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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): November 4, 2005
ACTIVE POWER, INC.
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(Exact Name of Registrant as Specified in Its Charter)
000-30939
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(Commission File Number)
Delaware 74-2961657
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(State of Other Jurisdiction of Incorporation) (IRS Employer
Identification No.)
2128 W. Braker Lane, BK12, Austin, Texas 78758
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(Address of Principal Executive Offices) (Zip Code)
(512) 836-6464
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registration 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 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
In connection with our promotion of Jim Clishem to the position of
President and Chief Operating Officer of Active Power, as described in Item 5.02
of this Current Report on Form 8-K, Active Power entered into a letter agreement
with Mr. Clishem relating to the terms of his employment. The letter agreement
is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by
reference and the terms thereof are described in Item 5.02 of this Form 8-K.
On November 7, 2005, we entered into a letter agreement with Sriram
Sivaram, our Vice President of Sales and Marketing, pursuant to which we agreed
to pay Mr. Sivaram a severance payment in the event he is terminated other than
for cause prior to November 7, 2006 pursuant to which we would pay Mr. Sivaram
his salary through November 7, 2006. A copy of the letter agreement is attached
as Exhibit 99.2 to this Form 8-K and is incorporated herein by reference.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.
On November 4, 2005, Active Power appointed Jim Clishem as its President
and Chief Operating Officer. Mr. Clishem previously served as Active Power's
Vice President of Marketing and Business Development. Joseph F. Pinkerton, III
will continue to serve as Chairman of the Board and as Active Power's Chief
Executive Officer and will continue to be Active Power's principal executive
officer.
Mr. Clishem has served as Active Power's Vice President of Marketing and
Business Development since May 2005. From August 2004 to May 2005, Mr. Clishem
served as Vice President of Business Development for Peregrine Systems, a
private enterprise software company where he focused primarily on global
alliances. From October 1999 to January 2004, Mr. Clishem served as Chief
Executive Officer of Xodiax, a managed IT services business that he founded. Mr.
Clishem remained the Chairman of Xodiax until July 2004. From August 1995 to
September 1999, Mr. Clishem served as Vice President of Data Services for
Broadwing Communications, LLC, and other entities later acquired by Broadwing.
Mr. Clishem holds a BSEE and MSEE from the University of Louisville and an
executive MBA from Southern Methodist University.
In connection with Mr. Clishem's promotion, we entered into a letter
agreement with Mr. Clishem, a copy of which is attached as Exhibit 99.2 hereto
and incorporated herein by reference, which sets forth the following terms of
Mr. Clishem's employment:
o Annualized salary of $250,000;
o An MBO bonus target that represents up to 100% of the annualized
salary;
o 300,000 option shares to vest over 4 years of employment;
o 50,000 shares of common stock upon acceptance of this offer for a
purchase price of $0.001 per share, for an aggregate payment of $50.
The shares will be subject to a lock-up agreement prohibiting their
sale or transfer for a period of one year after issuance. Active Power
will have the right to repurchase these shares for $0.001 per share
for a period of one year from the date of the agreement in the event
of Mr. Clishem terminating his employment or his employment is
terminated by Active Power for cause. This repurchase right will lapse
upon the consummation of a change of control (as defined in the
agreement) of Active Power.
o 50,000 shares of common stock upon acceptance of this offer for a
purchase price of $0.001 per share, for an aggregate payment of $50.
The shares will be subject to a lock-up agreement prohibiting their
sale or transfer for a period of one year after issuance. Active Power
will have the right to repurchase these shares for $0.001 per share
for a period of one year from the date of the agreement if (i) Mr.
Clishem terminates his employment or such employment is terminated by
Active Power for cause or (ii) Mr. Clishem fails to meet certain
company objectives which shall be determined and agreed on by Mr.
Clishem, Active Power's Compensation Committee and Joe Pinkerton for
2006. This repurchase right will lapse upon the consummation of a
change of control (as defined in the agreement) of Active Power.
ITEM 7.01 REGULATION FD DISCLOSURE.
On November 8, 2005, the Company issued a press release announcing our
promotion of Mr. Clishem, which is attached hereto as Exhibit 99.3. This exhibit
is furnished, not filed, pursuant to Regulation FD.
ITEM 9.01. EXHIBITS AND FINANCIAL STATEMENTS.
(c) EXHIBITS
Exhibit 99.1 Letter Agreement dated November 7, 2005 by and between
Registrant and Jim Clishem
Exhibit 99.2 Letter Agreement dated November 7, 2005 by and between
Registrant and Sriram Sivaram.
Exhibit 99.3 Press Release dated November 8, 2005
SIGNATURE
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 hereunto duly authorized.
ACTIVE POWER, INC.
Dated: November 8, 2005 By: /s/ Joseph F. Pinkerton III
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Joseph F. Pinkerton III
Chairman of the Board and
Chief Executive Officer
EXHIBIT 99.1
LETTER AGREEMENT
[LOGO OF ACTIVE POWER(R)]
November 7, 2005
Mr. Jim Clishem
2128 W. Braker Lane, BK12
Austin, TX 78758
Dear Jim:
This letter is to confirm the offer of employment with Active Power, Inc.
("Active Power"), in the position of President and Chief Operating Officer,
reporting to Joe Pinkerton. In consideration of the services to be provided by
you during the term of your employment, your initial compensation shall be as
follows:
(a) Biweekly (every 14 days) pay of $9,617.00, which if annualized is
$250,000.
(b) An MBO bonus target that represents up to 100% of your annualized
salary. Details to be determined and agreed on by you, Active Power's
Compensation Committee and Joe Pinkerton for 2006.
(c) 300,000 option shares to vest over 4 years of employment subject to
Board approval after your employment start date, to be granted upon
commencement of employment as President and Chief Operating Officer. A
Notice of Grant of Stock Option will be provided following Board
approval.
(d) 50,000 shares of common stock upon acceptance of this offer for a
purchase price of $0.001 per share for an aggregate payment of $50.
The shares will be subject to a lock-up agreement prohibiting their
sale or transfer for a period of one year after issuance. Active Power
will have the right to repurchase these shares for $0.001 per share
for a period of one year in the event you terminate your employment or
your employment is terminated by Active Power for cause. This
repurchase right will lapse upon the consummation of a change of
control of Active Power. A Restricted Stock Purchase Agreement will be
provided upon issuance of the shares.
(e) 50,000 shares of common stock upon acceptance of this offer for a
purchase price of $0.001 per share for an aggregate payment of $50.
The shares will be subject to a lock-up agreement prohibiting their
sale or transfer for a period of one year after issuance. Active Power
will have the right to repurchase these shares for $0.001 per share
for a period of one year if (i) you terminate your employment or your
employment is terminated by Active Power for cause or (ii) you fail to
meet certain company objectives which shall be determined and agreed
on by you, Active Power's Compensation Committee and Joe Pinkerton for
2006. This repurchase right will lapse upon the consummation of a
change of control of Active Power. A Restricted Stock Purchase
Agreement will be provided upon issuance of the shares.
(f) Miscellaneous: you shall continue to be entitled to participate in any
pension or profit-sharing plan, group life insurance plan,
hospitalization insurance plan, medical services plan, or any other
plan or arrangement of Active Power now or hereafter existing for the
benefit of employees generally.
Please note that your employment at Active Power is "at will", meaning either
you or Active Power can terminate the employment relationship at any time, with
or without notice and with or without cause. Nothing contained in this
confirmation of employment, your offer of employment, or in any other
communication, oral or written, between you and Active Power, may modify the
at-will relationship, which may only be modified by a written agreement signed
by the Chief Executive Officer of Active Power designating a specific term of
employment.
I'm excited about your decision to step up into the new role.
Sincerely,
Accepted: /s/ Jim Clishem
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Jim Clishem
/s/ Joe Pinkerton Date: November 7, 2005
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Joe Pinkerton
Chairman & CEO
EXHIBIT 99.2
LETTER AGREEMENT
[LOGO OF ACTIVE POWER(R)]
November 7, 2005
VIA HAND DELIVERY
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Sriram Sivaram
Active Power, Inc.
2128 W. Braker Lane, B12
Austin, TX 78758
RE: LETTER AGREEMENT
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Dear Sriram:
This letter addresses your continued employment at Active Power, Inc. ("Active
Power"), and outlines some financial items related to that employment.
Specifically, provided that you remain an employee of Active Power, Active Power
warrants that it will guarantee your title as a vice president and your base
salary beginning on the date of this letter, each through November 7, 2006.
In the event of your Involuntary Termination (as defined below) by Active Power
prior to November 7, 2006, Active Power shall pay you an amount equal to your
then current salary for the period beginning from the date your service for
Active Power terminates and ending on November 7, 2006. If your employment with
Active Power terminates due to a reason other than your Involuntary Termination,
Active Power will have no obligation to make any severance or other payment to
you pursuant to this letter agreement. Furthermore, this letter agreement does
not alter your status as an employee at will, nor does it obligate Active Power
to provide you with any compensation or benefits, other than as specifically set
forth herein.
For purposes of this letter agreement, "Involuntary Termination" means (i)
Active Power's termination of your employment other than due to the commission
by you of any act of fraud, embezzlement or dishonesty, any unauthorized use or
disclosure by you of confidential information or trade secrets of Active Power,
or any intentional wrongdoing by you, whether by omission or commission, which
adversely affects Active Power's business or affairs in a material manner or
(ii) your voluntary resignation following (A) a change in your position with
Active Power which materially reduces your duties and responsibilities or the
level of management to which you report, (B) a reduction in your level of
compensation (including base salary, fringe benefits and target bonus under any
corporate-performance based bonus or incentive programs) by more than 15% or (C)
a relocation of your place of employment by more than 50 miles, provided and
only if such change, reduction or relocation is effected by Active Power without
your consent..
If you have any questions regarding this matter, please do not hesitate to call
me at the above-listed number.
I HAVE READ THIS LETTER AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.
Dated: November 7, 2005 /s/ Sriram Sivaram
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Signature of Employee
ACCEPTED AND AGREED TO:
Sriram Sivaram
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Active Power, Inc. Print Name of Employee
By: /s/ Joseph F. Pinkerton
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Name: Joseph F. Pinkerton Address
Title: Chairman and CEO
EXHIBIT 99.3
PRESS RELEASE DATED NOVEMBER 8, 2005
[LOGO OF ACTIVE POWER(R)]
ACTIVE POWER PROMOTES JIM CLISHEM TO PRESIDENT AND COO
Austin, Texas (November 8, 2005) -- Active Power, Inc. (NASDAQ: ACPW) today
announced that Jim Clishem, its Vice President of Marketing and Business
Development, has been named the Company's President and Chief Operating Officer.
Mr. Clishem joined Active Power five months ago, bringing extensive expertise in
the computer, telecommunications and managed IT services industries. Clishem
came to the Company from Peregrine Systems, Inc., a publicly traded enterprise
software company, where he served as Vice President of Business Development
focusing on global alliances since 2004. From 1999 until it was sold in 2004, he
was founder-CEO of Xodiax, a profitable managed IT services business, which was
recognized by Inc Magazine as one of the fastest growing privately held
companies in the country. Clishem also served as Vice President of Data Services
for Broadwing Communications, where he had P&L responsibility for a $150 million
business unit. He has also held various senior roles at MCI, Ericsson, and
Tandem Computers.
"With the launch of our new CoolAir(TM) DC product line next week, Active Power
is significantly expanding its sales and marketing efforts to support this new
business and Jim brings a wealth of experience in these areas," said Joe
Pinkerton, Chairman and CEO of Active Power. "Jim has led sales and marketing
organizations, run profitable businesses and transformed a startup into a
profitable entity in under two years. He is intimately familiar with the backup
power needs of data center and telecom customers, having been a customer of this
equipment during his tenure at several successful telecom and managed IT
services businesses."
"I'm extremely excited about the opportunity that Joe and the Board of Directors
have given me," said Clishem. "I'm eager to begin taking a more prominent role
in the day-to-day operations of Active Power and in the strategic direction of
the business. My first priorities are to successfully manage the commercial
launch of CoolAir DC, drive revenue growth across all product lines and
accelerate the Company toward profitability."
Mr. Clishem will continue to report to Pinkerton, who remains the Company's
Chairman and Chief Executive Officer.
ABOUT ACTIVE POWER:
Active Power, Inc. (www.activepower.com) designs, manufactures and markets
battery-free backup power products that provide the consistent, reliable
electric power required by today's digital economy. An ISO 9001-registered
company, Active Power is the first to commercialize a flywheel energy storage
system, CleanSource(R), that provides a highly reliable, low-cost and non-toxic
replacement for lead-acid batteries used in conventional power quality
installations. Active Power has also recently developed a new battery-free
extended runtime product line (CoolAir(TM)) based on its proprietary thermal and
compressed air storage technology. For more information visit
www.activepower.com, e-mail info@activepower.com or call toll free 877-BUYACPW
(289-2279).
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
This release may contain forward-looking statements that involve risks and
uncertainties. Any forward looking statements and all other statements that may
be made in this news release that are not historical facts are subject to a
number of risks and uncertainties, and actual results may differ materially.
Specific risks include delays in new product development, product performance
and quality issues and the acceptance of our current and new products by the
power quality market. Please refer to Active Power filings with the Securities
and Exchange Commission for more information on the risk factors that could
cause actual results to differ.
Active Power, CleanSource and our Active Power logo are registered trademarks of
Active Power, Inc. All other trademarks are the properties of their respective
companies.
ACTIVE POWER CONTACTS:
Michael Chibib, Investors, 512.744.9453, mchibib@activepower.com
Derek Jones, Corporate Communications, 512.744.9210, djones@activepower.com