Item 1.01.
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Entry into a Material Definitive Agreement.
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Adoption
of a Shareholder Rights Plan
Overview
On
September 9, 2019, Neurotrope, Inc. (the “Company”) announced that its Board of Directors (the “Board”)
has adopted a shareholder rights plan (the “Rights Plan”). The Rights Plan is intended to protect the interests of
its stockholders and enable them realize the full potential value of their investment by reducing the likelihood that any person
or group gains control of the Company through open market accumulation or other tactics without appropriately compensating all
stockholders. Pursuant to the Rights Plan, the Company will issue, by means of a dividend, one preferred share purchase right
for each outstanding share of the Company's common stock to shareholders of record on the close of business on September 19, 2019.
Initially, these Rights (as defined below) will trade with, and be represented by, the shares of the Company's common stock. The
Rights will generally become exercisable only if any person (or any persons acting as a
group) acquires 15% or more of the Company’s outstanding common stock (the “Acquiring Person”) in a transaction
not approved by the Board, subject to certain exceptions, as explained below.
If
the Rights become exercisable, all holders of Rights, other than the Acquiring Person, will be entitled to acquire shares of
the Company’s common stock at a 50% discount or the Company may exchange each Right held by such holders for one share
of its common stock. See “Flip-In Event” below. In such situation, Rights held by the Acquiring Person would
become void and will not be exercisable. If any person at the time of the first public announcement of the Rights Plan owns
more than the triggering percentage then that stockholder's existing ownership percentage will be grandfathered, although,
with certain exceptions, the Rights will become exercisable if at any time after the announcement of the Rights Plan such
stockholder increases its ownership of the Company's common stock.
Unless
earlier redeemed, terminated or exchanged pursuant to the terms of the Rights Plan, the Rights will expire at the close of business
on September 8, 2021. The Board may terminate the Rights Plan before that date if the Board determines that there is no longer
a threat to shareholder value.
Key Features
On September 9,
2019, the Board of declared a dividend of one preferred share purchase right (a “Right”), payable on September 19,
2019, for each share of common stock, par value $0.0001 per share, of the Company (the “Common Shares”) outstanding
on September 19, 2019 (the “Record Date”) to the stockholders of record on that date. In connection with the distribution
of the Rights, the Company entered into a Rights Agreement (the “Rights Agreement”), dated as of September 9, 2019,
between the Company and Philadelphia Stock Transfer, Inc., as rights agent. Each Right entitles the registered holder to purchase
from the Company one one-thousandth of a share of Series C Preferred Stock, par value $0.0001 per share (the “Preferred Shares”),
of the Company at a price of $20 per one one-thousandth of a Preferred Share represented by a Right (the “Purchase Price”),
subject to adjustment.
As further described
below, the Rights Agreement contains the following key features:
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Cash-settled derivatives
that do not convey voting rights do not trigger the rights plan
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No aggregation of ownership
of stockholders “acting in concert” unless they have formed a group under applicable securities laws
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No “dead-hand,”
“slow-hand,” “no-hand,” or similar feature that limits the ability of a future board of directors
to redeem the rights plan
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Grandfathering provision
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Distribution
Date; Exercisability; Expiration
Initially, the
Rights will be attached to all Common Share certificates and no separate certificates evidencing the Rights (“Right Certificates”)
will be issued. Until the Distribution Date (as defined below), the Rights will be transferred with and only with the Common Shares.
As long as the Rights are attached to the Common Shares, the Company will issue one Right with each new Common Share so that all
such Common Shares will have Rights attached.
The Rights will
separate and begin trading separately from the Common Shares, and Right Certificates will be caused to evidence the Rights, on
the earlier to occur of (i) the Close of Business (as such term is defined in the Rights Agreement) on the tenth day following
a public announcement, or the public disclosure of facts indicating (or the Board of Directors becoming aware), that a Person (as
such term is defined in the Rights Agreement) or group of affiliated or associated Persons has acquired Beneficial Ownership (as
defined below) of 15% or more of the outstanding Common Shares (an “Acquiring Person”) (or, in the event the Board
of Directors determines to effect an exchange in accordance with Section 24 of the Rights Agreement and the Board of Directors
determines that a later date is advisable, then such later date) or (ii) the Close of Business on the tenth Business
Day (as such term is defined in the Rights Agreement) (or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) following the commencement of, or the first public announcement of
the intention to commence, a tender offer or exchange offer the consummation of which would result in the Beneficial Ownership
by a Person or group of 15% or more of the outstanding Common Shares (the earlier of such dates, the “Distribution Date”).
As soon as practicable after the Distribution Date, unless the Rights are recorded in book-entry or other uncertificated form,
the Company will prepare and cause the Right Certificates to be sent to each record holder of Common Shares as of the Distribution
Date.
An “Acquiring
Person” will not include (i) the Company, (ii) any Subsidiary (as such term is defined in the Rights Agreement)
of the Company, (iii) any employee benefit plan of the Company or of any Subsidiary of the Company, (iv) any entity holding
Common Shares for or pursuant to the terms of any such employee benefit plan or (v) any Person who or which, together with
all Affiliates and Associates (as such terms are defined in the Rights Agreement) of such Person, at the time of the first public
announcement of the Rights Agreement, is a Beneficial Owner of 15% or more of the Common Shares then outstanding (a “Grandfathered
Stockholder”). However, if a Grandfathered Stockholder becomes, after such time, the Beneficial Owner of any additional Common
Shares (regardless of whether, thereafter or as a result thereof, there is an increase, decrease or no change in the percentage
of Common Shares then outstanding Beneficially Owned (as such term is defined in the Rights Agreement) by such Grandfathered Stockholder)
then such Grandfathered Stockholder shall be deemed to be an Acquiring Person unless, upon such acquisition of Beneficial Ownership
of additional Common Shares, such person is not the Beneficial Owner of 15% or more of the Common Shares then outstanding. In addition,
upon the first decrease of a Grandfathered Stockholder’s Beneficial Ownership below 15%, such Grandfathered Stockholder will
no longer be deemed to be a Grandfathered Stockholder. For the avoidance of doubt, any derivative that is not by its express terms
capable of being settled directly into Common Shares and does not otherwise directly or indirectly convey any voting rights in
Common Shares to any Person will not be included in the calculation of Beneficial Ownership for purposes of determining whether
and the extent to which a Person may be deemed to be a Grandfathered Stockholder. In the event that after the time of the first
public announcement of the Rights Agreement, any agreement, arrangement or understanding pursuant to which any Grandfathered Stockholder
is deemed to be the Beneficial Owner of Common Shares expires, is settled in whole or in part, terminates or no longer confers
any benefit to or imposes any obligation on the Grandfathered Stockholder, any direct or indirect replacement, extension or substitution
of such agreement, arrangement or understanding with respect to the same or different Common Shares that confers Beneficial Ownership
of Common Shares shall be considered the acquisition of Beneficial Ownership of additional Common Shares by the Grandfathered Stockholder
and render such Grandfathered Stockholder an Acquiring Person for purposes of the Rights Agreement unless, upon such acquisition
of Beneficial Ownership of additional Common Shares, such person is not the Beneficial Owner of 15% or more of the Common Shares
then outstanding.
“Beneficial
Ownership” is defined in the Rights Agreement to include any securities (i) which a Person or any of such Person’s
Affiliates or Associates beneficially owns, directly or indirectly, within the meaning of Rules 13d-3 or 13d-5 promulgated
under the Exchange Act or has the right or ability to vote, or the right to acquire, pursuant to any agreement, arrangement
or understanding (except under limited circumstances), (ii) which are directly or indirectly Beneficially Owned by any other
Person with which a Person has any agreement, arrangement or understanding for the purpose of acquiring, holding or voting such
securities, or obtaining, changing or influencing control of the Company or (iii) in respect of which a Person or any of such
Person’s Affiliates or Associates has a derivative position which is capable of being settled, in whole or in part, through
delivery of Common Shares (whether on a required or optional basis, and whether such settlement may occur immediately or only after
the passage of time, the occurrence of conditions, the satisfaction of regulatory requirements or otherwise).
The Rights are
not exercisable until the Distribution Date. The Rights will expire on the Close of Business on September 8, 2021 (the
“Final Expiration Date”).
Exempt Persons
and Transactions
The Board of Directors
may, in its sole and absolute discretion, determine that a Person is exempt from the Rights Agreement (an “Exempt Person”),
so long as such determination is made prior to such time as such Person becomes an Acquiring Person. Any Person will cease to be
an Exempt Person if the Board of Directors makes a contrary determination with respect to such Person regardless of the reason
therefor. In addition, the Board of Directors may, in its sole and absolute discretion, exempt any transaction from triggering
the Rights Agreement, so long as the determination in respect of such exemption is made prior to such time as any Person becomes
an Acquiring Person.
Flip-in Event
If a Person or
group becomes an Acquiring Person at any time after the date of the Rights Agreement (with certain limited exceptions), the Rights
will become exercisable for Common Shares having a value equal to two times the exercise price of the Right. From and after the
announcement that any Person has become an Acquiring Person, if the Rights evidenced by a Right Certificate are or were acquired
or Beneficially Owned by an Acquiring Person or any Associate or Affiliate of an Acquiring Person, such Rights shall become void,
and any holder of such Rights shall thereafter have no right to exercise such Rights. If the Board of Directors so elects, the
Company may deliver upon payment of the exercise price of a Right an amount of cash, securities, or other property equivalent in
value to the Common Shares issuable upon exercise of a Right.
Exchange
At any time after
any Person becomes an Acquiring Person, the Board of Directors may exchange the Rights (other than Rights owned by any Person which
have become void), in whole or in part, at an exchange ratio of one Common Share per Right (subject to adjustment).
The Company may issue, transfer or deposit such Common Shares (or other property as permitted under the Rights Agreement) to or
into a trust or other entity created upon such terms as the Board of Directors may determine and may direct that all holders of
Rights receive such Common Shares or other property only from the trust. In the event the Board of Directors determines, before
the Distribution Date, to effect an exchange, the Board of Directors may delay the occurrence of the Distribution Date to such
time as it deems advisable.
Flip-over Event
If, at any time
after a Person becomes an Acquiring Person, (i) the Company consolidates with, or merges with, any other Person (or any
Person consolidates with, or merges with, the Company) and, in connection with such consolidation or merger, all or part of the
Common Shares are or will be changed into or exchanged for stock or other securities of any other Person or cash or any other property;
or (ii) 50% or more of the Company’s consolidated assets or Earning Power (as defined in the Rights Agreement) are sold,
then proper provision will be made so that each holder of a Right will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the exercise price of the Right.
Redemption
At any time prior
to the time any Person becomes an Acquiring Person, the Board of Directors may redeem the Rights in whole, but not in part, at
a price of $0.0001 per Right (the “Redemption Price”). The redemption of the Rights may be made effective at such time,
on such basis and with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption
of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
Amendment
The terms of the
Rights may be amended by the Board of Directors without the consent of the holders of the Rights, except that from and after such
time as any Person becomes an Acquiring Person no such amendment may adversely affect the interests of the holders of the Rights
(other than the Acquiring Person and its Affiliates and Associates).
Preferred Stock
Rights
Each one-thousandth of
a Preferred Share will entitle the holder thereof to the same dividends and liquidation rights as if the holder held one Common
Share and will be treated the same as a Common Share in the event of a merger, consolidation or other share exchange.
Rights of Holders
Until a Right
is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
THE RIGHTS ARE
IN ALL RESPECTS SUBJECT TO AND GOVERNED BY THE PROVISIONS OF THE RIGHTS AGREEMENT. THE FOREGOING DESCRIPTION OF THE RIGHTS AGREEMENT
DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE RIGHTS AGREEMENT, WHICH IS
ATTACHED HERETO AS EXHIBIT 4.1 AND INCORPORATED HEREIN BY REFERENCE.