| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
As previously reported in the Form 8-K filed by Calyxt, Inc. (“Calyxt” or the “Company”) on January 17, 2023 (the “Merger 8-K”), pursuant to the terms of the Merger Agreement (as defined in the Merger 8-K), beginning on March 15, 2023, Calyxt could request, and Cibus Global LLC (“Cibus”) has agreed to provide, an unsecured, interest-free revolving line of credit of up to $3,000,000 in cash, which amount may be increased as described in the Merger 8-K (the “Interim Funding”). Funds can be drawn by Calyxt in $500,000 increments and may only be used to fund operating expenses incurred in the ordinary course of business consistent with past practice and consistent with the negative covenants in the Merger Agreement. As of May 17, 2023, Calyxt has drawn an aggregate of $2.0 million under the Interim Funding.
On May 17, 2023, in connection with the Extension (as defined in Item 8.01 below), the total Interim Funding available to Calyxt was increased to $5,000,000 in the aggregate.
Item 2.03 of the Merger 8-K is incorporated herein by reference pursuant to General Instruction B.3. of Form 8-K.
The description of the terms and conditions of the Interim Funding does not purport to be complete and is qualified by reference in its entirety by reference to the Terms and Conditions of Interim Funding, a copy of which is attached to the Merger 8-K as Exhibit 10.3 and is incorporated herein by reference.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Amendment to 2021 Executive Severance Plan
Calyxt previously adopted the form of the 2021 Executive Severance Plan (as amended on January 13, 2023, the “Executive Severance Plan”) for certain key management employees who agree to participate and execute a participation agreement (the “plan participants”). The Executive Severance Plan provides plan participants with certain severance benefits upon a Qualifying Termination (as defined in the Executive Severance Plan) of the plan participant’s employment with Calyxt. On May 17, 2023, Calyxt adopted the second amendment to the Executive Severance Plan (the “Plan Amendment”). The Plan Amendment amends the Severance Benefit (as defined in the Executive Severance Plan) payable to plan participants pursuant to Section 4.1(a)(ii) of the Executive Severance Plan such that the portion of a participant’s Severance Benefit related to such participant’s bonus award shall be equal to the product of (i) the plan participant’s payment under Calyxt’s annual cash incentive plan for the year prior to the year in which the Qualifying Termination occurs (which payments for Calyxt’s named executive officers were $0 for 2022), and (ii) a fraction, the numerator of which is the number of days elapsed in such year as of the date of the Qualifying Termination and the denominator of which is the number of days in the year. All other terms of the Executive Severance Plan remain unchanged.
The foregoing description of the Plan Amendment does not purport to be complete and is qualified by reference in its entirety by reference to the Plan Amendment, a copy of which is attached to this report as Exhibit 10.1 and is incorporated herein by reference.
Adoption of 2023 Short-Term Incentive Plan
On May 17, 2023, Calyxt established the 2023 Short Term Incentive Plan (“STIP”), which provides performance-based awards for certain of the Company’s executives, subject to a maximum limit of 150% of the executive’s target bonus. Under the STIP, the eligible executives would be eligible to receive a cash bonus, based on a percentage of the individual’s annual base salary, subject to achievement of performance objectives. For the STIP, the Board established the following 2023 performance objectives: for participants to continue to perform his or her respective responsibilities and the closing of the transactions contemplated by the Merger Agreement. To be eligible to receive a bonus under the STIP, a participant in the plan must be employed by Calyxt as of both December 31, 2023 and the payment date, unless otherwise provided in a written agreement between the Company and the participant.
The foregoing description of the STIP does not purport to be complete and is qualified by reference in its entirety by reference to the STIP, a copy of which is attached to this report as Exhibit 10.2 and is incorporated herein by reference.
