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)
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July
21, 2006
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PubliCARD,
Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Pennsylvania
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0-29794
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23-0991870
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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One
Rockefeller Plaza, 14th
Floor,
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New
York, NY
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10020
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant's
telephone number, including area code
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(212)
651-3102
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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
July
21, 2006, PubliCARD, Inc. (the “Company”) entered into an Engagement Agreement
(as
amended, the
“Agreement”) with Joseph Sarachek. Pursuant to the Agreement, Mr. Sarachek was
appointed to the Company’s Board of Directors on July 21, 2006. Also pursuant to
the Agreement, Mr. Sarachek was appointed as the Company’s Chief Executive
Officer, effective July 31, 2006. Mr. Sarachek will receive compensation at
the
rate of $15,000 per month during the term of the Agreement and additional
compensation described in the following paragraph. The Agreement may be
terminated by the Company or Mr. Sarachek with 30 days’ prior written notice.
Pursuant
to the Agreement, Mr. Sarachek has been granted options (the “Initial Options”)
to purchase 2,837,075 shares of the Company’s common stock at an exercise price
of $0.0279 per share. 1,793,650 of the Initial Options were granted under the
Company’s 1999 Long Term Incentive Plan (the “Plan”), and 1,043,425 of the
Initial Options were granted pursuant to a Non-Plan Stock Option Agreement
between Mr. Sarachek and the Company, dated as of July 21, 2006. All of the
Initial Options will vest upon the consummation of a sale of the Company or
other restructuring or similar transaction involving the Company, as defined
in
the Agreement. Following the consummation of any such transaction, Mr. Sarachek
will be granted additional options to purchase shares of the Company’s common
stock, which options will be exercisable into shares of the Company’s common
stock representing (when taken together with the Initial Options) 10% of the
Company’s outstanding common stock, calculated on a fully-diluted basis. Such
options will be exercisable when granted. The Agreement also provides that,
upon
consummation of any such transaction, Mr. Sarachek will be entitled to receive
a
cash transaction fee in an amount equal to a percentage of the aggregate value
of such transaction received by the Company or its shareholders ranging from
4%
to 7%.
In
connection with the Initial Options, Mr. Sarachek and the Company entered into
the Non-Plan Stock Option Agreement described above and a Stock Option
Agreement, dated as of July 21, 2006 (collectively, the “Stock Option
Agreements”). Pursuant to the Stock Option Agreements, the Initial Options have
a term of 10 years. If Mr. Sarachek’s engagement by the Company is terminated
for cause, or if Mr. Sarachek voluntarily terminates such engagement, if the
Initial Options are not then vested, they will terminate. If such engagement
is
terminated for any other reason, if the Initial Options are then vested, then
the Initial Options will be exercisable for the shorter of 90 days following
termination and the remainder of their term.
The
Agreement further provides that Mr. Sarachek will be entitled to be reimbursed
by the Company for his reasonable fees and expenses, and that the Company will
indemnify Mr. Sarachek to the maximum extent permitted by law. In connection
with the foregoing, Mr. Sarachek and the Company entered into an Indemnification
Agreement.
Item
5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers
Antonio
L. DeLise has resigned from the Company’s Board of Directors. Mr. DeLise will
resign as President, Chief Executive Officer, Chief Financial Officer and
Corporate Secretary of the Company, as well as all positions held at the
Company’s subsidiaries, effective July 30, 2006. Mr. DeLise is leaving the
Company to pursue other opportunities.
On
July
21, 2006, Mr. Sarachek was appointed to the Company’s Board of Directors.
Pursuant to the Agreement, Mr. Sarachek will be the Company’s Chief Executive
Officer effective July 31, 2006. See Item 1.01 above. Mr. Sarachek, 44, has
been
the Managing Partner and founder of Triax Capital Advisors, LLC, a restructuring
advisory firm (“Triax”), since January 2003. Prior to founding Triax, Mr.
Sarachek was a Managing Director of Balfour Capital Advisors, the predecessor
to
Triax, from September 2001 until January 2003. From July 2001 until September
2001, Mr. Sarachek was a Managing Director of Amroc Capital Advisors, a
restructuring advisory group. Mr. Sarachek, an attorney, formerly practiced
corporate and bankruptcy law at McDermott, Will & Emery and Kelley Drye
& Warren. From 1998 through January 2000, Mr. Sarachek acted as a consultant
to the Company, but has not transacted any business with the Company since
that
time.
There
are
no arrangements or understandings between Mr. Sarachek and any other person
pursuant to which he was selected as an officer. Mr. Sarachek has no family
relations with any directors or executive officers of the Company. For a period
of time until September 30, 2002, Harry Freund, the Chairman of the Board of
Directors of the Company and Jay Goldsmith, the Vice Chairman of the Board
of
Directors of the Company, had a minority interest in Balfour Capital
Advisors.
10.1
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Engagement
Agreement, dated as of July 21, 2006, between PubliCARD, Inc. and
Joseph
E. Sarachek.
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10.2
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Addendum
to Engagement Agreement, dated as of July 26, 2006, between PubliCARD,
Inc. and Joseph E. Sarachek.
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10.3
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Indemnification
Agreement, dated as of July 21, 2006, between PubliCARD, Inc. and
Joseph
E. Sarachek.
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10.4
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Stock
Option Agreement, dated as of July 21, 2006, between PubliCARD, Inc.
and
Joseph E. Sarachek.
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10.5
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Non-Plan
Stock Option Agreement, dated as of July 21, 2006, between PubliCARD,
Inc.
and Joseph E. Sarachek.
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99.1
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Press
release issued by PubliCARD, Inc. on July 26,
2006.
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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.
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PubliCARD, Inc. |
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Registrant |
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Date:
July 27, 2006 |
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/s/
Antonio L. DeLise |
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Antonio
L. DeLise, President and Chief
Financial Officer |
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EXHIBIT
INDEX
Exhibit
Number
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Description
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10.1
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Engagement
Agreement, dated as of July 21, 2006, between PubliCARD, Inc. and
Joseph
E. Sarachek.
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|
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10.2
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Addendum
to Engagement Agreement, dated as of July 26, 2006, between PubliCARD,
Inc. and Joseph E. Sarachek.
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10.3
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Indemnification
Agreement, dated as of July 21, 2006, between PubliCARD, Inc. and
Joseph
E. Sarachek.
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|
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10.4
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Stock
Option Agreement, dated as of July 21, 2006, between PubliCARD, Inc.
and
Joseph E. Sarachek.
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10.5
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Non-Plan
Stock Option Agreement, dated as of July 21, 2006, between PubliCARD,
Inc.
and Joseph E. Sarachek.
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99.1
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Press
release issued by PubliCARD, Inc. on July 26,
2006.
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