Wisconsin
(State or other jurisdiction of incorporation or organization) |
39-1847269
(I.R.S. Employer Identification No.) |
3646
(Primary Standard Industrial Classification Code Number) |
Steven R. Barth, Esq.
Carl R. Kugler, Esq. Foley & Lardner LLP 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202 Tel: (414) 271-2400 Fax: (414) 297-4900 |
Daniel J. Waibel
Chief Financial Officer and Treasurer Eric von Estorff, Esq. Vice President, General Counsel and Secretary Orion Energy Systems, Inc. 1204 Pilgrim Road Plymouth, Wisconsin 53073 Tel: (920) 892-9340 Fax: (920) 892-4274 |
Kirk A. Davenport II, Esq.
Latham & Watkins LLP 885 Third Avenue New York NY 10022-4834 Tel: (212) 906-1200 Fax: (212) 751-4864 |
Title of Each Class of | Proposed Maximum | Amount of | ||||||
Securities to be Registered | Aggregate Offering Price (1) | Registration Fee (1) | ||||||
Common Stock, no par value
|
$100,000,000 | $3,070 | ||||||
(1) | Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act. Includes shares of common stock issuable upon exercise of the underwriters over-allotment option. |
The information in this prospectus is not complete and may be changed. We may not sell these
securities until the registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and we are not soliciting an
offer to buy these securities in any state where the offer or sale is not permitted.
Per Share
Total
$
$
$
$
$
$
$
$
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2
3
4
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we have a limited operating history, have previously incurred net operating losses,
and only recently achieved profitability;
some of our competitors are larger, have long-standing customer relationships at
existing commercial and industrial facilities, and have greater resources than we have;
we are dependent on the skills, experience and efforts of our senior management;
our success depends on market acceptance of our energy
management products and services;
our component parts and raw materials are subject to price fluctuations, potential
shortages and interruptions of supply;
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we are dependent upon our intellectual property, and our inability to protect our
intellectual property or enforce our rights could negatively affect our business and
results of operations;
if the price of electricity decreases, there may be less
demand for our energy management products and services;
we may fail to maintain adequate internal control over
financial reporting; and
our common stock has never traded publicly, and the market price of our common stock
may fluctuate significantly.
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6
Orion Energy Systems, Inc.
shares ( shares if the
underwriters over-allotment option
is exercised in full)
shares
shares ( shares if the
underwriters over-allotment option
is exercised in full)
We estimate that the net proceeds to
us from this offering will be
approximately $ million (or $ million if the underwriters
over-allotment option is exercised
in full), assuming an initial public
offering price of $ per share,
the midpoint of the range
set forth on the cover page of this
prospectus. We intend to use these
proceeds for working capital and
general corporate purposes,
including to fund increased sales
and marketing expenses, as well as
for potential future acquisitions.
We will not
receive any proceeds from the sale
of shares by the selling
shareholders. See Use of
Proceeds.
We currently do not intend to pay
any cash dividends on our common
stock.
The underwriters intend to reserve up to
shares for
sale at the initial public offering price to employees, officers, directors
and certain other persons
associated with us who have
expressed an interest in purchasing
our common stock in this offering.
See Underwriting.
You should carefully read and
consider the information set forth
under Risk Factors, together with
all of the other information set
forth in this prospectus, before
deciding to invest in shares of our
common stock.
We intend to apply to list our
common stock on the Nasdaq Global
Market under the symbol OESX.
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reflects the automatic conversion upon closing of this offering of all of our
outstanding shares of Series B preferred stock on a one-for-one basis into 2,989,830 shares
of common stock;
reflects the automatic conversion upon closing of this offering of all of our
outstanding shares of Series C preferred stock on a one-for-one basis into 1,818,182 shares
of common stock;
reflects the automatic conversion upon closing of this offering of the
Convertible Notes into 2,360,802 shares of common stock;
excludes 954,390 shares of common stock issuable upon the exercise of warrants outstanding as of June 30,
2007 with a weighted average exercise price of $2.24 per share;
excludes 4,712,077 shares of common stock issuable upon the exercise
of options outstanding as of June 30, 2007 with a
weighted average exercise price of $1.57
per share;
excludes 646,700 shares of common stock reserved for future
issuance as of
June 30, 2007 under our stock option plans;
assumes an initial public offering price of $ per share, the
midpoint of the range set forth on the
cover page of this prospectus; and
assumes no exercise of the underwriters option to purchase from us up to
additional shares to cover over-allotments.
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8
9
Three Months Ended
Fiscal Year Ended March 31,
June 30,
2005
2006
2007
2006
2007
(unaudited)
(in thousands, except per share data)
$
21,783
$
33,280
$
48,183
$
9,680
$
16,721
14,043
22,524
32,487
6,255
11,118
7,740
10,756
15,696
3,425
5,603
9,090
12,037
13,699
2,998
4,119
(1,350
)
(1,281
)
1,997
427
1,484
(567
)
(1,046
)
(843
)
(252
)
(255
)
(1,917
)
(2,327
)
1,154
175
1,229
(702
)
(762
)
225
34
481
(1,215
)
(1,565
)
929
141
748
(57
)
(1,272
)
(1,565
)
929
141
748
(104
)
(3
)
(201
)
(1
)
(75
)
(972
)
(83
)
$
(2,348
)
$
(1,568
)
$
645
$
140
$
673
$
(0.36
)
$
(0.18
)
$
0.07
$
0.02
$
0.07
$
(0.36
)
$
(0.18
)
$
0.04
$
0.01
$
0.04
6,470
8,524
9,080
8,999
9,950
6,470
8,524
16,433
15,073
18,088
As of June 30, 2007
Pro Forma As
Actual
Pro Forma
(4)
Adjusted
(5)
(in thousands, unaudited)
$
696
$
12,046
$
37,719
49,069
9,998
9,998
10,600
5,028
5,028
5,959
5,959
(361
)
(1,739
)
(2,128
)
$
15,401
$
16,151
$
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Cumulative From December 1,
2001 Through
June 30, 2007
(in thousands, unaudited)
853
1,108
243
2,914,625
$224,426
2,842
451,802
(1)
Cost of revenue includes stock-based compensation expense
recognized under SFAS 123(R) of $24,000 and $21,000 for fiscal 2007
and our fiscal 2008 first quarter, respectively. Operating expenses
include stock-based compensation expense recognized under
SFAS 123(R)
of $339,000 and $125,000 for fiscal 2007 and our fiscal 2008 first
quarter, respectively. See note (1) under Selected Historical
Consolidated Financial Data and Managements
Discussion and Analysis of Financial Condition and Results of
Operations Critical Accounting Policies and Estimates Stock-Based
Compensation.
(2)
For fiscal 2007 and our fiscal 2008 first quarter, represents the
impact attributable to the accretion of accumulated dividends on our Series C preferred
stock,
plus accumulated dividends on our Series A preferred stock prior to
its conversion into common stock on March 31, 2007. The Series C preferred
stock will convert automatically into common stock on a one-for-one basis
upon the closing of this offering and our obligation to pay accumulated
dividends will be extinguished. For fiscal 2005 and 2006, represents
accumulated dividends on our Series A preferred
stock prior to its conversion into common stock. See
Managements Discussion and Analysis of Financial Condition and Results of Operations Revenue and Expense Components Accretion
of Preferred Stock and Preferred Stock Dividends.
(3)
Represents the
estimated
fair market value of the premium paid to holders of
Series A preferred stock upon induced conversion. See Managements
Discussion and Analysis of Financial Condition and Results of
Operations Revenue and Expense Components
Conversion of Preferred Stock.
(4)
Gives effect to (i) the issuance of the Convertible
Notes and the application of the gross proceeds therefrom to cash and cash equivalents and (ii) the repayment of
approximately $2.1 million in aggregate principal amount of
shareholder notes with $0.8 million in cash and 306,932 shares
of common stock, as if each of these transactions had occurred on
June 30, 2007. See Related Party Transactions and Executive Compensation Compensation
Discussion and Analysis Long-Term Equity Compensation.
(5)
Gives effect to the pro forma adjustments described in note
(4) and (i) the automatic conversion of the
Convertible Notes into 2,360,802 shares of our common stock; (ii) the automatic conversion of 4,808,012 shares of our outstanding preferred stock into common
stock on a one-for-one basis; and (iii) the receipt of estimated net proceeds of $ million from our sale of shares of common
stock in
this offering at an assumed initial public offering price of $ per share (the midpoint of the range set forth on the cover page of
this prospectus), less estimated underwriting discounts and commissions and estimated offering expenses payable by us, as if each of these transactions had occurred on June 30, 2007.
(6)
HIF lighting systems includes all HIF units sold
under the brand name Compact Modular and its predecessor,
Illuminator.
(7)
A substantial majority of our HIF lighting systems, which generally operate at approximately 224 watts per six-lamp fixture, are installed in replacement of HID fixtures, which generally operate at approximately 465 watts per fixture in commercial
and industrial applications.
We calculate that each six-lamp HIF lighting system we install in replacement
of an HID fixture generally reduces electricity consumption by
approximately 241 watts (the difference between 465 watts
and 224 watts). In retrofit
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projects where we replace fixtures other than HID fixtures,
or where we replace fixtures with products other than our HIF
lighting systems, we generally
achieve similar wattage reductions (based on an analysis of the
operating wattages of each of our fixtures compared to the
operating wattage of the fixtures they typically replace). We
calculate the amount of kilowatt demand reduction by
multiplying (i) 0.241 kilowatts per six-lamp equivalent unit we install by
(ii) the number of units we have installed in the period presented,
including products other than our HIF
lighting systems (or a total of approximately 1.1 million units).
(8)
We calculate the number of kilowatt hours saved on a cumulative basis by assuming the reduction of 0.241 kilowatts of electricity consumption per six-lamp equivalent unit we install and assuming that each such unit has averaged 7,500 annual
operating hours since its installation.
(9)
We calculate our customers electricity costs saved by multiplying the cumulative total customer kilowatt hours saved indicated in the table by $0.077 per kilowatt hour. The national average rate for 2005, which is the
most current full year for which this information is available, was $0.0814 per kilowatt hour according to the United States Energy Information
Administration.
(10)
We calculate this figure by multiplying (i) the
estimated amount of carbon dioxide emissions that result from the
generation of one kilowatt hour of electricity (determined using the
Emissions and Generation Resource Integration Database, or EGrid,
prepared by the United States Environmental Protection Agency), by
(ii) the number of customer kilowatt hours saved as indicated in
the table.
(11)
Based on 1.1 million total units sold, which contain a
total of approximately 6.0 million lamps. Each lamp illuminates
approximately 75 square feet. The majority of
our installed fixtures contain six lamps and typically illuminate approximately 450 square feet.
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11
12
13
14
15
16
17
18
19
20
21
22
23
24
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earthquake, fire, flood and other natural disasters;
employee or other theft;
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attacks by computer viruses or hackers;
power outages; and
computer systems, Internet, telecommunications or data network failure.
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fluctuations in our financial performance;
economic and stock market conditions generally and specifically as they may impact
us, participants in our industry or comparable companies;
changes in financial estimates and recommendations by securities analysts following
our common stock or comparable companies;
earnings and other announcements by, and changes in market evaluations of, us,
participants in our industry or comparable companies;
changes in business or regulatory conditions affecting us, participants in our industry
or comparable companies;
changes in accounting standards, policies, guidance, interpretations or principles;
announcements or implementation by our competitors or us of acquisitions,
technological innovations or new products, or other strategic actions by our
competitors; or
trading volume of our common stock or the sale of stock by
our management team, directors or principal shareholders.
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institute a comprehensive compliance function;
prepare and distribute periodic and current public reports in compliance with our
obligations under the federal securities laws;
establish new internal policies, such as those relating to
internal controls over financial reporting, disclosure controls and
procedures and insider trading;
maintain appropriate committees of our board of directors;
prepare public reports of our audit and finance committee and our compensation committee;
involve and retain to a greater degree outside counsel and accountants in the above
activities; and
establish and maintain an investor relations function, including the provision of
certain information on our website.
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delaying, deferring, or preventing a change of control, even at a per share
price that is in excess of the then current price of our common stock;
impeding a merger, consolidation, takeover, or other business combination
involving us, even at a per share price that is in excess of the then current price of our common stock; or
discouraging a potential acquirer from making a tender offer or otherwise
attempting to obtain control of us, even at a per share price that is in excess of
the then current price of our common stock.
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26
our estimates regarding our future revenue, cost of revenue, gross margin,
expenses, capital requirements, liquidity and borrowing capacity and our needs for additional financing;
our estimates of market sizes and anticipated uses of and benefits from our
products and services;
our ability to market and achieve market acceptance for our products and services;
our anticipated use of the net proceeds of this offering and of our Convertible
Notes placement;
our business strategy and our underlying assumptions about
trends in our industry and about market data, including the relative demand for
and cost of energy;
our ability to protect our intellectual property and operate our business
without infringing upon the intellectual property rights of others; and
managements goals, expectations and objectives and other similar expressions
concerning matters that are not historical facts.
our limited operating history;
our ability to compete in a highly competitive market;
our ability to respond successfully to market competition;
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the retention of our senior management;
the market acceptance of our products and services;
our dependence on our customers capital budgets to generate
sales of our products and services;
price fluctuations, shortages or interruptions of component
supplies and raw
materials used to manufacture our products;
loss of one or more key customers;
delivery of satisfactory components by our current suppliers;
loss of one or more key suppliers;
warranty and product liability claims;
our ability to develop new products and services;
the success of potential acquisitions or investments in new
product lines;
our ability to protect our intellectual property or to respond to any
intellectual property litigation brought by others;
exercising our option to acquire intellectual property
rights owned by our chief executive officer;
reduction in the price of electricity;
the cost to comply with, and the effects of, any current and
future government regulations, laws and policies;
increased competition from government subsidiaries and
utility incentive programs;
the failure of our information technology systems;
the discovery of environmental contamination at our
manufacturing facility or the expenses and responsibility associated
with disposal of hazardous materials;
our ability to effectively manage our anticipated growth;
our ability to obtain additional capital;
fluctuations in our quarterly results;
our ability to use our net operating losses;
the costs associated with being a public company and our ability to comply with
the internal control and financial reporting obligations of the SEC
and Sarbanes-Oxley; and
other factors discussed in more detail under Risk Factors.
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28
29
on an actual basis;
on a pro forma basis to give effect to (i) the issuance of the Convertible Notes
and the application of the gross proceeds therefrom to cash and cash equivalents and
(ii) the repayment of approximately $2.1 million in aggregate principal amount of
shareholder notes with $0.8 million in cash and 306,932 shares
of common stock (see
Related Party Transactions and Executive Compensation Compensation Discussion and Analysis Long-Term Equity
Compensation); and
on a pro forma as adjusted basis to give effect to the pro
forma adjustments above, as well as (i) the automatic conversion
of the Convertible Notes into 2,360,802 shares of
our common stock; (ii) the automatic conversion of 4,808,012 shares of our
outstanding preferred stock into common stock on a one-for-one basis; and (iii) the receipt of estimated net proceeds of $
million from our sale of shares of common stock in this offering at an
assumed initial public offering price of $ per share (the midpoint of
the range set forth on the cover of this
prospectus), less the estimated underwriting discounts and commissions and
estimated offering expenses payable by us.
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As of June 30, 2007
Pro Forma
Actual
Pro Forma
as Adjusted
(In
thousands, except share and per share data, unaudited)
$
696
$
12,046
$
$
9,998
$
9,998
$
10,600
5,028
5,028
5,959
5,959
9,993
9,993
(361
)
(1,739
)
(2,128
)
(3,090
)
(3,090
)
15,401
16,151
$
25,399
$
36,749
$
954,390 shares of common stock issuable upon the exercise of outstanding warrants with a
weighted average exercise price of $2.24 per share;
4,712,077 shares of common stock issuable upon the exercise of outstanding options with a weighted average exercise price of $1.57
per share; and
646,700 shares of common stock reserved for future issuance under our stock option plans.
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31
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Shares Purchased
(1)
Total Consideration
Average Price
Number
Percent
Amount
Percent
Per
Share
%
%
$
%
%
$
100
%
$
100
%
(1)
The number of shares for existing shareholders includes shares being
sold by the selling shareholders in this offering. The number of shares disclosed for the new
public investors does not include the shares being purchased by the new public investors from the
selling shareholders in this offering.
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32
33
Three Months
Fiscal Year Ended March 31,
Ended June 30,
2003
2004
2005
2006
2007
2006
2007
(unaudited)
(in thousands, except per share amounts)
$
9,018
$
12,423
$
21,783
$
33,280
$
48,183
$
9,680
$
16,721
5,091
7,376
14,043
22,524
32,487
6,255
11,118
3,927
5,047
7,740
10,756
15,696
3,425
5,603
1,434
1,927
3,461
4,875
6,162
1,269
1,571
1,772
2,381
5,416
5,991
6,459
1,518
2,111
139
261
213
1,171
1,078
211
437
582
478
(1,350
)
(1,281
)
1,997
427
1,484
108
222
570
1,051
1,044
253
295
3
5
201
1
40
474
256
(1,917
)
(2,327
)
1,154
175
1,229
173
102
(702
)
(762
)
225
34
481
301
154
(1,215
)
(1,565
)
929
141
748
(57
)
301
154
(1,272
)
(1,565
)
929
141
748
(122
)
(122
)
(104
)
(3
)
(201
)
(1
)
(75
)
(972
)
(83
)
$
179
$
32
$
(2,348
)
$
(1,568
)
$
645
$
140
$
673
$
0.03
$
0.01
$
(0.36
)
$
(0.18
)
$
0.07
$
0.02
$
0.07
$
0.02
$
0.00
$
(0.36
)
$
(0.18
)
$
0.04
$
0.01
$
0.04
5,964
6,197
6,470
8,524
9,080
8,999
9,950
9,169
10,218
6,470
8,524
16,433
15,073
18,088
As of March 31,
As of June 30,
2003
2004
2005
2006
2007
2007
(unaudited)
(in thousands)
$
175
$
107
$
493
$
1,089
$
285
$
696
6,397
11,147
21,397
24,738
33,583
37,719
1,058
4,796
7,921
10,492
10,603
9,998
4,953
5,028
1,007
1,007
116
116
779
4,167
5,591
5,959
5,959
(105
)
(104
)
(246
)
(398
)
(2,128
)
(2,128
)
$
2,192
$
3,448
$
5,699
$
6,622
$
14,308
$
15,401
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(1)
Includes stock-based compensation expense recognized under
SFAS 123(R) as
follows:
Fiscal Year Ended
Three Months Ended
March 31, 2007
June 30, 2007
(unaudited)
(in thousands)
$
24
$
21
154
65
153
52
32
8
$
363
$
146
(2)
For fiscal 2007 and our fiscal 2008 first quarter, represents the impact
attributable to the accretion of accumulated dividends on our
Series C preferred stock, plus accumulated dividends on our Series A
preferred stock prior to its conversion into common stock on
March 31, 2007. The Series C preferred stock will
convert automatically into common stock on a one-for-one basis upon the closing of this
offering and our obligation to pay accumulated dividends will be
extinguished. For fiscal 2005 and 2006, represents accumulated
dividends on our Series A preferred
stock prior to its conversion into common stock. See Managements Discussion and Analysis of
Financial Condition and Results of Operations Revenue and
Expense Components Accretion of
Preferred Stock and Preferred Stock Dividends.
(3)
Represents the estimated
fair market value of the premium paid to
holders of Series A preferred stock upon induced conversion.
See Managements Discussion and Analysis of
Financial Condition and Results of Operations Revenue and
Expense Components Conversion of
Preferred Stock.
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34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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No. 123(R),
Share-Based Payment.
Prior to fiscal 2007, we accounted for our stock option awards under the
intrinsic value method under the provisions of Accounting Principles
Board Opinion (APB) No. 25,
Accounting for Stock Issued to
Employees
, and we did not recognize the fair value
expense of our stock option awards in our statements of operations, although we did report our pro
forma stock option award fair value expense in the footnotes to our financial statements. We
recognized $0.4 million of stock-based compensation
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Fiscal
Year Ended March 31,
Three
Months Ended June 30,
(unaudited)
(dollars
in thousands)
2005
2006
2007
2006
2007
% of
% of
% of
% of
% of
Amount
Revenue
Amount
Revenue
% Change
Amount
Revenue
% Change
Amount
Revenue
Amount
Revenue
% Change
$
21,783
100.0
%
$
33,280
100.0
%
52.8
%
$
48,183
100.0
%
44.8
%
$
9,680
100.0
%
$
16,721
100.0
%
72.7
%
14,043
64.5
%
22,524
67.7
%
60.4
%
32,487
67.4
%
44.2
%
6,255
64.6
%
11,118
66.5
%
77.7
%
7,740
35.5
%
10,756
32.3
%
39.0
%
15,696
32.6
%
45.9
%
3,425
35.4
%
5,603
33.5
%
63.6
%
3,461
15.9
%
4,875
14.6
%
40.9
%
6,162
12.8
%
26.4
%
1,269
13.1
%
1,571
9.4
%
23.8
%
5,416
24.9
%
5,991
18.0
%
10.6
%
6,459
13.4
%
7.8
%
1,518
15.7
%
2,111
12.6
%
39.1
%
213
1.0
%
1,171
3.5
%
449.8
%
1,078
2.2
%
(7.9
%)
211
2.2
%
437
2.6
%
107.1
%
(1,350
)
(6.2
%)
(1,281
)
(3.8
%)
5.1
%
1,997
4.1
%
NM
427
4.4
%
1,484
8.9
%
247.5
%
570
2.6
%
1,051
3.2
%
84.4
%
1,044
2.2
%
0.7
%
253
2.6
%
295
1.8
%
16.6
%
3
0.0
%
5
0.0
%
66.7
%
201
0.4
%
NM
1
0.0
%
40
0.2
%
NM
(1,917
)
(8.8
%)
(2,327
)
(7.0
%)
(21.4
%)
1,154
2.4
%
NM
175
1.8
%
1,229
7.4
%
602.3
%
(702
)
(3.2
%)
(762
)
(2.3
%)
8.5
%
225
0.5
%
NM
34
0.4
%
481
2.9
%
(1,215
)
(5.6
%)
(1,565
)
(4.7
%)
(28.8
%)
929
1.9
%
NM
141
1.5
%
748
4.5
%
430.5
%
(57
)
(0.3
%)
0.0
%
100.0
%
0.0
%
NM
0.0
%
0.0
%
(1,272
)
(5.8
%)
(1,565
)
(4.7
%)
(23.0
%)
929
1.9
%
NM
141
1.5
%
748
4.5
%
430.5
%
(104
)
(0.5
%)
(3
)
(0.0
%)
97.1
%
(201
)
(0.4
%)
NM
(1
)
(0.0
%)
(75
)
(0.4
%)
NM
(972
)
(4.5
%)
0.0
%
100.0
%
(83
)
(0.2
%)
100
%
0.0
%
0.0
%
0.0
%
$
(2,348
)
(10.8
%)
$
(1,568
)
(4.7
%)
33.2
%
$
645
1.3
%
NM
$
140
1.4
%
$
673
4.0
%
380.7
%
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For
the Three Months Ended
June 30,
Sept 30,
Dec 31,
Mar 31,
June 30,
Sept 30,
Dec 31,
Mar 31,
June 30,
2005
2005
2005
2006
2006
2006
2006
2007
2007
(in thousands,
unaudited)
$
5,004
$
7,984
$
8,898
$
11,394
$
9,680
$
10,631
$
13,563
$
14,309
$
16,721
3,799
5,509
5,759
7,457
6,255
7,378
9,200
9,654
11,118
1,205
2,475
3,139
3,937
3,425
3,253
4,363
4,655
5,603
966
1,100
1,509
1,300
1,269
1,336
1,614
1,943
1,571
1,690
1,376
1,369
1,556
1,518
1,608
1,551
1,782
2,111
239
330
269
333
211
229
257
381
437
(1,690
)
(331
)
(8
)
748
427
80
941
549
1,484
215
228
376
232
253
260
261
270
295
1
4
1
11
16
173
40
(1,905
)
(559
)
(383
)
520
175
(169
)
696
452
1,229
(623
)
(183
)
(126
)
170
34
(33
)
136
88
481
(1,282
)
(376
)
(257
)
350
141
(136
)
560
364
748
0
(1
)
(1
)
(1
)
(1
)
(45
)
(79
)
(76
)
(75
)
(83
)
$
(1,282
)
$
(377
)
$
(258
)
$
349
$
140
$
(181
)
$
481
$
205
$
673
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Fiscal
Year Ended March 31,
Three
Months Ended June 30,
2005
2006
2007
2006
2007
(unaudited)
(in thousands)
$
(863
)
$
(3,401
)
$
(6,234
)
$
(755
)
$
1,822
(5,888
)
(162
)
(969
)
(209
)
(706
)
7,137
4,159
6,399
181
(705
)
$
386
$
596
$
(804
)
$
(783
)
$
411
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Payments
Due By Period
Less than
More than
Total
1 Year
1-3 Years
3-5 Years
5 Years
(in thousands)
$
13,338
$
1,290
$
8,186
$
1,346
$
2,516
1,503
853
412
238
3,021
3,021
$
17,862
$
5,164
$
8,598
$
1,584
$
2,516
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(1)
Does not include any payment amounts under our 6% convertible subordinated
notes issued on August 3, 2007, which notes will convert automatically upon the closing
of this offering into shares of our common stock. See
Description of Capital Stock.
(2)
Debt and capital leases includes fixed contractual interest
payments by period of $554,000 (less than 1 year); $667,000
(1-3 years); $346,000 (3-5) years); and $324,000 (more
than 5 years).
(3)
Reflects non-cancellable purchase commitments for certain inventory items and
capital expenditure commitments entered into in order to secure better pricing and
ensure materials on hand.
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Three Months
Fiscal Year Ended March 31,
Ended
2005
2006
2007
June 30, 2007
6 Years
6 Years
6.6 Years
7.6 Years
4.32
%
4.35
%
4.62
%
4.58
%
39
%
50
%
60
%
60
%
N/A
N/A
6
%
6
%
0
%
0
%
0
%
0
%
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Financial
Number of shares
reporting
underlying options
Exercise price per
Fair market value
intrinsic value
Date of grant
granted
share
(1)
per share
(2)
per share
(3)
40,000
$
2.25 2.50
$
2.20
$
40,000
2.50
2.20
150,000
2.50
2.20
27,000
2.50
2.20
5,000
2.50
2.20
2,000
2.75
2.20
2,000
2.75
2.20
35,000
2.75
2.20
920,000
2.20
2.20
436,500
2.20
4.15
1.95
50,000
2.20
4.15
1.95
429,432
4.49
4.49
(1)
The exercise price per share was at least equal to the fair market
value of our common stock on each applicable stock option grant date as determined by our
compensation committee and board of directors on the basis described in the paragraphs
below. For option grants made between April 2006 and November 2006,
the per share exercise price was established principally based on
the per share issuance price of our then recent preferred stock
placements to third-party investors and, in our opinion, such per
share exercise prices were above the then current fair market value
of our common stock.
(2)
The fair market value per share was determined by our compensation
committee and board of directors on each applicable stock option grant date on the basis
described in the paragraphs below. However, for option grants in March and April 2007, fair
market value per share was reassessed subsequent to the grant dates for financial statement reporting purposes as
described in the paragraphs below.
(3)
The financial reporting intrinsic value per share is the difference
between the subsequently reassessed fair value per share for financial statement reporting purposes as
described in the paragraphs below and the fair market value exercise price per share as
established on each applicable stock grant date by our compensation committee and board of
directors on the basis described in the paragraphs below.
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63
64
65
66
67
68
69
70
71
72
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Thirty-two states have, through legislation or regulation, ordered utilities to
design and fund programs that promote or deliver energy efficiency.
Twelve states have implemented, or are in the process of implementing, Energy
Efficiency Resource Standards, which generally require utilities to allocate funds
to energy efficiency programs to meet near-term savings targets set by state
governments or regulatory authorities. These states include California, Texas,
Colorado, New Jersey and Illinois.
In recent years, there has also been an increasing focus on decoupling, a regulatory
initiative designed to break the linkage between utility kWh sales and revenues, in
order to remove the disincentives for utilities to promote load reducing
initiatives. Decoupling aims to encourage utilities to actively promote energy
efficiency by allowing utilities to generate revenues and returns on investment
from employing energy management solutions. To date, nearly half of all states
have adopted or are adopting forms of decoupling for gas or electric utilities.
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comprehensive site assessment, which includes a review of the
current lighting requirements and energy usage at the customers
facility;
site field verification, where we perform a test
implementation of our energy management system at a customers
facility upon request;
utility incentive and government
subsidy management, where we
assist our customers in identifying, applying for and obtaining
available utility incentives or government
subsidies;
engineering design, which involves designing a customized system to
suit our customers facility lighting and energy management
needs, and providing the customer with a written analysis of the potential
energy savings and lighting and environmental benefits associated with
the designed system;
project management, which involves our working with the
electrical contractor in overseeing and managing all phases of
implementation from delivery through installation;
installation services, which we provide through our national
network of qualified installers; and
recycling in connection with our retrofit
installations, where we remove, dispose of and recycle our customers
legacy lighting fixtures.
OfficeMax, Inc.
SYSCO Corp.
Pepsi Americas Inc.
Textron, Inc.
Sealed Air Corp.
Toyota Motor Corp.
Sherwin-Williams Co.
United Stationers Inc.
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Portions of our core HIF lighting technology (including our optically efficient
reflector and some of our thermally efficient fixture I-frame
constructions) are patented.
Our ballast assembly method is patent pending.
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Our light pipe technology and its
manufacturing methods are patent pending.
Our wireless lighting control system is patent pending.
The technology and methodology of our shared savings
program
is patent pending.
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73
74
75
76
Name
Age
Position
48
President, Chief Executive Officer and Director
47
Chief Financial Officer and Treasurer
43
Executive Vice President and Director
42
Vice President, General Counsel and Secretary
48
Vice President of Operations
42
Senior Vice President of Business Development
40
Vice President of Strategic Initiatives
59
Chairman of the Board
44
Director
65
Director
71
Director
51
Director
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77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
F-1
F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-9
F-10
F-11
F-12
F-13
F-14
F-15
F-16
F-17
F-18
F-19
F-20
F-21
F-22
F-23
F-24
F-25
II-1
II-2
II-3
II-4
II-5
S-1
E-1
E-2
to motivate our executive officers to achieve strong financial performance,
particularly sales, profitability growth and increased shareholder value;
to provide stability during our development stage; and
to align the interests of our executive officers with the interests of our shareholders.
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We propose to enter into new, standardized employment agreements with our NEOs.
The agreements will outline the executives position, base salary and incentive and
benefit plan participation during a specified term. The agreements will automatically renew unless either party gives written
notice in advance of the expiration of the term. The agreements also will provide for
employment protections and severance benefits in the event of certain terminations, and
for enhanced protections and benefits following a change of control. Our compensation
committees goals in putting these agreements in place are to secure and retain our
executive officers and to ensure stability and structure during our development stage,
particularly as a new public company. These employment agreements would replace the
existing employment agreements we have with certain of our NEOs.
We have amended and restated our 2004 Equity Incentive Plan, which will be
renamed the Orion Energy Systems, Inc. 2004 Stock and Incentive Awards Plan. Among
other things, the amendment and restatement does the following:
Increases the shares available under the plan from 1.0 million to 3.5
million shares;
Replaces the authority of our chief executive officer to make grants of
awards with the ability of our board of directors to delegate to another
committee of the board, including a committee comprised solely of our chief
executive officer, the ability to make grants of awards, subject to various
restrictions and limitations on such delegated authority;
Expands the list of performance goals that may be used for IRC Section 162(m) awards;
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Permits the grant of annual and long-term cash bonus awards
for IRC Section 162(m) purposes;
Includes a provision requiring that awards be adjusted in certain
circumstances, such as in the event of a stock split, to avoid potential
adverse accounting consequences;
Imposes a 10-year limit on the term of a stock option;
Permits cashless exercises of stock options through a broker-dealer;
Adds restricted stock units as a form of award available under the plan;
Caps the amount of an award that may vest or be paid upon a change of
control to the extent needed to preserve our deduction under the IRC excess parachute payment rules;
Permits awards to be assumed under the plan in the event we acquire
another entity;
Prohibits the repricing or backdating of stock options and stock
appreciation rights; and
Expands the list of plan provisions that may be amended only with
shareholder approval.
We have revised and amended our compensation committee charter to reflect our
compliance with current rules and guidelines of the Nasdaq Global Market, the
Exchange Act, and Sarbanes Oxley.
We are considering a management cash bonus program connected to the closing of
this offering and the post-offering price performance of our common stock.
Base salary;
Short-term incentive cash bonus compensation and other cash bonus compensation;
Long-term equity incentive compensation; and
Retirement and other benefits.
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Fiscal
Option Awards
All Other
Name and Principal Position
Year
Salary ($)
Bonus ($)
($)(1)
Compensation ($)
Total ($)
2007
270,000
18,572
156,739 (2)
445,311
2007
150,000
20,000
18,562
13,014 (3)
201,576
2007
149,375
50,000
53,291
15,764 (4)
268,430
2007
150,000
20,000
16,705
15,053 (3)
201,758
2007
150,000
20,000
14,848
12,366 (5)
197,214
2007
160,413
17,042
112,589
290,044
2007
126,500
13,419
40,306
180,225
(1)
Represents the amount of expense recognized for financial accounting purposes pursuant to
SFAS 123(R) for fiscal 2007 in our financial statements included elsewhere in this prospectus.
Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related
to service-based vesting conditions.
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(2)
Includes (i) $77,880 in guarantee fees we paid to Mr. Verfuerth in exchange for his personal
guarantee of certain of our outstanding indebtedness (see Related Party Transactions); (ii)
$36,667 in forgiveness of outstanding indebtedness pursuant to Mr. Verfuerths existing
employment agreement (see Related Party Transactions); (iii) $27,000 in intellectual
property fees we paid to Mr. Verfuerth pursuant to his existing
employment agreement; (iv) an automobile allowance of $12,000; and (v) $3,192 in life insurance premiums and health club membership
dues.
(3)
Includes (i) an automobile allowance of $12,000; (ii) matching contributions under our 401(k)
Plan; and (iii) life insurance premiums.
(4)
Includes (i) an automobile allowance of $1,000; (ii) life insurance premiums; and (iii) reimbursement of health and disability insurance
premiums pursuant to the terms of Mr. Scribantes employment agreement.
(5)
Includes (i) an automobile allowance of $12,000 and (ii) life insurance premiums.
(6)
Mr. Wadmans employment with us ended on February 19, 2007. The amounts shown in All Other
Compensation include (i) $101,439 of payments and other benefits pursuant to a separation
agreement that we entered into in connection with Mr. Wadmans termination of employment (see
Payments upon Termination or Change of Control); (ii) $11,000 as an automobile
allowance; and (iii) matching contributions under our 401(k) Plan.
(7)
Mr. Pranges employment with us ended on March 12, 2007. The amounts shown in All Other
Compensation consist of payments for services rendered in fiscal years prior to fiscal 2007
that we made to Mr. Prange pursuant to a separation agreement in connection with the
termination of his employment (see Payments upon Termination or Change of
Control).
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All Other
Option
Grant
Awards:
Date
Estimated Future
Payouts
Number of
Exercise
Fair
Under Non-Equity
Securities
Price of
Value of
Incentive Plan Awards(1)
Underlying
Option
Option
Grant
Threshold
Target
Max
Options
Awards
Awards
Name
Date
($)
($)
($)
(#)(2)
($/Sh)
($)(3)
162,000
(4)
270,000
270,000
12/20/2006
250,000
2.20
(5)
329,965
12/20/2006
100,000
2.20
(5)
131,986
90,000
(4)
150,000
150,000
6/2/2006
100,000
2.50
(6)
126,697
12/20/2006
75,000
2.20
(5)
98,990
12/20/2006
50,000
2.20
(5)
65,993
52,499
(1)
Amounts in the three columns below represent possible payments for the cash bonus incentive
compensation awards that we granted with respect to the performance period of fiscal 2007. No
amounts were actually earned under these awards, although we did pay Messrs. Scribante, Potts
and Waibel and Ms. Verfuerth discretionary bonuses of $50,000, $20,000, $20,000 and $20,000,
respectively.
(2)
We granted the stock options listed in this column under our 2004 Equity Incentive Plan in
fiscal 2007. As described under Compensation Discussion and Analysis Elements of
Compensation Long-Term Equity Incentive Compensation we granted stock options on July 27,
2007 to Mr. Verfuerth and Ms. Verfuerth for 180,958 shares and 125,974 shares, respectively,
at an exercise price of $4.49 per share, in connection with their satisfaction of certain
loans from us through their redemption of an equal number of shares of our common stock.
(3)
Represents the grant date fair value of the stock options computed in accordance with SFAS
123(R).
(4)
Represents the maximum discretionary payout of 60% of the target payout for achievement of
75% of target performance with respect to each performance measure under the award.
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(5)
The exercise price per share was equal to the fair market value of a share of our common
stock on the grant date, as determined by our compensation committee and board of directors.
(6)
The exercise price per share of $2.50 was equal to the price at which we offered shares in
our most recent offering of our Series B preferred stock at the time of the option grant.
Option
Awards
Number of Shares
Number of Shares
Underlying
Underlying
Unexercised
Unexercised
Option
Option
Options (#)
Options (#)
Exercise Price
Expiration
Name
Exercisable
Unexercisable (1)
($)
Date
250,000
(1)(2)
2.20
12/20/2016
100,000
(3)
2.20
12/20/2016
20,000
80,000
(4)
2.50
06/02/2016
50,000
125,000
(5)
2.25
07/31/2014
24,000
16,000
(6)
2.25
03/24/2014
75,000
(7)
2.20
12/20/2016
250,000
0.938
10/01/2011
340,318
0.688
06/01/2011
50,000
(1)(8)
2.20
12/20/2016
50,000
0.938
10/01/2011
16,666
0.688
10/01/2011
20,000
2.25
05/20/2007
172,222
0.688
06/10/2007
(1)
Does not reflect
the July 27, 2007 grant of options to purchase 180,958 and 125,974 shares of our common stock,
respectively, to Mr. Verfuerth and Ms. Verfuerth described above under Compensation
Discussion and Analysis Elements of
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Compensation Long-Term Equity Incentive Compensation, because such stock options were not
outstanding as of March 31, 2007.
(2)
The option will vest with respect to 50,000 shares on December 20 of each of 2007, 2008,
2009, 2010 and 2011, contingent on Mr. Verfuerths continued employment through the applicable
vesting date.
(3)
The option will vest with respect to 20,000 shares on December 20 of each of 2007, 2008,
2009, 2010 and 2011, contingent on Mr. Waibels continued employment through the applicable
vesting date.
(4)
The option will vest with respect to 20,000 shares on March 31 of each of 2008, 2009, 2010
and 2011, contingent on Mr. Scribantes continued employment through the applicable vesting
date.
(5)
The option will vest with respect to 50,000 shares on March 31 of each of 2008 and 2009, and
with respect to 25,000 shares on March 31, 2010, contingent on Mr. Scribantes continued
employment through the applicable vesting date.
(6)
The option will vest with respect to 8,000 shares on March 31 of each of 2008 and 2009,
contingent on Mr. Scribantes continued employment through the applicable vesting date.
(7)
The option will vest with respect to 15,000 shares on December 20 of each of 2007, 2008,
2009, 2010 and 2011, contingent on Mr. Pottss continued employment through the applicable
vesting date.
(8)
The option will vest with respect to 10,000 shares on December 20 of each of 2007, 2008,
2009, 2010 and 2011, contingent on Ms. Verfuerths continued employment through the applicable
vesting date.
(9)
Subsequent to March 31, 2007, in connection with Mr. Wadmans termination of employment, we
entered into a separation agreement with Mr. Wadman in which we agreed to amend his option
agreement to permit Mr. Wadman to exercise the option with respect to an additional 20,000
shares during a nine-month period between June 30, 2009 and March 31, 2010, so long as he
complies with his obligations under his separation agreement. The amendment also extends the
exercise period of the option with respect to the original 20,000 shares beyond the normal
expiration date of the option.
(10)
Subsequent to March 31, 2007, in connection with Mr. Pranges termination of employment, we
entered into a separation agreement with Mr. Prange in which we agreed to amend his existing
option agreement covering 220,222 shares of our common stock, which was exercisable with
respect to 172,222 shares of common stock on the date of termination, to permit Mr. Prange to
exercise the option with respect to the 48,000 shares not otherwise exercisable during a
90-day period following the effective date of his separation agreement. We also agreed to
amend Mr. Pranges option agreement to permit him to exercise his option with respect to
17,222 shares for a 90-day period commencing on the closing of our initial public offering, and
to exercise his option with respect to the remaining 172,222 shares (less any of the 17,222
shares he acquires following our initial public offering) between March 12, 2009 and June 10,
2009, in each case so long as Mr. Prange complies with his obligations under his separation
agreement.
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Option
Awards
Number of Shares
Acquired on
Name
Exercise (#)
Value Realized on Exercise ($) (1)
1,000,000
1,387,500
650,000
920,625
75,000
59,682
90,239
783,334
1,134,776
(1)
Represents the difference, if any, between the fair market value on the date of exercise of
the shares purchased as determined by our compensation committee and our board of directors
and the aggregate exercise price paid by the executive.
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Employment
Renewal
Noncompete and
Executive
Severance
Term
Term
Confidentiality
2 X Salary +
2 Years
2 Years
Yes
Avg. Bonus
1 X Salary +
1 Year
1 Year
Yes
General counsel
Executive vice presidents
Avg. Bonus
1/2 X Salary +
1 Year
1 Year
Yes
Avg. Bonus
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Post Change
of Control
Employment
Excise Tax
Executive
Severance
Term
Trigger
Gross-Up
Valley
3 X Salary +
3 Years
Double
No
Yes
Avg. Bonus
2 X Salary +
2 Years
Double
No
Yes
General counsel
Executive vice presidents
Avg. Bonus
1 X Salary +
1 Years
Double
No
Yes
Avg. Bonus
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After Change in Control Without
Cause or for Good Reason
Before Change in
Before
Control Without
Application of
After Application of
Cause or for Good
Valley
Valley
Name
Benefit
Reason ($)
Provision ($)(1)
Provision ($)(1)
Severance
583,200
874,800
Pro Rata Target Bonus
71,901
71,901
Benefits
11,029
11,029
Total
666,130
957,730
Severance
171,667
336,667
Pro Rata Target Bonus
Benefits
16,304
16,304
Total
187,971
352,971
Severance
166,667
316,667
Pro Rata Target Bonus
36,986
36,986
Benefits
Total
203,653
353,653
Severance
171,667
336,667
Pro Rata Target Bonus
Benefits
16,304
16,304
Total
187,971
352,971
Severance
171,667
336,667
Pro Rata Target Bonus
Benefits
11,029
11,029
Total
182,696
347,696
1,428,421
2,365,021
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(1)
The valley provision in the proposed new employment agreements provides that all amounts
payable under the employment agreement and any other of our agreements or plans that
constitute change of control payments will be cut back to one dollar less than three times the
executives base amount, as defined by Code Section 280G, unless the executive would retain
a greater amount by receiving the full amount of the payment and paying the excise taxes.
With certain exceptions, any person (as such term is used in
sections 13(d) and l4(d) of the Exchange Act), becomes a beneficial owner (as defined in Rule
13d-3 under the Exchange Act),
directly or indirectly, of securities representing more than 50%
of the voting power of our then outstanding securities.
Our shareholders approve (or, if shareholder approval is not
required, our board approves) an agreement providing for (i) our
merger or consolidation with another entity where our shareholders
immediately prior to the merger or consolidation will not
beneficially own, immediately after the merger or consolidation,
securities of the surviving entity representing more than 50% of
the voting power of the then outstanding securities of the
surviving entity, (ii) the sale or other disposition of all or
substantially all of our assets, or (iii) our liquidation or
dissolution.
Any person has commenced a tender offer or exchange offer for 30%
or more of the voting power of our then outstanding shares.
Directors are elected such that a majority of the members of our
board shall have been members of our board for less than two
years, unless the election or nomination for election of each new
director who was not a director at the beginning of such two-year
period was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning
of such period.
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Number of Option
Weighted Average Exercise
Name
Shares
Cashed Out (#)
Price per Option Share ($)
Value Realized ($)
250,000
2.20
100,000
2.20
315,000
2.33
665,318
0.952
116,666
1.44
(1)
The option shares shown in this table for Mr. Verfuerth do not reflect his receipt of the
July 27, 2007 grant of options to purchase 180,958 shares of our common stock at an exercise
price of $4.49 per share, which is described above under Compensation Discussion and Analysis
Elements of Compensation Long-Term Equity Incentive Compensation, because such stock
options were not outstanding as of March 31, 2007. If the stock options granted to Mr.
Verfuerth on July 27, 2007 were reflected in the table, his total value realized would be
$ .
(2)
The option shares shown in this table for Ms. Verfuerth do not reflect her receipt of the
July 27, 2007 grant of options to purchase 125,974 shares of our common stock at an exercise
price of $4.49 per share, which is described above under Compensation Discussion and Analysis
Elements of Compensation Long-Term Equity Incentive Compensation, because such stock
options were not outstanding as of March 31, 2007. If the stock options granted to Ms.
Verfuerth on July 27, 2007 were reflected in the table, her total value realized would be
$ .
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Fees Earned
Option
or Paid in
Awards
All Other
Name
Cash ($)
($)(1)(2)
Compensation ($)
Total ($)
7,000
7,000
12,000
26,827
5,000
43,827
6,000
5,225
11,225
9,000
4,180
5,000
18,180
(1)
Represents the amount of expense recognized for financial accounting purposes pursuant to
SFAS 123(R) for fiscal 2007 as reflected in our financial statements included elsewhere in this
prospectus. Pursuant to SEC rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions.
(2)
The aggregate number of option awards outstanding as of March 31, 2007 for each director was
as follows: Mr. Kackley held options to purchase an aggregate of 114,000 shares of our common
stock at a weighted average exercise price of $1.44 per share; Mr. Grohmann held an option to
purchase 20,000 shares of our common stock at an exercise price of $0.75 per share; and Mr.
Trotter held an option to purchase 20,000 shares of our common stock at an exercise price of
$0.75 per share. The grant date fair value of our special fiscal 2007 option grant to Mr.
Kackley, computed in accordance with SFAS 123(R), was $53,110. We also granted our non-employee
directors additional stock options on July 27, 2007, as follows: Messrs. Kackley, Quadracci
and Grohmann each received an option to purchase 10,000 shares of our common stock, and Ms.
Propper de Callejon and Mr. Trotter each received an option to purchase 5,000 shares of our
common stock. All of the options granted on July 27, 2007 have an exercise price of $4.49 per
share.
(3)
Ms. Propper de Callejon, who is associated with Clean Technology Fund II, LP, one of our
principal shareholders, received no additional compensation in fiscal 2007 for her service as
a director.
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each person (or group of affiliated persons) known to us to be the beneficial
owner of more than 5% of our common stock (assuming the conversion of all of our
preferred stock into 4,808,012 shares of common stock on a one-for-one basis and
the conversion of our Convertible Notes into 2,360,802 shares of
common stock upon closing of this
offering);
each of our named executive officers;
each of our directors;
all of our directors and current and certain former executive
officers as a group; and
all selling shareholders.
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Percentage
of Shares Beneficially Owned
Number of Shares
Number of
After Offering
Beneficially Owned
Shares to be
if Over-
Before
After
Sold in
Before
After
allotment
Offering
Offering
Offering
Offering
Offering
is Exercised
3,341,993
17.2
%
1,050,000
5.4
806,986
4.0
270,340
1.4
3,341,993
17.2
36,409
*
2,193,157
11.3
211,000
1.1
1,270,000
6.5
514,790
2.7
20,000
*
72,023
*
9,906,698
48.2
%
2,193,157
11.3
%
1,781,737
9.2
1,011,639
5.2
*
Indicates less than 1%.
(1)
Includes (i) 2,534,328 shares of common stock, 75,000 of which have been pledged as
security for a personal loan; (ii) 750,000 shares of common stock held by Mr. Verfuerths
wife, Patricia A. Verfuerth; and (iii) 57,665 shares of common stock issuable upon the
exercise of vested and exercisable options held by Mr. Verfuerths wife, Patricia A.
Verfuerth. The number does not reflect 250,000 shares of common stock subject to options held
by Mr. Verfuerth on June 30, 2007 that will not become exercisable within 60 days. The number
also does not reflect Mr. Verfuerths redemption of 180,958 shares in repayment of the
principal amount of a loan or the offsetting grant of an option to purchase 180,958 shares,
each effective on July 27, 2007. See Executive Compensation Compensation Discussion and
Analysis Elements of Compensation Long-Term Equity Incentive Compensation. Additionally,
the number does not reflect Mr. Verfuerths gift of 125,974 shares to Ms. Verfuerth in
connection with the repayment of the principal amount of a loan. See
note (5) below.
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(2)
Does not include 100,000 shares of common stock subject to an option held by Mr. Waibel that
will not become exercisable within 60 days.
(3)
Includes (i) 216,668 shares of common stock and (ii) 590,318 shares of common stock issuable
upon the exercise of vested and exercisable options. The number does not include 75,000
shares of common stock subject to options that will not become exercisable within 60 days.
(4)
Includes (i) 157,110 shares of common stock; (ii) 19,230 shares of common stock issuable upon
the conversion of Series B preferred stock; and (iii) 94,000 shares of common stock issuable
upon the exercise of vested and exercisable options. The number does not include 221,000
shares of common stock subject to an option that will not become exercisable within 60 days.
(5)
Includes (i) 750,000 shares of common stock; (ii) 2,534,328 shares of common stock held by
Ms. Verfuerths husband, Neal R. Verfuerth, 75,000 of which have been pledged as security for
a loan; and (iii) 57,665 shares of common stock issuable upon the exercise of vested and
exercisable options. The number does not reflect 50,000 shares of common stock subject to
options held by Ms. Verfuerth on June 30, 2007 that will not become exercisable within 60
days. The number also does not reflect Ms. Verfuerths
receipt of 125,974 shares gifted from Mr. Verfuerth. See note (1) above. Additionally, the number does not reflect Ms. Verfuerths
redemption of such shares in repayment of the principal amount of a loan, or the offsetting
grant of an option to purchase 125,974 shares, each effective on July 27, 2007. See
Executive Compensation Compensation Discussion and
Analysis Elements of Compensation Long-Term Equity Incentive Compensation.
(6)
Excludes an option of 10,000 shares granted on July 27, 2007.
(7)
Includes (i) 1,636,364 shares of common stock issuable upon the conversion of Series C
preferred stock owned by Clean Technology and (ii) 556,793 shares of common stock issuable
upon the conversion of the Convertible Note held by Clean Technology. Ms. Propper de
Callejon is the managing member of Expansion Capital Partners II General Partner, LLC, which
is the general partner of Expansion Capital Partners II, LP, which is the general partner of
Clean Technology. Ms. Propper de Callejon disclaims beneficial ownership of the shares held
by Clean Technology, except to the extent of her pecuniary interest therein. The address of
Clean Technology is 90 Park Avenue, Suite 1700, New York, NY 10016. Excludes an
option of 5,000 shares granted on July 27, 2007.
(8)
Includes (i) 207,000 shares of common stock and (ii) 4,000 shares of common stock issuable
upon the exercise of options that are vested and exercisable or that will become vested and
exercisable in the next 60 days. The number does not include 104,000 shares of common stock
subject to an option held by Mr. Kackley on June 30, 2007 that will not become exercisable
within 60 days. Excludes an option of 10,000 shares granted on July 27, 2007.
(9)
Includes (i) 620,000 shares of common stock; (ii) 480,000 shares of common stock issuable
upon the conversion of Series B preferred stock; (iii) 160,000 shares of common stock issuable
upon the exercise of warrants; and (iv) 10,000 shares of common stock issuable upon the
exercise of vested and exercisable options. The number does not include 10,000 shares of
common stock subject to an option held by Mr. Grohmann on June 30, 2007 that will not become
exercisable within 60 days, or the July 27, 2007 option grant for 10,000 shares.
(10)
Includes (i) 504,790 shares of common stock and (ii) 10,000 shares of common stock issuable
upon the exercise of vested and exercisable options. The number does not include 10,000
shares of
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common stock subject to an option held by Mr. Trotter on June 30, 2007 that will not become
exercisable within 60 days. Excludes an option of 5,000 shares granted on July 27, 2007.
(11)
Includes 20,000 shares of common stock issuable upon the exercise of vested and exercisable
options. The number does not include 20,000 shares of common stock subject to an option held
by Mr. Wadman that will not become exercisable within 60 days.
(12)
Includes (i) 6,801 shares of common stock; (ii) 48,000 shares of common stock issuable upon
the exercise of vested and exercisable options; and (iii) 17,222 shares of common stock
subject to an option that will become exercisable during a 90-day period commencing upon the
closing of this offering. The number does not include 155,000 shares of common stock subject
to an option that will not become exercisable within 60 days.
(13)
Includes (i) 1,636,364 shares of common stock issuable upon the conversion of Series C
preferred stock and (ii) 556,793 shares of common stock issuable upon the conversion of the
Convertible Notes. Clean Technology is the name we use for Clean Technology Fund II, LP. The
address of Clean Technology is 90 Park Avenue, Suite 1700, New York, NY 10016.
(14)
Includes 1,781,737 shares of common stock issuable upon the
conversion of its Convertible
Note. GEEFS is the name we use for GE Capital Equity Investments,
Inc., an indirect affiliate of
GE Energy Financial Services, Inc. GEEFS indirect affiliate, GE
Capital Equity Investments, Inc., is the holder of the Convertible
Note. The address of GEEFS is c/o GE Capital Equity
Investments, Inc., 201 Merritt 7, P.O. Box 5201, Norwalk, Connecticut 06851.
(15)
Does not include 50,000 shares of common stock subject to an option held by Mr. Olsen that
will not become exercisable within 60 days. Mr. Olsen is our vice president of technical
services and a former director.
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a related person means any of our directors, executive officers, nominees for
director, holder of 5% or more of our common stock or any of their immediate family
members; and
a related person transaction generally is a transaction (including any indebtedness or
a guarantee of indebtedness) in which we were or are to be a participant and the amount
involved exceeds $120,000, and in which a related person had or will have a direct or
indirect material interest.
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In December 2004, we refinanced a mortgage loan agreement with a local bank to
provide a $1.1 million note, as amended, for the purpose of acquiring our manufacturing facility. The note expires in September 2014 and bears
interest a prime plus 2.0% per annum. The note is secured by a first
mortgage on our manufacturing facility and was previously secured by a personal guarantee of Mr. Verfuerth, which was
released effective August 15, 2007. As of March 31, 2007, the remaining note balance
was $1.1 million.
In December 2004, we entered into a debenture payable issued by a certified
development company to provide $1.0 million for the purpose of acquiring our manufacturing and warehousing facility. The instrument expires in December 2024 and
carries an effective interest rate, including service fees, of 6.18% per annum. The
note is guaranteed by the United States Small Business Administration 504 program and
is secured by a second mortgage position on our manufacturing facility. Mr.
Verfuerth previously personally guaranteed the note, which guarantee was released effective
August 2, 2007. As of March 31, 2007, the remaining balance on the note was $1.0
million.
In March 2005, we entered into a loan and security agreement with the State of
Wisconsin to provide a $0.5 million federal block grant loan to be used for the
purchase of manufacturing equipment. The loan expires in October 2012 and bears
interest at a rate of 2.0% per annum. The loan is secured by a purchase money security
interest and was previously secured by a personal guarantee of Mr. Verfuerth, which was released effective June
25, 2007. As of March 31, 2007, the remaining balance on the loan was $0.4 million.
In September 2005, we entered into an agreement with the Industrial Development
Corporation of the City of Manitowoc to provide a $0.5 million loan for the purpose of
acquiring manufacturing equipment for our manufacturing facility. The loan expires in
October 2011 and bears interest a fixed rate of 2.925% per annum. The loan is
secured by a
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purchase money security interest and was also previously
secured by a personal guarantee of Mr. Verfuerth, which was
released effective July 5, 2007. As of March 31, 2007, the remaining balance on the
loan was $0.4 million.
In March 2004, we received a secured note from a local bank to provide a $3.3
million loan for working capital purposes. We pay principal and interest payments of
$24,755 per month on the note, which are payable through the expiration of the note in
February 2014. The note bears interest at a fixed rate of 6.9% per annum. The note is
75% guaranteed by the United States Department of Agriculture Rural Development
Association and was also previously guaranteed by a personal guarantee of Mr. Verfuerth,
which was released effective August 15, 2007. As of March 31, 2007, the remaining
balance on the note was $1.6 million.
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decreasing the amount of earnings and assets available for distribution to
holders of common stock;
restricting dividends on the common stock;
diluting the voting power of the common stock;
impairing the liquidation rights of the common stock; or
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delaying, deferring or preventing changes in our control or management.
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a merger or share exchange;
a sale, lease, exchange, mortgage, pledge, transfer or other disposition of
assets equal to 5% or more of the market value of the stock or consolidated assets
of the resident domestic corporation or 10% of its consolidated earning power or
income;
the issuance of stock or rights to purchase stock with a market value equal to
5% or more of the outstanding stock of the resident domestic corporation;
the adoption of a plan of liquidation or dissolution; or
certain other transactions involving an interested shareholder.
its principal offices are located in Wisconsin;
it has significant business operations located in Wisconsin;
more than 10% of the holders of record of its shares are residents of Wisconsin; or
more than 10% of its shares are held of record by residents of Wisconsin.
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the board of directors approved the acquisition of the stock prior to such
shareholders acquisition date;
the business combination is approved by a majority of the outstanding voting
stock not beneficially owned by the interested shareholder; or
the consideration to be received by shareholders meets certain fair price
requirements of the statute with respect to form and amount.
the aggregate value of the per share consideration is equal to the highest of:
the highest price paid for any common shares of the corporation by the
significant shareholder in the transaction in which it became a significant
shareholder or within two years before the date of the business
combination;
the market value of the corporations shares on the date of commencement
of any tender offer by the significant shareholder, the date on which the
person became a significant shareholder or the date of the first public
announcement of the proposed business combination, whichever is higher; or
the highest preferential liquidation or dissolution distribution to
which holders of the shares would be entitled; and
either cash, or the form of consideration used by the significant shareholder to
acquire the largest number of shares, is offered.
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a willful failure to deal fairly with us or our shareholders in connection with
a matter in which the director or officer has a material conflict of interest;
a violation of criminal law, unless the director or officer had reasonable cause
to believe his or her conduct was unlawful;
a transaction from which the director or officer derived an improper personal profit; or
willful misconduct.
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shares, which are not subject
to the 180-day lock-up period described under the caption
Underwriting, may
be sold immediately upon the date of this prospectus;
shares, which are not subject to the 180-day lock-up period described under the caption
Underwriting, may
be sold beginning 90 days after the date of this prospectus;
additional shares may be sold upon expiration of the 180-day lock-up period
described under the caption
Underwriting, of which would be subject to volume,
manner of sale and other limitations under Rule 144; and
the remaining shares will be eligible for resale pursuant to Rule 144
upon the expiration of various one-year holding periods during the six months
following the expiration of the 180-day lock-up period.
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one percent of our then-outstanding shares of common stock, which is expected to
equal approximately shares immediately after this offering; and
the average weekly trading volume of our common stock on the Nasdaq Global
Market during the four calendar weeks preceding the filing of a notice of the sale
on Form 144.
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CONSIDERATIONS FOR NON-UNITED STATES HOLDERS OF OUR COMMON STOCK
an individual who is a citizen or resident of the United States;
a corporation, partnership or any other organization taxable as a corporation or
partnership for United States federal income tax purposes, created or organized in
the United States or under the laws of the United States or of any state thereof or
the District of Columbia;
an estate, the income of which is included in gross income for United States
federal income tax purposes regardless of its source; or
a trust (A) if (i) a United States court is able to exercise primary supervision
over the trusts administration and (ii) one or more United States persons have the
authority to control all of the trusts substantial decisions or (B) that has a
valid election in effect under applicable United States Treasury Regulations to be
treated as a United States person.
insurance companies;
real estate investment companies, regulated investment companies or grantor trusts;
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corporations that accumulate earnings to avoid United States federal income tax;
tax-exempt organizations;
financial institutions;
brokers or dealers in securities or currencies;
partnerships and other pass-through entities;
pension plans;
holders that own or are deemed to own more than 5% of our common stock;
owners that hold our common stock as part of a straddle, hedge, conversion
transaction, synthetic security or other integrated investment;
persons that received our common stock as compensation for performance of services;
persons that have a functional currency other than the United States dollar; and
certain former citizens or residents of the United States.
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the gain is effectively connected with your conduct of a trade or
business in the United States (and if an applicable United States
income tax treaty so provides, is also attributable to a permanent
establishment or a fixed base in the United States maintained by
you), in which case you generally (unless an applicable tax treaty
provides otherwise) will be taxed at the graduated United States
federal income tax rates applicable to United States persons and,
if you are a corporation, the additional branch profits tax
described above in Distributions on Our Common Stock may apply;
or
you are an individual who is present in the United States for 183
days or more in the taxable year of the sale, exchange or
disposition and certain other conditions are met, in which case
you will be subject to a 30% tax on the net gain derived from the
disposition, which may be offset by your United States source
capital losses, if any.
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Number of
Underwriter
Shares
Total
With
Without
Per Share
Over-Allotment
Over-Allotment
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(a)
to legal entities which are authorized or regulated to operate in the financial
markets or, if not so authorized or regulated, whose corporate purpose is solely to
invest in securities;
(b)
to any legal entity which has two or more of (1) an average of at least 250
employees during the last financial year; (2) a total balance sheet of more than
43,000,000 and (3) an annual net turnover of more than
50,000,000, as shown in
its last annual or consolidated accounts; or
(c)
in any other circumstances which do not require the publication by the Issuer of a
prospectus pursuant to Article 3 of the Prospectus Directive.
(a)
it has not made or will not make an offer of shares to the public in the United
Kingdom within the meaning of section 102B of the Financial Services and Markets Act 2000
(as amended), or FSMA except to legal entities which are authorized or regulated to
operate in the financial markets or, if not so authorized or regulated, whose corporate
purpose is solely to invest in securities or otherwise in circumstances which do not
require the publication by us of a prospectus pursuant to the Prospectus Rules of the
Financial Services Authority, or FSA;
(b)
it has only communicated or caused to be communicated and will only communicate or
cause to be communicated an invitation or inducement to engage in investment activity
(within the meaning of section 21 of FSMA) to persons who have professional experience in
matters relating to investments falling within Article 19(5) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 or in circumstances in which
section 21 of FSMA does not apply to us; and
(c)
it has complied with, and will comply with, all applicable provisions of FSMA with
respect to anything done by it in relation to the shares in, from or otherwise involving
the United Kingdom.
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Page
Number
F-2
F-3
F-4
F-5
F-6
F-7
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REGISTERED PUBLIC ACCOUNTING FIRM
Orion Energy Systems, Inc.
August 16, 2007
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CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
March 31,
June 30, 2007
2006
2007
(Unaudited)
$
1,089
$
285
$
696
6,051
11,197
13,172
6,167
9,496
10,672
419
345
458
745
1,296
1,457
14,471
22,619
26,455
8,106
7,588
7,946
194
243
316
794
794
1,607
1,907
1,354
360
432
854
$
24,738
$
33,583
$
37,719
$
4,767
$
5,607
$
8,116
1,889
2,196
3,326
859
736
707
7,515
8,539
12,149
10,492
10,603
9,998
109
133
171
18,116
19,275
22,318
4,953
5,028
116
5,591
5,959
5,959
5,859
9,438
9,993
(345
)
(361
)
(361
)
(398
)
(2,128
)
(2,128
)
(4,201
)
(3,553
)
(3,090
)
6,622
9,355
10,373
$
24,738
$
33,583
$
37,719
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CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
Three months ended
Fiscal year ended
June 30,
March 31,
(unaudited)
2005
2006
2007
2006
2007
$
21,783
$
33,280
$
48,183
$
9,680
$
16,721
14,043
22,524
32,487
6,255
11,118
7,740
10,756
15,696
3,425
5,603
3,461
4,875
6,162
1,269
1,571
5,416
5,991
6,459
1,518
2,111
213
1,171
1,078
211
437
9,090
12,037
13,699
2,998
4,119
(1,350
)
(1,281
)
1,997
427
1,484
(570
)
(1,051
)
(1,044
)
(253
)
(295
)
3
5
201
1
40
(567
)
(1,046
)
(843
)
(252
)
(255
)
(1,917
)
(2,327
)
1,154
175
1,229
(702
)
(762
)
225
34
481
(1,215
)
(1,565
)
929
141
748
(57
)
(1,272
)
(1,565
)
929
141
748
(104
)
(3
)
(201
)
(1
)
(75
)
(972
)
(83
)
$
(2,348
)
$
(1,568
)
$
645
$
140
$
673
$
(0.36
)
$
(0.18
)
$
0.07
$
0.02
$
0.07
6,470,413
8,524,012
9,080,461
8,998,944
9,950,486
$
(0.36
)
$
(0.18
)
$
0.04
$
0.01
$
0.04
6,470,413
8,524,012
16,432,647
15,072,660
18,087,951
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CONSOLIDATED STATEMENTS OF TEMPORARY EQUITY AND SHAREHOLDERS EQUITY
Temporary
Equity
Preferred Stock
Common Stock
Series C Redeemable
Preferred Stock
Series A
Series B
Additional
Shareholder
Total
Paid-in
Treasury
Notes
Accumulated
Shareholders
Shares
Amount
Shares
Amount
Shares
Amount
Shares
Capital
Shares
Receivable
Deficit
Equity
$
732,010
$
1,007
392,000
$
710
6,355,776
$
2,229
$
$
$
(392
)
$
3,554
1,842,400
3,457
119,802
551
(63
)
3,945
(648,010
)
(891
)
1,944,030
1,863
(972
)
(64,000
)
(61,864
)
(345
)
(345
)
5
5
(1,272
)
(1,272
)
$
20,000
$
116
2,234,400
$
4,167
8,357,744
$
4,643
$
(345
)
$
(58
)
$
(2,636
)
$
5,887
613,000
1,424
55,778
153
1,577
483,378
445
(375
)
70
558
558
35
35
24,000
60
60
(1,565
)
(1,565
)
$
20,000
$
116
2.847,400
$
5,591
8,920,900
$
5,859
$
(345
)
$
(398
)
$
(4,201
)
$
6,622
1,818,182
4,755
142,430
368
368
3,064,809
2,582
(1,753
)
829
(20,000
)
(116
)
60,000
199
(83
)
435
435
(7,210
)
(16
)
(16
)
363
363
23
23
198
(198
)
(198
)
929
929
1,818,182
$
4,953
$
2,989,830
$
5,959
12,038,499
$
9,438
$
(361
)
$
(2,128
)
$
(3,553
)
$
9,355
181,470
376
376
33
33
146
146
75
(75
)
(75
)
(210
)
(210
)
748
748
1,818,182
$
5,028
$
2,989,830
$
5,959
12,219,969
$
9,993
$
(361
)
$
(2,128
)
$
(3,090
)
$
10,373
Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three months ended
June 30,
Fiscal
year ended March 31,
(unaudited)
2005
2006
2007
2006
2007
$
(1,272
)
$
(1,565
)
$
929
$
141
$
748
539
941
1,063
247
270
618
363
58
146
(740
)
(922
)
(213
)
28
440
13
224
268
4
37
8
10
(305
)
(2,757
)
(5,161
)
(27
)
(2,372
)
(3,472
)
491
(4,555
)
(2,223
)
(1,176
)
9
(300
)
(524
)
(9
)
315
3,338
(584
)
840
1,233
2,509
1,040
416
735
(207
)
932
(863
)
(3,401
)
(6,234
)
(755
)
1,822
(5,764
)
(871
)
(1,012
)
(169
)
(614
)
(40
)
(56
)
(81
)
(14
)
(78
)
735
263
(84
)
30
(139
)
(26
)
(14
)
(5,888
)
(162
)
(969
)
(209
)
(706
)
(345
)
10,099
134
40
40
(5,840
)
(2,416
)
(1,263
)
(198
)
(175
)
(636
)
4,853
1,211
201
(460
)
435
6
33
5
35
23
(17
)
(91
)
(94
)
(479
)
3,857
1,454
5,123
134
88
193
830
15
376
7,137
4,159
6,399
181
(705
)
386
596
(804
)
(783
)
411
107
493
1,089
1,089
285
$
493
$
1,089
$
285
$
306
$
696
$
492
$
1,003
$
927
$
231
$
267
17
10
$
$
81
$
40
$
40
$
63
375
1,753
794
307
104
3
201
1
75
Table of Contents
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
$
190
123
313
(23
)
$
290
March 31,
March 31,
June 30, 2007
2006
2007
(unaudited)
$
1,762
$
5,496
$
5,983
386
358
495
4,019
3,642
4,194
$
6,167
$
9,496
$
10,672
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31,
June 30, 2007
2006
2007
(unaudited)
$
557
$
557
$
560
4,240
4,423
4,449
1,298
1,441
1,492
3,923
3,747
3,790
141
130
625
10,159
10,298
10,916
2,053
2,710
2,970
$
8,106
$
7,588
$
7,946
March 31,
June 30, 2007
2006
2007
(unaudited)
$
1,498
$
1,451
$
1,206
328
531
328
$
1,170
$
920
$
878
10 15 years
10 39 years
3 10 years
3 10 years
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30,
March 31,
2007
2006
2007
(unaudited)
$
250
$
332
$
45
412
745
249
170
(1,075
)
(536
)
(38
)
$
332
$
45
$
177
persuasive evidence of an arrangement exists;
delivery has occurred and title has passed to the customer;
the sales price is fixed and determinable and no further obligation exists; and
collectibility is reasonably assured.
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal year
ended
March 31, 2007
$
363
292
292
.03
.02
Fiscal year ended March
June 30, 2007
2005
2006
2007
(unaudited)
6 years
6 years
6.6 years
7.6 years
4.32
%
4.35
%
4.62
%
4.58%
39
%
50
%
60
%
60
%
N/A
N/A
6
%
6
%
0
%
0
%
0
%
0
%
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three months ended June 30,
Fiscal year ended March 31,
(unaudited)
2005
2006
2007
2006
2007
6,470,413
8,524,012
9,080,461
8,998,944
9,950,486
7,352,186
6,073,716
8,137,465
6,470,413
8,524,012
16,432,647
15,072,660
18,087,951
June 30,
March 31,
(unaudited)
2005
2006
2007
2006
2007
20,000
20,000
20,000
2,234,400
2,847,400
2,989,830
2,989,830
2,989,830
1,818,182
1,818,182
2,150,000
2,150,000
6,412,108
6,394,730
4,714,547
6,605,550
4,712,077
1,064,314
1,098,574
1,109,390
1,097,908
954,390
9,730,822
10,360,704
12,781,949
10,713,288
12,624,479
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31,
June 30,
2006
2007
2007
(unaudited)
$
4,853
$
6,064
$
5,604
1,807
1,629
1,583
1,073
1,062
1,059
989
956
948
1,150
850
771
1,212
778
740
267
11,351
11,339
10,705
(859
)
(736
)
(707
)
$
10,492
$
10,603
$
9,998
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
$
736
750
705
509
491
2,084
$
5,275
March 31,
2005
2006
2007
$
$
160
$
438
(740
)
(922
)
(213
)
$
(740
)
$
(762
)
$
225
2005
2006
2007
(628
)
$
(517
)
$
295
(112
)
(245
)
(70
)
$
(740
)
$
(762
)
$
225
Fiscal year ended March 31,
2005
2006
2007
(34.0
)%
(34.0
)%
34.0
%
(5.4
%)
(5.5
)%
7.9
%
0.0
%
9.6
%
3.9
%
0.0
%
(3.2
)%
(13.3
)%
0.0
%
(5.8
)%
(16.5
)%
0.0
%
8.9
%
0.0
%
2.6
%
(2.7
)%
3.5
%
(36.8
)%
(32.7
)%
19.5
%
March
31,
2006
2007
$
1,346
$
857
292
702
162
192
(24
)
252
181
149
176
258
2,133
2,410
(107
)
(158
)
$
2,026
$
2,252
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
$
853
211
201
159
79
senior rank to other classes and series of stock with respect to the
payment of dividends and proceeds upon liquidation
entitlement to receive cumulative dividends accruing at a non compounded
annual rate of 6% upon the occurrence of certain events (accumulated dividends through
March 31, 2007 and June 30, 2007 (unaudited) were $198,000 and $273,000)
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
liquidation preference equal to the purchase price plus any
accumulated dividends
conversion into common stock at a one-to-one ratio upon certain qualifying
exit events resulting in net proceeds to the Company of at least $30 million (upon
conversion in a qualifying event, all rights related to accrued and unpaid dividends
would be extinguished)
weighted average dilution protection for any issuance of stock or other
equity instruments (other than for stock options granted under existing stock plans) at
a price per share less than the Series C purchase price of $2.75
proportional adjustment of the number of shares of common stock into which
one share of Series C preferred stock may be converted in the event of stock splits,
stock dividends reclassifications and similar events
a redemption feature at the option of the holder, including accumulated
dividends, if certain liquidity events are not achieved within five years from issuance
right to vote with common stock on all matters submitted to a vote of
shareholders
a liquidation preference equal to the purchase price of the Series B shares
automatic conversion to common stock at a one-to-one ratio upon registration of the
common stock under a 1933 Act registration
no dividend preference
right to vote with common stock on all matters submitted to a vote of shareholders
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three months ended June
30,
Fiscal year ended
(unaudited)
March 31, 2007
2006
2007
$
24
$
3
$
21
154
29
65
153
21
52
32
5
8
$
363
$
58
$
146
1,077,200
2,000,000
(599,000
)
27,000
2,505,200
(735,000
)
278,000
2,048,200
(1,657,500
)
280,000
670,700
(50,000
)
26,000
646,700
Number of
Fair value
options
granted
Exercise price
estimate per share
Intrinsic value
40,000
$
2.25- 2.50
$
2.20
$
40,000
2.50
2.20
150,000
2.50
2.20
27,000
2.50
2.20
5,000
2.50
2.20
2,000
2.75
2.20
2,000
2.75
2.20
35,000
2.75
2.20
920,000
2.20
2.20
436,500
2.20
4.15
851,000
50,000
2.20
4.15
98,000
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March
31, 2005
March
31, 2006
March
31, 2007
June
30, 2006
June
30, 2007
(unaudited)
(unaudited)
Weighted
Weighted
Weighted
Weighted
Weighted
average
average
average
average
average
exercise
exercise
exercise
exercise
exercise
Options
price
Options
price
Options
price
Options
price
Options
price
5,922,800
$
.89
6,412,108
$
1.02
6,394,730
$
1.06
6,394,730
$
1.06
4,714,547
$
1.56
599,000
2.24
735,000
1.87
1,657,500
2.26
230,000
2.50
50,000
2.20
(82,692
)
.82
(474,378
)
.91
(3,057,683
)
.84
(19,180
)
0.69
(26,470
)
1.03
(27,000
)
1.16
(278,000
)
2.09
(280,000
)
2.25
(26,000
)
2.11
6,412,108
$
1.02
6,394,730
$
1.06
4,714,547
$
1.56
6,605,550
$
1.10
4,712,077
$
1.57
$
0.48
$
1.54
$
1.35
$
1.27
$
3.27
March
31, 2007
June
30, 2007 (unaudited)
Weighted
Weighted
average
Weighted
Weighted
average
Weighted
Weighted
remaining
average
average
remaining
average
average
contractual life
exercise
exercise
contractual life
exercise
exercise
Price
Outstanding
(years)
price
Vested
price
Outstanding
(years)
price
Vested
price
1,260,627
4.1
$
.69
1,260,627
$
.69
1,240,157
3.9
$
0.69
1,240,157
$
.069
657,420
4.7
.91
571,420
.93
657,420
4.5
0.91
575,420
0.93
512,000
6.4
1.45
352,800
1.45
508,000
6.1
1.45
351,200
1.45
1,993,500
9.1
2.22
308,800
2.25
2,015,500
8.8
2.22
306,800
2.25
291,000
9.3
2.53
73,866
2.57
291,000
9.0
2.53
57,200
2.51
4,714,547
6.8
$
1.56
2,567,513
$
1.09
4,712,077
6.6
$
1.57
2,530,777
$
1.08
$
12,207,000
$
7,861,100
$
12,169,000
$
7,772,000
1,334,200
1,657,500
(579,266
)
(265,400
)
2,147,034
50,000
(5,334
)
(10,400
)
2,181,300
$
684
678
576
504
547
$
2,989
3.01
yrs
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31,
2005
2006
2007
0.00
%
0.00
%
0.00
%
4.32
%
4.35
%
4.62
%
5 years
5 years
5 years
39
%
50
%
60
%
March
31, 2005
March
31, 2006
March
31, 2007
June
30, 2006
June
30, 2007
(unaudited)
(unaudited)
Weighted
Weighted
Weighted
Weighted
Weighted
average
average
average
average
average
exercise
exercise
exercise
exercise
exercise
price
price
price
price
price
Warrants
Warrants
Warrants
Warrants
Warrants
239,766
$
1.98
1,064,314
$
2.22
1,098,574
$
2.24
1,098,574
$
2.24
1,109,390
$
2.24
824,548
2.29
45,260
2.47
19,580
2.41
(9,000
)
1.50
(7,966
)
1.80
(666
)
2.30
(155,000
)
2.25
(2,000
)
1.50
(798
)
1.50
1,064,314
$
2.22
1,098,574
$
2.24
1,109,390
$
2.24
1,097,908
$
2.24
954,390
$
2.24
June 30, 2007
Exercise
price
March
31, 2007
(unaudited)
Expiration
79,236
79,236
Fiscal 2012
221,480
66,480
Fiscal 2014
763,914
763,914
Fiscal 2010
37,260
37,260
Fiscal 2011
7,500
7,500
Fiscal 2012
1,109,390
954,390
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
Canaccord Adams
Pacific Growth Equities, LLC
Table of Contents
$
3,070
10,550
*
*
*
*
*
*
$
*
*
To be completed by amendment
a willful failure to deal fairly with us or our shareholders in connection with
a matter in which the director or officer has a material conflict of interest;
a violation of criminal law, unless the director or officer had reasonable cause
to believe his or her conduct was unlawful;
a transaction from which the director or officer derived an improper personal profit; or
willful misconduct.
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
ORION ENERGY SYSTEMS, INC.
By:
/s/ Neal R. Verfuerth
Neal R. Verfuerth
President and Chief Executive Officer
Signature
Title
President and Chief Executive Officer and
Director (Principal Executive Officer)
Chief Financial Officer (Principal Financial
Officer and Principal Accounting Officer)
Chairman of the Board
Director and Executive Vice President
Director
Director
Director
Director
Table of Contents
Number
Exhibit Title
Form of Underwriting Agreement.*
Form of Series C Senior Convertible Preferred Stock Purchase Agreement by
and among Orion Energy Systems, Inc. and the signatories thereto.
Note Purchase Agreement between Orion Energy Systems, Inc. and the
signatories thereto dated August 3, 2007.
Amended and Restated Articles of Incorporation of Orion Energy Systems, Inc.
Amendment to Amended and Restated Articles of Incorporation of Orion Energy
Systems, Inc.
Form of Amended and Restated Articles of Incorporation of Orion Energy
Systems, Inc. to be effective upon closing of this offering.
Amended and Restated Bylaws of Orion Energy Systems, Inc.
Form of Amended and Restated Bylaws of Orion Energy Systems, Inc. to be
effective upon closing of this offering.
Amended and Restated Investors Rights Agreement by and among Orion Energy
Systems, Inc. and the signatories thereto, dated August 3, 2007.
Amended and Restated First Offer and Co-Sale Agreement among Orion Energy
Systems, Inc. and the signatories thereto, dated August 3, 2007.
Form of Warrant to purchase Common Stock of Orion Energy Systems, Inc.
Form of Warrant to purchase Common Stock of Orion Energy Systems, Inc.
Credit and Security Agreement by
and between Orion Energy Systems, Inc.,
Great Lakes Energy Technologies, LLC and Wells Fargo Bank, National
Association, acting through its Wells Fargo Business Credit Operating
Division, dated December 22, 2005, as amended January 26, 2006, June 30,
2006, March 29, 2007 and July 27, 2007.
Convertible Subordinated Promissory Note in favor of GE Capital Equity
Investments, Inc. dated August 3, 2007.
Convertible Subordinated Promissory Note in favor of Clean Technology Fund
II, L.P. dated August 3, 2007.
Convertible Subordinated Promissory Note in favor of Capvest Venture Fund,
LP, dated August 3, 2007.
Convertible Subordinated Promissory Note in favor of Technology
Transformation Venture Fund, LP, dated August 3, 2007.
Opinion of Foley & Lardner LLP.*
Table of Contents
Number
Exhibit Title
Employment Agreement by and between Bruce Wadman and Orion Energy Systems,
Inc. dated October 1, 2005.
Employment Agreement by and between Neal Verfuerth and Orion Energy
Systems, Inc. dated April 1, 2005.
Separation Agreement by and between Orion Energy Systems, Inc. and Bruce
Wadman, effective July 5, 2007.*
Separation Agreement by and between Orion Energy Systems, Inc. and James
Prange, effective July 18, 2007.*
Employment Agreement by and between
John Scribante and Orion Energy Systems, Inc. dated June 2, 2006.
Orion Energy Systems, Inc. 2003 Stock Option Plan, as amended.
Form of Stock Option Agreement under the Orion Energy Systems, Inc. 2003
Stock Option Plan.
Amendment to Stock Option Agreement between Bruce Wadman and Orion Energy
Systems, Inc. dated February 19, 2007.*
Orion Energy Systems, Inc. 2004 Stock and Incentive Awards Plan.
Form of Stock Option Agreement
under the Orion Energy Systems, Inc. 2004 Equity Incentive Plan.
Form of Stock Option Agreement under the Orion Energy Systems, Inc. 2004
Stock and Incentive Awards Plan.
Form of Promissory Note and Collateral Pledge Agreement in favor of Orion
Energy Systems, Inc. in connection with option exercises (all such notes
were paid in full in July and August 2007).
Patent and Trademark Security Agreement by and between Orion Energy
Systems, Inc. and Wells Fargo Bank, National Association, Acting Through
its Wells Fargo Business Credit Operating Division, dated December 22,
2005.
Patent and Trademark Security Agreement by and between Great Lakes Energy
Technologies, LLC and Wells Fargo Bank, National Association, Acting
Through its Wells Fargo Business Credit Operating Division, dated December
22, 2005.
Subsidiaries of Orion Energy Systems, Inc.
Consent of Grant Thornton LLP.
Consent of Foley & Lardner LLP
(contained in Exhibit 5.1 hereto).*
Consent of Wipfli LLP.
Power of Attorney (contained on
signature page hereto).
*
To be filed by amendment
Page | ||||||||
1. | Purchase and Sale of Stock | 1 | ||||||
|
1.1 | Sale and Issuance of Series C Preferred Stock | 1 | |||||
|
1.2 | Closing | 1 | |||||
|
1.3 | Use of Proceeds | 1 | |||||
2.
|
Representations and Warranties of the Company | 2 | ||||||
|
2.1 | Organization, Good Standing and Qualification | 2 | |||||
|
2.2 | Existing Capitalization and Voting Rights of the Company | 2 | |||||
|
2.3 | Subsidiaries | 3 | |||||
|
2.4 | Authorization | 3 | |||||
|
2.5 | Valid Issuance of Preferred and Common Stock | 3 | |||||
|
2.6 | Governmental Consents | 4 | |||||
|
2.7 | Offering | 4 | |||||
|
2.8 | Litigation | 4 | |||||
|
2.9 | Patents and Trademarks | 4 | |||||
|
2.10 | Compliance with Other Instruments; No Conflicts | 5 | |||||
|
2.11 | Certain Contracts and Arrangements | 6 | |||||
|
2.12 | Related-Party Transactions | 7 | |||||
|
2.13 | Permits | 7 | |||||
|
2.14 | Environmental and Safety Laws | 7 | |||||
|
2.15 | Manufacturing, Marketing and Development Rights | 7 | |||||
|
2.16 | Registration Rights | 8 | |||||
|
2.17 | Corporate Documents | 8 | |||||
|
2.18 | Title to Property and Assets | 8 | |||||
|
2.19 | Financial Statements | 8 | |||||
|
2.20 | Changes | 8 | |||||
|
2.21 | Employee Benefit Plans | 9 | |||||
|
2.22 | Tax | 9 | |||||
|
2.23 | Insurance | 10 |
i
Page | ||||||||
|
2.24 | Minute Books | 10 | |||||
|
2.25 | Labor Agreements and Actions | 10 | |||||
|
2.26 | Significant Customers and Suppliers | 11 | |||||
|
2.27 | Inventory | 11 | |||||
|
2.28 | Accounts Receivable | 11 | |||||
|
2.29 | Product Warranty | 11 | |||||
|
2.30 | Disclosure | 11 | |||||
3. | Representations and Warranties of the Investors | 12 | ||||||
|
3.1 | Authorization | 12 | |||||
|
3.2 | Purchase Entirely for Own Account | 12 | |||||
|
3.3 | Disclosure of Information | 12 | |||||
|
3.4 | Investment Experience | 12 | |||||
|
3.5 | Accredited Investor | 13 | |||||
|
3.6 | Restricted Securities | 13 | |||||
|
3.7 | Further Limitations on Disposition | 13 | |||||
|
3.8 | Legends | 14 | |||||
|
3.9 | Exculpation Among Investors | 14 | |||||
4. | Conditions of Investors Obligations at Closing | 14 | ||||||
|
4.1 | Closing Conditions | 14 | |||||
5. | Conditions of the Companys Obligations at the Closing | 16 | ||||||
|
5.1 | Representations and Warranties | 16 | |||||
|
5.2 | Payment of Purchase Price | 16 | |||||
|
5.3 | Qualifications | 16 | |||||
|
5.4 | Consents, etc. | 16 | |||||
6. | Miscellaneous | 16 | ||||||
|
6.1 | Survival of Warranties | 16 | |||||
|
6.2 | Successors and Assigns | 16 | |||||
|
6.3 | Governing Law | 16 | |||||
|
6.4 | Waiver of Jury Trial | 16 | |||||
|
6.5 | Titles and Subtitles | 17 |
ii
Page | ||||||||
|
6.6 | Notices | 17 | |||||
|
6.7 | Finders Fee | 17 | |||||
|
6.8 | Indemnification | 17 | |||||
|
6.9 | Expenses | 18 | |||||
|
6.10 | Amendments and Waivers | 18 | |||||
|
6.11 | Severability | 18 | |||||
|
6.12 | Entire Agreement | 18 | |||||
|
6.13 | Delays or Omissions | 18 | |||||
|
6.14 | Counterparts | 18 |
SCHEDULE A
|
Schedule of Investors | |
SCHEDULE B
|
Shareholders and Shares Held | |
SCHEDULE C
|
Officers and Employees Party to Proprietary Information Agreement | |
|
||
EXHIBIT A
|
Amended and Restated Articles of Incorporation | |
EXHIBIT B
|
Investors Rights Agreement | |
EXHIBIT C
|
Offer and Co-Sale Agreement | |
EXHIBIT D
|
Proprietary Information Agreement | |
EXHIBIT E
|
Opinion of Foley & Lardner |
iii
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
COMPANY | ||||||
|
||||||
ORION ENERGY SYSTEMS, LTD. | ||||||
|
||||||
|
By: | |||||
|
|
|||||
|
Title: President | |||||
|
||||||
Address: Neal R. Verfuerth, President | ||||||
Orion Energy Systems, Ltd. | ||||||
1204 Pilgrim Road | ||||||
Plymouth, WI 53073 | ||||||
|
||||||
With copies to: | ||||||
|
||||||
General Counsel | ||||||
Orion Energy Systems, Ltd. | ||||||
1204 Pilgrim Road | ||||||
Plymouth, WI 53073; and | ||||||
|
||||||
Foley & Lardner LLP | ||||||
150 East Gilman Street | ||||||
Madison, WI 53703 | ||||||
Attention: Joseph P. Hildebrandt | ||||||
|
Carl R. Kugler | |||||
|
||||||
INVESTOR: | ||||||
|
||||||
|
By: | |||||
|
|
|||||
|
Title: | |||||
|
||||||
Address: |
|
Investor | Shares | ||||||
|
||||||||
|
||||||||
|
|
|||||||
|
||||||||
|
Total | |||||||
|
|
Page | ||||||||
1. | Purchase and Sale of Note | 4 | ||||||
|
1.1 | Sale and Issuance of Subordinated Convertible Promissory Notes | 4 | |||||
|
1.2 | Closing | 4 | |||||
|
1.3 | Use of Proceeds | 4 | |||||
2. | Representations and Warranties of the Company | 5 | ||||||
|
2.1 | Organization, Good Standing and Qualification | 5 | |||||
|
2.2 | Existing Capitalization and Voting Rights of the Company | 5 | |||||
|
2.3 | Subsidiaries | 6 | |||||
|
2.4 | Authorization | 6 | |||||
|
2.5 | Valid Issuance of Notes and Common Stock | 7 | |||||
|
2.6 | Governmental Consents | 7 | |||||
|
2.7 | Offering | 7 | |||||
|
2.8 | Compliance with Law | 7 | |||||
|
2.9 | Litigation | 7 | |||||
|
2.10 | Patents and Trademarks | 8 | |||||
|
2.11 | Compliance with Other Instruments; No Conflicts | 9 | |||||
|
2.12 | Certain Contracts and Arrangements | 9 | |||||
|
2.13 | Related-Party Transactions | 10 | |||||
|
2.14 | Permits | 11 | |||||
|
2.15 | Safety Laws | 11 | |||||
|
2.16 | Environmental Matters | 11 | |||||
|
2.17 | Manufacturing, Marketing and Development Rights | 13 | |||||
|
2.18 | Registration Rights | 13 | |||||
|
2.19 | Corporate Documents | 13 | |||||
|
2.20 | Title to Property and Assets | 13 | |||||
|
2.21 | Financial Statements | 13 | |||||
|
2.22 | Changes | 13 | |||||
|
2.23 | Employee Benefit Plans | 15 |
Page | ||||||||
|
2.24 | Tax | 15 | |||||
|
2.25 | Insurance | 15 | |||||
|
2.26 | Minute Books | 15 | |||||
|
2.27 | Labor Agreements and Actions | 15 | |||||
|
2.28 | Significant Customers and Suppliers | 16 | |||||
|
2.29 | Inventory | 16 | |||||
|
2.30 | Accounts Receivable | 16 | |||||
|
2.31 | Product Warranty | 17 | |||||
|
2.32 | Indebtedness | 17 | |||||
|
2.33 | Margin Regulations | 17 | |||||
|
2.34 | Investment Company | 17 | |||||
|
2.35 | Disclosure | 17 | |||||
3. | Representations and Warranties of the Investors | 18 | ||||||
|
3.1 | Authorization | 18 | |||||
|
3.2 | Purchase Entirely for Own Account | 18 | |||||
|
3.3 | Disclosure of Information | 18 | |||||
|
3.4 | Investment Experience | 18 | |||||
|
3.5 | Accredited Investor | 18 | |||||
|
3.6 | Restricted Securities | 18 | |||||
|
3.7 | Further Limitations on Disposition | 19 | |||||
|
3.8 | Legends | 19 | |||||
|
3.9 | Exculpation Among Investors | 20 | |||||
4. | Conditions of Investors Obligations at Closing | 20 | ||||||
|
4.1 | Closing Conditions | 20 | |||||
5. | Conditions of the Companys Obligations at the Closing | 22 | ||||||
|
5.1 | Representations and Warranties | 22 | |||||
|
5.2 | Payment of Purchase Price | 22 | |||||
|
5.3 | Qualifications | 22 | |||||
|
5.4 | Consents, etc. | 22 | |||||
|
5.5 | Investors Rights Agreement | 22 |
2
Page | ||||||||
|
5.6 | First Offer and Co-Sale Agreement | 22 | |||||
|
5.7 | Waiver of Series C Investors | 22 | |||||
|
5.8 | Lock-up Agreements | 22 | |||||
6. | Miscellaneous | 22 | ||||||
|
6.1 | Survival of Warranties | 22 | |||||
|
6.2 | Successors and Assigns | 22 | |||||
|
6.3 | Governing Law | 23 | |||||
|
6.4 | Exclusive Jurisdiction | 23 | |||||
|
6.5 | Waiver of Jury Trial | 23 | |||||
|
6.6 | Titles and Subtitles | 23 | |||||
|
6.7 | Notices | 23 | |||||
|
6.8 | Finders Fee | 24 | |||||
|
6.9 | Indemnification | 24 | |||||
|
6.10 | Expenses | 24 | |||||
|
6.11 | Amendments and Waivers | 24 | |||||
|
6.12 | Severability | 25 | |||||
|
6.13 | Entire Agreement | 25 | |||||
|
6.14 | Delays or Omissions | 25 | |||||
|
6.15 | Public Announcements | 25 | |||||
|
6.16 | Counterparts | 25 |
SCHEDULE 1
|
Investors | |
SCHEDULE 2
|
Key Employees | |
|
||
EXHIBIT A
|
Form of Convertible Note | |
EXHIBIT B
|
Form of Amended and Restated Investors Rights Agreement | |
EXHIBIT C
|
Form of Amended and Restated Offer and Co-Sale Agreement | |
EXHIBIT D
|
Form of Proprietary Information Agreement | |
EXHIBIT E
|
Form of Opinion of Foley & Lardner LLP | |
EXHIBIT F
|
Form of Lock-up Agreement | |
|
||
Schedule of Exceptions |
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
COMPANY | ||||||
|
||||||
ORION ENERGY SYSTEMS, INC. | ||||||
|
||||||
|
By: |
/s/ Neal R. Verfuerth
|
||||
|
Title: President | |||||
|
||||||
Address: Neal R. Verfuerth, President
Orion Energy Systems, Inc. 1204 Pilgrim Road Plymouth, WI 53073 |
||||||
|
||||||
With copies to: | ||||||
|
||||||
General Counsel
Orion Energy Systems, Inc. 1204 Pilgrim Road Plymouth, WI 53073; and |
||||||
|
||||||
Foley & Lardner LLP
150 East Gilman Street Madison, WI 53703 Attention: Carl R. Kugler |
INVESTOR: | ||||||
|
||||||
GE CAPITAL EQUITY INVESTMENTS, INC. | ||||||
|
||||||
|
By: |
/s/ Michael Donnelly
|
||||
|
Title: Senior Vice President | |||||
|
||||||
|
Address: 201 Merritt 7
P.O. Box 5201 Norwalk, CT 06851 Fax:____________ |
|||||
|
||||||
With copies to: | ||||||
|
||||||
King & Spalding LLP
1180 Peachtree Street Atlanta, GA 30309 Fax: (404) 572-5133 Attention: William G. Roche |
INVESTOR: | ||||||
|
||||||
CAPVEST VENTURE FUND, LP | ||||||
|
||||||
|
By: |
/s/
|
||||
|
|
|||||
|
||||||
|
By: |
|
||||
|
Name: | |||||
|
Title: | |||||
|
||||||
Address: | ||||||
|
||||||
|
||||||
With copies to: | ||||||
|
||||||
|
||||||
INVESTOR: | ||||||
|
||||||
TECHNOLOGY TRANSFORMATION VENTURE FUND, LP | ||||||
|
||||||
|
By: |
/s/
|
||||
|
|
|||||
|
||||||
|
By: |
|
||||
|
Name: | |||||
|
Title: | |||||
|
||||||
Address: | ||||||
|
||||||
|
||||||
With copies to: | ||||||
|
||||||
|
||||||
Investor | Note Amount | |||
GE Capital Equity Investments, Inc.
|
$ | 8,000,000 | ||
Clean Technology Fund II, L.P.
|
$ | 2,500,000 | ||
CapVest Venture Fund, LP
|
$ | 50,000 | ||
Technology Transformation Venture Fund, LP
|
$ | 50,000 | ||
|
||||
Total
|
$ | 10,600,000 |
1-1
2-1
A-1
B-1
C-1
D-1
E-1
F-1
\
(a) | The rate of dividend; |
1
(b) | The price and the terms and conditions on which shares may be redeemed; | ||
(c) | Sinking fund provisions for the redemption or purchase of shares; and | ||
(d) | The terms and conditions on which shares may be converted into Common Stock, if the shares of any series are issued with the privilege of conversion. |
2
(a) | create or authorize any class of stock ranking either as to payment of dividends or distributions of assets prior to or on a parity with the Cumulative Preferred Stock or increase the number of authorized shares of Cumulative Preferred Stock; or |
3
(b) | change the preferences, limitations or relative rights with respect to the outstanding Cumulative Preferred Stock, other than the preferences, limitations or relative rights of the Series C Preferred Stock (which are governed by Section 3.9.3(b) so as to materially and adversely alter in any respect the rights of the holders thereof. |
4
5
6
(I) | the Corporation is a constituent party or | ||
(II) | a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, |
7
8
9
10
11
(I) | shares of Common Stock issued or deemed issued as a dividend or distribution on, or upon conversion of, the Series C Preferred Stock; | ||
(II) | shares of Common Stock issued upon exercise or conversion of any Options or Convertible Securities outstanding on the Series C Original Issue Date; | ||
(III) | shares of Common Stock issued or issuable by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock that is covered by Subsection 3.9.4(e) or 3.9.4(f) below; | ||
(IV) | up to 2,048,200 shares of Common Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar |
12
recapitalization affecting such shares), issued or deemed issued to employees or directors of, or consultants to, the Corporation or any of its subsidiaries, whether issued before or after the Series C Original Issue Date ( provided , that any Options for such shares that expire or terminate unexercised or any restricted stock repurchased by the Corporation at cost shall not be counted toward such maximum number unless and until such shares are regranted as new stock grants or as new Options); | |||
(V) | up to an aggregate of 100,000 shares per year granted pursuant to Section 3.9.3(b)(viii)(E); | ||
(VI) | shares of Common Stock or warrants to purchase Common Stock issued pursuant to any strategic partnership, in each case approved by a majority of the Independent Directors; or | ||
(VII) | shares of Common Stock issued in a Qualifying Public Offering. |
13
14
(I) | insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation, excluding amounts paid or payable for accrued interest; | ||
(II) | insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors of the Corporation; and | ||
(III) | in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (I) and (II) above, as determined in good faith by the Board of Directors of the Corporation. |
(I) | the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set |
15
forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by | |||
(II) | the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities. |
16
17
18
19
(I) | the number of shares of Series C Preferred Stock held by the holder that the Corporation shall repurchase on the Repurchase Date specified in the Repurchase Notice; |
20
(II) | the Repurchase Date and the Series C Repurchase Price; | ||
(III) | the date upon which the holders right to convert such shares terminates (as determined in accordance with Section 3.9.4(a)); and | ||
(IV) | that the holder is to surrender to the Corporation, in the manner and at the place designated, his certificate or certificates representing the shares of Series C Preferred Stock to be repurchased. |
21
/s/ Eric Von Estorff
|
22
/s/ Eric von Estorff | ||||
Eric von Estorff, Vice President | ||||
-2-
-3-
-4-
ARTICLE O
|
VARIABLE REFERENCES | 1 | ||||
Section 0.01
|
Date of Shareholders Meeting | 1 | ||||
Section 0.02
|
Notice of Shareholders Meeting | 1 | ||||
Section 0.03
|
Notice of Directors Meeting | 1 | ||||
Section 0.04
|
Fiscal Year | 1 | ||||
|
||||||
ARTICLE 1
|
IDENTIFICATION | 2 | ||||
Section 1.01
|
Principal and Business Offices | 2 | ||||
Section 1.02
|
Registered Agent and Office | 2 | ||||
Section 1.03
|
Place of Keeping Corporate Records | 2 | ||||
|
||||||
ARTICLE 2
|
SHAREHOLDERS | 2 | ||||
Section 2.01
|
Annual Meeting | 2 | ||||
Section 2.02
|
Special Meetings | 2 | ||||
Section 2.03
|
Place of Meeting | 3 | ||||
Section 2.04
|
Notice of Meetings | 3 | ||||
Section 2.05
|
Waiver of Notice | 3 | ||||
Section 2.06
|
Fixing of Record Date | 3 | ||||
Section 2.07
|
Voting List | 4 | ||||
Section 2.08
|
Quorum and Voting Requirements | 5 | ||||
Section 2.09
|
Proxies | 5 | ||||
Section 2.10
|
Voting of Shares | 5 | ||||
Section 2.11
|
Voting of Shares by Certain Holders | 5 | ||||
|
(a)Other Corporations | 5 | ||||
|
(b)Legal Representatives and Fiduciaries | 6 | ||||
|
(c)Pledgees | 6 | ||||
|
(d)Minors | 6 | ||||
|
(e)Incompetents and Spendthrifts | 6 | ||||
|
(f)Joint Tenant/Survivorship Marital Property | 6 | ||||
Section 2.12
|
Action Without a Meeting | 7 |
i
ii
ARTICLE 7
|
CONTRACTS BETWEEN THE CORPORATION AND RELATED PERSONS | 16 | ||||
|
||||||
ARTICLE 8
|
CERTIFICATES FOR SHARES AND THEIR TRANSFER | 17 | ||||
Section 8.01
|
Certificates for Shares | 17 | ||||
Section 8.02
|
Shares Without Certificates | 17 | ||||
Section 8.03
|
Facsimile Signatures | 18 | ||||
Section 8.04
|
Signature by Former Officer | 18 | ||||
Section 8.05
|
Consideration for Shares | 18 | ||||
Section 8.06
|
Transfer of Shares | 18 | ||||
Section 8.07
|
Restrictions on Transfer | 18 | ||||
Section 8.08
|
Lost, Destroyed, or Stolen Certificates | 19 | ||||
|
||||||
ARTICLE 9
|
INSPECTION OF RECORDS BY SHAREHOLDERS | 19 | ||||
Section 9.01
|
Inspection of Bylaws | 19 | ||||
Section 9.02
|
Inspection of Other Records | 19 | ||||
|
||||||
ARTICLE 10
|
DISTRIBUTIONS AND SHARE ACQUISITIONS | 19 | ||||
|
||||||
ARTICLE 11
|
INDEMNIFICATION | 20 | ||||
|
||||||
ARTICLE 12
|
AMENDMENTS | 20 | ||||
Section 12.01
|
By Shareholders | 20 | ||||
Section 12.02
|
By Directors | 20 | ||||
Section 12.03
|
Implied Amendments | 20 | ||||
|
||||||
ARTICLE 13
|
SEAL | 21 | ||||
|
||||||
ARTICLE 14
|
FISCAL YEAR | 21 | ||||
|
||||||
ARTICLE 15
|
ADVISORY BOARD | 22 |
iii
(a) | not less than seventy-two (72) hours if by mail; and | ||
(b) | not less than twenty-four (24) hours if given orally or in person. |
* | These spaces are reserved for official notation of future amendments to these sections. |
-2-
(a) | With respect to an annual shareholders meeting or any special shareholders meeting called by the board or any person specifically authorized by the board or these Bylaws to call a meeting, at the close |
-3-
of business on the day before the first notice is delivered to shareholders; | |||
(b) | With respect to a special shareholders meeting demanded by the shareholders, on the date the first shareholder signs the demand; | ||
(c) | With respect to actions taken in writing without a meeting (pursuant to Section 2.12 of these Bylaws), on the date the first shareholder signs a consent; | ||
(d) | With respect to determining shareholders entitled to a share dividend, on the date the board authorizes the share dividend; | ||
(e) | With respect to determining shareholders entitled to a distribution (other than a distribution involving a repurchase or reacquisition of shares), on the date the board authorizes the distribution; | ||
(f) | With respect to any other matter for which such a determination is required, as provided by law. |
-4-
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-6-
-7-
-8-
-9-
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(a) | supervise and manage the Corporations business; | ||
(b) | coordinate and supervise the work of its other officers, employees and agents ; | ||
(c) | employ, direct, fix the compensation of, and discipline its officers, employees and agents; | ||
(d) | authority to sign, execute, and deliver in the Corporations name all instruments either when specifically authorized by the board of directors or when required or deemed necessary or advisable by the President in the ordinary conduct of the Corporations normal business, except in cases where the signing and execution of the instruments shall be expressly delegated by these Bylaws or by the board to some other officer(s) or agent(s) of the Corporation or shall be required by law or otherwise to be signed or executed by some other officer or agent; and |
-12-
(a) | keep any minutes of the shareholders and of the board of directors and its committees in one or more books provided for that purpose; | ||
(b) | see that all notices are duly given in accordance with these Bylaws or as required by law; | ||
(c) | be custodian of the Corporations corporate records and see that the books, reports, statements, certificates, and all other documents and records required by law are properly kept and filed; | ||
(d) | have charge, directly or through such transfer agent or agents and registrar or registrars as the board of directors may appoint, of the issue, transfer, and registration of certificates for shares in the Corporation and of the records thereof, such records to be kept in such manner as to show at any time the number of shares in the Corporation issued and outstanding, the manner in which and time when such shares were paid for, the names and addresses of the shareholders of record, the numbers and classes of shares held by each, and the time when each became a shareholder; | ||
(e) | exhibit at reasonable times upon the request of any director the records of the issue, transfer, and registration of the Corporations share certificates, at the place where those records are kept, and have these records available at each shareholders meeting; and |
-13-
(f) | in general, perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him or her by the board of directors or the President. |
(a) | have charge and custody of, and be responsible for, all of the Corporations funds and securities; receive and give receipts for monies due and payable to the Corporation from any source whatsoever; deposit all such monies in the Corporations name in such banks, financial institutions, trust companies, or other depositories as shall be selected in accordance with the provisions of Section 5.04 of these Bylaws; cause such funds to be disbursed by checks or drafts on the Corporations authorized depositories, signed as the board of directors may require; and be responsible for the accuracy of the amounts of, and cause to be preserved proper vouchers for, all monies disbursed; | ||
(b) | have the right to require from time to time reports or statements giving such information as he or she may desire with respect to any and all of the Corporations financial transactions from the officers, employees, or agents transacting the same; | ||
(c) | keep or cause to be kept, at the Corporations principal office or such other office or offices as the board of directors shall from time to time designate, correct records of the Corporations funds, business, and transactions, and exhibit those records to any director of the Corporation upon request at that office; | ||
(d) | deliver to the board of directors, the chairperson of the board, or the President whenever requested on account of the Corporations financial condition and of all his or her transactions as treasurer, and as soon as possible after the close of each fiscal year, make or cause to be made and submit to the board a like report for that fiscal year; | ||
(e) | at each annual shareholders meeting or the meeting held in lieu thereof, furnish copies of the Corporations most current financial statement to the |
-14-
shareholders and answer questions that may be raised regarding the statement; and | |||
(f) | in general, perform all duties incident to the office of treasurer and such other duties as from time to time may be assigned to him or her by the board of directors or the President. |
-15-
(a) | the material facts of the transaction and the directors interest were disclosed or known to the board of directors or a committee of the board of directors, and a majority of disinterested members of the board of directors or committee authorized, approved, or specifically ratified the transaction; or | ||
(b) | the material facts of the transaction and the directors interest were disclosed or known to the shareholders entitled to vote, and a majority of the shares held by disinterested shareholders authorized, approved, or specifically ratified the transaction; or |
-16-
(c) | the transaction was fair to the Corporation. |
-17-
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3
4
5
6
7
8
9
10
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12
13
14
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18
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20
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23
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25
26
27
Page | ||||
1. Registration Rights
|
1 | |||
1.1 Definitions
|
1 | |||
1.2 Request for Registration
|
3 | |||
1.3 Company Registration
|
4 | |||
1.4 Form S-3 Registration
|
6 | |||
1.5 Obligations of the Company
|
8 | |||
1.6 Information from Holder
|
9 | |||
1.7 Expenses of Registration
|
9 | |||
1.8 Delay of Registration
|
10 | |||
1.9 Indemnification
|
10 | |||
1.10 Reports Under the 1934 Act
|
13 | |||
1.11 Assignment of Registration Rights
|
13 | |||
1.12 Limitations on Subsequent Registration Rights
|
14 | |||
1.13 Market Stand Off Agreement
|
14 | |||
1.14 Termination of Registration Rights
|
15 | |||
|
||||
2. Covenants of the Company
|
16 | |||
2.1 Information Rights
|
16 | |||
2.2 Inspection
|
17 | |||
2.3 Termination of Information and Inspection Covenants
|
17 | |||
2.4 Right of First Refusal
|
17 | |||
2.5 Proprietary Information and Inventions Agreements
|
19 | |||
2.6 Lock-Up of Future Securityholders
|
19 | |||
2.7 D&O Insurance
|
19 | |||
2.8 Board of Directors
|
19 | |||
2.9 Board Observer
|
19 | |||
2.10 Related Party Transactions
|
20 | |||
2.11 Approval Rights
|
20 | |||
2.12 Termination of Certain Covenants
|
21 | |||
|
||||
3. Transfers of Registrable Securities
|
22 | |||
3.1 Transfer Notice
|
22 | |||
3.2 Non-Exercise of Rights
|
22 | |||
3.3 Limitations to Company Right of First Offer
|
22 | |||
|
||||
4. Miscellaneous
|
23 | |||
4.1 Successors and Assigns
|
23 | |||
4.2 Governing Law
|
23 | |||
4.3 Counterparts
|
24 | |||
4.4 Titles and Subtitles
|
24 | |||
4.5 Notices
|
24 | |||
4.6 Expenses
|
24 | |||
4.7 Amendments and Waivers
|
24 |
i
Page | ||||
4.8 Severability
|
24 | |||
4.9 Aggregation of Stock
|
25 | |||
4.10 Waiver of Jury Trial
|
25 | |||
4.11 Entire Agreement
|
25 |
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COMPANY | ||||
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ORION ENERGY SYSTEMS, INC. | ||||
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By: | /s/ Neal Verfuerth | ||
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Name: | |||
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Title: | |||
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Address: |
TECHNOLOGY TRANSFORMATION VENTURE FUND, LP | ||||
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COMPANY | ||||||
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ORION ENERGY SYSTEMS, INC. | ||||||
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By: | /s/ Neal Verfuerth | |||||
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Name: | |||||
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Title: | |||||
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Address: | |||||
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TECHNOLOGY TRANSFORMATION VENTURE FUND, LP | ||||||
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Title: | |||||
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SHAREHOLDERS : | ||||
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/s/ Neal Verfuerth | ||||
Neal Verfuerth | ||||
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Address: | |||
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/s/ Michael Potts | ||||
Michael Potts | ||||
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Address: | |||
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/s/ Patricia Verfuerth | ||||
Patricia Verfuerth | ||||
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Address: | |||
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|
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|
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|
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/s/ Daniel Waibel | ||||
Daniel Waibel | ||||
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Address: | |||
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/s/ John Scribante | ||||
John Scribante | ||||
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Address: | |||
|
||||
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|
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/s/ Erik G. Birkerts | ||||
Erik G. Birkerts | ||||
|
||||
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Address: | |||
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||||
|
||||
|
||||
/s/ Rick Olsen | ||||
Rick Olsen | ||||
|
||||
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Address: | |||
|
||||
|
||||
|
||||
|
||||
/s/ Daniel Czaja | ||||
Daniel Czaja | ||||
|
||||
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Address: | |||
|
||||
|
||||
|
||||
|
||||
/s/ Eric von Estorff | ||||
Eric von Estorff | ||||
|
||||
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Address: | |||
|
||||
|
||||
|
||||
|
||||
/s/ Patrick Trotter | ||||
Patrick Trotter | ||||
|
||||
|
Address: | |||
|
||||
|
||||
|
||||
/s/ Eckhart Grohmann | ||||
Eckhart Grohmann | ||||
|
||||
|
Address: | |||
|
||||
|
||||
|
||||
/s/ Jim Kackley | ||||
Jim Kackley | ||||
|
||||
|
Address: | |||
|
||||
|
||||
|
||||
|
||||
/s/ Thomas A. Quadracci | ||||
Thomas A. Quadracci | ||||
|
||||
|
Address: | |||
|
||||
|
||||
|
||||
|
||||
/s/ Diana Propper de Callejon | ||||
Diana Propper de Callejon | ||||
|
||||
|
Address: | |||
|
||||
|
||||
|
||||
|
||||
/s/ Ronald Ernst | ||||
Ronald Ernst | ||||
|
||||
|
Address: | |||
|
||||
|
||||
|
||||
/s/ Stephen Heins | ||||
Stephen Heins | ||||
|
||||
|
Address: | |||
|
||||
|
||||
|
||||
Officers | ||
President and CEO
|
Neal Verfuerth | |
Executive Vice President
|
Michael Potts | |
Vice President, Operations
|
Patricia Verfuerth | |
CFO and Treasurer
|
Daniel Waibel | |
Senior Vice President, Business Development
|
John Scribante | |
Vice President, Strategic Initiatives
|
Erik G. Birkerts | |
Vice President, Technical Services
|
Rick Olsen | |
Vice President, National Accounts
|
Daniel Czaja | |
Vice President, General Counsel and Corporate Secretary
|
Eric von Estorff | |
Vice President, Manufacturing and Engineering
|
Ronald Ernst | |
Vice President, Communications
|
Stephen Heins |
Directors | ||
Neal Verfuerth
|
||
Michael Potts
|
||
Patrick Trotter
|
||
Eckhart Grohmann
|
||
Jim Kackley
|
||
Thomas A. Quadracci
|
||
Diana Propper de Callejon
|
2
3
|
Orion Lighting, Ltd. | |||||||
|
||||||||
|
By: | |||||||
|
President | |||||||
|
||||||||
[CORPORATE SEAL]
|
||||||||
|
||||||||
|
Attest: | |||||||
|
Secretary |
4
|
By: | |||||
|
||||||
|
(Signature) |
|
|
|||
|
||||
|
||||
|
(Signature) |
5
2
3
|
Orion Energy Systems, Ltd. | |||||||
|
||||||||
|
By: | |||||||
|
President | |||||||
|
||||||||
[CORPORATE SEAL]
|
||||||||
|
||||||||
|
Secretary |
4
|
By: | |||||
|
||||||
|
(Signature) |
|
|
|||
|
||||
|
||||
|
(Signature) |
5
-2-
-3-
-4-
-5-
-6-
-7-
-8-
-9-
-10-
-11-
-12-
-13-
-14-
-15-
-16-
-17-
-18-
-19-
-20-
-21-
-22-
-23-
-24-
-25-
-26-
-27-
-28-
-29-
-30-
-31-
Date | Minimum Book Net Worth | |
Funding Date |
$5,490,000
|
|
December 31, 2005 |
Book Net Worth as of September 30, 2005,
plus
$60,000
|
|
March 31, 2006 |
Book Net Worth as of December 31, 2005,
plus
$300,000 and Book Net Worth as of March 31, 2005,
minus
$942,000
|
|
June 30, 2006 |
Book Net Worth as of March 31, 2006,
plus
$150,000
|
|
September 30, 2006 |
Book Net Worth as of March 31, 2006,
plus
$425,000
|
|
December 31, 2006 |
Book Net Worth as of March 31, 2006,
plus
$725,000
|
|
March 31, 2007 |
Book Net Worth as of March 31, 2006,
plus
$1,250,000
|
|
June 30, 2007, and each June 30 thereafter |
Book Net Worth as of prior March 31,
plus
$200,000
|
|
September 30, 2007, and each September 30 thereafter |
Book Net Worth as of prior March 31,
plus
$600,000
|
|
December 31, 2007, and each December 31 thereafter |
Book Net Worth as of prior March 31,
plus
$1,100,000
|
|
March 31, 2008, and each march 31 thereafter |
Book Net Worth as of prior March 31,
plus
$1,750,000
|
-32-
Period | Minimum Net Income | |||
Three (3) months ended December 31, 2005
|
$ | 60,000 | ||
Six (6) months ended March 31, 2006
|
$ | 300,000 | ||
Three (3) months ended June 30, 2006
|
$ | 150,000 | ||
Six (6) months ended September 30, 2006
|
$ | 425,000 | ||
Nine (9) months ended December 31, 2006, and each
December 31 thereafter
|
$ | 725,000 | ||
Twelve (12) months ended March 31, 2007, and each
March 31 thereafter
|
$ | 1,250,000 | ||
Three (3) months ended June 30, 2007, and each
June 30 thereafter
|
$ | 200,000 | ||
Six (6) months ended September 30, 2007, and each
September 30 thereafter
|
$ | 600,000 | ||
Nine (9) months ended December 31, 2007, and each
December 31 thereafter
|
$ | 1,100,000 | ||
Twelve (12) months ended March 31, 2008, and each March
31 thereafter
|
$ | 1,750,000 |
-33-
-34-
-35-
-36-
-37-
-38-
-39-
-40-
-41-
-42-
-43-
-44-
-45-
-46-
Orion Energy Systems, Ltd. | ORION ENERGY SYSTEMS, LTD. | |||||||
1204 Pilgrim Road | ||||||||
Plymouth, Wisconsin 53073 | ||||||||
Facsimile: ____/____-_______ | By: | /s/ Neal R. Verfuerth | ||||||
Attention:
|
Neal R. Verfuerth, President | |||||||
|
||||||||
e-mail:
|
||||||||
|
||||||||
|
||||||||
|
By: | /s/ Eric von Estorff | ||||||
|
||||||||
|
Eric von Estorff, Secretary | |||||||
|
||||||||
Great Lakes Energy Technologies, LLC | GREAT LAKES ENERGY TECHNOLOGIES, LLC | |||||||
2001 Mirro Drive | ||||||||
Manitowoc, Wisconsin 54220 | ||||||||
Facsimile: ____/____-________ | ||||||||
Attention:
|
By: | /s/ Neal Verfuerth | ||||||
|
||||||||
e-mail:
|
Neal R. Verfuerth, Manager | |||||||
|
||||||||
|
||||||||
Wells Fargo Bank, National Association | WELLS FARGO BANK, | |||||||
acting through its | NATIONAL ASSOCIATION, acting through its | |||||||
Wells Fargo Business Credit operating division | Wells Fargo Business Credit operating division | |||||||
100 East Wisconsin Avenue, Suite 1400 | ||||||||
MAC N9811143 | ||||||||
Milwaukee, Wisconsin 53202 | ||||||||
Telecopier: 414/224-7439 | ||||||||
Attention: Melissa L. Dreifuerst | By: | /s/ Melissa L. Dreifuerst | ||||||
|
||||||||
e-mail: melissa.l.dreifuerst@wellsfargo.com | Melissa L. Dreifuerst, Vice President |
-47-
Form of Revolving Note
Compliance Certificate
Premises
Executive Officers
Trade Names, Chief Executive Office, Principal Place of Business, and Locations of Collateral
Capitalization and Organizational Chart
Subsidiaries
Litigation Matters in Excess of $50,000.00
Intellectual Property Disclosures
Environmental Matters
Permitted Liens
Permitted Indebtedness and Guaranties
$25,000,000.00
|
December 22, 2005 |
A-1-
ORION ENERGY SYSTEMS, LTD. | ||||
|
||||
|
By: | |||
|
||||
|
Neal R. Verfuerth, President | |||
|
||||
GREAT LAKES ENERGY TECHNOLOGIES, LLC | ||||
|
||||
|
By: | |||
|
||||
|
Neal R. Verfuerth, President |
A-2-
To:
|
Wells Fargo Business Credit | |
Date:
|
, 200___ | |
Subject:
|
Financial Statements |
o | The undersigned does not have knowledge of the occurrence of an Event of Default under the Credit Agreement except as previously reported in writing to the Lender. | ||
o | The undersigned has knowledge of the occurrence of an Event of Default under the Credit Agreement not previously reported in writing to the Lender and attached hereto is a statement of the facts with respect to thereto. The Borrower acknowledges that pursuant to 2.5(c) of the Credit Agreement, the Lender may impose the Default Rate at any time during the resulting Default Period. |
Material Adverse Change in Litigation Matters of Borrowers . I further hereby certify as follows (check one): |
o | The undersigned has no knowledge of any material adverse change to the litigation exposure of the Borrowers or any of the Guarantors or Affiliates. | ||
o | The undersigned has knowledge of material adverse changes to the litigation exposure of the Borrowers or any of the Guarantors or Affiliates not previously disclosed in Schedule 5.7. Attached to this Certificate is a statement of the facts with respect thereto. |
B-1
Date | Minimum Book Net Worth | |
Funding Date |
$60,000
|
|
December 31, 2005 |
Book Net Worth as of September 30, 2005,
plus
$150,000
|
|
March 31, 2006 |
Book Net Worth as of December 31, 2005,
plus
$300,000 and Book Net Worth as of March 31,
2005,
minus
$942,000
|
|
June 30, 2006 |
Book Net Worth as of March 31, 2006,
plus
$150,000
|
|
September 30, 2006 |
Book Net Worth as of March 31, 2006,
plus
$425,000
|
|
December 31, 2006 |
Book Net Worth as of March 31, 2006,
plus
$725,000
|
|
March 31, 2007 |
Book Net Worth as of March 31, 2006,
plus
$1,250,000
|
|
June 30, 2007, and each June 30 thereafter |
Book Net Worth as of prior March 31,
plus
$200,000
|
|
September 30, 2007, and each September 30 thereafter |
Book Net Worth as of prior March 31,
plus
$600,000
|
|
December 31, 2007, and each December 31 thereafter |
Book Net Worth as of prior March 31,
plus
$1,100,000
|
|
March 31, 2008, and each march 31 thereafter |
Book Net Worth as of prior March 31,
plus
$1,750,000
|
B-2
Period | Minimum Net Income | |||
Three (3) months ended December 31, 2005
|
$ | 60,000 | ||
Six (6) months ended March 31, 2006
|
$ | 300,000 | ||
Three (3) months ended June 30, 2006
|
$ | 150,000 | ||
Six (6) months ended September 30, 2006
|
$ | 425,000 | ||
Nine (9) months ended December 31, 2006, and each
December 31 thereafter
|
$ | 725,000 | ||
Twelve (12) months ended March 31, 2007, and each
March 31 thereafter
|
$ | 1,250,000 | ||
Three (3) months ended June 30, 2007, and each
June 30 thereafter
|
$ | 200,000 | ||
Six (6) months ended September 30, 2007, and each
September 30 thereafter
|
$ | 600,000 | ||
Nine (9) months ended December 31, 2007, and each
December 31 thereafter
|
$ | 1,100,000 | ||
Twelve (12) months ended March 31, 2008, and each March
31 thereafter
|
$ | 1,750,000 |
B-3
ORION ENERGY SYSTEMS, LTD. | ||||
|
||||
|
By: | |||
|
||||
|
Its Chief Financial Officer | |||
|
||||
GREAT LAKES ENERGY TECHNOLOGIES, LLC | ||||
|
||||
|
By: | |||
|
||||
|
Its Chief Financial Officer |
B-4
C-1
-2-
WELLS FARGO BANK, | ORION ENERGY SYSTEMS, LTD. | |||||||
NATIONAL ASSOCIATION, acting through its | ||||||||
Wells Fargo Business Credit operating division | ||||||||
|
||||||||
|
By: | /s/ Neal R. Verfuerth | ||||||
|
||||||||
|
Neal R. Verfuerth, President | |||||||
|
||||||||
By:
|
/s/ Melissa L. Dreifuerst | |||||||
|
||||||||
|
Melissa L. Dreifuerst, Vice President | |||||||
|
||||||||
|
By: | /s/ Eric von Estorff | ||||||
|
||||||||
|
Eric von Estorff, Secretary | |||||||
|
||||||||
GREAT LAKES ENERGY TECHNOLOGIES, LLC | ||||||||
|
||||||||
|
By: | /s/ Neal R. Verfuerth | ||||||
|
||||||||
|
Neal R. Verfuerth, Manager |
-3-
ORION AVIATION, INC. | ||||||||
|
||||||||
|
By: | /s/ Neal R. Verfuerth | ||||||
|
||||||||
|
Neal R. Verfuerth, President |
-4-
-2-
-3-
WELLS FARGO BANK, | ORION ENERGY SYSTEMS, LTD. | |||||||
NATIONAL ASSOCIATION, acting through its | ||||||||
Wells Fargo Business Credit operating division | ||||||||
|
||||||||
|
By: | /s/ Neal R. Verfuerth | ||||||
|
||||||||
|
Neal R. Verfuerth, President | |||||||
|
||||||||
By:
|
/s/ Melissa L. Dreifuerst | |||||||
|
||||||||
|
Melissa L. Dreifuerst, Vice President | |||||||
|
||||||||
|
By: | /s/ Eric von Estorff | ||||||
|
||||||||
|
Eric von Estorff, Secretary | |||||||
|
||||||||
GREAT LAKES ENERGY TECHNOLOGIES, LLC | ||||||||
|
||||||||
|
By: | /s/ Neal R. Verfuerth | ||||||
|
||||||||
|
Neal R. Verfuerth, Manager |
-4-
ORION AVIATION, INC.
|
||||
By: | /s/ Neal R. Verfuerth | |||
Neal R. Verfuerth, President | ||||
Date | Minimum Book Net Worth | |
June 30, 2006 |
Book Net Worth as of March 31, 2006,
plus
$172,000
|
|
September 30, 2006 |
Book Net Worth as of March 31, 2006,
plus
$219,000
|
|
December 31, 2006 |
Book Net Worth as of March 31, 2006,
plus
$558,000
|
|
March 31, 2007 |
Book Net Worth as of March 31, 2006,
plus
$608,000
|
|
June 30, 2007, and each June 30 thereafter |
Book Net Worth as of prior March 31,
plus
$25,000
|
|
September 30, 2007, and each September 30 thereafter |
Book Net Worth as of prior March 31,
plus
$125,000
|
|
December 31, 2007, and each December 31 thereafter |
Book Net Worth as of prior March 31,
plus
$500,000
|
|
March 31, 2008, and each March 31 thereafter |
Book Net Worth as of prior March 31,
plus
$800,000
|
Period | Minimum Net Income | |||
Three (3) months ended June 30, 2006
|
$ | 172,000 | ||
Six (6) months ended September 30, 2006
|
$ | 219,000 | ||
Nine (9) months ended December 31, 2006
|
$ | 558,000 | ||
Twelve (12) months ended March 31, 2007
|
$ | 608,000 | ||
Three (3) months ended June 30, 2007, and
each June 30 thereafter
|
$ | 25,000 | ||
Six (6) months ended September 30, 2007,
and each September 30 thereafter
|
$ | 125,000 | ||
Nine (9) months ended December 31, 2007,
and each December 31 thereafter
|
$ | 500,000 | ||
Twelve (12) months ended March 31, 2008,
and each March 31 thereafter
|
$ | 800,000 |
WELLS FARGO BANK, | ORION ENERGY SYSTEMS, LTD. | |||||||
NATIONAL ASSOCIATION, acting through its | ||||||||
Wells Fargo Business Credit operating division | ||||||||
|
||||||||
|
By: | /s/ Neal R. Verfuerth | ||||||
|
||||||||
|
Neal R. Verfuerth, President | |||||||
|
||||||||
By:
|
/s/ Melissa L. Dreifuerst | |||||||
|
||||||||
|
Melissa L. Dreifuerst, Vice President | |||||||
|
||||||||
|
By: | /s/ Eric von Estorff | ||||||
|
||||||||
|
Eric von Estorff, Secretary | |||||||
|
||||||||
GREAT LAKES ENERGY TECHNOLOGIES, LLC | ||||||||
|
||||||||
|
By: | /s/ Neal R. Verfuerth | ||||||
|
||||||||
|
Neal R. Verfuerth, Manager |
-2-
-3-
WELLS FARGO BANK, | ORION ENERGY SYSTEMS, LTD. | |||||||
NATIONAL ASSOCIATION, acting through its | ||||||||
Wells Fargo Business Credit operating division | ||||||||
|
||||||||
|
By: | /s/ Neal R. Verfuerth | ||||||
|
||||||||
|
Neal R. Verfuerth, President | |||||||
|
||||||||
By:
|
/s/ Brian P. Bur | |||||||
|
||||||||
|
Brian P. Bur, Relationship Manager | |||||||
|
||||||||
|
By: | /s/ Eric von Estorff | ||||||
|
||||||||
|
Eric von Estorff, Secretary | |||||||
|
||||||||
GREAT LAKES ENERGY TECHNOLOGIES, LLC | ||||||||
|
||||||||
|
By: | /s/ Neal R. Verfuerth | ||||||
|
||||||||
|
Neal R. Verfuerth, Manager |
-4-
CLEAN ENERGY SOLUTIONS, LLC
|
||||
By: | /s/ Neal R. Verfuerth | |||
Neal R. Verfuerth, Manager | ||||
ENERGY CAPITAL PARTNERS, LLC
|
||||
By: | /s/ Neal R. Verfuerth | |||
Neal R. Verfuerth, Manager | ||||
5
$8,000,000 | August 3, 2007 |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
ORION ENERGY SYSTEMS, INC. | ||||||||
|
||||||||
|
By: | /s/ Neal Verfuerth | ||||||
|
||||||||
|
Name: | Neal Verfuerth | ||||||
|
Title: | President and Chief Executive Officer | ||||||
|
||||||||
Acknowledged and Agreed: | ||||||||
|
||||||||
GE CAPITAL EQUITY | ||||||||
INVESTMENTS, INC | ||||||||
|
||||||||
By:
Name: |
/s/ Michael Donnelly
|
|||||||
Title:
|
|
|||||||
Address: |
$2,500,000 | August 3, 2007 |
ORION ENERGY SYSTEMS, INC. | ||||||||
|
||||||||
|
By: | /s/ Neal Verfuerth | ||||||
|
||||||||
|
Name: | Neal Verfuerth | ||||||
|
Title: | President and Chief Executive Officer | ||||||
|
||||||||
Acknowledged and Agreed: | ||||||||
|
||||||||
CLEAN TECHNOLOGY FUND II, LP | ||||||||
|
||||||||
By:
|
Expansion Capital Partners II, LP,
its General Partner |
|||||||
|
||||||||
By:
|
Expansion Capital Partners II General
Partner, LLC, its General Partner |
|||||||
|
||||||||
By:
Name: |
/s/ Bernardo Llovera
|
|||||||
Title:
|
|
|||||||
Address: |
$50,000 | August 3, 2007 |
ORION ENERGY SYSTEMS, INC.
|
||||
By: | /s/ Neal Verfuerth | |||
Name: | Neal Verfuerth | |||
Title: | President and Chief Executive Officer | |||
By:
|
/s/ | |||||
|
||||||
|
||||||
By:
|
||||||
Name:
|
||||||
Title:
|
||||||
Address:
|
$50,000 | August 3, 2007 |
ORION ENERGY SYSTEMS, INC.
|
||||
By: | /s/ Neal Verfuerth | |||
Name: | Neal Verfuerth | |||
Title: | President and Chief Executive Officer | |||
By:
|
||||||
|
||||||
|
||||||
By:
|
/s/ | |||||
Name:
|
||||||
Title:
|
||||||
Address:
|
2
3
4
ORION:
|
By: | /s/ | ||||
|
||||||
|
||||||
|
Its: | Chairman | ||||
|
||||||
|
||||||
Date: 10/1/05 | ||||||
|
||||||
EMPLOYEE:
|
/s/ Bruce Wadman | |||||
|
||||||
Bruce Wadman | ||||||
|
||||||
Date: 10/1/05 | ||||||
|
5
Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | |||||||||||||||||
Bonus Schedule | 06 | 07 | 08 | 09 | 10 | ||||||||||||||||
Gross Revenue
Goal |
$ | 40 | MM | $ | 70 | MM | $ | 100 | MM | $ | 130 | MM | $ | 160 | MM | ||||||
Importance
|
40 | % | 35 | % | 35 | % | 35 | % | 35 | % | |||||||||||
EBITDA
Goal |
$ | 3.5 | MM | $ | 12 | MM | $ | 18 | MM | $ | 24 | MM | $ | 30 | MM | ||||||
Importance
|
30 | % | 35 | % | 40 | % | 40 | % | 40 | % | |||||||||||
Equity
Goal |
$ | 10 | MM | $ | 20 | MM | $ | 25 | MM | $ | 30 | MM | $ | 35 | MM | ||||||
Importance
|
15 | % | 15 | % | 10 | % | 10 | % | 10 | % | |||||||||||
Common Stock
Goal |
$ | 6 | $ | 10 | $ | 14 | $ | 18 | $ | 22 | |||||||||||
Importance
|
15 | % | 15 | % | 15 | % | 15 | % | 15 | % |
2
3
4
5
|
By: | Patrick Trotter | ||
|
||||
|
||||
|
Its: | Chairman | ||
|
|
/s Neal R. Verfuerth | |
|
||
|
Neal R. Verfuerth |
6
7
8
ASSIGNOR
|
||||
Neal Verfuerth | ||||
State of Wisconsin | ) |
|
||||
) |
ss.
|
|||||
County of | ) |
|
Notary Public | ||||
My Commission Expires: | ||||
9
ORION ENERGY SYSTEMS, LTD.
(ASSIGNEE) |
||||
By: | ||||
Name: | ||||
Title: | ||||
State of Wisconsin | ) |
|
||||
) |
ss.
|
|||||
County of | ) |
|
Notary Public | ||||
My Commission Expires: | ||||
10
TITLE OF INVENTION: |
|
|
|
Signature: |
|
|
|
||
Printed Name: |
|
|
|
||
Date: |
|
|
|
11
|
Job Title: | Senior Vice President Business Development | ||||
|
||||||
|
Base Salary: | $150,000 | ||||
|
||||||
|
Travel expenses: | Ordinary, customary and usual business expenses reimbursed using expense reporting procedure in compliance with company policy. The vehicle allowance terminated as of May 15, 2006. As of May 16, 2006, actual mileage will be paid at the rate of 40.5¢ per mile. | ||||
|
||||||
|
Benefits: | Continued reimbursement of actual costs of maintaining private FSA, health insurance and disability insurance in lieu of participating in the similar plans sponsored by Orion not to exceed costs of participation in the Orion sponsored plans. Participation in all other employee benefit plans subject to meeting eligibility requirements. Three weeks of vacation per year continues. | ||||
|
||||||
|
Stock options: | Additional 100,000 options at $2.50 per share, subject to standard five year vesting schedule, issued post April 1, 2006 two for one stock split. | ||||
|
||||||
|
Fiscal year incentive | Up to 100% of base salary payable July 31 following the end of the fiscal year if the following company sales performance goals are attained for the fiscal years ending March 31: |
2007 | 2008 | 2009 | ||||||||||||||
|
Sales | $70MM | $100MM | $130MM |
If 75%, but not 100%, of the above sales goals are met, the Board of Directors, in it sole discretion, may award a bonus of up to 60% of the amount otherwise due upon meeting that goal. |
|
Confidentiality, Intellectual
Property & Non Compete |
Compensation program is contingent upon your execution of the enclosed agreement |
To be eligible and remain eligible for this bonus, you must comply with company policies related to pricing and margins, calendar management and daily activity reports as well as other management expectations as established and communicated from time-to-time. If you do not comply with such requirements and expectations, you may not qualify for this bonus. |
/s/ Neal Verfuerth | 5/31/06 | |
|
||
Neal Verfuerth
Orion Energy Systems, Ltd. |
Date
|
|
/s/ John Scribante
|
5/31/06 | |
|
||
John Scribante
|
Date |
2
3
4
5
6
7
8
9
10
11
12
13
Date
|
# of Optioned Shares Exercisable | Total # of Optioned Shares Exercisable | ||
|
|
|
2
3
ORION ENERGY SYSTEMS, LTD.
|
||||
By: | ||||
Its: President |
||||
By: | ||||
Its: Secretary |
||||
GRANTEE
| ||||
SSN: | ||||
ADDRESS: | ||||
4
-2-
-3-
-4-
-5-
-6-
-7-
-8-
-9-
-10-
-11-
-12-
-13-
-14-
-15-
-16-
-17-
-18-
-19-
Number of Optioned Shares Vested | Vesting Date | |
___% of the Optioned Shares
|
___anniversary of the date hereof | |
___% of the Optioned Shares
|
___anniversary of the date hereof | |
___% of the Optioned Shares
|
___anniversary of the date hereof | |
___% of the Optioned Shares
|
___anniversary of the date hereof | |
___% of the Optioned Shares
|
___anniversary of the date hereof |
2
3
ORION ENERGY SYSTEMS, LTD.
|
||||
By: | ||||
Name: | Neal R. Verfuerth | |||
Title: | President and CEO | |||
4
TO: |
Orion Energy Systems, Ltd. 1204 Pilgrim Road Plymouth, WI 53073 |
Name: |
|
|
|
||
|
||
Signature: |
|
|
|
||
|
||
Address: |
|
|
|
||
(please print legibly)
|
||
|
||
Dated: |
|
|
|
5
2004 STOCK AND INCENTIVE AWARDS PLAN
STOCK OPTION AWARD
[Address]
, 20___
[Nonqualified or Incentive Stock Option]
U.S. $
percent (___%) of your Option will vest and become exercisable on each of
the
first
anniversaries of the Grant Date, provided you remain in employment or
service during such period. Upon your termination of employment from, or cessation
of services to, the Company and its Affiliates, the unvested portion of your Option
will immediately terminate.
Your Option expires at, and cannot be exercised after, the close of business at the
Companys headquarters on the earliest to occur of:
If the date this Option terminates as specified above falls on a day on which the
stock market is not open for trading or on a date that you are prohibited by Company
policy (such as an insider trading policy) from exercising the Option, the
termination date shall be
|
automatically extended to the first available trading day following the original termination date, but not beyond the tenth (10 th ) anniversary of the Grant Date. | |
|
||
|
Notwithstanding the above, your entire Option is terminated immediately if the Company or an Affiliate terminates you for Cause (as defined below), or if your employment or service is otherwise terminated at a time when you could be terminated for Cause, or you voluntarily terminate without the Companys prior consent. | |
|
||
|
For purposes of this Agreement, Cause means any of the following: (i) failure to perform or observe any of the terms or provisions of any written employment agreement with the Company or an Affiliate, or if no written employment agreement exists, the gross dereliction of your employment duties; (ii) failure to comply fully with the lawful directives of the Board of Directors of the Company; (iii) dishonesty; (iv) misconduct; (v) conviction of a crime involving moral turpitude; (vi) substance abuse; (vii) misappropriation of funds: (viii) disloyalty or disparagement of the Company, and of its Affiliates, or any of their management or employees; or (ix) other proper cause determined in good faith by the Committee. | |
|
||
Manner of Exercise:
|
You may exercise your Option only to the extent vested and only if it has not terminated. To exercise your Option, you must complete the Notice of Stock Option Exercise form provided by the Company and return it to the address indicated on the form. The form will be effective when it is received by the Company, but exercise will not be completed until you pay the total exercise price and all applicable withholding taxes due as a result of the exercise to the Company. | |
|
||
|
If someone else wants to exercise your Option after your death, that person must contact the Company and prove to the Companys satisfaction that he or she is entitled to do so. | |
|
||
|
Your ability to exercise your Option may be restricted by the Company if required by applicable law. | |
|
||
Restrictions on Resale:
|
By accepting your Option, you agree not to sell any Shares acquired under your Option at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. |
2
Restrictions on Transfer:
|
During your lifetime, this Option is only exercisable by you. You may not transfer, pledge or assign this Option, by operation of law or otherwise, except pursuant to your will or the laws of descent and distribution. If you attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this Option, except as provided above, or in the event this Option is subject to levy or attachment, execution or similar process, the Company may terminate this Option by providing written notice to you. | |
|
||
Rescission of Exercise;
Disgorgement of Option
Gains:
|
If you are terminated for Cause, or if you are not terminated for Cause but the Committee later determines that you could have been terminated for Cause if all facts had been known at that time, or if the Committee determines that, after your termination of employment, you have violated the provisions of any non-competition, non-solicitation, confidentiality or assignment of inventions agreement then in effect, then your Option will terminate immediately on the date of such termination or determination, as applicable, and the Committee may, in its sole and absolute discretion, (i) rescind any notice of exercise submitted by you for which payment or the issuance of Shares has not been completed, in which event any exercise price you have tendered will be promptly returned to you or retained by the Company as an offset as provided below, and/or (ii) notify you in writing within two (2) years after exercise of all or any portion of the Option that any exercise made within the one (1) year period prior to your termination or prior to your breach of any non-competition, non-solicitation, confidentiality or assignment of inventions agreement, is rescinded. Within ten (10) days after receiving such notice from the Company, you shall pay to the Company the amount of any cash payment received, or the value of any other gain realized, as a result of the rescinded exercise. Notwithstanding the foregoing, the Company shall have the right to retain (as an offset against any amounts due hereunder), the exercise price and withholding amount tendered by you with respect to any rescinded exercise, and the Company shall have the right to offset against any other amounts due from the Company to you the amount owed by you hereunder. |
3
Notice of Sale:
|
If your Option is designated as an incentive stock option, you must promptly report to the Secretary of the Company any disposition of the Shares acquired under your Option that is made within two (2) years from the Grant Date or within twelve (12) months from the date you acquired the Shares (the Notice Period). In addition, the Company may, at any time during the Notice Period, place a legend or legends on any certificate(s) for the Shares issued under your Option requesting the Companys transfer agent to notify the Company of any transfer of the Shares. | |
|
||
Miscellaneous:
|
As a condition of the granting of your Option, you agree, for
yourself and your legal representatives or guardians, that this Stock Option Award
shall be interpreted by the Committee and that any interpretation by the Committee of
the terms of this Stock Option Award or the Plan and any determination made by the
Committee pursuant to this Stock Option Award or the Plan shall be final, binding and
conclusive. Notwithstanding the foregoing, this Stock Option Award may not be
amended, and the Company may not take any other action the effect of which is, to
reduce the Exercise Price per Share other than (i) pursuant to Section 6.4 of the
Plan, and in accordance with Section 1.409A-1(b)(5)(v)(B) of the Treasury
Regulations, or (ii) in connection with a transaction which is considered the grant
of a new option for purposes of Section 409A of the Code, provided that the new
Exercise Price per Share is not less than Fair Market Value of a Share on the new
grant date.
|
|
|
||
|
As a condition of the granting of your Option, except as required
by law, you agree not to disclose information regarding the existence, terms, or
conditions of this Option to any person or entity whatsoever, including without
limitation any members of the media (including, but not limited to, print
journalists, newspapers, radio, television, cable, satellite programs, or Internet
media) or any Internet web page or chat room, or any other entity or person, with
the exception of your spouse, accountant, tax advisor, and/or attorneys. Any
violation of this provision may result in immediate and complete forfeiture of all
rights granted under this Option if so determined by the Committee.
|
|
|
||
|
This Stock Option Award may be executed in counterparts.
|
4
|
||
Authorized Officer
|
Optionee |
5
Name:
|
||
|
Street Address:
|
||
|
City:
|
State: | Zip Code: | ||||||||
|
Aggregate Exercise Price | ||||||||||||||||
Type of | Number of | (multiply Exercise Price | ||||||||||||||
Option | Option | Per Share by number of | ||||||||||||||
(specify ISO | Exercise Price | Shares Being | Option Shares being | |||||||||||||
Date of Grant | or NQSO) | Per Share | Purchased | purchased) | ||||||||||||
|
$ | $ | ||||||||||||||
|
||||||||||||||||
|
$ | $ | ||||||||||||||
|
||||||||||||||||
|
$ | $ | ||||||||||||||
|
||||||||||||||||
|
$ | $ | ||||||||||||||
|
||||||||||||||||
|
$ | $ |
6
o | Cash Exercise . I am enclosing a check or money order payable to Orion Energy Systems, Inc. for the Total Exercise Price. | |
o | Cashless Exercise Through the Company . Please withhold a whole number of shares otherwise deliverable to me upon exercise having a Fair Market Value equal to the Total Exercise Price and issue the net number of shares to me. Any fractional share remaining will be paid to me in cash. | |
o | Cashless Exercise Through a Broker-Dealer . I have requested through the broker specified below to ( select only one ): |
o | Sell to Cover . Sell or margin only enough of the option(s) being exercised to cover the Total Exercise Price (and tax withholding, if elected in Part 5), deliver the sale or margin loan proceeds directly to Orion Energy Systems, Inc., and deposit the remaining shares and any residual cash in my brokerage account. | ||
o | Same-Day-Sale . Sell or margin all of the shares of common stock issuable upon exercise of the option(s), deliver a portion of the sale or margin loan proceeds directly to Orion Energy Systems, Inc. to pay the Total Exercise Price (and tax withholding, if elected in Part 5), and deposit any remaining cash proceeds in my brokerage account. |
Broker-Dealer Name:
|
||
|
Contact Person:
|
||
|
DWAC Depository Trust Company (DTC) #:
|
||
|
Brokerage Account #:
|
||
|
Street Address:
|
||
|
City:
|
State: | Zip Code: | ||||||||
|
7
o | Broker Exercise . I have elected to exercise my option(s) through a broker in Part 3. The broker will sell sufficient shares to pay for the tax amount and will remit that amount to Orion Energy Systems, Inc. | |
o | Cash . I am enclosing a check or money order payable to Orion Energy Systems, Inc. for the withholding tax amount. | |
o | Withhold Shares . Please withhold a whole number of shares otherwise deliverable to me upon exercise having a Fair Market Value equal to the minimum statutory tax that is required to be withheld. Any fractional share remaining will be paid to me in cash. |
1. | I understand that all sales of Orions common stock received upon exercise of this option are subject to compliance with the companys policy on securities trades. |
2. | I hereby acknowledge that I have read a copy of the prospectus describing the Orion Energy Systems, Inc. plan under which the option(s) listed above were issued, and understand the tax consequences of an exercise. |
3. | I understand that this notice cannot be revoked by me if I have selected a cashless exercise through a broker-dealer. I personally guarantee that the Total Exercise Price and applicable taxes will be paid to Orion Energy Systems, Inc. in full in the event the Company does not receive the full amount from the Broker for any reason. |
Signature:
|
Date: | |||||||||
|
|
|
Received by:
|
||
|
Date received:
|
||||
|
|
8
$ | , 2007 |
(a) | any payment of interest hereunder is not made on or before ten (10) days after Holder provides written notice to Maker that such payment is past due; | ||
(b) | any default shall occur in Makers obligations hereunder, and the same shall not be timely cured to Holders satisfaction; or |
2
(c) | the filing of bankruptcy, insolvency, receivership, or similar proceedings for the relief of debtors or creditors, whether voluntary or involuntary, of Maker. |
3
2
3
4
5
WELLS FARGO BANK, NATIONAL
|
ORION ENERGY SYSTEMS, LTD. | |
ASSOCIATION, acting through its WELLS
|
||
FARGO BUSINESS CREDIT operating division
|
||
|
||
By: /s/ Melissa L. Dreifuerst
|
||
Its: Vice President
|
By: /s/ Neal R. Verfuerth | |
Wells Fargo Business Credit
|
Its: President | |
100 East Wisconsin Avenue
|
Orion Energy Systems, Ltd. | |
MAC N9811-143
|
1204 Pilgrim Road | |
Milwaukee, Wisconsin 53202
|
Plymouth, Wisconsin 53073 |
STATE OF WISCONSIN
|
) | |||
|
) | |||
COUNTY OF MILWAUKEE
|
) |
STATE OF WISCONSIN
|
) | |||
|
) | |||
COUNTY OF MILWAUKEE
|
) |
6
APP.
FILING
NO./PATENT
DATE/ISSUE
PATENT
NO.
DATE
STATUS
OWNER
D494700
08/17/2004
Issued
Orion Energy
Systems, Ltd.
6774619
08/10/2004
Issued
Orion Energy
Systems, Ltd.
ELECTRIC POWER
EFFICIENCY OF LIGHTING
SOURCES
6758580
07/06/2004
Issued
Orion Energy
Systems, Ltd.
6746274
06/08/2004
Issued
Orion Energy
Systems, Ltd.
6724180
04/20/2004
Issued
Orion Energy
Systems, Ltd.
CIRCUITS FOR
COMPARATIVE ELECTRIC
POWER USAGE TO
PROVIDE A VIRTUAL
POWER PLANT IN
ELECTRIC POWER
SAVINGS
6710588
03/23/2004
Issued
Orion Energy
Systems, Ltd,
EFFICIENCY OF
LIGHTING SOURCES TO
IN EFFECT BE A
VIRTUAL POWER PLANT
D483332
12/09/2003
Issued
Systems, Ltd.
Orion Energy
APP. | FILING | |||||||
NO./PATENT | DATE/ISSUE | |||||||
PATENT | NO. | DATE | STATUS | OWNER | ||||
ELECTRIC CONNECTOR
|
D479826 | 09/23/2003 | Issued | Orion Energy | ||||
CORD HAVING MALE
|
Systems, Ltd. | |||||||
PLUG ENDS
|
||||||||
|
||||||||
FLUORESCENT HANGING
|
6585396 | 07/01/2003 | Issued | Systems, Ltd. | ||||
LIGHT FIXTURE
|
Orion Energy | |||||||
|
||||||||
MEANS AND METHOD OF
|
6467933 | 10/22/2002 | Issued | Orion Energy | ||||
INCREASING LIFETIME OF
|
Systems, Ltd. | |||||||
FLUORESCENT LAMPS
|
||||||||
|
||||||||
OVERHEAD DOWN-LIGHT
|
D463059 | 09/17/2002 | Issued | Systems, Ltd. | ||||
FLUORESCENT LIGHT
|
Orion Energy | |||||||
FIXTURE
|
||||||||
|
||||||||
ELECTRICAL CONNECTOR
|
D460735 | 07/23/2002 | Issued | Systems, Ltd. | ||||
PIGTAIL CORD
|
Orion Energy | |||||||
|
||||||||
OVERHEAD DOWNLIGHT
|
D447266 | 08/28/2001 | Issued | Systems, Ltd. | ||||
FLUORESCENT LIGHT
|
Orion Energy | |||||||
FIXTURE
|
||||||||
|
||||||||
FLUORESCENT LIGHT
|
6257735 | 07/10/2001 | Issued | Systems, Ltd. | ||||
REFLECTOR
|
Orion Energy |
2
FILING | ||||||||
DATE/REG. | ||||||||
MARK | SERIAL NO./REG. NO. | DATE | STATUS | OWNER | ||||
|
2,403,983 | 11/14/2000 | Registered |
Orion Energy
Systems, Ltd. |
||||
|
FILING | ||||||||||||
SERIAL | DATE/REG. | |||||||||||
MARK | COUNTRY | NO./REG. | DATE | STATUS | OWNER | |||||||
ORION
|
Canada | 1213,003 | 04/13/2004 | Pending | Orion Energy | |||||||
|
Systems, Ltd. | |||||||||||
|
||||||||||||
ORION and Design
|
Canada | 1212,999 | 04/13/2004 | Pending | Orion Energy | |||||||
|
Systems, Ltd. |
3
2
3
4
5
WELLS FARGO BANK, NATIONAL
|
GREAT LAKES ENERGY TECHNOLOGIES, LLC | |
ASSOCIATION, acting through its WELLS
|
||
FARGO BUSINESS CREDIT operating
|
||
division
|
||
|
||
By: /s/ Melissa L. Dreifuerst
|
By: /s/ Neal R. Verfuerth | |
Its: Vice President
|
Its: President | |
|
||
Wells Fargo Business Credit
|
Great Lakes Energy Technologies, LLC | |
100 East Wisconsin Avenue
|
2001 Mirro Drive | |
MAC N9811-143
|
Manitowoc, Wisconsin 54220 | |
Milwaukee, Wisconsin 53202
|
STATE OF WISCONSIN
|
) | |
|
) | |
COUNTY OF MILWAUKEE
|
) |
STATE OF WISCONSIN
|
) | |
|
) | |
COUNTY OF MILWAUKEE
|
) |
6
2
FILING
SERIAL
DATE/REG.
MARK
NO./REG. NO.
DATE
STATUS
OWNER
78/543,917
01/07/2005
Pending
Great Lakes
Energy
Technologies,
LLC
Entity | Jurisdiction of Organization | |
Great Lakes Energy Technologies, LLC
|
Wisconsin | |
Clean Energy Solutions, LLC
|
Wisconsin | |
Energy Capital Partners, LLC
|
Wisconsin |