The Company’s Common Stock is listed on the New York Stock Exchange (the “Exchange”). On May 29, 2012, as a consequence of his making a charitable gift of a portion of the shares in the Company he owned, Nicholas G. Karabots’ voting control of the Company’s outstanding Common Stock was reduced from more than 50% to 45.9% and, accordingly, the Company ceased to be a “controlled company” within the meaning of the Corporate Governance Standards (the “Governance Standards”) of the Exchange. On May 29, 2012, the Company notified the Exchange that the Company was no longer a controlled company.
The Governance Standards generally require a company whose shares are listed on the Exchange to have a nominating/corporate governance committee and a compensation committee, each comprised of independent directors, and each having a charter meeting certain requirements, and for such charters to be posted on the company’s website. As a controlled company, the Company, as permitted by the Governance Standards, chose not to have a nominating/corporate governance committee, and chose not to have a compensation committee or a compensation committee charter meeting the requirements of the Governance Standards. As a consequence of its ceasing to be a controlled company, the Company was required immediately to have a nominating/corporate governance committee, to have a charter for that committee and a charter for its compensation committee, each meeting the requirements of the Governance Standards, and to post those charters on its website. On May 29, 2012, the Company received a letter from the Exchange providing official notice of its non-compliance with the Governance Standards, a copy of which is included as Exhibit 99.1 to this Current Report and incorporated into this Item 3.01 by reference.
The Company intends to remedy its non–compliance with the Governance Standards as soon as practicable by the establishment of a nominating/corporate governance committee, and the adoption and website posting of charters for that committee and for its compensation committee, and expects to be in full compliance shortly following the next regularly scheduled meeting of the Company’s Board of Directors, which is to be held on June 28, 2012.