Ormat Technologies, Inc. (NYSE:ORA) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
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Entry into a Material Definitive |
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Item 5.02 |
Departure of Directors or Certain Officers; |
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Item 8.01 |
Other Events. |
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Item 9.01 |
Financial Statements and Exhibits. |
Exhibit Index
| Exhibit 10.1 |
Commercial Cooperation Agreement, dated as of May |
| Exhibit 10.2 |
Governance Agreement, dated as of May 4, 2017, by |
| Exhibit 10.3 |
Registration Rights Agreement, dated as of May 4, |
| Exhibit 10.4 |
Lock-up Agreement, dated as of May 4, 2017, by and |
| Exhibit 10.5 |
Letter of Undertaking, dated as of May 4, 2017, by |
| Exhibit 99.1 |
Press Release of Ormat Technologies, Inc. dated May |
INFORMATION TO BE INCLUDED IN THE REPORT
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Item 1.01 |
Entry into a Material Definitive |
On May 4, 2017, Ormat Technologies, Inc. (the Company) entered
into a Commercial Cooperation Agreement (the Commercial
Cooperation Agreement), a Governance Agreement (the Governance
Agreement), and a Registration Rights Agreement (the
Registration Rights Agreement and, together with the Commercial
Cooperation Agreement and the Governance Agreement, the
Transaction Agreements), each with ORIX Corporation (ORIX).
The Transaction Agreements were entered into by the Company and
ORIX in connection with the acquisition by ORIX, to a stock
purchase agreement (the Stock Purchase Agreement) by and among
ORIX, as purchaser, FIMI ENRG Limited Partnership, FIMI ENRG
L.P. (such entities, collectively, FIMI), Bronicki Investments,
Ltd. (Bronicki), Mr. Isaac Angel, our Chief Executive Officer,
and Mr. Doron Blachar, our Chief Financial Officer, as sellers
(collectively, the Sellers), of an aggregate approximately 11
million shares of common stock of the Company that are
currently separately owned by FIMI, Bronicki, and each of Mr.
Angel and Mr. Blachar, respectively (the Shares). to the Stock
Purchase Agreement, ORIX will pay to the Sellers as
consideration for the Shares an aggregate approximately $627
million, which will be funded by ORIX with available corporate
funds. Following consummation of the transactions contemplated
by the Stock Purchase Agreement, ORIX will beneficially own
approximately 22% of the outstanding shares of common stock of
the Company.
The Transaction Agreements, together with the Stock Purchase
Agreement, and the transactions contemplated by each of the
Transaction Agreements and the Stock Purchase Agreement are
sometimes collectively referred to herein as the ORIX
Transaction.
In connection with the ORIX Transaction, the Board of Directors
of the Company (the Board) agreed to waive the applicability of
the restrictions on business combinations contained in Section
203 of the Delaware General Corporation Law (Section 203) to
the purchase of the Shares by ORIX. Accordingly, such
restrictions, which generally prohibit business combinations
with a stockholder and its affiliates and associates (each as
defined in Section 203) for three years following the
acquisition of 15% or more of the outstanding voting stock of a
corporation by such stockholder, will not apply to ORIX or any
affiliate or associate thereof.
Commercial Cooperation Agreement
to the Commercial Cooperation Agreement, the Company and its
affiliates will have an exclusive right of first refusal to
own, invest in, develop and operate new geothermal business
opportunities outside the State of Japan that are sourced by or
presented to ORIX or its affiliates after the effective date of
the Commercial Cooperation Agreement, subject to certain
limitations. The Company and its affiliates will also have the
exclusive right to provide certain geological, engineering,
procurement, construction, operational and/or management
services, and be granted the option to acquire up to 49%
ownership of all geothermal projects within the State of Japan
that (i) are new geothermal business opportunities sourced by
or presented to ORIX or its affiliates after the effective date
of the Commercial Cooperation Agreement, (ii) have an expected
generating capacity of greater than 15 MW and (iii) that are
100% owned by ORIX or its affiliates, or with respect to which
ORIX or its affiliates have the ability to control all relevant
decisions without being required to obtain any third party
consent. Subject to certain limitations, ORIX and its
affiliates will use their commercially reasonable efforts to
engage the Company or its affiliates to provide certain
geological, engineering, procurement, construction, operational
and/or management services to all geothermal projects within
the State of Japan that meet the foregoing criteria, but that
have an expected generating capacity of 15 MW or less.
Furthermore, ORIX will use commercially reasonable efforts to
assist the Company and its affiliates in obtaining project
financing for geothermal projects from certain providers of
debt financing with which ORIX or its affiliates have a
commercial relationship at the applicable time.
The Commercial Cooperation Agreement will be suspended during
any period in which ORIX and its affiliates cease to own,
collectively, at least 13% of the voting power of all of the
outstanding common stock or other securities of the Company
entitled to vote generally for the election of directors to
the Board. During any such period, neither party to the
Commercial Cooperation Agreement will have any obligations
under the Commercial Cooperation Agreement nor will they be
liable for any claims under the Commercial Cooperation
Agreement that arise during such period. The Commercial
Cooperation Agreement may not be terminated except (i) by
mutual agreement of the parties thereto, (ii) on the
effective date of termination of the Governance Agreement
(other than a termination resulting from the breach thereof
by ORIX or its affiliates), (iii) in the event of an uncured
event of default or (iv) upon certain bankruptcy or
insolvency events with respect to any of the parties thereto.
Governance Agreement
The Governance Agreement sets forth the rights and
obligations of the Company and ORIX with respect to certain
corporate governance matters of the Company, including, but
not limited to, the appointment of directors to the Board,
the composition of committees of the Board and voting with
respect to matters submitted to a vote of the stockholders of
the Company. The Governance Agreement also sets forth
limitations on the ability of ORIX and its affiliates to
acquire securities of the Company in excess of certain
thresholds.
to the Governance Agreement, the Company is required,
immediately upon the closing of the transactions contemplated
by the Stock Purchase Agreement, to (i) appoint the three
directors designated by ORIX to the Board to fill the
vacancies created by the resignation of three of the Companys
current directors from the Board and (ii) increase the size
of the Board to nine directors and appoint the independent
designee as a director to the Board. Candidates for the
independent designee will be proposed to the Company by ORIX,
and the Company and ORIX will jointly agree on an independent
designee for nomination by the Board as an independent
director, who shall be independent in accordance with the New
York Stock Exchange listing standards and Securities and
Exchange Commission (SEC) rules and regulations, and who
shall not have, and for the three-year period prior to his or
her designation, shall not have had, any material
relationship with ORIX or any of its affiliates. ORIXs right
to designate director nominees and to propose and jointly
designate for nomination the independent designee are subject
to the following limitations:
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if ORIX and its affiliates collectively hold less than |
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if ORIX and its affiliates collectively hold less |
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if ORIX and its affiliates collectively hold less |
The Company and the Board will cause each director nominee
designated by ORIX and the independent designee to be
included in managements slate of nominees for election as a
director at each annual or special meeting of stockholders
of the Company at which directors are to be elected. The
Company will also use reasonable best efforts to cause the
election of each such director nominee and independent
designee and, in the event any such director nominee or
independent designee fails to be elected or, following
election, ceases to be a director for any reason, ORIX will
have the right to designate replacement director nominees
or fill the vacancy on the Board, as applicable, subject to
approval by the Company. The Governance Agreement also
provides that ORIX will vote or cause to be voted all
securities beneficially owned by ORIX and its affiliates in
favor of the election of all director nominees nominated by
the Nominating and Corporate Governance Committee of the
Board, and ORIX will not take, alone or in concert with
others, any action to remove or oppose any director or
director nominee nominated by the Nominating and Corporate
Governance Committee of the Board.
Under the Governance Agreement, ORIX and its affiliates are
restricted from taking certain actions during the
Standstill Period (as defined in the Governance Agreement),
including, but not limited to:
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beneficially owning, individually or as part of a |
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engaging in any solicitation of proxies (as such |
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voting in favor of or otherwise supporting any |
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make any public request or proposal seeking to have |
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making any public request or proposal that the |
Such restrictions will be suspended upon certain events,
including, but not limited to, the Companys entering into
a definitive agreement providing for a transaction that
would result in a Change of Control.
During the Standstill Period, ORIX is also required to
vote or cause to be voted, on any action to be taken by
the Companys stockholders, in proportion to votes cast by
all the stockholders of the Company (other than ORIX and
its affiliates), all voting securities of the Company
representing in excess of 25% of the outstanding voting
power of the Company.
The Governance Agreement grants ORIX preemptive rights in
the event of certain issuances of securities by the
Company, as well as information rights with respect to
the Companys business, operations, finances, personnel
and prospects, upon ORIXs reasonable request, but in no
event more than once during any twelve-month period.
The Governance Agreement will terminate or may be
terminated as follows:
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at the time ORIX and its affiliates collectively |
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upon the mutual written agreement of the Company |
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by ORIX, upon a material breach by the Company of |
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by the Company, upon a material breach by ORIX of |
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upon termination of the Stock Purchase Agreement |
Registration Rights Agreement
The Registration Rights Agreement provides, among other
things, that ORIX may, at any time, request that the
Company file a registration statement with the SEC in
order to permit a public offering and sale of Company
securities held by ORIX. ORIX may exercise such demand
registration rights twice, provided that ORIX will be
entitled to exercise such demand registration rights a
third time in the event the Company includes shares for
its own account or other selling stockholders in an
offering to either of the first two demand registrations.
ORIX may not exercise such demand registration rights
less than 120 days following the effective date of a
registration statement filed by the Company in respect of
such demand registration rights or any other registration
of securities held by ORIX. The Registration Rights
Agreement also provides that if at any time the Company
proposes to file a registration statement with the SEC in
connection with any public offering of its common stock,
ORIX will be permitted to require the Company to include
the securities held by ORIX in such registration. At
least 5 business days before the Company files any
registration statement registering securities held by
ORIX or any related prospectus, or any amendment or
supplement thereto, the Company will furnish to ORIX for
review copies of all documents proposed to be filed and
include in such documents reasonable changes as ORIX and
the Company may agree should be included.
The foregoing summaries of the Transaction Agreements
are not exhaustive, do not contain complete
descriptions of all of the parties rights and
obligations under such Transaction Agreements and are
qualified in their entirety by reference to the
Commercial Cooperation Agreement, Governance Agreement
and Registration Rights Agreement, copies of which are
filed hereto as Exhibit 10.1, Exhibit 10.2 and Exhibit
10.3, respectively, and are incorporated herein by
reference.
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Item 5.02 |
Departure of Directors or Certain |
(b)In connection with the ORIX Transaction and to the
Governance Agreement, 3 of the directors currently
serving on the Board, Mr. Robert E. Joyal, Mr. Ami
Boehm and Mr. Gillon Beck, have each delivered or will
deliver to the Company his resignation as a director of
the Company, subject to and effective upon the closing
of the transactions contemplated by the Stock Purchase
Agreement.
(e)In connection with the ORIX Transaction, the
Compensation Committee of the Board (the Committee)
approved the acceleration of the remaining vesting
period applicable to unvested stock options to purchase
350,000 shares of the Companys common stock and 42,500
shares of the Companys common stock (the Accelerated
Stock Options) previously granted to Mr. Angel, the
Companys principal executive officer, and Mr. Blachar,
the Companys principal financial officer, respectively,
under the Companys Amended and Restated 2012 Incentive
Compensation Plan (the Plan). The Plan permits the
Compensation Committee of the Board to accelerate the
time at which any award under the Plan may first be
exercised or the time during which any award or any
part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the award stating the
time at which it may first be exercised or the time
during which it will vest.
The Committees approval is subject to the closing of
the ORIX Transaction and execution of a Lockup
Agreement (the Lockup Agreement) and an undertaking
(the Undertaking) by Mr. Angel and Mr. Blachar,
respectively. The Lockup Agreement provides that, for a
period of one year following the date of the Lockup
Agreement, Mr. Angel will not sell, transfer or
otherwise dispose of any shares of the Companys common
stock acquired through the exercise of the portion of
the Accelerated Stock Options granted to him on June
14, 2016. The Lockup Agreement also provides that, for
a period of 180 days following the foregoing initial
lockup period, Mr. Angel will not sell, transfer or
otherwise dispose of more than 50,000 shares of the
Companys common stock acquired through the exercise of
the portion of the Accelerated Stock Options granted to
him on June 14, 2016. Mr. Angel is also restricted from
exercising any of the Accelerated Stock Options during
either of the foregoing lockup periods to the extent
such Accelerated Stock Options are not required to be
exercised in connection with the ORIX Transaction. If,
at the end of either lockup period, Mr. Angel is no
longer employed by the Company other than by reason of
a termination by the Company without Cause (as defined
in Mr. Angels employment agreement) or a termination by
Mr. Angel for Good Reason (as defined in Mr. Angels
employment agreement), Mr. Angel will forfeit all such
Accelerated Stock Options. The Undertaking provides
that Mr. Blachar will not, for the period beginning on
the date of the Undertaking and ending on June 30,
2018, sell, transfer or otherwise dispose of any shares
of the Companys common stock acquired through the
exercise of the portion of the Accelerated Stock
Options granted to him on June 14, 2016, as long as he
is employed by the Company. The Lockup Agreement and
the Undertaking will not apply to any other stock
options or other incentive compensation which may be
granted to Mr. Angel and Mr. Blachar, respectively,
after the date of the Lockup Agreement and the
Undertaking.
The foregoing summaries of the Lockup Agreement and
the Undertaking are not exhaustive, do not contain
complete descriptions of all of the parties rights
and obligations under the Lockup Agreement and the
Undertaking and are qualified in their entirety by
reference to the Lockup Agreement and the
Undertaking, copies of which are filed hereto as
Exhibit 10.4 and Exhibit 10.5, respectively, and are
incorporated herein by reference.
The Company expects to incur a charge against net
income in the second quarter of fiscal year 2017 for
stock-based compensation expense associated with the
acceleration of the vesting period of the Accelerated
Stock Options.
Item 8.01 Other Events.
On May 4, 2017, the Company issued a press release
announcing the ORIX Transaction and the matters
described herein. A copy of the Companys press
release is furnished as Exhibit 99.1 to this Current
Report on Form 8-K and is incorporated herein by
reference.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits
Exhibit 10.1Commercial Cooperation Agreement, dated
as of May 4, 2017, by and between ORIX Corporation
and Ormat Technologies, Inc.
Exhibit 10.2Governance Agreement, dated as of May 4,
2017, by and between ORIX Corporation and Ormat
Technologies, Inc.
Exhibit 10.3Registration Rights Agreement, dated as
of May 4, 2017, by and between ORIX Corporation and
Ormat Technologies, Inc.
Exhibit 10.4Lock-up Agreement, dated as of May 4,
2017, by and between Isaac Angel and Ormat
Technologies, Inc.
Exhibit 10.5Letter of Undertaking, dated as of May 4,
2017, by and between Doron Blachar and Ormat
Technologies, Inc.
Exhibit 99.1Press Release of Ormat Technologies, Inc.
dated May 4, 2017
About Ormat Technologies, Inc. (NYSE:ORA)
Ormat Technologies, Inc. is engaged in the geothermal and recovered energy power business. The Company designs, develops, builds, owns and operates geothermal and recovered energy-based power plants. The Company’s equipment manufacturing operations are located in Israel. The Company conducts its business activities in two business segments: Electricity segment and Product segment. The Company’s Electricity segment develops, builds, owns and operates geothermal and recovered energy-based power plants in the United States and geothermal power plants in other countries around the world, and sells the electricity it generates. The Company’s Product Segment designs, manufactures and sells equipment for geothermal and recovered energy-based electricity generation, remote power units and other power generating units, and provide services relating to the engineering, procurement, construction, operation and maintenance of geothermal, and recovered energy-based power plants. Ormat Technologies, Inc. (NYSE:ORA) Recent Trading Information
Ormat Technologies, Inc. (NYSE:ORA) closed its last trading session down -1.16 at 57.99 with 159,097 shares trading hands.
