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): January 25, 2007
ASTA FUNDING, INC.
(Exact Name of Registrant as Specified in Charter)
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| Delaware
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0-26906
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22-3388607 |
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| (State Or Other
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(Commission
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(IRS Employer |
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File Number)
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Identification No.) |
| Incorporation) |
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210 Sylvan Avenue
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Englewood Cliffs, New Jersey
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07632 |
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(Address of Principal Executive Offices)
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(Zip Code) |
Registrant’s telephone number, including area code (201) 567-5648
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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 5.02 Compensatory Arrangements of Certain Officers.
On January 25, 2007, Asta Funding, Inc., (the “Company”) entered into an employment agreement
(an “Employment Agreement”) with each of Gary Stern, the Company’s President and Chief Executive
Officer, Arthur Stern, the Company’s Executive Vice President and Mitchell Cohen, the Company’s
Chief Financial Officer (each, an “Executive”). Each of Gary Stern’s and Mitchell Cohen’s
Employment Agreements expire on December 31, 2009, and Arthur Stern’s Employment Agreement expires
on December 31, 2007, provided, however, that the parties are required to provide ninety days’
prior written notice if they do not intend to seek an extension or renewal of the Employment
Agreement.
The following is a summary of the material terms the Employment Agreements with each of the
Executives:
The Executive shall receive a base annual salary and an annual bonus to be determined at the
discretion of the Compensation Committee Board of Directors. The Executive’s base salary for
fiscal year 2007 was set by the Compensation Committee on December 19, 2006 and disclosed in a
Current Report on Form 8-K. If the Executive’s employment is terminated as of the termination date
of the Employment Agreement, the Executive shall still be entitled to receive a bonus payment for
the bonus earned during the Executive’s last year of employment.
The Executive is eligible to receive stock option grants or restricted stock grants in amounts
to be determined by the Compensation Committee of the Board of Directors. The Executive may also
participate in all of the Company’s employee benefit plans and programs generally available to
other employees. The Company shall also provide the Executive with life insurance in an amount to
be set by the Company and has agreed to explore the possibility of providing the Executive with
personal disability insurance.
If the Executive’s employment is terminated for “disability” or “Without Cause” by the Company
(as such terms are defined in the Employment Agreement), subject to the execution of a general
release agreement by the Executive in favor of the Company, the Executive shall continue to receive
his base salary for 12 months following the effective date of termination plus maintain insurance
benefits for that period, provided that the Company’s payment obligation shall be reduced by any
disability payments received by the Executive. Upon termination Without Cause, the Executive will
not be eligible to participate in the Company’s benefit plans and programs as of the last day of
his employment by the Company; provided, however that he will not be precluded from exercising his
rights, if any, under COBRA or with respect to grants made under the Company’s 1995 Stock Option
Plan, the 2002 Plan, or the Equity Compensation Plan, pursuant to the terms of such plans and the
applicable grant agreements thereunder. The Company must provide the Executive either ninety days’
prior written notice of such termination or an amount equal to ninety days of his base salary in
lieu of such notice of termination.
If the Executive’s employment with the Company is terminated for any reason within 180 days
following a “change of control” of the Company, the Company is required to pay:
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a lump sum amount in cash equal to two (2) times the sum of the Executive’s base
salary in effect on the date of termination and the highest annual bonus earned by
the Executive during his employment with the Company, |
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any unpaid reimbursable expenses outstanding, |
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compensation for any unused accrued vacation, as of the date of termination, and |
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continue to provide the Executive with the benefits and perquisites as provided
in the Employment Agreement for two years from the date of termination. |
The term “change in control” has the same meaning assigned such term under the terms of the
Company’s 2002 Stock Option Plan. If the executive is terminated by the Company “Without Cause”
prior to the date of a change in control, but the executive reasonably demonstrates that the
termination (A) was at the request of a third party who indicated an intention or taken steps
reasonably calculated to effect a change in control or (B) otherwise arose in connection with, or
in anticipation of, a change in control which has been threatened or proposed, such termination
shall be deemed to have occurred after such change in control occurs.
The Executives are subject to standard non-compete and confidentiality provisions contained in
the Employment Agreements.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit 10.1
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Employment Agreement between Asta Funding, Inc. and Arthur Stern, dated January
25, 2007. |
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Exhibit 10.2
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Employment Agreement between Asta Funding, Inc. and Gary Stern, dated January
25, 2007. |
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Exhibit 10.3
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Employment Agreement between Asta Funding, Inc. and Mitchell Cohen, dated
January 25, 2007. |
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