Current Report Filing (8-k)
08 July 2022 - 6:31AM
Edgar (US Regulatory)
0001823766
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0001823766
2022-06-30
2022-06-30
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iso4217:USD
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UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the securities exchange act of 1934
Date
of Report (Date of earliest event reported): June 30, 2022
ARCHAEA
ENERGY INC.
(Exact name of registrant as specified in its charter)
Delaware |
|
001-39644 |
|
85-2867266 |
(State or other jurisdiction
of incorporation) |
|
(Commission File Number) |
|
(I.R.S. Employer
Identification No.) |
4444 Westheimer
Road, Suite G450 |
|
|
Houston,
Texas |
|
77027 |
(Address of principal executive
offices) |
|
(Zip Code) |
(346)
708-8272
(Registrant’s telephone number, including area code)
Not
applicable
(Former name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ |
Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Class A common stock, par
value $0.0001 per share |
|
LFG |
|
The New York Stock Exchange |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01. Entry into a Material Definitive Agreement.
On
June 30, 2022, Archaea Energy Operating LLC (the “Borrower”), a wholly owned indirect subsidiary of Archaea Energy Inc. (the
“Company”), entered into the Second Amendment to Revolving Credit and Term Loan Agreement (the “Second Amendment”),
with the financial institutions from time to time signatory thereto and Comerica Bank, as administrative agent, which amends the Revolving
Credit and Term Loan Agreement, dated as of September 15, 2021 (the “Original Credit Agreement”), by and among the Borrower,
Comerica Bank, as administrative agent, and the financial institutions from time to time party thereto as lenders. The Original Credit
Agreement provided for a senior secured term loan credit facility with an initial commitment of $220 million and a senior secured revolving
credit facility with an initial commitment of $250 million (collectively, the “Original Facilities”). The Second Amendment
increases aggregate total commitment amounts under the Original Facilities by $630 million to $1.1 billion and provides for a $400 million
senior secured term loan credit facility (the “Term Loan Facility”) and a $700 million senior secured revolving credit facility
(the “Revolving Credit Facility”).
In addition, pursuant to the
Second Amendment, the Original Credit Agreement was amended to, among other things, (i) permit the acquisition of all of the equity interests
of NextGen Power Holdings LLC with debt proceeds, (ii) permit an unlimited amount of investments in pledged unlevered controlled joint
ventures so long as the Credit Parties (as defined in the Second Amendment) are in pro forma compliance after such investment, (iii) increase
the investment baskets for other joint venture agreements and excluded subsidiaries, (iv) provide unlimited cash netting on the Credit
Parties’ total leverage ratio, subject to the terms and conditions set forth therein, and (v) provide grower baskets on the investments,
indebtedness and liens covenants as a percentage of Adjusted Consolidated Net Tangible Assets (as defined in the Second Amendment).
Previously,
on June 1, 2022, Comerica Bank, as administrative agent, entered into the First Amendment to Revolving Credit and Term Loan Agreement
(the “First Amendment” and, together with the Second Amendment, the “Amendments”) to amend the Original Credit
Agreement to make certain benchmark replacement conforming changes to the benchmark rate after the occurrence of an early opt-in event
to replace the LIBOR rate with Adjusted Term SOFR (as defined in the First Amendment).
The Borrower has the ability, subject to certain conditions, to draw upon the Revolving Credit Facility on a revolving basis
up to the amount of the Revolving Credit Facility then in effect. Amounts available under the Revolving Credit Facility are reduced by
any amounts outstanding under letters of credit. As of the date of the Second Amendment, the Borrower has $50 million of borrowings and
approximately $23.8 million in letters of credit outstanding under the Revolving Credit Facility and an
outstanding principal balance of $400 million outstanding under the Term Loan Facility.
The
foregoing description of the Amendments is not complete and is qualified in its entirety by reference to the text of the Amendments,
copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8-K and are incorporated herein by
reference.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The
information set forth in Item 1.01 is incorporated by reference into this Item 2.03.
Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
In
May 2022, the Company’s board of directors adopted the Archaea Energy Inc. Executive Severance Plan (the “Executive Severance
Plan”). To participate in the Executive Severance Plan, the Company’s executive officers and other eligible employees must
enter into participation agreements pursuant to the Executive Severance Plan (each, a “Participation Agreement”). The Company’s
Chief Accounting Officer and principal financial officer, who has been designated as a Level 1 Executive under the Executive Severance
Plan, entered into a Participation Agreement on July 6, 2022. Capitalized terms used but not otherwise defined in this Item 5.02 shall
have the meanings ascribed to them in the Executive Severance Plan.
Upon
a Qualifying Termination outside of a period commencing on the date on which a Change in Control is consummated and ending on the date
that is 24 months thereafter (a “Change in Control Protection Period”) (or, in the case of Level 2 Executives, at any time,
whether during or outside of a Change in Control Protection Period, except as specified below), participants in the Executive Severance
Plan will be eligible to receive the following benefits:
| ● | a
cash payment equal to the sum of the participant’s (i) Base Salary and (ii) Pro-Rata
Target Bonus, payable in substantially equal installments on the Company’s regular
payroll schedule for the 12-month period commencing on the participant’s employment
termination date, unless the Committee, in its sole discretion, elects to pay such amount
in a lump sum cash payment; |
| ● | a
lump sum cash payment equal to the product of (i) 12 and (ii) the monthly amount of the Company’s
contribution to the premiums for such participant’s group health plan coverage (including
coverage for such participant’s spouse and eligible dependents), determined under the
Company’s group health plans as in effect immediately prior to the date of the termination
of such participant’s employment; and |
| ● | except
in the case of a Qualifying Termination during a Change in Control Protection Period for
Level 2 Executives, pro-rated vesting of the participant’s outstanding and unvested
equity incentive awards, with performance-based vesting conditions deemed to be achieved
at target levels. |
Upon
a Qualifying Termination during a Change in Control Protection Period, participants in the Executive Severance Plan who are Level 1 Executives
(except as otherwise specified below) will be eligible to receive the following benefits:
| ● | a
lump sum cash payment equal to the sum of (i) the product of (a) 2.0 and (b) the sum of the
participant’s (1) Base Salary and (2) Target Annual Bonus and (ii) the participant’s
Pro-Rata Target Bonus; |
| ● | a
lump sum cash payment equal to the product of (i) 24 and (ii) the monthly amount of the Company’s
contribution to the premiums for such participant’s group health plan coverage (including
coverage for such participant’s spouse and eligible dependents), determined under the
Company’s group health plans as in effect immediately prior to the date of the termination
of such participant’s employment; and |
| ● | vesting
in full of the participant’s (including, for this purpose, participants who are Level
2 Executives) outstanding and unvested equity incentive awards that are assumed by the acquiring
entity in the Change in Control to which the Change in Control Protection Period is applicable,
with performance-based vesting conditions deemed to be achieved at the greater of target
and actual performance levels. Further, such participant’s outstanding and unvested
equity incentive awards that are not assumed by the acquiring entity in a Change in Control
will immediately vest as of the Change in Control with performance-based vesting conditions
deemed to be achieved at the greater of target and actual performance levels. |
In
order to receive any of the foregoing severance benefits under the Executive Severance Plan, a participant must timely execute (and not
revoke) a release of claims in favor of the Company and its affiliates. Further, the Executive Severance Plan requires continued compliance
with certain confidentiality, assignment of invention, cooperation, non-competition, non-solicitation and non-disparagement covenants.
If the severance benefits under the Executive Severance Plan would trigger an excise tax for a participant under Section 4999 of
the Internal Revenue Code of 1986, as amended, the Executive Severance Plan provides that the participant’s severance benefits
will be reduced to a level at which the excise tax is not triggered, unless the participant would receive a greater amount without such
reduction after taking into account the excise tax and other applicable taxes.
The
foregoing description of the Executive Severance Plan and the Participation Agreements thereunder is not complete and is qualified in
its entirety by reference to the full text of the Executive Severance Plan and the form of Participation Agreement, which are attached
hereto as Exhibits 10.3 and 10.4, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit
No. |
|
Description |
10.1* |
|
First Amendment to Revolving Credit and Term Loan Agreement, dated as of June 1, 2022, by Comerica Bank, as administrative agent. |
10.2* |
|
Second Amendment to Revolving Credit and Term Loan Agreement, dated as of June 30, 2022, by and among the financial institutions from time to time signatory thereto, Comerica Bank, as administrative agent, and Archaea Energy Operating LLC. |
10.3# |
|
Archaea Energy Inc. Executive Severance Plan. |
10.4# |
|
Form of Participation Agreement – Archaea Energy Inc. Executive Severance Plan. |
104 |
|
Cover Page Interactive
Data File (embedded within the Inline XBRL document). |
* | The
Company agrees to furnish supplementally to the Securities and Exchange Commission (the “SEC”) a copy of any omitted
schedule or exhibit upon the request of the SEC in accordance with Item 601(a)(5) of Regulation S-K. |
# | Management
contract or compensatory plan or arrangement. |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date:
July 7, 2022
|
ARCHAEA ENERGY INC. |
|
|
|
|
By: |
/s/ Edward
P. Taibi |
|
Name: |
Edward P. Taibi |
|
Title: |
General Counsel and Executive Vice President of Strategic
Initiatives and Government Affairs |
4
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