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):  July 28, 2006

ARTISTdirect, Inc.
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization)

000-30063
(Commission File Number)

95-4760230
(I.R.S. Employer
Identification Number)


1601 Cloverfield Boulevard, Suite 400 South
Santa Monica, California
(Address of Principal Executive Offices)

 



90404-4082
(Zip Code)

(310) 956-3300
(Registrant’s telephone number, including area code)

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:

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.

Amendment to Employment, Confidentiality and Non-competition Agreement with Randy Saaf

On July 28, 2006, the Registrant entered into an Amendment (the “Saaf Agreement Amendment”) to the Employment, Confidentiality and Non-competition Agreement (“Saaf Employment Agreement”) between the Registrant and Randy Saaf, Chief Executive Officer of MediaDefender, Inc, a wholly-owned subsidiary of the Registrant (“MediaDefender”). The Saaf Agreement Amendment amended the following provisions of the Saaf Employment Agreement:  (i) Section 2.2 to provide that any performance bonus earned by Mr. Saaf would be paid during the first half of the next calendar year following the period for which it is earned; (ii) Section 4 by (a) extending the period for which Mr. Saaf may act as a member of the board and as an officer of another company, OnSystems, Inc. (“OnSystems”) from twelve (12) months to twenty-four (24) months, and (b) extending the period for which Mr. Saaf has to use best efforts to cause the dissolution of OnSystems, from twelve (12) months to twenty-four (24) months.  The Saaf Agreement Amendment further requires Mr. Saaf to ensure that OnSystems does not operate any business that would require his attention except for activities reasonably related to the wind-down and dissolution and further provides that Mr. Saaf agrees to file or cause to be filed with the Secretary of State of California a certificate of election to wind up and dissolve OnSystems on or before August 18, 2006.  The Saaf Agreement Amendment also added a new Section 5.6 governing the timing of receipt by Mr. Saaf of payments upon his termination without cause, or for good reason, to avoid adverse tax consequences under Section 409A of the Internal Revenue Code of 1986, as amended (“IRC”).  All other provisions of the Saaf Employment Agreement were unchanged. The Saaf Agreement Amendment is included with this Current Report as Exhibit 10.1 and the summary above is qualified in its entirety by reference to such exhibit.

Amendment to Employment, Confidentiality and Non-competition Agreement with Octavia Herrera

On July 28, 2006, the Registrant entered into an Amendment (the “Herrera Agreement Amendment”) to the Employment, Confidentiality and Non-competition Agreement (“Herrera Employment Agreement”) between the Registrant and Octavia Herrera, President of MediaDefender. The Herrera Agreement Amendment amended the following provisions of the Herrera Employment Agreement:  (i) Section 2.2 to provide that any performance bonus earned by Mr. Herrera would be paid during the first half of the next calendar year following the period for which it is earned; (ii) Section 4 by (a) extending the period for which Mr. Herrera may act as a member of the board and as an officer of OnSystems from twelve (12) months to twenty-four (24) months, and (b) extending the period for which Mr. Herrera has to use best efforts to cause the dissolution of OnSystems, from twelve (12) months to twenty-four (24) months.  The Herrera Agreement Amendment further requires Mr. Herrera to ensure that OnSystems does not operate any business that would require his attention except for activities reasonably related to the wind-down and dissolution and further provides that Mr. Herrera agrees to file or cause to be filed with the Secretary of State of California a certificate of election to wind up and dissolve OnSystems on or before August 18, 2006.  The Herrera Agreement Amendment also added a new Section 5.6 governing the timing of receipt by Mr. Herrera of payments upon his termination without cause, or for good reason, to avoid adverse tax consequences under Section 409A of the IRC.  All other provisions of the Herrera Employment Agreement were unchanged. The Herrera Agreement Amendment is included with this Current Report as Exhibit 10.2 and the summary above is qualified in its entirety by reference to such exhibit.

Amendment to Employment Agreement with Jonathan V. Diamond

On July 31, 2006, the Registrant entered into an Amendment (the “Diamond Agreement Amendment”) to the Employment Agreement (“Diamond Employment Agreement”) between the

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Registrant and Jonathan V. Diamond, President and Chief Executive Officer of the Registrant. The Diamond Agreement Amendment amended the following provisions of the Diamond Employment Agreement:  (i) Section 5 to provide that any formula bonus and discretionary bonus will be paid during the first half of the next calendar year following the period for which such bonus relates; and (ii)  Section 7(f)(ii)(B) to provide that, to the extent necessary, to avoid adverse tax consequences pursuant to Section 409A of the IRC, any severance payment to be paid to Mr. Diamond in connection with his termination, may be paid to him in a lump sum six months after he becomes entitled to such severance payment.  All other provisions of the Diamond Employment Agreement were unchanged. The Diamond Agreement Amendment is included with this Current Report as Exhibit 10.3 and the summary above is qualified in its entirety by reference to such exhibit.

Amendment to Employment Agreement with Robert N. Weingarten

On July 31, 2006, the Registrant entered into an Amendment (the “Weingarten Agreement Amendment”) to the Employment Agreement (“Weingarten Employment Agreement”) between the Registrant and Robert N. Weingarten, Chief Financial Officer of the Registrant. The Weingarten Agreement Amendment amended the following provisions of the Weingarten Employment Agreement:  (i) Section 5 to provide that any formula bonus and discretionary bonus will be paid during the first half of the next calendar year following the period for which such bonus relates; and (ii)  Section 7(f)(ii)(B) to provide that, to the extent necessary, to avoid adverse tax consequences pursuant to Section 409A of the IRC, any severance payment to be paid to Mr. Weingarten in connection with his termination, may be paid to him in a lump sum six months after he becomes entitled to such severance payment.  All other provisions of the Weingarten Employment Agreement were unchanged. The Weingarten Agreement Amendment is included with this Current Report as Exhibit 10.4 and the summary above is qualified in its entirety by reference to such exhibit.

Item 9.01.              Financial Statements and Exhibits.

 (d)          Exhibits.


Exhibit No

 


Title

10.1

 

Amendment, dated July 28, 2006, to Employment, Confidentiality and Non-competition Agreement by and between the Registrant and Randy Saaf.

 

 

 

10.2

 

Amendment, dated July 28, 2006, to Employment, Confidentiality and Non-competition Agreement by and between the Registrant and Octavia Herrera.

 

 

 

10.3

 

Amendment No. 3, dated July 31, 2006, to Employment Agreement by and between the Registrant and Jonathan V. Diamond.

 

 

 

10.4

 

Amendment No. 2, dated July 31, 2006, to Employment Agreement by and between the Registrant and Robert N. Weingarten.

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

ARTISTdirect, Inc.

(Registrant)

 

 

Date: August 1, 2006

By: /s/ Robert N. Weingarten

 

 

 

Name: Robert N. Weingarten
Title: Chief Financial Officer

 

 

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EXHIBIT INDEX

Exhibit No.

 

Title

 

 

 

10.1

 

Amendment, dated July 28, 2006, to Employment, Confidentiality and Non-competition Agreement by and between the Registrant and Randy Saaf.

 

 

 

10.2

 

Amendment, dated July 28, 2006, to Employment, Confidentiality and Non-competition Agreement by and between the Registrant and Octavia Herrera.

 

 

 

10.3

 

Amendment No. 3, dated July 31, 2006, to Employment Agreement by and between the Registrant and Jonathan V. Diamond.

 

 

 

10.4

 

Amendment No. 2, dated July 31, 2006, to Employment Agreement by and between the Registrant and Robert N. Weingarten.

 

 

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Exhibit 10-1

AMENDMENT
TO
EMPLOYMENT, CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

THIS AMENDMENT (“Amendment”) to that certain Employment, Confidentiality and Non-Competition Agreement (the “Employment Agreement”), entered into between ARTISTdirect, Inc., a Delaware corporation (the “Company”), and Randy Saaf (“Executive”), is entered into as of July 28, 2006.  Capitalized terms used herein and not defined shall have the meanings given to them in the Employment Agreement.

RECITALS

WHEREAS, the parties hereto entered into the Employment Agreement effective as of July 28, 2005; and

WHEREAS, the parties hereto desire to amend the Employment Agreement, all upon the terms and conditions set forth herein.

NOW, THEREFORE, for valuable consideration, the receipt of which is hereby acknowledged, the parties agree to the terms and conditions set forth herein.

1.              Performance Bonus.  Section 2.2 shall be amended to include the following language at the end of the Section:

“Any Performance Bonus shall be paid during the first half of the next calendar year following the period for which it is earned.”

2.              Stock Option Grant.  Reference to “Nasdaq National Market” in Section 3 of the Employment Agreement shall be replaced with “Over the Counter Bulletin Board.”

3.              Standard of Performance.  Subject to Executive’s satisfaction of Section 4 of this Amendment, the parties hereby agree that all references to “twelve (12) months” contained in Section 4 of the Employment Agreement shall be deleted and replaced with “twenty-four (24) months.”  In addition, during the twenty-four (24) month period, Executive shall ensure that OnSystems does not operate or do any business whatsoever that would require Executive’s attention except for activities reasonably related to the wind-down and dissolution of OnSystems.  In the event that Executive becomes aware of any development regarding OnSystems that may require Executive’s attention which is not related to the wind-down and dissolution, Executive shall immediately notify the Company of such development.

4.              OnSystems.  Executive further agrees to file or cause to be filed with the Secretary of State of California a Certificate of Election to Wind Up and Dissolve OnSystems (the “Election”), which shall be filed on or before August 18, 2006 (the “Deadline”).  Failure to file the Election by the Deadline shall constitute a breach of Executive’s obligations under the Employment Agreement.

5.              Termination Payments.  A new Section 5.6 shall be added which shall read as follows:

“5.6.       Termination Payments.  If Executive is entitled to any payments or benefits pursuant to either Section 5.3 or 5.4 of this Agreement, then, to the extent necessary to avoid adverse tax consequences pursuant to Section 409A of the Internal Revenue Code of 1986, as amended, the first installment of Executive’s Base Salary shall be paid six (6) months after Executive becomes entitled to the continuation of Base




Salary and shall be in an amount equal to the aggregate of six (6) months of Base Salary as provided in Section 5.3 or 5.4, as applicable.  Thereafter, the balance due shall be paid according to the terms of Section 5.3 or 5.4, as applicable.”

6.             ConflictsExcept as expressly set forth in this Amendment, the terms and provisions of the Employment Agreement shall continue unmodified and in full force and effect.  In the event of any conflict between this Amendment and the Employment Agreement, this Amendment shall control.

7.             Governing Law.  This Amendment shall be governed and construed under the laws of the State of California, and shall be binding on and shall inure to the benefit of the parties and their respective successors and permitted assigns.

[The remainder of this page is left blank intentionally.]

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment, effective as of the date written above.

 

“EXECUTIVE”

 

“COMPANY”


Randy Saaf

 


ARTISTdirect, Inc.

 

 

 

/s/: Randy Saaf

 

 

 

By: /s/ Robert N. Weingarten

 

 

Randy Saaf

 

Robert  N. Weingarten
Its: Chief Financial Officer

 

 

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Exhibit 10.2

AMENDMENT
TO
EMPLOYMENT, CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

THIS AMENDMENT (“Amendment”) to that certain Employment, Confidentiality and Non-Competition Agreement (the “Employment Agreement”), entered into between ARTISTdirect, Inc., a Delaware corporation (the “Company”), and Octavio Herrera (“Executive”), is entered into as of July 28, 2006.  Capitalized terms used herein and not defined shall have the meanings given to them in the Employment Agreement.

RECITALS

WHEREAS, the parties hereto entered into the Employment Agreement effective as of July 28, 2005; and

WHEREAS, the parties hereto desire to amend the Employment Agreement, all upon the terms and conditions set forth herein.

NOW, THEREFORE, for valuable consideration, the receipt of which is hereby acknowledged, the parties agree to the terms and conditions set forth herein.

1.              Performance Bonus.  Section 2.2 shall be amended to include the following language at the end of the Section:

“Any Performance Bonus shall be paid during the first half of the next calendar year following the period for which it is earned.”

2.              Stock Option Grant.  Reference to “Nasdaq National Market” in Section 3 of the Employment Agreement shall be replaced with “Over the Counter Bulletin Board.”

3.              Standard of Performance.  Subject to Executive’s satisfaction of Section 4 of this Amendment, the parties hereby agree that all references to “twelve (12) months” contained in Section 4 of the Employment Agreement shall be deleted and replaced with “twenty-four (24) months.”  In addition, during the twenty-four (24) month period, Executive shall ensure that OnSystems does not operate or do any business whatsoever that would require Executive’s attention except for activities reasonably related to the wind-down and dissolution of OnSystems.  In the event that Executive becomes aware of any development regarding OnSystems that may require Executive’s attention which is not related to the wind-down and dissolution, Executive shall immediately notify the Company of such development.

4.              OnSystems.  Executive further agrees to file or cause to be filed with the Secretary of State of California a Certificate of Election to Wind Up and Dissolve OnSystems (the “Election”), which shall be filed on or before August 18, 2006 (the “Deadline”).  Failure to file the Election by the Deadline shall constitute a breach of Executive’s obligations under the Employment Agreement.

5.              Termination Payments.  A new Section 5.6 shall be added which shall read as follows:

“5.6.       Termination Payments.  If Executive is entitled to any payments or benefits pursuant to either Section 5.3 or 5.4 of this Agreement, then, to the extent necessary to avoid adverse tax consequences pursuant to Section 409A of the Internal Revenue Code of 1986, as amended, the first installment of Executive’s Base Salary shall be paid six (6) months after Executive becomes entitled to the continuation of Base




Salary and shall be in an amount equal to the aggregate of six (6) months of Base Salary as provided in Section 5.3 or 5.4, as applicable.  Thereafter, the balance due shall be paid according to the terms of Section 5.3 or 5.4, as applicable.”

6.             Conflicts.  Except as expressly set forth in this Amendment, the terms and provisions of the Employment Agreement shall continue unmodified and in full force and effect.  In the event of any conflict between this Amendment and the Employment Agreement, this Amendment shall control.

7.             Governing Law.  This Amendment shall be governed and construed under the laws of the State of California, and shall be binding on and shall inure to the benefit of the parties and their respective successors and permitted assigns.

[The remainder of this page is left blank intentionally.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment, effective as of the date written above.

 

“EXECUTIVE”

 

“COMPANY”

 

 

 

 

 

 Octavio Herrera

 

ARTISTdirect, Inc.

 

 

 

 

 

/s/ Octavio Herrera

 

 

By: /s/ Robert  N. Weingarten

 

 

Octavio Herrera

 

      Robert  N. Weingarten
Its: Chief Financial Officer

 

 

 

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Exhibit 10.3

AMENDMENT NO. 3
TO
EMPLOYMENT AGREEMENT

THIS AMENDMENT NO. 3 (“Amendment No. 3”) to that certain Employment Agreement (“Employment Agreement”), entered into between ARTISTdirect, Inc., a Delaware corporation (the “Company”) and Jon Diamond (“Employee”), is entered into as of July 31, 2006.  Capitalized terms used herein and not defined shall have the meanings given to them in the Employment Agreement.

RECITALS

WHEREAS, the parties hereto entered into the Employment Agreement effective as of July 28, 2005, as amended; and

WHEREAS, the parties hereto desire to amend the Employment Agreement, all upon the terms and conditions set forth herein.

NOW, THEREFORE, for valuable consideration, the receipt of which is hereby acknowledged, the parties agree to the terms and conditions set forth herein.

1.             Compensation.  Section 5 shall be amended to include the following language at the end of the last paragraph:

“The formula bonus and discretionary bonus, if any, shall be paid during the first half of the next calendar year following the period for which such bonus relates.”

2.             Termination.  Section 7(f)(ii)(B) shall be amended by deleting the first phrase thereof following “(B)” and replacing it with the following language:

“by Employee pursuant to Section 7(d) above, the Company shall pay Employee the Severance Amount as hereinafter defined, less required withholdings, in twelve (12) equal semi-monthly installments over the six (6) month period immediately following such termination; provided, however, that to the extent necessary to avoid adverse tax consequences pursuant to Section 409A of the Internal Revenue Code of 1986, as amended, the Severance Amount shall be paid in a lump sum six (6) months after Employee becomes entitled to the Severance Amount.”

The remainder of Section 7(f)(ii)(B) shall continue unamended.

3.             Conflicts.  Except as expressly set forth in this Amendment No. 3, the terms and provisions of the Employment Agreement shall continue unmodified and in full force and effect.  In the event of any conflict between this Amendment No. 3 and the Employment Agreement, this Amendment No. 3 shall control.




4.             Governing Law.  This Amendment No. 3 shall be governed and construed under the laws of the State of California, and shall be binding on and shall inure to the benefit of the parties and their respective successors and permitted assigns.

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 3, effective as of the date written above.

 

“EMPLOYEE”

 

“COMPANY”

 
Jon Diamond

 


ARTISTdirect, Inc.

 

 

 

 /s/ Jon Diamond

 

 

 

By: Fredrick W. Field

 

 

Jon Diamond

 

      Frederick W. Field
Its: Chairman

 

 

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Exhibit 10.4

AMENDMENT NO. 2
TO
EMPLOYMENT AGREEMENT

THIS AMENDMENT NO. 2 (“Amendment No. 2”) to that certain Employment Agreement (“Employment Agreement”), entered into between ARTISTdirect, Inc., a Delaware corporation (the “Company”) and Robert Weingarten (“Employee”), is entered into as of July 31, 2006.  Capitalized terms used herein and not defined shall have the meanings given to them in the Employment Agreement.

RECITALS

WHEREAS, the parties hereto entered into the Employment Agreement effective as of July 28, 2005, as amended; and

WHEREAS, the parties hereto desire to amend the Employment Agreement, all upon the terms and conditions set forth herein.

NOW, THEREFORE, for valuable consideration, the receipt of which is hereby acknowledged, the parties agree to the terms and conditions set forth herein.

1.             Compensation.  Section 5 shall be amended to include the following language at the end of the last paragraph:

“The formula bonus and discretionary bonus, if any, shall be paid during the first half of the next calendar year following the period for which such bonus relates.”

2.             Termination.  Section 7(f)(ii)(B) shall be amended by deleting the first phrase thereof following “(B)” and replacing it with the following language:

“by Employee pursuant to Section 7(d) above, the Company shall pay Employee the Severance Amount as hereinafter defined, less required withholdings, in twelve (12) equal semi-monthly installments over the six (6) month period immediately following such termination; provided, however, that to the extent necessary to avoid adverse tax consequences pursuant to Section 409A of the Internal Revenue Code of 1986, as amended, the Severance Amount shall be paid in a lump sum six (6) months after Employee becomes entitled to the Severance Amount.”

The remainder of Section 7(f)(ii)(B) shall continue unamended.

3.             Conflicts.  Except as expressly set forth in this Amendment No. 2, the terms and provisions of the Employment Agreement shall continue unmodified and in full force and effect.  In the event of any conflict between this Amendment No. 2 and the Employment Agreement, this Amendment No. 2 shall control.




4.             Governing Law.  This Amendment No. 2 shall be governed and construed under the laws of the State of California, and shall be binding on and shall inure to the benefit of the parties and their respective successors and permitted assigns.

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IN WITNESS WHEREOF,   the parties hereto have executed this Amendment No. 2, effective as of the date written above.

 

“EMPLOYEE”

 

“COMPANY”

 

 

 

 Robert Weingarten

 

ARTISTdirect, Inc.

 

 

 

/s/ Robert Weingarten

 

 

 

By:Frederick W. Field

 

 

Robert Weingarten

 

      Frederick W. Field
Its: Chairman

 

 

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