[ASU Diablo]

This story just keeps getting weirder and weirder. Where there's smoke, there's fire.

Trevor Milton, the founder and executive chairman of zero-emissions truck manufacturer Nikola Corp., whose character had been called into question after a recent report alleged that he had lied about the company’s technology capabilities, announced Sunday night that he would resign from his post.

In a statement posted on Twitter, Milton said he asked the company’s board of directors to allow him to step aside from his roles as executive chairman and member of the board of directors, effective Sept. 20.

“I know many of you have put a lot of your energy into supporting Nikola, and I hope you follow me in continuing to do so,” his statement read in part. “I will be cheering from the sidelines with you now. The company is incredible, the mission too important and the future ready and willing for your support.”

Milton said he will continue to defend himself against “the false allegations leveled against me by outside detractors.”

The U.S. Justice Department is reportedly looking into claims that the Phoenix-based company allegedly misled investors by exaggerating the capabilities of its technology. That move came after short-seller Hindenburg Research on Sept. 11 called Nikola's technology nonfunctional and accused Milton of deception when promoting and making claims about the company’s capabilities and performance. Hindenburg Research's report alleges the reveal of the Nikola One vehicle in 2016 was “a total farce” and the truck as well as the hydrogen technology claimed to power it was unfinished and not functional at the time of the reveal.

The report also alleged that Milton lied about the company's technology for years. Nikola has repeatedly refuted the claims.

Nikola's shares, which have risen and fallen sharply in the past week, slumped on the news in early trading on Monday. The shares lost $5.47, or 16%, falling to $28.72 in heavy trading. Track the stock here.

Stephen Girsky, former vice chairman of General Motors Co. and a member of Nikola’s Board, has been appointed chairman of the board, effective immediately, Nikola announced.

“On behalf of the board, I want to thank Trevor for his visionary leadership and significant contributions to Nikola since its founding," Girsky said in a statement. "Trevor saw the possibility of creating an end-to-end zero-emission transportation system when the industry was still in its nascent stages and took action to build the Nikola of today, with world-class partnerships, groundbreaking R&D, and a revolutionary business model. I know I speak for everyone at Nikola in our gratitude and in wishing him all the best.”

Giving up stock units
Mark Russell, who was appointed CEO in June, and the company's CFO, Kim Brady, will remain in those roles.

Milton agreed to relinquish all of the 4,859,000 performance-based stock units he was granted on Aug. 21, 2020 and any right to enter into a two-year consulting agreement with an annual fee of $10 million, according to a regulatory filing. Instead, as part of his separation agreement, Milton will be available to the board for any unpaid consulting services on an ad hoc basis until Dec. 31.

Milton currently holds about 91.6 million shares, representing 24% of the company's outstanding shares.

RECOMMENDED
The company agreed to grant 1,069,000 time-vested restricted stock units vesting on June 3, 2023, to more than 300 employees of the company designated by Milton, subject to the employees’ continued employment at the company through the vesting date. The agreement also provides for the accelerated vesting and settlement of 600,000 restricted stock units granted to Milton on Aug. 21.

Milton has agreed to a three-year "standstill provision" in which he agreed not to acquire ownership (beneficial or otherwise) of more than 19 million company shares, or seek to rejoin the board. He agreed to vote his shares in favor of the directors put forth by the company at any shareholder meeting and vote against the election of any nominee for director not recommended by the board.

https://www.bizjournals.com/phoenix/...ntroversy.html