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ENZN > SEC Filings for ENZN > Form 8-K on 1-May-2014All Recent SEC Filings

Show all filings for ENZON PHARMACEUTICALS INC

Form 8-K for ENZON PHARMACEUTICALS INC


1-May-2014

Entry into a Material Definitive Agreement, Material Modification to Ri


Item 1.01 Entry into a Material Definitive Agreement.

On April 30, 2014 (the "Rights Dividend Declaration Date"), the Board of Directors (the "Board of Directors") of Enzon Pharmaceuticals, Inc. (the "Company") adopted a Section 382 rights plan (the "Section 382 Rights Plan") and declared a dividend distribution of one right for each outstanding share of the Company's common stock to stockholders of record at the close of business on May 14, 2014. The Board of Directors adopted the Section 382 Rights Plan in an effort to protect stockholder value by attempting to protect against a possible limitation on the Company's ability to use its net operating loss carryforwards ("NOLs"). If the Company experiences an "ownership change," as defined in
Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), the Company's ability to fully utilize the NOLs on an annual basis will be substantially limited, and the timing of the usage of the NOLs could be substantially delayed, which could therefore significantly impair the value of those benefits. The Section 382 Rights Plan is intended to act as a deterrent to any person (an "Acquiring Person") acquiring (together with all affiliates and associates of such person) beneficial ownership of 4.99% or more of the Company's outstanding common stock within the meaning of Section 382 of the Code, without the approval of the Board of Directors. Stockholders who beneficially own 4.99% or more of the Company's outstanding common stock as of the Rights Dividend Declaration Date will not be deemed to be an Acquiring Person, but such person will be deemed an Acquiring Person if such person (together with all affiliates and associates of such person) becomes the beneficial owner of securities representing a percentage of the Company's common stock that exceeds by 0.5% or more the lowest percentage of beneficial ownership of the Company's common stock that such person had at any time since the Rights Dividend Declaration Date. The description and terms of the rights are set forth in a Section 382 Rights Agreement, dated as of May 1, 2014 (the "Section 382 Rights Agreement"), by and between the Company and Continental Stock Transfer & Trust Company, as Rights Agent.

The Rights. On the Rights Dividend Declaration Date, the Board of Directors authorized the issuance of one right (a "Right") for each outstanding share of the Company's common stock to the Company's stockholders of record as of May 14, 2014. Subject to the terms, provisions and conditions of the Section 382 Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Company one one-thousandth of a share of the Company's Series A Junior Participating Preferred Stock, par value $0.01 per share, for a purchase price of $1.50 per Right (the "Purchase Price"). If issued, each fractional share of Series A Junior Participating Preferred Stock would give the stockholder approximately the same dividend, voting and liquidation rights as does one share of the Company's common stock. However, prior to exercise, a Right does not give its holder any rights as a stockholder of the Company, including any dividend, voting or liquidation rights.

Initial Exercisability. The Rights are not exercisable until the earlier of (i) ten days after a public announcement that a person has become an Acquiring Person and (ii) ten business days (or such later date as may be determined by the Board of Directors) after the commencement of a tender or exchange offer by or on behalf of a person that, if completed, would result in such person becoming an Acquiring Person. The date that the Rights become exercisable under the Section 382 Rights Agreement is referred to as the "Distribution Date."

Until the Distribution Date, the Company's common stock certificates will evidence the Rights. Any transfer of the Company's common stock prior to the Distribution Date will constitute a transfer of the associated Rights. After the Distribution Date, separate Rights certificates will be issued, and the Rights may be transferred apart from the transfer of the underlying shares of the Company's common stock, unless and until the Board of Directors has determined to effect an exchange pursuant to the Section 382 Rights Agreement (as described below).

"Flip-In" Event. In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficially owned by the Acquiring Person (which will thereupon become void), will from and after the Distribution Date, have the right to receive, upon exercise of a Right and payment of the Purchase Price, a number of shares of the Company's common stock having a market value of two times the Purchase Price. However, Rights are not exercisable following the occurrence of a person becoming an Acquiring Person until such time as the Rights are no longer redeemable by the Company (as described below).

Exempted Persons and Exempted Transactions. The Board of Directors recognizes that there may be instances when an acquisition of shares of the Company's common stock that would cause a stockholder to become an Acquiring Person may not jeopardize or endanger in any material respect the availability of the NOLs to the Company. Accordingly, the Section 382 Rights Agreement grants discretion to the Board of Directors to designate a person as an "Exempted Person" or to designate a transaction involving shares of the Company's common stock as an "Exempted Transaction." An "Exempted Person" cannot become an Acquiring Person . . .



Item 3.03 Material Modification to Rights of Security Holders.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.



Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.



Item 8.01. Other Events

On May 1, 2014, the Company issued a press release announcing the adoption of the Section 382 Rights Agreement. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.



Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit
No.                                     Description

3.1        Certificate of Designation of Series A Junior Participating Preferred
           Stock of Enzon Pharmaceuticals, Inc. filed with the Secretary of the
           State of Delaware on May 1, 2014
4.1        Section 382 Rights Agreement, dated as of May 1, 2014, by and between
           Enzon Pharmaceuticals, Inc. and Continental Stock Transfer & Trust
           Company
99.1       Press Release issued on May 1, 2014

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