Exhibit 10.2
August 2, 2021
Josh Hoffman
Re: Employment
Separation Letter Agreement
Dear Josh:
This letter agreement (this “Letter Agreement”)
confirms the termination of your employment with Zymergen Inc. (the “Company”) and your resignation from all positions
and offices with the Company and any of its affiliates, including from the board of directors of the Company, in each case, to take effect
on August 2, 2021 (the “Separation Date”).
In connection with your termination, the Company
wishes to provide certain severance benefits to you, and you wish to receive such severance benefits, subject to the terms and conditions
below.
This Letter Agreement shall become a binding agreement
between you and the Company on the date you sign this Letter Agreement.
Therefore, for the receipt of good and adequate
consideration, you and the Company agree as follows:
1. Final
Pay; Business Expenses; Equity Grants.
(a) Upon
the Separation Date, you will be paid all final wages accruing through the Separation Date as set forth on Exhibit A, in accordance
with applicable law. You acknowledge and agree that the payments set forth on Exhibit A accurately and completely reflect all wages
earned by you through the Separation Date, and that you are not entitled to any additional wages or benefits, including any salary, bonuses,
commissions, benefits, or other compensation, in connection with your employment with or termination of employment from the Company, except
as set forth in this Letter Agreement.
(b) As
soon as possible and no later than September 15, 2021, you will submit for reimbursement in accordance with the Company’s expense
reimbursement policies and practices all unreimbursed business expenses, if any, incurred by you, and thereafter, the Company shall promptly
pay you.
(c) You
acknowledge and agree that as of the Separation Date, the unvested portion of any Company stock options or other equity awards held by
you shall terminate immediately.
2. Consideration.
With the receipt of the payments and benefits set forth in Section 1 above, you will have received all payments and benefits
earned or owed to you in connection with your employment with the Company, and you shall not be entitled to any additional
compensation or benefits, except as provided below, subject to the terms and conditions set forth in this Letter Agreement. You
acknowledge that the compensation and benefits provided below are good and valid consideration for the release of claims and other
covenants set forth below.
3. Severance
Benefits. In addition to the payments set forth in Section 1, provided you timely execute and return the Release attached hereto
as Exhibit B (the “Release”) and subject to your continued compliance with the provisions set forth in Section
6 and Section 9, the Company will pay to you severance in the form of salary continuation in installments at your base salary
rate for the twelve-month period immediately following the Separation Date (the “Severance Period”), less applicable
taxes, garnishments and any other withholding required by law or authorized by you, in accordance with the Company’s normal payroll
practices, with the first installment to commence no later than the second regular payroll date following the date the Release becomes
effective and irrevocable. The first installment shall be a “catch-up” payment equal to your base salary rate for the period
of time following the Separation Date through the date such first installment is paid, and the balance of the severance shall be paid
in regular installments payable in accordance with their original schedule through the expiration of the Severance Period.
4. COBRA.
If you elect COBRA continuation coverage, the American Rescue Plan Act of 2021 requires that the Company pay the COBRA premiums that you
incur during the period ending on the earlier of September 30, 2021 or the date your COBRA continuation coverage otherwise ends. In addition,
the deadline to elect COBRA continuation coverage is extended to the earlier of (i) one year from the date your COBRA election would otherwise
be due, or (ii) the end of the COVID-19 national emergency. Additional information about these special COBRA rules is included in your
COBRA notice.
In addition, provided you timely execute and return
and do not revoke the Release, and subject to your continued compliance with the provisions set forth in Section 6 and Section
9, the Company will directly pay, or reimburse you for, the Company’s portion of the COBRA premium (at the same rates in effect
on the Separation Date) for you and your covered dependents following September 30, 2021 through the earlier of (A) the expiration of
the Severance Period or (B) the date you and your covered dependents, if any, become eligible for healthcare coverage under another employer’s
plan(s). Notwithstanding the foregoing, (x) if any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration
of the period of continuation coverage to be, exempt from the application of Section 409A of the Internal Revenue Code of 1986, as amended,
(the “Code”) under Treasury Regulation Section 1.409A-1(a)(5), or (y) the Company is otherwise unable to continue to
cover you under its group health plans without penalty under applicable law (including without limitation, Section 2716 of the Public
Health Service Act), then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to you in substantially
equal monthly installments. You shall notify the Company immediately if you become covered by a group health plan of a subsequent employer.
5. Stock
Options. Provided you timely execute and return and do not revoke the Release, and subject to your continued compliance with the provisions
set forth in Section 6 and Section 9, all of the stock options held by you that are vested as of the Separation Date, shall
remain exercisable until June 30, 2022. Any unvested stock options or other equity awards held by you shall terminate immediately as of
the Separation Date. You acknowledge that to the extent your vested stock options constitute “incentive stock options” within
the meaning of Section 422 of the Code, they shall be deemed modified for the purposes of Section 424 of the Code and, to the
extent the exercise price thereof is lower than the fair market value of the Company’s common stock as of the date of modification,
such stock options shall no longer qualify as incentive stock options and you will lose the potentially favorable tax treatment associated
with such stock options.
6. Restrictive
Covenants. Both during and after your employment you acknowledge your continuing obligations under that certain At-Will
Employment, Confidential Information, Invention Assignment, and Arbitration Agreement (the “PIIA Agreement”)
entered into by and between you and the Company on April 13, 2021 not to use or disclose any confidential or proprietary information
of the Company, to refrain from certain solicitation activities and to not disparage the Company, its
affiliates or their respective directors or employees, in each case as detailed in the PIIA Agreement. A copy of your PIIA Agreement
is attached hereto as Exhibit C. You acknowledge that all such covenants remain in full force and effect pursuant to their
terms, and that your continuing compliance with such obligations is a material condition to the Company’s agreement to enter
into this Letter Agreement. As of the Separation Date, you have executed and delivered to the Company the “Termination
Certificate” attached as Appendix B to your PIIA Agreement. In the event that following
your Separation Date, the Company determines that during your employment with the Company and its affiliates, you engaged in conduct
that would have constituted “Cause” for termination (as defined under your Employment Agreement with the Company dated
as of April 2021) or you breached your obligations under this Section 6 or 9 (including your obligations under the
PIIA Agreement), the Company shall have no further obligations under Sections 3, 4 or 5 and you shall repay the
Company any amounts previously paid by the Company pursuant to Sections 3 and 4 and will forfeit any stock options
that remain outstanding pursuant to Section 5 and, to the extent permitted by applicable law, you shall pay the Company an
amount equal to all proceeds received in connection with any sale or other disposition of any shares underlying your stock
options.
Notwithstanding the foregoing, nothing herein
shall restrict you from responding to a valid subpoena, nor shall you be prohibited from communicating with any government agency, including
your right to communicate directly with the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, the
U.S. Department of Justice or similar agency, or to cooperate with or participate in any investigation conducted by such agency or to
make any other disclosures that are protected under the whistleblower provisions of applicable law. For the avoidance of doubt, you do
not need to notify or obtain the prior authorization of the Company to exercise any of the foregoing rights. Further, you understand that:
(i) you will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret
that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or
investigating a suspected violation of law; (ii) you will not be held criminally or civilly liable under any federal or state trade secret
law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such
filing is made under seal; and (iii) if you file a lawsuit for retaliation by the Company for reporting a suspected violation of law,
you may disclose trade secrets to your attorney and use the trade secret information in the court proceeding if you: (x) file any document
containing the trade secret under seal; and (y) do not disclose the trade secret, except pursuant to court order.
7. Arbitration.
Without limiting your right to file Claims (as defined in the Release) with governmental agencies, you and the Company agree and
desire that all disputes between you and the Company relating to or arising out of your employment with the Company or this Letter
Agreement, other than Claims which you have effectively released pursuant to the Release and Claims that cannot, as a matter of law,
be required to arbitrate (collectively, “Covered Claims”), will, to the fullest extent permitted by law, be
resolved by final and binding arbitration in the county where you primarily worked for the Company as of the Separation Date. The
arbitration will be conducted by a single, neutral arbitrator in accordance with the applicable arbitration rules
(“Rules”) of the Judicial Arbitration and Mediation Service (“JAMS”) in effect when the
dispute is submitted to arbitration, which can be found at www.jamsadr.com, or other rules mutually agreed upon in writing by the
Company and you. The arbitrator shall be appointed as mutually agreed upon by you and the Company or, if no agreement can be
reached, by JAMS pursuant to its Rules. The Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. shall govern the interpretation
and enforcement of this arbitration clause. The Company and you shall be entitled to more than minimal discovery and the arbitrator
shall prepare a written decision containing the essential findings and conclusions on which the award is based so as to ensure
meaningful judicial review of the decision. The arbitrator shall apply the same substantive law, with the same statutes of
limitation and the same remedies that would apply if the claims were brought in a court of law. The Company shall pay all costs
unique to arbitration, including without limitation arbitration administrative fees, arbitrator compensation and expenses, and costs
of any witnesses called by the arbitrator. Unless otherwise ordered by the arbitrator under applicable law, you and the Company
shall each bear your or its own expenses, such as expert witness fees and attorneys’ fees and costs. Nothing herein shall
prevent you or the Company from seeking a statutory award of reasonable attorneys’ fees and costs, if any. This Section 7
shall be governed by and enforceable pursuant to the Federal Arbitration Act. This Section 7 is intended to be the exclusive
method for resolving any and all Claims by you or the Company against each other for payment of damages under this Letter Agreement
or relating to your employment; provided, however, that neither this Letter Agreement nor the submission to arbitration shall limit
your or the Company’s right to seek provisional relief, including without limitation injunctive relief, in any court of
competent jurisdiction.
8. Waiver
of Right to Jury Trial; Class Action Waiver. The Company and you understand and agree that this Letter Agreement constitutes a waiver
of its and your right to a trial by court or jury of any Covered Claims. You understand and acknowledge that this Letter Agreement also
constitutes a waiver of your right to bring any Covered Claim as part of or in connection with, or to participate with each person in
or recover through, a class action lawsuit or claim. You and the Company agree that no Covered Claim shall be resolved by a court or jury
trial, and no Covered Claim shall be brought as a class action.
9. Cooperation.
You shall assist and cooperate with the Company and its affiliates, (i) concerning reasonable requests for information about the business
of the Company or its affiliates or your involvement and participation therein; (ii) in connection with the defense, prosecution or investigation
of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company or its subsidiaries
or affiliates, including any proceeding before any arbitral, administrative, judicial, legislative, or other body or agency, including
testifying in any proceeding to the extent such claims, actions, investigations or proceedings relate to services performed or required
to be performed by you, pertinent knowledge possessed by you, or any act or omission by you; and (iii) and in connection with any investigation
or review by any federal, state or local regulatory, quasi- or self-regulatory or self-governing authority or organization (including,
without limitation, the SEC and FINRA) as any such investigation or review relates to services performed or required to be performed by
you, pertinent knowledge possessed by you, or any act or omission by you. Your full cooperation shall include, but not be limited to,
being available to meet and speak with board members, officers or employees of the Company, its affiliates and/or their counsel at reasonable
times and locations, executing accurate and truthful documents, appearing at the Company’s request as a witness at depositions,
trials or other proceedings without the necessity of a subpoena, and taking such other actions as may reasonably be requested by the Company
and/or its counsel to effectuate the foregoing. In requesting such services, the Company will consider other commitments that you may
have at the time of the request.
10. Employee’s
Representations. You represent and warrant that:
(a) You shall return by September 15, 2021 to the Company all Company property in your possession, including, without limitation, all Confidential
Information, laptops (other than your company issued personal laptop), cell phones, portable devices, software, keys, access badges or
IDs, credit cards, thumb drives, equipment, supplies, records, files, handbooks, guidelines, materials, documents, and all other property
belonging to the Company, whether in physical or electronic form, and all copies thereof.
(b)
You are not owed wages, salaries, commissions, bonuses, business expenses, benefits, or other compensation, other than as set forth
in this Letter Agreement.
(c)
During the course of your employment you did not sustain any injuries for which you might be entitled to compensation pursuant
to worker’s compensation law.
(d)
You have not initiated any adversarial proceedings of any kind against any of the Company Parties, nor will you do so in the future,
except as specifically allowed by this Letter Agreement.
(e)
You have signed this Letter Agreement knowingly and voluntarily, without any duress.
(f)
In signing this Letter Agreement, everything you are receiving is set forth herein, and you are not relying upon any agreements,
promises or statements, verbal, written, or implied, that are not expressly set forth in this Letter Agreement.
11. Severability.
The provisions of this Letter Agreement are severable. If any provision is held to be invalid or unenforceable, it shall not affect the
validity or the enforceability of any other provision. You represent that you have thoroughly read and considered all aspects of this
Letter Agreement, that you understand all of its provisions, and that you are voluntarily entering into this Letter Agreement.
12. Governing
Law. Except as expressly provided otherwise herein, this Letter Agreement will in all respects be interpreted, enforced and governed
under the laws of the State of California, without regard to the conflicts of law rules thereof.
13. Integrated
Agreement. This Letter Agreement, together with the PIIA Agreement, sets forth the entire agreement between you and Company and supersedes
and replaces any and all prior oral or written agreements or understandings between you and Company.
14. Amendment
of this Letter Agreement. This Letter Agreement may not be altered, amended, or modified except by a further written document signed
by you and an authorized representative of Company.
15. Execution
in Counterparts. This Letter Agreement may be executed in counterparts with the same force and effectiveness as though executed in
a single document. Facsimile and electronic signatures shall have the same force and effectiveness as original signatures.
16. Section
409A.
(a) General. The intent of
the parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A of the Code and the Department
of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other
guidance that may be issued after the date hereof, (“Section 409A”) and, accordingly, to the maximum extent permitted,
this Agreement shall be interpreted to be in compliance therewith. Notwithstanding any provision of this Agreement to the contrary, if
the Company determines that any compensation or benefits payable under this Agreement may be subject to Section 409A, the Company shall
work in good faith with you to adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies
and procedures with retroactive effect), or take any other actions, that the Company determines are necessary or appropriate to avoid
the imposition of taxes under Section 409A, including, without limitation, actions intended to (i) exempt the compensation and benefits
payable under this Agreement from Section 409A, and/or (ii) comply with the requirements of Section 409A; however, this Section 16
shall not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or take any such other action,
nor shall the Company (A) have any liability for failing to do so, or (B) incur or indemnify you for any taxes, interest or other liabilities
arising under or by operation of Section 409A.
(b) Six-Month Delay.
Notwithstanding anything to the contrary in this Agreement, no compensation or benefits shall be paid to you during the six
(6)-month period following your “separation from service” with the Company (within the meaning of Section 409A) if the
Company determines that paying such amounts at the time or times indicated in this letter would be a prohibited distribution under
Section 409A(a)(2)(B)(i) of the Code. If the payment of any such amounts is delayed as a result of the previous sentence, then on
the first business day following the end of such six (6)-month period (or such earlier date upon which such amount can be paid under
Section 409A without resulting in a prohibited distribution, including as a result of your death), the Company shall pay you a
lump-sum amount equal to the cumulative amount that would have otherwise been payable to Employee during such period (without
interest).
(c) Installments and Reimbursements.
For purposes of Section 409A, your right to receive installment payments shall be treated as a right to receive a series of separate and
distinct payments. To the extent that any reimbursement of expenses or in-kind benefits constitutes “deferred compensation”
under Section 409A, such reimbursement or benefit shall be provided no later than December 31st of the year following the year
in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement
in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided
in any other year.
Signature Page Follows
To indicate your acknowledgment and agreement
to the terms above, please date and sign the original of this Letter Agreement in the place indicated below.
Very truly yours,
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ZYMERGEN
INC.
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/s/
Sandra Peterson
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Sandra
Peterson
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Compensation
Committee Chair
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Accepted
and agreed to on
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this
2nd day of August, 2021 by:
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/s/
Josh Hoffman
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Josh
Hoffman
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Exhibit A
The final wages referenced in Section 1
shall include your unpaid base salary accruing through the Separation Date; and
Such final wages will be paid out in accordance
with the applicable plan documents, if any, and the applicable wage payment laws and will be subject to applicable taxes, garnishments
and any other withholding required by law or authorized by you.
Exhibit B
RELEASE OF CLAIMS
WHEREAS, Josh Hoffman (hereinafter
“Executive”) and Zymergen Inc. (hereinafter the “Company”) (collectively, “the parties”)
are party to that certain Employment Separation Letter Agreement (the “Letter Agreement”);
WHEREAS, Executive’s
employment with the Company terminated effective August 2, 2021 (the “Termination Date”);
WHEREAS, on July 28, 2021 the
Company presented this Release of Claims (“Release”) to Executive for his consideration (the “Agreement Delivery
Date”); and
WHEREAS, the parties have agreed
to a separation package to ease Executive’s transition from the Company’s employment and to resolve any and all disputes between
them.
IT IS HEREBY AGREED by and
between Executive and the Company as follows:
1.
If Executive executes and does not revoke this Release by the end of the Revocation Period (as defined in Section 7 below),
then this Release shall become effective and the Company, for and in consideration of the undertakings of Executive set forth and referenced
herein, and intending to be legally bound, agrees to provide Executive, the payments and benefits set forth in Section 3, 4 and 5 of the
Letter Agreement, as applicable, subject to the terms and conditions set forth in the Letter Agreement (the “Severance Benefits”).
2.
Executive expressly acknowledges and agrees that he has 21 days to consider this Release. If Executive does not sign this Release
within 21 days following the Termination Date, or revokes this Release before the end of the Revocation Period, then Executive will not
receive the Severance Benefits.
3.
Executive agree not to sue, or otherwise file any claim against, the Company or its parent companies, subsidiaries or affiliates,
and any of their respective successors, assigns, directors, officers, managers, employees, attorneys, insurers, or agents (collectively,
the “Company Parties”) for any reason whatsoever based on anything that has occurred at any time up to and including
the date hereof as follows:
4. On
behalf of Executive and Executive’s executors, administrators, heirs and assigns, Executive hereby releases and forever
discharges the Company Parties, and all persons acting by, through, under or in concert with them, or any of them, of and from any
and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements,
promises, liability, claims, demands, damages, loss, cost or expense, of any nature whatsoever, known or unknown, fixed or
contingent (hereinafter called “Claims”), which Executive now has or may hereafter have against any of the
Company Parties by reason of any matter, cause, or thing whatsoever from the beginning of time through and including the date
hereof, including, without limiting the generality of the foregoing: any Claims arising directly or indirectly out of, relating to,
or in any other way involving in any manner whatsoever Executive’s employment by the Company or the separation thereof,
including without limitation any and all Claims arising under federal, state, or local laws relating to employment; any Claims of
any kind that may be brought in any court or administrative agency; any Claims arising under the Age Discrimination in Employment
Act, the Older Workers Benefits Protection Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal
Pay Act, the Civil Rights Act of 1866, Section 1981, 42 U.S.C. § 1981, the Family and Medical Leave Act of 1993, the Americans
with Disabilities Act of 1990, the False Claims Act, the Employee Retirement Income Security Act, the Worker Adjustment and
Retraining Notification Act, the Fair Labor Standards Act, the Sarbanes-Oxley Act of 2002, the National Labor Relations Act of 1935,
the Uniformed Services Employment and Reemployment Rights Act of 1994, Fair Credit Reporting Act, the California Consumer Credit
Reporting Agencies Act, the California Fair Employment and Housing Act, the California Family Rights Act, the California WARN Act,
the California Labor Code, California Business & Professions Code Section 17200, the California Family Military Leave Law, and
California Military and Veterans Code, each of the foregoing as may have been amended, and any other federal, state, or local
statute, regulation, ordinance, constitution, or order concerning labor or employment, termination of labor or employment, wages and
benefits, retaliation, leaves of absence, or any other term or condition of employment; Claims for breach of contract; Claims for
unfair business practices; Claims arising in tort, including, without limitation, Claims of wrongful dismissal or discharge,
discrimination, harassment, retaliation, fraud, misrepresentation, defamation, libel, infliction of emotional distress, violation of
public policy, and/or breach of the implied covenant of good faith and fair dealing; and Claims for damages or other remedies of any
sort, including, without limitation, compensatory damages, punitive damages, injunctive relief and attorney’s fees.
5.
Notwithstanding the generality of the foregoing, Executive does not release any Claims that cannot be released as a matter of law
including, without limitation, (i) Executive’s right to file for California unemployment or disability insurance benefits; (ii)
Executive’s right to seek indemnity under California Labor Code Section 2802; (iii) Executive’s right to file a charge of
discrimination, harassment, interference with leave rights, failure to accommodate, or retaliation with the Equal Employment Opportunity
Commission, the California Department of Fair Employment and Housing or similar local agency, or to cooperate with or participate in any
investigation conducted by such agency, provided, however, that Executive hereby releases Executive’s right to receive damages in
any such proceeding brought by Executive or on Executive’s behalf; (iv) Executive’s right to communicate directly with the
U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, the U.S. Department of Justice or similar agency,
or to cooperate with or participate in any investigation conducted by such agency; or (v) Executive’s right to make any other disclosures
that are protected under the whistleblower provisions of applicable law. For the avoidance of doubt, Executive does not need to notify
or obtain the prior authorization of the Company to exercise any of the foregoing rights.
6.
EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS BEEN ADVISED OF AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION
1542, WHICH PROVIDES AS FOLLOWS:
“A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH, IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
BEING AWARE OF SAID CODE SECTION,
EXECUTIVE HEREBY EXPRESSLY WAIVES ANY RIGHTS EXECUTIVE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES
OF SIMILAR EFFECT.
7.
Executive acknowledges that the general release of Claims set forth in Section 5 above includes a release of Claims under
the Age Discrimination in Employment Act (the “ADEA Release”). In accordance with the Older Workers Benefit Protection
Act, Executive acknowledges as follows:
(i) Executive
has been advised to consult an attorney of Executive’s choice before signing this Release and Executive either has so consulted
with counsel or voluntarily decided not to consult with counsel;
(ii) Executive
has been granted over twenty-one (21) days after Executive was presented with this Release to decide whether or not to sign it. Executive
agrees that such period shall not be extended due to any material or immaterial changes to the Release;
(iii) Executive
has carefully reviewed and considered and fully understand the terms set forth in this Release; and
(v) Executive
has the right to revoke this Release within seven (7) calendar days of signing this Release. If Executive wishes to revoke this Release,
Executive must deliver written notice stating Executive’s intent to so revoke by emailing Mina Kim, Chief Legal Officer, on or
before 5:00 p.m. on the seventh (7th) day after the date on which Executive signs this Release. In the event Executive’s
Release is so timely revoked, Executive shall not be entitled to any of the benefits set forth in the Letter Agreement, except as provided
in Section 1 thereof.
This Release will in all respects be interpreted,
enforced and governed under the laws of the State of California, without regard to the conflicts of law rules thereof.
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EXECUTIVE
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/s/
Josh Hoffman
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Josh
Hoffman
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ZYMERGEN
INC.
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/s/
Sandra Peterson
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Sandra
Peterson
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Compensation
Committee Chair
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Exhibit C
PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT
Exhibit 99.1
Zymergen Provides Business Update
Jay Flatley, Chairman of the Board, Appointed
Acting CEO; Josh Hoffman to Step Down
Conference Call to be Held at 2:00 p.m. Pacific
Time / 5:00 p.m. Eastern Time Today
EMERYVILLE, Calif., August 3, 2021 -- Zymergen Inc. (“Zymergen”
or the “Company”), today provided a business update regarding its commercial product pipeline and financial forecast.
Zymergen recently became aware of issues with its commercial product
pipeline that will impact the Company’s delivery timeline and revenue projections. Accordingly, the Company no longer expects product
revenue in 2021, and expects product revenue to be immaterial in 2022.
During the quarter, several key target customers encountered technical
issues in implementing Hyaline into their manufacturing processes typical of new product and process development learnings. The Company
has made significant progress towards addressing these challenges and believes there are no intrinsic technical issues with Hyaline. However,
this issue has resulted in a delay in the Company’s commercial ramp. Zymergen is working to strengthen its commercial team to ensure
the reliability and robustness of the sales pipeline qualification and forecast processes.
The Company is also evaluating emerging data on the total addressable
market for foldable display applications, which indicate a smaller near-term market opportunity that is growing less rapidly than anticipated,
as well as its impact on Zymergen’s sales forecast. The Company will conduct a full re-examination of Zymergen’s target markets
confirming our past views or altering them if the data indicate a shift in market focus is appropriate.
“We are disappointed by these developments, and the Board and
management team are focused on resolving the underlying issues to ensure Zymergen moves forward as a stronger company with a compelling
operating plan,” said Jay Flatley, Acting CEO and Chairman of the Board. “The Board has formed dedicated committees, including
a Strategic Oversight Committee, and is working with outside experts to conduct an in-depth review of the Company’s operational,
financial, product, and commercialization efforts to facilitate the development of an updated strategic plan for Zymergen. The underlying
promise of our business and technology is sound, and I am proud of the work our teams are doing across the organization. We are confident
in Zymergen’s opportunities and prospects, although it will take longer to accomplish our goals than previously expected.”
CEO Transition
In connection with the business update, Zymergen also announced that
Jay Flatley has been appointed Acting Chief Executive Officer, effective immediately. Flatley’s appointment follows the mutual decision
by Zymergen and Josh Hoffman that Hoffman will step down as CEO and as a member of the Board, effective immediately. The Company's Board
of Directors will commence a search process to identify a permanent CEO. Sandi Peterson will serve as Zymergen’s Lead Independent
Director while Flatley serves as Acting CEO.
Flatley is a seasoned executive, with a strong track record of driving
operational excellence and bringing innovative technology and products at scale into the markets. Flatley served as CEO of Illumina, a
cutting-edge company in the human health space, for 17 years, and as its Executive Chair, and later Chairman of the Board, until 2021.
“A key element to ensuring Zymergen is set-up for long-term success
is having the right team in place, and the Board and Josh recognize that new leadership is required,” said Flatley. “The Board
will take whatever time is needed to conduct a thorough search to identify a world-class leader for Zymergen. Until then, I am committed
to working with our deep bench of talent to drive our company forward. On behalf of the Board and management team, I thank Josh for his
work in advancing our mission and wish him the best in his future endeavors.”
Preliminary Q2 FY 2021 Results
For the quarter ended June 30, 2021, the Company currently estimates
total revenue of $5 million to $6 million, all relating to R&D service agreements and collaboration revenue.
The Company currently estimates GAAP total cost and operating expenses
of approximately $100 million to $105 million, including estimated stock-based compensation, depreciation and amortization and an increase
in non-cash rent expense of approximately $20 million, and non-GAAP total cost and operating expenses of approximately $80 million to
$85 million.
As of June 30, 2021, the Company had cash and cash equivalents of approximately
$588 million, including restricted cash of approximately $11 million.
In connection with today’s business update, Zymergen is developing
a plan to reduce and align expenses with the change in the Company’s revenue expectations
The financial results presented in this press release are preliminary,
estimated and unaudited. They are subject to the completion and finalization of Zymergen’s purchase accounting for the acquisition
of Lodo and other financial and accounting closing procedures. They reflect management’s estimates based solely upon information
available to management as of the date of this press release. Further information learned during that completion and finalization may
alter the final results. In addition, the preliminary estimates should not be viewed as a substitute for full quarter financial statements
prepared in accordance with GAAP. There is a possibility that Zymergen’s second quarter financial results could vary materially
from these preliminary estimates. In addition to the completion of the financial closing procedures, factors that could cause actual results
to differ from those described above are set forth below under “Cautionary Note Concerning Forward-Looking Statements.” Accordingly,
you should not place undue reliance upon this preliminary information.
Additional information regarding the Company’s second quarter
2021 financial results will be available in the Company’s Form 10-Q, which will be filed with the U.S. Securities and Exchange Commission
(the “SEC”).
Business Update Call
Zymergen will host a conference call to discuss the business update
today at 5:00 PM Eastern Time. A webcast for this call can be accessed at https://investors.zymergen.com/.
The webcast will be archived and available for replay for at least 90 days after the event.
About Jay Flatley
Mr. Flatley most recently served as CEO of Illumina, a cutting-edge
company in the human health space, from 1999 until 2016. He then transitioned to the role of Executive Chair until January 2020, and served
as Chairman of the Board from January 2020 to May 2021. During his tenure as CEO of Illumina, Mr. Flatley took the company from $1.3 million
in sales in 2000 to $2.2 billion in 2015. Under his leadership, Illumina was named multiple times to each of the Deloitte & Touche
Fast 50 and Fast 500 list, the Forbes 25 Fastest-Growing Tech Companies list, the Fortune 100 Fastest-Growing Companies list and was recognized
by MIT Technology Review as the World’s Smartest Company in 2014. Prior to joining Illumina, Mr. Flatley was co-founder, President,
CEO and a director of Molecular Dynamics, a life sciences company focused on genetic discovery and analysis, from 1994 until its sale
to Amersham Pharmacia Biotech in 1998. Mr. Flatley serves as Chairman of the Board of Zymergen, as a member of the Boards of Denali Therapeutics
Inc and Coherent Inc., is an advisory board member for U.C. San Diego’s Moore Cancer Center and serves on the Board of Trustees
for The Salk Institute for Biological Studies. Mr. Flatley holds a BSc and MSc (Hons) from Stanford University, along with a BA from Claremont
McKenna College.
About Zymergen
Zymergen is a biofacturing company using biology to reimagine the world.
Zymergen partners with nature to design, develop and manufacture bio-based breakthrough products that deliver value to customers in a
broad range of industries. A unique combination of biology, chemistry, software and automation enables the company to design and create
new materials.
Cautionary Note Concerning Forward-Looking
Statements
This press release contains “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements are based on the
Company’s beliefs and assumptions and on information currently available to it on the date of this press release. Forward-looking
statements may involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance
or achievements to be materially different from those expressed or implied by the forward-looking statements, including but not limited
to statements regarding the opportunities and prospects for our company, including our business, technologies and products, the delivery
timeline, revenue projections and market opportunity for Hyaline and other products in our pipeline, the development of our strategic
and operating plans, our plan to reduce expenses and our preliminary financial results. We do not have revenue from product sales, and
we may not be able to successfully commercialize Hyaline or our pipeline products. These and other risks are described more fully in the
Company’s filings with the SEC, including the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021
and other documents the Company subsequently files with the SEC from time to time, including the Company’s Quarterly Report on Form
10-Q for the quarter ended June 30, 2021. Except to the extent required by law, the Company undertakes no obligation to update such statements
to reflect events that occur or circumstances that exist after the date on which they were made.
Investor Contact
Niraj Javeri
investors@zymergen.com
Media Contact
Mike Dulin
mdulin@zymergen.com
502-777-2029
