Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Global Chief Executive Officer
On November 26, 2022, the Board of Directors (the "Board") of Faraday Future
Intelligent Electric Inc. (the "Company") appointed Xuefeng ("XF") Chen
as Global Chief Executive Officer of the Company ("Global CEO"), effective as of
November 27, 2022 (the "Effective Date").
Mr. Chen, 46, was most recently the Company's CEO-China and previously joined
the Company from Chery Jaguar Land Rover Automobile Co., Ltd. ("Chery Jaguar
Land Rover"), a joint venture between the British carmaker Jaguar Land Rover and
Chinese auto manufacturer Chery Automobile, where he served as China CEO,
Executive Vice President and Executive Vice President of the Joint Sales
organization and Assistant to Chery Group President from 2018 to February 2021.
Prior to that, he served in various positions at Chery Jaguar Land Rover,
including as quality leader from 2013 to 2014, as Chief Financial Officer
(2015), and as Vice President (CTO) of Research and Development (2017). As
executive vice president of manufacturing from 2013 to November 2015, Mr. Chen
led and set up a manufacturing team, a logistics supply chain team, and a
quality system team and built the world-class production base of Chery Jaguar
Land Rover in China within 18 months, and delivered the first Land Rover model
manufactured in China three months ahead of schedule. Within three years after
Chery Jaguar Land Rover's initial launch in March 2015, Mr. Chen led the launch
of five new Land Rover and Jaguar models in China, setting the luxury car
benchmark in the industry. Mr. Chen also presided over the planning and
implementation of Chery Jaguar Land Rover's new energy strategy and the planning
the battery sub-assembly plant and assembly plant. During Mr. Chen's tenure, he
presided over the planning and construction of Cherry Jaguar Land Rover's engine
plant, and Chery Jaguar Land Rover's vehicle production capacity expanded from
130,000 to 200,000 units, paving the way for Chery Jaguar Land Rover's hybrid
and electric vehicle strategy.
Mr. Chen also served as Project Director/Department Director of Project
Management of Changan Ford Mazda Company from October 2009 to January 2013 and
as Senior Manager of the B2e Platform Project (Ford Mazda's economic car
platform) from April 2005 to October 2009. He worked as an electrical design
engineer at Ford Motor Company, Ford Australia from January 2004 to April 2005,
and as electrical product development engineer at Chongqing Changan Ford Mazda
Automobile Company from 2002 to December 2003.
Mr. Chen graduated from Wuhan University of Technology in 1999 with a bachelor's
degree in automotive design and manufacturing and in 2016 with a master's degree
in automotive engineering. Mr. Chen is currently pursuing a master's degree in
business administration in Yangtze River Business School.
In connection with his appointment as Global CEO, the Company and its
subsidiary, Faraday&Future Inc., entered into an employment agreement with Mr.
Chen, dated as of November 27, 2022 (the "Employment Agreement"), setting forth
the terms of his employment and compensation. Pursuant to the Employment
Agreement, Mr. Chen's appointment as Global CEO will be for a term ending on
November 26, 2025, unless otherwise terminated or renewed in writing pursuant to
the Employment Agreement. He will be entitled to a base salary of $900,000 and
eligible for an annual performance-based bonus of up to $600,000 under the
Company's bonus plan. Mr. Chen will also receive a cash signing and retention
bonus of $500,000 payable within 30 days following the Effective Date, subject
to repayment (i) in full within 15 business days of termination of Mr. Chen by
the Company for "Cause" (as defined in the Employment Agreement), or (ii) on a
pro-rated basis, within 15 days, if Mr. Chen either resigns or is terminated
without Cause within 36 months of the Effective Date.
The Employment Agreement also provides that Mr. Chen will be eligible to
participate in the Company's 2021 Stock Incentive Plan (the "2021 Plan").
Subject to approval by the Board and the terms of the 2021 Plan, Mr. Chen will
receive (i) as of the Effective Date, $250,000 in grant date fair value of
restricted stock units ("RSUs"), (ii) as of the first anniversary of the
Effective Date, $300,000 in grant date fair value of RSUs, (iii) as of the
second anniversary of the Effective Date, $400,000 in grant date fair value of
RSUs, (iv) as of the third anniversary of the Effective Date, $450,000 in grant
date fair value of RSUs, and (v) as of the fourth anniversary of the Effective
Date, $600,000 in grant date fair value of RSUs. Each RSU grant will vest in
equal 25% increments on each of the first four anniversaries of the applicable
grant date, provided Mr. Chen remains employed with the Company on each such
vesting date.
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Subject to approval by the Board and the terms of the Company's 2021 Plan, Mr.
Chen will be eligible to receive an additional number of performance-based
restricted stock units ("PSUs") having a target grant date fair value equal to
$2,000,000 if the Company reaches certain milestones and/or performance goals on
certain dates, as specified by the Board (each a "Milestone"), and will be
granted as follows: (i) $250,000 in value after the Company achieves the first
Milestone; (ii) $300,000 in value after the Company achieves the second
Milestone; (iii) $400,000 in value after the Company achieves the third
Milestone; (iv) $450,000 in value after the Company achieves the fourth
Milestone; and (v) $600,000 in value after the Company achieves the fifth
Milestone. Should the Company reach any such Milestone, the PSUs associated with
such Milestone will be issued on the date(s) such Milestone is reached and shall
vest in equal one-third increments on each of the first three annual Milestone
anniversary dates following the applicable grant date, provided Mr. Chen remains
employed with the Company on each such vesting date.
Pursuant to the Employment Agreement, Mr. Chen will receive an option to
purchase 2,000,000 shares of the Company's class A common stock, par value
$0.0001 per share (the "Class A Common Stock") on or following the Effective
Date, of which 50% will vest in equal 25% increments on each of the first four
anniversaries of the Effective Date, and the other 50% shall commence vesting on
the fourth anniversary of the Effective Date and shall vest in equal 25%
increments on each of the next four anniversaries of the Effective Date
following such date, in each case, subject to Mr. Chen's continued employment on
each such vesting date. Mr. Chen will also receive a performance-based option to
purchase 2,000,000 shares of Class A Common Stock, which will not start to vest
until the Company reaches certain milestones on certain dates, as specified by
the Board (each, an "Option Milestone," and such grant, the "Milestone-Based
Grant"). The portion of the Milestone-Based Grant subject to each Option
Milestone shall commence vesting on the date such Option Milestone is achieved
and shall vest in equal 25% increments on each of the subsequent four
anniversaries of such date.
In the event that Mr. Chen's employment is terminated without Cause or due to
his death or disability, then, subject to his execution and non-revocation of a
standard release of claims in favor of the Company and its affiliates, Mr. Chen
or his immediate family members (as applicable) will be entitled to a lump sum
payment equal to the amount of his then current base salary that would have been
paid over the next three months, in the case of a termination due to death or
disability, or the remainder of the employment term, in the case of a
termination without Cause.
The foregoing description of the Employment Agreement is a summary and is
qualified in its entirety by reference to the full text of the Employment
Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K
and incorporated herein by reference.
There are no arrangements or understandings between Mr. Chen and any other
persons, pursuant to which he was appointed as Global CEO, no family
relationships among any of the Company's directors or executive officers and Mr.
Chen, and he has no direct or indirect material interest in any transaction
required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Departure of Dr. Carsten Breitfeld
On November 26, 2022, the Board voted to remove Dr. Carsten Breitfeld as Global
CEO. As of the Effective Date, Dr. Carsten Breitfeld has been provided written
notice of the Board's decision. Pursuant to the Company's Corporate Governance
Guidelines, management directors are required to tender their resignation from
the Board upon their removal as an officer of the Company. Accordingly, the
Board has requested and Dr. Breitfeld is expected to tender his resignation from
the Board in accordance with such Corporate Governance Guidelines, which the
Board expects to accept immediately.
In connection with Dr. Breitfeld's departure, it is expected that the Company
and Dr. Breitfeld will enter into a separation agreement, the material terms of
which have not been finalized as of the date of this Current Report on Form 8-K.
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Item 7.01. Regulation FD Disclosure
A copy of the Company's press release announcing the Global CEO transition
described in Item 5.02 is being furnished as Exhibit 99.1 to this Current Report
on Form 8-K.
The information in this Item 7.01, including Exhibit 99.1 hereto, shall not be
deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities
of that section, nor shall it be deemed incorporated by reference in any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except as
expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed with this Current Report on Form
8-K:
No. Description of Exhibits
10.1 Employment Agreement, dated as of November 27, 2022, by and among the
Faraday Future Intelligent Electric Inc., Faraday&Future Inc. and
Xuefeng Chen
99.1 Press Release dated November 28, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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