Power Solutions International, Inc. (NASDAQ:PSIX) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02.
On July 24, 2020, Power Solutions International, Inc. (the “Company” or “PSI”) announced the appointment of Donald P. Klein to serve as the Company’s Interim Chief Financial Officer effective July 20, 2020 (the “Effective Date”). Mr. Klein will succeed Charles F. Avery, Jr., who has resigned from his position as Chief Financial Officer by mutual agreement with the Company on the Effective Date to pursue other interests following a transition period. Mr. Avery has transitioned to a consulting role for the Company to an agreement between Mr. Avery and the Company as discussed below.
Mr. Klein, age 46, has served as PSI’s corporate controller and principal accounting officer since May 14, 2018 with the responsibility of leading the accounting, tax, internal control and reporting functions. Prior to joining the Company, he served as assistant corporate controller at Littelfuse, Inc., a publicly traded company that sells electronic products to customers in the electronics, automotive and industrial markets. Prior to that role, from 2008 to 2017, Mr. Klein served in various positions of increasing responsibility within finance and accounting, including most recently as assistant corporate controller at Navistar International Corporation, a publicly traded company. Prior to Navistar, he worked for Hewitt Associates as manager of external reporting and at Ernst & Young LLP as a senior manager of assurance and advisory services.
The details of Mr. Klein’s compensation in connection with his appointment will be determined by the Board of Directors (the “Board”) at a later date.
There are no family relationships between Mr. Klein and any of the directors or executive officers of the Company, and there are no transactions in which Mr. Klein has an interest requiring disclosure under Item 404(a) of Regulation S-K. There is no arrangement or understanding between Mr. Klein and any other person to which Mr. Klein was appointed as an officer of the Company.
A press release announcing the matters described above is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Avery Consulting Agreement
In connection with Mr. Avery’s separation from the Company, Mr. Avery and the Company entered into a Consulting Agreement and Release, effective July 20, 2020 (the “Consulting Agreement”). to the Consulting Agreement Mr. Avery is entitled to receive (a) a cash severance payment of $300,000 in 12 equal monthly installments of $25,000, (b) subject to his election to receive continued group health plan coverage under COBRA, continued coverage at active-employee rates for up to 12 months after the Effective Date, (c) a cash payment of $155,979.59 under the Company’s Key Performance Indicator (“KPI”) plan for 2019 and a prorated KPI plan bonus through the Effective Date for 2020, if one is put in place for dates prior to the Effective Date and such KPI bonus has been determined by the Board, and (d) a cash payment of $15,000 for transition services.
The Consulting Agreement also provides that Mr. Avery will assist with transition consulting services for the Company beginning on the Effective Date and terminating 90 days thereafter unless earlier terminated to the Consulting Agreement (the “Consulting Period”). Subject to compliance with the terms of the Consulting Agreement, Mr. Avery is entitled to receive a consulting fee of $25,000 payable every 30 days during the Consulting Period. Mr. Avery has agreed to make himself available on an “as needed” basis during the Consulting Period to assist with transitioning his duties with the Company and as reasonably directed by the Company’s Chief Executive Officer. The Consulting Agreement contains a release of the Company by Mr. Avery and mutual non-disparagement provisions. Mr. Avery also agreed that the confidentiality, non-competition and non-solicitation provisions in his current employment agreement with the Company will remain in effect. Finally, Mr. Avery agreed to cooperate with, and make himself reasonably available to, the Company for a period ending twelve months following termination of the Consulting Period in order to assist with the transition of his duties and financial matters with which he has knowledge at a rate of $250 per hour plus expenses.
The foregoing description of the Consulting Agreement is qualified in its entirety by the full text of the Consulting Agreement, which is attached hereto as Exhibits 10.1 and incorporated by reference herein.
