Item 1.01 Entry into a Material Definitive Agreement.
On July 23, 2021 (the "Effective Date"), Danimer Scientific, Inc. (the
"Company") and Stephen E. Croskrey entered into an Amended and Restated
Employment Agreement (the "A&R Employment Agreement"), which amended and
restated that certain Employment Agreement (the "2020 Employment Agreement")
entered into by and between the Company and Mr. Croskrey on October 3, 2020, in
its entirety. The 2020 Employment Agreement terminated upon the effectiveness of
the A&R Employment Agreement.
The A&R Employment Agreement became effective on the Effective Date and ends on
December 31, 2024, unless earlier terminated in accordance with its terms. The
A&R Employment Agreement provides that Mr. Croskrey shall continue to serve as
Chief Executive Officer and Chairman of the Board of Directors of the Company,
and provides for an annual base salary of $875,000 ("Annual Base Salary"),
effective as of January 1, 2021. Additionally, the A&R Employment Agreement
provides that Mr. Croskrey is entitled to a one-time bonus paid simultaneously
with the execution of the A&R Employment Agreement, equal to $2,000,000. The A&R
Employment Agreement also provides that upon satisfaction of performance targets
to be established by the Board of Directors, Mr. Croskrey will be paid an annual
incentive award for such year (the "Annual Incentive Award") equal to between
1.25 times his Annual Base Salary and 2.5 times his Annual Base Salary.
The A&R Employment Agreement states that each year during the term, and
simultaneously with the execution of the A&R Employment Agreement with respect
to 2021, Mr. Croskrey will receive a long term incentive award (the "Long Term
Incentive Award"), of which 50% shall be in the form of performance stock awards
and 50% shall be in the form of stock options, to vest upon satisfaction of the
performance targets to be established by the Board of Directors for each such
year (the "Long Term Incentive Performance Targets"). In the event that such
performance stock awards and/or stock options awarded to Mr. Croskrey are not
available to be issued to Mr. Croskrey for any reason, then the Company shall
pay to Mr. Croskrey, upon the vesting of such Long Term Incentive Award, an
amount in cash equal to the notional value that each such performance stock
award and/or stock option would have had on the date of such vesting as though
it had been granted to Mr. Croskrey on the date of grant, as applicable. In the
event that the Company is unable for any reason to issue to Mr. Croskrey stock
options, performance stock awards, other equity based awards or shares of common
stock, whether underlying such awards or otherwise, that the Company has
contractually agreed to in prior agreements with Mr. Croskrey, then the Company
shall be contractually obligated to pay to Mr. Croskrey, upon the vesting of any
such awards, an amount in cash equal to the notional value that each such stock
option, performance stock award or other equity based award would have had on
the date of such vesting as though it had been granted to Mr. Croskrey on the
date such other agreement giving rise to such award was entered into; provided
that in either such case, any such cash payment shall be payable over a period
of three years in equal quarterly installments, starting with the date of the
vesting of such award.
Furthermore, under the A&R Employment Agreement, Mr. Croskrey is eligible to
participate in employee benefit plans offered to the Company's executives, the
Company shall provide Mr. Croskrey with the use of a reasonably acceptable
rental home or apartment at market rates in the Bainbridge, Georgia area, and
will also provide Mr. Croskrey with the use of a corporate vehicle.
Pursuant to the A&R Employment Agreement, upon a termination of Mr. Croskrey's
employment (a) by the Company without cause, (b) by Mr. Croskrey for good
reason, or (c) by the Company or any successor either upon the occurrence of a
change in control (or within one year thereafter), and provided that Mr.
Croskrey delivers to the Company a waiver and release of claims: (i) Mr.
Croskrey will receive an amount in cash equal to 24 months of his Annual Base
Salary; (ii) Mr. Croskrey will receive the Annual Incentive Award as of the date
of termination; (iii) any unvested equity awards that are held by Mr. Croskrey,
other than any unvested performance stock award portion of any Long Term
Incentive Award (the "Excluded Award"), shall automatically vest and become
exercisable (as applicable) as of the date of termination, provided that with
respect to any Excluded Award, in the event of such termination, and provided
Mr. Croskrey remains on the Board of Directors following such termination, the
Excluded Award will remain in effect and continue to vest in accordance with its
terms so long as Mr. Croskrey remains on the Board of Directors, and the Long
Term Incentive Performance Targets established with respect to such Excluded
Award shall be deemed achieved in the event that such termination arises in
connection with a change in control; provided further that with respect to such
termination where Mr. Croskrey does not remain on the Board of Directors, any
such Excluded Award will vest pro rata in accordance with its terms if the
related Long Term Incentive Performance Targets established with respect thereto
as of the date of termination have been achieved, with such Long Term Incentive
Performance Targets being deemed achieved in the case of a termination in
connection with a change in control; and (iv) in the event that Mr. Croskrey is
entitled to and elects to utilize coverage under Section 4980B of the Code
("COBRA Coverage"), Mr. Croskrey shall be reimbursed for COBRA Coverage for he
and his dependents for the lesser of 24 months following termination or the date
that the COBRA Coverage terminates in accordance with its terms.
The A&R Employment Agreement also contains certain restrictive covenants
pursuant to which Mr. Croskrey is subject to non-competition and
non-solicitation obligations during the term of thereof and for a period of 12
months following his termination. The A&R Employment Agreement also contains
customary non-disparagement covenants and confidentiality obligations to which
Mr. Croskrey is subject.
All payments and benefits provided under the A&R Employment Agreement shall be
subject to any compensation recovery or clawback policy as required under
applicable law, rule or regulation or otherwise adopted by the Company from time
to time.
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Simultaneous with the execution of the A&R Employment Agreement, Mr. Croskrey
received:
1.
A performance stock award (the "PSA"), granted under the Company's 2020
Long-Term Incentive Plan (the "Plan") and pursuant to a Performance Stock
Agreement (the "Performance Stock Agreement"), dated July 23, 2021, between the
Company and Mr. Croskrey, consisting of 95,943 performance shares of the
Company's common stock (the "Performance Shares"). The Performance Shares shall
be issued only if (A) to the extent necessary, after the approval by the
shareholders of the Company of an amendment to the Plan to increase the number
of shares available under the Plan in an amount sufficient to permit the vesting
and issuance of the Performance Shares in accordance with the PSA, and (B) they
have vested in accordance with the following vesting criteria: (i) 30% of the
Performance Shares (the "ROE Metric Shares") shall be subject to vesting upon
achievement of the pre-tax return on equity ("ROE") metric as follows: the
threshold for vesting the ROE Metric Shares shall be the Company achieving ROE
of at least 5%, in which event 50% of the ROE Metric Shares shall vest, and upon
the Company achieving ROE of 9%, 100% of the ROE Metric Shares shall vest, with
pro rata vesting of the ROE Metric Shares for any amount of ROE in between such
ranges; (ii) 30% of the Performance Shares (the "EBITDA Metric Shares") shall be
subject to vesting upon achievement of the earnings before interest, taxes,
depreciation and amortization ("EBITDA") metric as follows: the threshold for
vesting the EBITDA Metric Shares shall be the Company achieving EBITDA of at
least $45 million, in which event 50% of the EBITDA Metric Shares shall vest,
and upon the Company achieving $65 million of EBITDA, 100% of the EBITDA Metric
Shares shall vest, with pro rata vesting of the EBITDA Metric Shares for any
amount of EBITDA in between such ranges; and (iii) 40% of the Performance Shares
(the "Neat Capacity Metric Shares") shall be subject to vesting upon achievement
of the nameplate capacity for neat PHA production ("Neat Capacity") metric as
follows: the threshold for vesting the Neat Capacity Metric Shares shall be the
Company achieving a Neat Capacity of at least 75 million pounds, in which event
50% of the Neat Capacity Metric Shares shall vest, and upon the Company
achieving 90 million pounds of Neat Capacity, 100% of the Neat Capacity Shares
shall vest, with pro rata vesting of the Neat Capacity Metric Shares for any
amount of Neat Capacity in between such ranges. For purposes of the PSA, (a) ROE
shall mean the pre-tax return on equity equal to earnings before taxes divided
by the average shareholders' equity, based on the Company's consolidated
financial statements for the period in question, and the vesting of the ROE
Metric Shares shall be measured based on the Company's audited consolidated
financial statements for the fiscal year ended December 31, 2023, (b) EBITDA
shall be determined based on the Company's consolidated financial statements for
the period in question, and the vesting of the EBITDA Metric Shares shall be
. . .
Item 7.01 Regulation FD Disclosure.
On July 29, 2021, Danimer Scientific, Inc. (the "Company") held a conference
call (the "Conference Call") to discuss its recently announced entry into a
definitive agreement to acquire Novomer, Inc., a Delaware corporation. The
transcript of the Conference Call is attached hereto as Exhibit 99.1 and is
incorporated herein by reference. Also attached hereto as Exhibit 99.2 and
incorporated herein by reference is a copy of the press release (the "Press
Release") that the Company issued announcing its entry into such agreement. The
Press Release includes information regarding participation in the Conference
Call. The information contained in this Item 7.01, Exhibits 99.1 and 99.2 and
the information set forth therein are being furnished only and shall not be
deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise
be subject to the liabilities of that section, nor shall they be deemed to be
incorporated by reference in any filing under the Securities Act or the Exchange
Act.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following Exhibits are filed herewith as a part of this
Report:
Exhibit Description
10.1 Amended and Restated Employment Agreement, dated as of July 23,
2021, between Danimer Scientific, Inc. and Stephen E. Croskrey.
10.2 Performance Stock Agreement, dated July 23, 2021, between the
Company and Stephen E. Croskrey.
10.3 Stock Option Agreement, dated July 23, 2021, between the Company
and Stephen E. Croskrey.
99.1 Conference Call Transcript (furnished only).
99.2 Press Release (furnished only).
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