Item 1.01. |
Entry into a Material Definitive Agreement. |
Cooperation Agreement
On May 25, 2022, WisdomTree Investments, Inc. (the “Company”) entered into a cooperation agreement (the “Cooperation Agreement”) with ETFS Capital Limited and Graham Tuckwell (together with ETFS Capital Limited, “ETFS”), and Lion Point Capital, LP, Lion Point Capital Holdings GP, LLC and Didric Cederholm (together with Lion Point Capital, LP and Lion Point Capital Holdings GP, LLC, “Lion Point” and, together with ETFS, the “Investor Group”).
Pursuant to the Cooperation Agreement, the Company has agreed to increase the size of its board of directors (the “Board”) by two directors to a total of nine directors and appoint Lynn S. Blake and Deborah A. Fuhr (together, the “New Directors”) as independent members of the Board. Ms. Blake will serve as a Class II director with a term expiring at the Company’s 2022 annual meeting of stockholders (the “2022 Annual Meeting”) and Ms. Fuhr will serve as a Class III director with a term expiring at the Company’s 2023 annual meeting of stockholders (the “2023 Annual Meeting”). Ms. Blake will be appointed to the Compensation Committee of the Board (the “Compensation Committee”), and Ms. Fuhr will be appointed to the Nominating and Governance Committee of the Board (the “Nominating Committee”).
Additionally, the Company formed a four-member Operations and Strategy Committee of the Board (the “Operations Committee”), which will make formal recommendations to the Board on matters, including (i) operational improvement opportunities, (ii) Company strategy and (iii) if the Operations Committee so determines, management changes. The New Directors will join Smita Conjeevaram and Anthony Bossone, existing independent directors of the Company’s Board, on the Operations Committee, and Ms. Conjeevaram will serve as its Chair.
The Company also agreed to propose an amendment to the Company’s Amended and Restated Certificate of Incorporation at the 2022 Annual Meeting to declassify the Board and provide for the annual election of directors starting at the 2022 Annual Meeting (the “Declassification Proposal”) and to recommend that the Company’s stockholders vote in favor of the Declassification Proposal. If stockholder approval of the Declassification Proposal is obtained, the Board will begin the declassification process at the 2022 Annual Meeting and will be declassified fully starting at the Company’s 2024 annual meeting of stockholders.
As part of the Cooperation Agreement, the Investor Group has agreed to customary standstill provisions, which provide that from the date of the Cooperation Agreement until the earlier of (a) the date that is 30 calendar days prior to the deadline for the submission of director nominations by stockholders for the 2023 Annual Meeting and (b) the date that is 90 calendar days prior to the first anniversary of the 2022 Annual Meeting (such period, the “Standstill Period”), the Investor Group will not, among other things: (i) acquire beneficial ownership in, or aggregate economic exposure to, directly or indirectly, the Company’s shares of common stock that would result in ETFS owning or controlling the greater of (A) 10.4% of the then-outstanding shares of common stock in the aggregate and (B) 15,250,000 shares of common stock (subject to adjustment for stock splits, reclassifications, combinations and similar adjustments), or Lion Point owning or controlling the greater of (Y) 9.9% of the then-outstanding shares of common stock in the aggregate and (Z) 14,512,042 shares of common stock (subject to adjustment for stock splits, reclassifications, combinations and similar adjustments); (ii) make any proposal for consideration by stockholders at any annual or special meeting of stockholders of the Company; (iii) make any offer or proposal with respect to any extraordinary transactions; or (iv) seek, alone or in concert with others, the appointment, election or removal of any directors in opposition to any recommendation of the Board, in each case as further described in the Cooperation Agreement.
In addition, Lion Point agreed that if it obtains the right to exercise voting rights attached to Voting Securities (as defined in the Cooperation Agreement) in excess of the greater of (i) 3.1% of the voting power of the outstanding Voting Securities and (ii) 4,521,979 shares of Common Stock (subject to adjustment for stock splits, reclassifications, combinations and similar adjustments) (the “Excess Voting Rights”), then from the end of the Standstill Period through the conclusion of the 2023 Annual Meeting, Lion Point will exercise such Excess Voting Rights in the same proportion in which all other Voting Securities voting on such matter are voted, subject to the terms of the Cooperation Agreement.