Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
On June 30, 2022, the Company, upon the approval of its Board of Directors (the
"Board"), entered into an agreement relating to restricted stock units ("RSUs")
with Dr. Pamela Marrone, a director of and consultant to the Company, which
agreement was acknowledged and agreed to by Parent and Merger Sub. Pursuant to
the agreement, notwithstanding anything to the anything to the contrary in the
award agreement with respect to Dr. Marrone's 1,250,000 RSUs granted in
connection with her services as a consultant to the Company, the Merger
Agreement or otherwise, any portion of such RSUs that is not vested as of
immediately prior to the closing of the Merger shall not vest as a result of the
Merger and shall instead continue to vest on the scheduled vesting dates,
subject to Dr. Marrone's continued service to the surviving company following
the Merger and all otherwise applicable terms of the award agreement, the
Company's 2013 Stock Incentive Plan and Dr. Marrone's consulting agreement.
The agreement is filed herewith as Exhibit 10.1, and is incorporated herein by
reference, and the foregoing description is qualified in its entirety by the
terms contained therein.
Item 8.01. Other Events
Between May 16 and June 24, 2022, the following lawsuits were filed against the
Company and its directors (1) Schaefer v. Marrone Bio Innovations, Inc. et al.,
1:22-cv-03995 in the United States District Court for the Southern District of
New York; (2) Stein v. Marrone Bio Innovations, Inc. et al., 1:22-cv-03978 in
the United States District Court for the Southern District of New York; (3)
Berrahou v. Marrone Bio Innovations, Inc. et al., 1:22-cv-02996 in the United
States District Court for the Eastern District of New York; (4) Thompson v.
Marrone Bio Innovations, Inc. et al., 1:22-cv-02998 in the United States
District Court for the Eastern District of New York; (5) Redfield v. Marrone Bio
Innovations, Inc. et al., 1:22-cv-03342 in the United States District Court for
the Eastern District of New York; (6) Finger v. Marrone Bio Innovations, Inc. et
al., 1:22-cv-03554 in the United States District Court for the Eastern District
of New York; and (7) Siler v. Marrone Bio Innovations, Inc. et al.,
1:22-cv-05336 in the United States District Court for the Southern District of
New York. If additional similar complaints are filed, absent new or different
allegations that are material, the Company will not necessarily announce such
additional filings.
The complaints each allege that the Preliminary Registration Statement filed on
May 9, 2022 and/or the Proxy Statement omitted material information that
rendered it false and misleading. As a result of the alleged omissions, the
lawsuits seek to hold the Company and its directors liable for violating Section
14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and Rule 14a-9 promulgated thereunder, and additionally seek to hold MBI's
directors liable as control persons pursuant to Section 20(a) of the Exchange
Act. The complaints seek, among other relief, an injunction preventing the
closing of the Merger, rescission of the merger agreement or any of its terms to
the extent already implemented, and award of rescissory damages, and an award of
attorneys' and experts' fees. The Company believes that the lawsuits are without
merit and that no supplemental disclosures are required under applicable law.
However, in order to avoid nuisance, potential expense, and delay from the
lawsuits and to provide additional information to the stockholders of the
Company, and without admitting any liability or wrongdoing, the Company has
determined to voluntarily supplement the Proxy Statement with the disclosures
set forth herein. Nothing in this Current Report on Form 8-K shall be deemed an
admission of the legal necessity or materiality under applicable law of any of
the disclosures set forth herein. The Company specifically takes the position
that no further disclosure of any kind is required to supplement the Proxy
Statement under applicable law.
These supplemental disclosures do not affect the merger consideration to be paid
to the Company's stockholders in connection with the Merger or the timing of the
Company's virtual special meeting of stockholders scheduled to be held online
via live webcast on July 8, 2022 at 10:30 am, Eastern Time, at
www.virtualshareholdermeeting.com/MBII2022SM (the "Special Meeting"). The Board
continues to recommend that you vote "FOR" the proposal to adopt the Merger
Agreement and "FOR" the other proposals being considered at the Special Meeting.
Supplement to Proxy Statement
The following supplemental disclosures should be reviewed in conjunction with
the disclosures in the Proxy Statement, which should be carefully read in its
entirety. To the extent information set forth herein differs from or updates
information contained in the Proxy Statement, the information contained herein
supersedes the information contained in the Proxy Statement. Any defined terms
used but not defined herein have the meanings set forth in the Proxy Statement.
Paragraph and page references used herein refer to the Proxy Statement before
any additions or deletions resulting from the supplemental disclosures. Unless
stated otherwise, the revised text in the supplemental disclosures is underlined
to highlight the supplemental information being disclosed.
The disclosure in the section entitled "Background of the Merger," beginning on
page 55 of the Proxy Statement, is hereby amended to add the following after the
last sentence of the first paragraph on page 57:
MBI's management was also directed not to have communications about post-closing
roles or the terms of any potential post-closing employment with representatives
of BIOX or any other potentially interested party until authorized by MBI's
Board.
The disclosure in the section entitled "Background of the Merger," beginning on
page 55 of the Proxy Statement, is hereby amended to add the following to the
end of the third paragraph on page 57:
Under the terms of the engagement letter, as compensation, Roth would receive
cash advisory fees at certain milestones through the signing of a definitive
agreement and a success fee, comprising the substantial majority of the
aggregate fees to be paid to Roth, at the closing of a transaction.
The disclosure in the section entitled "Background of the Merger," beginning on
page 55 of the Proxy Statement, is hereby amended by replacing the first
paragraph on page 58 with the following:
On November 30, December 6, December 14 and December 15, 2021, MBI signed mutual
confidentiality agreements with each of Company C, Company D, Company B and
Company A, respectively, each of which included a one- or two-year standstill
provision. None of the four mutual confidentiality agreements included a
so-called "don't ask, don't waive" provision related to the standstill. Rather,
and each of which the agreements allowed each party to request waiver of the
standstill with respect to confidential requests made to the other party's board
upon the other party's announcement of its entry into a definitive agreement
with respect to a change of control transaction with a third party.
The disclosure in the section entitled "Background of the Merger," beginning on
page 55 of the Proxy Statement, is hereby amended by replacing the sixth
paragraph on page 58 with the following:
On December 6, 2021, the MBI Board met, with members of management and
representatives of Morrison & Foerster and Roth also attending. Mr. Saval
discussed the activities of Roth and MBI management with respect to each of the
Outreach Parties and with BIOX. Mr. Saval also discussed the need for financial
models for each of MBI and BIOX, and Roth's work with MBI management in
preparing financial models for the Board's review in connection with the
potential transaction. Mr. Saval noted that BIOX had said that it was not
willing to share their own projections, such that MBI would need to prepare a
model for BIOX, and that BIOX had requested that it not receive any MBI
forecasts. Mr. Saval also confirmed for MBI's Board factors previously disclosed
to or known by MBI's Board regarding his and Roth's relationship with BIOX and
MBI, which included Mr. Saval's ownership of a fraction of one percent in MBI
from warrants and common share compensation from advising on a 2018
restructuring, and noted that he had previously had non-engaged discussions with
each of BIOX and MBI, individually, about a potential combination and that Roth
provides equity research on both BIOX and MBI.
The disclosure in the section entitled "Background of the Merger," beginning on
page 55 of the Proxy Statement, is hereby amended by replacing the fourth
paragraph on page 59 with the following:
MBI's Board met on December 13, 2021, with members of management and
representatives of Morrison & Foerster and Roth also attending. Mr. Woods
updated MBI's Board on his discussion with Company B. Representatives of
Morrison & Foerster then updated MBI's Board on discussions with BIOX regarding
the potential new confidentiality agreement, noting that BIOX continued to
resist any standstill and that, based on prior guidance from the board, MBI had
agreed to continue discussions with BIOX based on the existing May 2020
nondisclosure agreement, without a standstill. MBI's Board also discussed BIOX's
request for exclusivity in light of anticipated timing for receipt of bids from
the Outreach Parties.
The disclosure in the section entitled "Background of the Merger," beginning on
page 55 of the Proxy Statement, is hereby amended by replacing the sixth
paragraph on page 59 with the following:
At a meeting of MBI's Board held on December 20, 2021, with members of
management and representatives of Morrison & Foerster and Roth also attending,
representatives of Morrison & Foerster discussed with MBI's Board potential deal
terms for a transaction with BIOX. Among other things, MBI's Board also
discussed the impact of the use of BIOX ordinary shares as merger consideration,
the proposed fixed exchange ratio, and the potential for implementing a collar
mechanism on the merger consideration. It was discussed that a price collar was
not common in similar transactions, and if accepted likely would be reciprocal
and so would limit MBI stockholders' potential upside as well as downside. Mr.
Saval also discussed with MBI's Board the discussions that Roth had had with
BIOX, as well as the Roth's discussions with the other Outreach Parties. Mr.
Saval also discussed next steps for negotiations with BIOX and the Outreach
Parties, with the goal of enabling the Outreach Parties to catch up with the
work done by BIOX.
The disclosure in the section entitled "Background of the Merger," beginning on
page 55 of the Proxy Statement, is hereby amended by replacing the second
paragraph on page 63 with the following:
MBI's Board met on February 21, 2022, with members of management and
representatives of Morrison & Foerster and Roth also attending. Mr. Saval
reviewed BIOX's updated proposal, including BIOX's demand for exclusive
negotiations, and MBI's Board determined to seek to not enter into exclusivity
with BIOX so as to allow MBI to receive and evaluate a potential response from
Company D. MBI's Board then reviewed and approved a revised MBI financial model
that MBI management had provided to them. MBI's Board also reviewed and approved
the revised BIOX financial model, prepared by MBI management with the assistance
of Roth, that Mr. Saval had provided to them. Mr. Saval then reviewed Roth's
valuation perspectives with respect to each of MBI and BIOX, as well as the
Combined Company, with MBI management providing input related to the pro forma
financial impact of the combined businesses. A representative of Morrison &
Foerster reviewed with MBI's Board certain commercial issues raised by BIOX,
including the potential need for a BIOX shareholder vote, BIOX's proposed
restrictions on MBI's solicitation or negotiation of superior bids, including
the prohibition on termination by MBI's Board to accept a superior proposal, and
BIOX's requirement of support agreements from key MBI Stockholders. MBI's Board
also discussed providing a counter-proposal to BIOX of 0.1 shares of BIOX
Ordinary Share for each share of MBI Common Stock, which MBI's Board approved.
The disclosure in the section entitled "Prospective Financial Information
Prepared by MBI's Management," beginning on page 70 of the Proxy Statement, is
hereby amended to add the following after the third chart that appears on page
72:
Unlevered Free Cash Flow
As described in the section below entitled "Opinion of Houlihan Lokey to MBI's
Board," Houlihan Lokey used calculations of projected unlevered free cash flow
in its discounted cash flow analyses with respect to MBI and BIOX. MBI does not
generally use, or make projections with respect to, unlevered free cash flow in
the operation of its business and estimates of unlevered free cash flow were not
included in the financial forecasts described above. However, MBI management
provided to Houlihan Lokey, for Houlihan Lokey's use in calculating the
unlevered free cash flow for purposes of their financial analyses and opinion,
estimates of share-based compensation expense, capital expenditures, changes in
net working capital and taxes for each of MBI and BIOX, which Houlihan Lokey
subtracted from MBI's EBITDAO estimates to determine estimates of unlevered free
cash flow for each of MBI and BIOX. The following is a summary of the unlevered
free cash flow estimates as so calculated. Such estimates, and the estimates of
share-based compensation expense, capital expenditures, changes in net working
capital and taxes, are subject to all the qualifications and limitations
provided above with respect to the other financial forecasts.
-MBI management's unlevered free cash flow estimates for MBI
2022E 2023E 2024E 2025E 2026E 2027E
(in U.S. $ millions)
Unlevered Free Cash Flows ($ 12.2 ) ($ 9.0 ) $ 1.2 $ 10.4 $ 20.0 $ 29.9-MBI management's unlevered free cash flow estimates for BIOX
2022E 2023E 2024E 2025E 2026E 2027E
(in U.S. $ millions)
Unlevered Free Cash Flows $ 23.5 $ 36.8 $ 13.3 $ 5.1 $ 23.1 $ 32.3The disclosure in the section entitled "Prospective Financial Information
Prepared by MBI's Management," beginning on page 70 of the Proxy Statement, is
hereby amended by replacing the paragraph following the third chart, under the
heading "Summary of MBI's management's financial forecasts for the Combined
Company" that appears on page 72 with the following:
The financial forecasts in this section were not presented in accordance with
the requirements of U.S. GAAP or IFRS. Due to the forward-looking nature of
. . .
Item 9.01. Financial Statements and Exhibits.
Exhibit
Number Description
10.1* Agreement Relating to Restricted Stock Units, dated June 30, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
*Indicates management compensatory plan or arrangement.
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MARRONE BIO INNOVATIONS, INC. 
