Entry into Material Agreement, Material Modifications, Change in FYE
Item 1.01. Entry into a Material Definitive Agreement. Effective November 7, 2005, the Board of Directors (the "Board") of Momenta Pharmaceuticals, Inc. (the "Company") declared a dividend of one Right (each, a "Right") for each outstanding share of the Company's common stock, $0.0001 par value per share ("Common Stock"), to stockholders of record at the close of business on November 18, 2005 (the "Record Date"). Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, $0.01 par value per share ("Series A Junior Preferred Stock"), at a purchase price of $125 (the "Purchase Price") in cash, subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement dated as of November 7, 2005 (the "Rights Agreement") between the Company and American Stock Transfer & Trust Company, as Rights Agent.
Initially, the Rights are not exercisable and will be attached to all certificates representing outstanding shares of Common Stock, and no separate Rights Certificates will be distributed. The Rights will separate from the Common Stock, and the distribution date (the "Distribution Date") will occur, upon the earlier of (i) 10 business days following the later of (a) the first date of a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") has acquired, or obtained the right to acquire, beneficial ownership of 20% or more of the outstanding shares of Common Stock or (b) the first date on which an executive officer of the Company has actual knowledge that an Acquiring Person has become such (the "Stock Acquisition Date") or (ii) 10 business days following the commencement of a tender offer or exchange offer that would result in a person or group beneficially owning 20% or more of the outstanding shares of Common Stock. The Distribution Date may be deferred in circumstances determined by the Board. In addition, certain inadvertent acquisitions will not trigger the occurrence of the Distribution Date. Until the Distribution Date (or earlier redemption or expiration of the Rights), (i) the Rights will be evidenced by the Common Stock certificates outstanding on the Record Date, together with a Summary of Rights to be mailed to record holders, or by new Common Stock certificates issued after the Record Date which contain a notation incorporating the Rights Agreement by reference, (ii) the Rights will be transferred with and only with such Common Stock certificates, and (iii) the surrender for transfer of any certificates for Common Stock outstanding (with or without a copy of the Summary of Rights or such notation) will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire upon the close of business on November 6, 2008 (the "Final Expiration Date") unless earlier redeemed or exchanged as described below. As soon as practicable after the Distribution Date, separate Rights Certificates will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone will represent the Rights. Except as otherwise determined by the Board, and except for shares of Common Stock issued upon exercise, conversion or exchange of then outstanding options, convertible or exchangeable securities or other contingent obligations to issue shares or pursuant to any employee benefit plan or arrangement, only shares of Common Stock issued prior to the Distribution Date will be issued with Rights.
In the event that any Person becomes an Acquiring Person, unless the event causing the 20% threshold to be crossed is a Permitted Offer (as defined in the Rights Agreement), then, promptly following the first occurrence of such event, each holder of a Right (except as provided below and in Section 7(e) of the Rights Agreement) shall thereafter have the right to receive, upon exercise, that number of shares of Common Stock of the Company (or, in certain circumstances, cash, property or other securities of the Company) which equals the exercise price of the Right divided by 50% of the current market price (as defined in the Rights Agreement) per share of Common Stock at the date of the occurrence of such event. However, Rights are not exercisable following such event until such time as the Rights are no longer redeemable by the Company as described below. Notwithstanding any of the foregoing, following the occurrence of such event, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. The event summarized in this paragraph is referred to as a "Section 11(a)(ii) Event."
For example, at an exercise price of $125 per Right, each Right not owned by an Acquiring Person (or by certain related parties) following a Section 11(a)(ii) Event would entitle its holder to purchase for $125 such number of shares of Common Stock (or other consideration, as noted above) as equals $125 divided by one-half of the current market price (as defined in the Rights Agreement) of the Common Stock. Assuming that the Common Stock had a market price of $25 per share at such time, the holder of each valid Right would be entitled to purchase ten shares of Common Stock, having a market value of 10 x $25, or $250, for $125.
In the event that, at any time after any Person becomes an Acquiring Person, (i) the Company is consolidated with, or merged with and into, another entity and the Company is not the surviving entity of such consolidation or merger (other than a consolidation or merger which follows a Permitted Offer) or if the Company is the surviving entity, but shares of its outstanding Common Stock are changed or exchanged for stock or securities (of any other person) or cash or any other property, or (ii) more than 50% of the Company's assets or earning power is sold or transferred, each holder of a Right (except Rights which previously have been voided as set forth above) shall thereafter have the right to receive, upon exercise, that number of shares of common stock of the acquiring company which equals the exercise price of the Right divided by 50% of the current market price (as defined in the Rights Agreement) of such common stock at the date of the occurrence of the event. The events summarized in this paragraph are referred to as "Section 13 Events." A Section 11(a)(ii) Event and Section 13 Events are collectively referred to as "Triggering Events."
For example, at an exercise price of $125 per Right, each valid Right following a Section 13 Event would entitle its holder to purchase for $125 such number of shares of common stock of the acquiring company as equals $125 divided by . . .
Item 3.03. Material Modification to Rights of Security Holders. See the description set forth under "Item 1.01. Entry into a Material Definitive Agreement," which is incorporated into this Item 3.03 by reference.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. Effective November 8, 2005, the Company filed a Certificate of Designations of Series A Junior Participating Preferred Stock (the "Certificate of Designations") with the Secretary of State of the State of Delaware. The Board authorized the filing of the Certificate of Designations pursuant to resolutions adopted by the Board at a meeting duly called and held on October 31, 2005. Pursuant to the Certificate of Designations, the Board designated 100,000 shares of the Company's Preferred Stock, $.01 par value per share, as Series A Junior Participating Preferred Stock in connection with the Rights Agreement. See the description set forth under "Item 1.01. Entry into a Material Definitive
Agreement" for a more complete description of the rights and preferences of the Series A Junior Participating Preferred Stock. The description of the Certificate of Designations is qualified in its entirety by reference to the Certificate of Designations, which is attached as Exhibit 3.1 hereto and incorporated into this Item 5.03 by reference.
Item 9.01. Financial Statements and Exhibits. (d) Exhibits
Market Data 
Markets 
AI
