BOCA RATON, Fla. — FriendFinder Networks Inc. on Friday said that it restructured employment and compensation agreements with two top executives with the company, Marc Bell and Daniel Staton.
The move to restructure employment agreements for Bell and Staton comes at a time when the pair, along with another exec, Andrew Conru, have been building up their portfolio of FriendFinder stock.
Last month, the three execs bought more shares of the company. Now, Bell, Staton and Conru, control more than 51 percent of common shares in the company.
The new "consulting agreement" deals for Bell and Staton mean that the pair will hold the titles of non-executive co-chairman of the board.
Bell, the former longtime chief executive of the company, earlier this year gave up the post to Anthony Previte and later took the title of chief strategy officer. Staton, along with Bell, had been executive co-chairman of the board.
With the new employment agreements in place, Bell and Staton will receive annual consulting fees of $500,000 per year, which may be increased each year by 10 percent.
The employment deals go further, granting — Bell and Staton 62,500 shares of the company's common stock each quarter, as well as an option to purchase 4,000 additional shares. The agreements also give them 2,500 shares of restricted stock annually.
Bell and Staton also will be eligible to receive an additional consulting fee annually, subject to the successful completion of a refinancing of the company's outstanding debt in an amount up to 100 percent of their consulting fee and 100 percent of the dollar value of the quarterly common stock grants.
According to the agreements, both Bell and Staton would gain lucratively if they were terminated following a “change in control” in an amount equal to five times Bell's or Staton's consulting fee and five times the value of 250,000 shares of the company's common stock, as well as 100 percent of additional consulting fee opportunities.
Bell's and Staton's consulting services call for services that include "enterprise-wide" business initiatives, strategic planning and issues relating to the company's debt, including any refinancing of the company's debt. As of March, the company had outstanding principal debt of $497.7 million.
FriendFinder Networks operates AdultFriendFinder.com, Amigos.com, AsiaFriendFinder.com, Cams.com, FriendFinder.com, BigChurch.com and SeniorFriendFinder.com, among others. FriendFinder Networks also produces and distributes original video content and engages in brand licensing. It also operates Penthouse magazine.
The company recently announced that it is making significant changes to boost income and reduce debut, including shifting the focus of an affiliate network strategy to one that supports the further development of primary brands. As a result, FriendFinder said it had begun the process of shutting 5,000 co-branded websites, calling them " too cumbersome and cost prohibitive" to continue operating.
FriendFinder shares traded at 80 cents a share on the Nasdaq on Monday. The company had its initial public offering in May 2011 at $10 a share.
XBIZ calls to Previte, FriendFinder's CEO, went unreturned at post time.