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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:
June 2, 1998
CHOICES ENTERTAINMENT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 000-17001 52-1529536
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
10770 Wiles Road
Coral Springs Florida 33076
(Address of principal executive offices)
954-752-4289
(Registrant's telephone number, including area code)
836 W Trenton Avenue
Suite 205
Morrisville, PA 19067
(Former name or former address, if changed since last report)
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ITEM 1. Changes in Control of Registrant.
This Report contains certain information regarding what may constitute a
change in the majority of the directors and change in control of Choices
Entertainment Corporation. Mr. John Boylan and Mr. Fred Portner, two members of
a three-person board of directors have resigned as directors and Mr. Thomas
Renna and Mr. George Pursglove have been appointed by James Sink, Chairman, to
replace them.
On June 2, 1998 John Boylan and Fred Portner resigned as directors of the
Company and Lorraine Cannon resigned as Chief Financial Officer. These
resignations were effective upon the agreement by James Sink, to enter into a
separation agreement ( the "Separation Agreement"), prepared and tendered by the
resigning directors and officer. Pursuant to the terms of the Separation
Agreement, the Company and each of Messrs. Boylan, Portner and Ms. Cannon agreed
to a mutual release from any damage, action, cause of action, or claim
whatsoever, known or unknown, liquidated or unliquidated, and whether otherwise
enforceable, for a period up to and including the date of the Separation
Agreement. The Separation Agreement also provided for the indemnification of
Messrs. Boylan, Portner and Ms. Cannon from and against any loss, damage,
liability, judgment or claim ( and related expenses including attorneys fees)
based on the fact that such persons were directors or an officer of the Company.
Additionally, the Separation Agreement contained an affirmation of the validity
of certain stock options granted to Messrs. Boylan, Portner, Ms. Cannon and
Ronald Martignoni.
Also on June 2, 1998 the sole remaining director, Mr. James Sink, was
appointed Chairman of the Board by the outgoing directors, and he in turn
appointed Mr. Thomas Renna and Mr. George Pursglove to the Board of Directors.
The new Board of Directors passed a resolution by written consent indemnifying
and holding harmless James Sink from any liability as a result of signing the
Separation Agreement.
Mr. Renna and Mr. Pursglove are the Co-Chairmen of the Committee for Change
at Choices, a committee of shareholders ( the "Shareholder Committee") who
organized and filed a nonmanagement written consent solicitation statement with
the Securities and Exchange Commission on November 25, 1997. The Shareholder
Committee withdrew its solicitation statement on June 5, 1998 and has ceased to
exist.
The costs of the election contest initiated by the Shareholder Committee
and which may be considered to be a cause or contributing cause to the change of
the majority of the board of directors, as more fully disclosed herein, was
borne by the Shareholder Committee without reimbursement by the Company. Such
costs are estimated to approximate $75,000.
Mr. Kenneth Hiniker, a member of the Shareholder Committee, has advanced
$25,000 to the Shareholder Committee to pay legal fees. The loan is to be repaid
when, as, and if the Shareholder Committee has funds sufficient for that
purpose.
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ITEM 2. Acquisition or Disposition of Assets.
Not Applicable.
ITEM 3. Bankruptcy or Receivership.
Not Applicable.
ITEM 4. Changes in Registrant's Certifying Accountant.
Not Applicable.
ITEM 5. Other Events.
Not Applicable.
ITEM 6. Resignations of Registrant's Directors.
Not Applicable.
ITEM 7. Financial Statements, PRO FORMA Financial Information and Exhibits.
(a) Not Applicable.
(b) Not Applicable
(c) Exhibits
Exhibit 10(k) - Separation Agreement effective June 2, 1998. SEE INDEX TO
EXHIBITS.
ITEM 8. Change in Fiscal Year.
Not Applicable.
ITEM 9. Sales of Equity Securities Pursuant to Regulation S.
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report on form 8-K for the report date indicated
to be signed on its behalf by the undersigned thereunto duly authorized.
CHOICES ENTERTAINMENT CORPORATION
June 15, 1998 /s/ James Sink
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(Date) James Sink, Chairman of the Board
June 15, 1998 /s/ Thomas Renna
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(Date) Thomas Renna, Director
June 15, 1998 /s/George Pursglove
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(Date) George D. Pursglove, Director
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
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<S> <C>
10(k) Separation Agreement effective June 2, 1998 among Choices
Entertainment Corporation and Boylan, Portner, Cannon
and Martignoni.
</TABLE>
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CHOICES ENTERTAINMENT CORPORATION
SEPARATION AGREEMENT
May , 1998
SEPARATION AGREEMENT, made as of the ____ day of May, 1998, between
CHOICES ENTERTAINMENT CORPORATION, a Delaware corporation ("Choices") and
JOHN BOYLAN, RONALD MARTIGNONI, FRED PORTNER and LORRAINE CANNON
("Resignees").
WHEREAS, the Resignees have in the past served or now are serving as
officers and/or directors of Choices, and
WHEREAS, the Resignees now desire to confirm their separate resignations
as officers and/or directors of Choices, and Choices wishes to accept such
resignations, and
WHEREAS, the parties desire to enter into a mutual release and to confirm
the existence and binding effect of certain stock options heretofore issued
by Choices to the Resignees.
IN CONSIDERATION of the mutual covenants and agreements contained herein,
the parties agree as follows:
1. RESIGNATION. Effective as of the date hereof, John Boylan will resign
as the Chairman, President, Chief Executive Officer and a Director of
Choices, and Fred Portner will resign as a Director of Choices.
2. ACCEPTANCE OF RESIGNATIONS. Choices acknowledges that Lorraine Cannon
and Ronald Martignoni have heretofore resigned as officers and/or directors
of Choices. Choices accepts, as of the date hereof, the resignations of John
Boylan and Fred Portner in the capacities described.
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3. MUTUAL RELEASE. Choices for itself, its successors and assigns, does
hereby fully discharge and release the Releasees, their personal
representatives, heirs, successors and assigns, and Releasees for themselves,
their personal representatives, heirs, successors and assigns do hereby fully
discharge and release Choices, its successors and assigns from any damage,
action, cause of action or claim whatsoever that Choices may have against
Releasees, and that Releasees may have against Choices arising from or
related to the service of the Releasees as officers and/or directors of
Choices, whether known or unknown, liquidated or unliquidated and whether
enforceable under any local, state or federal charter, constitution, statute,
executive order, regulation or ordinance, or under the common law of the
United States, or of any of the states, territories or possessions thereof,
which arose or occurred from the beginning of time up to and including the
date of this Agreement.
4. INDEMNIFICATION OF RELEASEES. Choices shall indemnify, defend or hold
harmless each of the Releasees to the full extent authorized by the laws of
the State of Delaware from and against any loss, damage, liability, judgment
or claim (and related expenses including, but not limited to, attorneys' fees
and amounts paid in settlement) based upon or arising in whole or in part out
of the fact that the Releasee was a director of or officer of Choices.
5. CONFIRMATION OF OPTIONS. Choices herewith acknowledges and confirms
that the options set forth below were duly and
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validly issued by Choices to the individuals so named and are in full force
and effect in accordance with their stated terms.
<TABLE>
<CAPTION>
Name Issue Date Exp. Date # of Options
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<S> <C> <C> <C>
John Boylan........... 1/31/91 1/31/01 1,000,000
2/9/94 1/31/01 375,000
Lorraine Cannon....... 1/31/91 1/31/01 200,000
2/9/94 1/31/01 75,000
R. Martignoni......... 1/31/91 1/31/01 1,050,000
2/9/94 1/31/01 375,000
Fred Portner.......... 1/31/91 1/31/01 90,000
9/27/95 9/27/00 100,000
2/13/97 2/13/02 50,000
</TABLE>
6. GOVERNING LAW. The internal laws of Delaware (irrespective of its
choice of law principles) will govern this Agreement, the construction of its
terms, and the interpretation and enforcement of the rights and duties of the
parties hereto.
7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original as against any party whose
signature appears thereon and all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CHOICES ENTERTAINMENT CORPORATION
By /s/ James Sink
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James Sink
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/s/ John Boylan
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John Boylan
/s/ Ronald Martignoni
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Ronald Martignoni
/s/ Fred Portner
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Fred Portner
/s/ Lorraine Cannon
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Lorraine Cannon
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