UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
8-K
Current Report
Pursuant to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): January 21, 2023
BARNWELL
INDUSTRIES, INC.
(Exact Name of Registrant as
Specified in its Charter)
Delaware
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1-5103
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72-0496921
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(State or other jurisdiction of
Incorporation)
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(Commission File Number)
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(IRS Employer Identification
No.)
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1100 Alakea
Street, Suite 500
Honolulu,
Hawaii 96813
(Address of Principal Executive
Offices) (Zip Code)
(808)
531-8400
(Registrant’s Telephone Number,
Including Area Code)
Not
Applicable
(Former Name or Former Address, if
Changed Since Last Report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following
provisions:
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Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
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☒
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Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to
Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which
registered
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Common Stock, $0.50 Par
Value
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BRN
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NYSE American
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Indicate by check mark whether
the registrant is an emerging growth company as defined in Rule 405
of the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this
chapter). Emerging growth company ☐
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act. ☐
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Item 1.01 |
Entry into a Material Definitive
Agreement.
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On January 21, 2023, Barnwell
Industries, Inc. (“Barnwell” or the “Company”) entered into a
Cooperation and Support Binding Term Sheet (the “Cooperation
Agreement”) with Alexander C. Kinzler, MRMP-Managers LLC, the Ned
L. Sherwood Revocable Trust, NLS Advisory Group, Inc. and Ned L.
Sherwood (collectively, the “MRMP Stockholders”), with respect to
the potential proxy contest pertaining to the election of directors
to Barnwell’s Board of Directors (the “Board”) at the Company’s
2023 annual meeting of stockholders (the “2023 Annual
Meeting”).
The Cooperation Agreement provides, among other things,
that:
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Director
Nominations. Pursuant to the terms of
the Cooperation
Agreement,
among other things, the Company has agreed to promptly appoint
Joshua S. Horowitz and Laurance Narbut to serve on the Board,
subject to certain customary board procedures. The Board has
determined that each of Mr. Horowitz and Mr. Narbut are independent
under applicable NYSE rules and regulations.
Additionally, the Company has agreed
to nominate Mr. Kinzler, Barnwell’s CEO and President, Kenneth
Grossman, Douglas Woodrum, and Messrs. Horowitz and Narbut as
candidates for election to the Board at the 2023 Annual Meeting and
the 2024 annual meeting of stockholders (the “2024 Annual Meeting”)
and Mr. Kinzler and the MRMP Stockholders have agreed to vote their
respective shares of common stock of the Company in favor of the
election of the Company’s slate at the 2023 Annual Meeting and 2024
Annual Meeting. The Company has agreed to use commercially reasonable
efforts to hold the 2023 Annual Meeting within sixty (60) days of
the Effective Date (as defined in the Cooperation
Agreement).
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Standstill. The MRMP Stockholders
agreed to observe normal and customary standstill provisions during
the period (the “Standstill Period”) beginning on January 21, 2023
until the date ten business days prior to the deadline for the
submission of stockholder nominations for directors for the
Company’s 2025 annual meeting of stockholders. The standstill
provisions provide, among other things, that the MRMP Stockholders
will not (except as otherwise permitted by the Cooperation
Agreement):
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make, participate in or propose any tender or exchange offer
for any Company Securities or any merger, consolidation,
acquisition, business combination, recapitalization, restructuring,
liquidation, dissolution or other similar extraordinary transaction
involving the Company or any of its subsidiaries or its or their
securities or assets;
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make any private proposal, alone or in concert with others,
that would reasonably be expected to require the Company or the
MRMP Stockholders to make public disclosure (of any kind);
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engage in any solicitation of proxies or become a
“participant” in a contested “solicitation” of proxies, each as
defined under the Securities Exchange Act of 1934, as amended, (the
“Exchange Act”) with respect to securities of the Company;
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seek any additional representation on the Board, seek the
removal of any member of the Board or encourage any person to
submit nominees in furtherance of a contested election;
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make any request for stockholders list materials or other
books and records of the Company;
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o |
present at any Stockholder Meeting any proposal, resolution or
motion for consideration for action by stockholders or seek to call
any Stockholder Meeting;
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make or be the proponent of any stockholder proposal;
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o |
grant any proxy, consent or other authority to vote with
respect to any matters;
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take any action in support of or make any public disclosure,
announcement, statement, proposal, plan or request with respect to:
(i) controlling, changing or influencing the Board or management of
the Company, including any plans or proposals relating to any
change in the number or term of directors or the filling of any
vacancies on the Board, (ii) any material change in the business,
capitalization, stock repurchase programs and practices, capital
allocation programs and practices or dividend policy of the
Company, (iii) any other material change in the Company’s
management, compensation, business, corporate or governance
structure, (iv) any waiver, amendment or modification to the
Certificate of Incorporation or the By-Laws, (v) causing a class of
Company Securities to be delisted from, or to cease to be
authorized to be quoted on, any securities exchange or (vi) causing
a class of equity Company Securities to become eligible for
termination of registration pursuant to Section 12(g)(4) of the
Exchange Act;
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form, join or act in concert with any other person or group,
including a “group” as defined pursuant to Section 13(d) of the
Exchange Act with respect to any securities of the Company;
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make any public disclosure, announcement, plan or request
involving the Company, its management, business, policies or the
Board;
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make any request or submit any proposal to amend or waive the
terms of the Cooperation Agreement, which could reasonably be
expected to require a public announcement or disclosure of such a
request or proposal; or
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enter into any discussions, negotiations, agreements or
understandings (whether written or oral) with any third party to
take any action with respect to any of the foregoing, or
facilitate, knowingly assist, finance, knowingly encourage or seek
to persuade any third party to take any action the MRMP
Stockholders are prohibited from taking pursuant to the Cooperation
Agreement.
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Voting Matters. During the Standstill
Period, Mr. Kinzler and the MRMP Stockholders agree that they will
(A) be present for quorum purposes at any annual or special meeting
of the Company’s stockholders, and (B) vote or cause to be voted
(including in any action by written consent) all shares of the
Company common stock beneficially owned, or deemed to be
beneficially owned (as determined under Rule 13d-3 promulgated
under the Exchange Act), and entitled to vote as of the record
date, by Mr. Kinzler and the MRMP Stockholders in favor of the
slate of directors recommended by the Board.
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Ownership Limit. Each MRMP Stockholder
agreed that, for a period of twelve (12) months following January
21, 2023 (“Initial Security Period”) they shall not have, in the
aggregate, beneficial ownership of, or economic exposure to, more
than twenty-eight percent (28%) of the Company’s outstanding
Company Securities that are entitled to vote at any meeting of the
Company’s stockholders and that following the Initial Security
Period and for a period of twelve (12) months thereafter, Mr. Ned
L. Sherwood and his Affiliates may acquire beneficial ownership of,
or economic exposure to, Company Securities, provided that, after
giving effect to any such acquisition, Mr. Ned L. Sherwood and his
Affiliates, taken together, shall not have, in the aggregate,
beneficial ownership of, or economic exposure to, more than thirty
percent (30%) of the Company’s outstanding Company Securities that
are entitled to vote at any meeting of the Company’s
stockholders.
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Expense Reimbursement. The Company agreed
to reimburse the MRMP Stockholders and Mr. Kinzler for their
reasonable, documented out-of-pocket fees and expenses (including
legal expenses) in connection with the negotiation and execution of
the Cooperation Agreement and the transactions contemplated hereby
and the proposed nomination of directors by the MRMP Stockholders
in connection with the 2023 Annual Meeting. The expenses shall be
paid promptly, but in no event no later than thirty (30) days,
following the Effective Date.
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Termination of Tax Benefits Preservation
Plan. Pursuant to the terms of the Cooperation Agreement,
the Company also agreed to
terminate the previously enacted Tax Benefits Preservation
Plan.
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Board Size. During the Standstill
Period, and except as contemplated by the Cooperation Agreement,
Barnwell agreed that it will not expand the size of the Board above
five members and shall not establish or maintain an executive
committee or another committee with similar powers of the Board
without each of Messrs. Horowitz and Narbut being
appointed as a member of such committee.
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Mutual Non-Disparagement. Subject
to customary exceptions, the parties to the Cooperation Agreement
agreed to observe normal and customary non-disparagement
provisions.
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The foregoing summary is qualified in its entirety by
reference to the full text of the Cooperation Agreement, a copy of
which is attached hereto as Exhibit 10.1 and is incorporated in its
entirety by reference herein.
At a meeting of the Company’s Board of Directors on January
21, 2023, Mr. Kenneth S. Grossman was elected Chairman of the
Board.
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Item 9.01 |
Financial Statements and
Exhibits.
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Exhibit No.
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Description
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10.1
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Cooperation and Support Binding
Term Sheet, dated as of January 21, 2023, by and among Barnwell
Industries, Inc., Alexander C. Kinzler MRMP-Managers LLC, the Ned
L. Sherwood Revocable Trust, NLS Advisory Group and Ned L.
Sherwood
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104
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Cover Page Interactive Data File (embedded within the Inline
XBRL document)
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SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto
duly
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Dated: January 25, 2023 |
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BARNWELL INDUSTRIES, INC.
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By:
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Name:
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Russell M.
Gifford
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Title:
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Executive Vice President and Chief
Financial Officer
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Exhibit Index
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Exhibit No.
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Description
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Cooperation and Support Binding Term Sheet, dated as of
January 21, 2023, by and among Barnwell Industries, Inc.,
MRMP-Managers LLC, the Ned L. Sherwood Revocable Trust, NLS
Advisory Group, Inc. and Ned L. Sherwood
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104
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Cover Page Interactive Data File (embedded within the Inline
XBRL document)
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