Item 1.01 Entry into a Material Definitive Agreement.
In connection with the plan of Bentley Pharmaceuticals, Inc. ("Bentley") to
spin off its drug delivery business conducted through its wholly owned
subsidiary, CPEX Pharmaceuticals, Inc. ("CPEX"), on June 13, 2008 (see item
8.01), CPEX entered into definitive agreements with Bentley that, among other
things, set forth the terms and conditions of the separation of CPEX from
Bentley and provide a framework for the relationship between Bentley and CPEX
following the separation. In addition to the Separation and Distribution
Agreement, which contains many of the key provisions related to the spin-off of
CPEX and the distribution of CPEX's common shares to Bentley's shareholders, the
parties also entered into, on June 13, 2008, a Tax Sharing Agreement, a
Transition Services Agreement, and an Employee Matters Agreement. A summary of
certain important features of the material agreements, which are referenced
below, can be found in the section entitled "Certain Relationships and Related
Party Transactions" in CPEX's Information Statement, which is attached as
Exhibit 99.1 to this Form 8-K, and is incorporated herein by reference.
Separation and Distribution Agreement
On June 13, 2008, CPEX entered into a Separation and Distribution Agreement
with Bentley that sets forth CPEX's agreements with Bentley regarding principal
transactions necessary to separate CPEX from Bentley. This agreement also sets
forth the other provisions that govern certain aspects of CPEX's relationship
with Bentley after the completion of the separation from Bentley and provides
for the allocation of assets, liabilities and obligations between CPEX and
Bentley in connection with the separation. The description of the Separation and
Distribution Agreement set forth under this Item 1.01 is qualified in its
entirety by reference to the complete terms and conditions of the Separation and
Distribution Agreement filed as Exhibit 2.1 hereto.
Tax Sharing Agreement
On June 13, 2008, CPEX entered into a Tax Sharing Agreement with Bentley that
governs the parties' respective rights, responsibilities and obligations after
the distribution with respect to taxes. The description of the Tax Sharing
Agreement set forth under this Item 1.01 is qualified in its entirety by
reference to the complete terms and conditions of the Tax Sharing Agreement
filed as Exhibit 10.1 hereto.
Transition Services Agreement
On June 13, 2008, CPEX entered into a Transition Services Agreement with
Bentley that governs the orderly transition of both CPEX and Bentley following
CPEX becoming an independent company. Under the Transition Services Agreement,
CPEX has agreed to provide Bentley with various services, including services
relating to accounting, SEC reporting, payroll, financial systems management,
telecommunications services, occupancy and information technology services, and
Bentley has agreed to provide CPEX with certain clinical trial and intellectual
property related services. Bentley will, prior to the separation, pay CPEX in
advance for the services which CPEX will provide to Bentley. CPEX will pay
Bentley a monthly fee for its transition services, which fee will be based on
the costs incurred by Bentley in providing such services. The description of the
Transition Services Agreement set forth under this Item 1.01 is qualified in its
entirety by reference to the complete terms and conditions of the Transition
Services Agreement filed as Exhibit 10.2 hereto.
Employee Matters Agreement
On June 13, 2008, CPEX entered into an Employee Matters Agreement with
Bentley that allocates liabilities and responsibilities relating to employee
compensation and benefit plans and programs and other related matters in
connection with the separation, including the treatment of outstanding incentive
awards and certain retirement and welfare benefit obligations, both in and
outside of the United States. The description of the Employee Matters Agreement
set forth under this Item 1.01 is qualified in its entirety by reference to the
complete terms and conditions of the Employee Matters Agreement filed as
Exhibit 10.3 hereto.
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Item 3.03 Material Modification to Rights of Security Holders
In connection with Bentley's previously announced plan to spin off its drug
delivery business conducted through its wholly owned subsidiary, CPEX, on
June 12, 2008, the Board of Directors of CPEX adopted a Rights Agreement with
American Stock Transfer & Trust Company, LLC as rights agent, which was entered
into on June 13, 2008, and declared a dividend of one right for each share of
CPEX's common stock to be distributed to holders of record of outstanding shares
of CPEX's common stock at the close of business on June 23, 2008. Each right
allows its holder to purchase one one-thousandth of a share of CPEX's series A
preferred stock for $100.00, once the rights become separated from CPEX's common
stock and exercisable. Prior to its exercise, a right does not give its holder
any dividend, voting or liquidation rights. In connection with the adoption of
the Rights Agreement, CPEX filed with the Delaware Secretary of State a
Certificate of Designation authorizing 1,000,000 shares of series A Preferred
Stock. More information about the terms of the rights can be found in the
section entitled "Description of Capital Stock - Rights Plan" in CPEX's
Information Statement, which is attached as Exhibit 99.1 to this form 8-K and is
incorporated by reference into this item. The description of the Rights
Agreement, series A Preferred Stock and the terms of the rights set forth under
this Item 3.03 is qualified in its entirety by reference to the complete terms
and conditions of the Rights Agreement and the Certificate of Designation filed
as Exhibit 4.1 and Exhibit 4.2 respectively hereto.
Item 7.01 Regulation FD Disclosure.
On June 13, Bentley issued a press release announcing that its Board of
Directors had approved the distribution to its shareholders of all of its common
shares of CPEX, its wholly owned subsidiary. To effect the distribution, Bentley
will distribute one CPEX common share for every ten Bentley common shares
outstanding as of the close of business on June 20, 2008 (the "Spin-off Record
Date"). Fractional shares of CPEX will not be distributed and any Bentley
shareholder entitled to receive a fractional share will instead receive a cash
payment. The distribution is expected to occur after the close of business on
June 30, 2008 to Bentley shareholders of record as of the Spin-off Record Date.
The press release, which is attached as Exhibit 99.2, is incorporated herein by
reference.
The information in the press release and this Item 7.01 is "furnished" and
not "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject
to the liabilities of that section. Such information may be incorporated by
reference in another filing under the Exchange Act or the Securities Act only if
and to the extent such subsequent filing specifically references the information
incorporated by reference herein.
Item 8.01 Other Events.
On June 12, 2008, the Board of Directors of CPEX approved an issuance to
Bentley of that number of shares of CPEX common stock such that following such
issuance the total number of shares of CPEX common stock outstanding shall equal
one share and one right for every ten shares of Bentley common stock outstanding
as of the close of business on the Spin-off Record Date.
On June 12, 2008, Bentley's Board of Directors approved, and Bentley, on
June 12, 2008, issued a press release announcing such approval of, the
distribution to Bentley's shareholders of all of the common shares of CPEX,
Bentley's wholly owned subsidiary. To effect the distribution, Bentley will
distribute one CPEX common share for every ten Bentley common shares outstanding
as of the close of business on the Spin-off Record Date. Fractional shares of
CPEX will not be distributed and any Bentley shareholder entitled to receive a
fractional share will instead receive a cash payment. The distribution is
expected to occur after the close of business on June 30, 2008 to Bentley
shareholders of record as of the close of business on the Spin-off Record Date.
The Information Statement of CPEX, dated June 17, 2008, which describes for
shareholders the details of the distribution and provides information as to the
business and management of CPEX, is attached as Exhibit 99.1 to this form 8-K
and is incorporated by reference into this item. Shortly after the Spin-off
Record Date, the Information Statement will be mailed to Bentley shareholders of
record as of the Spin-off Record Date.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
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Exhibit No. Description
2.1 Separation and Distribution Agreement, dated June 13, 2008, by and
between CPEX Pharmaceuticals, Inc. and Bentley Pharmaceuticals, Inc.
4.1 Rights Agreement, dated June 13, 2008, by and between CPEX
Pharmaceuticals, Inc. and American Stock Transfer & Trust Company, LLC
4.2 Certificate of Designation of Series A Preferred Stock
4.3 Form of Rights Certificate (attached as an exhibit to the Form of
Rights Agreement filed as Exhibit 4.1 hereto)
10.1 Tax Sharing Agreement, dated June 13, 2008, by and between CPEX
Pharmaceuticals, Inc. and Bentley Pharmaceuticals, Inc.
10.2 Transition Services Agreement, dated June 13, 2008, by and between
CPEX Pharmaceuticals, Inc. and Bentley Pharmaceuticals, Inc.
10.3 Employee Matters Agreement, dated June 13, 2008, by and between CPEX
Pharmaceuticals, Inc. and Bentley Pharmaceuticals, Inc.
99.1 Information Statement of CPEX Pharmaceuticals, Inc., dated June 17,
2008.
99.2 Press Release, dated June 12, 2008.
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