Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
On December 3, 2019 (the \”Effective Date\”), Rocky Mountain Chocolate Factory, Inc. (the “Company”) entered into a cooperation agreement (the “Agreement”) with AB Value Management LLC (“AB Value”), pertaining to, among other things, the nomination and election of two directors to the Company’s Board of Directors (the “Board”) at the Company’s annual meeting of stockholders to be held on January 9, 2020 (the “2019 Annual Meeting”). to the Agreement, subject to conditions, AB Value agreed to customary standstill and voting provisions.
to the Agreement, the Company agreed to take appropriate action to nominate Andrew T. Berger and Mary K. Thompson (each, an “AB Value Director” and together, the “AB Value Directors”) for election to the Board at the 2019 Annual Meeting. The AB Value Directors will also have certain board observer and information rights with respect to the Board, its committees and the Company, as set forth in the Agreement.
If the AB Value Directors are elected to serve as directors on the Board at the 2019 Annual Meeting, the AB Value Directors are expected to serve until the Company’s 2020 annual meeting of stockholders (the “2020 Annual Meeting”). The Board agreed to re-nominate the AB Value Directors for election to the Board at the 2020 Annual Meeting; provided, that Mr. Berger has not previously resigned from the Board. The Company will use the same solicitation efforts on behalf of the AB Value Directors as for all other nominees at the 2019 Annual Meeting and the 2020 Annual Meeting. In addition, subject to certain conditions and requirements described in the Agreement, AB Value will have certain replacement rights in the event Ms. Thompson resigns or either AB Value Director is otherwise unable to serve as a director during the Standstill Period (as defined below).
The Company and AB Value agreed to a “Standstill Period” commencing on the Effective Date and ending on the date that is the earliest of (i) the date that is 15 days prior to the beginning of the Company’s advance notice period for the nomination of directors at the Company’s 2021 annual meeting of stockholders, (ii) Mr. Berger’s resignation from the Board any time after the 2019 Annual Meeting, and (iii) a material breach by the Company of its obligations under the Agreement which (if capable of being cured) is not cured within 15 days after receipt by the Company of written notice from AB Value specifying the material breach.
The Company and AB Value further agreed to customary mutual non-disparagement provisions during the Standstill Period.
The Agreement will remain in effect until the date that is earliest of (i) the date that is 15 days prior to the beginning of the Company’s advance notice period for the nomination of directors at the Company’s 2021 annual meeting of stockholders, (ii) Mr. Berger’s resignation from the Board any time after the 2019 Annual Meeting, and (iii) a material breach by either party thereto of its obligations under the Agreement which (if capable of being cured) is not cured within 15 days after receipt by such breaching party of written notice from the other party specifying the material breach.
Other elements of the Agreement include, among others:
During the term of the Agreement, AB Value agreed, subject to certain exceptions, to comply with certain customary standstill provisions, including, among other things:
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Rocky Mountain Chocolate Factory, Inc. Exhibit
EX-10.1 2 ex_166624.htm EXHIBIT 10.1 ex_166624.htm Exhibit 10.1 COOPERATION AGREEMENT This Cooperation Agreement (this “Agreement”),…
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About Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF)
Rocky Mountain Chocolate Factory, Inc. is an international franchisor, confectionery manufacturer and retail operator. The Company’s subsidiary, U-Swirl International, Inc. (U-Swirl), franchises and operates soft-serve frozen yogurt stores. The Company operates through five segments: Franchising, Manufacturing, Retail Stores, U-Swirl operations and Other. The Company manufactures a range of chocolate candies and other confectionery products. The Company’s franchised/license system of retail stores features chocolate, frozen yogurt and other confectionary products. The Company also sells its candy in selected locations outside of its system of retail stores and licenses the use of its brand with certain consumer products. The Company’s products include a range of clusters, caramels, creams, mints and truffles. Its individual stores also offer over 15 fudges and other products prepared in the store. The Company uses chocolate, nut meats and other ingredients in its candies.
