Item 1.01 Entry into a Material Definitive Agreement.
On October 29, 2021, the Company, Atotech and Atotech Manufacturing, Inc., a
Delaware corporation that is an indirect wholly owned subsidiary of the Company
("Bidco"), entered into a letter agreement (the "Letter Agreement"), under which
Bidco, acting as nominee for the Company, shall acquire the entire issued and to
be issued share capital of Atotech pursuant to the terms of the Scheme.
The Letter Agreement also amends the provisions to Schedule 1 to the
Implementation Agreement relating to the settlement of the outstanding
time-based restricted stock units of Atotech ("Atotech RSUs") and
performance-based restricted stock units of Atotech ("Atotech PSUs"). As a
result of the amendment, if Closing occurs on or before December 31, 2021,
Atotech RSUs that are scheduled to vest on or before January 1, 2022 shall be
accelerated and cash settled on or shortly following Closing. Additionally, the
amendment provides that if Closing occurs on or before December 31, 2021,
Atotech shall determine the number of Atotech PSUs that would have been earned
at the end of the applicable performance period, based on the greater of (x) the
target number of Atotech PSUs subject to the award or (y) the number of Atotech
PSUs that would have been earned based on actual performance through the earlier
of December 31, 2021 or the Closing date with respect to any EBITDA-based
performance goals for calendar year 2021, and assuming the target level
performance for the other performance calendar years and performance goals (the
"Specified Number"). The Atotech PSU award would then be accelerated and cash
settled on or shortly following Closing as to one-third of the Specified Number.
Any Atotech RSUs or Atotech PSUs that are not cash settled in this way shall be
dealt with in the context of Closing in the manner previously described in the
Current Report on Form 8-K filed on July 2, 2021 by the Company.
The foregoing description of the material terms of the Letter Agreement is
qualified in its entirety by reference to the full text of the Letter Agreement,
which is attached hereto as Exhibit 10.1 and is incorporated herein by
reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Management Change
On October 25, 2021, the Board of Directors (the "Board") of the Company
appointed James A. Schreiner, who currently serves as the Company's Senior Vice
President and Chief Operating Officer, to the position of Senior Vice President
and Chief Operating Officer, Atotech Division, subject to and effective upon the
Closing of the Acquisition.
On October 25, 2021, the Company and Mr. Schreiner entered into an amendment
(the "Amendment") to Mr. Schreiner's employment agreement with the Company dated
as of September 16, 2019 (the "Existing Employment Agreement"). Pursuant to the
Amendment: (i) Mr. Schreiner's base salary will be increased to $465,000
effective as of the Closing; (ii) Mr. Schreiner will be eligible for an
expatriate service bonus equal to $500,000, which will be payable in a single
lump sum within thirty days following Mr. Schreiner's return to the United
States following the completion of a two-year term of expatriate service (or
such longer term of service as may be mutually agreed by the Company and
Mr. Schreiner) as the Senior Vice President and Chief Operating Officer, Atotech
Division (the "Expatriate Service Term"); and (iii) Mr. Schreiner will be
eligible for Enhanced Severance Compensation (as such term is defined in the
Existing Employment Agreement) in the event that he resigns his employment if
the Company fails to return him to the position of Senior Vice President and
Chief Operating Officer or a position of at least substantially similar duties
and authority within six months after his return to the United States following
the completion of the Expatriate Service Term.
The foregoing description of the material terms of the Amendment is qualified in
its entirety by reference to the full text of the Amendment, which is attached
hereto as Exhibit 10.2 and is incorporated herein by reference.
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Appointment of Director
On October 25, 2021, the Board elected Geoff Wild as a Class III Director,
effective immediately following the Closing of the Acquisition, to fill the
existing vacancy on the Board, and to serve until the 2023 Annual Meeting of
Shareholders. Mr. Wild is currently the President and Chief Executive Officer
and a director of Atotech.
Upon the effectiveness of his appointment, Mr. Wild will be entitled to receive
compensation for his Board and committee service in accordance with the
Company's standard compensation arrangements for non-employee directors, which
are described under the caption "Director Compensation" in the Company's
definitive proxy statement on Schedule 14A filed with the Securities and
Exchange Commission on March 26, 2021, as adjusted by the Board from time to
time.
In connection with the Acquisition, Mr. Wild will be entitled to severance
payments pursuant to the terms of his employment agreement with Alpha US Bidco,
Inc., a subsidiary of Atotech ("Alpha US") (as amended, the "Atotech Employment
Agreement"). The Atotech Employment Agreement provides that in the event
Mr. Wild's employment is terminated by Alpha US without Cause or by Mr. Wild for
Good Reason (as such terms are defined in the Atotech Employment Agreement) on
the date of or within 12 months following a Change of Control (as defined in the
Atotech Employment Agreement), Mr. Wild will be entitled to receive a lump sum
payment equal to (i) 150% of Mr. Wild's total remuneration (which includes
Mr. Wild's then-current base salary, target annual bonus, and company-funded
pension contributions), plus (ii) a pro-rated portion of Mr. Wild's annual bonus
that he would have been entitled to if he had completed the then-current full
fiscal year, based on actual performance results, as well as continued
company-paid healthcare coverage for up to 18 months. The severance payment is
contingent upon Mr. Wild's timely execution and nonrevocation of a release of
claims in favor of Atotech and its affiliates. The Atotech Employment Agreement
also provides that if Mr. Wild's employment is terminated by Alpha US without
Cause or by Mr. Wild for Good Reason (as such terms are defined in the Atotech
Employment Agreement), the notice period for termination would be at least 6
months, and Alpha US may elect to pay Mr. Wild his base salary for such period
in lieu of such notice. Additionally, if Mr. Wild's employment is terminated by
Alpha US without Cause or by Mr. Wild for Good Reason (as such terms are defined
in the Atotech Employment Agreement) in either case on the date of or within 12
months following a Change of Control (as defined in the Atotech Employment
Agreement), then upon the 18-month anniversary of the date of termination,
Mr. Wild will be entitled to receive 150% of the greater of (i) 50% of the total
remuneration most recently received by Mr. Wild under the Atotech Employment
Agreement and (ii) 100% of Mr. Wild's most recently received annual base salary.
The Acquisition will constitute a Change of Control for the purposes of the
Atotech Employment Agreement. The approximate dollar value of the foregoing is
not determinable at this time. An amendment to this 8-K will be filed when the
dollar value of the foregoing payments is determinable.
There were no arrangements or understandings between Mr. Wild and any other
persons pursuant to which Mr. Wild was appointed as a director.
Item 9.01. Exhibits.
(d) Exhibits
Exhibit No. Exhibit
10.1 Letter Agreement, dated October 29, 2021, by and among MKS
Instruments, Inc., Atotech Limited and Atotech Manufacturing,
Inc.
10.2 Amendment to Employment Agreement, dated October 25, 2021, by
and between MKS Instruments, Inc. and James A. Schreiner
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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