UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 14, 2021
Power Solutions International, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware | 001-35944 | 33-0963637 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
201 Mittel Drive, Wood Dale, Illinois 60191
(Address of Principal Executive Offices, and Zip Code)
(630) 350-9400
Registrant’s Telephone Number, Including Area Code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
None | — | — |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On December 14, 2021, Power Solutions International, Inc. (the “Company” or “PSI”) entered into a retirement agreement with Executive Vice President and co-founder Kenneth Winemaster, who will retire and resign from his position on December 31, 2021. Mr. Winemaster has agreed to transition his responsibilities pursuant to an agreement with the Company as discussed below. His operational duties will be assumed internally.
Winemaster Retirement Agreement
In connection with Mr. Winemaster’s retirement from the Company, Mr. Winemaster and the Company entered into a Retirement Agreement and Release, effective the Effective Date (the “Retirement Agreement”). Pursuant to the Retirement Agreement and the retirement of Mr. Winemaster, he is entitled to receive (a) cash severance payments of (i) $337,000, payable in twelve monthly installments of $28,083.33 payable by the first day of each month from January 2022 through December 2022; and (ii) $16,737 representing the payback of the 10% reduction in salary for Mr. Winemaster from July 2021 through December 2021 (this payment shall occur as Company executives are reimbursed for the 10% reduction in salary instituted July 1, 2021, but will occur no later than July 1, 2022), (b) cash payment of $32,500 payable on January 1, 2023, under the 2019 Long Term Incentive (“LTI”) plan as full and complete payment under the LTI plan at the same time other LTI participants are paid for the 2021 LTI plan year, (c) the maintenance of his preferred airline status throughout the current term and for one additional term, to the extent the Company continues to participate in such program, (d) subject to his election to receive COBRA health insurance, the Company payment of a proportional share of the premiums owed by Mr. Winemaster as if he were still employed by the Company for a period of thirteen months.
The Retirement Agreement contains a release of the Company by Mr. Winemaster and mutual non-disparagement provisions. Mr. Winemaster 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. Winemaster agreed to cooperate with, and make himself reasonably available, to assist in any transition related duties as requested by the Company at a rate of $250 per hour plus expenses.
The foregoing description of the Retirement Agreement is qualified in its entirety by the full text of the Retirement Agreement, which is attached hereto as Exhibit 10.2 and incorporated by reference herein.
Item 7.01 | Regulation FD Disclosure. |
On December 17, 2021, the Company issued a press release announcing the Mr. Winemaster’s retirement, which is attached as Exhibit 99.1 hereto.
The information contained in this Item 7.01 and Exhibit 99.1 hereto shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by reference in such a filing.
Caution Regarding Forward-Looking Statements
This Form 8-K contains forward-looking statements regarding the current expectations of the Company about its prospects and opportunities. These forward-looking statements are entitled to the safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934. The Company has tried to identify these forward-looking statements by using words such as “anticipate,” “believe,” “budgeted,” “contemplate,” “estimate,” “expect,” “forecast,” “guidance,” “may,” “outlook,” “plan,” “projection,” “should,” “target,” “will,” “would,” or similar expressions, but these words are not the exclusive means for identifying such statements. These statements are subject to a number of risks, uncertainties, and assumptions that may cause actual results, performance or achievements to be materially different from those expressed in, or implied by, such statements. The Company cautions that the risks, uncertainties and other factors that could cause its actual results to differ materially from those expressed in, or implied by, the forward-looking statements, include, without limitation: the impact of the ongoing COVID-19 pandemic could have on the Company’s business and financial results; the Company’s ability to continue as a going concern; the Company’s ability to raise additional capital when needed and its liquidity; uncertainties around the Company’s ability to meet funding conditions under its financing arrangements and access to capital thereunder; the potential acceleration of the maturity at any time of the loans under the Company’s uncommitted senior secured revolving credit facility through the exercise by Standard Chartered
Bank of its demand right; the timing of completion of steps to address, and the inability to address and remedy, material weaknesses; the identification of additional material weaknesses or significant deficiencies; risks related to complying with the terms and conditions of the settlements with the Securities and Exchange Commission (the “SEC”) and the United States Attorney’s Office for the Northern District of Illinois (the “USAO”); variances in non-recurring expenses; risks relating to the substantial costs and diversion of personnel’s attention and resources deployed to address the internal control matters; the Company’s obligations to indemnify past and present directors and officers and certain current and former employees with respect to the investigations conducted by the SEC and the criminal division of the USAO, which will be funded by the Company with its existing cash resources due to the exhaustion of its historical primary directors’ and officers’ insurance coverage; the ability of the Company to accurately forecast sales, and the extent to which sales result in recorded revenues; changes in customer demand for the Company’s products; volatility in oil and gas prices; the impact of U.S. tariffs on imports from China on the Company’s supply chain; disruptions to the Company’s supply chain; the impact of increasing warranty costs and the Company’s ability to mitigate such costs; any delays and challenges in recruiting key employees consistent with the Company’s plans; any negative impacts from delisting of the Company’s common stock par value $0.001 from the NASDAQ Stock Market and any delays and challenges in obtaining a re-listing on a stock exchange; and the risks and uncertainties described in reports filed by the Company with the SEC, including without limitation its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and the Company’s subsequent filings with the SEC.
The Company’s forward-looking statements are presented as of the date hereof. Except as required by law, the Company expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit | Description | |
10.1 | Retirement Agreement and Release, dated as of December 14, 2021, between the Company and Kenneth Winemaster | |
99.1 | Press Release dated as of December 17, 2021, announcing the retirement of Kenneth Winemaster | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Power Solutions International, Inc. | ||||||||
Dated: December 17, 2021 | By: | /s/ Donald P. Klein | ||||||
Name: Donald P. Klein | ||||||||
Title: Chief Financial Officer |