Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
Director Appointment
On September 8, 2009, our board of directors appointed Mr. Ed Ekstrom to serve as a member of our board of directors and he shall serve in that capacity until the next annual meeting of the shareholders or until removed by other action as allowed by the corporate bylaws.
Prior Arrangements and Understandings
There were no arrangements or understandings between Mr. Ekstrom and any other persons pursuant to which such individual was selected as a director of our company.
Transactions with Related Persons
Mr. Ekstrom has not had any direct or indirect material interest in any transaction during the last two years, or in any proposed transaction, to which our company was or is to be a party.
Grant of Options
We granted to Mr. Ekstrom an option to purchase 220,000 shares of common stock at an exercise price of $5.05 upon his appointment to the board of directors on September 8, 2009. The option vests according to the following schedule:
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73,333 on September 8, 2010;
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73,333 on September 8, 2011; and
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73,334 on September 8, 2012.
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The option is exercisable when vested so long as Mr. Ekstrom remains a member of our board of directors.
Creation of Committees and Adoption of Charters
On September 8, 2009, the Board of Directors created and adopted charters for the Audit Committee, the Compensation and Stock Option Committee, and the Corporate Governance and Nominating Committee of our board of directors. The charters are attached as Exhibits 99.1 – 99.3 and will be posted on the company’s website.
Committees Appointments
Mr. Larry Harmer has been named to the Audit Committee, Compensation and Stock Option Committee, and the Corporate Governance and Nominating Committee of our company’s board of directors. Mr. Harmer has been appointed as the chairperson of the Audit Committee by our board of directors.
Our board of directors has judged and affirmatively determined that Mr. Harmer: (1) meets the definition of an “audit committee financial expert,” as such term is defined in Item 407(d)(5)(ii) of Regulation S-K and the rules and regulations promulgated by the Securities and Exchange Commission thereunder; (2) has past employment
experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in his financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities; (3) meets the criteria for independence set forth in Rule 10A-3(b)(1) of the Securities Exchange Act of 1934 and Rule 5605(a)(2) of the Nasdaq Rules; (4) has not participated in the
preparation of the financial statements of our company or any current subsidiary of our company at any time during the past three years; and (5) is able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement.
Apart from the appointment of Mr. Harmer to the Audit Committee, Compensation and Stock Option Committee, the Corporate Governance and Nominating Committee, and as the chairperson of the Audit Committee, there are no other definitive arrangements that have been made regarding committees of our company to which Mr. Harmer is expected to be
named.
In addition to the foregoing, Mr. Mr. Ekstrom and Mr. Shu Ueyama have been appointed to the Audit Committee, Compensation and Stock Option Committee, and the Corporate Governance and Nominating Committee of the board of directors.
Both Mr. Ekstrom and Mr. Ueyama (1) meet the criteria for independence set forth in Rule 10A-3(b)(1) of the Securities Exchange Act of 1934 and Rule 5605(a)(2) of the Nasdaq Rules; (2) have not participated in the preparation of the financial statements of our company or any current subsidiary of our company at any time during the past three
years; and (3) are able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement.