| Unfortunately, no. Dees, Scott, Culpepper and Wachter owe $2.24 million each, or $8.96 total. However, the settlement provides “Executives are entitled to a 2:1 credit such that total actual repayment may be $1.12 million each." I read that to mean that the 4 executives have to pay back cash of $1.12 million each, or $4.48 million total, plus they will have their future compensation reduced by another $1.12 million each or $4.48 million total. The settlement does not indicate the timing of the cash payback or salary reductions. The executive obligations are secured by a lien on 1 million shares owned by each of the 4 executives. The settlement also provides the 4 executives must "reimburse the Company for 25% of the actual costs, net of recovery from any other source, incurred by the Company as a result of the Shareholder Derivative Lawsuit." The company incurred legal and other costs defending the lawsuit, plus the settlement requires reimbursing plaintiffs legal fees and costs, and the 4 executives will have to pay the company 25% of those total costs…..those costs could easily be in the high 6 to low 7 figures. Further, directors Fuchs, Smith and McMasters have to repay $25,000 each, or $75,000 total. So actual known cash payments back to the company total $4,555,000 ($4.48 million + $75,000). Unknown additional cash would be 25% of the lawsuit costs already paid by the company that the 4 executives must now reimburse. Future company benefits would be the $4.48 million reduction in future executive compensation, fewer executive stock options, and new executive employment agreements with strict controls regarding future compensation and bonuses. |
