UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Schedule 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant
☒
Filed by a party other than the Registrant
☐
Check the appropriate box:
☐
Preliminary Proxy Statement
☐
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
☐
Definitive Additional Materials
☐
Soliciting Material Under §240.14a-12
EOS ENERGY ENTERPRISES, INC.
(Exact Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒
No fee required.
☐ Fee paid previously with preliminary materials.
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Fee computed on table in exhibit required by Item 25 (b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
Eos Energy Enterprises, Inc.
3920 Park Avenue
Edison, New Jersey 08820
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 1, 2024
To the Stockholders of Eos Energy Enterprises, Inc.:
NOTICE IS HEREBY GIVEN
that the Annual Meeting of Stockholders (the “Annual Meeting”) of Eos Energy Enterprises, Inc., a Delaware corporation (the “Company”), will be a virtual meeting conducted exclusively via live webcast at www.virtualshareholdermeeting.com/EOSE2024 on May 1, 2024 at 10:00 a.m. Eastern time for the following purposes:
1.
to elect two directors as Class I directors of Eos Energy Enterprises, Inc., each to serve for three years and until his/her successor has been elected and qualified, or until his/her earlier death, resignation or removal;
2.
to ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024;
3.
to approve a non-binding advisory resolution approving the compensation of the named executive officers;
4.
to approve an amendment to our Third Amended and Restated Certificate of Incorporation to increase the authorized shares of common stock from 300,000,000 to 600,000,000 (the "Authorized Shares Amendment"); and
5.
to approve an amendment to our Amended and Restated 2020 Incentive Plan.
The Company will also transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice of Annual Meeting of Stockholders. Only stockholders who owned common stock of the Company at the close of business on March 11, 2024 (the “Record Date”) can vote at this meeting or any adjournments that take place.
The Board of Directors recommends that you vote:
Proposal 1
:
FOR
the election of the two director nominees;
Proposal 2
:
FOR
the ratification of the appointment of Deloitte & Touche LLP, as the independent registered public accounting firm;
Proposal 3
:
FOR
the approval of the non-binding advisory resolution to approve the compensation of our named executive officers;
Proposal 4
:
FOR
the Authorized Shares Amendment; and
Proposal 5:
FOR
the approval of an amendment to our Amended and Restated 2020 Incentive Plan.
2024 Virtual Annual Stockholder Meeting
The Board of Directors has determined to hold the annual meeting virtually in order to facilitate stockholder attendance and participation by stockholders from all locations at no cost. We believe this is the right choice for the Company at this time, as it enables engagement with our stockholders, regardless of size, resources, or physical location while safeguarding the health of our stockholders, Board and management. We are committed to ensuring that stockholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend the meeting online, vote your shares electronically and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/EOSE2024 at the meeting date and time. The meeting webcast will begin promptly at 10:00 a.m. Eastern Time. We encourage you to access the meeting prior to the start time. Online check-in will begin at 9:45 a.m. Eastern Time, and you should allow ample time for the check-in procedures. If you experience technical difficulties during the check-in process or during the meeting, please call the technical support number that will be posted on the virtual Annual Meeting login page for assistance. Technical assistance will be available through the conclusion of the Annual Meeting.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE VIRTUAL MEETING ONLINE, WE ENCOURAGE YOU TO READ THE ACCOMPANYING PROXY STATEMENT AND OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023, AND SUBMIT YOUR PROXY AS SOON AS POSSIBLE USING ONE OF THE THREE CONVENIENT VOTING METHODS DESCRIBED IN “INFORMATION ABOUT THE PROXY PROCESS AND VOTING” IN THE PROXY STATEMENT. IF YOU RECEIVE MORE THAN ONE SET OF PROXY MATERIALS BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH PROXY SHOULD BE SIGNED AND SUBMITTED TO ENSURE THAT ALL OF YOUR SHARES WILL BE VOTED.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 1, 2024
The Notice of Annual Meeting of Stockholders to be held on May 1, 2024, the accompanying Proxy Statement and the Company’s 2023 Annual Report on Form 10-K are available, free of charge, at www.proxyvote.com.
The Notice contains instructions on how to access our proxy materials and vote over the internet at www.proxyvote.com and how stockholders can receive a paper copy of our proxy materials, including the accompanying Proxy Statement, a proxy card or voting instruction card and our fiscal year ended December 31, 2023 Annual Report on Form 10-K. Stockholders can also request to receive future proxy materials in printed form by mail or electronically by email by contacting Investor Relations Department at 862-207-7955 or email ir@eose.com.
By Order of the Board of Directors
/s/Michael Willis Silberman
Michael Willis Silberman
General Counsel, Chief Compliance Officer and Corporate Secretary
April 2, 2024
TABLE OF CONTENTS
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Proposal No. 4 A
uthorized Shares Amendment
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1
Eos Energy Enterprises, Inc.
3920 PARK AVENUE
EDISON, NEW JERSEY 08820
PROXY STATEMENT
FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS
MAY 1, 2024
We have made available our proxy materials because the Board of Directors (the “Board”) of Eos Energy Enterprises, Inc. (referred to herein as the “Company,” “Eos,” “we,” “us” or “our”) is soliciting your proxy to vote at our 2024 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on May 1, 2024, at 10:00 a.m. Eastern time, at www.virtualshareholdermeeting.com/EOSE2024.
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This Proxy Statement summarizes information about the proposals to be considered at the Annual Meeting and other information you may find useful in determining how to vote.
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The Proxy Card is the means by which you actually authorize another person to vote your shares in accordance with your instructions.
In addition to solicitations by mail, our directors, officers and employees, without additional remuneration, may solicit proxies by telephone, e-mail and personal interviews. All costs of solicitation of proxies will be borne by us. Brokers, custodians and fiduciaries will be requested to forward proxy soliciting material to the owners of stock held in their names, and we will reimburse them for their reasonable out-of-pocket expenses incurred in connection with the distribution of proxy materials.
Pursuant to the rules adopted by the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our Annual Meeting materials, which include this Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Form 10-K”) by sending you this full set of proxy materials, including a Proxy Card. Accordingly, the proxy statement and accompanying Proxy Card will first be mailed to our stockholders of record as of
March 11, 2024 (the “Record Date”) for the first time on or about April 2, 2024.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
Our Board is divided into three (3) classes with only one class of directors being elected in each year and each class serving a three (3) year term. The directors hold their office for a term of three (3) years or until their respective successors are elected and qualified, subject to such director’s earlier death, resignation, disqualification or removal. Class I directors are Marian “Mimi” Walters, Audrey Zibelman and Jeffrey McNeil; Class II directors are Joe Mastrangelo, our CEO, and Alex Dimitrief; and Class III directors are Russell Stidolph, the Chair of our Board, Jeff Bornstein and Claude Demby.
Class I directors standing for re-election at the Annual Meeting are Marian “Mimi” Walters and Jeffrey McNeil. Audrey Zibelman is not standing for re-election at the Annual Meeting. Class II and Class III directors will stand for election at the 2025 and 2026 annual meetings of stockholders, respectively.
Each of the nominees for election as Class I directors is currently a director. If elected at the Annual Meeting, each of the nominees for election as Class I directors would serve for three years and until his/her successor is duly elected and qualified, or until his/her earlier death, resignation or removal. If any nominee is unable or unwilling to be a candidate for election, the Board may appoint another nominee or reduce the size of the Board.
The following table sets forth information for the nominees who are currently standing for election:
| Name | Age | Director Since | ||||||
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Marian “Mimi” Walters (1)
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61 | 2020 | ||||||
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Jeffrey McNeil (2)
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62 | 2023 | ||||||
(1) Member of the Leadership Development & Compensation Committee and member of the Nominating and Corporate Governance Committee.
(2) Member of the Audit Committee and member of the Leadership Development & Compensation Committee.
Set forth below is biographical information for the nominees. The following includes certain information regarding the nominees’ individual experience, qualifications, attributes and skills that led the Board to conclude that they should serve as a director.
Marian “Mimi” Walters
, 61, has served as a director since the closing of the Business Combination in 2020. Ms. Walters has been serving as a director for B. Riley Financial, Inc. (Nasdaq: RILY) since July 2019 and has been Chief Commercial Officer for Leading Edge Power Solutions, LLC since November 2019. From 2015 to 2019, she served as a Member of the U.S. House of Representatives (the “House”) from California’s 45
th
District where she worked on key legislation, business and policy initiatives related to energy, technology, environmental and healthcare. Ms. Walters was a member of House Leadership and served on the influential Energy and Commerce Committee. She was a member of the Communications and Technology, Digital Commerce and Consumer Protection, and Oversight and Investigations subcommittees. Prior to her election to Congress, Ms. Walters was a member of the California State Senate, from 2008 to 2014, where she served on the Banking and Financial Institutions Committee and was Vice Chair of the Appropriations Committee. She previously served in the California State Assembly and was mayor and council member for the City of Laguna Niguel. Prior to her career in public service, Ms. Walters was an investment professional at Drexel Burnham Lambert and Kidder, Peabody & Co. She earned a B.A. in Political Science from the University of California, Los Angeles. Ms. Walters’ qualifications to serve on our board of directors include: her experience with the alternative energy industry, policy and government affairs and her background in investment banking.
3
Jeffrey McNeil
, 62,
has served as a member of our Board since 2023. Mr. McNeil has held various significant positions, showcasing his vast experience and leadership capabilities. Since April of 2023, Mr. McNeil has served as Executive Vice President - Advisor at Enphase Energy, playing a pivotal role in guiding the company's strategic initiatives. Before this role, he served as Chief Operations Officer (2019-2023) and Vice President of Quality and Customer Support (2018-2019) at Enphase Energy, demonstrating his commitment to operational excellence. Mr. McNeil's dedication to the advancement of renewable energy solutions is evident in his roles at other leading companies in the industry. He served as Senior Vice President of Operations at Energous Corporation (2016-2018) and held key positions at Cypress Semiconductor Corporation for over two decades (1994-2012), including Senior Vice President of Worldwide Operations and Vice President of Planning. Mr. McNeil’s career journey also includes notable positions at Upstart Power, Inc., where he currently serves on the board of directors, as well as Heraeus, Digital Equipment Corporation (later acquired by Hewlett Packard Enterprise), Seagate Technology, and Memorex. Mr. McNeil earned his Bachelor of Science degree from San Jose University, majoring in Chemical Engineering. Mr. McNeil’s qualifications to serve on our board of directors include: four decades of experience spanning various facets of the energy and technology sectors and a proven track record of driving growth and innovation, positioning Mr. McNeil as a key asset in our mission to deliver scalable and sustainable energy storage solutions.
THE BOARD RECOMMENDS A VOTE
FOR
THE ELECTION OF EACH OF THE ABOVE-NAMED CLASS I NOMINEES
4
DIRECTORS
The following table sets forth the name, age as of March 1, 2024 and position of the nominees for election at the Annual Meeting and the other current directors of Eos Energy Enterprises, Inc. whose terms extend past the Annual Meeting. The following also includes certain information regarding our directors’ individual experience, qualifications, attributes and skills and brief statements of those aspects of our directors’ backgrounds that led us to conclude that they are qualified to serve as directors (information for Ms. Walters and Mr. McNeil is set forth above in “Proposal No. 1 Election of Directors”).
| Name | Age | Position | Independent | ||||||||
| Russell Stidolph (2) (3) |
48
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Independent Chair; Director | ☑ | ||||||||
| Jeff Bornstein (1) (2) |
58
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Director | ☑ | ||||||||
| Claude Demby (1) (3) |
59
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Director | ☑ | ||||||||
| Alex Dimitrief (1) (3) |
65
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Director | ☑ | ||||||||
| Joe Mastrangelo |
55
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Chief Executive Officer and Director | |||||||||
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Jeffrey McNeil (1) (2)
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62
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Director | ☑ | ||||||||
| Marian “Mimi” Walters (2) (3) |
61
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Director | ☑ | ||||||||
(1) Member of the Audit Committee
(2) Member of the Leadership Development & Compensation Committee
(3) Member of the Nominating and Corporate Governance Committee
Russell Stidolph
, 48, has served as a member of our Board since the closing of the Business Combination in 2020. He has also served as a director of Eos Energy Storage LLC (“EES LLC”) since 2014 and the chairman of the board of EES LLC since 2018, and continued in both positions following the closing of the Business Combination. Mr. Stidolph is the founder of AltEnergy, LLC a private equity firm focused on alternative energy investing, where he has served as Managing Director since 2006 and is the Chairman and CEO of AltEnergy Acquisition Corp. (NASDAQ: AEAE). He also serves as director of Hulett Bancorp. Prior to forming AltEnergy, Mr. Stidolph was a Principal at J.H. Whitney & Co., LLC, a middle-market private equity firm based in New Canaan, Connecticut. While at J.H. Whitney, Mr. Stidolph was responsible for starting and developing the firm’s alternative energy investing practice where he was responsible for Hawkeye Renewables, LLC and Iowa Winds, LLC. Mr. Stidolph was both the Chief Financial Officer and Vice Chairman of Hawkeye Renewables, LLC before it was sold in 2006 to Thomas H. Lee Partners, LP. Prior to joining J.H. Whitney, Mr. Stidolph was a member of the corporate finance group at PaineWebber, Inc., that was responsible for high yield and leverage finance origination. Mr. Stidolph also acted as Senior Vice President and the Chief Financial Officer of Tres Amigas, LLC and he still sits on the company’s board of directors, and was Chair of the board of directors of Viridity Energy, Inc. before it was sold to Ormat Technologies in 2017. Russell received a Bachelor of Arts degree from Dartmouth College. Mr. Stidolph’s qualifications to serve on our Board include: his background in financial investments, financial and risk management, equity capital markets and the renewable energy industry.
5
Jeff Bornstein
, 58,
has served as a member of our Board since September 2022, and was recommended by both a non-management director and our chief executive officer. Mr. Bornstein is the founder, principal and co-managing partner of Whipstick Ventures LLC, an investment company focused on early-stage companies with novel solutions across energy storage and efficiency, services, biotech, and fin-tech. He also currently serves as the managing partner of Generation Capital Partners and sits on the board of AlloVir (NASDAQ: ALVR) as Chair of their Audit Committee. Before establishing Whipstick Ventures in 2018, Mr. Bornstein held pivotal roles at General Electric (GE), notably as Vice Chairman and Chief Financial Officer from 2013 to 2017. During his tenure, he led significant portfolio transformations, including divesting the Appliances division, merging GE Oil & Gas with Baker Hughes, and streamlining GE Capital's assets by over $300 billion. He also facilitated GE's acquisition of Alstom while implementing cost-saving measures. Mr. Bornstein's GE journey began in 1989 with the GE Power Systems' Financial Management Program. Over the years, he ascended through various finance roles within the company, notably serving as Senior Vice President and Chief Financial Officer of GE Capital for 12 years. His leadership during the financial crisis and transition to Federal Reserve regulation were instrumental in navigating challenging times. Beyond his corporate responsibilities, Mr. Bornstein is a trustee of Northeastern University, on the board of Build On, and is involved in a number of youth programs. He holds a B.S. in Business Administration from Northeastern University. Mr. Bornstein's appointment to our Board is underpinned by his extensive finance background, executive leadership experience, and deep industry knowledge, particularly in the energy sector.
Claude Demby
,
59, has served as a member of our Board since 2021. Mr. Demby has led complex global organizations through turnaround and fast growth periods with his extensive executive leadership experience within the automotive, aerospace and materials technology industries. He has established international operations and infrastructure throughout the world including Asia, Europe and the Americas during his career. Mr. Demby served as President of Cree LED, a lighting and industrials innovation company with 2,400 employees, 13 global locations servicing over 25,000 customers in 101 different countries from 2018 to 2022. In this role, Mr. Demby led the turnaround and growth of this recognized global brand delivering application optimized solutions worldwide. Prior to leading the LED business, Mr. Demby led Mergers and Acquisitions for Cree Inc., driving the M&A strategy establishing the foundation for Cree’s future growth platform into the power, communications and infrastructure sectors. Prior to leading M&A, Mr. Demby was the Senior VP and General Manager of the Cree’s Semiconductor Materials Business. Before joining Cree, Mr. Demby served as the CEO and Director of Noel Group, an industrial holding company owning 5 global businesses focused on the manufacture of synthetic materials. At Noel Group, Mr. Demby led the turnaround of this business across the globe establishing the strategy, processes and global footprint significantly improving company financial health and shareholder value. Before his role at Noel Group, Mr. Demby served as the President and COO of L&L Products Inc., a global automotive and aerospace OEM delivering solutions to reduce the noise and vibration while reinforcing application structural integrity. Mr. Demby led L&L Products through one of its fastest growth periods in the company’s history establishing operations throughout the world. Mr. Demby began his career in engineering roles with Proctor and Gamble and GE and has extensive public and private board experience. He currently serves as the Chair of Nominating and Governance Committee and Director on the board of Brown Capital Management Mutual Fund Trust; and as the Chair of the Nominating and Governance Committee, member of the Audit Committee, and Director on the board of Piedmont Lithium Incorporated (NASDAQ: PLL), a clean energy company, with prior service as a Director on the board of the Federal Reserve Bank of Richmond Charlotte branch from 2012 to 2017 including a period as Chairman. In addition to his professional experience and corporate board service, Mr. Demby has a strong record of community service through his founding and leadership of Valour Academy Schools Inc. Raleigh, past service on multiple leadership committees on Raleigh Chamber of Commerce Board including Chair Elect and past service as an advisor. Mr. Demby's qualifications to serve on our Board include: his extensive experience in industrial manufacturing, materials technology, executive level leadership as well as his experience in international operations.
6
Alex Dimitrief
, 65, has served as a director since the closing of the Business Combination in 2020. Mr. Dimitrief is an experienced director, C-suite leader and general counsel who has steered varied energy-related and other global businesses through a wide range of complex commercial, legal, and organizational challenges. He has previously served as a director of both public and non-public companies including The We Company, Synchrony Financial (NYSE: SYF), SmileDirectClub (Nasdaq: SDC), and GE Capital Bank and presently sits on the Advisory Board of Cresset Capital Management. Since November 2022, Mr. Dimitrief has been serving as Senior Vice President and General Counsel of Sotera Health Co. (Nasdaq: SHC). Previously, as President and Chief Executive Officer of General Electric’s Global Growth Organization, Mr. Dimitrief was responsible for driving GE’s growth in more than 180 countries. Under Mr. Dimitrief’s watch in 2018, GE achieved $76 billion in international orders and secured billions in financing for many of GE’s emerging market customers. As GE’s General Counsel from 2015-2018, Mr. Dimitrief served as the principal executive advisor to GE’s board and led a global team responsible for GE’s legal matters, compliance, SEC reporting, government affairs and environmental safety programs. In previous roles at GE, Mr. Dimitrief was a leader of the transformation of GE Capital (including the IPO/split-off of Synchrony Financial) and led joint venture negotiations for GE Energy in China and Russia. In announcing Mr. Dimitrief’s retirement from GE in January 2019, Chief Executive Officer Larry Culp described Mr. Dimitrief as “one of the most respected leaders at GE” who “effectively represented GE before governments, regulators, and customers throughout the world and is widely recognized as a compelling champion of integrity, transparency and the rule of law.” In 2007, Mr. Dimitrief came to GE after 20 years as a senior partner at Kirkland & Ellis LLP, where he “first chaired” and regularly advised boards about securities, restructuring, intellectual property, product liability, environmental, governance and commercial disputes. Mr. Dimitrief earned his B.A. from Yale College and his J.D. from Harvard Law School. Mr. Dimitrief’s qualifications to serve on our board of directors include: his lengthy executive and board experiences, as well as his expertise in managing risk, legal compliance, governance, and other functions at mature companies with large workforces.
Joe Mastrangelo,
55, has served as a director and the Chief Executive Officer since the closing of the Business Combination in 2020. He joined EES LLC as a Board advisor in March 2018 and assumed the role of Chief Executive Officer from August 2019 until the closing of the Business Combination. Before coming to Eos, Mr. Mastrangelo was president and chief executive officer of General Electric's Gas Power Systems since September 2015. As an energy industry leader for the past two decades, Mr. Mastrangelo has extensive experience leading diverse teams to develop and deploy commercial scale projects around the world. Mr. Mastrangelo has broad operating experience across the energy value chain including serving as Chief Executive Officer of GE’s Power Conversion business, applying science and systems of power conversion to increase the efficiency of the world’s energy infrastructure. Mr. Mastrangelo spent ten years with GE Oil & Gas, in leadership roles in finance, quality, and commercial operations, culminating in being named a GE Corporate Officer in 2008. Joe began his career with GE in the company’s Financial Management Program and then joined GE’s Corporate Audit Staff. Originally from New York, Mr. Mastrangelo earned a Bachelor of Science in Finance from Clarkson University and an Associate of Science, Business Administration and Management from Westchester Community College. Mr. Mastrangelo’s qualifications to serve on our Board include: his extensive experience in operations management at executive level positions, as well as his educational background in finance and business.
7
CORPORATE GOVERNANCE
Board Composition
In accordance with the terms of the Director Nomination Agreement, the Board of the Company presently comprises eight directors.
Our Charter provides the number of directors, which is fixed from time to time by a resolution of our Board. Our Board is divided into three classes with only one class of directors being elected in each year and each class serving a three-year term, as follows:
•
Our Class I directors, consisting of Marian “Mimi” Walters and Jeffrey McNeil, are nominated for re-election at this Annual Meeting, while Audrey Zibelman is not standing for re-election at the Annual Meeting;
•
Our Class II directors, consisting of Joe Mastrangelo and Alex Dimitrief, will expire at the Company’s annual meeting of stockholders in 2025;
•
Our Class III directors, consisting of Russell Stidolph, Claude Demby, and Jeff Bornstein, will expire at the Company’s annual meeting of stockholders in 2026.
The directors hold their office for a term of three years or until their respective successors are elected and qualified, subject to such director’s earlier death, resignation, disqualification or removal. In accordance with the Third Amended and Restated Bylaws of the Company, the Board will also be responsible for filling vacancies or newly-created directorships on the Board that may occur between annual meetings of stockholders.
Continuously Improving Our Board and Director Nomination Considerations
As the Company evolves, so will our Board. The Company and its Board are committed to continuing to develop a Board comprising experienced and qualified directors with integrity and expertise who can serve as effective stewards for an increasingly diverse base of stockholders and other stakeholders and institute robust governance principles.
To this end, our Board has instituted a process designed to regularly review the mix of skills and experience of our current directors and those it expects would be desirable in the future, including industry experience; public company experience; operational, manufacturing and supply chain expertise, especially in high-technology start-ups; finance and accounting, including capital markets expertise; cognitive diversity, both in terms of demographics and personal and professional experience; enterprise risk management; regulation and government affairs; talent development; environmental, social and governance (“ESG”) and sustainability; and growth, with a focus on leading businesses through periods of significant growth and transformation and exposure to various domestic and international markets. The Board also assesses its own performance and the performance of its committees.
We view continuous self-improvement of our corporate governance processes as an imperative for the Nominating and Corporate Governance Committee and our Board. We have retained Heidrick & Struggles to provide consulting and assistance in support of the Company’s Board composition and effectiveness planning. We selected Heidrick & Struggles based on its record as a preeminent firm in working with boards on succession planning, board effectiveness and culture shaping.
Directors are expected to possess certain personal traits and, in fulfilling its responsibility to identify qualified candidates for membership on the Board, the Nominating and Corporate Governance Committee will examine each director nominee on a case-by-case basis regardless of who recommended the nominee (including with respect to stockholder recommendations) and take into account all factors it considers appropriate, including those described above as well as, enhanced independence, financial literacy and financial expertise, diversity of background and perspective, including, but not limited to, with respect to age, gender, race, demographics, and any other relevant qualifications, attributes or skills.
Our directors self-identify as set forth in the table below.
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Board Composition
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Total Number of Directors
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8 | |||||||||||||||||||||||||
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Director Name
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Jeff Bornstein
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Claude Demby
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Alex
Dimitrief
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Joe Mastrangelo
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Jeffrey McNeil
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Russell Stidolph
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Marian “Mimi” Walters
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Audrey Zibelman
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Gender Identification
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Male
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ü
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ü
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ü
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ü
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ü
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ü
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Female
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ü
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ü
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Race/Ethnicity
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African American or Black
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ü
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White
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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Independence of the Board of Directors
Nasdaq Global Select Market ("Nasdaq") rules require that a majority of our Board be independent. Consistent with its charter, the Nominating and Corporate Governance Committee has reviewed the relationships between directors, the Company and members of management and recommended to the Board whether each director qualifies as “independent” under the Board’s definition of “independence” and the applicable rules of Nasdaq and the Company’s Corporate Governance Guidelines. Our Board has determined that seven of the eight directors, Jeff Bornstein, Claude Demby, Alex Dimitrief, Jeffrey McNeil, Russell Stidolph, Marian “Mimi” Walters and Audrey Zibelman are “independent directors” as defined in the rules of Nasdaq and applicable SEC rules.
Board Leadership Structure
Mr. Stidolph serves as the Chair of the Board and is an independent member of the Board. The Independent Directors meet in executive session without non-Independent Directors or management present no less than twice per year. Each executive session of the Independent Directors is presided over by the Chair of the Board.
Our Board believes that, at this time, the foregoing structure separating the Chair of the Board and CEO roles achieves an appropriate balance between the effective development of key strategic and operational objectives by the CEO, and independent oversight of management’s execution of such objectives. Our Board also believes that this structure improves its risk oversight function. Our Board also periodically evaluates our leadership structure to determine if it remains in our best interests based on circumstances existing at the time. If the Chair of the Board is a member of management or does not otherwise qualify as independent, the Independent Directors may elect a Lead Director.
Committees of the Board of Directors
Our Board has three fully independent standing committees: the Audit Committee, the Leadership Development & Compensation Committee and the Nominating and Corporate Governance Committee. Each of the committees reports to the Board as they deem appropriate and as the Board may request.
Audit Committee
The Company’s Audit Committee oversees the Company’s corporate accounting and financial reporting process and the Company’s compliance with legal and regulatory requirements. Among other matters, the Audit Committee:
9
•
appoints our independent registered public accounting firm;
•
evaluates the independent registered public accounting firm’s qualifications, independence and performance;
•
determines the engagement of the independent registered public accounting firm;
•
reviews and approves the scope of the annual audit and the audit fee;
•
discusses with management and the independent registered public accounting firm the results of the annual audit and the review of the Company’s quarterly financial statements;
•
approves the retention of the independent registered public accounting firm to perform any proposed permissible non-audit services;
•
monitors the rotation of the lead audit partner of the independent registered public accounting firm on the Company’s engagement team in accordance with requirements established by the SEC;
•
is responsible for reviewing our financial statements and our management’s discussion and analysis of financial condition and results of operations to be included in our annual and quarterly reports to be filed with the SEC;
•
reviews our critical accounting policies and practices; and
•
reviews the audit committee charter and the committee’s performance at least annually.
The current members of the Audit Committee are Jeff Bornstein, Claude Demby, Alex Dimitrief, Jeffrey McNeil and Audrey Zibelman, with Jeff Bornstein serving as the chair of the committee. Under the rules of the SEC, members of the Audit Committee must also meet heightened independence standards. All of the members of the Audit Committee are independent directors as defined under the applicable rules and regulations of the SEC and Nasdaq with respect to Audit Committee membership. Jeff Bornstein qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5)(ii) of Regulation S-K.
Leadership Development & Compensation Committee
Our Leadership Development & Compensation Committee (the "Compensation Committee") reviews and recommends policies relating to compensation and benefits of our officers and employees. Among other matters, the Compensation Committee:
•
establishes, reviews and approves corporate goals and objectives of the Company's management compensation programs, its basic compensation policies and annual and long-term performance goals and objectives;
•
reviews the Company’s employee compensation policies and practices;
•
reviews and approves any employment, compensation, benefit or severance agreement with any executive officer;
•
evaluates the performance of executive officers against corporate goals and objectives and recommends to our Board the compensation of these officers based on such evaluations;
•
reviews, approves and recommends to the Board the adoption of any equity-based compensation plan for employees of or consultants to the Company and any modification of any such plan; and
•
reviews and evaluates, at least annually, the directors' compensation and makes recommendations thereon to the Board.
10
Pursuant to the Compensation Committee’s charter, the Compensation Committee may, by resolution approved by a majority of the Compensation Committee members, form and delegate any of its responsibilities to a subcommittee so long as such subcommittee is solely comprised of one or more members of the Committee and such delegation is not otherwise inconsistent with law and applicable rules and regulations of the SEC and Nasdaq. The Compensation Committee may also, in certain instances by resolution approved by a majority of the Compensation Committee members, delegate to management the administration of the Company’s incentive compensation and equity-based compensation plans, to the extent permitted by law and as may be permitted by such plans and subject to such rules, policies and guidelines (including limits on the aggregate awards that may be made pursuant to such delegation) as the Compensation Committee shall approve.
The Compensation Committee consults with members of our management team, including our CEO, when making compensation decisions. While the Compensation Committee considers our CEO’s recommendations, the Compensation Committee ultimately uses its own business judgment and experience in approving, or making recommendations to the Board, where applicable, regarding individual compensation elements and the amount of each element for our NEOs. Our CEO recuses himself from all determinations regarding his own compensation. The current members of our Company’s Compensation Committee are Jeff Bornstein, Jeffrey McNeil, Russell Stidolph, Marian “Mimi” Walters and Audrey Zibelman, with Russell Stidolph serving as the chair of the committee.
Our Board has determined that each member of the Compensation Committee meets the independence requirements under the applicable rules and regulations of the SEC and the applicable listing standards of Nasdaq, and each is a “non-employee director” as defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible for making recommendations to our Board regarding candidates for directorships and the size and composition of our Board. In addition, the Nominating and Corporate Governance Committee is responsible for overseeing our corporate governance policies and reporting and making recommendations to our Board concerning governance matters. This includes oversight of ESG matters.
The current members of the Company’s Nominating and Corporate Governance Committee are Alex Dimitrief, Claude Demby, Russell Stidolph and Marian “Mimi” Walters, with Alex Dimitrief serving as the chair of the committee. Our Board has determined that each member of the Nominating and Corporate Governance Committee meets the independence requirements under the applicable rules and regulations of the SEC and the applicable listing standards of Nasdaq.
Code of Business Conduct and Ethics
Our Board of Directors has adopted a Code of Business Conduct and Ethics (the “
Code
”) that applies to all officers, directors and employees. The Company intends to disclose any amendments to or waivers of certain provisions of the Code on its website at https://investors.eose.com within the time period required by the SEC and the Nasdaq.
Copies of our Code, along with our Corporate Governance Guidelines and the charter of each of our Audit, Compensation and Nominating and Corporate Governance Committees are available on our website at investors.eose.com. Information on or accessible through our website is not part of, or incorporated by reference into, this Proxy Statement. In addition, a copy of the Code will be provided, without charge upon request from us.
Hedging and Pledging Policy
Our Insider Trading Policy prohibits employees and directors from engaging in any hedging transactions or from pledging Company securities in any circumstance, including by purchasing Company securities on margin or holding Company securities in a margin account.
11
Role of Compensation Consultant
The Compensation Committee has engaged Mercer to provide the services of executive compensation consulting and to assist it on matters relating to our executive compensation program pursuant to its authority under the Compensation Committee charter. During 2023, Mercer provided benchmarking studies to the Compensation Committee, as well as information on corporate governance, regulatory issues, and developments regarding executive compensation. When requested by the Compensation Committee, Mercer consultants attend certain meetings of the Compensation Committee.
The Compensation Committee has evaluated Mercer’s independence by considering the requirements adopted by Nasdaq and the SEC and has determined that no conflict of interest exists. The Compensation Committee is directly responsible for the appointment, compensation and oversight of the work performed by any such advisor and the sole authority to approve all such advisors’ fees. Mercer has not provided any other services to us and has received no compensation other than with respect to the services described above.
Meetings of the Board, Board and Committee Member Attendance and Annual Meeting Attendance
Our Board met thirteen times during the fiscal year ended December 31, 2023. The Audit Committee met seven times, the Compensation Committee met five times and the Nominating and Corporate Governance Committee met seven times. During fiscal year ended December 31, 2023, there was 95% attendance of the meetings of the Board and the committees of the Board. We encourage and expect all of our directors and nominees for director to attend our annual meeting of stockholders. All directors attended the 2023 annual stockholders meeting.
Stockholder Communications with the Board
Should stockholders or other interested parties wish to communicate with the Board, non-management directors or independent directors as a group or any specified individual directors, such correspondence should be sent to the attention of our Secretary at 3920 Park Avenue, Edison, NJ 08820. Our Secretary will forward correspondence relating to a director’s duties or responsibilities to the specified recipient. Correspondence that is unrelated to a director’s duties will be handled at the Secretary’s discretion. Stockholders may also submit recommendations of director candidates by following the same procedures.
Role of the Board in Risk Oversight
Our Board oversees our risk management. Our Board, directly and through the Audit Committee carries out this oversight role by reviewing the Company’s policies and practices with respect to risk assessment and risk management, and by discussing with management the risks inherent in the operation of our business. Our Compensation Committee reviews risks arising out of the Company’s compensation policies and practices, which are monitored and mitigated on an ongoing basis. Any necessary adjustments are addressed in the Company’s risk profile.
Board Oversight of Material Environmental and Social Risk
Eos takes into account considerations that affect all of our key stakeholders, including our stockholders, customers, employees, communities, regulators and suppliers. Our Board oversees the Company's overall social responsibility strategy and supports the implementation of the Company's ESG strategy. The Board continues to monitor and evaluate the impact of the Company’s ESG efforts and strives for improvement and growth of the Company's social responsibility benchmarks.
12
DIRECTOR COMPENSATION TABLE
The following table sets forth information concerning the compensation earned by each of our non-employee directors during the fiscal year ended December 31, 2023. Mr. Mastrangelo does not earn any additional compensation for service on our Board.
| Name and Principal Position | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Option Awards(2) ($) | All Other Compensation ($) | Total ($) | ||||||||||||
|
Russell Stidolph
|
25,000 | 75,000 | 125,229 | — | 225,229 | ||||||||||||
|
Alex Dimitrief
|
25,000 | 75,000 | 100,184 | — | 200,184 | ||||||||||||
|
Audrey Zibelman
|
25,000 | 75,000 | 75,138 | — | 175,138 | ||||||||||||
| Marian "Mimi" Walters | 25,000 | 75,000 | 75,138 | — | 175,138 | ||||||||||||
| Claude Demby | 25,000 | 75,000 | 75,138 | — | 175,138 | ||||||||||||
|
Jeff Bornstein
|
25,000 | 75,000 | 125,229 | — | 225,229 | ||||||||||||
| Jeffrey McNeil (3) | 6,250 | 75,000 | 75,192 | — | 156,442 | ||||||||||||
(1) Represents the grant date fair value of restricted stock unit awards, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. For a discussion of the valuation methodology used, see Note 17, “Stock-Based Compensation” of the notes to our consolidated financial statements included in the Form 10-K. These amounts do not necessarily correspond to the actual value that may be realized from the stock awards by the non-employee directors. The aggregate number of stock awards (in the form of restricted stock units) outstanding for our non-employee directors as of December 31, 2023 was: Mr. Stidolph: 32,328, Mr. Dimitrief: 32,328, Ms. Zibelman: 32,328, Ms. Walters: 32,328, Mr. Demby: 32,328, Mr. Bornstein: 32,328, and Mr. McNeil: 36,232.
(2) Represents the grant date fair value of option awards, computed in accordance with FASB ASC Topic 718. Grant date fair value is calculated based on the Black-Scholes option pricing model. For information regarding the assumptions used in determining the grant date fair value, see Note 17, “Stock-Based Compensation” of the notes to our consolidated financial statements included in the Form 10-K. These amounts do not necessarily correspond to the actual value that may be realized from the option awards by the named executive officers. The aggregate number of option awards outstanding for our non-employee directors as of December 31, 2023 was: Mr. Stidolph: 594,246, Mr. Dimitrief: 272,647, Ms. Zibelman: 245,488, Ms. Walters: 245,488, Mr. Demby: 231,175, Mr. Bornstein: 213,718, and Mr. McNeil: 82,452.
(3) Mr. McNeil was appointed to the Board effective October 6, 2023.
Director Compensation
On December 8, 2020, our compensation committee approved our Non-Employee Director Compensation Policy (the “Director Compensation Policy”). Under the Director Compensation Policy, each non-employee director is eligible to receive (i) an annual cash retainer equal to $25,000, payable in equal quarterly installments in arrears, and (ii) an annual equity-based retainer (the “Equity Retainer”) with a grant date fair value of $150,000, payable 50% in restricted stock units and 50% in stock options.
The Equity Retainers vest, subject to continued service, on the earlier of (i) the one-year anniversary of the grant date and (ii) immediately prior to the date of the next annual stockholders meeting of the Company following the grant date (with accelerated vesting upon a change in control).
In addition, all members of our Board will be reimbursed for their costs and expenses in attending Board meetings.
13
On September 7, 2022, the Board approved certain amendments to the Director Compensation Policy, which provide for additional equity compensation, in the form of stock options, to be paid to any chairperson of the Board or one of its committees (the “Chairperson Grants”). The chairperson of the Board or the Audit Committee are eligible to receive a Chairperson Grant valued at $50,000 and the chairperson of the compensation committee or the nominating committee are eligible to receive a Chairperson Grant valued at $25,000. The Chairperson Grants will be effective beginning with the service year beginning at the Annual Meeting.
Equity Retainers for 2023 were granted to our non-employee directors
on May 18, 2023 and October 6, 2023. In the future, Equity Retainers and Chairperson Grants will generally be granted on the second trading day following each annual meeting of our stockholders. Any individual that becomes a non-employee director for the first time other than by election or appointment at an annual meeting of our stockholders will be granted an Equity Retainer in
connection with his or her appointment and will be eligible to receive an Equity Retainer with the next annual stockholders meeting so long as such annual stockholders meeting is more than four calendar months from the date such individual becomes a non-employee director. The Equity Retainer and Chairperson Grants will be granted pursuant to our 2020 Plan.
14
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of our Board has selected Deloitte (as defined below), as our independent registered public accounting firm for the fiscal year ending December 31, 2024, and is seeking ratification of such selection by our stockholders at the Annual Meeting. “Deloitte” shall mean (i) Deloitte & Touche LLP, and the other subsidiaries of its parent company, Deloitte LLP, a U.S. member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”); and (ii) any of the other member firms of DTTL and their affiliates that, in case of both (i) and (ii) of this sentence, provide professional services to the Company. A representative of Deloitte is expected to be present at the Annual Meeting to make a statement and be available to respond to questions.
Neither our Third Amended and Restated Bylaws nor other governing documents or applicable law require stockholder ratification of the selection of Deloitte as our independent registered public accounting firm. Still, the Audit Committee is submitting the selection of Deloitte to our stockholders for ratification as a matter of good corporate practice. If our stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain Deloitte. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in the best interests of the Company and our stockholders.
Principal Accountant Fees and Services
The following table provides information regarding the fees incurred to Deloitte during the fiscal years ended December 31, 2023 and December 31, 2022. All of the services of Deloitte for 2023 and 2022 described below were pre-approved by the Audit Committee.
| Fiscal Year Ended December 31, | |||||||||||
|
2023
|
2022
|
||||||||||
|
Audit Fees (1)
|
$ | 2,514,123 | $ | 1,922,919 | |||||||
|
Tax Fees
|
— | — | |||||||||
|
Audit-Related Fees
|
— | — | |||||||||
|
All Other Fees
|
— | — | |||||||||
|
Total Fees
|
$ | 2,514,123 | $ | 1,922,919 | |||||||
(1) Audit fees for fiscal years ended December 31, 2023 and December 31, 2022 consisted of fees billed for professional services rendered for the audit of our consolidated financial statements, review of the financial statements included in the Company’s Form 10-Q filings, and services in connection with regulatory filings.
Pre-Approval Policies and Procedures
The Audit Committee is responsible for appointing, setting compensation and overseeing the work of the independent auditors. In recognition of this responsibility, the Audit Committee is exclusively authorized and directed to consider and, in its discretion, approve in advance any services proposed to be carried out for the Company by the independent auditor or by any other firm proposed to be engaged by the Company as its independent auditor. As permitted by applicable law, the Audit Committee delegates to its committee chair the authority to grant pre-approvals of permissible services and fees. All such pre-approvals are disclosed to the full Audit Committee on a regular basis, generally quarterly. In connection with approval of any permissible tax services and services related to internal control over financial reporting, the Audit Committee discusses with the independent auditor the potential effects of such services on the independence of the auditor.
THE BOARD RECOMMENDS A VOTE
FOR
RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
15
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The material in this report is not “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any filing of Eos under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
The primary purpose of the Audit Committee is to oversee our financial reporting processes on behalf of our Board. The Audit Committee’s functions are more fully described in its charter, which is available on our website at https://investors.eose.com (but which is not hereby incorporated by reference). Management is responsible for the preparation, presentation, and integrity of the Company’s financial statements, for the appropriateness of the accounting principles and reporting policies that are used by the Company, and for establishing and maintaining effective internal control over financial reporting. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
The Audit Committee has discussed with Deloitte, the Company’s independent registered public accounting firm, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the SEC. In addition, the Audit Committee has received from Deloitte the written disclosures and the letter required by the applicable requirements of the PCAOB regarding Deloitte’s communications with the Audit Committee concerning independence, and has discussed with Deloitte their independence. Finally, the Audit Committee discussed with Deloitte, with and without management present, the scope and results of Deloitte’s audit of the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Based on these reviews and discussions, the Audit Committee has recommended to our Board that such audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC. The Audit Committee also has selected Deloitte as our independent registered public accounting firm for year ended December 31, 2024 and is seeking ratification of such selection by the stockholders.
Audit Committee
Jeff Bornstein
Claude Demby
Alex Dimitrief
Jeffrey McNeil
Audrey Zibelman
16
EXECUTIVE OFFICERS
The following table sets forth the name, age as of March 1, 2024 and position of the individuals who currently serve as the executive officers of the Company (with the exception of Mr. Mastrangelo, which is set forth above under "Directors"). The following also includes certain information regarding our officers’ individual experience, qualifications, attributes and skills. Our officers are appointed by the Board and serve at the discretion of the Board, rather than for specific terms of office. Our Board is authorized to appoint persons to the offices set forth in our Third Amended and Restated Certificate of Incorporation and our Third Amended and Restated Bylaws as it deems appropriate.
| Name | Age | Position | ||||||||||||
| Joe Mastrangelo |
55
|
Chief Executive Officer | ||||||||||||
| Nathan Kroeker |
50
|
Chief Financial Officer | ||||||||||||
|
Michael Silberman
|
53
|
General Counsel, Chief Compliance Officer and Corporate Secretary | ||||||||||||
Nathan Kroeker
, 50, joined Eos as Chief Financial Officer in January 2023. In this position, Mr. Kroeker is responsible for the overall financial strategy and direction at Eos, overseeing all financial functions, he guides the controller, treasury, shareholder relations, accounting, tax, financial planning and internal audit functions to support Eos’s aggressive growth strategy and meet its clients’ and investors’ expectations. Prior to joining Eos, Mr. Kroeker spent ten years with Spark Energy, a retail energy services company, serving as Chief Financial Officer and then as Chief Executive Officer. As Spark Energy’s Chief Executive Officer, he led the company through its initial public offering and subsequent mergers and acquisitions transactions. From 2009 to 2010, Mr. Kroeker served as Senior VP, Head of Energy Finance for Macquarie Bank, and from 2004 to 2009 worked for Direct Energy, a provider of home and business energy services, ultimately becoming VP of Finance. Mr. Kroeker began his career in public accounting with Coopers & Lybrand and Arthur Andersen, before transitioning into a transaction advisory role with Ernst & Young. Mr. Kroeker holds a Bachelor of Commerce in Accounting from the University of Manitoba, and is a Certified Public Accountant.
Michael Silberman
, 53, joined Eos as General Counsel, Chief Compliance Officer, and Corporate Secretary in January 2024. Mr. Silberman is responsible for all legal, compliance and corporate secretarial matters at Eos. Prior to joining Eos, Mr. Silberman served from 2020 to 2023 as General Counsel, Chief Compliance Officer, and Corporate Secretary at Trecora Resources, a NYSE-listed international diversified technology and specialty materials company based in Sugar Land, Texas. Before Trecora, from 2016 to 2020, Mr. Silberman was the Vice President and Deputy General Counsel, & Assistant Secretary at Celanese Corporation, a Fortune 500 international diversified technology and specialty materials company based in Dallas, Texas. Prior to that role, Mr. Silberman held several positions from 2004 to 2016 at FMC Corporation, a Fortune 1000 international diversified technology and specialty materials company based in Philadelphia, Pennsylvania. While at FMC, Mr. Silberman served as Assistant General Counsel and Assistant Secretary during which he was the company’s chief M&A and corporate counsel, and prior to that, served as division general counsel for FMC’s global Health and Nutrition division. Before FMC, Mr. Silberman worked for the law firms of Morgan, Lewis, Bockius LLP in Philadelphia from 2000 to 2004, and Blank Rome LLP in Philadelphia from 1996 to 2000, and as a Law Clerk and Court Mediator for the New Jersey Superior Court in Camden, New Jersey from 1995 to 1996. Mr. Silberman graduated with a Juris Doctor degree from Emory University School of Law, and a Bachelor of Arts degree with distinction from the University of Pennsylvania.
17
EXECUTIVE COMPENSATION
We have opted to comply with the executive compensation disclosure rules applicable to “smaller reporting companies,” as such term is defined under the Securities Act, which require compensation disclosure for (i) all individuals who served as our principal executive officer or in a similar capacity during fiscal years ended December 31, 2022 and December 31, 2023, (ii) our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers as of the fiscal year ended December 31, 2023, and (iii) up to two additional individuals for whom disclosure would have been provided pursuant to clause (ii), but for the fact that the individual was not serving as an executive officer as of the fiscal year ended December 31, 2023. We refer to these executive officers collectively as the named executive officers (“NEOs”). This section should be read in conjunction with our financial statements and related notes appearing in our annual report on Form 10-K for fiscal year ended December 31, 2023, filed with the SEC on March 4, 2024 (“Form 10-K”), along with the section of this proxy entitled “
Certain Relationships and Related Party Transactions
.” Compensation information included in the following section is presented in actual dollar amounts. For fiscal year ended December 31, 2023, the NEOs were:
•
Joe Mastrangelo, Chief Executive Officer
•
Nathan Kroeker, Chief Financial Officer
•
Melissa Berube, former General Counsel, Chief Compliance Officer and Corporate Secretary
Summary Compensation Table
The following table presents summary information regarding the total compensation paid to, earned by and awarded to each of our NEOs for the fiscal year ended December 31, 2023.
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Option Awards(2) ($) | Non-Equity Incentive Plan and Compensation ($) |
All Other Compensation
(3) ($) | Total ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Joe Mastrangelo, Chief Executive Officer
|
2023
|
650,000 | — | 3,250,000 | — | 292,500 | 129,698 | 4,322,198 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
2022
|
648,929 | — | — | 298,568 | 162,500 | 125,302 | 1,235,299 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Nathan Kroeker(4), Chief Financial Officer
|
2023
|
415,385 | — | 2,620,000 | — | 105,750 | 1,163 | 3,142,298 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Melissa Berube, General Counsel, Chief Compliance Officer and Corp. Secretary
|
2023
|
334,750 | — | 552,339 | — | 75,319 | 744 | 963,152 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 332,723 | — | 259,500 | 158,704 | 41,683 | — | 792,610 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Represents the grant date fair value of restricted stock unit awards, computed in accordance with FASB ASC Topic 718. For a discussion of the valuation methodology used, see Note 17, “Stock-Based Compensation” of the notes to Eos Energy Enterprises, Inc. consolidated financial statements included in our Form 10-K. These amounts do not necessarily correspond to the actual value that may be realized from the stock awards by the NEOs.
(2) Represents the grant date fair value of option awards, computed in accordance with FASB ASC Topic 718. Grant date fair value is calculated based on the Black-Scholes option pricing model. For information regarding the assumptions used in determining the grant date fair value, see Note 17, “Stock-Based Compensation” of the notes to our consolidated financial statements included in our Form 10-K. These amounts do not necessarily correspond to the actual value that may be realized from the option awards by the NEOs.
18
(3) Amounts in this column reflect for Mr. Mastrangelo (i) for fiscal 2023, $66,800 in residential expenses, $7,301 in a car allowance, and $51,985 in travel expense reimbursement and (ii) for fiscal 2022, $6,120 in a car allowance, $54,750 in residential expenses and $64,432 in travel expense reimbursement. Additionally, amounts of $3,612, $1,163, and $744 for Mr. Mastrangelo, Mr. Kroeker, and Ms. Berube, respectively as earnings reported for the Company’s Group Term Life policy.
(4) Mr. Kroeker was appointed Chief Financial Officer on January 23, 2023.
Narrative Disclosure to the Summary Compensation Table
Employment Agreements
Employment Agreement with Mr. Mastrangelo
Effective as of February 24, 2021, the Company entered into an Employment Agreement with Mr. Mastrangelo, which replaced and superseded Mr. Mastrangelo’s June 22, 2020 employment agreement (the "Mastrangelo Agreement").
The Mastrangelo Agreement contains the following material compensation terms:
•
An annual base salary of $650,000 per year based on full-time employment;
•
An annual performance-based incentive bonus with an annual target payout of 100% of base salary, payable in cash; and
•
Participation in the Company’s health insurance and other employee benefits the Company maintains; provided, that if Mr. Mastrangelo elects not to participate in the Company’s medical and other health benefit plans, the Company will pay for Mr. Mastrangelo and his family’s current medical and other health benefit plans in Italy, in an amount not to exceed a cumulative maximum of $17,000 per calendar year.
Pursuant to the terms of the Mastrangelo Agreement, if Mr. Mastrangelo is terminated without “cause” or resigns for “good reason” he will be entitled to (i) continued payment of his annual base salary for twenty-four months, (ii) a pro-rated annual bonus for the year of termination, if the applicable performance targets are achieved, and (iii) full vesting of any then-unvested equity awards, in each case, subject to his timely execution and non-revocation of a release of claims against the Company and continued compliance with certain restrictive covenants.
Pursuant to the terms of the Mastrangelo Agreement, Mr. Mastrangelo is subject to certain restrictive covenants, including perpetual confidentiality obligation, a 12-month post-termination non-compete, a 12-month post-termination non-solicit covering our employees and business relationships, invention assignment provisions and a mutual non-disparagement obligation.
Employment Agreement with Mr. Kroeker
Effective as of January 20, 2023, the Company entered into an employment agreement with Mr. Kroeker, which set forth the terms and conditions of his employment (the "Kroeker Agreement").
The Kroeker Agreement contains the following material compensation terms:
•
An annual base salary of $440,000 per year based on full-time employment;
•
An annual performance-based incentive bonus with an annual target payout of 50% of base salary, payable in cash;
•
Participation in the Company’s health insurance and other employee benefits the Company maintains;
•
An initial grant of restricted stock units with a grant date value of $450,000, vesting in equal amounts annually over three years, and fully vesting upon a change in control. This grant was made on January 23, 2023; and
19
•
In the event the total aggregate value of the initial grant is less than $2,000,000 on July 3, 2023, as of the close of market the prior trading day, the Company may make an additional grant, not to exceed 200,000 restricted stock units, and up to $2,000,000 total aggregate value of the initial grant and follow-on grant and the additional grant (the “Follow On Grant”).
On July 3, 2023, Mr. Kroeker received the Follow On Grant consisting of 160,829 restricted stock units, vesting ratably in equal installments over three years, each case subject to Mr. Kroeker’s continued employment as of the applicable vesting date. In the event that the Company undergoes a “change in control” (as defined in the Eos Energy Enterprises, Inc. 2020 Incentive Plan (the “2020 Plan”)), the Follow On Grant will fully vest.
Pursuant to the Kroeker Agreement, if Mr. Kroeker is terminated without “cause” or resigns for “good reason” he will be entitled to (i) continued payment of his annual base salary for twelve months, (ii) a pro-rated annual bonus for the year of termination, if the applicable performance targets are achieved, and (iii) full vesting of any then-unvested equity awards, in each case, subject to his timely execution and non-revocation of a release of claims against the Company and continued compliance with certain restrictive covenants.
Pursuant to the Kroeker Agreement, Mr. Kroeker is subject to certain restrictive covenants, including perpetual confidentiality obligations, a 12-month post-termination non-solicit covering our employees and business relationships, invention assignment provisions and a mutual non-disparagement obligation.
Agreements with Ms. Berube
Effective as of July 29, 2022, the Company entered into an employment agreement with Ms. Berube, which replaced and superseded her prior offer letter, and which set forth the terms and conditions of her employment (the "Berube Agreement").
The Berube Agreement contains the following material compensation terms:
•
An annual base salary of $334,750 per year based on full-time employment;
•
An annual performance-based incentive bonus with an annual target payout of 50% of base salary, payable in cash;
•
Participation in the Company’s health insurance and other employee benefits the Company maintains; and
•
Amendment of the terms of the Ms. Berube’s outstanding equity awards to clarify that her equity grants will fully vest upon a change in control.
Pursuant to the terms of the Berube Agreement, if Ms. Berube is terminated without “cause” or resigns for “good reason” she will be entitled to (i) continued payment of her annual base salary for twelve months, (ii) a pro-rated annual bonus for the year of termination, if the applicable performance targets are achieved, and (iii) full vesting of any then-unvested equity awards, in each case, subject to her timely execution and non-revocation of a release of claims against the Company and continued compliance with certain restrictive covenants. Pursuant to her employment agreement, Ms. Berube is subject to certain restrictive covenants, including perpetual confidentiality obligations, a 12-month post-termination non-solicit covering our employees and business relationships, invention assignment provisions and a mutual non-disparagement obligation.
20
In connection with her resignation, Ms. Berube entered into a separation agreement with the Company dated January 19, 2024 which provides that, subject to her timely execution and non-revocation of a release of claims and her agreement to cooperate with the Company’s executive management team through January 31, 2024 in connection with her transition: (i) the vesting of 204,657 of her unvested restricted stock units accelerated, (ii) her previously granted options were amended to allow for the vested options to remain outstanding until the earlier of Ms. Berube’s exercising the options or the expiration of the options on June 16, 2032, (iii) Ms. Berube will receive a bonus if applicable performance targets have been achieved for 2023 in proportion and to the extent a bonus is paid to our other executive officers, and (iv) if timely elected the Company will reimburse up to $700 per month to Ms. Berube’s COBRA continuation coverage until the earlier of August 31, 2024 or the date on which Ms. Berube becomes eligible for coverage under a successor’s group health insurance program. Ms. Berube also agreed that she will continue to be subject to the restrictive covenants set forth in her employment agreement with the Company.
Annual Bonus Plan
We maintain a cash-based annual bonus program for executives, including the NEOs, under which the NEOs are eligible to receive bonuses based on performance goals established in 2023. Such awards are designed to incentivize the NEOs with a variable level of compensation that is based on performance measures established by the Compensation Committee and tied to pre-defined business and personal goals and objectives.
Each NEO’s target annual bonus opportunity was approved by the Compensation Committee and is reflected as a percentage of the NEO’s base salary. In 2023, Mr. Mastrangelo’s target was 100% of his base salary and Mr. Kroeker’s and Ms. Berube’s targets were 50% of their respective base salaries.
In 2023, the Compensation Committee established three performance metrics for the 2023 bonus as follows:
| Performance Metrics | Weighting | Threshold (1) | Target (1) | Stretch (1) | ||||||||||
| Booked Orders | 40% |
$500M
|
$800M
|
$1,100M
|
||||||||||
| Revenue | 30% |
$30M
|
$40M
|
$50M
|
||||||||||
|
Cost-Out
|
30% | 5% | 15% | 30% | ||||||||||
(1) Straight-line interpolation is used to determine the performance award when the Company's performance is between the target, threshold and stretch amounts.
The Company earned a 30% payout for the Cost-Out; reduction as decrease from initial design cost; achieving a 45% total performance award. Based on the level of achievement of the financial and performance targets, the Compensation Committee awarded bonuses as follows: $292,500 for Mr. Mastrangelo, $105,750 for Mr. Kroeker and $75,319 for Ms. Berube.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth information concerning outstanding equity awards for our NEOs as of the end of our fiscal year ended December 31, 2023.
21
| Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Number of Securities Underlying Unexercised Unearned Options (#) |
Option
Exercise Price ($) |
Option
Expiration Date |
Number of
shares or units of stock that have not vested (#) |
Market value
of shares of units of stock that have not vested ($) (1)
|
Joe Mastrangelo
10/23/2020 (2)
|
691,656
|
|
—
|
|
—
|
|
$
|
8.67
|
|
6/30/2025
|
—
|
|
—
|
|
|
10/23/2020 (3)
|
345,828
|
|
—
|
|
—
|
|
$
|
8.67
|
|
10/23/2030
|
—
|
|
—
|
|
|
2/26/2021 (4)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
250,000
|
|
$
|
272,500
|
|
|
6/16/2022 (5)
|
200,000
|
|
—
|
|
—
|
|
$
|
1.34
|
|
6/16/2032
|
—
|
|
—
|
|
|
|
7/5/2023 (6)
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
762,911
|
|
$
|
831,573
|
|
|
Nathan Kroeker
|
1/23/2023 (7)
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
300,000
|
|
$
|
327,000
|
|
|
|
7/3/2023 (8)
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
160,829
|
|
$
|
175,304
|
|
|
|
7/5/2023 (9)
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
315,024
|
|
$
|
343,376
|
|
|
Melissa Berube
|
7/28/2021 (10)
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
25,000
|
|
$
|
27,250
|
|
|
|
2/9/2022 (11)
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
50,000
|
|
$
|
54,500
|
|
|
|
6/16/2022 (12)
200,000
|
|
—
|
|
—
|
|
$
|
1.34
|
|
6/16/2032
|
—
|
|
—
|
|
|
|
7/5/2023 (13)
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
129,657
|
|
$
|
141,326
|
| |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) The market value is calculated by multiplying the closing price of the Company's common stock on December 29, 2023, which was $1.09, by the number of restricted stock units that had not vested.
(2) 691,656 of the shares of common stock subject to this option vested upon Mr. Mastrangelo's continued employment through the vesting dates of June 22, 2021, June 22, 2022 and June 22, 2023.
(3) 345,828 of the shares of common stock subject to this option vested upon the Board's determination that the Company had successfully closed an equity financing transaction prior to June 22, 2023 in connection with the merger agreement with BMRG.
(4) The RSUs vest in three equal installments on each of January 3, 2022, January 2, 2023 and January 1, 2024, subject to continued service through each vesting date.
(5) The stock options vest in two equal installments based on the achievement of certain performance conditions during specified time periods (each, a "Milestone Event"), with the full vesting of the applicable tranche of stock options to occur 60 days after the achievement of the applicable Milestone Event. The first of the Milestone Events was achieved on July 29, 2022 and the stock options with respect to 200,000 shares of common stock became fully vested and exercisable on the 60th day following the date of the achievement of the Milestone Event, subject to Mr. Mastrangelo's continued employment with the issuer through such date. The remaining 200,000 stock options pertaining to the second of the Milestone Events were forfeited on December 30, 2022.
(6) The RSUs vest in three equal installments on each of July 5, 2024, July 5, 2025 and July 5, 2026, subject to continued service through each vesting date.
(7) The RSUs vest in three equal installments on each of January 23, 2024, January 23, 2025 and January 23, 2026, subject to continued service through each vesting date.
(8) The RSUs vest in three equal installments on each of July 3, 2024, July 3, 2025 and July 3, 2026, subject to continued service through each vesting date.
(9) The RSUs vest in three equal installments on each of July 5, 2024, July 5, 2025 and July 5, 2026, subject to continued service through each vesting date.
(10) The RSUs were originally scheduled to vest in three equal installments on each of June 15, 2022, June 15, 2023 and June 15, 2024. In connection with Ms. Berube's resignation effective January 31, 2024, 25,000 RSUs were accelerated.
22
(11) The RSUs were originally scheduled to vest in three equal installments on each of February 9, 2023, February 9, 2024 and February 9, 2025. In connection with Ms. Berube's resignation effective January 31, 2024, 50,000 RSUs were accelerated.
(12) The stock options vest in two equal installments based on the achievement of a Milestone Event, with the full vesting of the applicable tranche of stock options to occur 60 days after the achievement of the applicable Milestone Event. The first and second of the Milestone Events were achieved on July 29, 2022 and August 31, 2023, respectively, and the stock options with respect to 200,000 shares of common stock became fully vested and exercisable on the 60th day following the date of the achievement of the Milestone Events, subject to Ms. Berube's continued employment with the issuer through such date. In connection with Ms. Berube's resignation, her previously granted performance options were amended to allow for the vested options to remain outstanding until the earlier of Ms. Berube’s exercising the options or the expiration of the options on June 16, 2032.
(13) The RSUs were originally scheduled to vest in three equal installments on each of July 5, 2024, July 5, 2025 and July 5, 2026. In connection with Ms. Berube's resignation effective January 31, 2024, 129,657 RSUs were accelerated.
Other Compensation Plans
Eos Energy Enterprises, Inc. 2020 Incentive Plan
The 2020 Plan was approved by our stockholders and became effective on November 16, 2020. The 2020 Plan was further amended, and such amendment was approved by our stockholders, effective May 16, 2023. As described in more detail under Proposal 5, we are submitting an amendment to the 2020 Plan for shareholder approval at the Annual Meeting to provide for the addition of 19,000,000 shares of our common stock to the number of shares available for issuance under the 2020 Plan. The terms of the 2020 Plan are described in more detail under Proposal 5.
Health and Retirement Benefits
We provide medical, dental, vision, life insurance and disability benefits to all eligible employees. The NEOs are eligible to participate in these benefits on the same basis as all other employees. In addition, we maintain a tax-qualified defined contribution plan (the “401(k) Plan”), under which eligible employees of Eos, including our named executive officers, may defer a portion of their annual compensation on a pre-tax basis. We do not provide a pension plan for employees and none of our named executive officers participates in a nonqualified deferred compensation plan.
Clawback
In 2023, we adopted an executive compensation recoupment policy intended to comply with the requirements of Section 10D of the Exchange Act and the rules of the Nasdaq under which the Compensation Committee must recover certain excess incentive-based compensation received by executive officers in the event of a restatement of our financial statements due to our material noncompliance with any financial reporting required under U.S. federal securities laws. For more information on this policy, see Exhibit 97 to our Form 10-K.
Termination and Change in Control Benefits
Our NEOs are entitled to severance benefits under their respective employment agreements, as described under “-Employment Agreements,” above.
23
Pay Versus Performance
The following table sets forth the compensation for our Chief Executive Officer and the average compensation for our other NEOs, both as reported in the Summary Compensation Table and with certain adjustments to reflect the “compensation actually paid” to such individuals, as defined under SEC rules, for each of 2023, 2022 and 2021. The table also provides information on our cumulative total shareholder return (“TSR”) and Net Income.
| Year |
Summary Compensation Table Total for PEO
(1)
|
Compensation Actually Paid to PEO
(2)
|
Average Summary Compensation Table Total for Non-PEO Named Executive Officers
(1)
|
Average Compensation Actually Paid to Non-PEO Named Executive Officers
(2)
|
Value of Initial Fixed $100 Investment Based On Total Shareholder Return
(3)
|
Net Income (Loss) (in Thousands)
(4)
|
||||||||||||||
| 2023 | $ | 4,322,198 | $ | 1,956,453 | $ | 2,052,725 | $ | 1,039,489 | $ | 4.88 | $ | (229,506) | ||||||||
| 2022 | $ | 1,235,299 | $ | (3,054,439) | $ | 1,770,017 | $ | 490,324 | $ | 6.62 | $ | (229,813) | ||||||||
| 2021 | $ | 16,678,672 | $ | 2,432,410 | $ | 3,177,554 | $ | 1,770,916 | $ | 33.65 | $ | (124,216) | ||||||||
(1) Compensation for our PEO, Joe Mastrangelo, reflects the amounts reported in the “Summary Compensation Table” for the respective years. Average compensation for non-PEOs includes the following NEOs: (i) in 2023, Nathan Kroeker and Melissa Berube, (ii) in 2022, Randall Gonzales and Melissa Berube, and (iii) in 2021, Sagar Kurada and Jody Markopoulos.
(2) Compensation “actually paid” for the PEO and average compensation “actually paid” for our non-PEOs in 2023 reflects the respective amounts set forth in columns (b) and (d), adjusted as follows in the table below, as determined in accordance with SEC rules. These dollar amounts do not reflect the actual amount of compensation earned by or paid to the PEO and our other NEOs during the applicable year.
(3) Total Shareholder Return is cumulative for the measurement periods beginning on December 31, 2020 and ending on December 31 of each of 2023, 2022, and 2021, respectively, calculated in accordance with Item 201(e) of Regulation S-K.
(4) Reflects “Net Income” in the Company’s Consolidated Statements of Income included in the Company’s Annual Reports on Form 10-K for each of the years ended December 31, 2023, 2022 and 2021, respectively.
|
PEO 2023
|
Non-PEOs 2023
|
|||||||
| Summary Compensation Table Total | $ | 4,322,198 | $ | 2,052,725 | ||||
|
Less
Stock Award and Option Award Value Reported in Summary Compensation Table for the Covered Year
|
(3,250,000) | (1,586,169) | ||||||
|
Plus
Fair Value for Unvested Awards Granted in the Covered Year
|
831,573 | 493,503 | ||||||
|
Change
in Fair Value of Outstanding Unvested Awards from Prior Years
|
(97,500) | (29,250) | ||||||
|
Plus
Fair Value for Vested Awards Granted in the Covered Year
|
— | 63,600 | ||||||
|
Change
in Fair Value of Awards from Prior Years that Vested in the Covered Year
|
150,182 | 45,080 | ||||||
|
Less
Fair Value of Awards Forfeited during the Covered Year
|
— | — | ||||||
| Compensation Actually Paid | $ | 1,956,453 | $ | 1,039,489 | ||||
Note: Fair values set forth in the table above are computed in accordance with
ASC 718
as of the end of the respective fiscal year, other than fair values of awards that vest in the covered year, which are valued as of the applicable vesting date.
Relationship Between Compensation Actually Paid and Cumulative TSR
The amount of compensation actually paid to the PEO and the average amount of compensation actually paid to the non-PEO NEOs have generally aligned with the Company’s cumulative TSR over the three-year period presented in the table. From January 1, 2021 to December 31, 2023, cumulative TSR decreased by approximately 95%. For the three-years presented, the decline in both compensation actually paid and cumulative TSR are primarily driven by the decline in the Company's stock price from $22.35 as of December 31, 2020, $7.52 as of December 31, 2021, $1.48 as of December 31, 2022, to $1.09 as of December 31, 2023. Stock price is a large driver in the value of the equity incentive awards, which is a major component of compensation actually paid to the PEO and the average compensation actually paid to the non-PEO NEOs.
24
Equity Compensation Plans
The following table summarizes our equity compensation plan information as of December 31, 2023:
| Plan Category |
Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants, Rights and Restricted Stock Units
(a) |
Weighted-average Exercise Price of Outstanding Options, Warrants and Rights
(b) |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a))
(c) |
||||||||
| Equity Compensation Plans Approved by Security Holders | 9,675,085 | $ | 4.47 | 5,015,893 | |||||||
| Equity Compensation Plans Not Approved by Security Holders | — | — | — | ||||||||
| Total | 9,675,085 | $ | 4.47 | 5,015,893 | |||||||
|
Total number of shares that would be authorized for issuance upon stockholder approval of the amendments to the 2020 Plan (1)
|
36,035,887 | ||||
|
Number of shares relating to outstanding stock options under the 2020 Plan
|
4,227,627 | ||||
|
Number of shares relating to outstanding full-value awards under the 2020 Plan
|
5,447,458 | ||||
|
Weighted average remaining term of outstanding stock options under the 2020 Plan
|
5.2 | ||||
|
Number of shares remaining for issuance under the 2020 Plan upon shareholder approval of the amendments to the 2020 Plan
|
24,015,893 | ||||
(1) Reflects the sum of (i) the 6,000,000 shares originally reserved for issuance under the 2020 Plan, (ii) the shares automatically added to the share reserve on January 1, 2021 and 2022 and (iii) the additional 2,000,000 shares added to the share pool pursuant to the amendments to the 2020 Plan approved by shareholders on May 17, 2022 (iv) the additional 8,000,000 shares added to the share pool pursuant to the amendments of the 2020 Plan approved by shareholders on May 16, 2023, and (v) the additional 19,000,000 shares to be added to the share pool pursuant to the proposed amendments of the 2020 Plan.
Description of the 2020 Plan
The key features of the 2020 Plan are described below, but are qualified in their entirety by reference to the full text of the third amendment of the 2020 Plan included as Appendix B to this Proxy Statement. Appendix C to this Proxy Statement contains a full draft of the 2020 Plan as a blackline showing the proposed amendments thereto.
Administration
. The 2020 Plan is administered by a committee appointed by our Board, or if no such committee has been appointed, by our Board (the “Committee”). The Committee will, subject to the terms and conditions of the 2020 Plan, have the authority to, among other actions, designate participants in the 2020 Plan, determine the type of awards to be granted to a participant and the terms of conditions of such awards, determine the terms of settlement or exercise of awards, reconcile any inconsistency and correct any defect in the 2020 Plan or an award agreement, accelerate the vesting or exercisability of an award and make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the 2020 Plan.
Eligibility
. Those eligible to participate in the 2020 Plan consist of employees, directors and consultants of the Company or one of its affiliates (provided that such person is eligible to be offered securities registrable on Form S-8 under the Securities Act of 1933), as well as prospective employees, directors, officers, consultants or advisors who have accepted offers of employment or consultancy from the Company or its affiliates (and would satisfy the eligibility criteria once he or she begins employment with or begins providing services to the Company or its affiliates.
While all employees are eligible to receive awards under the 2020 Plan, the Committee currently expects that approximately 430 employees participate in the 2020 Plan. In addition, all non-employee directors, of whom there are 7, also participate in the 2020 Plan. The basis for participation in the 2020 Plan is the Committee’s (or its authorized delegate’s) decision, in its sole discretion, that an award to an eligible participant will further the 2020 Plan’s purposes of providing a means through which the Company and its affiliates may attract and retain key personnel and to providing a means whereby certain directors, officers, employees, consultants and advisors (and certain prospective directors, officers, employees, consultants, and advisors) of the Company and its affiliates can acquire and maintain an equity interest in the Company, or be paid incentive compensation, which may be measured by reference to the value of shares of common stock, thereby strengthening their commitment to the welfare of the Company and its affiliates and aligning their interests with those of the Company’s stockholders. In exercising its discretion, the Committee (or its delegate) will consider the recommendations of management and the purposes of the 2020 Plan.
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Shares Reserve; Adjustments.
The maximum number of shares of our common stock available for issuance under the 2020 Plan will be 36,035,887 shares. Shares of common stock underlying awards that are forfeited, canceled, expire unexercised, or are settled in cash shall be available again for issuance under the 2020 Plan. However, shares of common stock underling an Award shall not again be available for issuance under the Plan if such shares are (i) tendered or withheld in payment of the exercise price of a stock option or other award, (ii) delivered to or withheld by the Company to satisfy any tax withholding liabilities arising from an award, or (iii) covered by a stock-settled SAR and were not issued upon the settlement of the SAR. The maximum number of shares of our common stock available for issuance upon exercise of incentive stock options granted under the 2020 Plan will be 35,000,000
shares.
Non-Employee Director Limits
. Under the 2020 Plan, the maximum number of shares of our common stock that may be granted during a single fiscal year to any non-employee director, taken together with any cash fees paid during the fiscal year, in respect to the director’s service as a member of our Board during such year, shall not exceed $500,000 in total value. The independent directors may make exception to this limit for a non-executive chair of the Board, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation.
Available Awards
. The 2020 Plan permits the grant of incentive stock options to employees and/or nonstatutory stock options to all eligible participants, as well as, SARs, restricted stock, restricted stock units (“RSUs”), performance awards, other cash-based awards and other stock-based awards to all eligible participants.
Dividends and Dividend Equivalents
. No adjustment may be made in the shares of common stock issuable or taken into account under an award on account of cash dividends made prior to settlement of such award. The Committee may grant Dividend Equivalents based on the dividends declared on shares of common stock subject to any award (other than stock options or SARs), provided that any such dividend equivalents will not be payable unless and until the award becomes payable, and shall be subject to forfeiture to the same extent as the underlying award.
No Repricing
. The Committee may not, without stockholder consent, reduce the exercise price of outstanding stock options of SARs or cancel any outstanding stock options or SARs with an exercise price below the fair market value of our common stock and replace it with a new award or cash or take any other action considered a “repricing” for purposes of the stockholder approval rules of the applicable securities exchange.
Change in Control
. Upon a change in control (as defined in the 2020 Plan) and certain other corporate events, the Committee will make adjustments it may deem necessary or appropriate and equitable, subject to the requirements of Sections 409A, 421 and 422 of the Internal Revenue Code, including (i) adjusting the number of shares which may be delivered upon settlement of an award and the terms of any outstanding awards, (ii) providing for the substitution or assumption of awards, (iii) accelerating the vesting of awards, (iv) deeming any performance measures satisfied at target, maximum or actual performance, (v) providing for a period of time during which stock options and SARs will remain exercisable or (vi) canceling any awards in exchange for cash or other securities or property, or a combination thereof
Termination of Employment
. The treatment of awards upon a participant’s termination of employment is generally set forth in the applicable award agreement. Unless otherwise provided in such an award agreement, any unvested restricted stock or RSUs will be forfeited upon the participant’s termination of employment.
Clawback; Anti-Hedging and Pledging
. All awards (including on a retroactive basis) granted under the 2020 Plan are subject to the terms of any Company forfeiture, incentive compensation recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of Applicable Laws, as well as any other policy of the Company that may apply to the Awards, such as anti-hedging or pledging policies, as they may be in effect from time to time.
Plan Amendment or Suspension
. Our Board has the authority to amend, suspend or terminate the 2020 Plan, provided that no such action may be taken without stockholder approval if the approval is necessary to comply with a tax or regulatory requirement or other applicable law for which the Committee deems it necessary or desirable to comply. No amendment may adversely and materially affect a participant’s rights under any award without such participant’s consent.
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Term of the Plan
. No awards may be granted under the 2020 Plan after our Board terminates the plan or after ten years from the effective date.
Federal Income Tax Consequences
The following discussion summarizes certain material federal income tax consequences of the issuance and receipt of awards under the 2020 Plan under the law as in effect on the date of this proxy statement. This summary does not purport to cover all federal employment tax or other federal tax consequences that may be associated with the 2020 Plan, nor does it cover state, local, or non-U.S. taxes.
•
Incentive Stock Options (ISOs)
. An optionee generally realizes no taxable income upon the grant or exercise of an ISO. However, the exercise of an ISO may result in an alternative minimum tax liability to the employee. With some exceptions, a disposition of shares purchased under an ISO within two years from the date of grant or within one year after exercise produces ordinary income to the optionee equal to the value of the shares at the time of exercise less the exercise price. The same amount is deductible by the Company as compensation, provided that the Company reports the income to the optionee. Any additional gain recognized in the disposition is treated as a capital gain for which the Company is not entitled to a deduction. However, if the optionee exercises an ISO and satisfies the holding period requirements, the Company may not deduct any amount in connection with the ISO. If a sale or disposition of shares acquired with the ISO occurs after the holding period, the employee will recognize long-term capital gain or loss at the time of sale equal to the difference between proceeds realized and the exercise price paid. In general, an ISO that is exercised by the optionee more than three months after termination of employment is treated as an NQSO. ISOs are also treated as NQSOs to the extent that they first become exercisable by an individual in any calendar year for shares having a fair market value (determined as of the date of grant) in excess of $100,000.
•
Non-Qualified Stock Options (NQSOs)
. An optionee generally has no taxable income at the time of grant of an NQSO but realizes income in connection with exercise of the option in an amount equal to the excess (at the time of exercise) of the fair market value of shares acquired upon exercise over the exercise price. The same amount is deductible by the Company as compensation, provided that, in the case of an employee option, the Company reports the income to the employee. Upon a subsequent sale or exchange of the shares, any recognized gain or loss after the date of exercise is treated as capital gain or loss for which the Company is not entitled to a deduction.
•
SARs
. Generally, the recipient of a stand-alone SAR will not recognize taxable income at the time the SAR is granted. If a participant receives the appreciation inherent in the SAR in cash, the cash will be taxed as ordinary income to the participant at the time it is received. If a participant receives the appreciation inherent in the SAR in shares, the spread between the then-current market value and the base price will be taxed as ordinary income to the participant at the time it is received. In general, there will be no federal income tax deduction allowed to the Company upon the grant or termination of SARs. However, upon the settlement of a SAR, the Company will be entitled to a deduction equal to the amount of ordinary income the recipient is required to recognize as a result of the settlement.
33
•
Restricted Stock
. The recipient of restricted stock will not recognize any taxable income for federal income tax purposes in the year of the award, provided that the shares are subject to restrictions (that is, they are nontransferable and subject to a substantial risk of forfeiture). However, the recipient may elect under Section 83(b) of the IRC to recognize compensation income in the year of the award in an amount equal to the fair market value of the shares on the date of the award (less the purchase price, if any, paid for such shares), determined without regard to the restrictions. If a Section 83(b) election is made, the capital gain/loss holding period for such shares commences on the date of the award. Any further change in the value of the shares will be taxed as a capital gain or loss only if and when the shares are disposed of by the recipient. If the recipient does not make a Section 83(b) election, the fair market value of the shares on the date the restrictions lapse will be treated as compensation income to the recipient and will be taxable in the year the restrictions lapse, and the capital gain/ loss holding period for such shares will also commence on such date.
•
RSUs
. No income generally will be recognized upon the award of RSUs. The recipient of a RSU award generally will be subject to tax at ordinary income rates on the market price of unrestricted shares on the date that such shares are transferred to the participant under the award (reduced by any amount paid, if any, by the participant for such restricted stock units), and the capital gain/loss holding period for such shares will also commence on such date.
New Plan Benefits
The benefits that will be awarded or paid under the 2020 Plan are not currently determinable. Any future awards granted to eligible participants under the 2020 Plan will be made at the discretion of the Committee, the Board, or under delegated authority, and no such determination as to future awards or who might receive them has been made.
Existing Plan Benefits
The following tables summarizes the grants made to our named executive officers, all current executive officers as a group, all current non-executive directors as a group, each nominee for election as a director and all non-executive employees as a group, from the inception of the 2020 Plan through December 31, 2023. The closing price per share of our common stock on was $1.09 as of December 29, 2023.
| Name | Number of Stock Options Granted Since Adoption of the 2020 Plan | Number of RSUs Granted Since Adoption of the 2020 Plan | ||||||
| Joe Mastrangelo | 1,437,484 | 1,512,911 | ||||||
|
Nathan Kroeker
|
— | 815,853 | ||||||
|
Melissa Berube
(a)
|
200,000 | 279,657 | ||||||
| Current Executive Officers as a Group (3) | 1,637,484 | 2,608,421 | ||||||
|
Current Non-Employee Directors as a Group, excluding the two director nominees below (5)
|
1,562,011 | 568,253 | ||||||
|
Marian "Mimi" Walters
|
245,488 | 104,847 | ||||||
|
Jeffrey McNeil
|
82,452 | 36,232 | ||||||
|
Non-Executive Officer Employees as a Group
(b)
|
2,295,872 | 6,548,024 | ||||||
(a)
Ms. Berube is no longer an employee of the Company as of January 31, 2024. In connection with her departure, Ms. Berube no longer has any outstanding RSUs.
(b)
Represents total stock options and RSUs granted since the adoption of the 2020 Plan to all employees (current and former) who received awards under the 2020 Plan, other than current executive officers.
34
Registration with the SEC
If our stockholders approve the amendment to the 2020 Plan, we will file with the SEC a registration statement on Form S-8, as soon as reasonably practicable after the approval, to register the additional shares available for issuance under the 2020 Plan.
35
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Unless otherwise stated or unless the context otherwise requires, the terms “Company,” “we,” “us,” “our,” and “Eos” refer to Eos Energy Enterprises, Inc., a Delaware corporation, and the term “BMRG” refers to the Company prior to the consummation of the business combination.
The following is a summary of transactions since January 1, 2023 to which we and BMRG have been a participant, in which:
i.
the amount involved exceeded or will exceed the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years; and
ii.
any of our directors, executive officers, or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest, other than compensation and other arrangements that are described in the section titled “Executive Compensation” or that were approved by our compensation committee.
B Riley Principal Merger Corp. II
B. Riley Financial is the ultimate parent company of B. Riley Securities, Inc. ("BRFBR"), the Sponsor and B. Riley Principal Investments, LLC ("BRPI"). Daniel Shribman, who was BMRG’s Chief Executive Officer and Chief Financial Officer prior to the business combination, is the President of BRPI and the Chief Investment Officer of B. Riley Financial. Bryant Riley, a member of BMRG’s board of directors prior to the business combination, is the Chairman and Co-Chief Executive Officer of B. Riley Financial. Kenneth Young, a member of BMRG’s board of directors prior to the business combination, is the President of B. Riley Financial and the Chief Executive Officer of BRPI.
BMRG Registration Rights Agreement
The holders of the founder shares, private placement shares, private placement warrants, and shares of common stock underlying the private placement warrants have rights to require us to maintain an effective registration statement with respect to such securities. These holders are also entitled to make up to three demands, excluding short form registration demands, that we register such securities for sale under the Securities Act. In addition, these holders have “piggy-back” registration rights to include their securities in other registration statements filed by us. Notwithstanding the foregoing, the Sponsor may not exercise its demand and “piggyback” registration rights after five (5) and seven (7) years, respectively, after the effective date of IPO registration statement and may not exercise its demand rights on more than one occasion.
Eos Registration Rights Agreement
In connection with the Closing, we entered into a registration rights agreement with certain of our security holders, which requires us to maintain an effective registration statement registering the resale of their shares of common stock. Such security holders also have certain “piggyback” registration rights and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. We will bear the expenses incurred in connection with the filing of any such registration statements.
Director Nomination Agreement
In connection with the Closing, we entered into the Director Nomination Agreement with the Sponsor and certain Eos equity holders (the “Sellers”), pursuant to which the Sponsor and the Sellers have the right to designate members to be appointed or nominated for election to the Board of the Company, subject to terms and conditions set forth therein.
Merger Consideration
Subject to certain downward adjustments and the other terms and conditions set forth in the Merger Agreement, at Closing the EES LLC security holders received total aggregate consideration of 29,644,680 shares of common stock.
36
The EES LLC security holders also received an additional 1,994,171 shares of our common stock upon the achievement of certain earnout targets pursuant to the terms of the Merger Agreement.
Issuance and Sale of 26.5% Convertible Senior PIK Notes due 2026
On January 18, 2023, the Company entered into an investment agreement (the “Investment Agreement”) with Great American Insurance Company, Ardsley Partners Renewable Energy, LP, CCI SPV III, LP, Denman Street LLC, John B. Berding Irrevocable Children’s Trust, John B. Berding, and AE Convert, LLC, a Delaware limited liability company managed by Russell Stidolph, a director of the Company relating to the issuance and sale to the Purchasers of $13,750,000 in aggregate principal amount of the Company’s 26.5% Convertible Senior PIK Notes due 2026 (the “Notes”). The Board reviewed and approved the issuance of the Notes to AE Convert, LLC in accordance with the Company's related person transaction policy. The Notes are governed by a form of indenture (the “Indenture”) incorporated by reference into the Notes. The Notes will bear interest at a rate of 26.5% per annum, which interest shall be entirely paid-in-kind. All interest payments on the Notes shall be made through an increase in the principal amount of the outstanding Notes or through the issuance of additional Notes (such interest is referred to herein as “PIK Interest”). Interest on the Notes is payable semi-annually in arrears on June 30 and December 30, commencing on June 30, 2023. It is expected that the Notes will mature on June 30, 2026, subject to earlier conversion, redemption or repurchase. The Notes are convertible at the option of the holder at any time until the business day prior to the maturity date, including in connection with a redemption by the Company. The Notes will be convertible into shares of the Company’s common stock, par value $0.0001 per share, based on an initial conversion rate of 598.824 shares of the Company’s common stock per $1,000 principal amount of the Notes (which is equal to an initial conversion price of approximately $1.67 per share), in each case subject to customary anti-dilution and other adjustments (as described in the Indenture).
Policies and Procedures for Related Person Transactions
Our Board adopted a written related person transaction policy that sets forth the following policies and procedures for the review and approval or ratification of related person transactions.
A “Related Person Transaction” is a transaction, arrangement or relationship in which we or any of our subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest. A “Related Person” means:
◦
any person who is, or at any time during the applicable period was, one of our officers or one of our directors;
◦
any person who is known to be the beneficial owner of more than 5% of our voting stock;
◦
any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, officer or a beneficial owner of more than 5% of our voting stock, and any person (other than a tenant or employee) sharing the household of such director, officer or beneficial owner of more than 5% of our voting stock; and
◦
any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.
Pursuant to our related person transaction policy, the Chief Financial Officer of the Company is responsible for collecting information regarding Related Person Transactions, determining whether a transaction, arrangement or relationship meets the definition of Related Person Transaction, and preparing information regarding Related Person Transactions for presentation to the Nominating and Corporate Governance Committee. Directors and officers are expected to promptly notify the Chief Financial Officer or the Chair of the Nominating and Corporate Governance Committee of any potential or existing Related Person Transactions of which they are aware.
We have policies and procedures designed to minimize potential conflicts of interest arising from any dealings we may have with our affiliates and to provide appropriate procedures for the disclosure of any real or potential conflicts of interest that may exist from time to time.
37
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information relating to the beneficial ownership of our common stock as of March 1, 2024 by:
•
each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstanding shares of common stock;
•
each of our directors, nominees and named executive officers; and
•
all directors and executive officers as a group.
A person is a “beneficial owner” of a security if that person has or shares voting or investment power over the security or if that person has the right to acquire sole or shared voting or investment power over the security within 60 days. Unless otherwise noted, these persons, to our knowledge, have sole voting and investment power over the shares listed. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to options, warrants and restricted stock units held by that person that are currently exercisable or exercisable within 60 days of March 1, 2024.
Unless stated otherwise, the percentage of shares beneficially owned is computed on the basis of 202,776,151
shares of our common stock outstanding as of March 1, 2024.
| Shares of Common Stock Beneficially Owned | |||||||||||
| Name of beneficial owner | Number of Securities Beneficially Owned | Percentage | |||||||||
|
5% Stockholder
|
|||||||||||
|
High Trail Capital (4)
|
11,869,955 | 5.53 | % | ||||||||
|
Directors and Executive Officers
|
|||||||||||
|
Joe Mastrangelo (1) (2)
|
1,955,856 | * | |||||||||
|
Nathan Kroeker (1) (2)
|
89,610 | * | |||||||||
| Melissa Berube (1) (2) | 371,836 | * | |||||||||
|
Michael Silberman (1) (2)
|
— | * | |||||||||
|
Russell Stidolph (2) (3)
|
3,909,246 | 1.92 | % | ||||||||
|
Alex Dimitrief (1) (2)
|
444,994 | * | |||||||||
|
Audrey Zibelman (1) (2)
|
350,385 | * | |||||||||
|
Marian "Mimi" Walters (1) (2)
|
355,335 | * | |||||||||
| Claude Demby (1) (2) | 325,515 | * | |||||||||
|
Jeff Bornstein (1) (2)
|
470,866 | * | |||||||||
|
Jeffrey McNeil (1) (2)
|
345,956 | * | |||||||||
|
All directors, director nominees and executive officers as a group (10 individuals)
|
8,247,763 | 4.06 | % | ||||||||
—————
*Less than 1%.
(1) The business address of each of these entities or individuals is c/o 3920 Park Avenue Edison, New Jersey 08820.
(2) Includes shares of common stock underlying restricted stock units.
38
(3) Represents (i) 268,869 shares of common stock directly owned by Mr. Stidolph, (ii) 473,613 shares of common stock issuable upon exercise of vested options held by Mr. Stidolph, (iii) 32,328 restricted stock units and 120,633 options issuable upon exercise within 60 days of March 1, 2024, (iv) 2,653,272 shares of common stock in which Mr. Stidolph has a pecuniary interest in that are held directly by AltEnergy LLC, or AltEnergy, AltEnergy Storage LLC, or AltEnergy I, AltEnergy Storage II LLC, or AltEnergy II, AltEnergy Storage V LLC, or AltEnergy V, AltEnergy VI LLC, or AltEnergy VI, AltEnergy Storage Bridge LLC, or Bridge, AltEnergy Transmission LLC, or Transmission, AltEnergy Storage Bridge Phase II LLC, or Bridge II (collectively, the “AltEnergy Shares”) and (v) 360,531 shares of common stock issuable upon conversion of the outstanding 26.5% Convertible Senior PIK Notes due 2026 held by AE Convert, LLC. Mr. Stidolph disclaims beneficial ownership of these shares, except to the extent of his pecuniary interest therein. Mr. Stidolph is the managing director of AltEnergy, the managing member of each of AltEnergy I, AltEnergy II, AltEnergy VI, AltEnergy V, Bridge, Transmission and Bridge II, and has voting and dispositive power with respect to the AltEnergy Shares.
Mr. Stidolph is a manager of AE Convert, LLC, and has voting and dispositive power with respect to the securities owned by AE Convert, LLC.
The percentage of shares beneficially owned by Mr. Stidolph is computed on the basis of 202,776,151 shares of our common stock outstanding as of March 1, 2024 and 360,531 shares of common stock issuable upon conversion of the outstanding 26.5% Convertible Senior PIK Notes due 2026 held by AE Convert, LLC. The address of Mr. Stidolph and each of the above referenced entities is 137 Rowayton Avenue, Rowayton, CT 06853.
(4) Represents 11,869,955 shares of common stock issuable upon conversion of outstanding warrants held by High Trail Capital and its affiliates. The percentage of shares beneficially owned by High Trail Capital and its affiliates is computed on the basis of 202,776,151 shares of our common stock outstanding as of March 1, 2024 and 11,869,955 shares of common stock issuable upon conversion of warrants held by High Trail Capital and its affiliates as of March 1, 2024. This statement should not be construed as an admission that any of the foregoing persons or any reporting person is the beneficial owner of the shares listed herein. The address for this stockholder is 80 River Street, Suite 4C, Hoboken, NJ 07030.
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DELINQUENT SECTION 16(A) REPORTS
Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than 10% of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Such officers, directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.
To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with during fiscal year ended December 31, 2023.
40
ADDITIONAL INFORMATION
Householding of Proxy Materials
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.
Brokers with account holders who are Eos stockholders may be “householding” our proxy materials. A single proxy statement may be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that it will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you notify your broker or the Company that you no longer wish to participate in “householding.”
If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report, you may (1) notify your broker or (2) direct your written request to our Investor Relations Department at 3920 Park Avenue, Edison, New Jersey 08820, 862-207-7955 or email ir@eose.com. Stockholders who currently receive multiple copies of this Proxy Statement at their address and would like to request “householding” of their communications should contact their broker. In addition, the Company will promptly deliver, upon written request to the address above, a separate copy of the Form 10-K, Proxy Statement and Proxy Card to a stockholder at a shared address to which a single copy of the documents was delivered.
Other Matters
As of the date of this Proxy Statement, the Board does not intend to present any matters other than those described herein at the Annual Meeting and is unaware of any matters to be presented by other parties. If other matters are properly brought before the Annual Meeting for action by the stockholders, proxies will be voted in accordance with the recommendation of the Board or, in the absence of such a recommendation, in the discretion of the proxy holder.
We have filed our Annual Report on Form 10-K for fiscal year ended December 31, 2023 with the SEC. It is available free of charge at the SEC’s web site at www.sec.gov. Upon written request by an Eos stockholder, we will mail without charge a copy of our Annual Report on Form 10-K, including the financial statements and financial statement schedules, but excluding exhibits to the Annual Report on Form 10-K. Exhibits to the Annual Report on Form 10-K are available upon payment of a reasonable fee, which is limited to our expenses in furnishing the requested exhibit. All requests should be directed our Investor Relations department
at 3920 Park Avenue, Edison, New Jersey 08820, 862-207-7955 or email ir@eose.com.
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INFORMATION ABOUT THE PROXY PROCESS AND VOTING
Why am I receiving these materials?
We have delivered printed proxy materials to you because the Board is soliciting your proxy to vote at the Annual Meeting, including at any adjournments or postponements of the Annual Meeting. You are invited to attend the virtual Annual Meeting to vote on the proposals described in this Proxy Statement. However, you do not need to attend the virtual Annual Meeting to vote your shares. Instead, you may simply complete, sign and return the Proxy Card, or follow the instructions below to submit your proxy on the internet.
These printed proxy materials are being sent to our stockholders on or about April 2, 2024
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Who can vote at the Annual Meeting?
The outstanding voting securities of Eos are shares of common stock, $0.0001 par value per share. There were 202,984,609 shares of common stock outstanding as of March 11, 2024. Only stockholders of record at the close of business on the Record Date will be entitled to vote at the Annual Meeting.
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record as of March 11, 2024, you may vote online during the virtual Annual Meeting. Alternatively, you may vote by proxy by using the accompanying Proxy Card, over the internet. Whether or not you plan to attend online the virtual Annual Meeting, we encourage you to vote by proxy ahead of the Annual Meeting to ensure your vote is counted. Even if you have submitted a proxy before the Annual Meeting, you may still attend the Annual Meeting and vote. In such case, your previously submitted proxy will be disregarded.
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To vote using the Proxy Card, simply complete, sign and date the accompanying Proxy Card and return it promptly in the envelope provided. If you return your signed Proxy Card to us before the Annual Meeting, we will vote your shares in accordance with the Proxy Card.
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To vote by proxy over the internet before the Annual Meeting, follow the instructions as directed on the enclosed Proxy Card.
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To vote by telephone, you may vote by proxy by calling the toll free number found on the enclosed Proxy Card.
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To vote at the virtual Annual meeting, you will need the 16-digit control number included on your Proxy Card or voting instruction form. The meeting webcast will begin promptly at 10:00 a.m., Eastern time. We encourage you to access the meeting prior to the start time. Online check-in will begin at 9:45 a.m. Eastern time, and you should allow ample time for the check-in procedures. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual Annual Meeting login page for assistance.
Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Agent
If, on the Record Date, your shares were held in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account.
If you are a beneficial owner as described above, you should have received a Proxy Card and voting instructions with these proxy materials from the brokerage firm, bank, dealer or other similar organization that holds your shares, rather than from us. Simply complete and mail the Proxy Card to ensure that your vote is counted. To vote online at the virtual Annual Meeting, you must obtain a valid proxy from your broker, bank, dealer or other agent and follow the accompanying instructions included with these proxy materials.
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We provide internet proxy voting to allow you to vote your shares online before the Annual Meeting, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.
What is the required vote to approve the proposals discussed in this Proxy Statement?
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With respect to Proposal No. 1, directors are elected by a plurality of the votes cast. “Withhold” votes have no effect. There is no ability to “abstain”. Broker non-votes will have no effect on the outcome of the vote.
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With respect to Proposal No. 2, the affirmative vote of the majority of votes cast is required for approval. Abstentions will have no effect on the outcome of the vote. In addition, because this is a routine item, there will not be any broker non-votes.
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With respect to Proposal No. 3, the affirmative vote of the majority of votes cast is required for approval. Abstentions and broker non-votes will have no effect on the outcome of the vote. We note that this is an advisory vote and is not binding on the Company, the Board, or the Leadership Development & Compensation Committee.
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With respect to Proposal No. 4, the affirmative vote of the holders of at least 66 2/3% of the voting power of all outstanding shares of capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class is required for approval. Abstentions will have the same effect as a vote against. In addition, because this is a routine item, there will not be any broker non-votes.
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With respect to Proposal No. 5, the affirmative vote of the majority of votes cast is required for approval. Abstentions and broker non-votes will have no effect on the outcome of the vote.
What are “broker non-votes”?
If your shares are held by your broker as your nominee (that is, in “street name”), you will need to instruct your broker to vote your shares. If you do not give instructions to your broker, your broker can vote your shares with respect to “routine” items, but not with respect to “non-routine” items. Only Proposal No. 2, the ratification of the appointment of Deloitte as our independent registered public accounting firm for the fiscal year ending December 31, 2024, and Proposal No. 4, the Authorized Shares Amendment, are considered “routine” under applicable rules.
If a broker, bank, custodian, nominee or other record holder of common stock indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular proposal, then those shares will be treated as “broker non-votes” with respect to that proposal. Broker non-votes may affect the result of a Proposal, as stated above in “What is the required vote to approve the proposals discussed in this Proxy Statement?”.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you own as of the Record Date.
What if I return a Proxy Card but do not make specific choices?
If we receive a signed and dated Proxy Card and the Proxy Card does not specify how your shares are to be voted, your shares will be voted “For” the election of each of the two nominees for director, “For” the ratification of the appointment of Deloitte as our independent registered public accounting firm, “For” the approval of the non-binding advisory resolution to approve the compensation of our named executive officers, “For” the Authorized Shares Amendment, and “For” an amendment to our Amended and Restated 2020 Incentive Plan. If any other matter is properly presented at the Annual Meeting, your proxy (one of the individuals named on your Proxy Card) will vote your shares in his or her discretion.
What does it mean if I receive more than one set of materials?
If you receive more than one set of materials, your shares are registered in more than one name or are registered in different accounts. In order to vote all the shares you own, you must either sign and return all of the Proxy Cards or follow the instructions for any alternative voting procedure on each of the Proxy Cards.
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Can I change my vote after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of three ways:
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You may submit another properly completed proxy with a later date.
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You may send a written notice that you are revoking your proxy to our Investor Relations Department at 3920 Park Avenue, Edison, New Jersey 08820, 862-207-7955 or email ir@eose.com.
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You may attend the virtual Annual Meeting through online presence and vote online. Simply attending the Annual Meeting will not, by itself, revoke your prior proxy.
If your shares are held by your broker, bank or other agent, you should follow the instructions provided by them.
When are stockholder proposals due for next year’s Annual Meeting?
If you wish to submit a stockholder proposal pursuant to Rule 14a-8 of the Securities Exchange Act to be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December 3, 2024 to Eos Energy Enterprises Inc., c/o Elizabeth Higley, 3920 Park Avenue, Edison, New Jersey 08820, or email at ir@eose.com.
Pursuant to our Third Amended and Restated Bylaws, in order for a stockholder to present a proposal at the annual meeting, other than 14a-8 proposals to be included in the Proxy Statement as described above, or to nominate a director, you must give timely notice thereof in writing to the Secretary at Eos Energy Enterprises Inc., 3920 Park Avenue, Edison, New Jersey 08820, which must be received between January 1, 2025 and January 31, 2025;
provided
that if the date of the 2025 annual meeting is more than 30 days before or more than 60 days after May 1, 2025, notice must be received no earlier than 120 days prior to such annual meeting and no later than the later of the 90th day prior to the annual meeting date or the 10th day following the day on which public announcement of the 2025 annual meeting date is first made by the Company. You are also advised to review our Third Amended and Restated Bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.
In addition to satisfying the foregoing requirements, including the timing and other requirements, under the Company’s Third Amended and Restated Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees for the 2025 Annual Meeting of Stockholders must also provide notice to our Secretary that sets forth all information required by Rule 14a-19 under the Exchange Act, and such notice must be received no later than March 2, 2025. A shareholder seeking to utilize the universal proxy rules must comply with those rules and must also comply with the Company’s Third Amended and Restated Bylaws, including the obligation to provide timely notice as described above.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if the holders of a majority in voting power of the shares of common stock issued and outstanding and entitled to vote are present online at the virtual Annual Meeting represented by proxy. Your shares will be counted towards the quorum only if you submit a valid proxy or vote at the Annual Meeting. If there is no quorum, either the chair of the Annual Meeting or a majority in voting power of the stockholders entitled to vote at the Annual Meeting, present online or represented by proxy, may adjourn the Annual Meeting to another time or place.
How can I find out the results of the voting at the Annual Meeting?
Voting results will be announced by the filing of a Current Report on Form 8-K within four business days after the Annual Meeting.
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Who can help answer my questions?
If you have questions about this Proxy Statement or if you need additional copies of the proxy materials, you should contact our Investor Relations department at 862-207-7955 or ir@eose.com. To obtain timely delivery, our stockholders must request the materials on or before April 17, 2024 to facilitate timely delivery.
Who will solicit and pay the cost of soliciting proxies?
Eos will pay the cost of soliciting proxies for the general meeting. Eos will reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of ordinary shares for their expenses in forwarding soliciting materials to beneficial owners of ordinary shares and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, mail, on the Internet or at the Annual Meeting. They will not be paid any additional amounts for soliciting proxies. In addition, we have retained Morrow Sodali to act as a proxy solicitor in conjunction with the Annual Meeting. We have agreed to pay that firm $12,500, plus reasonable out-of-pocket expenses, for proxy solicitation services.
How do I attend the Annual Meeting?
After careful consideration, our Board has determined to hold a virtual-only annual meeting. You may attend the Annual Meeting live via the Internet at www.virtualshareholdermeeting.com/EOSE2024. Stockholders will need the 16-digit control number provided on their Proxy Card, voting instruction form or notice. We suggest you log in at least 15 minutes before the start of the meeting.
Can I ask questions at the Annual Meeting?
Stockholders as of our record date will have an opportunity to submit questions live via the Internet during the meeting.
| How to Participate in the Annual Meeting |
Online:
1. Visit www.virtualshareholdermeeting.com/EOSE2024; and
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2. Enter the 16 digit control number included on your Notice Regarding the Availability of Proxy Materials (“Notice”), on your Proxy Card (if you received a printed copy of the proxy materials), or on the instructions that accompanied your proxy materials.
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You may begin to log into the meeting platform beginning at 9:45 a.m. Eastern Time on May 1, 2024. The meeting will begin promptly at 10:00 a.m. Eastern Time.
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APPENDIX A
EOS ENERGY ENTERPRISES, INC.
CERTIFICATE OF AMENDMENT TO THE
THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
FIRST
: The present name of the corporation is Eos Energy Enterprises, Inc., a Delaware corporation (the “Corporation”). The original certificate of incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on June 3, 2019 (the “Original Certificate”). An Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate”) was filed with the Secretary of State of the State of Delaware on February 4, 2020. A Second Amended and Restated Certificate of Incorporation (the “Second Amended and Restated Certificate”) was filed with the Secretary of State of the State of Delaware on May 19, 2020. A Third Amended and Restated Certificate of Incorporation (the “Third Amended and Restated Certificate”) was filed with the Secretary of State of the State of Delaware on November 16, 2020. A certificate of amendment to the Third Amended and Restated Certificate was filed with the Secretary of State of the State of Delaware on June 28, 2022.
SECOND
: Section 4.1(b) of Article IV of the Company’s Third Amended and Restated Certificate is hereby amended to read in its entirety as set forth below:
(b) The total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Corporation is authorized to issue is 601,000,000 shares, consisting of (a) 600,000,000 shares of common stock (the “Common Stock”) and (b) 1,000,000 shares of preferred stock (the “Preferred Stock”).
Effective at 5:00 p.m. Eastern Time on ____________, 20__, the date of filing with the Secretary of State of the State of Delaware (such time, on such date, the “Effective Time”) of this [__] Certificate of Amendment to the Certificate of Incorporation of the Corporation, every [__] shares of the Corporation’s issued and outstanding Common Stock, par value $0.0001 per share, that are issued and outstanding immediately prior to the Effective Time (“Old Common Stock”) shall, automatically and without any further action on the part of the Corporation or the holder thereof, be combined into one (1) validly issued, fully paid and non-assessable share of the Corporation’s Common Stock, par value $0.0001 per share, subject to the treatment of fractional interests as described below (the “Reverse Stock Split”). No fractional share shall be issued in connection with the Reverse Stock Split. The Corporation shall issue and deliver one full share of post-Reverse Stock Split Common Stock or Preferred Stock to any stockholder (other than with respect to shares held by the Corporation as treasury stock) who would have been entitled to receive a fractional share of Common Stock or Preferred Stock, respectively, as a result of the Reverse Stock Split, in lieu of receiving such fractional share. The Reverse Stock Split shall occur whether or not any certificates representing such shares are surrendered to the Corporation or its transfer agent.
THIRD
: The foregoing amendment has been duly proposed and declared advisable by the Corporation’s Board of Directors and adopted by the Corporation’s stockholders in accordance with the provisions of Sections 222 and 242 of the General Corporation Law of the State of Delaware.
FOURTH
: This Certificate of Amendment shall become effective as of upon the filing of this Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware.
* * * * *
IN WITNESS WHEREOF
, the Corporation has caused this Certificate of Amendment to be signed by an authorized officer of the Corporation this day of , 20 .
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By:
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Michael Silberman
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| Title: | Authorized Officer | |||||||
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APPENDIX B
THIRD AMENDMENT TO THE
EOS ENERGY ENTERPRISES, INC.
AMENDED AND RESTATED
2020 INCENTIVE PLAN
This Third Amendment (the “Amendment”) to the Eos Energy Enterprises, Inc. Amended and Restated 2020 Incentive Plan (as amended or restated from time to time, the “Plan”) is approved and adopted to be effective as of _______________, 2024, (the “Effective Date”).
RECITALS
A.
The stockholders of Eos Enterprises, Inc., a Delaware corporation (the “Company”) approved the Amendment effective as of _____________, 2024.
A.
The Company now desires to amend the Plan in accordance with the terms and conditions of this Amendment.
AMENDMENT
NOW THEREFORE, effective as of the Effective Date, Sections 5(b) and Section 7(a) of the Plan are hereby deleted in their entirety and restated as follows:
1.
Grant of Awards; Shares Subject to the Plan; Limitations
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(b) Subject to Section 12 of the Plan and this Section 5, Awards granted under the Plan shall be subject to the following limitations: (i) the Committee is authorized to deliver under the Plan an aggregate of __________________ Common Stock; provided, that the maximum number of Common Stock that may be granted under the Plan during any single fiscal year to any Participant who is a non-employee director, when taken together with any cash fees paid to such nonemployee director during such year in respect of his service as a non-employee director (including service as a member or chair of any committee of the Board), shall not exceed $500,000 in total value (calculating the value of any such Awards based on the Fair Market Value on the Date of Grant of such Awards for financial reporting purposes); provided that the non-employee directors who are considered independent (under the rules of The Nasdaq Capital Market or other securities exchange on which the Common Stock is traded) may make exceptions to this limit for a non-executive chair of the Board, if any, in which case the non-employee director receiving such additional compensation may not participate in the decision to award such compensation.
1.
Options
.
a.
Generally
. Each Option granted under the Plan shall be evidenced by an Award Agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each Option so granted shall be subject to the conditions set forth in this Section 7 and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. All Options granted under the Plan shall be Nonqualified Stock Options unless the applicable Award Agreement expressly states that the Option is intended to be an Incentive Stock Option. Subject to Section 12, the maximum aggregate number of Common Stock that may be issued through the exercise of Incentive Stock Options granted under the Plan is ______________ Common Stock. Incentive Stock Options shall be granted only to Eligible Persons who are employees of the Company and its Affiliates, and no Incentive Stock Option shall be granted to any Eligible Person who is ineligible to receive an Incentive Stock Option under the Code. No Option shall be treated as an Incentive Stock Option unless the Plan has been approved by the stockholder of the Company in a manner intended to comply with the stockholder approval requirements of Section 422(b)(1) of the Code; provided that any Option intended to be an Incentive Stock Option shall not fail to be effective solely on account of a failure to obtain such approval, but rather such Option shall be treated as a Nonqualified Stock Option unless and until such approval is obtained. In the case of an Incentive Stock Option, the terms and conditions of such grant shall be subject to and comply with such rules as may be prescribed by Section 422 of the Code. If for
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any reason an Option intended to be an Incentive Stock Option (or any portion thereof) shall not qualify as an Incentive Stock Option, then, to the extent of such nonqualification, such Option or portion thereof shall be regarded as a Nonqualified Stock Option appropriately granted under the Plan.
IN WITNESS WHEREOF, the Company has executed this Amendment to the Plan as of _________, 2024.
EOS ENERGY ENTERPRISES, INC.
/s/Michael Silberman
Michael Silberman
General Counsel, Chief Compliance Officer, and Corporate Secretary
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APPENDIX C
EOS ENERGY ENTERPRISES, INC.
AMENDED AND RESTATED
2020 INCENTIVE PLAN
1.
Establishment of the Plan; Effective Date; Duration
.
(a)
Establishment of the Plan; Effective Date
. Eos Energy Enterprises, Inc. (f/k/a B. Riley Principal Merger Corp. II), a Delaware corporation (the “
Company
”), hereby establishes this incentive compensation plan to be known as the “Eos Energy Enterprises, Inc. Amended and Restated 2020 Incentive Plan”, as amended from time to time (the “
Plan
”). The Plan permits the grant of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards, Other Cash-Based Awards and Dividend Equivalents. If the Plan is not so approved by the stockholders of the Company, then the Plan will be null and void in its entirety. The Plan shall remain in effect as provided in Section 1(b) of the Plan. Capitalized but undefined terms shall have the meaning set forth in Section 3 of the Plan.
(b)
Duration of the Plan
. The Plan shall commence on the Effective Date and shall remain in effect, subject to the right of the Board to amend or terminate the Plan at any time pursuant to Section 13. However, in no event may an Award be granted under the Plan on or after ten years from the Effective Date.
2.
Purpose
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The purpose of the Plan is to provide a means through which the Company and its Affiliates may attract and retain key personnel and to provide a means whereby certain directors, officers, employees, consultants and advisors (and certain prospective directors, officers, employees, consultants, and advisors) of the Company and its Affiliates can acquire and maintain an equity interest in the Company, or be paid incentive compensation, which may be measured by reference to the value of Common Stock, thereby strengthening their commitment to the welfare of the Company and its Affiliates and aligning their interests with those of the Company’s stockholders.
3.
Definitions
.
Certain terms used herein have the definitions given to them in the first instance in which they are used. In addition, for purposes of the Plan, the following terms are defined as set forth below:
(a)
“
Affiliate
” means (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the Company and/or (ii) to the extent provided by the Committee, any person or entity in which the Company has a significant interest. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise.
(b)
“
Applicable Laws
” means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Common Stock are listed or quoted, and the applicable laws and rules of any foreign country or other jurisdiction where Awards are granted, as are in effect from time to time.
(c)
“
Award
” means, individually or collectively, any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Other Stock-Based Awards, Other Cash-Based Awards, and/or Dividend Equivalents, granted under the Plan.