KNSY » Topics » Note 19 - Subsequent Event

This excerpt taken from the KNSY 10-Q filed Nov 10, 2008.

Note 19 – Subsequent Event

On October 20, 2008, Wendy F. DiCicco, C.P.A, the Chief Financial Officer of the Company, submitted her resignation to pursue other opportunities. Ms. DiCicco’s resignation as Chief Financial Officer (as which she served as both the principal financial officer and principal accounting officer of the Company) will be effective on November 15, 2008.

On October 27, 2008, the Company’s Board of Directors designated Ryan D. Lake, C.P.A, who is the Company’s Director of Finance, to assume the additional roles of the Company’s principal financial officer and principal accounting officer, until the Board of Directors appoints a new Chief Financial Officer. During this interim period, Mr. Lake will report directly to the Company’s President and Chief Executive Officer, Joseph W. Kaufmann.

Ms. DiCicco’s resignation does not entitle her to receive any severance benefits under her employment agreement with the Company. However, the Company, in order to retain certain enhanced restrictive covenants, as well as to obtain a repayment provision for violation of any such covenants and a general release of claims, entered into a Separation and General Release Agreement (the Agreement) with Ms. DiCicco. Among other things, the Agreement provides for (1) a cash severance payment equal to $223,800, less applicable withholdings, to be paid over a period of 12 months; (2) a lump sum bonus payment equal to $51,200 to be paid no later than November 30, 2008; (3) accelerated vesting of options to purchase 16,000 shares of the Company’s common stock; and (4) exercisability of all the options, including the accelerated options, held by Ms. DicCicco (for a total of 53,000 shares of the Company’s Common Stock) for a period of 12 months following her termination. Pursuant to the Agreement, Ms. DiCicco will be subject to one-year non-competition and non-solicitation provisions, in addition to certain other restrictive covenants.

 

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Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes included in this report and our audited consolidated financial statements and the related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2008, as filed with the Securities and Exchange Commission.

This discussion and analysis below contains forward-looking statements relating to future events or our future financial performance. These statements are only predictions and actual events or results may differ materially. In evaluating such statements, you should carefully consider the various factors identified in this report which could cause actual results to differ materially from those expressed in, or implied by, any forward-looking statements, including those set forth under the heading “CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS” at the end of this Item 2 in this Quarterly Report on Form 10-Q.

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