Exhibit 10.2
SEPARATION, CONSULTING AND NON-COMPETITION AGREEMENT
     This SEPARATION AND CONSULTING AGREEMENT (the “Agreement”) is made and
entered into on the 9th day of May, 2008, by and between GREAT WOLF RESORTS,
INC., a Delaware corporation (the “Company”), and JOHN EMERY (the “Executive”).
RECITALS:
     WHEREAS, the Company and the Executive are parties to an Employment
Agreement dated December 13, 2004 (the “Employment Agreement”); and
     WHEREAS, the Executive hereby tenders his resignation as an officer,
director and employee of the Company, and the Company hereby accepts such
resignation effective as of the date specified herein; and
     WHEREAS, the Company and the Executive desire to memorialize the terms of
the Executive’s termination of employment in this Agreement and completely
resolve all matters arising out of the Executive’s employment with the Company
or the termination of that employment, as well as all matters arising out of or
related to the Employment Agreement.
     NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
     1. Termination of the Employment Agreement; Resignation as an Officer and
Director and Termination of Employment. The Executive and the Company hereby
mutually terminate, revoke and rescind the Employment Agreement and all rights
and obligations either party has or may be entitled to under the Employment
Agreement. The Executive and the Company agree further that the Executive’s
status as an officer, director and employee of the Company terminates as of the
date specified herein.
     2. Consulting Services and Ongoing Cooperation. The Executive agrees to use
his best efforts to assist, advise and cooperate with the Company if the Company
so requests on issues that arose or were in any way developing during his
employment with the Company, subject to Executive’s availability given his
employment obligations, if any, at that time. For a period of sixty (60) days,
the Executive shall furnish such assistance, advice or cooperation to the
Company as the Company shall reasonably request and as is within the Executive’s
reasonable capability. Such assistance, advice and cooperation may include, but
shall not be limited to the preparation for, or the conduct of, any litigation,
investigation or proceeding involving matters or events which occurred during
the Executive’s employment by the Company as to which the Executive’s knowledge
or testimony may be important to the Company. In connection with the preparation
for, or the conduct of such litigation, investigation or proceeding as described
in the preceding sentence, the Executive shall promptly provide the Company with
any records or other materials in his possession that the Company shall request
in connection with the defense or prosecution of such litigation, investigation
or proceeding. If and to the extent that the Company requests that the Executive
attend a meeting, deposition or trial, the

 

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Company shall compensate Executive for his time at the rate of $750 per day or
portion thereof during which Executive complies with such request. The Company
shall also pay or reimburse the Executive for his travel expenses reasonably
incurred in the course of providing such cooperation. The Company shall make
such payment or reimbursement within thirty (30) days of receipt of reasonable
substantiating documentation from the Executive but in no event later than the
end of the calendar year following the year in which such expenses were
incurred.
     3. Covenants as to Confidential Information, Competitive Conduct and
Solicitation. The Executive hereby acknowledges and agrees as follows: (a) this
Section 3 is necessary for the protection of the legitimate business interests
of the Company, (b) the restrictions contained in this Section 3 with regard to
geographical scope, length of term and types of restricted activities are
reasonable; (c) the Executive has received adequate and valuable consideration
for entering into this Agreement, and (d) the Executive’s expertise and
capabilities are such that his obligations hereunder and the enforcement hereof
by injunction or otherwise will not adversely affect the Executive’s ability to
earn a livelihood.
          a. Confidentiality Information. The Executive agrees that the
Executive will not, directly or indirectly, without the express written approval
of the Company, unless directed by applicable legal authority (including any
court of competent jurisdiction, governmental agency having supervisory
authority over the business of the Company or its subsidiaries, or any
legislative or administrative body having supervisory authority over the
business of the Company or its subsidiaries) having jurisdiction over the
Executive, disclose to or use, or knowingly permit to be so disclosed or used,
for the benefit of himself, any person, corporation or other entity other than
the Company, (i) any non-public information concerning any financial matters,
customer relationships, competitive status, supplier matters, internal
organizational matters, current or future plans, or other business affairs of or
relating to the Company, its subsidiaries or affiliated or related parties,
(ii) any proprietary management, operational, trade, technical or other secrets
or any other proprietary information or other data of the Company, its
subsidiaries or affiliated or related parties, or (iii) any other information
related to the Company, its subsidiaries or affiliated or related parties, or
which the Executive should reasonably believe will be damaging to the Company,
its subsidiaries or affiliated or related parties, which has not been published
and is not generally known outside of the Company. The Executive acknowledges
that all of the foregoing constitutes confidential and proprietary information,
which is the exclusive property of the Company.
          b. Restrictive Period. The term “Restricted Period” for purposes of
this Agreement shall mean the one-year period following the date of this
Agreement.
          c. Nonsolicitation of Customers and Employees.
               i. Customers. The Executive, during the Restricted Period, shall
not, on the Executive’s own behalf or on behalf of any person, firm partnership,
association, corporation or business organization, entity or enterprise, call on
or solicit for the purpose of competing with the Company or its affiliates any
customers of the Company or its affiliates with whom the Executive had contact,
knowledge, or association at any time during the twelve (12) month period
immediately preceding the beginning of the Restricted Period.

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               ii. Employees. The Executive, during the Restricted Period, shall
not, either directly or indirectly, call on, solicit or attempt to induce any
other officer, employee or independent contractor of the Company or its
affiliates with whom the Executive had contact, knowledge of, or association at
any time during the twelve (12) month period immediately preceding the beginning
of the Restricted Period, to terminate his or her employment or business
relationship with the Company or its affiliates and shall not assist any other
person or entity in such a solicitation.
          d. Non-Compete. The Executive and the Company agree that (a) the
Company is engaged in the family entertainment resort business featuring indoor
waterparks, which shall be referred to as the “Business,” (b) the Business can
be conducted anywhere, (c) the Business can be and is available to any person or
entity with access to sufficient capital, (d) the Business consequently has no
geographic boundary or limitation, (e) the Executive was intimately involved in
the Business wherever it operates, and (f) this Section 3(d) is intended to
provide fair and reasonable protection to the Company in light of the unique
circumstances of the Business. The Executive therefore agrees that the Executive
shall not, for the one (1) year period which starts on the date of this
Agreement, compete with the Company within fifty (50) miles of a location where
the Company conducts its Business or is planning to conduct its Business;
provided, however, the Executive may own up to five percent (5%) of the stock of
a publicly traded company that engages in such competitive business so long as
the Executive is only a passive investor and is not actively involved in the
company in any way.
          e. Remedy for Breach. The Executive agrees that the remedies at law of
the Company for any actual or threatened breach by Executive of the covenants in
this Section 3 would be inadequate and that the Company shall be entitled to
specific performance of the covenants in this Section 3, including entry of an
ex parte, temporary restraining order in state or federal court, preliminary and
permanent injunctive relief against activities in violation of this Section 3,
or both, or other appropriate judicial remedy, writ or order, in addition to any
damages and legal expenses which the Company may be legally entitled to recover.
The Executive acknowledges and agrees that the covenants in this Section 3 shall
be construed as agreements independent of any other provision of this or any
other agreement between the Company and the Executive, and that the existence of
any claim or cause of action by the Executive against the Company, whether
predicated upon this Agreement or any other agreement, shall not constitute a
defense to the enforcement by the Company of such covenants.
     4. Consideration.
          a. In consideration of the execution and performance of this Agreement
by the Executive, and subject to the remaining provisions of this Section 4, the
Executive will receive from the Company the following severance payments and
benefits. The Company shall pay to the Executive cash totaling $825,000, payable
in a lump sum within five days of expiration of the 7-day revocation period
referred to in Section 6 hereof.

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          b. All payments under this Section 4 shall be subject to applicable
deductions. For the purposes of this Agreement, “applicable deductions” shall
include, but shall not be limited to, any federal, state, or local taxes
determined by the Company to be required to be withheld from amounts paid to the
Executive pursuant to this Agreement or otherwise due from the Company, and any
other amounts that the Company may be legally required to deduct from his
earnings.
          c. Any date specified as a payment date under this Section 4 shall be
construed as meaning any date on or about the specified date; provided, however,
that the Company shall make payment as soon as practicable after the specified
date without, to the extent possible, incurring any tax penalties on either the
Executive or the Company.
          d. Except as provided in this Agreement, the Executive agrees that he
is not entitled to any other compensation (including, but not limited to, salary
or bonuses), perquisites, or benefits of any kind or description from the
Company, or from or under any employee benefit plan or fringe benefit plan
sponsored by the Company or under the Employment Agreement, other than as
described above and other than his regular salary through the Effective Date, as
defined in Section 6(f). The consideration paid by the Company to the Executive
pursuant to this Agreement shall be in compromise, settlement and full
satisfaction of any and all Claims, as defined in Section 5 of this Agreement,
that the Executive has, or may have, against the Company or other Releasees, as
defined in Section 5 of this Agreement, arising out of the Executive’s
employment with the Company or its affiliates, the termination of such
employment and any and all matters related to the Executive’s employment and
termination, or to his Employment Agreement.
     5. Mutual Release.
          a. The Executive, for himself, his heirs, successors and assigns and
in consideration of the payments to be made by or on behalf of the Company
pursuant to Section 4 of this Agreement, does hereby forever discharge and
release the Company, any subsidiaries, affiliated companies, companies with
common management, ownership or control, successors, assigns, insurers and
reinsurers, attorneys, and franchisees, and all of their officers, directors,
shareholders, employees, agents and representatives, in their official and
individual capacities (collectively referred to as “Releasees”), from any and
all claims, demands, causes of action, damages, charges, complaints, grievances,
expenses, compensation and remedies which the Executive now has or may in the
future have on account of or arising out of any matter or thing which has
happened, developed or occurred before the date of this Agreement (collectively
“Claims”), including, but not limited to, all Claims arising from the
Executive’s employment with the Company or any of its affiliated companies, the
termination of such employment, any and all relationships or dealings between
the Executive and the Company or any of the other Releasees, the termination of
any such relationships and dealings, and any and all other Claims the Executive
may have against the Company or any of the other Releasees, and the Executive
hereby waives any and all such Claims including, all charges or complaints that
were or could have been filed with any other court, tribunal or governmental
agency, and any and all Claims not previously alleged, including, but not
limited to, any Claims under the following: (a) Title VII of the Civil Rights
Act of 1964, as amended; (b) the Age Discrimination in Employment Act

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(ADEA), as amended; (c) the Federal Employee Retirement Income Security Act of
1974 (ERISA), as amended; (d) the Americans With Disabilities Act (ADA), as
amended; (e) the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA),
as amended; (f) Section 806 of the Sarbanes-Oxley Act of 2002, as amended;
(g) any and all statutes of similar nature or purpose under Delaware or
Wisconsin law, or the law of any other state; and (h) any federal, state or
local law, rule, regulation, constitution, executive order or guideline of any
description, including, but not limited to, those laws described above, or any
rule or principle of equity or common law, or any Claim of defamation,
conversion, interference with a contract or business relationship, or any other
intentional or unintentional tort, or any Claim of loss of consortium, or any
Claim of harassment or retaliation, or breach of contract or implied contract,
or breach of covenant of good faith and fair dealing, or any whistle-blower
Claim. This release, discharge and waiver shall be hereinafter referred to as
the “Release.”
          Notwithstanding the foregoing, Executive shall have the right to
assert defenses and counterclaims against any individuals referenced in this
subparagraph in connection with any claim that might be asserted against
Executive by any of them, in which case this Release shall not preclude the
assertion of any defenses or counterclaims that are otherwise the subject of
this Release.
          b. The Company similarly agrees to release the Executive and his
agents, attorneys, heirs and assigns from any and all Claims as defined above,
whether known or unknown, which the Company has, had or might have been able to
assert or make based on any action, omission or conduct of any kind on the part
of the Executive or his agents, attorneys, heirs or assigns from the beginning
of time up to the execution of this Agreement.
          c. The Executive agrees that this Release may be enforced in federal,
state or local court, and before any federal, state or local administrative
agency or body.
          d. This Release does not prohibit the Executive from filing an
administrative charge of alleged employment discrimination, harassment or
retaliation under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act of 1967, the Americans With Disabilities Act or
the Equal Pay Act of 1963; however, the Executive represents that he has not to
date filed or cause to be filed any such administrative charge, and further
agrees that he hereby waives any right to monetary or other recovery should any
federal, state or local administrative agency pursue any Claim on his behalf and
will immediately request in writing that the Claim or matter on his behalf be
withdrawn. Thus by signing this Agreement, the Executive waives any right he had
to obtain a recovery if an administrative agency pursues a Claim against the
Company or any of the other Releasees based on any action taken by the Company
or any of the other Releasees up to the date of this Agreement, and that he will
have released the Company and the other Releasees of any and all Claims, and the
continuing effect of any and all Claims of any nature up to the date of this
Agreement.
          e. The Executive specifically understands and agrees that the
termination of his employment does not violate or disregard any oral or written
promise or agreement, of any nature whatsoever, express or implied. If any
contract or agreement of employment exists concerning the employment of the
Executive by the Company or the terms and conditions of

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such employment or the termination of such employment, whether oral or written,
express or implied, that contract or agreement (including the Employment
Agreement) is hereby terminated and is null and void.
     6. Compliance with OWBPA. It is the mutual intent of the parties that this
Agreement, as it applies to claims under the ADEA, fully complies with the Older
Worker Benefit Protection Act (OWBPA). Accordingly, this Agreement requires, and
Executive agrees, as follows:
          a. Executive has read this Agreement, understands its contents and
agrees to its terms and conditions of his own free will. He understands this
Agreement and its language.
          b. Executive acknowledges that this Agreement provides him with pay
and benefits to which he would not otherwise be entitled.
          c. Executive is hereby advised to consult with an attorney prior to
signing this Agreement.
          d. Executive has twenty-one (21) days in which to consider whether to
sign this Agreement.
          e. After Executive signs this Agreement, he shall have seven (7) days
in which to revoke his acceptance of this Agreement by delivering written notice
to the Company.
          f. This Agreement is not enforceable and effective until the seven
(7) day revocation period has expired without revocation (“Effective Date”). In
computing this seven-day period, the day the Agreement is executed by Executive
shall not be included, and the last day of the seven-day period shall be
included.
     7. Additional Terms.
          a. Nothing contained in this Agreement prohibits the Executive from
seeking a determination by a court of competent jurisdiction that the Release
is, in whole or in part, invalid under applicable law. To the extent of such
determination, the Executive may assert Claims or other matters included in the
Release, subject to final determination on appeal.
          b. The Executive agrees that he has not sustained any disabling
personal injury and/or occupational disease which has resulted in a loss of wage
earning capacity during his employment with the Company, and that he has no
personal injury and/or occupational disease which has been contributed to, or
aggravated or accelerated in a significant manner by his employment with the
Company.
          c. The Executive represents and warrants that the Company has
encouraged and advised the Executive in writing, prior to signing this
Agreement, to consult with an attorney of the Executive’s choosing concerning
all of the terms of this Agreement.

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          d. Nothing contained in this Agreement is intended to be an admission
of any fault, wrongdoing, or liability on the part of any of the parties hereto,
and nothing contained in this Agreement may be deemed, construed, or treated in
any respect as such an admission. The Company specifically denies any fault,
wrongdoing or liability toward the Executive. This Agreement was reached by the
parties as a mutual compromise of their respective positions, in order to avoid
the costs and inconvenience of litigation and for other reasons deemed good and
sufficient by the respective parties.
     8. Indemnification. The Executive shall be entitled to be indemnified by
the Company to the same extent and subject to the same limitations as the
Company provides indemnification generally to its officers and directors. The
Company agrees to maintain in force a policy of directors and officers liability
coverage in such amounts as the Company’s Board of Directors deems reasonable
and to cover the Executive under such policy, for acts occurring prior to the
date of this Agreement, subject to any such insurance being available on
commercially reasonable terms.
     9. Non-Disparagement. The Executive shall not disparage the Company or
other Releasees, or its officers, directors or employees in any way orally or in
writing. The Company shall, and the Company shall take reasonable measures to
cause its directors and officers to, refrain from disparaging the Executive in
any way, orally or in writing.
     10. Statements Concerning Executive’s Resignation. Executive and the
Company agree that, in response to inquiries concerning the reasons for
Executive’s resignation, the statement attached hereto as Exhibit A shall be
used by the Company and its officers and directors. Unless approved in writing
in advance by the other party, no party shall make additional statements in
connection therewith to unrelated third parties.
     11. Employment References. Nothing in this Agreement shall prevent either
party from stating the fact that Executive was employed by the Company, the
address of his work location, the dates of his employment, his job titles and
job duties, his rate of pay, or that he resigned from his position as an officer
of the Company on or about the Effective Date. The Company will provide
employment references upon Executive’s request on the condition that Executive
sign a notice and release provided by the Company.
     12. Breach of Agreement. The Executive agrees that if he violates any of
the terms of this Agreement, the Company may pursue whatever rights it has under
this Agreement, whether in law or in equity, without affecting the validity and
enforceability of the Release contained in this Agreement.
     13. Company Property, Records, Files and Equipment. The Executive will
return all Company property, records, files, or any other Company owned
equipment in his possession within ten (10) days after the execution of this
Agreement.

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     14. Certain Additional Payments by the Company. Notwithstanding anything in
this Agreement to the contrary, in the event it is determined by the Company
that any payment or distribution by the Company to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement, or otherwise, is subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”),
or any successor provision, on excess parachute payments, as that term is used
and defined in Sections 4999 and 280G of the Code, then the Executive shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an amount
equal to the then current rate of tax under said Section 4999 multiplied by the
total of the amounts so paid or payable, including the Gross-Up Payment, which
are deemed to be a part of an excess parachute payment.
     15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin applicable to contracts
executed in and to be performed in that state without regard to its conflicts of
laws provisions. Each of the parties hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the State of
Wisconsin located in the County of Milwaukee, Wisconsin, and of the United
States for the Eastern District of Wisconsin for any litigation arising out of
or relating to this Agreement or the transactions contemplated hereby. Each of
the parties hereby irrevocably and unconditionally acknowledges that service of
any process, summons, notice or document by United States registered mail to the
respective addresses set forth herein shall be effective service of process for
any litigation brought against a party in any such court. Any legal action
relating to this Agreement shall be brought in the courts of the State of
Wisconsin located in the County of Milwaukee, Wisconsin, and of the United
States for the Eastern District of Wisconsin and the parties irrevocably and
unconditionally waive and will not plead or claim in any such court that venue
is improper or that such litigation has been brought in an inconvenient forum.
     16. Waiver. The waiver by a party hereto of any breach by the other party
hereto of any provision of this Agreement shall not operate or be construed as a
waiver of any other or subsequent breach by a party hereto.
     17. Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company, and the Company shall be
obligated to require any successor to expressly acknowledge and assume its
obligations hereunder. This Agreement shall inure to the extent provided
hereunder to the benefit of and be enforceable by the Executive or the
Executive’s legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. The Executive may not delegate any of the
Executive’s duties, responsibilities, obligations or positions hereunder to any
person and any such purported delegation shall be void and of no force and
effect.
     18. Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

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     19. Notices. Any notices required or permitted to be given under this
Agreement shall be sufficient if in writing, and if personally delivered or when
sent by first class certified or registered mail, postage prepaid, return
receipt requested — in the case of the Executive, to his principal residence
address, and in the case of the Company, to the address of its principal place
of business as set forth above, to the attention of the Chairman of the Board of
the Company.
     20. Defined Terms. Any terms not specifically defined herein have the
meanings set forth in the Employment Agreement.
     21. Entire Agreement. This Agreement constitutes the entire agreement of
the parties relating to the subject matter hereof, and supersedes any
obligations of the Company and the other Releasees under any previous agreements
or arrangements (including the Employment Agreement), except as otherwise
provided in this Agreement. The provisions of this Agreement may not be amended,
modified, repealed, waived, extended or discharged except by an agreement in
writing signed by the party against whom enforcement of any amendment,
modification, repeal, waiver, extension or discharge is sought. No person acting
other than pursuant to a resolution of the Company’s Board of Directors shall
have authority on behalf of the Company to agree to amend, modify, repeal,
waive, extend or discharge any provision of this Agreement or anything in
reference thereto. This Agreement may be executed in one or more counterparts
(including by facsimile signature), all of which shall be considered one and the
same instrument, and shall be fully executed when one or more counterparts have
been signed by and delivered to each party.
     22. Headings. The descriptive headings used herein are used for convenience
of reference only and shall not constitute a part of this Agreement.
     THE EXECUTIVE HEREBY EXPRESSLY WARRANTS AND REPRESENTS THAT, BEFORE
ENTERING INTO THIS AGREEMENT, HE HAS RECEIVED A REASONABLE PERIOD OF TIME WITHIN
WHICH TO CONSIDER ALL OF THE PROVISIONS CONTAINED IN THIS AGREEMENT, THAT HE HAS
FULLY READ, INFORMED HIMSELF OF AND UNDERSTANDS ALL THE TERMS, CONTENTS,
CONDITIONS AND EFFECTS OF ALL PROVISIONS OF THIS AGREEMENT, AND THAT HE
CONSIDERS ALL SUCH PROVISIONS TO BE SATISFACTORY.
     THE EXECUTIVE FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT NO PROMISE OR
REPRESENTATION OF ANY KIND HAS BEEN MADE, EXCEPT THOSE EXPRESSLY STATED IN THIS
AGREEMENT.
     THE EXECUTIVE FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT HE ENTERS INTO
THIS AGREEMENT KNOWINGLY AND VOLUNTARILY.

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     IN WITNESS WHEREOF, the Executive and the Company, by its duly authorized
representative, have signed this Agreement as of the date set forth above.

         
 
  THE EXECUTIVE:    
 
         
 
  /s/ John Emery    
 
       
 
  Name: John Emery    
 
       
 
  GREAT WOLF RESORTS, INC.      
 
       
 
  /s/ James A. Calder    
 
       
 
  Name:  James A. Calder, CFO    

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EXHIBIT A
Press Release
     Great Wolf Resorts also reported that John Emery has announced his
intention to step down as chief executive officer and a director of the
company.  Mr. Emery is leaving the company to pursue an opportunity in the
private equity sector which will allow him to spend the majority of his time at
his home in Virginia after more than four years of weekly commuting between
Virginia and the company’s headquarters in Madison, Wisconsin.  “With the
company’s continued strong operating results and the recent successful resort
openings, I am comfortable choosing this time to make my transition,” Emery
said.  “We have a strong management team in place, headed up by Kim Schaefer,
our chief operating officer; Jim Calder, our chief financial officer; and Hernan
Martinez, our president of development.”  Mr. Emery will be available to assist
the company as necessary during the transition of his responsibilities.
     As a result of Mr. Emery’s decision, the Board of Directors will appoint
Randy Churchey, a director of the company, as interim chief executive officer. 
Commenting on both developments, Chairman of the Board Joe Vittoria stated, “We
thank John for his more than four years of leadership and service to the company
and wish him the best of luck in all his future endeavors.  Randy has been a
director of the company since our IPO in 2004 and has extensive public company
experience, formerly serving as president and chief executive officer of RFS
Hotel Investors, Inc.  We believe Randy will provide solid leadership on an
interim basis as we begin our search for a permanent chief executive officer.”