BOCA RATON, FL. — In an 8-K filing dated Oct. 5, publicly traded FriendFinder Networks announced that it has entered into a new relationship with Marc H. Bell and Daniel C. Staton, who, effective last Friday, will now provide consultation services to the Nasdaq-traded company.
"FriendFinder Networks Inc.... and each of Marc H. Bell and Daniel C. Staton [have] determined to change Messrs. Bell's and Staton's status from executive Co-Chairman of the Board of Directors... and Chief Strategy Officer in Mr. Bell's case and Executive Co-Chairman of the Board in Mr. Staton's case to non-executive Co-Chairmen of the Board," read the statement. "In connection with this change in status, FFN and each of Messrs. Bell and Staton have agreed to terminate the Amended and Restated Employment Agreements, dated as of April 24, 2012, by and between FFN and Mr. Bell and FFN and Mr. Staton. No termination payments are being made pursuant to the Employment Agreements.
"In connection with the change in status for Messrs. Bell and Staton," the statement continued, "FFN determined it was in the best interests of FFN for Messrs. Bell and Staton to provide consulting services to FFN. As a result, FFN and each of Messrs. Bell and Staton entered into Consulting Agreements, dated as of October 5, 2012.
The consulting agreements, which run through March 29, 2017, provide that "Bell and Staton will provide consulting services in connection with enterprise-wide business initiatives, strategic planning and issues relating to the Company's debt, including any refinancing of the Company's debt," and that "each will receive an annual consulting fee of $500,000 per year which may be increased each fiscal year by 10% following the first anniversary of the Consulting Agreements if permitted under the terms of the agreements governing the Company's indebtedness and obligations in effect from time to time."
The two men also will be "eligible to receive an additional consulting fee annually, subject to the successful completion of a refinancing of the Company's outstanding debt as of the date of the Consulting Agreements and the satisfaction of certain performance criteria, in an amount up to 100 percent of their consulting fee and 100 percent of the dollar value of the quarterly common stock grants made to each of Messrs. Bell and Staton."
The agreement also provides for "a grant of 62,500 shares of the Company's common stock on the last day of each calendar quarter beginning with the calendar quarter commencing October 1, 2012, an option to purchase 4,167 shares of the Company's common stock on April 3, 2013 and each anniversary thereafter, and an annual grant of 2,500 shares of restricted stock on May 16, 2013 and on each anniversary thereafter (vesting on the third anniversary of the grant date)."
Termination payments are also provided for under the new agreement, which includes non-compete provisions that prevent the two executives from competing with FFN for two years following a voluntary termination.
The 8-K filing can be accessed here.