EXPLANATORY NOTE
On June 2, 2022, Power Solutions International, Inc. (the “Company”) filed with the Securities and Exchange Commission (the “SEC”) its original Current Report on Form 8-K (the “Original Form 8-K”) to report, among other things, the appointment of C. (Dino) Xykis to the additional role of Interim Chief Executive Officer (“Interim CEO”) of the Company. As contemplated in the Original Form 8-K, this Form 8-K/A amends the Original Form 8-K to summarize the additional compensation that Mr. Xykis will receive with his appointment to this new position that was not determined at the time of the filing of the Original Form 8-K.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On June 15, 2022, the Company entered into the Interim CEO Letter Agreement (the “Interim CEO Letter Agreement”) with Dino Xykis, which finalized the terms of his appointment to Interim CEO. The Interim CEO Letter Agreement provides for, in addition to his normal salary, Mr. Xykis will receive a bonus paid semi-monthly in the amount of $5,000 per month (subject to an aggregate minimum bonus payment of $25,000) from June 1, 2022 until such time as a successor CEO is appointed by the Board of Directors (the “Term”). Additionally, subject to the approval of the Compensation Committee of the Board of Directors and approval by the Company’s stockholders of the 2012 Incentive Compensation Plan, as amended and restated (the “Stock Plan”), he shall be eligible to receive an award of 3,333 Stock Appreciation Rights (“SARs”) per month during the Term (the “SARs Award”). The initial SARs Award of 20,000 SARs (the “Minimum SARs Award”) shall vest on the one-year anniversary of the grant date, subject to his continued service with the Company through the vesting date. Notwithstanding the foregoing, if following the grant date the Company terminates his employment without Cause (as defined under the Stock Plan), the Minimum SARs Award shall immediately vest in full and be exercisable in accordance with the Stock Plan and his award agreement.
The foregoing description of the Interim CEO Letter Agreement is qualified in its entirety by the full text of the Interim CEO Letter Agreement, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
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 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, 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; impact on the global economy of the war in Ukraine; the impact of supply chain interruptions and raw material shortages; the potential impact of higher warranty costs and the Company’s ability to mitigate such costs; any delays and challenges in recruiting and retaining 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, 2021 and the Company’s subsequent filings with the SEC.
