| Item 1.01. | Entry into a Material Definitive Agreement. |
As previously disclosed, on March 15, 2019, affiliates of the Chairman of our Board of Directors, or Board, and largest beneficial stockholder, Mitchell A. Saltz, entered into a Put and Call Stock Purchase Agreement, or the Purchase Agreement, with Hampstead Park Capital Management, LLC, or Hampstead, of which Dan Friedberg is the Chief Executive Officer. Pursuant to the Purchase Agreement, which was consummated on April 11, 2019, Mr. Saltz sold 1,750,000 shares of common stock of our company to Hampstead’s designee, Hampstead Park Environmental Services Investment Fund LLC, or Buyer, at a purchase price of $2.00 per share. We were not a party to the Purchase Agreement.
As a condition to the consummation of the Purchase Agreement, on April 11, 2019, Mr. Saltz, Jeffrey D. Forte, a founder and director of our company, Brian Dick, a founder and major stockholder of our company as well as our former Chief Executive Officer, and Buyer entered into a three-year Voting Agreement, or Voting Agreement, of which we are a party. Pursuant to the Voting Agreement, Messrs. Saltz, Forte, and Dick agree to vote or cause to be voted the remaining shares of our common stock owned by them (1) in favor of directors nominated and recommended by our Board, including two designees of Buyer, provided that a majority of our Board must be “independent” within the meaning of the rules of Nasdaq; (2) against any stockholder nomination or proposal not approved or recommended by our Board; (3) in accordance with the recommendations of our Board on all other proposals as our Board sets forth in the proxy statements of our company, unless multiple proxy advisory firms recommend a vote against such recommendation; and (4) in their own discretion in certain “Extraordinary Matters” (as defined in the Voting Agreement), including various change in control, spin off, recapitalizations, reorganization, and sale of asset transactions.
In addition, Messrs. Saltz, Forte, and Dick have agreed to vote all their shares for up to a maximum of three additional directors proposed by Buyer in addition to the two then serving Buyer designees and, if necessary, the removal of up to a maximum of three directors who are not designees of Buyer so that Buyer will have a maximum of five designees if the following Board conditions are not satisfied: (i) Messrs. Saltz and Forte are not serving on our Board or any committees thereof; (ii) Mr. Friedberg and a second person designated by Buyer, or the Second Designee, shall be elected or appointed as members of our Board, commencing as of the Effective Date of the Purchase Agreement; (iii) if Mr. Friedberg or the Second Designee do not serve for any reason during the term of the Voting Agreement, Buyer will have the right to designate a replacement director(s) to our Board and such replacement director(s) shall be promptly appointed to our Board, provided any such replacement director shall be “independent” for Nasdaq purposes and qualified to serve; (iv) Mr. Friedberg shall serve as Chairman of our Board, provided he is willing and able to serve in such capacity; and (v) Mr. Friedberg shall serve as Chairman of the Nominations and Corporate Governance Committee of our Board, provided he is willing and able to serve in such capacity.
The foregoing description of the terms of the Voting Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Voting Agreement, a copy of which is filed herewith as Exhibit 10.26 and is incorporated herein by reference.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
In connection with the consummation of the Purchase Agreement and entry into the Voting Agreement, and in view of the substantial ownership position of Buyer, the strategic alignment between our company and Buyer, and the substantial reduction in the share ownership by Mr. Saltz and others, on April 11, 2019 and effective as of the closing of the Purchase Agreement: (i) Messrs. Saltz and Forte resigned from our Board; (ii) Mr. Friedberg and Stephen A. Nolan, the Second Designee, were appointed to serve on our Board; (iii) Mr. Friedberg was also appointed to serve as the Chairman of our Board, replacing Mr. Saltz, and as the Chairman of the Nominations and Corporate Governance Committee of our Board, replacing I. Marie Wadecki who stepped down as the chair of this committee; and (iv) prior to Mr. Friedberg’s appointment as the Chairman of the Nominations and Corporate Governance Committee of our Board, I. Marie Wadecki stepped down as Chairman of the Nominations and Corporate Governance Committee of our Board. It is anticipated that Mr. Nolan will be appointed to the Audit Committee of our Board.
| Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On April 11, 2019, our Board approved Amendment No. 1 to our Second Amended and Restated Bylaws, or Bylaws. Our Bylaws were further amended (i) to permit two or more directors to call special meetings of stockholders, (ii) to permit stockholders to fill director vacancies resulting from the removal of directors by stockholders, (iii) to
