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 earliest event reported): January 22, 2006
ELECTRIC CITY CORP.
(Exact name of registrant as specified in its charter)
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DELAWARE
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001-16265
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36-4197337 |
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(State or other jurisdiction of
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(Commission File #)
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(IRS Employer Identification No.) |
incorporation or organization |
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1280 Landmeier Road, Elk Grove Village, Illinois 60007-2410
(Address of principal executive offices)
(847) 437-1666
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement
Electric
City Corp. and Mr. David Asplund entered into a three year
employment contract for Mr. Asplund to serve as
the Companys Chief Executive Officer, effective as of January 23, 2006, the date when Mr. Asplund
began serving as the Companys CEO. The contract provides for a base annual salary of $285,000
and eligibility for up to $65,000 of bonus compensation each year, based on the Companys
performance. For the first year, the bonus will be based on consolidated gross revenue, with
$15,000 payable if gross revenue exceeds $10 million, an additional $15,000 payable if gross
revenue exceeds $12.5 million, an additional $15,000 payable if gross revenue exceeds $16 million
and an additional $20,000 payable if gross revenue exceeds $18 million. The bonus formula for the
second and third contract years has not been determined but is to be based on consolidated net
income of Electric City for such years.
In addition to base salary and bonus, Electric City has agreed to grant to Mr. Asplund options to
purchase up to 1.5 million shares for each of the three contract years, with such options vesting
in arrears at the end of each year. The option price for the first 1.5 million shares is $0.62,
which was the 30 day average closing price of the Companys common stock, determined on Friday,
January 20, 2006, which was the last business day prior to the day Mr. Asplund began serving as
CEO. The option price for each of the subsequent grants will be based on the market price on
January 23, 2007 and January 23, 2008, respectively, using the 30 day average closing price of the
Companys common stock, determined on each such date. 500,000 of such options were granted
pursuant to the Companys 2001 Incentive Stock Plan. The remaining 4 million options are granted
subject to obtaining shareholder approval to an amendment to the Companys Incentive Stock Plan at
the 2006 annual meeting of shareholders to increase the number of shares available under the Plan
by at least 4 million. If the Companys stockholders do not approve this amendment to the
Incentive Stock Plan, for 30 days thereafter Mr. Asplund shall have the option of terminating his
contract and receiving from the Company, as a lump sum, an amount equal to his base salary from the
date of such termination through January 22, 2007 plus $65,000, plus any accrued unused vacation as
of the date of termination, and such amount shall be paid to Mr. Asplund on the date of the
Companys next regular payroll. In addition, upon electing to terminate his contract in such
circumstances, the 500,000 options shall immediately vest and will be exercisable for a period of
90 days.
The description of Mr. Asplunds Employment Agreement is not intended to be complete and is
qualified in its entirety by the complete text of the document attached to this filing as an
exhibit, which is incorporated herein by reference.
Item 8.01 Other Events
Pursuant to the grant of options to purchase 500,000 shares of common stock at a price of $0.62 per
share to Mr. Asplund (described above), the exercise price applicable under certain Warrant
Certificates to Purchase Shares of Common Stock issued to CIT Capital Securities, Inc. (formerly
named Newcourt Capital Securities, Inc.) on July 31, 2001 and September 7, 2001 automatically
adjusted from $1.00 per share and $0.90 per share, respectively to $0.62 per share. The warrants
evidenced thereby are exercisable for up to 4,064,830 shares of the Companys common stock. The
Company is recording an additional non-cash dividend of approximately
$300,000 in respect of such adjustment to
the exercise prices, due to the increase in value of the warrants as determine using a modified
Black-Sholes option pricing model.
Item 9.01 Financial Statements and Exhibits
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(a) |
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Not Applicable |
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(b) |
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Not Applicable |
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(c) |
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Not Applicable |
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(d) |
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Exhibits |
10.1 Employment Agreement with David R. Asplund