ALICO, INC. (NASDAQ:ALCO) Files An 8-K Entry into a Material Definitive Agreement
Entry into a Material Definitive Agreement.
On February 11, 2019, Alico, Inc. (the “Company” or “Alico“) along with George R. Brokaw, R. Greg Eisner, Benjamin D. Fishman, W. Andrew Krusen, Henry R. Slack (each of the foregoing individuals, together with Alico, the “Alico Parties“) entered into a Settlement Agreement and Release (the “Settlement Agreement“) with Remy W. Trafelet (“Trafelet“), the former president and chief executive officer of the Company, 734 Agriculture, LLC (“734Agriculture“), RCF 2014 Legacy LLC (“RCF“) and Delta Offshore Master II, LTD. (collectively with Trafelet, 734 Agriculture and RCF, the “Trafelet Parties“). to the Settlement Agreement, among other matters, the Alico Parties and the Trafelet Parties have agreed to promptly dismiss all claims in the litigation pending in the Circuit Court in Hillsborough County, Florida between the Alico Parties and Trafelet Parties.
to the Settlement Agreement, which was unanimously approved by the Alico Board of Directors(the “Board“),Trafelet agreed to voluntarily resign from his roles as president and chief executive officer and a director of the Company, effective upon the execution of the Settlement Agreement. Under the Settlement Agreement, Mr. Trafelet will forfeit (i)all stock options granted to him in December2016 and (ii)all stock options granted to him in September2018, other than 26,250stock options that will vest if the minimum price of Alico’s common stock over 20consecutive trading days exceeds $35.00 per share and 26,250stock options that will vest if the minimum price of Alico’s common stock over 20consecutive trading days exceeds $40.00 per share, in each case, by the first anniversary of the date of the Settlement Agreement (collectively, the “Retained Options“). Any Retained Options that vest in accordance with their terms will expire on the date that is six months following the date on which the Retained Option vests, and any Retained Options that do not vest by the first anniversary of the Settlement Agreement will be forfeited as of such first anniversary.
The Trafelet Parties have agreed that until the earlier of the five-year anniversary of the Settlement Agreement and the date on which the Trafelet Parties together with any affiliates cease to beneficially own in the aggregate at least 0.5% of the outstanding shares of Alico common stock (the “Restricted Period“), the Trafelet Parties will vote all shares of Alico common stock that they or their affiliates may beneficially own in accordance with the recommendation of the Board on the election of directors, compensation plans and any routine matter.
The Trafelet Parties have also agreed to abide by certain restrictions with respect to the Company and the Company’s securities including, during the Restricted Period, customary standstill provisions, including among others: (i) acquiring any voting securities of the Company; (ii) soliciting or participating in the solicitation of proxies or a written consent of shareholders of the Company; (iii) joining any “Group”; or (iv) seeking, alone or in concert with others, board representation or the nominations for election or removal of any director.
Additionally, on February 11, 2019, Trafelet, 734 Agriculture, 734 Investors, LLC (“734 Investors“), and certain members of 734 Investors entered into a settlement agreement resolving pending litigation in the Delaware Court of Chancery. to that agreement, 734 Agriculture resigned as Managing Member of 734 Investors and Arlon Valencia Holdings, LLC was confirmed as Managing Member of 734 Investors.
A copy of the Settlement Agreement is filed with this Form 8-K and attached hereto as Exhibit 10.1 and incorporated by reference herein. The foregoing description of the Settlement Agreement is qualified in its entirety by reference to the full text of the Settlement Agreement.
Registration Rights Agreement
Also on February 11, 2019, as contemplated by the Settlement Agreement, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement“) with Trafelet, relating to the shares of the Company’s common stock held by Trafelet or his affiliates as of February 11, 2019 (the “Registrable Securities“).
The Registration Rights Agreement requires the Company to, among other things and subject to the terms and conditions thereof, use reasonable best efforts to file with the U.S. Securities and Exchange Commission a registration statement on Form S-3 within 90 days of the date thereof, covering the resale of the Registrable Securities.
A copy of the Registration Rights Agreement is filed with this Form 8-K and attached hereto as Exhibit 10.2 and incorporated by reference herein. The foregoing description of the Registration Rights Agreement is qualified in its entirety by reference to the full text of the Registration Rights Agreement.
This filing does not constitute an offer to sell or the solicitation of an offer to buy any securities.
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As described above, on February 11, 2019 and as contemplated by the Settlement Agreement, Trafelet submitted to the Board his resignation as president and chief executive officer of the Company and a member of the Board, effective upon the execution of the Settlement Agreement. Trafelet’s resignation is not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices. The description of the Retained Options set forth in Item 1.01 is incorporated by reference herein.
Also on February 11, 2019, as contemplated by the Settlement Agreement, the Company entered into a consulting agreement (the “Consulting Agreement“) with Trafelet and 3584 Inc., an entity controlled by Trafelet (the “Consultant“). to the Consulting Agreement, Trafelet will make himself available to provide consulting services to the Company through the Consultant for up to 24months. In exchange for the consulting services, the Consultant will receive an annual consulting fee of $400,000. If the Company terminates the consulting period (other than in certain specified circumstances), the Company will continue to pay the consulting fees described in the immediately preceding sentence through the balance of the 24-month term.
A copy of the Consulting Agreement is filed with this Form8-K and attached hereto as Exhibit10.3 and incorporated by reference herein. The foregoing description of the Consulting Agreement is qualified in its entirety by reference to the full text of the Consulting Agreement.
On February 11, 2019, the Company issued a press release announcing entry into the Settlement Agreement and the resignation of Trafelet as president and chief executive officer of the Company and a member of the Board. A copy of the press release is filed with this Form 8-K and attached hereto as Exhibit 99.1 and incorporated by reference herein.
Financial Statements and Exhibits.
Settlement Agreement and Release, dated as of February 11, 2019, by and among Alico, Inc., George R. Brokaw, R. Greg Eisner, Benjamin D. Fishman, W. Andrew Krusen, Henry R. Slack, Remy W. Trafelet , 734 Agriculture, LLC, RCF 2014 Legacy LLC and Delta Offshore Master II, LTD.
Forward Looking Statements
This Current Report on Form 8-K may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on the Company’s current expectations about future events and can be identified by terms such as “plans,” “expect,” “may,” “anticipate,” “intend,” “should be,” “will be” “is likely to,” “believes,” and similar expressions referring to future periods. The Company believes the expectations reflected in the forward-looking statements are reasonable but cannot guarantee future results, level of activity, performance or achievements. Actual results may differ materially from those expressed or implied in the forward-looking statements. Therefore, the Company cautions you against relying on any of these forward-looking statements. Factors which may cause future outcomes to differ materially from those foreseen in forward-looking statements include, but are not limited to: changes in laws, regulation and rules; weather conditions that affect production, transportation, storage, demand, import and export of fresh product and its by-products, increased pressure from diseases including citrus greening and citrus canker, as well as insects and other pests; disruption of water supplies or changes in water allocations; pricing and supply of raw materials and products; market responses to industry volume pressures; pricing and supply of energy; changes in interest rates; availability of financing for land development activities and other growth opportunities; onetime events; acquisitions and divestitures; seasonality; our ability to achieve the anticipated cost savings under the Alico 2.0 Modernization Program; customer concentration; labor disruptions; inability to pay debt obligations; inability to engage in certain transactions due to restrictive covenants in debt instruments; government restrictions on land use; changes in agricultural land values; market and pricing risks due to concentrated ownership of stock; the Company’s receipt of future funding from the state of Florida in connection with water retention projects; any federal relief received in the future by the Company in connection with Hurricane Irma; recent changes in the equity plan awards to employees; continuation of the Company’s dividend policy; political changes and economic crises; competitive actions by other companies; changes in dividends; increased competition from international companies; changes in environmental regulations and their impact on farming practices; the land ownership policies of governments, changes in government farm programs and policies, international reaction to such programs, changes in pricing calculations with our customers; fluctuations in the value of the U.S. dollar, interest rates, inflation and deflation rates; changes in and effects of crop insurance programs, global trade agreements, trade restrictions and tariffs; soil conditions, harvest yields, prices for commodities, and crop production expenses. Other risks and uncertainties include those that are described in Alico’s SEC filings, which are available on the SEC’s website at http://www.sec.gov. The Company undertakes no obligation to subsequently update or revise the forward-looking statements made in this press release, except as required by law.
ALICO INC Exhibit
EX-10.1 2 exhibit101settlementagree.htm Exhibit 10.1 EXECUTION VERSION SETTLEMENT AGREEMENT AND RELEASE This Settlement Agreement and Release (this “Agreement”) is entered into and effective as of this 11th day of February,…
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About ALICO, INC. (NASDAQ:ALCO)
Alico, Inc. is an agribusiness and natural resources management company. The Company’s segments include Orange Co., Conservation and Environmental Resources and, Other Operations. Its principal lines of business are citrus groves, cattle ranching and conservation. The Orange Co. segment includes activities related to planting, owning, cultivating and/or managing citrus groves in order to produce fruit for sale to fresh and processed citrus markets, including activities related to the purchase and resale of fruit and value-added services, which include contracting for the harvesting, marketing and hauling of citrus. The conservation and environmental resources segment includes activities related to cattle grazing, sod, native plant and animal sales, leasing, management and/or conservation of unimproved native pasture land. The other operations segment consists of activities related to rock mining royalties, oil exploration and other insignificant lines of business.