Item 1.01 Entry into a Material Definitive Agreement.
On January 3, 2023, Orion Energy Systems, Inc. (the "Company"), entered into a
cooperation agreement (the "Agreement") with Kanen Wealth Management, LLC and
certain of its affiliates (collectively, "Kanen"). Kanen beneficially owns
approximately 5.3% of the Company's outstanding common stock. Pursuant to the
Agreement, the Board of Directors of the Company (the "Board") agreed, among
other things, to appoint Charles McDulin as a Class II director of the Company,
with a scheduled regular term to expire at the Company's 2024 annual meeting of
shareholders (the "2024 Annual Meeting").
Under the terms of the Agreement, Kanen has agreed to abide by customary
standstill restrictions until fifteen (15) days prior to the deadline for
submission of a notice of shareholder nomination of individuals for election as
directors of the Company at the 2024 Annual Meeting (the "Standstill Period");
provided that if the Board offers to nominate Mr. McDulin for election to the
Board at the 2024 Annual Meeting and Mr. McDulin agrees to stand for election to
the Board at the 2024 Annual Meeting, then the Standstill Period will be
automatically extended for such period as Mr. McDulin remains on the Board.
Pursuant to the Agreement, Mr. McDulin has delivered to the Company an
irrevocable advance resignation letter, tendering his resignation from the Board
upon the occurrence of certain events specified in such resignation letter
(which resignation may be accepted by the Board in its sole discretion), and a
written acknowledgement of foregoing $25,000 in cash compensation from the
Company for his first year serving as an independent director of the Company.
Other than Mr. McDulin's foregoing of $25,000 in cash, he will otherwise receive
compensation for his service as a director in the same manner as the Board's
other independent directors.
The parties also agreed to customary mutual non-disparagement obligations, and
the Company agreed to reimburse Kanen for its reasonable, documented
out-of-pocket fees and expenses (including legal expenses) incurred in
connection with the negotiation and execution of the Agreement, up to a cap of
$25,000 in the aggregate.
The foregoing description does not purport to be complete and is qualified in
its entirety by reference to the Agreement, a copy of which is attached hereto
as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated into this Item 5.02 by reference.
On January 3, 2023, the Board increased the size of the Board to six (6) members
and appointed Charles McDulin to the Board. Mr. McDulin will serve as a Class II
director with a scheduled regular term expiring at the 2024 Annual Meeting.
Other than the Agreement, there is no arrangement or understanding between Mr.
Dulin and any other person pursuant to which Mr. Dulin was elected as a
director. Mr. Dulin was determined by the Board to be independent under the
applicable rules of Nasdaq and the rules and regulations of the U.S. Securities
and Exchange Commission.
The Company is not aware of any transactions, proposed transactions or series of
either to which the Company or any of its subsidiaries was or is to be a party,
in which the amount involved exceeds $120,000 and in which Mr. McDulin had, or
will have, a direct or indirect material interest.
Item 8.01 Other Events.
On January 4, 2023, the Company issued a press release announcing the
appointment of Mr. McDulin to the Board, a copy of which is filed as Exhibit
99.1 to this Current Report on Form 8-K.
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Item 9.01 Financial Statements and Exhibits.
Exhibit 10.1 Cooperation Agreement, dated January 3, 2023, by and among Orion
Energy Systems, Inc., Kanen Wealth Management, LLC, Philotimo Fund, LP and David
Kanen and Charles McDulin.
Exhibit 99.1 Press Release, dated January 4, 2023.
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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ORION ENERGY SYSTEMS, INC. 
