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| Item 3.01 |
Material Modifications to Rights of Security Holders. |
Pursuant to the Liquidating Trust Agreement, effective as of the Transfer Date:
•Each record owner of shares of common stock, $0.32 par value per share, of the Company (the “Shares”) as of the Transfer Date will receive one equal, undivided portion into which the beneficial interests in the Trust Assets are divided, as evidenced on the books and records of the Trust (each, a “Unit”) for each Share then held of record;
•The Units will not be certificated;
•The Units will generally not be transferable or assignable, except by will, intestate succession or operation of law;
•Except as may be otherwise required by law, the interests of the holders of Units (the “Unitholders”) will not be subject to attachment, execution, sequestration or any order of a court, nor will such interests be subject to the contracts, debts, obligations, engagements or liabilities of any Unitholders, but the interest of a Unitholder will be paid by the Trustees to the Unitholder free and clear of all assignments, attachments, anticipations, levies, executions, decrees and sequestrations and shall become the property of the Unitholder only when actually distributed by the Trustees to, and received by such Unitholder;
•Any Trustee may be removed, with or without cause, by Unitholders holding a majority of the Units (a “Majority-in-Interest”) or a majority of remaining Trustees;
•The Trustees may not remove a Trustee selected by a Majority-in-Interest, nor may the Trustees re-appoint any Trustee removed by a Majority-in-Interest;
•In case of death, resignation or removal of any Trustee, a majority of remaining Trustees or, if there is none, a Majority-in-Interest, may appoint a successor or successors;
•The Trust will submit to the beneficiaries such reports as the Trustees deem advisable;
•Any alteration or amendment of the Liquidating Trust Agreement will not become effective until consented to by the Trustees in writing and approved by a Majority-in-Interest;
•The Trustees may at any time call a meeting of the Unitholders to be held at such time and at such place as the Trustees shall determine, unlike the Company, which must hold a stockholders’ meeting every year; and
•The Trustees will call a meeting of the Unitholders upon request to the Trustees by a Majority-in-Interest to call a meeting of all of the Unitholders.
Pursuant to the Liquidating Trust Agreement, on and after the Transfer Date, all outstanding Shares shall automatically be deemed cancelled.
The foregoing description of the Liquidating Trust Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Liquidating Trust Agreement, a copy of which is filed as Exhibit 10.1 and incorporated herein by reference.
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| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On May 31, 2022, pursuant to the Liquidating Trust Agreement, Gerald Bodzy, John Garilli and Joe C. McKinney were appointed Trustees of the Trust.
Pursuant to the Liquidating Trust Agreement, the Chairman selected by a majority of the Trustees will receive $25,000 per fiscal quarter and the remaining Trustees will receive $20,000 per fiscal quarter for their services. In addition, the Trustees will be reimbursed by the Trust for their reasonable expenses and disbursements incidental to Trustee duties.
In connection with the appointment of Mr. Garilli as the Company’s Interim President and Chief Executive Officer, the Company and Mr. Garilli’s employer, Winthrop Capital Advisors LLC (“WCA”), entered into an agreement, pursuant to which the Company paid WCA a one-time fee of $50,000 and will pay a monthly fee of $20,000 for so long as Mr. Garilli serves the Company in said positions. The
Company also entered into an Indemnity Agreement with Mr. Garilli and WCA. The Company and WCA had previously entered into a consulting agreement, pursuant to which WCA provided consulting services related to the Company’s adoption of the liquidation basis of accounting in the filing of the Company’s Quarterly Report on Form 10-Q for the quarter ended December 16, 2020. The Company and WCA also executed separate consulting agreements to provide similar services for the filing of the Company’s subsequent Quarterly Reports on Form 10-Q and for the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended August 25, 2021. Following the Transfer Date, WCA will continue to provide services to the Trust as it did for the Company, on terms and for remuneration to be agreed upon.
There are no arrangements or understandings between any of Messrs. Bodzy, Garilli and McKinney and any other persons pursuant to which Messrs. Bodzy, Garilli or McKinney was appointed as a Trustee. In addition, there are no transactions or proposed transactions, to which the Trust is a party, or intended to be a party, in which any of the Trustees has, or will have, a material interest subject to disclosure under Item 404(a) of Regulation S-K except as described herein.
