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Item 5.02
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Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers
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The information set forth in Items 5.03
and 8.01 of this Current Report on Form 8-K is incorporated herein by reference.
Board of Directors
Change in Board Composition
On April 26, 2019, and in connection with
the Closing, the maximum number of directors comprising the Board was increased from nine to 13 (with the precise number of directors
to be determined from time to time by resolution of the Board), the actual number of directors comprising the Board was increased
from seven to 13, and six directors individuals designated by Beneficient were appointed as directors of the Company to fill the
resulting vacancies. Immediately thereafter, the seven individuals serving as directors immediately prior to the Closing resigned
from the Board. No director resigned because of any disagreement with the Company on any matter relating to the Company’s
operations, policies, or practices. Immediately following the acceptance of such resignations, the Company’s remaining six
directors appointed five additional individuals designated by Beneficient as directors of the Company to fill five of the seven
resulting vacancies, leaving two seats vacant after the Closing. As a result, the Company’s Board is now comprised solely
of individuals designated by Beneficient.
The identities of the 11 new directors of
the Company, and the class of director into which each has been assigned, are set forth in the following chart:
Director
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Class
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Expiration of Initial
Term of Director
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Brad K. Heppner
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Class I
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2019
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Sheldon I. Stein
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Class I
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2019
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Thomas O. Hicks
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Class I
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2019
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Richard W. Fisher
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Class I
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2019
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Michelle Caruso-Cabrera
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Class II
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2020
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Bruce W. Schnitzer
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Class II
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2020
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Roger T. Staubach
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Class II
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2020
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Bruce E. Zimmerman
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Class II
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2020
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Peter T. Cangany, Jr.
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Class III
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2021
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David H. de Weese
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Class III
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2021
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David H. Glaser
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Class III
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2021
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The biographies of the above-identified
directors were previously disclosed in the Information Statement on Schedule 14F-1 filed by the Company with the SEC and disseminated
to the holders of the Company’s common stock on April 16, 2019, which Information Statement is included as Exhibit 20.1 to
this Current Report on Form 8-K.
Brad K. Heppner will serve as Chairman of
the Board, and Peter T. Cangany, Jr. will serve as Chairman of the Audit Committee of the Board.
Resignation of Executive Officers
On April 26, 2019, and in connection with
the Closing, (i) Jon R. Sabes resigned as the Company’s Chief Executive Officer and from all officer positions he held with
the Company or any of its subsidiaries prior to the Closing, other than his position as Chief Executive Officer of the Company’s
technology focused wholly-owned subsidiaries, Life Epigenetics, Inc. (“Life Epigenetics”) and youSurance General Agency,
LLC (“youSurance”), and (ii) Steven F. Sabes resigned as the Company’s Executive Vice President of Originations
and Servicing and from all officer positions he held with the Company or any of its subsidiaries prior to the Closing, except as
Chief Operating Officer of Life Epigenetics. The resignations of Messrs. Jon and Steven Sabes included a full waiver and forfeit
of (i) any severance that may be payable by the Company or any of its subsidiaries in connection with such resignations or the
Transactions and (ii) all equity awards of the Company currently held by either of them.
Appointment of Executive Officers
On April 26, 2019, and in connection with
the Closing, Murray T. Holland, a trust advisor of the Seller Trusts, was appointed as interim Chief Executive Officer of the Company.
Mr. Holland, age 65, became an original investor and consultant for MHT Partners, a boutique investment banking firm based in Dallas,
Texas with a number of offices in the United States in 2001. From 2013 until recently, he was Managing Director of MHT Partners.
Mr. Holland resigned from this position in connection with the Transactions. Prior to MHT, he was CEO and principal shareholder
of Convergent Media Systems (Atlanta), a $100 million custom network outsourcing firm with approximately 300 employees, CEO and
principal shareholder of Convergent Group Corporation (Denver), a $200 million geographic information systems software and integration
firm with approximately 450 employees, and CEO and principal shareholder of BTI Americas (Chicago), a $2.7 billion business travel
agency with approximately 4,400 employees. EDS was his principal business partner in these ventures. Prior to that, Mr. Holland
was a partner at the law firm of Akin, Gump, Strauss, Hauer & Feld (Dallas) in corporate finance and securities, a Senior Vice
President of Credit Suisse First Boston (New York and Dallas) in Mergers and Acquisitions and a Managing Director of Kidder, Peabody
& Co. (New York) in Mergers and Acquisitions. He graduated from Washington and Lee University with a B.S. in 1975, University
of Virginia Graduate School of Business Administration with an M.B.A. in 1978, and Washington and Lee University School of Law
with a J.D. in 1980.
Director and Officer Indemnification Agreements
On April 26, 2019, the Company entered into
Indemnification Agreements (the “Indemnification Agreements”) with each of the current directors and executive officers
of the Company (collectively, the “Indemnitees”). The Indemnification Agreements clarify and supplement indemnification
provisions already contained in the Company's bylaws (the “Bylaws”) and generally provide that the Company shall indemnify
the Indemnitees to the fullest extent permitted by applicable law, subject to certain exceptions, against expenses, judgments,
fines and other amounts actually and reasonably incurred in connection with their service as a director or officer and also provide
for rights to advancement of expenses and contribution.
The description of the form of Indemnification
Agreement set forth in this Item 5.02 is not complete and is qualified in its entirety by reference to the full text of the form
of Indemnification Agreement which is filed as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated herein by reference.