Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The Board Directors of Reliability Incorporated (the "Company") determined to
reduce the number of employee directors on the Board and Mark Speck, the Chief
Financial Officer of the Company, volunteered to resign as a director effective
October 7, 2020.
On October 7, 2020, the Board of Directors of the Company appointed John Chanaud
to fill the vacancy created by the resignation of Mark Speck. The initial term
as director for Mr. Chanaud will expire upon the election of his replacement at
a duly called meeting of shareholders. Mr. Chanaud is independent under the
Company's criteria for determining director independence. It is expected that
Mr. Chanaud will be appointed as a member of each of the Company's Compensation
Committee and Audit Committee.
John Chanaud is Vice President and Chief Financial Officer of The Bernstein
Companies where his primary responsibility is financial oversight and planning
for the Company along with budgeting, reporting and financial controls of
Bernstein's hotel and commercial office group. This includes financial and tax
planning, treasury management, and financial statement preparation as well as
working closely with outside auditors and accounting firms. Additionally, John
oversees the asset management and servicing of the Company's structured finance
group. He is a 1986 graduate of Towson University with a BS degree in
Accounting. Prior to joining Bernstein in 1997, Mr. Chanaud was a Senior Manager
for a regional public accounting and consulting firm. Mr. Chanaud is a member of
the American Institute of Certified Public Accountants and the Maryland
Association of CPAs.
There are no arrangements or understandings between Mr. Chanaud and any other
person pursuant to which he was appointed to serve as a director, nor are there
related party transactions requiring disclosure pursuant to Item 404(a) of
Regulation S-K under the Securities Exchange Act of 1934, as amended.
Mr. Chanaud will receive the same compensation for service on the Board as that
of the other non-employee directors of the Company. Upon his appointment to the
Board, the Company intends to enter into its standard form of indemnification
agreement for directors with Mr. Chanaud, which indemnification agreement, among
other matters, requires the Company to (1) indemnify him against certain
liabilities that may arise by reason of his status or service as a director and
(2) to advance expenses incurred as a result of a proceeding as to which he may
be indemnified. The indemnification agreement is intended to provide
indemnification rights to the fullest extent permitted under applicable law,
including the applicable indemnification rights statutes in the State of Texas,
and is in addition to any rights a director may have under the Company's
organizational documents. The Company's form of indemnification agreement is
filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 20, 2019 and incorporated herein
by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws.
The Board of Directors of the corporation, at a meeting duly held, determined
that it was in the best interest of the corporation and its shareholders to
provide for qualifications for directors of the corporation. Acting by unanimous
written consent, the Board resolved to amend Section 4.1 of the corporation's
Bylaws effective upon the filing of the amendment with this Current Report on
Form 8-K. Section 4.1 is amended as provided in Exhibit 3.1 hereto to designate
that the Board shall consist of not less than three nor more than seven
directors, with such number to be set by the Board from time to time, and to
include notice and qualification requirements for any individual nominated to
serve as a director of the corporation. A copy of the amendment is attached to
this Form 8-K as Exhibit 3.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) The following exhibit is furnished with this report:
Exhibit No. Description
3.1 Second Amendment to Amended and Restated Bylaws of Reliability
Incorporated
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