Item 5.02
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Departure of Directors or Certain Officers;
Election of Directors;
Appointment of Certain Officers;
Compensatory Arrangements of Certain
Officers.
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Appointment of Douglas Glaspey as Interim Chief Executive
Officer
On July 13, 2017 the Company announced the appointment of
Douglas J. Glaspey to serve as the Companys Interim Chief Executive Officer,
effective July 19, 2017. The Companys Board of Directors appointed Mr. Glaspey
to serve as the Interim Chief Executive Officer on July 6, 2017 and in
connection with his appointment to the position of Interim Chief Executive
Officer, Mr. Glaspeys annual salary will increase to $284,180.
Mr. Glaspey will continue to serve as the Companys President
and Chief Operating Officer. Mr. Glaspey, age 64, was the co-founder and also
serves as a director of the Company. He has served as a director of the Company
since March 2000, President of the Company since September 2011, and Chief
Operating Officer of the Company since December 2003. Mr. Glaspey served from
March 2000 until December 2004 as the President and Chief Executive Officer for
the TSX Venture Exchange listed U.S. Cobalt Inc. until the acquisition of
Geo-Idaho in December 2003. He also served as a director and the Chief Executive
Officer of Geo-Idaho from February 2002 until the acquisition of Geo-Idaho in
December 2003. During his prior career in the mining industry, he has held
operating positions with ASARCO, Earth Resources Company, Asamera Minerals,
Atlanta Gold Corporation and Twin Gold Corporation. Mr. Glaspey has 38 years of
operating and management experience, 14 of which are in geothermal. He holds a
Bachelor of Science in Mineral Processing Engineering and an Associate of
Science in Engineering Science. His experience includes public company financing
and administration, production management, planning and directing resource
exploration programs, preparing feasibility studies and environmental
permitting. He has formed and served as an executive officer of several private
resource development companies in the United States, including Drumlummon Gold
Mines Corporation and Black Diamond Corporation. He is currently a director of
TSX Venture Exchange listed Thunder Mountain Gold, Inc., which is also quoted on
the OTC Bulletin Board.
The Board of Directors has established an Executive Committee
that, in addition to overseeing the search for a new CEO, will guide the company
on key strategic initiatives and capital allocation.
Dennis Gilles Advisory Agreement
As previously reported on a Form 8-K, on April 19, 2017, the
Company determined not to extend its employment agreement with Dennis Gilles,
the Companys Chief Executive Officer, beyond its current term expiring on July
18, 2017. In accordance with the terms of the employment agreement, the Company
delivered a notice of non-renewal to Mr. Gilles. At the time, the Company
reported that it and Mr. Gilles were discussing a role for Mr. Gilles as an
outside advisor to the Company after his employment agreement expired.
On July 12, 2017, the Company entered into an advisory
agreement for executive management advisory services (the "Advisory Agreement")
with Mr. Gilles. The Advisory Agreement is effective July 19, 2017, and will remain in effect until
January 18, 2018 unless earlier terminated in accordance with its terms or
renewed by agreement of both parties.
Under the terms of the Advisory Agreement, the Company has
agreed to pay to Mr. Gilles $10,000 per month during the term of the Advisory
Agreement. Mr. Gilles will provide no more than an average of one hundred hours
per month of services to the Company under the Advisory Agreement. In addition,
Mr. Gilles will be eligible to receive stock option awards under the Companys
2009 Stock Incentive Plan at the discretion of the Board. The Company will also
reimburse Mr. Gilles for reasonable incidental, or Chief Executive Officer
pre-approved, expenses incurred in connection with its engagement.
Under the Advisory Agreement, Mr. Gilles will perform such
duties communicated to him by the President, CEO or Chair of the Board or Chair
of any Board Committee.
The Company has agreed to pay Mr. Gilles a performance bonus in
the following circumstances:
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(a)
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If Mr. Gilles is specifically tasked by the Company to
provide consulting services relating to the negotiation of a Power
Purchase Agreement for the Companys Geysers project in California, Mr.
Gilles would receive a performance bonus in the amount of $100,000 upon
the execution of the Power Purchase Agreement by both parties, provided it
occurs during the term of the Advisory Agreement, or within 6 months after
the expiration or termination of the Advisory Agreement other than for
Cause.
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(b)
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If Mr. Gilles is specifically tasked by the Company to
provide consulting services relating to the negotiation of a Power
Purchase Agreement for the Companys San Emidio II project in Nevada, Mr.
Gilles would receive a performance bonus in the amount of $100,000 upon
the execution of the Power Purchase Agreement by both parties, provided it
occurs during the term of the Advisory Agreement, or within 6 months after
the expiration or termination of the Advisory Agreement other than for
Cause.
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The Advisory Agreement may be terminated without notice for
Cause or upon 30 days prior written notice without Cause. The Advisory Agreement
will otherwise terminate upon completion of a Change of Control or upon
expiration of the term of the Advisory Agreement.
The Advisory Agreement also includes covenants by Mr. Gilles
with respect to the treatment of confidential information, non-competition,
non-solicitation and non-change of control activities, and provides for
equitable relief in the event of breach.
Pursuant to Mr. Gilles employment agreement with the Company
dated April 19, 2013 and, as amended on January 1, 2017, Mr. Gilles is entitled
to severance payments under specified circumstances (see the Companys most
recent definitive proxy statement for a description of his termination
payments). However, payment of such amounts is not due until after he
experiences a termination of his employment, which is determined in a manner
consistent with the definition of separation from service under Code Section
409A. Based on the anticipated level of services to be provided under the Advisory Agreement, the
parties do not intend that Mr. Gilles service under the Advisory Agreement will
constitute a separation from service until his services under the Advisory
Agreement terminate.