Acacia Research Corp. (ACTG), the patent licensing company run by interim CEO Marvin Key, said its board on Aug. 1 disbanded the Office of the Chairman set up to assist Key, and named G. Louis Graziadio as executive chairman.
Newport Beach, California-Based Acacia said Graziadio will have authority and duties commensurate with his position and will continue, among other duties, to provide leadership to the board, identify strategic opportunities and oversee the senior management team.
In June, the Patent Investor reported that Graziadio was behind an effort on the board to exit Acacia’s struggling patent licensing business and use its $156.8 million in cash to acquire one or moe pre-IPO business. He was said by former Acacia employees to be instrumental in forcing out former CEO Matt Vella and former Executive Chairman Robert "Chip" Harris and naming Key as interim CEO.
In connection with Graziadio’s appointment as executive chairman and the consulting arrangement described below, the board concluded that he will no longer be deemed independent under the Listing Rules of The Nasdaq Stock Market, LLC.
To comply with Nasdaq requirements for having an independent board, the board appointed Ted Walsh, an independent director, to serve as a member of the compensation committee, replacing Graziadio.
Acacia said Graziadio will not receive a salary for his service as executive chairman (other than compensation to which he is entitled as a director of the company).
Additionally, however, the board approved an arrangement pursuant to which the company will make a one-time payment of $250,000 to Second Southern Corp., a company wholly owned by Graziadio and which he serves as president, as reimbursement for costs and expenses incurred by Second Southern in providing resources (including personnel, facilities and supplies) used by Graziadio in connection with his previous duties as a member of the Office of the Chairman from December 2015 through July 2016.
Under this arrangement going forward, Second Southern will continue to provide such resources in connection with Graziadio’s performance of his duties as executive chairman.
Any personnel utilized by Second Southern will be subject to the same confidentiality, insider trading and other restrictions as are applicable to similarly situated employees of the company.
For these continuing services, Acacia has agreed to pay Second Southern $250,000 per year (payable on a quarterly basis) to reimburse Second Southern for its expected costs and expenses incurred, which amount will be subject to adjustment in the event that Second Southern’s actual costs and expenses incurred in providing such resources are materially different from the current estimate. The arrangement may be terminated by the parties at any time upon prior written notice.
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