| 1. | Jeffrey J. McCall, 39, was appointed Executive Vice President and Chief Financial Officer of the Company, effective June 1, 2011. Mr. McCall has served as Chief Financial Officer-Americas for REGUS plc (FTSE:RGU), the world’s largest provider of serviced offices, since 2004. From 2003 to 2004, Mr. McCall served as Chief Financial Officer and Executive Vice President of HQ Global Workplaces, Inc. until its acquisition by REGUS plc. Prior to that, Mr. McCall was a principal with Casas, Benjamin & White, LLC, a boutique financial advisory services firm, since 1998. Mr. McCall received his MBA from the University of Chicago in 2000. Mr. McCall’s employment letter with the Company provides that he will receive (i) a base salary of $550,000; (ii) a signing bonus of $600,000; (iii) 1.3 million non-qualified stock options with an exercise price equal to the Company’s closing price on the date of grant, June 1, 2011, vested 25% upon issuance, with an additional 25% vesting on each of the first three anniversaries of the grant date; (iv) a bonus payable 50% in cash and 50% in common stock for the year ending December 31, 2011 equal to 0.75% of the Adjusted EBITDA (as defined) of the Company, pro-rated for that portion of the year in which Mr. McCall is actively employed by the Company; (v) the reimbursement of relocation expenses associated with Mr. McCall relocating his family from Chicago to Southern California, including a housing allowance of $15,000 per month payable for up to eight months; and (vi) if his employment is terminated by the Company without cause or by Mr. McCall for good reason prior to December 31, 2013, severance consisting of (x) a $1.1 million cash payment, (ii) the vesting of any tranche of his stock option grant that would have otherwise vested within the twelve month period following the date of termination of employment, and (iii) twelve months of COBRA premiums. In addition, if Mr. McCall's employment is terminated in connection with the acquisition of the Company, he will be entitled to a pro-rated bonus for the portion of the year in which the Company was acquired that he was actively employed. A copy of Mr. McCall’s employment letter is attached hereto as Exhibit 10.1. |
| 2. | John M. Stephens resigned from his position as Senior Vice President and Chief Financial Officer of the Company, effective June 1, 2011. Attached hereto as Exhibit 10.2 is the Retirement and Transition Services Agreement the Company entered into with Mr. Stephens. The Agreement provides Mr. Stephens with (i) a lump sum payment of $430,000; (ii) the vesting of Mr. Stephens remaining unvested stock options that Mr. Stephens may exercise for a period of 90 days following June 30, 2011; (iii) up to twelve months of COBRA premiums ; and (iv) eligibility to receive a discretionary bonus of up to 0.26% of the Company’s Adjusted EBITDA (as defined) for the six month period ended June 30, 2011 (payable when the Company’s other executive officers are paid incentive compensation for 2011). The agreement also contains, among other things, customary non-disclosure, non-solicitation, and general release provisions. A copy of Mr. Stephen’s agreement is attached hereto as Exhibit 10.2. |
