Purecycle Technologies, Inc. current report, 10 May 2022

Business Context and Reporting Period

PureCycle Technologies, Inc. filed this Form 8-K on May 12, 2022, reporting events occurring on May 10–11, 2022. The filing amends prior disclosures regarding Dustin Olson’s appointment as Chief Operating Officer and Chief Manufacturing Officer and the election of directors Allen W. Jacoby and Stephen F. Bouck. It also reports results of the May 11, 2022 annual meeting of stockholders.

Key Financial and Corporate Metrics

  • Mr. Olson’s base salary increased from $420,000 to $450,000, retroactive to March 1, 2022.
  • His short-term incentive opportunity increased from 70% to 85% of base salary, representing a total potential target award of $382,500. Payouts may range from 0% to 200% of target and depend 70% on company performance and 30% on individual performance.
  • Mr. Olson was scheduled to receive a $350,000 long-term incentive award on May 20, 2022, split equally between performance-based restricted stock units and service-based restricted stock units.
  • The service-based RSUs vest in substantially equal installments over four years, subject to continued employment.
  • The performance-based RSUs are tied equally to cumulative EBITDA through December 31, 2024, and cumulative production at operational manufacturing facilities through December 31, 2024. Settlement may range from 50% to 200% of target, subject to performance and continued employment through December 31, 2024.
  • As of the March 15, 2022 record date, the company had 127,519,408 shares outstanding; 110,954,733 shares were present or represented by proxy at the annual meeting.

Material Changes and Governance Actions

  • On May 11, 2022, the Board appointed Allen W. Jacoby to the Nominating and Corporate Governance Committee.
  • Stephen F. Bouck was appointed chair of the Compensation Committee.
  • Stockholders elected Tanya Burnell, Timothy Glockner, and Dr. John Scott as Class I directors.
  • Stockholders ratified Grant Thornton LLP as the independent registered public accounting firm for the year ending December 31, 2022.

Annual Meeting Voting Results

ProposalForAgainst/WithheldOther
Tanya Burnell election98,128,7925,695,023 withheld7,130,918 broker non-votes
Timothy Glockner election77,820,91126,002,904 withheld7,130,918 broker non-votes
Dr. John Scott election79,993,35623,830,460 withheld7,130,918 broker non-votes
Grant Thornton ratification110,667,136110,830 against176,767 abstentions

Outlook, Risks, and Unusual Items

  • The filing does not provide revenue, profit, cash flow, margin, debt, liquidity, or operating guidance figures.
  • Mr. Olson’s incentive compensation is materially contingent on future EBITDA, production, company performance, individual performance, and continued employment.
  • The filing does not disclose the specific EBITDA or production thresholds underlying the performance share awards.
  • The long-term incentive award was scheduled for May 20, 2022, after the May 10 approval date.

Investor Verification Items

  • Verify the final terms, grant date, share count, valuation, and accounting treatment of the $350,000 equity award.
  • Review the performance targets and vesting mechanics for the EBITDA- and production-based PSUs.
  • Assess the financial impact of the higher salary, increased short-term incentive opportunity, and equity compensation.
  • Confirm the company’s subsequent operating results, liquidity, debt position, and progress toward the 2024 production and EBITDA objectives, which are not provided in this filing.