Orion Energy Awards CEO 500,000 Options with Aggressive Performance Hurdles

Rhea-AI Filing Summary

Orion Energy Systems (OESX) – Form 4 insider filing: CEO & Director Sally A. Washlow reported the grant of 500,000 stock options on 08/07/2025 at a $0.60 exercise price. The grant was originally issued 07/18/2025 and became effective following shareholder approval on 08/07/2025.

Vesting terms:

• 250,000 options vest in three equal annual tranches beginning one year after the grant date, contingent on continued employment.
• The remaining 250,000 vest in three equal tranches only if the stock averages $3.00, $4.00 and $5.00 for five consecutive trading days within three years of grant, plus service-based conditions.

The options expire 07/17/2035.

Following the award, Washlow’s beneficial ownership stands at 253,580 common shares directly and 1,000 shares indirectly through her spouse, in addition to the newly issued options. No open-market purchases or sales of common stock were reported.

The filing signals a significant, performance-linked incentive package for the new CEO, but also introduces up to 500,000 shares of potential dilution if vesting hurdles are met.

Positive

• Performance-based vesting ties half the award to ambitious $3–$5 share-price targets, aligning CEO incentives with shareholder returns.
• Shareholder approval was secured before the grant became effective, reflecting sound governance practices.

Negative

• Potential dilution of up to 500,000 shares (≈1-2% of float) if all options vest and are exercised.

Insights

Financial Analyst

TL;DR: Large, performance-tied option grant incentivises growth; dilution immaterial unless price triples.

The 500k option grant equals roughly 1–2% of OESX’s shares outstanding, typical for a small-cap CEO package. Strike price of $0.60 sits near recent trading levels, but vesting targets of $3–$5 imply a 5-8x return requirement, aligning management with aggressive shareholder value creation. Should the hurdles be met, dilution would be offset by a materially higher market cap. Near-term cash flow is unaffected because this is a non-cash award. Overall market impact is neutral to modestly positive, hinging on execution.

Corporate Governance Expert

TL;DR: Grant structure shows good pay-for-performance design, yet shareholder dilution remains possible.

Board linked half the options to multi-year price thresholds, meeting best-practice incentive alignment. Annual time-based vesting ensures retention, while price-based tranches discourage windfall gains. However, 500k options could dilute existing holders if exercised, and the plan’s 10-year term is long. Governance risk is limited by shareholder approval already obtained.

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

OMB APPROVAL

OMB Number:			3235-0287
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hours per response:			0.5

Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

Check this box to indicate that a transaction was made pursuant to a contract, instruction or written plan for the purchase or sale of equity securities of the issuer that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). See Instruction 10.

1. Name and Address of Reporting Person^*

Washlow Sally A.

(Last) (First) (Middle)

2210 WOODLAND DRIVE

(Street)

MANITOWOC WI 54220

(City) (State) (Zip)

2. Issuer Name and Ticker or Trading Symbol
ORION ENERGY SYSTEMS, INC. [ OESX ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director		10% Owner
X	Officer (give title below)		Other (specify below)
	Chief Executive Officer

3. Date of Earliest Transaction (Month/Day/Year)
08/07/2025

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock								253,580	D
Common Stock								1,000	I	By Spouse

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Stock Options (right to buy)	$0.6	08/07/2025(1)		A		500,000		(2)	07/17/2035	Common Stock	500,000	$0	500,000	D

Explanation of Responses:

1. This option was granted July 18, 2025, subject to shareholder approval of the stock option award. Orion Energy Systems, Inc.'s stockholders approved the stock option award on August 7, 2025.

2. This option becomes exercisable as follows: (i) the portion of the stock option exercisable for one-half of the option shares (250,000 shares) will vest in three equal increments on each of the first three anniversaries of the grant date, provided Ms. Washlow remains in Orion Energy Systems, Inc.'s employment until the applicable vesting date, and (ii) the second one-half of the grant (250,000 shares) will vest, if at all, in three equal increments if the average closing sale price of Orion Energy Systems, Inc.'s common stock, for five consecutive trading days during the three calendar years immediately following the date of the grant, equals or exceeds $3.00, $4.00 and $5.00, respectively, provided Ms. Washlow remains in Orion Energy Systems, Inc.'s employment until the applicable vesting date.

	/s/ Steven R. Barth, Attorney-in-Fact for Sally A. Washlow	08/08/2025
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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FAQ

How many Orion Energy Systems (OESX) options were granted to the CEO?

Sally A. Washlow received 500,000 stock options at a $0.60 exercise price.

What are the vesting conditions for the new OESX option grant?

Half vests over three years with continued employment; the other half vests only if the stock averages $3, $4, and $5 for five days within three years.

What is the CEO's current share ownership in OESX?

After the filing, Washlow beneficially owns 253,580 common shares directly and 1,000 shares indirectly via her spouse.

When do the newly issued Orion Energy options expire?

The options expire on 07/17/2035.

Did the option grant require shareholder approval?

Yes, OESX shareholders approved the grant on 08/07/2025.