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EX-16.1 - LETTER - BPO Management Services, Inc. | bpo_8k-ex1601.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 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): December
31, 2009
BPO
Management Services, Inc.
|
(Exact
Name of Registrant as Specified in Its
Charter)
|
Pennsylvania
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(State
or Other Jurisdiction of
Incorporation)
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0-13591
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23-2214195
|
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
1290
N. Hancock, Suite 200, Anaheim, CA
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92807
|
|
(Address
of Principal Executive Offices)
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(Zip
Code)
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(714) 974-2670
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(Registrant’s
Telephone Number, Including Area
Code)
|
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))
|
BPO
Management Services, Inc. (the “Company”) was notified that,
effective January 1, 2010, certain partners of Moore Stephens Wurth Frazer and
Torbet, LLP (“MSWFT”) and Frost, PLLC (“Frost”) formed Frazer Frost, LLP
(“Frazer Frost”), a new partnership. Pursuant to the terms of a combination
agreement by and among MSWFT, Frazer Frost and Frost (the “Combination
Agreement”), each of MSWFT and Frost contributed all of their assets and certain
of their liabilities to Frazer Frost, resulting in Frazer Frost assuming MSWFT’s
engagement letter with the Company and becoming the Company’s new independent
accounting firm. As of the date of this Current Report, Frazer Frost
is registered with the Public Company Accounting and Oversight Board
(PCAOB).
During
the Company’s most two recent fiscal years ended December 31, 2008 and 2007 and
through January 1, 2010, the Company did not consult with Frazer Frost on (i)
the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that may be rendered on the
Company’s financial statements, and Frazer Frost did not provide either a
written report or oral advice to the Company that was an important factor
considered by the Company in reaching a decision as to any accounting, auditing,
or financial reporting issue; or (ii) the subject of any disagreement, as
defined in Item 304 (a)(1)(iv) of Regulation S-K and the related instructions,
or a reportable event within the meaning set forth in Item 304(a)(1)(v) of
Regulation S-K.
In
connection with the audits of the Company’s financial statements for the fiscal
year ended December 31, 2008 and 2007 and through the date of this Current
Report, there were: (i) no disagreements between the Company and MSWFT on any
matters of accounting principles or practices, financial statement disclosure,
or auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of MSWFT, would have caused MSWFT to make reference to the subject
matter of the disagreement in their reports on the Company’s financial
statements for such years, and (ii) no reportable events within the meaning set
forth in Item 304(a)(1)(v) of Regulation S-K.
The
Company has provided MSWFT a copy of the disclosures in this Form 8-K and has
requested that MSWFT furnish it with a letter addressed to the Securities and
Exchange Commission stating whether or not MSWFT agrees with the Company’s
statements in this Item 4.01(a). A copy of the letter dated January 7, 2010,
furnished by MSWFT in response to that request is filed as Exhibit 16.1 to this
Form 8-K.
ITEM
5.02: Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On
December 31, 2009, the Company and BPOMS, Inc., a wholly-owned subsidiary of the
Company (“Former BPOMS”), entered into an Employment Separation Agreement with
Ronald K. Herbert, the Company’s Chief Financial Officer. Under the terms of the
agreement, the Company, Former BPOMS and Mr. Herbert agreed that his existing
employment agreement would be terminated immediately and that his employment
with the Company and Former BPOMS would terminate effective as of the close of
business on January 15, 2010 (the “Termination Date”). In addition to payment of
his normal base salary and other amounts due under Company policies through the
Termination Date, under the terms of the agreement the Company has and will pay
Mr. Herbert additional amounts up to a total maximum of $65,000 in certain
circumstances, with such amounts being in full settlement of payments otherwise
due under his original employment agreement. Under the terms of the
Employment Separation Agreement and consistent with the terms of his existing
employment agreement all of Mr. Herbert’s unvested restricted stock awards will
become fully vested on the Termination Date, and the terms of Mr. Herbert’s
outstanding options to purchase Company common stock have been extended and
shall be exercisable for a period of thirty-six (36) months after the
Termination Date, subject to the terms of the applicable option
plan. From the date of execution of the Employment Separation
Agreement through the Termination Date, Mr. Herbert will continue to perform his
normal duties as Chief Financial Officer of the Company, and following the
Termination Date Mr. Herbert will cooperate with the Company regarding
transition of outstanding business issues to the extent reasonably requested by
the Company and agreed upon by the parties. The Employment Separation
Agreement also includes a mutual release of claims.
Effective
January 16, 2010, David Frear, the Company’s current Controller will become the
Company’s Chief Accounting Officer. Mr. Frear, age 51, has served as
the Company’s Controller since June 15, 2007. Mr. Frear served as
Controller for Realigent, Inc. (formerly HomeSeekers.com) from February 2002 to
October 2006. He began his career as a public accountant
with Arthur Andersen and Company in Los Angeles, California. Mr.
Frear received his bachelor’s of business administration from the University of
Southern California and is a licensed Certified Public Accountant in the state
of California.
ITEM
9.01: Financial Statements and Exhibits.
(d)
Exhibit
No.
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Description
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16.1
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Letter
dated January 7, 2010 to the Securities and Exchange Commission from Moore
Stephens Wurth Frazer and Torbet,
LLP
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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.
Date:
January 7, 2010
BPO
MANAGEMENT SERVICES, INC.
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By:
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/s/
James Cortens
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James
Cortens
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President
and Secretary
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