Amended Statement of Ownership: Solicitation (sc 14d9/a)
June 18 2018 - 4:06PM
Edgar (US Regulatory)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14D-9
(Rule
14d-101)
Solicitation/Recommendation Statement
Under Section 14(d)(4) of the Securities Exchange Act of 1934
(Amendment No. 4)
ARMO
BioSciences, Inc.
(Name of Subject Company)
ARMO
BioSciences, Inc.
(Name of Persons Filing Statement)
Common Stock, par value $0.0001 per share
(Title of Class of Securities)
04225U104
(CUSIP Number
of Class of Securities)
Peter Van Vlasselaer, Ph.D.
Chief Executive Officer
ARMO BioSciences, Inc.
575 Chesapeake Drive
Redwood City, CA 94063
(650)
779-5075
(Name, address, and telephone numbers of person authorized to receive notices and communications
on behalf of the persons filing statement)
Copies to:
Marcia A. Hatch, Esq.
Andrew Y. Luh, Esq.
Heidi E. Mayon, Esq.
Albert W. Vanderlaan, Esq.
Gunderson Dettmer Stough
Villeneuve Franklin & Hachigian, LLP
1200 Seaport Blvd.
Redwood City, CA 94063
(650)
321-2400
☐
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Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
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This Amendment No. 4 to Schedule
14D-9
amends and supplements the
Solicitation/Recommendation Statement on Schedule
14D-9
previously filed by ARMO BioSciences, Inc., a Delaware corporation (
ARMO
), with the Securities and Exchange Commission on May 23,
2018 (the
Schedule
14D-9
), relating to the offer by Bluegill Acquisition Corporation, a Delaware corporation (
Purchaser
) and wholly-owned subsidiary of Eli Lilly and
Company, an Indiana corporation (
Parent
), to purchase all of the outstanding shares of ARMOs common stock, par value $0.0001 per share (the
Shares
), at a purchase price of $50.00 per Share, net to the
seller in cash, without interest and less any applicable tax withholding, on the terms and subject to the conditions set forth in the Offer to Purchase, dated May 23, 2018, and the related Letter of Transmittal.
Except as otherwise set forth below, the information set forth in the Schedule
14D-9
remains unchanged and is
incorporated by reference as relevant to the items in this Amendment No. 4. Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Schedule
14D-9.
ITEM 3.
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PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
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Item 3 of the Schedule
14D-9
is hereby amended by deleting the final sentence of the paragraph under the subheading
Retention Pool
under the heading
Arrangements between ARMO and its Executive Officers,
Directors and Affiliates
on page 8 of the Schedule
14D-9.
Item 3 of the Schedule
14D-9
is hereby amended and supplemented by inserting under the subheading
Retention Pool
under the heading
Arrangements between ARMO and its Executive Officers, Directors and
Affiliates
on page 8 of the Schedule
14D-9
the following disclosure:
On
June 15, 2018, the ARMO Board approved the following allocations of the retention pool to executive officers:
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Executive
Officer
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Retention Pool Allocation
Amount
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Peter Van Vlasselaer, M.D.
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$2,500,000
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Herb Cross
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$1,900,000
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The remainder of the retention pool was allocated to ARMO employees.
ITEM 8.
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ADDITIONAL INFORMATION
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Item 8 of the Schedule
14D-9
is hereby
amended by deleting in its entirety the table and footnotes associated therewith under the heading
Golden Parachute Compensation
on pages 41 and 42 of the Schedule
14D-9
and replacing such
table and footnotes with the following disclosure:
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Name
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Cash Severance
($)(1)
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Equity
($)(2)
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Perquisites/
Benefits
($)(3)
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Other
($)(4)
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Total ($)
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Peter Van Vlasselaer, Ph.D.
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1,267,995
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17,319,817
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23,327
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2,500,000
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21,111,139
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Herb Cross
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571,442
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10,355,571
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15,285
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1,900,000
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12,842,298
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Joseph Leveque, M.D.
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705,706
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12,426,659
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21,717
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13,154,082
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(1)
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Represents cash severance payments for each executive officer under their applicable employment agreement, which agreements and payments are described more fully in
Item 3. Past Contracts,
Transactions,
Negotiations and Agreements Arrangements between ARMO and its Executive Officers, Directors and Affiliates Severance and Change of Control Arrangements.
The amounts are double trigger in nature
(
i.e
., they are triggered by a change of control and payment becomes due if the named executive officer is subject to an involuntary termination within the period commencing three months prior to and ending 12 months following such change of
control). In the case of Dr. Van Vlasselaer, the amount listed in this column represents (i) 18 months of base salary, (ii) 18 months of his current target bonus and (iii) his prorated target bonus for the current fiscal year. In
the case of each of Mr. Cross and Dr. Leveque, the amount listed in this column represents (i) 12 months of base salary, (ii) 12 months of his current target bonus and (iii) his prorated target bonus for the current fiscal
year.
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(2)
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Represents (i) the Per Share Merger Consideration less the exercise price per share of each unvested ARMO Option held by the executive multiplied by (ii) the number of Shares subject to such ARMO Option. No
executive officer holds options with an exercise price in excess of the Per Share Merger Consideration. The amounts in respect of the unvested ARMO options are single trigger in nature (i.e., vest in connection with a change of control)
and are separately quantified in the Acceleration of Vesting of Equity Awards column in the table in
Item 3. Past Contracts, Transactions, Negotiations and Agreements Arrangements between ARMO and its Executive
Officers, Directors and Affiliates Severance and Change of Control Arrangements
.
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(3)
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Represents the
after-tax
aggregate amount of all premiums payable for the continuing of the executive officers health benefits for the applicable severance period, based on
the amounts of such premiums at May 21, 2018. These amounts also assume that the premiums payable for continuation of the executive officers health and welfare benefits remain unchanged from their levels in effect on the date of this
Schedule
14D-9.
The amounts are double trigger in nature (
i.e
., they are triggered by a change of control and payment becomes due if the named executive officer is subject to an involuntary
termination within the period commencing three months prior to and ending 12 months following such change of control). The severance period for Dr. Van Vlasselaer is 18 months and for each of Mr. Cross and Dr. Leveque is 12 months.
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(4)
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Represents cash bonus payable from retention pool available to employees and executives for continued employment through the closing of the Offer and Merger and payable at the Effective Time. The ARMO Board allocated
the retention pool on June 15, 2018. These amounts are single trigger in nature (i.e., they are payable in connection with a change of control).
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After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this
Amendment No. 4 to the Schedule
14D-9
is true, complete and correct.
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Date: June 18, 2018
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ARMO BioSciences, Inc.
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By:
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/s/ Peter Van Vlasselaer
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Peter Van Vlasselaer
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President and Chief Executive Officer
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