KARA THER : Acquisition/Asset Disposal - Form 8-K

Item 2.01

Completion of Acquisition or Disposition of Assets.

The information set forth in the Introductory Note of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.

On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the "Effective Time"), and as a result of the Merger, each share of common stock of Karuna ("Karuna Common Stock") that was issued and outstanding immediately prior to the Effective Time (other than (i) shares of Karuna Common Stock owned by Bristol-Myers Squibb, Merger Sub or any other wholly owned subsidiary of Bristol-Myers Squibb immediately prior to the Effective Time and shares of Karuna Common Stock owned by Karuna immediately prior the Effective Time, including shares of Karuna Common Stock held in treasury by Karuna, and in each case not held on behalf of third parties, and (ii) shares of Karuna Common Stock for which appraisal rights have been properly exercised and perfected and not withdrawn) was converted into the right to receive $330 in cash (the "Merger Consideration"), without interest, and subject to any applicable withholding taxes.

In addition, pursuant to the Merger Agreement, immediately prior to the Effective Time, (i) each outstanding and unexercised option to purchase shares of Karuna Common Stock (an "Option"), whether granted under a Karuna stock plan or otherwise, automatically and immediately vested and was cancelled in exchange for the right to receive, at or promptly after the Effective Time, a one-time lump sum cash payment, without interest, equal to (A) the total number of shares of Karuna Common Stock subject to such Option multiplied by (B) the excess, if any, of the Merger Consideration over the exercise price per share of Karuna Common Stock under such Option, less applicable taxes, and (ii) each outstanding restricted stock unit ("Karuna RSU"), whether granted under a Karuna stock plan or otherwise, automatically and immediately vested and was cancelled in exchange for the right to receive, at or promptly after the Effective Time, a one-time lump sum cash payment, without interest, equal to (A) the total number of shares of Karuna Common Stock subject to such Karuna RSU immediately prior to the Effective Time, multiplied by (B) the Merger Consideration, less applicable taxes. For the avoidance of doubt, any Option with an exercise price per share of Karuna Common Stock greater than or equal to the Merger Consideration was cancelled at the Effective Time for no consideration or payment. Special rules governed the treatment of Karuna RSUs that were granted following the entry into the Merger Agreement.

The foregoing description of the Merger Agreement and Merger is not complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit 2.1 to Karuna's Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on December 22, 2023, and is incorporated into this item by reference.