WORKHORSE GROUP INC. (NASDAQ:WKHS) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On August 9, 2017, Paul Gaitan and Workhorse Group Inc. (the “Company”) entered into an Executive Retention Agreement whereby Mr. Gaitan was retained as Chief Financial Officer in consideration of an annual salary of $200,000. The Company also granted stock options exercisable at $2.74 per share to Mr. Gaitan to acquire 200,000 shares of common stock of the Company, which are exercisable for a period of ten years. The Stock Options vest in 16 equal quarterly tranches.
Commencing during the year ended December 31, 2018, the Company has agreed to provide a bonus to Mr. Gaitan of 25% of his base salary upon the Company achieving 75% of annual revenue targets established by the Board of Directors and management. The cash bonus will be increased to 37.5% and 50% of the base salary in the event that 50% or 125% of the revenue target is achieved, respectively. The Company and Mr. Gaitan entered into an Indemnification Agreement.
The employment of each of Mr. Gaitan is at will and may be terminated at any time, with or without formal cause. to the terms of the executive retention agreement, the Company has agreed to provide specified severance and bonus amounts and to accelerate the vesting on the equity awards upon termination upon a change of control or an involuntary termination, as each term is defined in the agreements. The severance clause is not effective until November 9, 2017. In the event of a termination upon a change of control or an involuntary termination, the executive is entitled to receive an amount equal to 12months of their base salary and the target bonus then in effect for the executive officer for the year in which such termination occurs, such bonus payment to be pro-rated to reflect the full number of months the executive remained in the Company’s employ. In addition, the vesting on any equity award held by the executive officer will be accelerated in full upon a change of control or an involuntary termination. In the event the executive is terminated for cause, then the vesting of all equity awards shall cease and such equity awards will be terminated. In the event the executive leaves for any reason that is not considered a good reason, then the vesting of equity award shall cease. At the election of the executive officer, the Company will also continue to provide health related employee insurance coverage for twelve months, at the Company’s expense upon termination upon a change of control or an involuntary termination. On August 9, 2017, the Company and Mr. Rodriguez entered a letter agreement amending certain terms of his Executive Retention Agreement dated May 19, 2017, to which Mr. Rodriguez agreed to serve as the Chief Information Officer at a salary of $250,000 per year with stock options exercisable at $5.28 per share to acquire 300,000 shares of common stock of the Company, which are exercisable for a period of ten years vesting over four years in instalments of 18,750 shares.
During 2016, Mr. Gaitan most recently served as Chief Financial Officer of Crown Health Care Laundry Services, where he helped set strategic vision and drove excellence in accounting operations and financial reporting for an organization of 800 employees. From 2006 through 2015, Mr. Gaitan was employed by ClarkDietrich Building Systems, a light gauge steel framing manufacturer with revenue of $600m per year, where he served as Chief Financial Officer from 2012 through 2015 and Controller from 2006 through 2012. Mr. Gaitan has also held various controller roles at Axion Automotive Technologies, Endar Corporation, Dentsply International, Avery Dennison and Cummins Engine Company. Mr. Gaitan earned his BS degree in business from the University of Southern California and his MBA from Stanford University with a concentration in production control systems.
The above offers and sales of the securities was made to an accredited investor and the Company relied upon the exemptions contained in Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated there under with regards to the sales. No advertising or general solicitation was employed in offerings the securities. The offers and sales were made to an accredited investor and transfer of the securities was restricted by the Company in accordance with the requirements of the Securities Act of 1933.
The foregoing is only a brief description of the material terms of the above corporate actions and agreements, and does not purport to be a complete description of the rights and obligations of the parties under those agreements, and such descriptions are qualified in their entirety by reference to the agreements which are filed as exhibits to this Current Report.
Item 9.01 Financial Statements and Exhibits.
|(1)||Incorporated by referenced to the Form 8-K Current Report filed with the Securities and Exchange Commission dated May 19, 2017.|
Workhorse Group Inc. ExhibitEX-10.1 2 f8k081117ex10-1_workhorse.htm EXECUTIVE RETENTION AGREEMENT BY AND BETWEEN WORKHORSE GROUP INC. AND PAUL GAITAN DATED AUGUST 9,…To view the full exhibit click
About WORKHORSE GROUP INC. (NASDAQ:WKHS)
Workhorse Group, Inc., formerly AMP Holding Inc., is a development-stage company. The Company designs, develops, manufactures and sells medium-duty trucks with powertrain components under the Workhorse chassis brand. The Company’s products include trucks comprising powertrain and chassis. Its powertrain products include E-GEN and E-100. Its chassis products include W88, W22, W42 and W62. E-GEN is an electric drive, transmission-free system, which has a gasoline/propane or compressed natural gas (CNG) engine that functions as an auxiliary generator. E-100, an all-electric, medium-duty truck, is an electric power-train. It focuses on offering W88 chassis with gross vehicle weight (GVW) ratings of 10,000 to 26,000 pounds. The W22 chassis is designed to meet the needs of the recreational vehicle market for weight ratings till over 26,000 GVW. The W42 chassis is designed for the 12,000 to 14,500 GVW vehicle market. The W62 chassis is designed for the 19,500 to 23,500 GVW vehicle market.