Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
December
29, 2006
(Date
of
earliest event reported)
vFINANCE,
INC.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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1-11454-03
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58-1974423
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(State
or Other Jurisdiction of
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(Commission
File No.)
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(IRS
Employer Identification No.)
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Incorporation)
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3010
North Military Trail
Suite
300
Boca
Raton, Florida 33431
(Address
of Principal Executive Offices)
(561)
981-1000
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
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:
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
5.02 Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers.
On
December 29, 2006, vFinance, Inc. (the “Company”) and Mr. Mahoney entered into a
Resignation Agreement (the "Resignation Agreement"), pursuant to which Mr.
Mahoney resigned from his positions as the Chairman of the Company’s Board of
Directors and Chief Operating Officer effective January 3, 2007. In accordance
with the Resignation Agreement, the Company has agreed to pay to Mr. Mahoney,
upon a “Change in Control” (as defined in the Resignation Agreement)
anytime
from January 3, 2007 up to and including January 3, 2010 an
amount
equal to: (a) twice the sum of Mr. Mahoney’s highest annual base salary during
his employment with the Company, and (b) twice the greater of (i) the highest
bonus, incentive or other compensation payment actually received by Mr. Mahoney
during the three years preceding the “Change in Control” and (ii) the highest
bonus, incentive or other compensation payment Mr. Mahoney was entitled to
receive during the three years preceding the “Change in Control.” In the event
of a “Change in Control,” all stock options, warrants, stock appreciation rights
and other similar securities held by Mr. Mahoney will become immediately and
fully vested.
In
connection with Mr. Mahoney’s resignation, on December 29, 2006, the Company and
Mr. Mahoney jointly terminated Mr. Mahoney's Amended and Restated Employment
Agreement dated November 16, 2004, which termination was effective January
3,
2007.
Pursuant
to his employment agreement, Mr. Mahoney received an annual base salary of
$283,394 and was entitled to bonus or incentive compensation as determined
by
the Company’s Board of Directors based on his performance, the Company’s
performance and other factors. The employment agreement provided that if the
Company terminated Mr. Mahoney other than for cause or upon death or disability,
or if Mr. Mahoney voluntarily terminated his employment due to an adverse change
in duties, a reduction in compensation or benefits or the relocation of the
Company’s principal offices (collectively a “Triggering Event”), the Company
would have been required to pay Mr. Mahoney (a) two times his highest annual
base salary in one lump sum, and (b) twice the greater of (i) the highest bonus,
incentive or other compensation payment actually received by Mr. Mahoney during
the three years preceding the Triggering Event and (ii) the highest bonus,
incentive or other compensation payment Mr. Mahoney was entitled to receive
during the three years preceding the Triggering Event. The Company would have
also been required to provide Mr. Mahoney up to two years of other employee
benefits.
The
termination of the employment agreement prior to the expiration of its term
will
not cause the Company to incur any early termination penalties of any kind,
and
all post-employment matters between the Company and Mr. Mahoney are governed
by
the Resignation Agreement.
Effective
upon Mr. Mahoney's resignation, Mr. Sokolow, age 50, assumed the position of
Chairman of the Company’s Board of Directors. Mr. Sokolow will continue to serve
as the Company’s Chief Executive Officer. Mr. Sokolow, co-founder of the Company
with Mr. Mahoney, has been one of the Company's directors since November 8,
1997, the Chief Executive Officer since November 8, 1999, and was President
from
January 5, 2001 to January 3, 2007.
In
connection with Mr. Mahoney’s departure, Messrs. Mahoney and Sokolow entered
into a voting agreement dated December 29, 2006 (the “Voting Agreement”). The
Voting Agreement provides that as long as either party owns 1,000,000 shares
of
the Company’s common stock, as adjusted for stock splits and other
recapitalizations, each party will vote for the other party or his designee
to
serve on the Company’s Board of Directors.
On
December 29, 2006, the Company and Mr. Sokolow entered into an amendment to
Mr.
Sokolow's Employment Agreement dated November 16, 2004 and as previously amended
on May 12, 2006. Under the amended Employment Agreement, Mr. Sokolow will serve
as the Chairman of the Company’s Board of Directors and Chief Executive Officer.
Mr. Sokolow’s base salary has been increased from $343,511 per annum to $396,750
per annum, subject to an annual increase based on the reported cost of living
adjustment beginning January 1, 2008. None of the other terms of Mr. Sokolow's
Employment Agreement were modified in any material respect.
In
addition, on December 29, 2006, in recognition of Mr. Sokolow’s additional
responsibilities, the Company granted to Mr. Sokolow five-year options to
purchase 2,000,000 shares of the Company's common stock at an exercise price
of
$0.21 per share, of which 500,000 options vest on December 29, 2007, and 500,000
options vest each subsequent anniversary thereafter. Upon the acquisition by
any
individual, group or entity of more than 50% of the issued and outstanding
shares of the Company's common stock, Mr. Sokolow’s options will vest
immediately.
On
December 29, 2006, the Company’s Board of Directors approved bonuses to Leonard
J. Sokolow and Timothy E. Mahoney in the amount of $170,000 and $136,000,
respectively, for services performed during 2006. Such bonuses shall be paid
in
2007 in equal amounts of 25% of such bonuses by the end of each calendar quarter
or in such greater amounts as determined by the Company’s Board of
Directors.
On
December 29, 2006, the Company elected Charles R. Modica, age 59,
to the
Company’s Board of Directors as of January 3, 2007. Mr. Modica has served as
Chairman of the Board of Trustees and Chancellor of St. George’s University
located in Grenada, West Indies, since co-founding the university as a School
of
Medicine in 1976. He has served on the Board of Trustees of Barry University,
Miami, Florida, since 1983, and as Chairman of such Board of Trustees of Barry
University from 1997 to 2001. Additionally, he served on the Board of Trustees
of Rosarian Academy, West Palm Beach, Florida from 1995 to 2001, and as Chairman
of such Board of Trustees from 1998 to 2001. Mr. Modica also has served on
the
Board of Trustees of WXEL Public Radio and Television in Florida since 1998.
Mr.
Modica received his B.S. degree in Biology from Bethany College in 1970 and
his
J.D. degree from the Delaware Law School in 1975.
On
December 29, 2006, the Company appointed Alan B. Levin the Company’s Chief
Financial Officer. Mr. Levin, age 43, served as the Interim Chief Financial
Officer of the Company since July 2006 and Controller of the Company between
June 2005 and July 2005. Prior to joining the Company, Mr. Levin served as
Chief
Financial Officer for United Capital Markets, Inc. from September 2000 to
January 2005.
On
December 29, 2006, in recognition of Mr. Levin’s performance and promotion, the
Company also granted to Mr. Levin five-year options to purchase 500,000 shares
of the Company's common stock at an exercise price of $0.21 per share, of which
125,000 options vest on December 29, 2007, and 125,000 options vest each
subsequent anniversary thereafter. Upon the acquisition by any individual,
group
or entity of more than 50% of the issued and outstanding shares of the Company's
common stock, Mr. Levin’s options will vest immediately.
Item
9.01 Financial
Statements And Exhibits.
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10.1 |
Resignation
Agreement dated December 29, 2006 by and between vFinance, Inc. and
Timothy E. Mahoney.
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10.2 |
Employment
Agreement Amendment No. 2 dated December 29, 2006 by and between
vFinance,
Inc. and Leonard J. Sokolow.
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10.3 |
Voting
Agreement dated December 29, 2006 by and between Timothy E. Mahoney
and
Leonard J. Sokolow.
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SIGNATURE
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.
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vFINANCE,
INC. |
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By: |
/s/ Leonard
J. Sokolow |
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Name:
Leonard J. Sokolow |
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Title:
Chief Executive Officer |
Date:
January 8, 2007
Exhibit
Index
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Exhibit
No.
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Description
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10.1
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Resignation
Agreement dated December 29, 2006 by and between vFinance, Inc. and
Timothy E. Mahoney.
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10.2
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Employment
Agreement Amendment No. 2 dated December 29, 2006 by and between
vFinance,
Inc. and Leonard J. Sokolow.
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10.3
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Voting
Agreement dated December 29, 2006 by and between Timothy E. Mahoney
and
Leonard J. Sokolow.
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