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): May 5, 2017

 

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

 

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

 

122 East 42nd Street,

New York, NY

  10168
(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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

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.

 

Employment Agreement

 

Effective May 5, 2017, Snap Interactive Inc. (the “ Company ”) entered into an employment agreement (the “ Employment Agreement ”) with Eric Sackowitz (“ Mr. Sackowitz ”). The Employment Agreement sets forth, among other things, Mr. Sackowitz’s employment responsibilities, term of employment and base salary.

 

The Employment Agreement retains Mr. Sackowitz as the Company’s Chief Technology Officer. The Employment Agreement provides for a one (1) year term with automatic successive one (1) year renewals unless earlier terminated in accordance with its terms. Under the Employment Agreement, Mr. Sackowitz is entitled to receive a base salary of two hundred sixty five thousand dollars ($265,000) per year, effective retroactively to February 1, 2017, and is eligible to receive an annual incentive bonus for the 2017 calendar year of up to sixty thousand dollars ($60,000), with fifteen thousand dollars ($15,000) of such bonus being guaranteed and the remaining forty-five thousand dollars ($45,000) of such bonus being based on the achievement of performance metrics to be decided by the Chief Executive Officer, in his sole discretion. Mr. Sackowitz’s annual incentive bonuses in subsequent calendar years shall be determined by the Board of Directors of the Company (the “ Board ”), based on criteria to be established jointly by the Chief Executive Officer and Mr. Sackowitz. The payment of Mr. Sackowitz’s annual incentive bonus is contingent on him being employed by the Company on the date that such bonus is paid.

 

In addition, the Employment Agreement contains customary provisions relating to confidentiality, non-solicitation, non-disparagement and non-competition.

 

Pursuant to the Employment Agreement, if Mr. Sackowitz’s employment is terminated (i) upon death or permanent disability (as defined in the Employment Agreement), (ii) by the Company with “cause” (as defined in the Employment Agreement), (iii) by the Company “without cause” (as defined in the Employment Agreement), (iv) by Mr. Sackowitz for “good reason” (as defined in the Employment Agreement), (v) by Mr. Sackowitz for “other than for good reason” (as defined in the Employment Agreement), or (vi) because the Company elects not to renew the Employment Agreement and Mr. Sackowitz’s employment terminates as a result of such non-renewal, Mr. Sackowitz shall be entitled to (a) the base salary earned by him before the effective date of termination, (b) any unreimbursed reasonable business expenses and (c) any amounts to which Mr. Sackowitz is entitled to under the Company's benefit plans in accordance with their terms.

 

Additionally, if (i) the Company elects not to renew the Employment Agreement and Mr. Sackowitz’s employment terminates as a result of such non-renewal, (ii) the Company terminates Mr. Sackowitz’s employment without “cause” or (iii) Mr. Sackowitz terminates his employment for “good reason,” then the Company shall, subject to Mr. Sackowitz’s execution of a general release of claims in favor of the Company, and, subject to Mr. Sackowitz’s compliance with certain provisions of the Employment Agreement, provide to Mr. Sackowitz, in addition to the amounts set forth above, an amount equal to three (3) months of Mr. Sackowitz’s then-current annualized base salary, payable in three (3) equal monthly installments commencing on the Company’s first regular payroll date after the release of claims provided by Mr. Sackowitz has become effective and binding upon Mr. Sackowitz. Additionally, if Mr. Sackowitz is eligible and timely elects to continue his health insurance coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1984 (“ COBRA ”), and subject to Mr. Sackowitz’s execution of the release of claims referred to above, the Company will continue to pay its portion of Mr. Sackowitz’s monthly health insurance premiums for the earlier of (a) the three (3) months following the effective date of termination of Mr. Sackowitz’s employment or (b) the date Mr. Sackowitz’s coverage under such group health plans terminates for any reason; provided that the Company’s payment of such premiums shall be limited to the same proportion of the cost of coverage under the Company’s group health plans as the Company pays on behalf of its employees generally (the “ COBRA Entitlement ”).

 

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If, during the sixty (60) day period immediately prior to a “change in control” (as defined in the Employment Agreement) or during the one (1) year period beginning on the date of a “change in control,” (a) Mr. Sackowitz’s employment is terminated by the Company (or by the acquiring or successor business entity following a “change in control”) other than for “cause” or (b) Mr. Sackowitz terminates his employment with the Company (or with the acquiring or successor business entity following a “change in control”) for “good reason,” then, Mr. Sackowitz shall receive, in lieu of the severance benefits described above and subject to Mr. Sackowitz’s execution of a general release of claims as provided in the Employment Agreement, a severance benefit in an amount equal to three (3) months of Mr. Sackowitz’s annualized base salary as in effect on the date of the “change in control” plus three (3) months of the COBRA Entitlement.

 

The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to Mr. Sackowitz’s Employment Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.

 

Stock Option Awards

 

Effective May 5, 2017, the Compensation Committee of the Board awarded Mr. Sackowitz a stock option pursuant to a Nonqualified Stock Option Agreement (the “ Stock Option Agreement ”). The stock option represents the right to buy twenty-eight thousand five hundred seventy-one (28,571) shares of the Company’s common stock at an exercise price equal to $3.36 per share of common stock. The stock option vests and becomes exercisable in four (4) separate tranches of twenty five percent (25%) each, with the first tranche vesting on the one (1) year anniversary of the date of grant and the remaining three (3) tranches vesting on one (1) year intervals thereafter; provided that Mr. Sackowitz is providing services to the Company on such dates and subject to early termination or forfeiture in accordance with the terms of the Stock Option Agreement.

 

In addition, on May 5, 2017, the Company entered into an option cancellation and release agreement with Mr. Sackowitz (the “ Cancellation Agreement ”), pursuant to which the Company cancelled a stock option that was awarded to Mr. Sackowitz on October 7, 2016 (the “ Cancelled Option ”). The Cancelled Option represented the right to purchase fifteen thousand six hundred seventy-eight (15,678) shares of the Company’s common stock at an exercise price of $6.65 per share. Pursuant to the Cancellation Agreement, Mr. Sackowitz generally released all claims against the Company related to his right to acquire shares of the Company’s common stock pursuant to the Cancelled Option. As consideration for Mr. Sackowitz agreeing to forfeit the Cancelled Option, on May 5, 2017, the Compensation Committee of the Board awarded Mr. Sackowitz a stock option representing the right to purchase fifteen thousand six hundred seventy-eight (15,678) shares of the Company’s common stock at an exercise price equal to $3.36 per share (the “ Replacement Option ”). The shares of common stock underlying the Replacement Option fully vested on the date of grant.

 

The foregoing description of the Stock Option Agreement and the Replacement Option does not purport to be complete and is qualified in its entirety by reference to the Form of Nonqualified Stock Option Agreement awarded under the Snap Interactive, Inc. 2016 Long-Term Incentive Plan, which was filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 11, 2016 by the Company with the Securities and Exchange Commission. The foregoing description of the Cancellation Agreement 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 and is incorporated by reference herein.

 

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Section 9 — Financial Statements and Exhibits

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
10.1   Employment Agreement, dated May 5, 2017, by and between Snap Interactive, Inc. and Eric Sackowitz.
10.2   Option Cancellation and Release Agreement, dated May 5, 2017, by and between Snap Interactive, Inc. and Eric Sackowitz.

 

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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: May 11, 2017    
     
  SNAP INTERACTIVE, INC.
     
  By: /s/ Alexander Harrington
    Alexander Harrington
    Chief Executive Officer

 

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EXHIBIT INDEX

 

Exhibit No.   Description
10.1   Employment Agreement, dated May 5, 2017, by and between Snap Interactive, Inc. and Eric Sackowitz.
10.2   Option Cancellation and Release Agreement, dated May 5, 2017, by and between Snap Interactive, Inc. and Eric Sackowitz.

 

 

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Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.2

 

OPTION CANCELLATION AND RELEASE AGREEMENT

 

This OPTION CANCELLATION AND RELEASE AGREEMENT (this “ Agreement ”) is entered into by and between Snap Interactive, Inc., a Delaware corporation (the “ Company ”), and Eric Sackowitz (the “ Participant ”), effective as of May 5, 2017 (the “ Effective Date ”).

 

WHEREAS , for the benefit of its key employees, key contractors, and outside directors, the Company currently sponsors the Snap Interactive, Inc. 2016 Long-Term Incentive Plan (the “ Incentive Plan ”);

 

WHEREAS , pursuant to the Incentive Plan, the Company granted stock options permitting the Participant to acquire up to five hundred forty-eight thousand seven hundred ten (548,710) full shares of common stock of the Company, par value $0.001 per share (the “ Common Stock ”), at an exercise price of $0.19 per share (the “ Current Option ”), and subject to the terms and conditions of the Incentive Plan and the Nonqualified Stock Option Agreement, with a date of grant of October 7, 2016 (the “ Award Agreement ”);

 

WHEREAS , the Company previously approved a 1-for-35 reverse stock split of the Company’s Common Stock, effective as of January 5, 2017 (the “ Reverse Stock Split ”);

 

WHEREAS , pursuant to Article 11 of the Incentive Plan, as a result of the Reverse Stock Split, the number of shares of Common Stock issuable upon exercise of the Current Option was reduced to fifteen thousand six hundred and seventy eight (15,678) full shares of Common Stock, and the exercise price was increased to $6.65; and

 

WHEREAS , effective as of the Effective Date and in exchange for the New Option (defined below), the Company and the Participant desire to cancel the entire Current Option as it relates to all fifteen thousand six hundred and seventy eight (15,678) full shares of Common Stock, so that on and after the Effective Date, the entire Current Option and the Award Agreement shall be cancelled and of no further force or 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 OPTION

 

1.1        Cancellation of Option . In exchange for the consideration described in Section 1.2 below, the Participant hereby agrees that the entire Current Option and the Award Agreement shall be cancelled, terminated, and of no further force or effect, effective as of the Effective Date, and neither the Company nor the Participant shall have any further rights or obligations with respect to the Current Option, the Award Agreement, or with respect to any Common Stock of the Company that could have been purchased upon exercise of the Current Option under the Award Agreement.

 

1.2        New Option Award . In exchange for the Participant’s agreement to cancel the Current Option, the Award Agreement, and any other rights, obligations, or liabilities of the Company thereunder, and the release of claims set forth in Section 1.3 below, the Company hereby agrees to grant the Participant a new option to purchase fifteen thousand six hundred and seventy eight (15,678) full shares of Common Stock, (a) with an exercise price of $3.36, which is equal to the fair market value of the Company’s Common Stock on the date of grant and (b) which shall be fully vested on the date of grant (the “ New Option ”), subject to the terms and conditions of the Incentive Plan and a nonqualified stock option agreement substantially in the same form as attached hereto as Exhibit A (the “ New Option Agreement ”).

 

 

 

 

1.3         Release .

 

Effective as of the Effective Date, the Participant, for the Participant and the Participant’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 Current Option or 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 Participant or the Participant’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 Participant 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 to 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 Participant hereby represents and warrants to the Company that: (i) there are no restrictions on the cancellation of the Current Option; (ii) the Participant has full power and authority to enter into and perform this Agreement and to carry out the transactions contemplated hereby; and (iii) this Agreement constitutes the legal, valid, and binding obligation of the Participant, enforceable against the Participant in accordance with its terms. The Participant has read and understood this Agreement and is entering into this Agreement voluntarily. The Participant agrees that this Agreement provides good and valuable consideration for the Participant’s agreements contained herein.

 

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.

 

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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 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 Participant at the address that he most recently provided to the Company.

 

 

[ Remainder of page intentionally left blank.

Signature Page to Follow. ]

 

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

 

  THE COMPANY:
     
  Snap Interactive, Inc.
   
  By: /s/ Judy Krandel
  Name: Judy Krandel
  Title: CFO
     
  THE PARTICIPANT:
     
  /s/ Eric Sackowitz
  Signature

 

  Name: Eric Sackowitz
  Address:  25 River Road, #4203
    Wilton, CT 06897

 

 

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