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): September 16, 2021 |
Astra Space, Inc.
(Exact name of Registrant as Specified in Its Charter)
Delaware |
001-39426 |
14-1916687 |
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(State or Other Jurisdiction
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(Commission File Number) |
(IRS Employer
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1900 Skyhawk Street |
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Alameda, California |
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94501 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s Telephone Number, Including Area Code: (866) 278-7217 |
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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:
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Trading
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Class A common stock, par value $0.0001 per share |
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ASTR |
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NASDAQ Global Select Market |
Warrants to purchase one share of common stock, each at an exercise price of $11.50 |
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ASTRW |
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NASDAQ Global Select Market |
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 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective September 16, 2021, Astra Space, Inc. (the “Company”) increased the annual base salary for each of Adam London, its founder and chief technology officer, and Kelyn Brannon, its chief financial officer, from $400,000 to $500,000.
Additional changes with respect to Mr. London and Ms. Brannon’s compensation, as well as the compensation of the Company’s founder, chief executive officer and chairman, are described in Item 8.01 Other Events, which is incorporated herein by reference.
Item 8.01 Other Events.
On September 20, 2021, the Company awarded restricted stock unit (“RSUs”) and stock option (“Options”) grants of shares of its Class A common stock to each of its executive officers (collectively, the “Equity Grants”), as follows:
Executive Officer |
RSUs |
Time Based Stock Options |
Performance Based Stock Options |
Total |
Chris Kemp |
650,809 |
1,301,618 |
6,508,088 |
8,460,515 |
Adam London |
325,405 |
650,809 |
1,301,618 |
2,277,832 |
Kelyn Brannon |
1,387,527 |
1,244,345 |
650,809 |
3,282,681 |
Martin Attiq |
306,826 |
229,322 |
1,952,427 |
2,488,575 |
Benjamin Lyon |
1,301,618 |
0 |
2,603,236 |
3,904,854 |
Total |
3,972,185 |
3,426,094 |
13,016,178 |
20,414,457 |
These grants were issued under the Company’s 2021 Omnibus Incentive Plan. The exercise price for the stock option grants is $9.04, which was the closing share price for a share of the Company’s Class A common stock on September 20, 2021.
The RSUs and certain of the stock option grants vest based on each executive officer’s continued service to the Company, specifically:
The performance based stock options granted to all executive officers vest based on the Company’s achievement of the following performance criteria:
Milestone A: |
The Company has had a Successful Orbital Delivery.
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Milestone B: |
The Company has had six (6) Orbital Launches during a six (6) consecutive month period.
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Milestone C: |
The Company has completed a prototype for a Spacecraft that has achieved an Orbital Launch.
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Milestone D: |
The Company has conducted twenty-six (26) Orbital Launches during a six (6) consecutive month period. |
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Milestone E: |
The Company has achieved an Orbital Launch for an aggregate of 100 Spacecraft.
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The milestones do not need to be achieved in any specific order or sequence.
After a milestone is achieved, twenty percent (20%) of the performance stock option grant will vest on the vesting date immediately following the date that the volume weighted average share price for a period of thirty trading days has met the share price threshold. For this purpose, a “vesting date” is the February 15, May 15, August 15 or November 15 immediately following the date the share price threshold is achieved and the “share price threshold” is (i) $15.00 following the achievement of the first milestone; (b) $20.00
following the achievement of the second milestone; (c) $30.00 following the achievement of the third milestone; (d) $40.00 following the achievement of the fourth milestone, and (e) $50.00 following the achievement of the fifth milestone. Notwithstanding the foregoing, no portion of the performance based stock option grant will vest until November 15, 2022, and no unvested portion of the performance based stock option grant shall vest after November 15, 2026. The foregoing summary of the vesting schedule for the performance based stock option grants is qualified in its entirety by reference to the full text of the form of Performance Stock Option Award Agreement, which is filed as Exhibit 10.1 and incorporated in this current report on Form 8-K by reference. In addition, capitalized terms used, but not defined, in this current report on Form 8-K have the meanings ascribed to them in the Performance Stock Option Award Agreement.
The size of the performance based stock option grants reflects the expectation of the Company’s compensation committee that the grants will address the Company’s growth and development goals over the next five years. Thus, the compensation committee does not, at this time, anticipate granting any additional performance based stock option grants in the near future. The mix of time-based and performance based equity grants among the executive officers was primarily driven by the executive officer’s direct ability to drive the performance metrics measured. The Equity Grants, as a whole, further support the goals of the Company’s compensation philosophy to align the executive officer’s interests with the long-term interests of the Company’s stockholders and to drive stockholder value. While the Equity Grants to the Company’s executive officers are, as a whole, positioned above the mid-point of the Company’s peer group, these grants cover a longer period of time than grants issued to similarly situated executive officers for the Company’s peers and are much more heavily weighted towards performance based awards than the Company's peers. In addition, the cash compensation of the Company’s executive officers, other than Ms. Brannon, is positioned well below the mid-point of the Company’s peer group. The compensation committee's approach is consistent with the Company’s philosophy to emphasize equity based compensation over cash compensation.
In conjunction with the Equity Grants, the Company determined that Messrs. Kemp, London, Attiq and Lyon would not be paid cash performance bonuses for fiscal year 2021. Ms. Brannon had negotiated a cash performance bonus for fiscal year 2021 as part of her offer for employment with the Company, and thus, Ms. Brannon remains entitled to a cash performance bonus in an amount not in excess of $300,000 for fiscal year 2021. Any performance bonus to which Ms. Brannon becomes entitled will be paid in fiscal year 2022.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
Description |
10.1 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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 thereunto duly authorized.
Date: September 22, 2021 |
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Astra Space, Inc. |
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By: |
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/s/ Chris Kemp |
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Name: |
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Chris Kemp |
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Title: |
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Chief Executive Officer |
Exhibit 10.1
Name: |
[●] |
Number of Shares of Stock subject to the Stock Option: |
[●] |
Exercise Price Per Share: |
$[●] |
Date of Grant: |
[●] |
ASTRA SPACE, INC.
2021 OMNIBUS Incentive Plan
Performance Stock Option Agreement
This agreement (this “Agreement”) evidences a stock option granted by Astra Space, Inc. (the “Company”) to the individual named above (the “Participant”), pursuant to and subject to the terms of the Astra Space, Inc. 2021 Omnibus Incentive Plan (as from time to time amended and in effect, the “Plan”). Except as otherwise defined herein, all capitalized terms used herein have the same meaning as in the Plan.
The Stock Option evidenced by this Agreement is a non-statutory option (that is, an option that is not intended to qualify as an ISO) and is granted to the Participant in connection with the Participant’s Employment.
The right of exercise shall be cumulative so that to the extent the Stock Option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date (as defined below) or the termination of this Stock Option under Section 3 hereof or the Plan.
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[Signature page follows.]
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The Company, by its duly authorized officer, and the Participant have executed this Agreement as of the Date of Grant.
AGREED AND ACCEPTED:
By:_____________________________ Participant Name |
ASTRA SPACE, INC.
__________________________________ By: Its:
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EXHIBIT A
Vesting Schedule
This Exhibit A describes the terms and conditions upon which the Stock Option will become vested.
“Final Vesting Date” means November 15, 2026.
“Launch Vehicle” means a Company rocket, with a serial number of LV0007 or a serial number issued after LV0007.
“Milestone” means any of the five performance metrics set forth in Section 2 of this Exhibit A and which the Company must achieve for any portion of the Stock Option to vest.
“Orbital Launch” means a Launch Vehicle has traveled on a free trajectory which has an altitude at perigree around 80 kilometers such that it remained in space for at least one orbit around Earth.
“Payload” means one or more satellites for which the Company is under contract with a customer to Launch on a paid or unpaid basis.
“Share Price” means the VWAP for a 30 consecutive day trading period following the achievement of a Milestone.
“Share Price Threshold” means (a) a Share Price of $15.00 following the achievement of the first Milestone; (b) a Share Price of $20.00 following the achievement of the second Milestone; (c) a Share Price of $30.00 following the achievement of the third Milestone; (d) a Share Price of $40.00 following the achievement of the fourth Milestone, and (e) a Share Price of $50.00 following the achievement of the fifth Milestone.
“Spacecraft” means a vehicle or machine that the Company developed to fly in space. For clarity, the term “Spacecraft” does not include a Launch Vehicle.
“Successful Orbital Delivery” means that a Launch Vehicle has (a) achieved Orbital Launch, and (b) delivered a Payload for a customer consistent with the orbital mission parameters defined in the Company’s contract with the customer.
“Vesting Date” means the February 15, May 15, August 15 and November 15 of any calendar year immediately following the date on which the Share Price Threshold is met.
“VWAP” means the dollar volume-weighted average closing price for a share of the Company’s Class A common stock on Nasdaq.
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All capitalized terms used, but not defined, in this Exhibit A have the meanings set forth in the Performance Stock Option Award Agreement to which this Exhibit A is attached.
Milestone A: |
The Company has had a Successful Orbital Delivery.
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Milestone B: |
The Company has had six (6) Orbital Launches during a six (6) consecutive month period.
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Milestone C: |
The Company has completed a prototype for a Spacecraft that has achieved an Orbital Launch.
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Milestone D: |
The Company has conducted twenty-six (26) Orbital Launches during a six consecutive month period.
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Milestone E: |
The Company has achieved an Orbital Launch for an aggregate of 100 Spacecraft.
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The Milestones do not need to be achieved in any specific order or sequence; however a Milestone will not be deemed “achieved” for purposes of vesting until approved by the Compensation Committee, whose determination as to whether a Milestone has been “achieved” shall be final and binding.
3. Vesting. Once a Milestone is achieved, twenty percent (20%) of the shares of Class A common stock underlying the Stock Option shall vest on the Vesting Date immediately following the achievement of the Share Price Threshold, provided that (a) no portion of this Stock Option shall vest until November 15, 2022, and (b) no portion of this Stock Option shall vest after the Final Vesting Date. If any portion of this Stock Option remains unvested on the Final Vesting Date, such unvested portion of the Stock Option will be forfeited and cancelled.
4. Example. Assume for purposes of this example only, and for no other purpose, that:
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then no portion of the Stock Option will vest until the applicable Share Price Threshold is met. Specifically, (w) no portion of the Stock Option will vest on February 15, 2023, (x) twenty percent (20%) of the shares of Class A common stock underlying the Stock Option will vest on May 15, 2023, (y) an additional twenty percent (20%) of the shares of Class A common stock underlying the Stock Option will vest on August 15, 2023, and (z) an additional twenty percent (20%) of the shares of Class A common stock underlying the Stock will vest on February 15, 2024. As of February 15, 2024, sixty percent (60%) of the shares of Class A common stock underlying the Stock Option will be vested based on the assumptions above. The example is being provided to further clarify the vesting schedule for the Stock Option.
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