DEFA14A: Barnwell Industries Shareholders Reject Ned Sherwood's Attempt to Seize Control

Barnwell Industries announces that shareholders have rejected Ned Sherwood's attempt to take full control of the company by replacing the entire Board of Directors.

Summary

• Barnwell Industries announced that shareholders rejected Ned Sherwood's attempt to replace the entire Board of Directors.
• Preliminary results indicate shareholders consented to remove directors Alexander Kinzler and Douglas Woodrum, and elected Heather Isidoro, a Sherwood Group nominee.
• Ken Grossman and Joshua Horowitz will continue to serve as directors, ensuring continuity.
• Shareholders also approved the Sherwood Group's proposal to repeal the amendment to the company's bylaws that went into effect on February 4, 2025.
• The company is awaiting the Delaware Court of Chancery's decision on the validity of the Sherwood Group's nomination notice for the 2025 annual meeting.
• Alexander Kinzler will step down as a director on or before December 31, 2025, if re-elected at the 2025 annual meeting.
• Kinzler will assist in selecting a successor CFO and transitioning the company's headquarters from Honolulu to Calgary.
• Barnwell remains open to settlement discussions with the Sherwood Group.
• The company will report the results of the consent solicitation on a Form 8-K no later than May 19, 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While there's conflict with an activist investor, the company is maintaining control and is open to constructive dialogue. The willingness of a key executive to step down to facilitate a settlement is also a positive sign.

Positives

• Shareholders rejected the attempt by Ned Sherwood to take full control of the company.
• Continuity is ensured with Ken Grossman and Joshua Horowitz remaining on the Board.
• Alexander Kinzler is willing to step down to facilitate a settlement with the Sherwood Group.
• Barnwell remains open to constructive settlement discussions.

Negatives

• Shareholders consented to remove directors Alexander Kinzler and Douglas Woodrum.
• The Sherwood Group's proposal to repeal the amendment to the company's bylaws was approved.
• Alexander Kinzler is stepping down as a director on or before December 31, 2025, if re-elected, which may cause disruption.

Risks

• The outcome of the Delaware Court of Chancery's decision on the validity of the Sherwood Group's nomination notice is uncertain.
• The company's ability to successfully solicit proxies from stockholders in connection with the 2025 annual meeting of stockholders is subject to risk.
• The company faces risks related to the actions of the Sherwood Group and potential claims by them.
• The company's ability to execute on its strategy and business plan is subject to risks and uncertainties.

Future Outlook

The company is focused on long-term value creation by developing its Canadian energy assets and is open to settlement discussions with the Sherwood Group to resolve governance matters.

Management Comments

• 'While I am disappointed with the results of the consent solicitation, in the interest of good governance, I have advised the Board that if I am elected at the Companys 2025 annual meeting, I will step down as a director on or prior to December 31, 2025,' said Alexander Kinzler.
• Mr. Kinzler continued, 'During such period, I will work with the Board to help the Company identify and select a successor Chief Financial Officer, transition the Companys headquarters from Honolulu to Calgary and ensure management and the Board have sufficient background and information to transition oversight of the Companys complex real estate investments in Hawaii.'
• Barnwell remains open to engaging in constructive, good-faith settlement discussions with the Sherwood Group in pursuit of a resolution that represents the best interests of the Company and all shareholders.

Industry Context

This announcement reflects ongoing shareholder activism and corporate governance challenges, which are common in publicly traded companies. The outcome of the consent solicitation and the pending lawsuit will likely influence the company's strategic direction and shareholder value.

Comparison to Industry Standards

• Proxy contests and shareholder activism are increasingly common in the current corporate landscape.
• Companies like Procter & Gamble and ExxonMobil have faced similar challenges from activist investors seeking board representation and strategic changes.
• The willingness of Alexander Kinzler to step down mirrors actions taken by other executives to resolve disputes and facilitate settlements with activist groups.

Management Changes

Corporate Governance

Legal Proceedings

• The company is awaiting the Delaware Court of Chancery's decision on the pending lawsuit related to the validity of the Sherwood Group's nomination notice.

Stakeholder Impact

• Shareholders are impacted by the outcome of the consent solicitation and the ongoing dispute with the Sherwood Group.
• Employees may be affected by the potential transition of the company's headquarters from Honolulu to Calgary.
• The company's strategic direction and focus on developing its Canadian energy assets will impact its long-term value creation for all stakeholders.

Next Steps

• The company awaits the Delaware Court of Chancery's decision on the validity of the Sherwood Group's nomination notice.
• Barnwell will supplement its proxy materials for the 2025 annual meeting of shareholders following receipt of the Court's decision.
• Alexander Kinzler will work with the Board to identify and select a successor CFO and transition the company's headquarters.
• Barnwell will report the results of the consent solicitation on a Form 8-K no later than May 19, 2025.

Key Dates

Keywords

Barnwell Industries, Ned Sherwood, Proxy Contest, Board of Directors, Shareholders, Consent Solicitation, Corporate Governance