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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported):
April 15, 2022 (April 11, 2022)
 
Commission File Number: 0-29923
 
Orbital Energy Group, Inc.
(Exact Name of registrant as specified in Its Charter)
 
 
   Colorado
 
84-1463284
   (State or jurisdiction of
 
(I.R.S. Employer
   incorporation or organization)
 
Identification No.)
 
 
 
   1924 Aldine Western, Houston, Texas
 
77038
   (Address of Principal Executive Offices)
 
(zip code)
 
(832) 467-1420
 
(Registrant’s telephone number)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a- 12)
 
 
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.1 4d-2(b))
 
 
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, $0.001 par value
OEG
Nasdaq Capital Market
 
 
 
 
 
 
 
 
 
 
Item 5.02(e) Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
 
Addendum to Employment Agreement
 
On April 11, 2022, our board of directors, including all of our independent directors, ratified and approved a two-year extension to the Executive Employment Agreements for James O’Neil and William Clough.  The extensions were negotiated and approved by the Compensation Committee after review and approval by a third-party, independent compensation consultant hired by the Company.  The Addenda left the salary and benefits for the two executives unchanged. The primary changes were the 24-month extension and a revision of the Bonus Provisions to be more in line with shareholder interests and industry standards.  The new provisions base the bonus on various criteria including, but not limited to Total Shareholder Return (TSR) as measured against the Company’s peers.  For further information, see the attached Addenda.
 
Exchange of Cash Settled Stock Appreciation Rights (“SAR”) for Restricted Stock Units (“RSU”)
 
Effective as of April 13, 2022, the following named executive officers (NEO’s) exchanged the cash value of previously issued cash settled SAR’s for RSU’s as summarized below:
 
NEO  
SAR's Value
     RSU's     Vested     Unvested  
James F. O'Neil   $ 2,122,078.14       1,035,161       373,055       662,106  
William J. Clough   $ 1,752,023.83       854,734       457,224       397,510  
Daniel N. Ford (1)   $ 1,413,959.64       689,736       362,324       327,412  
 
(1)Mr. Ford was our former Chief Financial Officer.
 
The RSU’s were issued at an exchange value of $2.05 per RSU.  One third of the RSU’s vest immediately and the remainder vest in two equal annual instalments.
 
Item 5.08 Shareholder Director Nominations
 
We are pleased to announce that on April 11, 2022, the Board of Directors of Orbital Energy Group, Inc. scheduled the 2022 Annual Meeting of Stockholders to be held 9:00 am MST on Thursday, July 21, 2022, at Orbital Energy Group, Inc., 1924 Aldine Western, Houston, Texas 77038.  The record date for determining stockholders entitled to notice of, and to vote at, the 2022 Meeting is set at May 27, 2022, and only such stockholders will be entitled to notice of and to vote at the 2022 Annual Meeting.
 
Because this meeting date differs more than thirty days from the anniversary of the Company's 2021 Annual Meeting of Stockholders, held October 12, 2021, in order for a stockholder to be entitled to vote, to bring a proposal or submit a nominee for director at the 2022 Annual Meeting, such stockholder must be a stockholder of record on May 27, 2022.  Under the Security and Exchange Commission’s proxy rules, shareholder proposals that meet certain conditions may be included in our Proxy Statement and such notice by such stockholder must be received no later than 5:00 p.m. Houston local time on May 27, 2022.
 
Proposals and notices must be in writing and received by our Corporate Secretary at Orbital Energy Group Global, Inc., Attn: Corporate Secretary, 1924 Aldine Western, Houston, Texas 77038, and must also comply with the requirements set forth in the rules and regulations of the Exchange Act and the Company's Bylaws.
 
Section 9 - Financial Statement and Exhibits
 
Item 9.01 Financial Statement and Exhibits.
 
(d)     Exhibits
 
Exhibit No.
 
Description of Exhibit
 
 Addendum “A” to employment agreement of James F. O’Neill III, Employee
99.2   Addendum “A” to employment agreement of William J. Clough, Employee 
104   Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL)
 
 
 
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
Signed and submitted this 15h day of April 2022.
 
 
Orbital Energy Group, Inc.
(Registrant)
 
 By:
   /s/ William J. Clough
 
        William J. Clough
 
        Chief Legal Officer
 
 

Exhibit 99.1

 

 

ADDENDUM “A”

TO

EMPLOYMENT AGREEMENT

of

James F. O’Neil III, Employee

 

THIS ADDENDUM TO EMPLOYMENT AGREEMENT is entered into this 1st day of April 2022, by and between Orbital Energy Group, Inc., a Colorado corporation (hereinafter “OEG” or “Employer”) and James F. O’Neil III, hereinafter (“Employee”), collectively referred to herein as the “Parties”, or in the singular as "Party.”

 

WHEREAS, Employee and OEG entered into an Employment Agreement dated October 1, 2019, that provides for all customary matters inter alia compensation, bonus, term, etc.

 

WHEREAS, Employee and OEG have agreed to modify and revise certain terms and conditions of the Employment Agreement as modified and to retain, intact, all non-modified provisions and covenants.

 

WHEREAS, Employee and OEG have agreed to extend the Term of the Employment Agreement for an additional 24 months.

 

IT IS THEREFORE AGREED:

 

 

1)

EFFECTIVE DATE. This Agreement is entered into and is effective on the date indicated above and, except as otherwise noted herein, shall remain in effect until such time as it is terminated as provided for herein.

 

 

2)

CHANGES AND MODIFICATIONS. Employee and OEG agree to change and replace the following paragraphs in the Employment Agreement as follows:

 

 

a)

Remove and Replace Paragraph Nos. 2(a), (b), & (c) as follows:

 

2.         Executive Compensation

 

 

(a)

Base Salary. During the Employment Period, Executive’s beginning base salary (the “Base Salary”) shall be $800,000.00 per annum, which Base Salary shall be payable by the Company in regular installments in accordance with the Company’s general payroll practices (as in effect from time to time). Executive’s Base Salary for any partial year will be based upon the actual number of days elapsed in such year. The Executive’s Base Salary shall be subject to annual increases by the Compensation Committee of the Board of Directors, who will take in consideration, among other things, cost-of-living, performance, and increase in shareholder returns.
 

(b)

Bonus Short Term Incentive Plan. Executive has a target annual bonus payment of one hundred percent (100%) of his Annual Base Salary (“Target Bonus”) during the Term. Said bonus shall be based on performance objectives, goals, and milestones agreed to by the Executive and the Compensation Committee. Executive shall have the ability to earn a larger bonus based on performance criteria and the reasonable judgment and discretion of the Compensation Committee. The Executive shall have the right, but not the obligation to have any bonuses paid in the form of restricted stock units or other equity incentive arrangements provided for under the proposed new Equity Incentive Plan. Any issuance of equity based compensation to the Executive shall be consistent with the provisions of NASDAQ Listing Rule 5635(c).
 

(c)

Long Term Incentive Plan (LTI). Executive shall be granted, subject to the restrictions and understandings described below, Restricted Stock Units (RSU) annually in the form of Time-Based RSU’s and/or Performance Share Units (PSU). RSU’s will issue at the average daily price of the Company’s common stock for the 5-days immediately preceding issuance of the RSU’s. Such RSU’s shall vest in annual installments equaling 1/3 of the issuance, with the first 1/3 vesting at the end of the first year from the issuance date, and 1/3 in each of the two years thereafter for this year (2022). Future RSU’s will vest 1/3 upon issuance and 1/3 in each of the two years thereafter. The RSU’s shall immediately vest in the event of an involuntary termination of the Executive by the Company for any reason other than Cause, death or disability or termination of this Agreement by Executive for Good Reason.
 

(i)

PSU’s are granted on April 1st of each calendar year. The number of PSU’s will be determined by the average stock price the last 10 days trading days in March. PSU’s will ‘cliff vest’ on March 31st (or the first trading day thereafter) after the three year period. The PSU’s will be based on the company’s three year total shareholder return (TSR) against its Peer Group. The amount of PSU’s cliff vesting at the end of the three year period will be multiplied by a factor of 0.50 (for lower percentile performance against peers) to a factor of 2.00 (for upper percentile performance against peers) and the number of shares is determined by the average stock price of the last ten trading days prior to March 31st of the grant date. TSR will be calculated by the increase in the stock price from the initial calendar year end to the calendar year end three years later. The stock price for the initial calendar year will be determined by the average closing stock price for all trading days in December of the prior year and the stock price for the closing calendar year will be determined by the average closing stock price for all trading days in December three years later.

 

 

b)

Remove and Replace Paragraph No. 8 as follows:

 

8.         Term of Agreement. This Agreement shall continue in full force and effect until the second (2nd) anniversary of the Effective Date of this Amendment (“Initial Term”). This Agreement shall be extended following the Initial Term (or any successor, extended, or renewal term, (a "Renewal Term") for continuing one year terms; provided, however, that within the ninety (90) day period prior to the expiration of the Initial Term or any Renewal Term, at its discretion, the Compensation Committee or the Board may propose for consideration by Executive, such amendments to the Agreement as it deems appropriate. If Executive's employment with the Company terminates during the Initial Term or a Renewal Term, this Agreement shall remain in effect until all of the obligations of the parties hereunder are satisfied or have expired.

 

 

3)

Extension Agreement. This Addendum hereby extends previous agreements for a period of twenty-four (24) months or two full years.

 

 
 

 

 

4)

This document consists of three (3) pages including signature page.

 

 

Employee

 

/s/ James F. O'Neil III                                         

James F. O’Neil III

 

Orbital Energy Group, Inc.

Compensation Committee

 

 

By: /s/ Corey Lambrecht                                              

Corey Lambrecht, Independent Director

 

By: /s/ Steve Cochennet                                      

         Steve Cochennet, Independent Director

 

 

Exhibit 99.2

 

ADDENDUM “A”

TO

EMPLOYMENT AGREEMENT

of

William J. Clough, Employee

 

THIS ADDENDUM TO EMPLOYMENT AGREEMENT is entered into this 1st day of April 2022, by and between Orbital Energy Group, Inc., a Colorado corporation (hereinafter “OEG” or “Employer”) and William J. Clough, hereinafter (“Employee”), collectively referred to herein as the “Parties”, or in the singular as "Party.”

 

WHEREAS, Employee and OEG entered into an Employment Agreement dated May 14, 2019, that provides for all customary matters inter alia compensation, bonus, term, etc.

 

WHEREAS, Employee and OEG have agreed to modify and revise certain terms and conditions of the Employment Agreement as modified and to retain, intact, all non-modified provisions and covenants.

 

WHEREAS, Employee and OEG have agreed to extend the Term of the Employment Agreement for an additional 24 months.

 

IT IS THEREFORE AGREED:

 

 

1)

EFFECTIVE DATE. This Addendum is entered into and is effective on the date indicated above and, except as otherwise noted herein, shall remain in effect until such time as it is terminated as provided for herein.

 

 

2)

CHANGES AND MODIFICATIONS. Employee and OEG agree to change and replace the following paragraphs in the Employment Agreement as follows:

 

 

a)

Remove and Replace Paragraph Nos. 2(a), (b), & (c) as follows:

 

2.         Executive Compensation

 

 

(a)

Base Salary. During the Employment Period, Executive’s beginning base salary (the “Base Salary”) shall be $850,000.00 per annum, which Base Salary shall be payable by the Company in regular installments in accordance with the Company’s general payroll practices (as in effect from time to time). Executive’s Base Salary for any partial year will be based upon the actual number of days elapsed in such year. The Executive’s Base Salary shall be subject to annual increases by the Compensation Committee of the Board of Directors, who will take in consideration, among other things, cost-of-living, performance, and increase in shareholder returns.
 

(b)

Bonus Short Term Incentive Plan. Executive has a target annual bonus payment of one hundred percent (100%) of his Annual Base Salary (“Target Bonus”) during the Term. Said bonus shall be based on performance objectives, goals, and milestones agreed to by the Executive and the Compensation Committee. Executive shall have the ability to earn a larger bonus based on performance criteria and the reasonable judgment and discretion of the Compensation Committee. The Executive shall have the right, but not the obligation to have any bonuses paid in the form of restricted stock units or other equity incentive arrangements provided for under the proposed new Equity Incentive Plan. Any issuance of equity based compensation to the Executive shall be consistent with the provisions of NASDAQ Listing Rule 5635(c).
 

(c)

Long Term Incentive Plan (LTI). Executive shall be granted, subject to the restrictions and understandings described below, Restricted Stock Units (RSU) annually in the form of Time-Based RSU’s and/or Performance Share Units (PSU). RSU’s will issue at the average daily price of the Company’s common stock for the 5-days immediately preceding issuance of the RSU’s. Such RSU’s shall vest in annual installments equaling 1/3 of the issuance, with the first 1/3 vesting at the end of the first year from the issuance date, and 1/3 in each of the two years thereafter for this year (2022). Future RSU’s will vest 1/3 upon issuance and 1/3 in each of the two years thereafter. The RSU’s shall immediately vest in the event of an involuntary termination of the Executive by the Company for any reason other than Cause, death or disability or termination of this Agreement by Executive for Good Reason.
 

(i)

PSU’s are granted on April 1st of each calendar year. The number of PSU’s will be determined by the average stock price the last 10 days trading days in March. PSU’s will ‘cliff vest’ on March 31st (or the first trading day thereafter) after the three year period. The PSU’s will be based on the company’s three year total shareholder return (TSR) against its Peer Group. The amount of PSU’s cliff vesting at the end of the three year period will be multiplied by a factor of 0.50 (for lower percentile performance against peers) to a factor of 2.00 (for upper percentile performance against peers) and the number of shares is determined by the average stock price of the last ten trading days prior to March 31st of the grant date. TSR will be calculated by the increase in the stock price from the initial calendar year end to the calendar year end three years later. The stock price for the initial calendar year will be determined by the average closing stock price for all trading days in December of the prior year and the stock price for the closing calendar year will be determined by the average closing stock price for all trading days in December three years later.

 

 

b)

Remove and Replace Paragraph No. 8 as follows:

 

8.         Term of Agreement. This Agreement shall continue in full force and effect until the second (2nd) anniversary of the Effective Date of this Amendment (“Initial Term”). This Agreement shall be extended following the Initial Term (or any successor, extended, or renewal term, (a "Renewal Term") for continuing one year terms; provided, however, that within the ninety (90) day period prior to the expiration of the Initial Term or any Renewal Term, at its discretion, the Compensation Committee or the Board may propose for consideration by Executive, such amendments to the Agreement as it deems appropriate. If Executive's employment with the Company terminates during the Initial Term or a Renewal Term, this Agreement shall remain in effect until all of the obligations of the parties hereunder are satisfied or have expired.

 

 

3)

Extension Agreement. This Addendum hereby extends previous agreements for a period of twenty-four (24) months or two full years.

 

 
 

 

 

4)

This document consists of three (3) pages including signature page.

 

 

Employee

 

/s/ William J. Clough                                            

William J. Clough

 

Orbital Energy Group, Inc.

Compensation Committee

 

 

By: /s/ Corey Lambrecht                                                

Corey Lambrecht, Independent Director

 

By: /a/ Steve Cochennet                                        

         Steve Cochennet, Independent Director