grandfathered Stockholder and this proviso shall have no further force or effect with respect to such Person.