Item 1.01. Entry into a Material Definitive Agreement.
Arrangement Agreement
On August 20, 2021, Trillium Therapeutics Inc.,
a corporation existing under the laws of the Province of British Columbia (“Trillium”), Pfizer Inc., a Delaware corporation
(“Pfizer”) and PF Argentum Acquisition ULC, a corporation formed under the laws of the Province of British Columbia (“Purchaser”),
entered into a definitive arrangement agreement (the “Arrangement Agreement”), under which Purchaser will acquire all of the
issued and outstanding common shares and first preferred shares (collectively, the “Shares”) of Trillium not owned by Purchaser
and its affiliates for $18.50 per Share in cash (the “Consideration”). The acquisition of Trillium’s Shares will be
completed by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia) (the “Arrangement”).
At the effective time of the Arrangement (the
“Effective Time”): (i) each Share outstanding immediately prior to the Effective Time, other than Shares held by Purchaser
and its affiliates or held by a dissenting holder of Shares who has validly exercised such holder’s dissent rights, will be deemed
to be assigned and transferred by the holder thereof to Purchaser in exchange for the Consideration; (ii) each warrant to purchase or
acquire Shares (a “Warrant”) outstanding immediately prior to the Effective Time (whether or not exercisable), other than
Warrants held by a dissenting Warrant holder who has validly exercised such holder’s dissent rights, will be transferred from the
holder thereof to Trillium in consideration for, at the holder’s election: (x) a cash payment equal to the amount by which the Consideration,
in respect of each Warrant, exceeds the exercise price per Share of such Warrant, subject to applicable tax withholdings and other source
deductions, or (y) a cash payment equal to the amount by which the Black-Scholes value of a Warrant (as calculated pursuant to the terms
and conditions of the certificate governing such Warrant), in respect of each Warrant, exceeds the exercise price per Share of such Warrant,
subject to applicable tax withholdings and other source deductions, and such Warrant will be cancelled immediately after its transfer;
(iii) each option to purchase Shares (an “Option”) outstanding immediately prior to the Effective Time, whether vested or
unvested, will be deemed to be unconditionally vested and exercisable and such Options will be deemed to be assigned and transferred to
Trillium in exchange for a cash payment from Trillium in respect of each Share subject to each Option equal to the amount (if any) by
which the Consideration exceeds the exercise price of such Option, subject to applicable tax withholdings and other source deductions,
and such Option will be cancelled immediately after its transfer; and (iv) each deferred share unit (a “DSU”) shall ordinarily
vest in accordance with the terms of Trillium’s omnibus incentive plan and shall require settlement as all of the holders of DSUs
shall cease to serve in their capacity as a director of Trillium and each DSU outstanding immediately prior to the Effective Time (whether
vested or unvested) shall be settled and extinguished in consideration for a cash payment by or on behalf of Trillium equal to the Consideration,
calculated with respect to the number of common shares of Trillium to which a holder of DSUs may be entitled, subject to applicable tax
withholdings and other source deductions, and such DSUs shall be cancelled and cease to exist without any further act or formality.
Conditions to the Arrangement
Completion of the Arrangement is subject to a
number of conditions, including: (i) the approval of 66⅔% of the votes cast by Trillium’s shareholders (the “Shareholders”),
voting together as a single class, at a special meeting of Trillium (the “Meeting”) and approval of 66⅔% of the votes
cast by the Shareholders and the holders of Warrants, voting together as a single class, at the Meeting (the “Required Securityholder
Approval”), (ii) court approval of the Arrangement; (iii) the accuracy of the representations and warranties contained in the Arrangement
Agreement, subject to specified thresholds and exceptions; (iv) compliance in all material respects with the covenants contained in the
Arrangement Agreement; (v) the absence of a Material Adverse Effect (as defined in the Arrangement Agreement) with respect to Trillium;
and (vi) receipt of approval or expiration of the applicable waiting period, under each of the Competition Act (Canada) and the
U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
Certain Other Terms of the Arrangement Agreement
The Arrangement Agreement includes customary representations,
warranties and covenants of Trillium, Pfizer and Purchaser, including, among others, covenants relating to the conduct of the business
of Trillium during the interim period between execution of the Arrangement Agreement and the Effective Time.
The Arrangement Agreement also provides customary
restrictions on Trillium’s ability to solicit alternative acquisition proposals from third parties and engage in discussions or
negotiations with third parties regarding such proposals. Notwithstanding these restrictions, Trillium may under certain circumstances
provide information to and participate in discussions or negotiations with third parties with respect to an unsolicited acquisition proposal
that constitutes or could reasonably be expected to constitute or lead to a superior proposal (as defined in the Arrangement Agreement).
The parties may terminate the Arrangement Agreement
in certain circumstances, including: (i) by mutual written agreement; (ii) by either Trillium or Purchaser if the Required Securityholder
Approval is not obtained; (iii) by either Trillium or the Purchaser if any law is enacted, enforced or amended that makes the consummation
of the Arrangement illegal or otherwise permanently prohibits or enjoins Trillium or Purchaser from consummating the Arrangement; (iv)
by either Trillium or Purchaser if the Effective Time does not occur on or prior to February 20, 2022 (with an option to extend for up
to three months in the event certain conditions are not satisfied) or such later date as may be agreed to between the parties; (v) by
the non-breaching party if either Trillium or Purchaser breaches its representations, warranties or covenants in the Arrangement Agreement
in a way that would entitle the party seeking to terminate the Arrangement Agreement not to consummate the Arrangement, subject to the
right of the breaching party to cure the breach; (vi) by Trillium if, prior to obtaining the Required Securityholder Approval, the Board
of Directors of Trillium (the “Board”) authorizes Trillium to enter into a definitive written agreement with respect to a
superior proposal (as defined in the Arrangement Agreement), subject to compliance with specified process and notice requirements; (vii)
by Trillium if the closing conditions have been satisfied and Purchaser fails to comply with its obligations to satisfy payment of the
aggregate Consideration payable to Trillium’s securityholders; (viii) by Purchaser if, prior to obtaining the Required Securityholder
Approval, the Board has changed its recommendation in favor of the Arrangement or fails to reconfirm its recommendation under certain
circumstances; or (ix) by Purchaser if a Material Adverse Effect with respect to Trillium has occurred and is continuing. The Arrangement
Agreement also provides for the payment by Trillium to Purchaser of a termination fee of $83.2 million if the Arrangement Agreement is
terminated in certain circumstances, including termination by Trillium to accept and enter into a definitive agreement with respect to
a superior proposal.
The foregoing description of the Arrangement Agreement
and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full
text of the Arrangement Agreement, which is included as Exhibit 2.1 to this report and which is incorporated herein by reference.
The Arrangement Agreement has been included
to provide investors with information regarding its terms and is not intended to provide any other factual information about Trillium,
Pfizer, Purchaser or their respective subsidiaries and affiliates. The representations, warranties and covenants contained in the Arrangement
Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement,
may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the
purposes of allocating contractual risk among the parties to such agreement instead of establishing these matters as facts, and may be
subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are
not third-party beneficiaries under the Arrangement Agreement and should not rely on the representations, warranties and covenants or
any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective
subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the
date of the Arrangement Agreement, and unless required by applicable law, Trillium does not undertake any obligation to update such information.
Voting Support Agreements
In connection with the execution of the Arrangement
Agreement, certain Shareholders, directors and executive officers of Trillium holding in the aggregate approximately 17.9% of Trillium’s
outstanding Shares entered into voting and support agreements (the “Voting Agreements”). Pursuant to the Voting Agreements,
Purchaser and the signatories thereto have agreed, among other things, to vote in favor of the Arrangement Agreement, the Arrangement,
and the other transactions contemplated thereby at the Meeting. The Voting Agreements terminate in certain circumstances, including upon
the termination of the Arrangement Agreement in accordance with its terms.
The foregoing description of the Voting Agreements
does not purport to be complete and is subject to, and qualified in its entirety by, references to the form of the Voting Agreement, which
is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 5.01. Compensatory
Arrangements of Certain Officers.
The Arrangement Agreement also provides for the
adoption of change in control severance policies applicable to the employees of Trillium (the “Severance Policies”). Pursuant
to the Severance Policies, employees at the level of Senior Vice President and above (including the executive officers) will be eligible
to receive a lump sum payment equal to 12 months of base salary, payment of the monthly employer contribution for medical, dental and
vision insurance for the employee and his or her eligible dependents for up to 12 months following termination, and 12 months of outplacement
assistance in the event that the employee’s employment is terminated by Trillium without “cause” or by the employee
for “good reason” as of or within eighteen months following the effective date of a “change in control” (each
as defined in the policy), subject to the execution and non-revocation of a general release of claims by the employee. To the extent that
an employee is party to an existing employment agreement or offer letter with Trillium providing for more favorable severance payments
or benefits or the employee is entitled to receive more favorable severance payments or benefits pursuant to applicable law, then the
employee will be entitled to receive payments and benefits under such employment agreement or offer letter or pursuant to applicable law
only and not under the applicable Severance Policy.