| Item 5.01. | Changes in Control of Registrant. |
Change in Control
On November 10, 2022, TuSimple Holdings Inc. (the “Company” or “TuSimple”) was notified that, on November 9, 2022, the Company’s stockholders White Marble LLC and White Marble International Limited (collectively, the “Principal Parties”) (i) granted Mr. Mo Chen, who is currently the Executive Chairman of the Company’s board of directors, an irrevocable proxy (the “Proxy”) pursuant to which Mr. Chen has the right to exercise, in his sole discretion, each shareholder’s rights to vote, consent or waive any rights attaching to all equity securities of the Company beneficially owned by the Principal Parties, including with respect to election of directors, and (ii) entered into a voting agreement (the “Voting Agreement”) with Mr. Chen, pursuant to which the Principal Parties will vote, or cause to be voted, all equity securities of the Company beneficially owned by the Principal Parties as directed by Mr. Chen at any regular or special meeting of the Company’s stockholders or in connection with any written consent of the Company’s stockholders. The Proxy will remain in effect until the earlier to occur of (i) the two year anniversary of the date of the Proxy and (ii) mutual agreement among Mr. Chen and the Principal Parties in writing to terminate the Proxy. The Voting Agreement will be terminated upon mutual agreement among Mr. Chen and the Principal Parties. Based on a joint Schedule 13D filed on November 15, 2022 by Mr. Chen, THC International Limited, Mo Star LLC, Brown Jade Holding Limited and Gray Jade Holding Limited (the “Schedule 13D”), no monetary consideration was given or received by any party in exchange for executing the Proxy or the Voting Agreement.
Based on the information provided to the Company as of November 10, 2022, after giving effect to the Proxy, Mr. Chen beneficially owns 19,734,628 shares of the Company’s Class A Common Stock and 24,000,000 shares of the Company’s Class B Common Stock, which together represent the beneficial ownership of approximately 19.5% of the Company’s outstanding Class A Common Stock and approximately 59.0% of the voting power of the outstanding shares of capital stock of the Company. As a result, under the SEC’s rules with respect to the beneficial ownership of securities, Mr. Chen acquired control of the Company as of November 9, 2022.
Controlled Company Exemptions
As discussed above and as disclosed in the Schedule 13D, Mr. Chen controls more than 50% of the voting power of the outstanding shares of capital stock of the Company. As a result, the Company qualifies as a “controlled company” as defined in Listing Rule 5615(c)(1) of The Nasdaq Stock Market LLC (“Nasdaq”) and may elect not to comply with certain corporate governance standards, including the requirements (i) that a majority of its board of directors consist of independent directors, (ii) that its board of directors have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities and (iii) that director nominees must either be selected or recommended for the board’s selection either by independent directors constituting a majority of the board’s independent directors in a vote in which only independent directors participate, or a nominating and corporate governance committee comprised solely of independent directors with a written charter addressing the committee’s purpose and responsibilities. If the Company ceases to be a “controlled company” and its shares continue to be listed on the Nasdaq, the Company will be required to comply with these standards and, depending on the board of directors’ independence determination with respect to its then-current directors, the Company may be required to add additional directors to its board of directors in order to achieve such compliance within the applicable transition periods.
The Company intends to elect all available controlled company exemptions under the Nasdaq Listing Rules.
Under Nasdaq and SEC rules, the Company will continue to be required to have an audit committee comprised of at least three independent directors. In addition, under The Committee on Foreign Investment in the United States National Security Agreement (the “NSA”) entered into between the Company and certain entities of the U.S. Government in February 2022, the Company is required to have one director who is designated as the Security Director under the NSA. The Company intends to appoint independent directors to the audit committee and a Security Director as soon as possible.
