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 1934
Date
of Report: September 28, 2006
a21,
Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
(State
or Other Jurisdiction of
Incorporation)
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000-51285
(Commission
File Number)
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74-2896910
(I.R.S.
Employer Identification No.)
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7660
Centurion Parkway, Jacksonville, Florida
(Address
of Principal Executive Offices)
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32256
(Zip
Code)
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Registrant’s
telephone number, including areas code: (904)
565-0066
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(Former
Name or Former Address, is Changed Since Last Report)
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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 A2. 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
September 28, 2006, a21, Inc. (“a21”) entered into an employment agreement with
John Z. Ferguson, effective as of October 9, 2006, pursuant to which Mr.
Ferguson was appointed a21’s Chief Executive Officer. Mr. Ferguson will receive
a salary of $250,000 per year, a signing bonus of $25,000, and an annual bonus
based on certain performance criteria established by the Board of Directors.
For
the year ending December 31, 2006, Mr. Ferguson will be entitled to receive
up
to $37,500 based on the number of days he has worked for a21 in the fourth
quarter. In addition, a21 granted Mr. Ferguson options to purchase 500,000
shares of a21’s common stock, exercisable at $0.275 per share, and 500,000
restricted shares of a21’s common stock. 62,500 shares of restricted stock and
options to purchase 62,500 shares will vest on the six month anniversary of
the
effective date of Mr. Ferguson’s employment agreement and the remainder of the
options and restricted stock will vest in forty-two equal monthly installments
on the first day of each month thereafter such that all of such options and
restricted stock will be vested by the forty-eight month anniversary of the
date
of the agreement. The options expire on October 9, 2011. All unvested options
and shares of restricted stock immediately vest (i) upon a change in control,
(ii) in the event that a21 and Mr. Ferguson, negotiating in good faith, are
unable to reach an agreement, by no later than the three year anniversary of
his
employment agreement, regarding the continuation of his employment by a21 and
his employment agreement is not earlier terminated, or (iii) upon Mr. Ferguson’s
death or disability. a21 will also pay up to $1,400 per month for Mr. Ferguson’s
employee benefits, whether he chooses to use a21 provided benefit plans or
benefit plans of his choosing. The employment agreement has a term of thirty-six
months and may be terminated by either party without cause on 30 days written
notice to the other party. In addition, a21 may terminate the employment
agreement immediately for cause, as defined in the employment agreement, and
Mr.
Ferguson may terminate the employment agreement for good reason, as defined
in
the employment agreement. If a21 terminates the agreement or Mr. Ferguson
terminates the agreement for good reason, a21 is obligated to make certain
payments to Mr. Ferguson, as outlined in the agreement.
On
October 6, 2006, a21 adopted a compensation plan for its non-employee directors
for the next twelve months. Each non-employee member of the Board of Directors
received, as of October 9, 2006, 72,727 restricted shares of a21’s common stock.
The shares of restricted stock vest one year from the date of grant, provided,
however, that if a member of the Board of Directors is asked to resign from
the
Board of Directors not for cause, such shares of restricted stock will vest
on
the date that such director resigns. In addition, each non-employee director
will be paid $5,000 per quarter for each of the next four quarters, beginning
with the fourth quarter of 2006.
On
October 9, 2006, a21 entered into an employment agreement with Philip N.
Garfinkle, pursuant to which Mr. Garfinkle was appointed a21’s Executive
Chairman. This agreement supersedes in its entirety Mr. Garfinkle’s previous
employment agreement with a21 dated June 27, 2006. Mr. Garfinkle will receive
a
salary of $165,000 per year and a signing bonus of $25,000. In addition, a21
granted Mr. Garfinkle options to purchase 500,000 shares of a21’s common stock,
exercisable at $0.275 per share, and 500,000 restricted shares of a21’s common
stock. 214,280 shares of restricted stock and options to purchase 214,280 shares
will vest on the six month anniversary of the effective date of Mr. Garfinkle’s
employment agreement and the remainder of the options and restricted stock
will
vest in eight equal monthly installments on the first day of each month
thereafter such that all of such options and restricted stock will be vested
by
December 31, 2007. The options expire on October 9, 2011. a21 will also pay
up
to $1,400 per month for Mr. Garfinkle’s employee benefits, whether he chooses to
use s a21 provided benefit plans or benefit plans of his choosing. The
employment term ends on December 31, 2007, and may be terminated by either
party
without cause on 30 days written notice to the other party. In addition, a21
may
terminate the employment agreement immediately for cause, as defined in the
employment agreement, and Mr. Garfinkle may terminate the employment agreement
for good reason, as defined in the employment agreement. If a21 terminates
the
agreement or Mr. Garfinkle terminates the agreement for good reason, a21 is
obligated to make certain payments to Mr. Garfinkle, as outlined in the
agreement.
On
October 9, 2006, a21 entered into an advisory agreement with Albert H. Pleus,
pursuant to which Mr. Pleus resigned from his position as Chief Executive
Officer of a21 and all other positions he had with a21 or any of its
subsidiaries, except that Mr. Pleus did not resign from his position as a
director of a21. Pursuant to this agreement, Mr. Pleus’s prior employment
agreement with a21 was terminated. Mr. Pleus will receive a fee of $150,000
for
his services to a21. In addition, unvested options to purchase 525,000 shares
of
a21’s common stock were deemed vested and unvested options to purchase 325,000
shares of a21’s common stock were cancelled. a21
also
agreed that all of Mr. Pleus’s vested and unexercised stock options could be
exercised on a cashless basis.
The
advisory agreement has a term of twelve months and Mr. Pleus may terminate
the
agreement on 30 days written notice to a21. a21 may only terminate the advisory
agreement for cause, as defined in the advisory agreement.
Item
5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
On
October 9, 2006, a21, Inc. (“a21”) announced that a21’s Board of Directors had
appointed John Z. Ferguson as a21’s Chief Executive Officer and appointed him to
a21’s Board of Directors as of that date. Concurrently with the appointment of
Mr. Ferguson, Albert H. Pleus resigned from his position as a21’s Chairman and
Chief Executive Officer, but will remain on a21’s Board of Directors and serve
a21 in the capacity of Executive Advisor. In addition, Philip N. Garfinkle
resigned from his position as a21’s interim President and Chief Operating
Officer and was appointed to the position of Executive Chairman.
Mr.
Ferguson was the Executive Vice President of Strategic Sales and Marketing
for
Inforte Corp. (NASDAQ: INFT) from June 2006 until October 2006. From February
1999 to October 2005, Mr. Ferguson was with Getty Images (NYSE:GYI) where he
served in a number of capacities, most recently (from June 2003 to October
2005)
as the Senior Vice President of Sales, Americas. From January 1996 to January
1999, Mr. Ferguson was the Director of Sales for Broderbund Software, Inc.,
and
prior thereto, from March 1992 to December 1995, Mr. Ferguson worked for Quaker
Oats Company, most recently as National Vend Sales Manager. Mr. Ferguson
received his Masters of Business Administration degree from Depaul University
and his Bachelors degree in marketing from Michigan State
University.
Mr.
Garfinkle has been a member of a21’s Board of Directors since June 2003, served
as a21’s interim President and Chief Operating Officer from June 2006 to October
and served a21 as an advisor from September 2002 to June 2003. Since November
1999, Mr. Garfinkle has been President, Chief Executive Officer and Chairman
of
Navig8US.com LLC, an executive advisory company. Since April 2004, Mr. Garfinkle
has been the Chairman and Chief Executive Officer of LogoVision LLC, a business
management company. Since July 2004 he has been a partner in and advisor to
Gabriel Venture Partners, an investment company. From September 1999 to
September 2000, Mr. Garfinkle was President and a member of the Board of
Directors of Yazam.com Inc., a worldwide venture capital organization of which
he was one of the founders and which was purchased by US Technologies in 2001.
From September 1995 to May 2000, Mr. Garfinkle was President, Chief Executive
Officer and Chairman of PictureVision, Inc., a digital imaging concern he
founded that introduced online photo processing to consumers and that was sold
to Kodak in February 1998. He also served as general manager of Network Services
for Kodak from February 1998 until August 1999. Mr. Garfinkle received his
BS
degree in commerce and engineering from Drexel University.
Please
see the disclosure in Item 1.01 above for a description of the terms the
employment agreements with Mr. Ferguson and Mr. Garfinkle and the advisory
agreement with Mr. Pleus.
Item
9.01. Financial Statements and Exhibits.
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Exhibit
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Description
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10.1
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Employment
Agreement between a21, Inc. and John Z. Ferguson, dated as of October
9,
2006
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10.2
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Employment
Agreement between a21, Inc. and Philip N. Garfinkle, dated as of
October
9, 2006
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10.3
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Advisory
Agreement between a21, Inc. and Albert H. Pleus, dated as of October
9,
2006
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99.1
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Press
Release dated October 9, 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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a21,
INC. |
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By: |
/s/
Thomas Costanza |
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Thomas
Costanza |
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Chief
Financial Officer |
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| Dated: October 10, 2006 |
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EXHIBIT
INDEX
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Exhibit
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Description
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10.1
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Employment
Agreement between a21, Inc. and John Z. Ferguson, dated as of October
9,
2006
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10.2
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Employment
Agreement between a21, Inc. and Philip N. Garfinkle, dated as of
October
9, 2006
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10.3
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Advisory
Agreement between a21, Inc. and Albert H. Pleus, dated as of October
9,
2006
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99.1
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Press
Release dated October 9, 2006
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