ENERGY FOCUS, INC. (NASDAQ:EFOI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
Entry into a Material Definitive Agreement.
On February 21, 2019, Energy Focus, Inc. (the “Company”) entered into an agreement (the “Agreement”) with the investor group comprised of Gina Huang, Brilliant Start Enterprise, Inc., Jag International, Ltd., Jiangang Luo, Cleantech Global Ltd., James Tu, 5 Elements Global Fund L.P., Communal International, Ltd., Yeh-Mei Hui Cheng, and 5 Elements Energy Efficiency Limited, which holds a 17.6% ownership position in the Company (the “Investor Group”), providing for the appointment of two new independent directors to the Board of Directors (the “Board”). The new independent directors, Jennifer Y. Cheng and Geraldine McManus, were proposed by the Investor Group and approved by the Board and will join the six currently serving directors. Ms. Cheng and Ms. McManus will also serve as members of the Nominating and Corporate Governance Committee of the Board. Ms. Cheng is the daughter of Yeh-Mei Hui Cheng.
Under the Agreement, the Company agreed to (i) increase the size of the Board by one member; (ii) appoint Ms. Cheng and Ms. McManus to the Board for the term ending at the annual meeting of stockholders to be held in 2019 (the “2019 Annual Meeting”) and nominate Ms. Cheng and Ms. McManus for election as director to the Board at the 2019 Annual Meeting; (iii) recommend that the Company’s shareholders vote in favor of the election of Ms. Cheng and Ms. McManus; and (iv) solicit proxies for the election of Ms. Cheng and Ms. McManus at the 2019 Annual Meeting.
The Investor Group agreed to comply with customary standstill provisions and the parties agreed to customary non-disparagement provisions. These provisions terminate on the earlier of (i) sixty calendar days prior to the start of the Company’s advance notice period for the nomination of directors for election at the 2020 annual meeting of stockholders under the Company’s bylaws and (ii) the occurrence of a Termination Event (as such term is defined in the Agreement). In addition, the parties agreed to the release and discharge of certain claims. The Agreement will terminate on the date of 2020 annual meeting of stockholders.
The above summary is qualified in its entirety by reference to the full text of the Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and 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.
The information set forth above under Item 1.01 is incorporated by reference under this Item 5.02.
On February 21, 2019, the Board increased the size of the Board by one member and appointed Ms. Cheng and Ms. McManus to the Board for the term ending at the 2019 Annual Meeting and agreed to nominate Ms. Cheng and Ms. McManus for election as director to the Board at the 2019 Annual Meeting. Ms. Cheng and Ms. McManus will also serve as members of the Nominating and Corporate Governance Committee of the Board.
The Board also approved the following compensation for the Company’s non-employee directors, including Ms. Cheng and Ms. McManus: (a) an annual cash retainer of $24,000 and (b) restricted stock units having an annual grant date value of $33,300 vesting over a one-year period, in each case pro-rated for service of a partial term. Ms. Cheng and Ms. McManus will each also receive a $4,000 cash retainer for serving as a member of the Nominating and Corporate Governance Committee.
Ms. Cheng is a co-founder and Chairwoman of Social Energy Partners LLC, which pioneered the Intelligent Building as-a-Service model to accelerate the adoption of sustainability technologies and building IoT. Ms. Cheng served as an independent director of the Company from 2012 to July 2014 and is the daughter of Yeh-Mei Hui Cheng, one of the members of the Investor Group.
Ms. McManus has been a Managing Member of Granger Management since May 2014. Previously, she was a Managing Director in the Investment Management Division at Goldman Sachs, where she worked from February 1998 until February 2014 and helped build its Private Wealth Management business, including structuring its
business model and key functions focused on ultra-high net worth individuals and family groups.
Also on February 21, 2019, Glenda Dorchak resigned from the Board.
A copy of the press release issued by the Company announcing these changes is filed as Exhibit 99.1 to this Current Report on Form 8-K.
On February 21, 2019, the Board approved the following amounts for the base salary of its executive officers: (a) $330,000 for Dr. Tewksbury, as Chairman of the Board, Chief Executive Officer and President, and (b) $219,000 for Jerry Turin, as Chief Financial Officer.
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Item 7.01 |
Regulation FD Disclosure. |
On February 21, 2019, the Company issued a press release announcing its agreement with the Investor Group. The full text of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
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Item 9.01 |
Financial Statements and Exhibits. |
(d)Exhibits.
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Exhibit |
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Number |
Description |
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10.1 |
Agreement dated February 21, 2019 entered into by Energy Focus, Inc. and the Investor Group |
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99.1 |
Press release of Energy Focus, Inc. dated February 26, 2019 |
ENERGY FOCUS, INC/DE Exhibit
EX-10.1 2 ex101agrmt-investorgrpxfin.htm EXHIBIT 10.1 Exhibit Exhibit 10.1AGREEMENTThis Agreement dated February 21,…
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About ENERGY FOCUS, INC. (NASDAQ:EFOI)
Energy Focus, Inc. along with its subsidiaries is engaged in the design, development, manufacturing, marketing, installation and sale of lighting systems. The Company is engaged in developing and selling of light-emitting diode (LED) lighting products for military maritime market, and general commercial and industrial markets. It produces, sources and/or markets a range of lighting technologies to serve its primary end markets. It offers military maritime products, such as Military Intellitube, military globe lights and military berth light to serve the United States navy and allied foreign navies. It offers commercial products, such as direct-wire tubular LED (TLED) replacements for linear fluorescent lamps, LED dock lights, low-bay and high-bay lighting for high-intensity discharge applications and LED retrofit kits to serve general commercial and industrial markets.