|
Item 5.02
|
Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
(b)
On October 4, 2016,
Kenneth M. Young resigned from the Board of Directors (the “Board”) of B. Riley Financial, Inc. (the “Company”)
and all committees thereof. His resignation was not due to any disagreement with the Company or any of its affiliates on any matter
relating to the Company’s operations, policies or practices, or otherwise.
(d)
Also on October 4,
2016, the Board, acting upon the recommendation of the Company’s Corporate Governance Committee, appointed Todd D. Sims to
serve as a member of the Board to fill the newly created vacancy on the Board.
Since March
2010, Todd D. Sims has served as Senior Vice President of Digital Strategy of Anschutz Entertainment Group, Inc. (AEG),
one of the leading sports and entertainment presenters in the world, overseeing business and corporate development for
AEG’s ticketing business, AXS. Prior to AEG, Mr. Sims spent more than 15 years building Internet businesses. In
the mid 1990's, he served as ESPN's executive producer of NFL.com, NBA.com and NASCAR Online. He also served on
the management team of eCompanies, LLC, an incubator which has incubated a number of companies including Jamdat Mobile
Inc. (acquired by Electronic Arts Inc.), Business.com Inc. (acquired by R.H. Donnelley Corp.) and Boingo Wireless, Inc.
(initial public offering). Mr. Sims serves as an advisor to the L.A. Dodgers Tech Accelerator and is a guest lecturer
at the University of Southern California’s Marshall School of Business. Mr. Sims’ digital experience will
provide an important resource to our Board.
Mr. Sims will serve
until the Company’s 2017 annual meeting of stockholders and until his successor is duly elected. There is no arrangement
between Mr. Sims and any other person pursuant to which he was selected as director. The Board has determined that Mr. Sims is
“independent” as that term is defined in Rule 5605 of the Nasdaq Marketplace Rules (“
Rule 5605
”).
The Board has also reconstituted its standing
committees as follows:
Audit Committee
.
Todd D. Sims, Richard L. Todaro and Mikel Williams were appointed as members of the Company’s Audit Committee, with Mr. Todaro
serving as Chairman, until their successors shall be duly appointed, or until they resign, are removed, or are otherwise disqualified
from serving as members thereof. In addition, after due inquiry and investigation, the Board concluded that each member of the
Audit Committee is independent as defined by Rule 10A-3 of the Securities Exchange Act of 1934, as amended, and Rule 5605, and
that all members of the Audit Committee are able to read and understand financial statements, including the Company’s balance
sheet, income statement, and cash flow statement. The Board also determined that both Mr. Todaro and Mr. Williams, through their
respective education and experience, satisfy the definition of an “audit committee financial expert,” as defined by
Securities and Exchange Commission rules and regulations.
Compensation Committee
.
Robert D’Agostino, Todd D. Sims and Mikel Williams were appointed as members of the Company’s Compensation Committee,
with Mr. D’Agostino serving as Chairman, until their successors shall be duly appointed, or until they resign, are removed,
or are otherwise disqualified from serving as members thereof. After due inquiry and investigation, the Board determined that each
member of the Compensation Committee is independent as defined by Rule 5605.
Corporate Governance
Committee
. Robert D’Agostino, Todd D. Sims, and Richard L. Todaro were appointed as members of the Company’s Corporate
Governance Committee, with Mr. Sims serving as Chairman, until their successors shall be duly appointed, or until they resign,
are removed, or are otherwise disqualified from serving as members thereof. After due inquiry and investigation, the Board determined
that each member of the Corporate Governance Committee is independent as defined by Rule 5605.
As a non-employee director,
Mr. Sims will receive the same compensation paid to other non-employee directors of the Company in accordance with the policies
and procedures previously approved by the Board for non-employee directors. In addition, it is anticipated that Mr. Sims will execute
the Company’s form of indemnification agreement.