Item 2.01 Completion of Acquisition or Disposition of Assets.
The disclosure set forth in the “Introductory
Note” above is incorporated into this Item 2.01 by reference.
Pursuant to the Aria Merger Agreement, the aggregate
merger consideration payable upon closing of the Aria Merger to Aria Holders was approximately $680.0 million, subject to certain adjustments
set forth in the Aria Merger Agreement for, among other things, Aria’s cash, indebtedness, unpaid transaction expenses and certain
capital expenditures (the “Aria Closing Merger Consideration”). The Aria Closing Merger Consideration consisted of both cash
consideration and consideration in the form of newly issued Opco Class A units and newly issued shares of the Company’s Class B
common stock, par value $0.0001 per share (“Class B Common Stock”). The cash component of the Aria Closing Merger Consideration
was an amount equal to $450.0 million, subject to certain adjustments set forth in the Aria Merger Agreement. The remainder of the Aria
Closing Merger Consideration consisted of 23.0 million Opco Class A units and 23.0 million shares of Class B Common Stock.
Pursuant to the Archaea Merger Agreement, the aggregate
merger consideration payable upon closing of the Archaea Merger to Archaea Holders was approximately $347.0 million, subject to certain
adjustments set forth in the Archaea Merger Agreement for, among other things, Archaea’s cash, indebtedness, unpaid transaction
expenses and certain capital expenditures (the “Archaea Closing Merger Consideration”). The Archaea Closing Merger Consideration
consisted of newly issued Opco Class A units and newly issued shares of Class B Common Stock based on a value of $10.00 per share.
The material terms and conditions of the Business
Combination Agreements are described in greater detail in the section of the Company’s definitive proxy statement filed with the
Securities and Exchange Commission (the “SEC”) on August 12, 2021 (the “Proxy Statement”) entitled “Proposal
No. 1 – The Business Combination Proposal” beginning on page 91, which information is incorporated herein by reference.
FORM 10 INFORMATION
Prior to the Closing, the Company was a shell company
(as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) with no operations, formed
as a vehicle to effect a business combination with one or more operating businesses. After the Closing, the Company became a holding company
whose only assets consist of equity interests in Aria and Archaea.
Cautionary Note Regarding Forward-Looking
Statements
This Current Report on Form 8-K, including the
information incorporated herein by reference, contains “forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. Statements that do not
relate strictly to historical or current facts are forward-looking and usually identified by the use of words such as “anticipate,”
“estimate,” “could,” “would,” “should,” “will,” “may,” “forecast,”
“approximate,” “expect,” “project,” “intend,” “plan,” “believe”
and other similar words. Forward-looking statements may relate to expectations for future financial performance, business strategies
or expectations for the Company’s business. Specifically, forward-looking statements may include statements concerning market conditions
and trends, earnings, performance, strategies, prospects and other aspects of the business of the Company. Forward looking statements
are based on current expectations, estimates, projections, targets, opinions and/or beliefs of the Company, and such statements involve
known and unknown risks, uncertainties and other factors.
The risks and uncertainties that could cause those
actual results to differ materially from those expressed or implied by these forward looking statements include, but are not limited to:
(a) the ability to recognize the anticipated benefits of the Business Combinations and any transactions contemplated thereby, which may
be affected by, among other things, competition, the ability of the Company to grow and manage growth profitably and retain its management
and key employees; (b) the possibility that the Company may be adversely affected by other economic, business and/or competitive factors;
(c) the Company’s ability to develop and operate new projects; (d) the reduction or elimination of government economic incentives
to the renewable energy market; (e) delays in acquisition, financing, construction and development of new projects; (f) the length of
development cycles for new projects, including the design and construction processes for the Company’s projects; (g) the Company’s
ability to identify suitable locations for new projects; (h) the Company’s dependence on landfill operators; (i) existing regulations
and changes to regulations and policies that affect the Company’s operations; (j) decline in public acceptance and support of renewable
energy development and projects; (k) demand for renewable energy not being sustained; (l) impacts of climate change, changing weather
patterns and conditions, and natural disasters; (m) the ability to secure necessary governmental and regulatory approvals; and (n) other
risks and uncertainties indicated in the Proxy Statement, including those under “Risk Factors” therein, and other documents
filed or to be filed with the SEC by the Company.
Accordingly, forward-looking statements should
not be relied upon as representing the Company’s views as of any subsequent date. The Company does not undertake any obligation
to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information,
future events or otherwise, except as may be required under applicable securities laws.
Business and Properties
The information set forth in the section of the
Proxy Statement entitled “Information About The Combined Company” beginning on page 169 is incorporated herein by reference.
The Company’s principal executive office
is located at 500 Technology Drive, Second Floor, Canonsburg, PA 15317. We currently own and operate 23 projects, 10 of which are renewable
natural gas (“RNG”) projects and 13 of which are Renewable Electricity (“LFGTE” or “REG”) projects.
We typically secure our biogas feedstock through long-term fuel supply agreements and property lease agreements with biogas site hosts.
RNG Projects
Site
|
|
Location
|
|
Plant Capacity - MMBtu/day
|
|
|
Pre-Closing Operating Company
|
|
Pre-Closing
Operating
Segment
|
Butler*
|
|
David City, NE
|
|
|
790
|
|
|
Aria
|
|
RNG
|
Boyd County Landfill*
|
|
Ashland, KY
|
|
|
2,600
|
|
|
Archaea
|
|
RNG
|
Canton (JV)
|
|
Canton, MI
|
|
|
2,620
|
|
|
Aria
|
|
RNG
|
KC LFG*
|
|
Johnson County, KS
|
|
|
3,480
|
|
|
Aria
|
|
RNG
|
North Shelby (JV)
|
|
Millington, TN
|
|
|
2,020
|
|
|
Aria
|
|
RNG
|
Oklahoma City*
|
|
Oklahoma City, OK
|
|
|
1,970
|
|
|
Aria
|
|
RNG
|
SE Oklahoma City (JV)
|
|
Oklahoma City, OK
|
|
|
2,000
|
|
|
Aria
|
|
RNG
|
Seneca Gas*
|
|
Waterloo, NY
|
|
|
4,000
|
|
|
Aria
|
|
RNG
|
South Shelby (JV)
|
|
Memphis, TN
|
|
|
4,000
|
|
|
Aria
|
|
RNG
|
SWACO*
|
|
Grove City, OH
|
|
|
4,000
|
|
|
Aria
|
|
RNG
|
Total
|
|
|
|
|
27,480
|
|
|
|
|
|
|
*
|
Project pledged as collateral
in connection with the New Credit Agreement.
|
Renewable Electricity Projects
Site
|
|
Location
|
|
Plant Capacity (MW)
|
|
|
Pre-Closing Operating Company
|
|
Pre-Closing Operating Segment
|
Colonie*
|
|
Cohoes, NY
|
|
|
6.4
|
|
|
Aria
|
|
LFGTE
|
County Line*
|
|
Argos, IN
|
|
|
7.5
|
|
|
Aria
|
|
LFGTE
|
DANC*
|
|
Rodman, NY
|
|
|
6.4
|
|
|
Aria
|
|
LFGTE
|
Erie*
|
|
Erie, CO
|
|
|
3.2
|
|
|
Aria
|
|
LFGTE
|
Fulton*
|
|
Johnstown, NY
|
|
|
3.2
|
|
|
Aria
|
|
LFGTE
|
Hernando County*
|
|
Brooksville, FL
|
|
|
1.6
|
|
|
Aria
|
|
LFGTE
|
Model City*
|
|
Youngstown, NY
|
|
|
5.6
|
|
|
Aria
|
|
LFGTE
|
Modern*
|
|
Youngstown, NY
|
|
|
4.8
|
|
|
Aria
|
|
LFGTE
|
Ontario*
|
|
Stanley, NY
|
|
|
11.2
|
|
|
Aria
|
|
LFGTE
|
PEI Power*
|
|
Archbald, PA
|
|
|
84.0
|
|
|
Archaea
|
|
REG
|
Sarasota*
|
|
Nokomis, FL
|
|
|
6.4
|
|
|
Aria
|
|
LFGTE
|
Seneca Power*
|
|
Waterloo, NY
|
|
|
17.6
|
|
|
Aria
|
|
LFGTE
|
Sunshine Canyon (JV)
|
|
Sylmar, CA
|
|
|
19.4
|
|
|
Aria
|
|
LFGTE
|
Total owned
|
|
|
|
|
177.3
|
|
|
|
|
|
|
*
|
Project pledged as collateral
in connection with the New Credit Agreement.
|
Risk Factors
The information set forth in the section of the
Proxy Statement entitled “Risk Factors” beginning on page 35 is incorporated herein by reference.
Financial Information
Unaudited Condensed Financial
Statements
The unaudited condensed financial statements as
of June 30, 2021 and for the six months ended June 30, 2021 and 2020 of Archaea Energy LLC and Aria set forth in Exhibit 99.1 and Exhibit
99.2 hereto, respectively, have been prepared in accordance with U.S. generally accepted accounting principles and pursuant to SEC regulations.
The condensed financial information reflects, in the opinion of management, all adjustments, consisting of normal recurring adjustments,
considered necessary for a fair statement of Archaea Energy LLC and Aria’s financial position, results of operations and cash flows
for the periods indicated. The results reported for the interim period presented are not necessarily indicative of results that may be
expected for the full year.
These unaudited condensed financial statements
should be read in conjunction with the historical audited financial statements of Archaea Energy LLC and Aria as of December 31, 2020
and 2019 and for the years ended December 31, 2020, 2019 and 2018, and the related notes, included in the Proxy Statement, which are incorporated
by reference herein, the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations
of Archaea,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Aria” included
therein and the section titled “Management’s Discussion and Analysis of Financial Condition” included herein.
Unaudited Pro Forma Condensed
Combined Financial Information
The unaudited pro forma condensed combined financial
information of the Company as of and for the six months ended June 30, 2021 and for the year ended December 31, 2020 is set forth in
Exhibit 99.3 hereto and is incorporated herein by reference.
Management’s Discussion and Analysis of Financial
Condition
The information set forth in the section of the
Proxy Statement entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Aria”
beginning on page 180 is incorporated herein by reference. The information set forth in the section of the Proxy Statement entitled “Management’s
Discussion and Analysis of Financial Condition and Results of Operations of Archaea” beginning on page 205 is incorporated herein
by reference. The Management’s Discussion and Analysis of Financial Condition and Results of Operations of Archaea Energy LLC and
Aria for the six months ended June 30, 2021 and 2020 are included in Exhibit 99.4 and Exhibit 99.5 hereto, respectively, and are incorporated
herein by reference.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information known
to the Company regarding beneficial ownership of shares of the Company’s common stock as of the Closing Date by:
|
●
|
each person known by the Company to
be the beneficial owner of more than 5% of the Company’s outstanding common stock;
|
|
●
|
each of the Company’s named executive officers and directors;
and
|
|
●
|
all executive officers and directors as a group.
|
Beneficial ownership is determined according to
the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or
shared voting or investment power over that security, including options, warrants and certain other derivative securities that are currently
exercisable or will become exercisable within 60 days.
The percentage of beneficial ownership is based
on the 115,128,930 shares of Company’s Class A Common Stock and Class B common stock issued and outstanding as of the Closing Date.
Unless otherwise indicated, the business address
of each of the entities, directors and executives in this table is 500 Technology Drive, Second Floor, Canonsburg, PA 15317. Unless otherwise
indicated and subject to community property laws and similar laws, the Company believes that all parties named in the table below have
sole voting and investment power with respect to all shares of common stock beneficially owned by them.
Name
|
|
Number of Shares
|
|
|
Ownership Percentage
|
|
Archaea Energy LLC
|
|
|
20,010,231
|
|
|
|
17.4
|
|
Aria Renewable Energy Systems LLC(1)
|
|
|
21,700,392
|
|
|
|
18.8
|
|
Shalennial Fund I, L.P.(2)
|
|
|
25,888,541
|
|
|
|
22.5
|
|
Nicholas Stork(3)
|
|
|
4,071,711
|
|
|
|
3.5
|
|
Richard Walton(4)
|
|
|
3,275,429
|
|
|
|
2.8
|
|
Brian McCarthy(5)
|
|
|
530,855
|
|
|
|
*
|
|
J. Kyle Derham(6)
|
|
|
5,569,787
|
|
|
|
4.8
|
|
Kathryn Jackson
|
|
|
30,000
|
|
|
|
*
|
|
Joseph Malchow
|
|
|
30,000
|
|
|
|
*
|
|
Scott Parkes(7)
|
|
|
—
|
|
|
|
—
|
|
Daniel Joseph Rice, IV(6)(8)
|
|
|
31,423,328
|
|
|
|
27.3
|
|
James Torgerson
|
|
|
30,000
|
|
|
|
*
|
|
All directors and executive officers as a group (11 individuals)
|
|
|
37,257,604
|
|
|
|
32.3
|
|
|
(1)
|
Shares of Class B Common Stock are held directly by Aria Renewable Energy Systems LLC (“Aria RES”). Aria RES is indirectly controlled by United States Power Fund III, L.P. (“USP Fund III”) and EIF United States Power Fund IV, L.P. (“EIF USP Fund IV” and, together with USP Fund III, the “Ares Funds”). The general partner of USP Fund III is EIF US Power III, LLC, and the managing member of EIF US Power III, LLC is Ares EIF Management LLC. The general partner of EIF USP Fund IV is EIF US Power IV, LLC, and the managing member of EIF US Power IV, LLC is Ares EIF Management LLC. The sole member of Ares EIF Management LLC is Ares Management LLC. The sole member of Ares Management LLC is Ares Management Holdings L.P. (“Ares Management Holdings”) and the general partner of Ares Management Holdings is Ares Holdco LLC (“Ares Holdco”). The sole member of Ares Holdco is Ares Management Corporation (“Ares Management”). Ares Management GP LLC (“Ares Management GP”) is the sole holder of the Class B common stock, $0.01 par value per share, of Ares Management (the “Ares Class B Common Stock”) and Ares Voting LLC (“Ares Voting”) is the sole holder of the Class C common stock, $0.01 par value per share, of Ares Management (the “Ares Class C Common Stock”). Pursuant to Ares Management’s Certificate of Incorporation, the holders of the Ares Class B Common Stock and the Ares Class C Common Stock, collectively, will generally have the majority of the votes on any matter submitted to the stockholders of Ares Management if certain conditions are met. The sole member of both Ares Management GP and Ares Voting is Ares Partners Holdco LLC (“Ares Partners” and, together with Aria RES, the Ares Funds, EIF US Power III, LLC, EIF US Power IV, LLC, Ares EIF Management LLC, Ares Management LLC, Ares Management Holdings, Ares Holdco, Ares Holdings, Ares Management, Ares Management GP and Ares Voting, the “Ares Entities”). Ares Partners is managed by a board of managers, which is composed of Michael J. Arougheti, Ryan Berry, R. Kipp deVeer, David B. Kaplan, Antony P. Ressler and Bennett Rosenthal (collectively, the “Ares Board Member”). Mr. Ressler generally has veto authority over decisions of the Ares Board Members. Each of the Ares Entities (other than Aria Renewable Energy Systems LLC, solely with respect to the shares held directly by it) and the Ares Board Members and the other partners, affiliates, members and managers thereof expressly disclaims beneficial ownership of the shares of Class B Common Stock. The address of each Ares Entity (other than each Ares Fund) is 2000 Avenue of the Stars, 12th Floor, Los Angeles, California 90067. The address of each of the Ares Funds is Three Charles River Place, Suite 101, 63 Kendrick Street, Needham, MA 02494, c/o Ares Management LLC.
|
|
(2)
|
Consists of (i) 5,878,310 shares of Class B Common Stock held of record by Shalennial Fund I, L.P. and (b) 20,010,231 shares of Class B Common Stock held of record by Archaea Energy LLC. Archaea Energy LLC is majority-owned and controlled by Shalennial Fund I, L.P. One year after the closing of the Business Combinations, as a Series B member of Archaea Energy LLC, Shalennial Fund I, L.P. will be entitled to receive a portion of the 20,010,231 shares of Class B Common Stock to be held of record by Archaea Energy LLC immediately after the closing of the Business Combinations. The number of such shares to be received by Shalennial Fund I, L.P. is based on the 30-day volume weighted average price of the shares of Class A Common Stock on such one-year anniversary. For illustrative purposes, assuming such price is $10 per share, Shalennial Fund I, L.P. would be entitled to receive 9,077,220 shares of Class B Common Stock. A lower price would increase the number of shares that Shalennial Fund I, L.P. and the other Series B members of Archaea Energy LLC would be entitled to receive, with a corresponding decrease in the number of shares that entities affiliated with certain members of Archaea Energy LLC management (as the Series A members of Archaea Energy LLC) would be entitled to receive. A higher price would decrease the number of shares that Shalennial Fund I, L.P. and the other Series B members of Archaea Energy LLC would be entitled to receive, with a corresponding increase in the number of shares that entities affiliated with certain members of Archaea Energy LLC management (as the Series A members of Archaea Energy LLC) would be entitled to receive. For example, for illustrative purposes, assuming such price increases to $20 per share, Shalennial Fund I, L.P. would only be entitled to receive 6,787,170 shares of Class B Common Stock.
|
|
(3)
|
Consists of (i) 1,632,864 shares of Class B Common Stock held of record by Struan & Company, LLC, for which Mr. Stork serves as a manager, (ii) 1,592,565 shares of Class B Common Stock held of record by Rothwell-Gornt, LLC, a limited liability company controlled by Mr. Stork, (iii) 796,282 shares of Class B Common Stock held of record by Stork Partners, LLC, a limited liability company controlled by Mr. Stork, and (iv) 50,000 shares of Class A Common Stock purchased in the PIPE Financing (as defined below). Mr. Stork disclaims beneficial ownership of shares owned of record by Struan & Company LLC, Rothwell-Gornt, LLC and Stork Partners, LLC, except to the extent of his pecuniary interests therein. One year after the closing of the Business Combinations, as a Series B member of Archaea Energy LLC, Struan & Company, LLC, and, as a Series A member of Archaea Energy LLC, Rothwell-Gornt, LLC, will be entitled to receive a portion of the 20,010,231 shares held by Archaea Energy LLC. The number of such shares to be received by Struan & Company, LLC and Rothwell-Gornt, LLC is based on the 30-day volume weighted average price of the shares of Class A Common Stock on such one-year anniversary. For purposes of this table, we have assumed such price is $10 per share, in which case, Struan & Company, LLC would be entitled to receive 2,521,450 shares of Class B Common Stock, Rothwell-Gornt, LLC would be entitled to receive 2,527,000 shares of Class B Common Stock and Stork Partners, LLC would be entitled to receive 1,263,500 shares of Class B Common Stock. A lower price would increase the number of shares that Struan & Company, LLC and the other Series B members of Archaea Energy LLC would be entitled to receive, with a corresponding decrease in the number of shares that entities affiliated with certain members of Archaea Energy LLC management, including Rothwell-Gornt, LLC and Stork Partners, LLC (as the Series A members of Archaea Energy LLC) would be entitled to receive. A higher price would decrease the number of shares that Struan & Company, LLC and the other Series B members of Archaea Energy LLC would be entitled to receive, with a corresponding increase in the number of shares that entities affiliated with certain members of Archaea Energy LLC management (as the Series A members of Archaea Energy LLC) would be entitled to receive. For illustrative purposes, assuming such price increases to $20 per share, Struan & Company, LLC would only be entitled to receive 1,885,325 shares of Class B Common Stock, while Rothwell-Gornt, LLC would be entitled to receive 3,505,654 shares of Class B Common Stock and Stork Partners, LLC would be entitled to receive 1,752,827 shares of Class B Common Stock. Because Struan & Company, LLC, Rothwell-Gornt, LLC and Stork Partners, LLC have no voting or investment power over the shares held by Archaea Energy LLC, these shares are not reflected in the table above.
|
|
(4)
|
Consists of (i) 1,632,864 shares of Class B Common Stock held of record by Struan & Company, LLC, for each of which Mr. Walton serves as a manager, (ii) 1,592,565 shares of Class B Common Stock held of record by Green Eyed Devil LLC, a limited liability company controlled by Mr. Walton, and (iii) 50,000 shares of Class A Common Stock purchased in the PIPE Financing. Mr. Walton disclaims beneficial ownership of shares owned of record by Struan & Company LLC, except to the extent of his pecuniary interests therein. One year after the closing of the Business Combinations, as a Series B member of Archaea Energy LLC, Struan & Company, LLC, and, as a Series A member of Archaea Energy LLC, Green Eyed Devil LLC, will be entitled to receive a portion of the 20,010,231 shares held by Archaea Energy LLC. The number of such shares to be received by Struan & Company, LLC and Green Eyed Devil LLC is based on the 30-day volume weighted average price of the shares of Class A Common Stock on such one-year anniversary. For purposes of this table, we have assumed such price is $10 per share, in which case, Struan & Company, LLC would be entitled to receive 2,521,450 shares of Class B Common Stock and Green Eyed Devil LLC would be entitled to receive 2,527,000 shares of Class B Common Stock. A lower price would increase the number of shares that Struan & Company, LLC and the other Series B members of Archaea Energy LLC would be entitled to receive, with a corresponding decrease in the number of shares that entities affiliated with certain members of Archaea Energy LLC management, including Green Eyed Devil LLC (as the Series A members of Archaea Energy LLC) would be entitled to receive. A higher price would decrease the number of shares that Struan & Company, LLC and the other Series B members of Archaea Energy LLC would be entitled to receive, with a corresponding increase in the number of shares that entities affiliated with certain members of Archaea Energy LLC management (as the Series A members of Archaea Energy LLC) would be entitled to receive. For illustrative purposes, assuming such price increases to $20 per share, Struan & Company, LLC would only be entitled to receive 1,885,325 shares of Class B Common Stock, while Green Eyed Devil LLC would be entitled to receive 3,505,654 shares of Class B Common Stock. Because Struan & Company, LLC and Green Eyed Devil LLC have no voting or investment power over the shares held by Archaea Energy LLC, these shares are not reflected in the table above.
|
|
(5)
|
Consists of 530,855 shares of Class B Common Stock held of record by McCarthy
Biogas Holdings LLC, a limited liability company controlled by Mr. McCarthy.
|
|
(6)
|
Includes 2,500 shares of Class A Common Stock and 5,532,287 shares of
Class B Common Stock held of record by Rice Acquisition Sponsor LLC. Messrs. Rice and Derham
are the managing members of Rice Acquisition Sponsor LLC. Messrs. Rice and Derham disclaim
any beneficial ownership of such shares, except to the extent of any pecuniary interest therein.
|
|
(7)
|
Scott Parkes is a Principal at Ares Management LLC, which indirectly controls
United States Power Fund III, L.P. (“USP Fund III”) and EIF United States Power
Fund IV, L.P. (“EIF USP Fund IV” and, together with USP Fund III, the “Ares
Funds”). Mr. Parkes disclaims any beneficial ownership of the shares owned by the Ares
Funds, except to the extent of any pecuniary interest therein.
|
|
(8)
|
Includes 20,010,231 shares held of record by Archaea Energy LLC and 5,878,310
shares held of record by Shalennial Fund I, L.P. Archaea Energy LLC is majority-owned and
controlled by Shalennial Fund I, L.P. Mr. Rice is the sole managing member of Rice Investment
Group UGP, LLC, which is the general partner of both (i) Shalennial GP I, L.P. (the general
partner of Shalennial Fund I, L.P.) and (ii) Rice Investment Group, L.P. (the management
company for Shalennial Fund I, L.P.). Mr. Rice disclaims any beneficial ownership of the
shares held of record by Archaea Energy LLC or Shalennial Fund I, L.P., except to the extent
of any pecuniary interest therein. Does not include 330,000 shares purchased in the PIPE
Financing by Daniel J. Rice IV 2018 Irrevocable Trust because the trustee, rather than Mr.
Rice, has voting and investment power over such shares.
|
Directors and Executive Officers
Information with respect to the Company’s
directors immediately after the Closing, including biographical information regarding these individuals, is set forth in the Proxy Statement
in the section entitled “Proposal No. 4 — The Director Election Proposal” beginning on page 154, which information
is incorporated herein by reference. At the Company’s special meeting of stockholders on September 9, 2021, Dr. Jackson and Messrs.
Derham and Parkes were elected to serve as Class I directors with a term expiring at the Company’s 2022 annual meeting of stockholders,
Messrs. Malchow and Rice were elected to serve as Class II directors with a term expiring at the Company’s 2023 annual meeting
of stockholders, and Messrs. Stork and Torgerson were elected to serve as Class III directors with a term expiring at the Company’s
2024 annual meeting of stockholders, in each case assuming the consummation of the Business Combinations.
Dr. Jackson and Messrs. Malchow and Torgerson serve
as members of the Audit Committee of the Board (the “Audit Committee”), with Mr. Torgerson serving as its chairperson. Messrs.
Derham, Malchow and Parkes serve as members of the Compensation Committee of the Board (the “Compensation Committee”), with
Mr. Malchow serving as its chairperson. Dr. Jackson and Messrs. Rice and Torgerson serve as members of the Nominating and Corporate Governance
Committee of the Board (the “Nominating and Corporate Governance Committee”), with Dr. Jackson serving as its chairperson.
Information with respect to the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee is set
forth in the Proxy Statement in the section entitled “Management After the Business Combinations – Committees of the Board
of Directors” beginning on page 227, which information is incorporated herein by reference.
Information regarding the Company’s executive officers and significant
employees upon consummation of the Business Combinations is set forth below. Each of the Company’s executive officers were appointed
to their respective positions listed below effective upon the consummation of the Business Combinations.
Name
|
|
Age
|
|
Position
|
Nicholas Stork*
|
|
37
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|
Chief Executive Officer and Director
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Richard Walton*
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38
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President
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Eric Javidi*
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42
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Chief Financial Officer
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Lindsay Ellis*
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34
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General Counsel and Secretary
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Chad Bellah*
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44
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Chief Accounting Officer
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Brian McCarthy
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37
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Chief Investment Officer
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*
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Denotes an executive officer.
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Nicholas Stork — Chief
Executive Officer and director. Mr. Stork served as co-founder, Chief Executive Officer and a director of Archaea Energy LLC from
its founding in November 2018. Since November 2016, Mr. Stork has also served as Chief Financial Officer and a director of Noble
Environmental, Inc. (“Noble”), an industry-leading environmental services company focused on providing innovative solutions
to solid waste management companies, and Managing Partner of Noble House Capital, where he is responsible for investing and business development
in the Appalachian Basin. From 2013 to 2016, Mr. Stork served as a Principal with Baleen Capital Management, a global value investment
firm. Mr. Stork is a graduate of Dartmouth College.
Richard Walton — President.
Mr. Walton has served as co-founder and President of Archaea Energy LLC from its founding in November 2018. Since November 2016,
Mr. Walton has also served as Chief Executive Officer and a director of Noble. From September 2013 until June 2017, Mr. Walton
was Chief Executive Officer of Redstone International, a services company that specializes in deep foundations, earth retention, shoring
systems and grouting solutions. Mr. Walton also held various positions with private equity and investment banking firms. Mr. Walton
is a graduate of Dartmouth College with a B.A. in Economics.
Eric Javidi — Chief
Financial Officer. Mr. Javidi has served as Chief Financial Officer of Archaea Energy LLC since May 2021. Prior to joining Archaea
Energy LLC, Mr. Javidi was Chief Financial Officer of CrossAmerica Partners LP, a leading wholesale distributor of motor fuels and
owner and lessor of real estate used in the retail distribution of motor fuels, from November 2020 through April 2021. Prior to joining
CrossAmerica, Mr. Javidi served as President and Chief Executive Officer of Southcross Holdings GP, LLC, the general partner of Southcross
Holdings, LP, an energy infrastructure company that provides natural gas gathering, treating, processing and transportation services.
Southcross Holdings owned the general partner of Southcross Energy Partners, L.P., a publicly traded Delaware limited partnership. Mr. Javidi
was at Southcross from June 2019 to July 2020, where he led the successful strategic dissolution of the company. Prior to Southcross,
from April 2015 to March 2019, Mr. Javidi was a Managing Director at Kayne Anderson Capital Advisors, LP, an alternative investment
management firm focused on real estate, credit, infrastructure/energy, renewables and growth equity. Mr. Javidi also worked as an
investment banker at UBS, Barclays and Lehman Brothers, focused on M&A and capital markets activity in the energy infrastructure space.
Mr. Javidi holds a bachelor’s degree with majors in Economics and Psychology from the University of California, Davis and has
an M.B.A. from Duke University — The Fuqua School of Business with emphasis in Finance & Accounting as well as Financial
Analysis.
Lindsay Ellis — General
Counsel and Secretary. Mrs. Ellis has served as the General Counsel and Secretary of Archaea Energy LLC since July 2021. Prior to joining
Archaea Energy LLC, Mrs. Ellis was the Associate General Counsel at EagleClaw Midstream Ventures, LLC, a large privately-owned midstream
operator, from February 2019 until July 2021. From February 2018 through February 2019, Mrs. Ellis practiced corporate law at Gibson,
Dunn & Crutcher LLP representing public and private companies in capital markets offerings and mergers and acquisitions. Prior to
joining Gibson Dunn, Mrs. Ellis served as the Associate General Counsel at Rice Energy Inc. and Rice Midstream Partners LP from February
2015 until Rice Energy Inc.’s merger with EQT Corporation in November 2017. From September 2012 through February 2015, Mrs. Ellis
practiced corporate law at Vinson & Elkins LLP serving public and private companies, primarily in the oil and natural gas industry.
Mrs. Ellis received a Bachelor of Arts in Political Science and Communication Studies from Southwestern University and a Doctor of Jurisprudence
from the University of Houston Law Center.
Chad Bellah — Chief Accounting
Officer. Mr. Bellah has served as Chief Accounting Officer of Archaea Energy LLC since June 2021. From July 2020 to June 2021, Mr. Bellah
served as a freelance accounting consultant, including Vice President, Controller of Penn America Energy Holdings LLC, a liquified natural
gas energy project development company. From November 2007 to May 2020, Mr. Bellah served in various accounting positions with Anadarko
Petroleum Corporation, including Director of Accounting Policy from November 2018 to May 2020, International Accounting Finance Manager
from July 2016 to November 2018, Finance Director of Anadarko Algeria Company based in London from April 2013 to July 2016. Prior to joining
Anadarko, Mr. Bellah worked as an Audit Manager in Houston for Ernst & Young LLP, serving large clients in the airlines and oil
and gas industry. Mr. Bellah is a licensed Certified Public Accountant in the State of Texas and a graduate of Texas A&M University
with a B.B.A. in Accounting and an M.S. in Finance.
Brian McCarthy — Chief
Investment Officer. Mr. McCarthy has served as Chief Investment Officer of Archaea Energy LLC since May 2021. From January 2019
to May 2021, Mr. McCarthy served as Archaea Energy LLC’s Chief Financial Officer. Mr. McCarthy is also a Partner
at Saltonstall & Co., a Boston-based financial services company and minority owner of Archaea Energy LLC, where he has been
employed since 2013. Previously, Mr. McCarthy was an analyst with Stevens Capital Management, Schneider Capital Management and Goldman
Sachs. Mr. McCarthy is a graduate of the University of Pennsylvania where he studied Physics and Economics.
Compensation Committee Interlocks and Insider Participation
Except as provided in the following sentence,
none of the Company’s executive officers currently serve, or in the past year have served, as members of the board of directors
or compensation committee of any entity that has one or more executive officers serving on the Company’s board of directors. Both
Messrs. Stork and Walton, two of our executive officers, are controlling stockholders and officers (and Mr. Stork is also a director)
of Noble Environmental, Inc.
Executive Compensation
The compensation of the Company’s named
executive officers before the consummation of the Business Combinations is described in the Proxy Statement in the section entitled “Executive
Compensation” beginning on page 231, which information is incorporated herein by reference.
On September 9, 2021, the stockholders of the
Company approved the Archaea Energy Inc. 2021 Omnibus Incentive Plan (the “2021 Plan”), which become effective upon the Closing.
The material terms of the 2021 Plan are described in the Proxy Statement in the section entitled “Proposal No. 5 – The Incentive
Plan Proposal” beginning on page 157, which information is incorporated herein by reference.
In connection with the Business Combinations, the
Board and its Compensation Committee approved a one-time grant of restricted stock units (“RSUs”) under the 2021 Plan to certain
executive officers and in the amounts below, which will be granted following the filing of a registration statement on Form S-8 with respect
to the 2021 Plan:
Executive Officer
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Number of RSUs
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Chad Bellah
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33,333
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Eric Javidi
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62,750
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Lindsay Ellis
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33,333
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Each of these RSU grants will vest in full on the
third anniversary of the Closing Date, subject to the executive’s continuous service through that date.
In addition, the Company approved a grant of 140,000
fully vested shares of Class A Common Stock to Eric Javidi, which will be granted following the filing of a registration statement on
Form S-8 with respect to the 2021 Plan.
The foregoing summary description of the RSU grants and Mr. Javidi’s
fully vested share grant does not purport to be complete and is qualified in its entirety by the forms of award agreements for such grants
attached hereto as Exhibit 10.15 and Exhibit 10.16 to this Current Report on Form 8-K, which are incorporated herein by reference.
Director Compensation
In connection with the Business Combinations, the Company adopted a
new non-employee director compensation policy, which is designed to provide competitive compensation necessary to attract and retain high
quality non-employee directors and to encourage ownership of Company stock to further align their interests with those of its
stockholders. The new policy will provide the following compensation for non-employee directors going forward:
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●
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an annual cash retainer of $75,000 for each non-employee director, paid quarterly in arrears and prorated for the non-employee director’s period of service on the Board; and
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●
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commencing
January 1, 2022, an annual equity award with grant date fair value of $125,000 for each non-employee director,
granted in the form of restricted stock units that will vest on the one-year anniversary of the grant date, subject to the
director’s continuous service through the vesting date.
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In
addition, the Board approved a one-time grant of RSUs under the 2021 Plan to each of the Company’s non-employee directors with a
grant date fair value of $36,986.30, representing a prorated portion of the annual equity grant for the period during 2021 calendar year
beginning on the Closing Date, to be granted following the filing of a registration statement on Form S-8 with respect to the 2021 Plan.
Each such grant of RSUs will vest in full on January 1, 2022, subject to the director’s continuous service through that date.
The foregoing summary description of the RSU grants to the non-employee
directors does not purport to be complete and is qualified in its entirety by the form of award agreement for such grants attached hereto
as Exhibit 10.15 to this Current Report on Form 8-K, which is incorporated by reference herein.
Under
the 2021 Plan, in any single fiscal year, a non-employee director generally may not be granted awards for such individual’s
service on the board of directors of the Company having a value that, together with cash fees paid or other compensation provided to
such individual for service on the Board, exceeds $500,000.
Certain Relationships and Related Party Transactions
The information set forth in the section of the
Proxy Statement entitled “Certain Relationships and Related Party Transactions” beginning on page 257 and the information
set forth under the heading “Stockholders Agreement” in Item 1.01 of this Current Report on Form 8-K is incorporated herein
by reference.
Director Independence
NYSE listing standards require that a majority
of the members of the Board be comprised of independent directors. An “independent director” is defined generally as a person
other than an officer or employee of a company or its subsidiaries or any other individual having a relationship which, in the opinion
of the board of directors of such company, would interfere with the director’s exercise of independent judgment in carrying out
the responsibilities of a director.
The Company currently has six “independent
directors” as defined in the NYSE listing standards and applicable SEC rules and as determined by the Board using its business
judgment: Dr. Jackson and Messrs. Derham, Malchow, Parkes, Rice and Torgerson.
Legal Proceedings
Information about legal proceedings is set forth
in the section of the Proxy Statement entitled “Information About the Combined Company – Legal Proceedings” beginning
on page 179, which information is incorporated herein by reference.
Market Price of and Dividends on the Registrant’s
Common Equity and Related Stockholder Matters
Following the Closing, on September 16, 2021, the
Class A Common Stock and publicly traded warrants of the Company were listed on the NYSE under the symbols “LFG” and “LFG
WS”, respectively. The public units of the Company automatically separated into the component securities upon consummation of the
Business Combinations and, as a result, no longer trade as a separate security.
Recent Sales of Unregistered Securities
On April 7, 2021, in connection with its
entry into the Business Combination Agreements, the Company entered into subscription agreements (each, an “Initial
Subscription Agreement”) with certain investors (the “Initial PIPE Investors”) pursuant to which, among other
things, the Initial PIPE Investors agreed to subscribe for and purchase, and the Company agreed to issue and sell to the Initial
PIPE Investors, an aggregate of 30.0 million shares of the Company’s Class A Common Stock for an aggregate purchase price of
$300.0 million ($10.00 per share), on the terms and subject to the conditions set forth therein (the “Initial PIPE
Financing”). Each Initial Subscription Agreement contains customary representations and warranties of the Company, on the one
hand, and the Initial PIPE Investor, on the other hand, and customary conditions to closing, including the substantially concurrent
consummation of the Business Combinations. The form of the Initial Subscription Agreement is attached hereto as Exhibit 10.10, and the foregoing description of the Initial Subscription
Agreements is not complete and is subject to, and qualified in its entirety by, reference to such form.
On September 13, 2021, due to the expectation that
one of the Initial PIPE Investors would not be able to fulfill its $25.0 million commitment for 2.5 million shares ($10.00 per share)
in the Initial PIPE Financing, the Company entered into additional subscription agreements (each, a “Follow-On Subscription Agreement”)
with certain investors (the “Follow-On PIPE Investors” and, together with the Initial PIPE Investors, the “PIPE Investors”)
pursuant to which, among other things, the Follow-On PIPE Investors agreed to subscribe for and purchase from the Company, and the Company
agreed to issue and sell to the Follow-On PIPE Investors, an aggregate of approximately 1.7 million newly issued shares of the Company’s
Class A Common Stock for an aggregate purchase price of $25.0 million ($15.00 per share), on the terms and subject to the conditions set
forth therein (the “Follow-On PIPE Financing” and, together with the Initial PIPE Financing, the “PIPE Financing”).
Each Follow-On Subscription Agreement is substantially identical to the form of Initial Subscription Agreement.
Additionally, on April 7, 2021, RAC, RAC OpCo, Sponsor and Atlas Point
Energy Infrastructure Fund, LLC, a Delaware limited liability company (“Atlas”), entered into an Amendment to Forward Purchase
Agreement (the “FPA Amendment”) pursuant to which the Forward Purchase Agreement, dated as of September 30, 2020 (the “Original
FPA Agreement” and, together with the FPA Amendment, the “FPA”), by and among such parties was amended to provide that
Atlas shall purchase a total of $20.0 million of Forward Purchase Securities (as defined in the Original FPA Agreement) and the Forward
Purchase Warrants (as defined in the Original FPA Agreement) will consist of one-eighth of one redeemable warrant (where each whole redeemable
warrant is exercisable to purchase one share of Class A Common Stock at an exercise price of $11.50 per share). Atlas satisfied its obligation
to purchase the Forward Purchase Securities by participating in the PIPE Financing, and upon consummation of the Business Combinations,
Atlas received 250,000 warrants (each exercisable for one share of Class A Common Stock at a price of $11.50).
In addition, the description of the Aria Closing
Merger Consideration and the Archaea Closing Merger Consideration under Item 2.01 of this Current Report on Form 8-K is incorporated
herein by reference, and information regarding unregistered sales of the Company’s securities is set forth in Part II, Item 5 of
the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2021 and the amendment thereto filed with the SEC on May
13, 2021 and Item 3.02 of the Company’s Current Report on Form 8-K filed with the SEC on April 8, 2021.
The issuances of the shares of the Class B Common Stock issued as Aria
Closing Merger Consideration and Archaea Closing Merger Consideration, the shares of Class A Common Stock issued in the PIPE Financing
and the warrants to Atlas pursuant to the FPA were not registered under the Securities Act in reliance on the exemption from registration
provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder as a transaction by an issuer not involving
a public offering without any form of general solicitation or general advertising.
Description of the Company’s Securities
Information regarding the Class A Common Stock
and the Company’s warrants is included in the section of the Proxy Statement entitled “Description of Securities” beginning
on page 234, which information is incorporated herein by reference.
The Company has authorized 1,100,000,000
shares of capital stock, consisting of (i) 1,090,000,000 shares of Common Stock, consisting of 900,000,000 shares of Class A Common
Stock, par value $0.0001 per share, and 190,000,000 shares of Class B Common Stock, par value $0.0001 per share, and (ii) 10,000,000
shares of preferred stock, par value $0.0001 per share. As of the Closing Date, upon consummation of the Business Combinations and
the PIPE Financing, there were approximately 52,847,195 shares of Class A Common Stock outstanding held of record by approximately
99 holders, approximately 62,281,735 shares of Class B Common Stock outstanding held of record by approximately 20 holders, no
shares of preferred stock outstanding, and warrants to purchase approximately 18,883,500 shares of Class A Common Stock outstanding
held of record by approximately three holders. Such holder numbers do not include The Depository Trust Company participants or
beneficial owners holding shares through nominee names.
Indemnification of Directors and Officers
Further information about the indemnification of
the Company’s directors and officers is set forth in the section of the Proxy Statement entitled “RAC Current Management and
Board of Directors – Limitation on Liability and Indemnification of Officers and Directors” on page 224, which information
is incorporated herein by reference.
Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
The information set forth in Item 4.01 of this
Current Report on Form 8-K is incorporated herein by reference.