UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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) November 7, 2008
CASTLE BRANDS INC.
(Exact name of registrant as specified in its charter)
         
DELAWARE   001-32849   41-2103550
(State or other jurisdiction of
incorporation)
  (Commission File Number)   (IRS Employer Identification
Number)
     
570 Lexington Avenue, 29 th Floor, New York NY   10022
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code (646) 356-0200
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 ( 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))
 
 

 


 

Item 1.01   Entry into a Material Definitive Agreement.
     On November 7, 2008, Castle Brands Inc. (the “Company”) entered into a letter agreement with Vector Group Ltd. (“Vector”) and Richard J. Lampen. Under the agreement, effective as of October 11, 2008, Vector has agreed to make available to the Company the services of Mr. Lampen, Vector’s Executive Vice President, to serve as the Company’s interim President and Chief Executive Officer and to provide certain other financial and accounting services, including assistance with complying with Section 404 of the Sarbanes-Oxley Act of 2002. In consideration for such services, the Company will pay Vector an annual fee of $100,000, plus any direct, out-of-pocket costs, fees and other expenses incurred by Vector or Mr. Lampen in connection with providing such services, and will indemnify Vector. The agreement is terminable by either party upon 30 days’ prior written notice.
     Vector beneficially owns, within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, 320,000 shares of the Company’s Series A Preferred Stock (convertible into 11,428,576 shares of the Company’s Common Stock, representing approximately 11.3% of the Company’s Common Stock on an as-converted basis). Mr. Lampen is a director and executive officer of the Company. Dr. Phillip Frost, a director the Company, together with related entities, is a principal stockholder of the Company and a greater than 5% stockholder of Vector. Dr. Frost, together with related entities, beneficially owns approximately 6% of the outstanding shares of Vector.
     The full terms of the letter agreement are set forth therein, a copy of such letter agreement is attached hereto as Exhibit 10.1 and incorporated by reference herein. The above description of the terms of the letter agreement do not constitute a complete summary and is qualified in its entirety by reference to such exhibit.
Item 5.02   Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
     See Item 1.01, which is incorporated herein by reference.
Item 8.01   Other Events.
     On November 7, 2008, the Company entered into an agreement, effective as of October 11, 2008, with Ladenburg Thalmann Financial Services Inc. (“LTFS”) under which the Company agreed to reimburse LTFS for its costs in providing certain administrative, legal and financial services to the Company. Mr. Lampen is a director and executive officer of LTFS. Dr. Frost is the chairman of the board of directors of LTFS. Dr. Frost, together with related entities, is a principal stockholder of the Company and the principal shareholder of LTFS. Dr. Frost, together with related entities beneficially owns approximately 31% of the outstanding shares of LTFS.
Item 9.01   Financial Statements and Exhibits.
     (d) Exhibits
         
Exhibit No.   Description
       
 
  10.1    
Letter Agreement, dated November 7, 2008, between Castle Brands Inc. and Vector Group Ltd.

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SIGNATURES
     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.
         
  CASTLE BRANDS INC.
 
 
  By:   /s/ Seth B. Weinberg    
    Name:   Seth B. Weinberg   
    Title:   Senior Vice President, General Counsel and Secretary   
 
Dated: November 7, 2008
EXHIBIT INDEX
         
Exhibit No.   Description
       
 
  10.1    
Letter Agreement, dated November 7, 2008, between Castle Brands Inc. and Vector Group Ltd.

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Exhibit 10.1
(CASTLE BRANDS LOGO)
November 7, 2008
Vector Group Ltd.
100 S.E. Second Street
Miami, Florida 33131
Attn.: Howard M. Lorber, President
Gentlemen:
     This letter agreement will confirm the understanding between Castle Brands Inc. (“Company”), a Delaware corporation with offices at 570 Lexington Avenue, New York, New York 10022, and Vector Group Ltd. (“VGL”), a Delaware corporation with offices at 100 S.E. Second Street, Miami, Florida 33131, under which VGL will provide certain services to the Company.
     As reasonably requested by the Company, VGL will provide the following services (“Services”) to the Company: (i) VGL will make available to the Company the services of Richard J. Lampen (“Lampen”), VGL’s Executive Vice President, to serve as the Company’s interim President and Chief Executive Officer; and (ii) VGL will provide, upon request of the Company, such other financial, tax and accounting resources, including assistance in complying with Section 404 of the Sarbanes-Oxley Act of 2002.
     In consideration of the Services, the Company shall pay VGL an annual fee of $100,000, payable in quarterly installments of $25,000 in advance, commencing October 11, 2008, prorated for the calendar quarter. Thereafter, payments will be made on the first day of each calendar quarter. Additionally, VGL shall be entitled to recover all direct, out-of-pocket costs, fees and other expenses incurred by VGL or Mr. Lampen in connection with the Services.
     In connection with performance of the Services, Lampen, or other VGL employees, may receive certain Confidential Information of the Company. VGL agrees that Lampen and each such other VGL employee will neither disclose to any other person, entity or third party any of the Confidential Information which is disclosed to Lampen or such other VGL employee, as applicable, nor utilize such Confidential Information except in connection with the provision of the Services and that each such person will only disclose the Confidential Information to such employees of VGL who need to know such Confidential Information in order for Lampen and/or VGL to perform the Services. Any such employees will also agree to the restrictions contained herein. Nothing herein shall be deemed to prohibit or restrict Lampen, or such other VGL employee, from disclosing or using Confidential Information in connection with performing Services on behalf of the Company, or, with respect to Lampen, in performing his duties as an officer or director of the Company and its subsidiaries.
     “Confidential Information” means any confidential data or information of the Company that is not in the public domain or otherwise generally known.
570 Lexington Ave., 29 th Floor | New York, NY 10022 | Voice 1.646.356.0200
www.castlebrandsinc.com

 


 

     The Company shall indemnify, defend and hold harmless VGL from and against any loss, liability, claim, demand, action, suit, proceeding, judgment, penalty, government investigation or expense (including reasonable attorneys’ fees), whether or not involving a third-party claim, proceeding, demand, or liability of any kind, (collectively, “Damages”) arising, directly or indirectly, or alleged to arise, directly or indirectly, in anyway out of the provision of services by Mr. Lampen hereunder.
     VGL shall provide the Company with reasonably prompt written notice of a claim for any Damages or the commencement of any claim, demand, proceeding, action or suit (collectively, “Proceeding”). Any failure to notify the Company will not relieve the Company of its indemnification obligation hereunder except to the extent that the Company demonstrates that the defense of a Proceeding by the Company was materially prejudiced by failure or delay to give such notice. The Company shall diligently assume the defense, including payment thereof, of any Proceeding through counsel selected by the Company (and not reasonably objected to by VGL). The Company shall have the right to compromise or settle such matters (and VGL shall not have such right) provided however, that no compromise or settlement of any such Proceeding may be effected by the Company without the consent of VGL, such consent not to be unreasonably withheld or delayed, unless (a) there is no finding or admission of any violation of law by VGL and (b) the sole remedy provided thereunder is monetary damages which will be paid in full by the Company and the Company demonstrates the capacity to do so.
     Our agreement will commence as of October 11, 2008 and will terminate upon not less than 30 days’ prior written notice by either of us.
     Please indicate your acceptance by signing this letter in the space provided below.
         
  CASTLE BRANDS INC.
 
 
  By:   /s/ Seth B. Weinberg    
    Name:   Seth B. Weinberg   
    Title:   Senior Vice President and General Counsel   
 
         
ACCEPTED AND AGREED TO:

VECTOR GROUP LTD.
 
 
By:   /s/ Howard M. Lorber    
  Name:   Howard M. Lorber   
  Title:   President and Chief Executive Officer   
 
ACCEPTED AND AGREED TO:
 
 
/s/ Richard J. Lampen    
Richard J. Lampen