interesting 8 k filed- who pays for your golf
Item 8.01 Other Information.
Telos Corporation (hereinafter referred to as the “Company”) announced today that Mr. David Borland, a member of the Board of Directors (hereinafter referred to as the “Board”) and Chairman of the Compensation Committee and member of the Audit and Transaction Committees, has resigned as Chairman of the Compensation Committee and has stepped down from the Audit Committee. He will remain a member of the Board, Compensation and Transaction Committees.
In May 2004, shortly after Mr. Borland was recruited to join the Board, the Company designated Mr. Borland as its member to use its corporate golf membership. On two prior occasions this corporate golf membership was similarly designated to prior executives and each prior designee agreed that upon their separation from the Company they would take all such steps that may be necessary to transfer the corporate golf membership to the Company’s successor designee, and in fact did so. Mr. Borland also agreed that when he ceased to be a director of the Company he would transfer the corporate golf membership to whomever the Company chose to designate. Mr. Borland further agreed to reimburse or offset against director fees all costs associated with such corporate golf membership, including the $10,000 transfer fee owed by the Company in designating him as the transferee, the annual dues charged by the golf club in connection with the membership (usually between $9,000 and $12,000 per annum), and any other charges unrelated to the Company’s business. In addition, the Company agreed that any charges at the golf club related to the Company’s business would be paid or reimbursed by the Company to Mr. Borland. The Company has reimbursed to Mr. Borland club charges of approximately $900 related to the Company’s business. To date, the total fees, dues and charges for which Mr. Borland has reimbursed or offset against director fees amount to approximately $38,600, with an additional amount of approximately $3,200 yet to be offset from his director fees.
Mr. Borland, because he agreed to pay all costs associated with the corporate golf membership, did not believe that such arrangement was required to be disclosed. Based upon such assumption, Mr. Borland did not disclose the corporate golf membership to other outside directors until he was informed in late July 2006 that such a disclosure might be appropriate. The corporate golf membership was not disclosed by the Company in its proxy statements for annual meetings of stockholders held on November 9, 2004 and November 9, 2005, because it similarly did not consider it a matter subject to disclosure by the Company or Mr. Borland.
In an abundance of caution and to avoid any appearance of a lack of independence caused by his use of the corporate golf membership and the non-disclosure thereof, Mr. Borland has resigned from the Audit Committee of the Board and has stepped down from the chairmanship of the Compensation Committee. |
