UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of
1934
Date of Report
(Date of earliest event reported) March 29, 2005
FRANKLIN COVEY
CO.
(Exact name of
registrant as specified in its charter)
Utah |
1-11107 |
87-0401551 |
| |
|
|
(State or
other jurisdiction of
incorporation) |
(Commission
File
Number) |
(IRS
Employer
Identification
No.) |
2200 West Parkway
Boulevard
Salt Lake City,
Utah 84119-2099
(Address of
principal executive offices including zip code)
(Registrant's
telephone number, including area code) (801) 817-1776
(Former name or
former address, if changed since last report) Not Applicable
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|
o |
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425) |
|
o |
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
|
o |
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
|
o |
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item
1.01 Entry into
a Material Definitive Agreement.
Val J.
Christensen, Executive Vice President, General Counsel and Secretary,
terminated service as an executive officer on March 29, 2005. Under the terms of
the Separation Agreement, the Company will pay to Mr. Christensen the lump sum
severance amount of $900,000, less applicable withholdings. Such amount
represents the Company’s severance obligation to Mr. Christensen in the amount
of $450,000, representing one year’s target cash compensation, and another
$450,000, representing payment for a one year sabbatical leave to which Mr.
Christensen was entitled, but did not take, as an executive officer who served
the Company for approximately 17 years. In addition, he
will receive the cash performance bonus he would have been entitled to for our
current fiscal year as if he had remained employed in his prior position and his
performance objectives for the year were met, the amount of which we estimate at
$150,000. In addition, his options and restricted stock vested, we waived
the requirement that options be exercised in 90 days and we will pay him $57,000
to offset income taxes resulting from the acceleration of restricted stock
awards.
Subsequent to
entering into the Separation Agreement, on March 29, 2005, the Company and Mr.
Christensen entered into a Legal Services Agreement effective as of such date
(the “Legal Services Agreement”). Under the terms of the Legal Services
Agreement, the Company will retain Mr. Christensen as independent legal counsel
to provide services to the Company for 1,000 hours per year. This will allow us
to continue to benefit from Mr. Christensen’s extensive institutional knowledge
and experience gained from serving at the Company for approximately 17 years and
representing the
Company as outside counsel for several years
prior to joining the Company, while allowing Mr. Christensen one-half of his
time to pursue other interests apart from providing legal services. We will
pay Mr. Christensen an annual retainer in the amount of $225,000, effectively
allowing us to obtain the services of Mr. Christensen at the rate of $225
per hour for 1,000 hours annually, a rate which we believe to be below
market for legal counsel with similar capacity and experience. In addition, the
Company will pay Mr. Christensen $325 for every hour of legal services, if any,
provided in excess of the initial 1,000 hours of legal services provided in any
given year, payable following any month in which Mr. Christensen provides more
than 83.3 hours of legal services. Mr. Christensen will be an
independent contractor and not entitled to company benefits for performing these
services.
The foregoing
summaries of the separation and legal services agreements are subject to, and
qualified in its entirety by, the full text of those documents filed
herewith. See Item 9.01 of this Report.
Item
1.02 Termination
of a Material Definitive Agreement.
The disclosure
contained in Item 1.01 above is hereby incorporated into this Item 1.02 by
reference.
Item
5.02 Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers.
On March 29, 2005,
Mr. Christensen terminated employment as our Executive Vice President,
General Counsel and Secretary. See Item 1.01 of this
Report.
Item
9.01 Financial
Statements and Exhibits.
(c) Exhibits
|
99.1 |
Separation
Agreement between the Company and Val J. Christensen, dated March 29,
2005. |
|
99.2 |
Legal
Services Agreement between the Company and Val J. Christensen, dated March
29, 2005. |
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
| |
|
FRANKLIN
COVEY CO. |
|
| |
|
|
|
|
Date: April
4, 2005 |
|
|
|
| |
By: |
/s/
ROBERT A. WHITMAN |
|
| |
Name: |
Robert
A. Whitman |
|
| |
Title: |
Chief Executive Officer |
|
EXHIBIT
INDEX
|
99.1 |
Separation
Agreement between the Company and Val J. Christensen, dated as of March
29, 2005. |
|
99.2 |
Legal
Services Agreement between the Company and Val J. Christensen, dated March
29, 2005. |