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): March 3, 2016

 

SNAP INTERACTIVE, INC.
(Exact name of registrant as specified in its charter)

 

Delaware   000-52176   20-3191847
(State or other jurisdiction   (Commission File Number)   (IRS Employer
of incorporation)       Identification No.)

 

320 W. 37th Street, 13th Floor

New York, NY

  10018
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (212) 594-5050

 

(Former name or former address, if changed since last report)

 

Not Applicable

 

 

 

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):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

 

 

Section 5 – Corporate Governance and Management

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Appointment of Director

 

On March 3, 2016, the Board of Directors (the “ Board ”) of Snap Interactive, Inc. (the “ Company ”) increased the size of the Board from four (4) members to five (5) members and appointed Judy Krandel to the Board, effective March 3, 2016. Ms. Krandel will serve as a director until the Company’s 2016 annual meeting of stockholders. Ms. Krandel has not been appointed to any Board committees at this time.

 

Ms. Krandel will be entitled to receive a cash fee for her service as a non-employee member of the Board and for her service on any committee of the Board of $15,000 and $2,500 per year, respectively. As additional consideration for her service on the Board, the Board awarded Ms. Krandel a stock option representing the right to purchase 100,000 shares of the Company’s common stock, par value $0.001 per share (the “ Common Stock ”), at an exercise price equal to $0.11 per share of Common Stock, which was the fair market value of a share of Common Stock as of the close of market on March 3, 2016. The shares underlying the stock option will vest in three (3) equal annual installments on the first, second and third anniversaries of the date of grant, provided that Ms. Krandel is providing services to the Company on such dates. There are no arrangements or understandings between Ms. Krandel and any other persons pursuant to which she was selected as a director. In addition, there are no transactions between the Company and Ms. Krandel or her immediate family members requiring disclosure under Item 404(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended.

 

Employment Agreement Amendment

 

On March 3, 2016, the Company entered into an amendment to its employment agreement with Alexander Harrington, the Company’s Chief Executive Officer and Chief Financial Officer (the “ Amendment ”).

 

The Amendment amends the terms of Mr. Harrington’s annual incentive bonus for the year ended December 31, 2015 under his employment agreement to provide that Mr. Harrington will (i) receive a stock option representing the right to purchase 50,000 shares of Common Stock at an exercise price of $0.20 per share, with the shares underlying such option vesting in four (4) equal annual installments on the first, second, third and fourth anniversary of the date of grant, provided that Mr. Harrington is providing services to the Company on such dates (the “ New Harrington Option ”), and (ii) be entitled to a cash payment of $25,000 payable in March 2016. The Board awarded the New Harrington Option to Mr. Harrington on March 3, 2016.

 

Prior to the amendment, Mr. Harrington was entitled to an annual incentive bonus of $145,000, with (i) 50% of the bonus payable so long as Mr. Harrington remained employed with the Company and (ii) 50% of the bonus payable if certain performance metrics were achieved during 2015, in each case to be paid during January or February of 2016.

 

The foregoing description of the Amendment and the New Harrington Option does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and the Form of Nonqualified Stock Option Agreement awarded under the Incentive Plan, which was filed as Exhibit 99.4 to the Company’s Registration Statement on Form S-8 filed on May 24, 2011 by the Company with the Securities and Exchange Commission (the “ Form S-8 ”), and in each case are incorporated by reference herein.

 

  2  

 

Restricted Stock Cancellation and Equity Awards

 

On March 3, 2016, the Company entered into a restricted stock cancellation and release agreement (the “ Cancellation Agreement ”) with Clifford Lerner, the Company’s President of the Grade, pursuant to which the Company cancelled a grant of 5,000,000 restricted shares of Common Stock awarded to Mr. Lerner on April 10, 2013 (the “ Original Restricted Shares ”). The Original Restricted Shares would have vested 50% on the third anniversary of the date of grant and 50% on the fourth anniversary of the date of grant. As consideration for Mr. Lerner agreeing to forfeit the Original Restricted Shares, on March 3, 2016, the Board awarded Mr. Lerner a replacement award of 5,000,000 restricted shares that vest 100% on the (10th) tenth anniversary of the date of grant, provided Mr. Lerner is providing services to the Company on such date (the “ New Restricted Shares ”).

 

In addition, on March 3, 2016, the Board awarded Mr. Lerner a stock option representing the right to purchase 50,000 shares of Common Stock at an exercise price of $0.20 per share, with the shares underlying such option vesting in four (4) equal annual installments on the first, second, third and fourth anniversary of the date of grant, provided that Mr. Lerner is providing services to the Company on such dates (the “ New Lerner Option ”).

 

The foregoing description of the Cancellation Agreement, the Original Restricted Shares, the New Restricted Shares and the New Lerner Option does not purport to be complete and is qualified in its entirety by reference to the Cancellation Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K, the Form of Restricted Stock Award Agreement awarded under the Incentive Plan, which was filed as Exhibit 99.3 to the Form S-8, and the Form of Nonqualified Stock Option Agreement awarded under the Incentive Plan, which was filed as Exhibit 99.4 to the Form S-8, and in each case are incorporated by reference herein.

 

Section 8 – Other Events

 

Item 8.01 Other Events.

 

On March 7, 2016, the Company issued a press release announcing Ms. Krandel’s appointment as a director. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

 

Section 9 – Financial Statements and Exhibits

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
10.1   Third Amendment to Executive Employment Agreement, effective as of March 3, 2016, by and between Snap Interactive, Inc. and Alexander Harrington.
10.2   Restricted Stock Cancellation and Release Agreement, dated as of March 3, 2016, by and between Clifford Lerner and Snap Interactive, Inc.
99.1  

Press release, dated March 7, 2016, issued by Snap Interactive, Inc.

 

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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.

 

Date:  March 7, 2016    
       
    SNAP INTERACTIVE, INC.
       
    By: /s/ Alexander Harrington
      Alexander Harrington
      Chief Executive Officer and Chief Financial Officer

  

  4  

 

EXHIBIT INDEX

 

Exhibit No.   Description
10.1   Third Amendment to Executive Employment Agreement, effective as of March 3, 2016, by and between Snap Interactive, Inc. and Alexander Harrington.
10.2   Restricted Stock Cancellation and Release Agreement, dated as of March 3, 2016, by and between Clifford Lerner and Snap Interactive, Inc.
99.1  

Press release, dated March 7, 2016, issued by Snap Interactive, Inc.

 

 

5

Exhibit 10.1

 

THIRD Amendment to EXECUTIVE EMPLOYMENT Agreement

 

This THIRD Amendment to EXECUTIVE EMPLOYMENT Agreement (this “ Amendment ”), effective as of March 3, 2016 (the “ Effective Date ”), is made and entered into by and between Snap Interactive, Inc., a Delaware corporation (the “ Company ”), and Alexander Harrington (“ Executive ”) for purposes of amending that certain Executive Employment Agreement, dated as of February 28, 2014, as amended by the First Amendment to Executive Employment Agreement, effective as of March 19, 2015, and as further amended by the Second Amendment to Executive Employment Agreement (the “ Second Amendment ”), effective as of October 13, 2015, by and between the Company and Executive (collectively, the “ Agreement ”). Terms used in this Amendment with initial capital letters that are not otherwise defined herein shall have the meanings assigned to such terms in the Agreement.

 

WHEREAS , Section 12(j) of the Agreement provides that the Agreement can only be amended by a writing signed by the parties thereto; and

 

WHEREAS , the Company and Executive mutually desire to amend the Agreement to reflect a change to Executive’s Annual Incentive Bonus for the 2015 calendar year and to clarify that the parties intended the changes made by the Second Amendment to eliminate the guaranteed bonus provided by Section 5(b)(i) of the Agreement.

 

NOW, THEREFORE , pursuant to Section 12(j) of the Agreement, in consideration of the mutual promises, conditions, and covenants contained herein and in the Agreement, and other good and valuable consideration, the adequacy of which is hereby acknowledged, the parties agree to amend the Agreement as follows, effective as of the Effective Date:

 

1.           Section 5 of the Agreement is hereby amended by deleting subsections (i) and (ii) of said section in their entirety and substituting in lieu thereof the following new Section 5(b)(i) and renumbering the current Section 5(b)(iii) as Section 5(b)(ii):

 

(i) For the 2015 calendar year, Executive shall be eligible to receive an annual incentive bonus (the “ Annual Incentive Bonus ”) of Twenty-Five Thousand Dollars (US $25,000), provided Executive is employed by the Company on the date the Annual Incentive Bonus is paid, which date shall be during the annual review period (generally January through March) in 2016. In addition, Executive shall be eligible to receive, subject to Board approval, an option to purchase fifty thousand (50,000) shares of common stock of the Company , with (A) an exercise price equal to $0.20 per share, which is greater than the fair market value of the Company’s common stock on the date of grant and (B) twenty-five percent (25%) of the options vesting on each of the first, second, third, and fourth anniversary of the date of grant, subject to the terms and conditions of the Company’s Amended and Restated 2011 Long-Term Incentive Plan and the Company’s standard form of nonqualified stock option agreement.

 

2.           Except for the Annual Incentive Bonus described in this Amendment, Executive acknowledges and agrees that he has voluntarily and irrevocably waived his right to any other incentive bonus for the 2015 calendar year that he may have previously been eligible to receive under the terms of this Agreement or any prior amendment thereto.

 

3.           Except as expressly amended by this Amendment, the Agreement shall continue in full force and effect in accordance with the provisions thereof.

 

[Remainder of Page Intentionally Left Blank

Signature Page Follows]

 

 

 

IN WITNESS WHEREOF , the Company and Executive have executed, or caused to be executed, this Amendment to be effective as of the Effective Date.

 

  SNAP INTERACTIVE, INC.
       
  By: /s/ Clifford Lerner
    Name: Clifford Lerner
    Title: President of The Grade
       
  EXECUTIVE  
       
  /s/ Alexander Harrington
  Alexander Harrington

  

 

  Signature Page to

Third Amendment to Executive Employment Agreement

Exhibit 10.2

 

RESTRICTED STOCK CANCELLATION AND RELEASE AGREEMENT

   

This RESTRICTED STOCK CANCELLATION AND RELEASE AGREEMENT (this “ Agreement ”) is entered into by and between Snap Interactive, Inc., a Delaware Corporation (the “ Company ”), and Clifford Lerner (the “ Employee ”), effective as of March 3, 2016 (the “ Effective Date ”).

 

WHEREAS , the Company sponsors the Snap Interactive, Inc. Amended and Restated 2011 Long-Term Incentive Plan (the “ Incentive Plan ”); and

 

WHEREAS , pursuant to that certain Restricted Stock Award Agreement, dated April 10, 2013 (the “ Award Agreement ”), the Company granted the Employee, outside of the Incentive Plan, five million (5,000,000) shares (the “ Awarded Shares ”) of restricted common stock of the Company, par value $0.001 per share (“ Common Stock ”), which Awarded Shares are unvested as of the Effective Date; and

 

WHEREAS , effective as of the Effective Date and in exchange for the New Awards (defined below), the Company and the Employee desire to cancel the Award Agreement as it relates to all five million (5,000,000) Awarded Shares, so that on and after the Effective Date, all of the Awarded Shares and the Award Agreement shall be cancelled and of no further effect.

 

NOW, THEREFORE , in consideration of the mutual covenants contained herein and other good and valuable consideration, the sufficiency of which are hereby acknowledged, the parties to this Agreement agree as follows:

 

CANCELLATION OF AWARD

 

1.1           Cancellation of Award . In exchange for the consideration described in Section 1.2 below, the Employee hereby agrees that the Award Agreement and the Awarded Shares granted thereunder shall be cancelled, terminated, and of no further force or effect, effective as of the Effective Date, and neither the Company nor the Employee shall have any further rights or obligations with respect to the Awarded Shares, the Award Agreement, or with respect to any Common Stock of the Company that could have been acquired pursuant to the Award Agreement.

 

1.2           New Awards . In exchange for the Employee’s agreement to cancel the Awarded Shares, the Award Agreement, and any other rights, obligations, and liabilities of the Company thereunder, and the release of claims set forth in Section 1.3 below, the Company hereby agrees to grant the Employee, as soon as administratively practicable after the Effective Date and subject to Board approval, the following new awards under the Incentive Plan (the awards described in Sections 1.2(a) and (b) below are collectively referred to herein as, the “ New Awards ”):

 

(a)          Five million (5,000,000) shares of restricted Common Stock (the “ New Awarded Shares ”), with all of the New Awarded Shares vesting upon the earlier of (i) a Change in Control (as defined in the Incentive Plan) and (ii) the tenth anniversary of the New Awarded Shares’ date of grant, subject to the terms and conditions of the Incentive Plan and of the form of restricted stock award agreement, a copy of which is attached hereto as Exhibit A (the “ New Award Agreement ”).

 

(b)          An option to purchase fifty thousand (50,000) shares of Common Stock (the “ New Option ”), with (i) an exercise price equal to $0.20 per share, which is greater than the fair market value of the Company’s Common Stock on the date of grant and (ii) twenty-five percent (25%) of the New Option vesting on each of the first, second, third and fourth anniversary of the New Option’s date of grant, subject to the terms and conditions of the Incentive Plan and of the form of nonqualified stock option agreement, a copy of which is attached hereto as Exhibit B (the “ New Option Agreement ”).

 

   

 

 

1.3           Release .

 

(a)          Effective as of the Effective Date, the Employee, for the Employee and the Employee’s successors and assigns forever, does hereby unconditionally and irrevocably compromise, settle, remise, acquit, and fully and forever release and discharge the Company and its respective successors, assigns, parents, divisions, subsidiaries, and affiliates, and its present and former officers, directors, employees, and agents (collectively, the “ Released Parties ”) from any and all claims, counterclaims, set-offs, debts, demands, choses in action, obligations, remedies, suits, damages, and liabilities in connection with any rights to acquire securities of the Company pursuant to the Award Agreement and the Common Stock of the Company issuable thereunder (collectively, the “ Releaser’s Claims ”), whether now known or unknown, suspected or claimed, whether arising under common law, in equity, or under statute, which the Employee or the Employee’s successors or assigns ever had, now have, or in the future may claim to have against the Released Parties and which may have arisen at any time on or prior to the date hereof; provided, however, that this Section 1.3(a) shall not apply to any of the obligations or liabilities of the Released Parties arising under or in connection with this Agreement.

 

(b)          The Employee covenants and agrees never to commence, voluntarily aid in any way, prosecute, or cause to be commenced or prosecuted against the Released Parties any action or other proceeding based on any of the released Releaser’s Claims which may have arisen at any time on or prior to the date hereof.

 

1.4           Further Assurances . Each party to this Agreement agrees that it will perform all such further acts and execute and deliver all such further documents as may be reasonably required in connection with the consummation of the transactions contemplated hereby in accordance with the terms of this Agreement.

 

1.5           Representations and Warranties . The Employee hereby represents and warrants to the Company that the Employee has full power and authority to enter into and perform this Agreement and to carry out the transactions contemplated hereby. This Agreement constitutes the legal, valid, and binding obligation of the Employee, enforceable against the Employee in accordance with its terms. The Employee has read and understood this Agreement and is entering into this Agreement voluntarily. The Employee agrees that this Agreement provides good and valuable consideration for the Employee agreements herein.

 

  2  

 

 

MISCELLANEOUS

 

2.1           Headings . The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

 

2.2           Parties Bound . The terms, provisions, representations, warranties, covenants, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties to this Agreement and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns.

 

2.3           Execution . This Agreement may be executed in two or more counterparts (including facsimile or portable document (“.pdf”) counterparts), all of which taken together shall constitute one instrument. The exchange of copies of this Agreement and of signature pages by facsimile or .pdf transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile or .pdf shall be deemed to be their original signatures for any purpose whatsoever.

 

2.4           Entire Agreement . This Agreement, together with the New Award Agreement and the New Option Agreement, contains the entire understanding of the parties to this Agreement with respect to the subject matter contained in this Agreement and supersedes all prior agreements and understandings among the parties with respect to such subject matter, including, without limitation, the Award Agreement.

 

2.5           Law Governing . This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Delaware, without regard to its principles of conflict of laws.

 

2.6           Notice . Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery or upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid. Notice shall be addressed to the Company at its principal executive office and to the Employee at the address that he most recently provided to the Company.

  

[ Remainder of page intentionally left blank.

Signature Page to Follow. ]

 

  3  

 

 

IN WITNESS WHEREOF , the Company has caused this Agreement to be executed by its duly authorized officer, and the Employee, to evidence his consent and approval of all the terms hereof, has duly executed this Agreement as of the date first written above.

 

  SNAP INTERACTIVE, INC.
     
  By: /s/ Alexander Harrington
  Name: Alexander Harrington
  Title: Chief Executive Officer and Chief Financial Officer
     
  EMPLOYEE
     
  /s/ Clifford Lerner
  Clifford Lerner
     
  Address:  
     
     

 

4

Exhibit 99.1

 

 

Snap Interactive Appoints Judy Krandel to Board of Directors

 

 

NEW YORK, NY / ACCESSWIRE / March 7, 2016 / Snap Interactive, Inc. ("SNAP," the "Company," "we," "our" or "us") (OTCQB: STVI), today announced that Judy F. Krandel has been appointed to the Company's Board of Directors, effective immediately. Ms. Krandel will join as the Company’s third independent director.

 

Ms. Krandel, who currently serves as a portfolio manager at the Juniper Investment Company, brings to SNAP’s Board more than 20 years of capital markets experience, principally as an investment analyst and portfolio manager focusing on small-cap stocks, with a concentration in technology. Throughout her career, she has worked closely with corporate management teams to help them develop strategic business plans, explore M&A and joint venture opportunities, raise capital and enhance their investor relations efforts.

 

“Judy’s background as an investor provides a critical perspective that will make her a tremendous asset to the Board. She has also cultivated deep relationships with participants in the small and micro-cap ecosystem that could help the Company achieve its strategic objectives,” said Alex Harrington, CEO of SNAP. “Over the course of her career, Judy has established a stellar reputation as a top small-cap investor. In that capacity, she’s also served as a trusted advisor to many corporate management teams, helping them unlock shareholder value. We welcome Judy to the SNAP family and look forward to her contributions.” 

Mr. Harrington continued, “ We are also pleased to enhance our corporate governance by adding professionals of the highest caliber to our Board. Now that SNAP’s Board consists of a majority of independent directors, we have met an important requirement to list on a national securities exchange."

 

 

“I am excited to join SNAP’s Board and work with the executive team to help build it into a leader in the interactive dating industry,” said Ms. Krandel. “SNAP has the elements in place to be successful: It operates in an industry undergoing tremendous growth and has a management team with the vision and experience to capitalize on the opportunity. I am looking forward to helping guide SNAP on a path to continued success.”

 

Ms. Krandel joined Juniper in 2011 as Portfolio Manager for the Juniper Public Fund, a concentrated, value-oriented fund that focuses on small-cap equities. Before that, Ms. Krandel was a Portfolio Manager at Alpine Woods where she managed portions of two long/short equity hedge funds. Prior to that, she was a Portfolio Manager from 2001 to 2009 at First New York Securities, LLC, where her experience included founding and co-managing a domestic long/short small-cap hedge fund. Ms. Krandel has been engaged in public equity research and investing since 1992, starting with Fred Alger Management, followed by positions at Delaware Management and Kern Capital Management. Ms. Krandel received her B.S. from the Wharton School of Business at the University of Pennsylvania and her M.B.A. from the University of Chicago.

 

 

 

 

IR Contacts:

 

IR@snap-interactive.com

 

PR Contact:

 

Adam Handelsman

adam@SpecOpsComm.com

212-518-7721

 

About Snap Interactive, Inc.

 

Snap Interactive, Inc. develops, owns and operates dating applications for social networking websites and mobile platforms. The Grade is a patent-pending mobile dating application catering to high-quality singles. SNAP's flagship brand, FirstMet (formerly AYI.com), is a multi-platform online dating site with a large user database of approximately 30 million users.

 

For more information, please visit http://www.snap-interactive.com.

 

The contents of our websites are not part of this press release, and you should not consider the contents of these websites in making an investment decision with respect to our common stock.

 

Facebook is a registered trademark of Facebook Inc. Apple, iTunes and iPhone are registered trademarks of Apple Inc. and App Store is a registered service mark of Apple Inc. Android and Google Play are registered trademarks of Google Inc. FirstMet and The Grade are trademarks and AYI.com is a registered trademark of Snap Interactive, Inc.

 

Forward-Looking Statements:

 

This press release contains "forward-looking statements." Such statements may be preceded by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential" or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with general economic, industry and market sector conditions; the Company's ability to institute corporate governance standards or achieve compliance with national exchange listing requirements; the Company's future growth and the ability to obtain additional financing to implement the Company's growth strategy; the ability to increase or recognize revenue, decrease expenses and increase the number of active subscribers, new subscription transactions or monthly active users; the ability to enter into new advertising agreements; the ability to diversify new user acquisition channels or improve the conversion of users to paid subscribers; the ability to anticipate and respond to changing user and industry trends and preferences; the intense competition in the online dating marketplace; the ability to release new applications or derive revenue from new applications; and circumstances that could disrupt the functioning of the Company's applications. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission ("SEC"), including the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov.

 

All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement was made, except to the extent required by applicable securities laws.