Business Context and Reporting Period
Company: Optical Cable Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: January 28, 2006
Event Date: February 14, 2006 (Effective termination date)
Subject: Termination of a Material Definitive Agreement (Employment Agreement)
Key Financial Metrics
This filing does not report general company financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The financial data provided is specific to the severance package for the terminated executive:
- Annual Base Salary: $175,000
- Severance Salary Continuation: $175,000 (paid over one year from Feb 15, 2006, to Feb 18, 2007)
- Lump Sum Bonus Payment: $70,022 (average of annual bonuses over the prior three years)
- Total Immediate Cash Outlay: $70,022 (plus ongoing salary obligation)
Material Changes
The Company terminated the employment of Mr. Charles W. Carson, Senior Vice President of Marketing and Sales, effective February 14, 2006. The termination was without "Cause" and was conducted in connection with a planned restructuring of the Company's marketing and sales teams. Mr. Carson plans to retire, and the Company has no immediate plans to hire a replacement; his responsibilities have been transferred to other current employees.
Outlook, Risks, and Management Commentary
Management Commentary: The termination is part of a strategic restructuring of marketing and sales functions. The Company has executed a separation agreement with Mr. Carson, which includes a release of claims.
Contingencies: The severance payments are conditioned upon Mr. Carson's execution of a separation agreement releasing claims, which has been completed.
Risks: The filing does not disclose new material risks beyond the operational impact of the executive departure and the associated severance costs.
Investor Verification Checklist
- Verify the impact of the marketing and sales team restructuring on future revenue growth.
- Confirm the total cash impact of the $245,022 severance package ($175,000 salary continuation + $70,022 bonus) on the Company's liquidity for the fiscal year.
- Assess how the transfer of Mr. Carson's responsibilities to existing staff affects operational continuity.
- Review subsequent filings for any changes in the Company's sales strategy or leadership structure.