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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Departure of Jeffery A. Croft
On December 20,
2007, the Company and Jeffrey A. Croft mutually agreed to terminate Mr. Croft’s employment as President and Chief Operating Officer of the Company, effective as of December 31, 2007 (the “Separation Date”), and the Board of
Directors of the Company ratified and approved the same on December 19, 2007.
In connection with his termination, the Company and
Mr. Croft entered into a Separation and Release Agreement, dated December 20, 2007 (the “Separation Agreement”). Under the terms of the Separation Agreement, Mr. Croft will continue to serve as President and Chief Operating
Officer of the Company until the Separation Date and for thirty (30) days thereafter will provide the Company with up to sixty (60) hours of post-separation support. As part of Mr. Croft’s termination, the Company has agreed to
pay Mr. Croft a lump sum severance payment in an amount equal to $575,000 (the “Lump Sum Payment”), plus an additional amount equal to $25,200 for health care coverage costs (the “Health Care Coverage Payment”), for a total
cash payment of $600,200, less applicable tax withholdings. The Lump Sum Payment is due and payable to Mr. Croft on the first day of the seventh month following the Separation Date, and the Health Care Coverage Payment is due within 10 days of
the date on which Mr. Croft’s right to revoke the Separation Agreement expires as described therein. Mr. Croft has agreed to forfeit any unvested awards of equity compensation he has received from the Company, and has further agreed
that certain restrictions on competition and confidentiality shall remain in full force and effect for a period of 12 months following the Separation Date.
The foregoing summary of the Separation Agreement is qualified in its entirety by reference to the full
text of the Separation Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.
Appointment of Douglas G.
Borror as President
On December 19, 2007, the Board authorized and approved the appointment of Douglas G. Borror to serve as
President of the Company, in addition to his other positions with the Company as Chairman of the Board and Chief Executive Officer, with such appointment to be effective as of December 31, 2007.
Appointment of William G. Cornely as Chief Operating Officer
On December 19, 2007, the Board authorized and approved the appointment of William G. Cornely as Chief Operating Officer of the Company, in addition to his other positions with the Company as Executive Vice President of Finance and
Chief Financial Officer, with such appointment to be effective as of December 31, 2007. In light of Mr. Cornely’s appointment as Chief Operating Officer, the Company and Mr. Cornely entered into a Second Amendment to Employment
Agreement on December 20, 2007 (the “Second Amendment”), amending the previously executed Employment Agreement between the Company and Mr. Cornely to reflect Mr. Cornely’s appointment as Chief Operating Officer
effective as of December 31, 2007, and to further provide that, as of December 31, 2007, Mr. Cornely’s annual base salary will increase from $250,000 to $300,000 to reflect the increased duties and responsibilities associated
with his appointment to the position of Chief Operating Officer.
The Company has issued a press release as of December 20, 2007 regarding
the departure of Mr. Croft and the appointments of Messrs. Borror and Cornely as described above. A copy of this press release is attached hereto as Exhibit 99.2. The foregoing summary of the Second Amendment is qualified in its entirety by
reference to the full text of the Second Amendment, a copy of which is attached hereto as Exhibit 10.2 and is incorporated by reference herein.