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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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Appointment of Chief Executive Officer and President and Director
On
September 13, 2007, Brooke Corporation, a Kansas corporation (the “Company”) (NASDAQ:BXXX), announced the appointment of Keith E. Bouchey as director, president and CEO of Brooke Corporation effective October 1, 2007.
Mr. Bouchey most recently served as director, senior executive vice president and chief financial officer of First Community Bancshares, Inc. in Overland Park,
Kansas, and its wholly-owned subsidiary bank, First Community Bank of Lee’s Summit, Missouri. He is also a director, officer and shareholder of Holyrood Bancshares, Inc. in Holyrood, Kansas, and director and shareholder of UBT Bancshares Inc.
in Marysville, Kansas. Bouchey served five years as the executive financial officer of Gold Banc Corporation Inc. of Leawood, Kansas. Additionally, Mr. Bouchey served for 17 years as the managing director of the regulatory services practice at
GRA, Thompson, White and Co., a regional bank accounting and consulting firm, and was with the Federal Reserve Bank of Kansas City for five years. Mr. Bouchey is a native of Kansas, and received his bachelor’s degree in corporate finance
from Kansas State University.
In connection with Mr. Bouchey’s appointment as President and Chief Executive Officer, the Company and
Mr. Bouchey entered into an employment agreement. Pursuant to the employment agreement, Mr. Bouchey’s employment will commence on October 1, 2007, and the term of the employment agreement is three years (the “Initial
Term”). Unless sooner terminated pursuant to the terms thereof, the employment agreement will automatically renew for additional one-year terms (“Renewal Terms”). Mr. Bouchey will receive an annual salary of $300,000.00 per year.
Mr. Bouchey also received a sign-on bonus of $40,000 upon the next regularly-scheduled payroll processing date immediately following October 1, 2007.
If the Company terminates Mr. Bouchey’s employment under the employment agreement for any reason other than just cause, as defined in the agreement, Mr. Bouchey will be entitled to severance payments as follows: if such
termination occurs during the Initial Term, Mr. Bouchey will continue to receive, as severance pay, payments of his annual salary, as in effect on the date of his termination, until the gross aggregate amount of such payments equals $600,000;
and if such termination occurs during a Renewal Term, Mr. Bouchey will continue to receive, as severance pay, payments of his annual salary, as in effect on the date of his termination, until the gross aggregate amount of such payments equals
$400,000, and if such termination occurs during the Initial Term or a Renewal Term, Mr. Bouchey may receive, as severance pay, any amounts other than his annual salary, including, but not limited to, any earned prorated performance awards,
solely within the discretion of the Company.
The employment agreement also contains customary non-disclosure/non-solicitation and non-competition
provisions.
In connection with the employment agreement, Mr. Bouchey was granted 50,000 restricted shares of the Company’s common stock pursuant
to a restricted share agreement under the
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Company’s 2006 Equity Incentive Plan. The restricted shares will vest in one-third increments as follows: 16,666 shares on October 1, 2008; 16,667
shares on October 1, 2009 and 16,667 shares on October 1, 2010; provided, however, the restricted shares will fully vest in the event of (i) the Company’s change in control, as defined in the restricted shares agreement, or
(ii) a termination by the Company of Mr. Bouchey’s employment other than for just cause, as defined in the restricted shares agreement.
The
board of directors of the Company will appoint Mr. Bouchey as a director to fill a vacancy on the Company’s board. The appointment will be effective on October 1, 2007.
The foregoing summary of the employment agreement and the restricted shares agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of such agreements, which are
filed as Exhibits 10.1 and Exhibits 10.2, respectively, hereto and incorporated herein by reference.
Departure of Named Executive Officer
In connection with the appointment of Mr. Bouchey as president and chief executive officer of the Company, Ms. Anita F. Larson announced
her resignation as president and chief operating officer of the Company, and Mr. Robert D. Orr announced his resignation as chief executive officer. Both resignations are effective on October 1, 2007. Ms. Larson announced that
she will now focus full time on her responsibilities as an executive officer of Brooke Credit Corporation (OTCBB:BRCR), Brooke Corporation’s majority-owned finance company subsidiary. Mr. Orr will remain as chairman of the board of
directors of the Company.