ITEM 1.01 Entry into a Material Definitive Agreement.
On July 14, 2022, Zymeworks Inc. ("Zymeworks") entered into a Transaction
Agreement (the "Agreement") by and among Zymeworks Delaware Inc., a Delaware
corporation and a direct, wholly-owned subsidiary of Zymeworks (the "Parent"),
Zymeworks CallCo ULC, an unlimited liability company existing under the laws of
the Province of British Columbia and a direct, wholly-owned subsidiary of Parent
("Callco"), and Zymeworks ExchangeCo Ltd., a company existing under the laws of
the Province of British Columbia and a direct, wholly-owned subsidiary of Callco
("ExchangeCo"). The Agreement includes a plan of arrangement (the "Plan of
Arrangement"), which will effect the proposed redomicile transactions (the
"Redomicile Transaction") pursuant to an arrangement under the British Columbia
Business Corporations Act (the "Arrangement"). On July 15, 2022, Zymeworks
announced its intention to complete the Redomicile Transaction, subject to
receipt of necessary shareholder, stock exchange, and court approvals. A press
release issued by Zymeworks is attached hereto as Exhibit 99.1 and is
incorporated herein by reference (the "Press Release").
As described in greater detail below, the purpose of the Redomicile Transaction
is to facilitate a series of transactions which will occur in a specific
sequence and as a consequence of which, among other things, (i) holders of
Zymeworks common shares (the "Zymeworks Common Shares" and the holders thereof,
the "Zymeworks Shareholders") will receive, at their election and subject to
applicable eligibility criteria, for their Zymeworks Common Shares, either
(a) shares of Parent common stock (the "Delaware Common Stock") on a one-for-one
basis, or (b) exchangeable shares (the "Exchangeable Shares" and recipients
thereof, the "Exchangeable Shareholders") in the capital of ExchangeCo, on a
one-for-one basis, or a mix of Exchangeable Shares and Delaware Common Stock (in
such aggregate number that is equal to the number of Zymeworks Common Shares
exchanged for them), subject to a cap on the aggregate number of Exchangeable
Shares that is equal to 18% of (1) the number of Zymeworks Common Shares issued
and outstanding, less (2) the number of Zymeworks Common Shares held by any
Zymeworks Shareholders who exercise their dissent rights (the "Dissenting
Shareholders", and with respect to the cap, the "Exchangeable Share Cap"), (ii)
Parent, Callco and ExchangeCo will enter into an Exchangeable Share Support
Agreement (the "Support Agreement"), which will require, among other things,
that Parent issue shares of Delaware Common Stock as consideration when the
holder calls for Exchangeable Shares to be retracted by ExchangeCo, when
ExchangeCo redeems Exchangeable Shares from the holder, or when Callco purchases
Exchangeable Shares from the Exchangeable Shareholder under Callco's overriding
call rights; and (iii) Parent, ExchangeCo, Callco and Computershare Trust
Company of Canada, a trust company existing under the laws of Canada (the "Share
Trustee") will enter into a Voting and Exchange Trust Agreement (the "Trust
Agreement"), whereby the Share Trustee will hold the Special Voting Stock (as
defined below), enabling the Share Trustee to exercise voting rights for the
benefit of the Exchangeable Shareholders. Immediately prior to completion of the
Redomicile Transaction, the Delaware Common Stock will be listed on the New York
Stock Exchange ("NYSE") under the symbol "ZYME".
Plan of Arrangement Steps
Pursuant to the Plan of Arrangement, commencing on the Effective Date (as
defined below), each of the following events or transactions shall occur and be
deemed to occur in the following sequence and five minutes following the
event(s) in the immediately preceding section, without any further act or
formality, unless specifically noted:
(a) subject to Section 5.1 of the Plan of Arrangement, each of the Zymeworks
Common Shares held by Dissenting Shareholders shall be, and shall be
deemed to be, transferred to Zymeworks (free and clear of any liens) and
cancelled in consideration for a debt claim against Zymeworks for the
amount determined in accordance with Section 3.1(a) of the Plan of
Arrangement, and:
a. such Dissenting Shareholders shall cease to be the holders of such
Zymeworks Common Shares and to have any rights as holders of such
Zymeworks Common Shares (including for the purposes of any matter
concerning the Zymeworks Common Shares or the Zymeworks
Shareholders in the remainder of Section 3.1 of the Plan of
Arrangement), other than the right to be paid fair value for such
Zymeworks Common Shares as set out in Section 3.1(a) of the Plan
of Arrangement; and
b. such Dissenting Shareholders' names shall be removed as the
holders of such Zymeworks Common Shares from the registers of
Zymeworks Common Shares maintained by or on behalf of Zymeworks;
(b) Eligible and non-eligible Zymeworks Shareholders who have not made an
election for the purposes of (c) below (and in each case excluding
Dissenting Shareholders) will receive shares of Delaware Common Stock on
a one-for-one basis;
(c) Eligible Zymeworks Shareholders will receive, at their election,
Exchangeable Shares on a one-for-one basis, or a mix of Exchangeable
Shares and Delaware Common Stock (in such aggregate number that is equal
to the number of Zymeworks Common Shares exchanged for them), subject to
the Exchangeable Share Cap. If the Exchangeable Share Cap is reached,
then the Exchangeable Shares shall be allocated proportionally among the
applicable Eligible Zymeworks Shareholders based on the number of
Zymeworks Common Shares designated by such eligible Zymeworks
Shareholders to be exchanged for Exchangeable Shares, subject to
additional terms and conditions, and rounded down to the nearest whole
share in respect of each Eligible Zymeworks Shareholders, and any other
Zymeworks Common Shares held by them will be exchanged for Delaware
Common Stock;
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(d) the Zymeworks Shareholders who have surrendered their Zymeworks Common
Shares in the exchange described in (b) and (c) above shall cease to be,
and shall be deemed to cease to be, holders of such Zymeworks Common
Shares and to have any rights as holders of such Zymeworks Common Shares
other than the right to receive the consideration to which they are
entitled pursuant to the Plan of Arrangement, and such Zymeworks
Shareholders' names shall be removed as the holders from the register of
Zymeworks Common Shares maintained by or on behalf of Zymeworks;
(e) Parent, Callco and ExchangeCo will enter into the Support Agreement;
(f) Parent, ExchangeCo, Callco and Share Trustee will enter into the Trust
Agreement for the benefit of the Exchangeable Shareholders, and one share
. . .
ITEM 7.01 Regulation FD Disclosure.
On July 15, 2022, Zymeworks filed a material change report with the Canadian
securities regulatory authorities regarding its intention to complete the
Redomicile Transaction, subject to receipt of necessary shareholder, stock
exchange, and court approvals, as described in the Press Release. A copy of this
material change report is furnished as Exhibit 99.2 hereto.
The information under this Item 7.01 of this Current Report on Form 8-K and
Exhibit 99.2 attached hereto are being furnished and shall not be deemed "filed"
for the purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or otherwise subject to the liability of that
section, nor shall such information be deemed incorporated by reference in any
filing under the Exchange Act or the Securities Act of 1933, as amended (the
"Securities Act"), regardless of the general incorporation language of such
filing, except as shall be expressly set forth by specific reference in such
filing.
ITEM 8.01 Other Events.
Parent Registration Statement
In connection with the Redomicile Transaction, Zymeworks intends to cause Parent
to file the Registration Statement (as defined below), which includes the Proxy
Statement/Prospectus, with the SEC on or about July 15, 2022. The information in
the Registration Statement, including the information in the Proxy
Statement/Prospectus, is subject to completion and amendment.
Important Information for Investors and Securityholders
This communication is not intended to and does not constitute an offer to sell,
buy or exchange or the solicitation of an offer to sell, buy or exchange any
securities or the solicitation of any vote or approval in any jurisdiction, nor
shall there be any sale, purchase, or exchange of securities or solicitation of
any vote or approval in any jurisdiction in contravention of applicable law. In
connection with the Redomicile Transaction, Zymeworks will cause Parent to file
a registration statement on Form S-4 (the "Registration Statement"), which will
include Parent's prospectus as well as Zymeworks' proxy statement (the "Proxy
Statement/Prospectus"), with the U.S. Securities and Exchange Commission (the
"SEC") and the appropriate Canadian securities regulatory authorities. Zymeworks
plans to mail the definitive Proxy Statement/Prospectus to its shareholders and
holders of its warrants and outstanding equity awards in connection with the
Redomicile Transaction. INVESTORS AND SECURITYHOLDERS OF ZYMEWORKS ARE URGED TO
READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE
FILED WITH THE SEC AND CANADIAN SECURITIES REGULATORY AUTHORITIES CAREFULLY WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
ZYMEWORKS, PARENT, THE REDOMICLE TRANSACTION, AND RELATED MATTERS. Investors and
securityholders will be able to obtain free copies of the Proxy
Statement/Prospectus (when available) and other documents filed with the SEC by
Zymeworks or Parent through the website maintained by the SEC at www.sec.gov
("EDGAR"). Investors and securityholders will also be able to obtain free copies
of the Proxy Statement/Prospectus (when available) and other documents filed
with Canadian securities regulatory authorities by Zymeworks, through the
website maintained by the Canadian Securities Administrators at www.sedar.com
("SEDAR"). In addition, investors and securityholders will be able to obtain
free copies of the documents filed with the SEC and Canadian securities
regulatory authorities on Zymeworks' website at www.zymeworks.com or by
contacting Zymeworks' corporate secretary.
Participants in the Solicitation
Zymeworks and certain of its directors, executive officers and employees may be
considered participants in the solicitation of proxies in connection with the
Redomicile Transaction. Information regarding the persons who may, under the
rules of the SEC, be deemed participants in the solicitation of the
securityholders of Zymeworks in connection with the Redomicile Transaction,
including a description of their respective direct or indirect interests, by
security holdings or otherwise, will be included in the Proxy
Statement/Prospectus described above when it is filed with the SEC and Canadian
securities regulatory authorities. Additional information regarding Zymeworks'
directors and executive officers is also included in Zymeworks' Amendment No. 1
to the Annual Report on Form 10-K/A, which was filed with the SEC and Canadian
securities regulatory authorities on May 2, 2022. This document is available
free of charge as described above.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This filing and the exhibits hereto include "forward-looking statements" or
information within the meaning of applicable securities legislation, including
Section 27A of the Securities Act, and Section 21E of the Exchange Act.
Forward-looking statements include, but are not limited to, statements that
relate to the timing and completion of the Redomicile Transaction; opportunities
to enhance long-term value for shareholders as a U.S. corporation; opportunities
to expand the institutional investor base; eligibility for inclusion in certain
leading indices; Zymeworks' ability to commercialize zanidatamab in the United
States; and other information that is not historical information. When used
herein, words such as "intention", "subject to", believes", "will", "future",
"may", "anticipates", "plans", "potential", and similar expressions are intended
to identify forward-looking statements. In addition, any statements or
information that refer to expectations, beliefs, plans, projections, objectives,
performance or
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other characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking. All forward-looking statements are
based upon Zymeworks' current expectations and various assumptions. Actual
results could differ materially from those described or implied by such
forward-looking statements as a result of various factors, including, without
limitation: the impact of the COVID-19 pandemic on Zymeworks' business, research
and clinical development plans and timelines and results of operations,
including impact on its clinical trial sites, collaborators, and contractors who
act for or on Zymeworks' behalf, may be more severe and more prolonged than
currently anticipated; the ability to receive, in a timely manner and on
satisfactory terms, the required securityholder, stock exchange and court
approvals for the Redomicile Transaction; the anticipated last day of trading of
Common Shares on the NYSE and the anticipated trading of shares of Delaware
Common Stock on the NYSE; and assumptions in corporate guidance. Risks and
uncertainties include, but are not limited to: the anticipated benefits of the
Redomicile Transaction may not be achieved; the receipt of securityholder, stock
exchange and court approvals and satisfaction of other conditions in connection
with the Redomicile Transaction may not be obtained; the anticipated tax
consequences and impact of the Redomicile Transaction to Zymeworks Shareholders,
Zymeworks and Parent may not materialize; risks relating to Parent following the
Redomicile Transaction, including triggering provisions in certain agreements
that require consent or may result in termination; publicity resulting from the
Redomicile Transaction and impacts to the company's business and share price;
the benefits of being a U.S. corporation on efforts to commercialize zanidatamab
may not be realized; Zymeworks may ultimately decide to abandon the Redomicile
Transaction, even if required approvals are obtained; changes in or
interpretation of laws or regulations may prevent the realization of anticipated
benefits from the Redomicile Transaction; risks associated with existing or
potential lawsuits and regulatory actions; the impact of disputes arising with
partners; and other risks and uncertainties as described in Zymeworks' Annual
Report on Form 10-K, as amended, and Quarterly Report on Form 10-Q and as
described from time to time in Zymeworks' other periodic filings as filed on
SEDAR and EDGAR.
Although Zymeworks believes that such forward-looking Statements are reasonable,
there can be no assurance they will prove to be correct. Investors should not
place undue reliance on forward-looking statements. The above assumptions, risks
and uncertainties are not exhaustive. Forward-looking statements are made as of
the date hereof and, except as may be required by law, Zymeworks undertakes no
obligation to update, republish, or revise any forward-looking statements to
reflect new information, future events or circumstances or to reflect the
occurrences of unanticipated events.
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ITEM 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
2.1 Transaction Agreement, dated July 14, 2022, by and among
Zymeworks, Parent, Callco, and ExchangeCo.
99.1 Press Release dated July 15, 2022.
99.2 Material Change Report dated July 15, 2022.
104 Cover Page Interactive Data File (embedded as Inline XBRL
document).
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