ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
Sid Toama Letter Agreement
On February 10, 2023, Troika Media Group, Inc. (the "Company") and Sadiq (Sid)
Toama, the Company's President and Chief Executive Officer, entered into a
letter agreement (the "Toama Letter Agreement") that amends the terms of Mr.
Toama's Executive Employment Agreement with the Company dated March 21, 2022
(the "Toama Employment Agreement"). The Toama Letter Agreement (i) provides that
Mr. Toama shall serve as the Chief Executive Officer of the Company, (ii)
increases Mr. Toama's base salary to $750,000, (iii) increases his car allowance
to $3,000 per month, and (iv) provides that he is eligible for an annual
incentive bonus of up to 200% of his base salary based on achievement of annual
Company and individual performance objectives as determined by the Compensation
Committee.
In addition, under the terms of the Toama Letter Agreement, Mr. Toama will be
entitled to a one-time Retention Bonus upon the occurrence of a "Triggering
Event", subject to Mr. Toama's continuous employment through the occurrence
thereof. A Triggering Event is defined as the earliest to occur of (i) the
consummation of the first Change of Control (defined in the Toama Employment
Agreement), (ii) the consummation of a "Financing Transaction", and (iii)
February 10, 2024. A Financing Transaction is defined as a refinancing,
refunding or restructuring of the debt payable pursuant to the Financing
Agreement with a maturity date of not less than 12 months from the date such
refinancing, refunding or restructuring is consummated.
The amount of Mr. Toama's Retention Bonus, if any, will be (i) $2,250,000, if
the Triggering Event is a Change of Control or (ii) $1,500,000, if the
Triggering Event is a Financing Transaction. In addition, a Retention Bonus of
$1,500,000 will be payable to Mr. Toama if no Change of Control or Financing
Transaction has been consummated by February 10, 2024, or if Mr. Toama's
employment is terminated by the Company other than for Cause or he resigns for
Good Reason prior to a Triggering Event, subject to his delivery of a customary
release in favor of the Company and any additional severance payable by the
Company under the terms of the Toama Employment Agreement. The Retention Bonus,
if paid, will be in lieu of Mr. Toama's annual bonus for the 2023 fiscal year.
The foregoing summaries do not purport to be complete and are subject to, and
qualified in their entirety by, the Toama Employment Agreement on file with the
SEC and the Toama Letter Agreement attached as Exhibit [10.1] hereto.
Erica Naidrich Letter Agreement
On February 10, 2023, the Company and Erica Naidrich, the Company's Chief
Financial Officer, entered into a letter agreement (the "Naidrich Letter
Agreement") that amends the terms of Ms. Naidrich's Executive Employment
Agreement with the Company dated May 23, 2022 (the "Naidrich Employment
Agreement"). The Naidrich Letter Agreement, (i) increases Ms. Naidrich's base
salary to $450,000, (ii) increases her car allowance to $3,000 per month, (iii)
provides for an annual reimbursement of $5,481 for life insurance, and (iv)
provides that she is eligible for an annual incentive bonus of up to 100% of her
base salary based on achievement of annual Company and individual performance
objectives as determined by the Compensation Committee.
In addition, under the terms of the Naidrich Letter Agreement, Ms. Naidrich will
be entitled to a one-time Retention Bonus upon the occurrence of a Triggering
Event, subject to Ms. Naidrich's continuous employment through the occurrence
thereof.
The amount of Ms. Naidrich's Retention Bonus, if any, will be (i) $900,000, if
the Triggering Event is a Change of Control or (ii) $450,000, if the Triggering
Event is a Financing Transaction. In addition, a Retention Bonus of $450,000
will be payable to Ms. Naidrich if no Change of Control or Financing Transaction
has been consummated by February 10, 2024, or if Ms. Naidrich's employment is
terminated by the Company other than for Cause or she resigns for Good Reason
prior to a Triggering Event, subject to her delivery of a customary release in
favor of the Company and any additional severance payable by the Company under
the terms of the Naidrich Employment Agreement. The Retention Bonus, if paid,
will be in lieu of Ms. Naidrich's annual bonus for the 2023 fiscal year.
The foregoing summaries do not purport to be complete and are subject to, and
qualified in their entirety by, the Naidrich Employment Agreement on file with
the SEC and the Naidrich Letter Agreement attached as Exhibit [10.2] hereto.
Item 8.01 Other Events.
On February 10, 2023, Blue Torch Finance LLC ("Blue Torch") and the Company
entered into an Amended and Restated Limited Waiver (the "A&R Limited Waiver")
of certain events of default (such events of default, the "Specified Events of
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Default") under the Financing Agreement dated March 21, 2022, by and among the
Company, the lenders from time-to-time party thereto (the "Lenders"), and Blue
Torch as collateral agent and administrative agent for the Lenders (the
"Financing Agreement"). The A&R Limited Waiver amends and restates the Limited
Waiver to Financing Agreement dated as of October 14, 2022, as amended by that
certain First Amendment to Limited Waiver to Financing Agreement dated as of
October 28, 2022, Second Amendment to the Limited Waiver to Financing Agreement
dated as of November 11, 2022, Third Amendment to the Limited Waiver to
Financing Agreement dated as of November 25, 2022, Fourth Amendment to the
Limited Waiver to Financing Agreement dated as of December 9, 2022, and Fifth
Amendment to the Limited Waiver to Financing Agreement dated as of December 23,
2022, and Sixth Amendment to the Limited Waiver to Financing Agreement dated as
of January 13, 2023, and the Seventh Amendment to the Limited Waiver to the
Financing Agreement dated January 31, 2023.
The A&R Limited Waiver provides that, among other things, during the Waiver
Period (defined below), the Company will comply with certain sale and
refinancing milestones and refrain from engaging in any "Permitted Acquisition"
under the Financing Agreement or making certain post-closing payments to the
sellers of the Converge business under that certain Membership Interest Purchase
Agreement, dated as of November 22, 2021, among the Company, the Converge
sellers and the other parties thereto.
The A&R Limited Waiver will expire on the earliest of (x) the occurrence of an
Event of Default under the Financing Agreement that is not a Specified Event of
Default, (y) a failure by the Company to comply with certain sale and
refinancing milestones set forth in a side letter agreed by the Company and the
Lenders and (z) June 20, 2023, subject to potential extension of up to 60 days
to obtain regulatory and/or shareholder approval in the event the Company is
pursuing a sale transaction (the "Waiver Period").
The A&R Limited Waiver concerns events of default that relate to the Company's
failure to satisfy certain financial and non-financial covenants under the
Financing Agreement. The Company is currently engaged in good faith negotiations
with Blue Torch, as agent for the Lenders, to amend the Financing Agreement and
cure the events of default, although we cannot assure you that we will be
successful in doing so. If the Company is unsuccessful in renegotiating the
Financing Agreement and curing the continuing events of default by the
expiration of the Waiver Period, the Company intends to seek further Limited
Waivers with Blue Torch, although we cannot assure you that Blue Torch would be
willing to grant additional waivers. For further information on the terms of the
Financing Agreement please refer to our Amended Annual Report on Form 10-K/A for
the fiscal year ended June 30, 2022, filed with the SEC on November 22, 2022.
The foregoing summaries do not purport to be complete and are subject to, and
qualified in their entirety by, the A&R Limited Waiver attached as Exhibit
[99.1].
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Number Description
10 .1 Toama Letter Agreement
10.2 Naidrich Letter Agreement
99.1 Amended and Restated Limited Waiver
Cover Page Interactive Data File (embedded within the Inline
104 XBRL document).
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