| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Resignation of Sidong Shao as Director of the Company
On September 16, 2022, Sidong Shao resigned from the Board of Directors (the “Board”) of Power Solutions International, Inc. (the “Company”). Mr. Shao served on the Board as a Weichai designee and was also a member of the Executive Committee. Mr. Shao’s resignation is not based upon any disagreement with the Company on any matter relating to the respective operations, policies, or practices of the Company.
Mr. Shao was appointed as the Company’s Executive Vice President (“EVP”), effective September 16, 2022. As EVP, Mr. Shao will be responsible for the oversight of product management, purchasing and supply chain.
Mr. Shao previously served as the President and Chairman of the Board of Directors of Weichai America Corp. (“Weichai America”), the Company’s majority stockholder, which focuses on researching, developing and manufacturing a full line of off-road natural gas engines and engine components, from 2019 to September 2022. Weichai America is a wholly owned subsidiary of Weichai Power Co., Ltd., a publicly traded company on the Hong Kong Stock Exchange and the Shenzhen Stock Exchange. From May 2012 to April 2018, Mr. Shao was President of Weichai Westport Inc., a joint venture between Weichai Power and Westport Fuel Systems Inc., a publicly traded company on the NASDAQ and Toronto Stock Exchanges, that manufactures and sells alternative-fuel engines for automobiles, heavy-duty trucks, power generation and shipping applications.
Shao has a Bachelor’s degree in Industrial Energy and Power Engineering from Shandong University. Mr. Shao also holds a Master’s degree in Power Engineering from Tianjin University and a Masters of Business Administration degree from Missouri State University.
There are no family relationships between Mr. Shao and any of the directors or executive officers of the Company, and there are no transactions in which Mr. Shao has an interest requiring disclosure under Item 404(a) of Regulation S-K. There is no arrangement or understanding between Mr. Shao and any other person pursuant to which Mr. Shao was appointed as an officer of the Company.
Employment Agreement with Sidong Shao
On September 16, 2022, the Company entered into an employment agreement with Sidong Shao (the “Employment Agreement”). The Employment Agreement provides that Mr. Shao’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 $260,000, subject to increase from time to time; (ii) eligibility to participate in the Company Key Performance Indictor (“KPI”) plan at a target amount equal to 50% of his base salary; and (iii) eligibility to participate in the Company Long Term Incentive (“LTI”) Plan. In the event that Mr. Shao’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. Shao 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. Shao 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.
Appointment of Gengsheng Zhang to the Company’s Board of Directors
The Board of Directors of Power Solutions International, Inc. appointed Mr. Gengsheng Zhang as a member of the Board effective as of September 16, 2022. Mr. Zhang, who will serve on the Board as designee of Weichai America Corp., PSI’s majority stockholder, will fill the position previously held by Sidong Shao, who was a Weichai America Corp. designee and resigned from the Board effective September 16, 2022. Mr. Zhang was also appointed to the Executive Committee.
Mr. Zhang will serve until the Company’s 2023 annual meeting of stockholders or until his successor is duly elected and qualifies.
Mr. Zhang, age 55, has served as Director of International Cooperation and Business Synergy Department for Shandong Heavy Industry Group (“SHIG”), a leading automobile and equipment manufacturing group, since March 2022. Prior to this, he served as Deputy General Manager of Weichai Group, a multi-field and multi-industry international group which owns six business segments of powertrain, intelligent logistics, automotive, construction machinery, luxury yacht, and finance & after-services, from August 2020 to March 2022. Prior to this, he originally served as Assistant General Manager of Weichai Group (and later as Deputy General Manager) and Chairman and CEO of SHIG India Pvt Ltd., a subsidiary of SHIG, from December 2019 to August 2020. Prior to this role, he served as Assistant General Manager of Weichai Group and General Manager of Shandong Weichai Import & Export Company, from May 2012 to December 2019. Prior to this, he served as Director of Weichai International Service Department from October 2005 to May 2012. Earlier in his career, Mr. Zhang was employed in various leadership and engineering roles at manufacturing organizations.
