| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On August 26, 2022, the Board of Directors appointed Xun (Kenneth) Li as chief financial officer of Power Solutions International, Inc. (“the Company”), effective August 29, 2022, succeeding Matthew Thomas who had been serving in an interim role since April 2022. Mr. Thomas will resume his role as corporate controller.
Mr. Li is an accomplished executive who has more than 20 years of professional experience in the areas of finance, accounting, financial planning & analysis, internal controls and strategy, among others. Most recently, Mr. Li served as chief financial officer for ND Paper, a leading pulp, packaging and paper company, from 2020 to August 2022, where he was a member of the executive leadership management team with primary responsibility for finance, accounting, tax, auditing, treasury, risk management, internal audit, and strategic planning, among other areas, and served as a strategic advisor to the CEO. Prior to this role, Mr. Li was with Caterpillar Inc., a publicly traded company on the NYSE, from 2008 through 2020, where he served in various financial leadership positions, the most recent of which was chief financial officer of the global mining machine product group from 2013 to 2020. Prior to Caterpillar, Mr. Li was with Ford Motor Company, a publicly traded company on the NYSE, where he held finance leadership roles of increasing responsibility, from 2003 to 2008.
Mr. Li holds an MBA with high distinction and an M.S. in Accounting, both from the University of Michigan. He also holds an M.S. in Mechanical Engineering from the University of Oklahoma and a B.S. in Mechanical Engineering from Shanghai JiaoTong University. Mr. Li is a certified public accountant.
There are no family relationships between Mr. Li and any of the directors or executive officers of the Company, and there are no transactions in which Mr. Li has an interest requiring disclosure under Item 404(a) of Regulation S-K. There is no arrangement or understanding between Mr. Li and any other person pursuant to which Mr. Li was appointed as an officer of the Company.
Employment Agreement with Kenneth Li
On August 29, 2022, the Company entered into an employment agreement with Kenneth Li (the “Employment Agreement”). The Employment Agreement provides that Mr. Li’s employment is “at will” and may be terminated at any time by either party. The Employment Agreement provides for (i) an annual base salary of $360,000, subject to increase from time to time; (ii) a sign-on bonus of $20,000; (iii) eligibility to participate in the Company Key Performance Indictor (“KPI”) plan at a target amount equal to 50% of his base salary; (iv) eligibility to participate in the Company Long Term Incentive (“LTI”) Plan with a target LTI bonus equal to 60% of his Base Salary; and (v) eligibility to receive an award of 30,000 Stock Appreciation Rights (“SARs Award”) with a strike price determined by the Compensation Committee at the grant date, to be vested in four equal installments on the anniversaries of the grant date. In the event that Mr. Li’s employment is terminated by the Company without Cause (as defined in the Employment Agreement) during the employment term, he will be entitled to receive, among other things, (i) severance equal to base salary for 6 months if his employment period is less than 48 months, and for 1 year if his employment period is 48 months or longer; and (ii) any unpaid awarded KPI and LTI bonuses. The Employment Agreement restricts Mr. Li from competing with the Company during the term of the agreement and for one year after termination of his employment with the Company. The Employment Agreement also restricts Mr. Li from soliciting the Company’s customers or employees during the term of the agreement and for one year after termination of his employment with the Company.
The foregoing description of the Employment Agreement is qualified in its entirety by reference to the complete text of the Employment Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.
| Item 7.01 | Regulation FD Disclosure. |
On August 29, 2022, the Company issued a press release announcing the appointment of a Chief Financial Officer, 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.
