Effective with his retirement from his employment as Executive Vice President and Chief Operating Officer of the Company as described at Item 5.02(b) below, Mr. Charles G. Robertson has also resigned from the Company's Board of Directors.
The service of Mr. Robertson as Executive Vice President and Chief Operating Officer of the Company ended on May 16, 2006. The Company and Mr. Robertson had previously entered into a Change in Control Agreement (the “Robertson Agreement”). Upon his retirement from his position) pursuant to which Mr. Robertson was entitled to severance benefits in the event of a "change in control" (as defined in the Robertson Agreement) of the Company during the term of his employment. The terms of that agreement expired upon of Mr. Robertson’s retirement from his employment with the Company. A form of such agreement was filed with the SEC as exhibit 10.1 to the Company’s current report on Form 8-K, which was filed with the SEC on June 28, 2000, and is incorporated herein by reference.
The Company’s Board of Directors has appointed Mr. Yetter to the position of Senior Vice President and Chief Financial Officer, effective May 17, 2006, on which date Mr. Yetter was also elected to the Company’s Board of Directors. Mr. Yetter will serve as a Class II director of the Company, with a term that will expire at the Company’s 2006 Annual Meeting of Shareholders.
Mr. Yetter, 53, has served as Interim Chief Financial Officer since February 15, 2006, when the Company’s prior Chief Financial Officer resigned. He has been with the Company since 1986, and has served as Treasurer and Vice President of Finance for the Company and FFE Transportation Services, Inc. ("FFE"), respectively. Mr. Yetter is a graduate of the University of Iowa and is a Certified Public Accountant. A summary of Mr. Yetter’s compensation arrangements reflecting his responsibilities as Senior Vice President and Chief Financial Officer is filed as Exhibit 99.1 hereto.
Under the terms of the Yetter Agreement and substantially identical agreements in place with the Company’s other two executive officers, if an executive officer (i) is terminated by the Company without cause during the six month period following a change in control ("Transition Period"), (ii) resigns for "good reason" (as defined in the agreements) during the Transition Period, or (iii) resigns for any reason during the ten day period following a change in control or during the thirty day period following the Transition Period, then the Company is required to provide the executive officer with certain payments and benefits. Such payments and benefits include (a) payment of accrued and unpaid base salary, car allowance, plus accrued and unpaid bonus, if any, for the prior fiscal year plus a pro-rated bonus (as defined in the agreements) for the year during which such executive officer's employment is terminated; (b) payment of a lump sum amount equal to the sum of 2.9 times the executive officer's annual pay (as defined in the agreements); (c) payment of the unvested account balance under the Company's 401(k) Savings Plan and 401(k) Wrap Plan; (d) continued participation, at the same premium rate charged when actively employed, in the Company's employee welfare plans, until the expiration of two years following the change in control or cash equivalent; (e) vesting of all stock options on change of control; and (f) "gross-up" payments, if applicable, in the amount necessary to satisfy any excise tax imposed on the executive officer by the Internal Revenue Code of 1986.
The Company’s Board of Directors has also appointed Mr. Stoney R. (“Russell”) Stubbs, 42, to the position of Senior Vice President and Chief Operating Officer, effective May 17, 2006,. He replaces the retiring Charles G. Robertson, 63, who was also an Executive Vice President and a Director of the Company. Previously, Mr. Stubbs served as Senior Vice President of the Company, and since 1999, as President of Lisa Motor Lines, Inc., a subsidiary based in Fort Worth, Texas. He joined the Company's primary operating subsidiary, FFE, in 1986 as a management trainee upon his graduation from Texas A&M University. Russell Stubbs is also a Director of the Company and is the son of Stoney M. Stubbs, Jr. For a description of transactions between Mr. Stubbs and certain related parties and the Company, reference is made to the Company's Current Report on Form 8-K dated November 16, 2005, which is incorporated herein by reference. A summary of Mr. Russell Stubbs's compensation arrangements appears as Exhibit 99.2 to this Form 8-K.
