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 of 1934
Date
of Report - August 21, 2006
(Date
of
earliest event reported)
MACE
SECURITY INTERNATIONAL, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
(State
or other jurisdiction of
incorporation)
|
0-22810
(Commission
File Number)
|
03-0311630
(IRS
Employer Identification Number)
|
1000
Crawford Place, Suite 400, Mt. Laurel, NJ 08054
(Address
of principal executive offices)
(856)
778-2300
(Registrant’s
telephone number, including area code)
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 to Form 8-K):
| |
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
24.14a-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
40.13e-4(c))
|
Item
1.01. Entry
into a Material Definitive Agreement.
(a)(1) Mace
Security International, Inc. (the “Company”) and Louis D. Paolino, Jr. entered
into an Employment on August 21, 2006 (“Employment Agreement”). Louis D.
Paolino, Jr. is the President, Chief Executive Officer and Chairman of the
Board
of Directors of the Company. The Company obtained a Compensation Study from
a
third party consulting firm prior to entering into the Employment Agreement.
(a)(2) The
principal terms of the employment agreement, which expire on August 21, 2009,
include:
(i)
an annual salary
of $450,000;
(ii)
three separate
option grants for common stock under the Corporation’s Stock Option Plan at an
exercise price equal to the close of market on the date of grant. The first
grant shall be an option exercisable into 450,000 shares of common stock to
be
awarded within two days of the date of the Employment Agreement, the second
option grant (“Second Grant”) is to be awarded within five days of the first
yearly anniversary date of the Employment Agreement and the third option grant
(“Third Grant”) is to be awarded within five days of the second yearly
anniversary date of the Employment Agreement. The amount of shares (“Option
Shares”) the Second Grant and Third Grant shall be exercisable into shall be
determined by the Company’s Compensation Committee, based on a then current
compensation study of the Chief Executive Officer position. The amount of Option
Shares to be awarded is to be calculated so that the Black-Scholes Value of
the
Option Shares, at time of grant, plus the $450,000 annual compensation paid
to
Mr. Paolino equals no less then the “market consensus total direct compensation”
amount paid by the comparable companies to their chief executive officers,
as
set forth in the compensation study obtained by the Compensation Committee.
The
options with respect to each of the grants shall be fully vested on the date
of
the grant.
(iii)
a bonus of (a)
one percent (1%) of the sales price of any car washes sold, except two car
washes currently under an agreement of sale for which no bonus will be paid;
and
(b) three percent (3%) of the purchase or sales price of any other business
sold
or purchased, the three percent (3%) amount to be reduced by the amount of
any
fee paid to an investment banker hired by the Company where the investment
banker located the transaction and conducted all negotiations, and no deduction
will be made for a fee paid to any investment banker for a fairness opinion
or
other valuation;
(v)
a payment of 2.99
times Mr. Paolino’s average total compensation (base salary plus any bonuses
plus the value of any option award, valued using the Black Scholes method)
over
the past five years, upon termination of employment under certain conditions
or
upon a change in control. If Mr. Paolino receives the change of control bonus,
his employment agreement can then be terminated without an additional
payment.
(vi)
provision for
Company standard medical and other employee benefits;
(vi)
a car at a lease
cost of $1,500 per month;
(vii)
prohibition
against competing with the Company during employment and for a three-month
period following a termination of employment.
The
Employment Agreement is attached to this Current Report as Exhibit 10.1.
Item
9.01 Financial
Statements and Exhibits.
(c) Exhibits.
The
following exhibit is being filed herewith:
10.1 Employment
Agreement dated August 21, 2006 between Mace Security International, Inc. and
Louis D. Paolino, Jr.
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, thereunto
duly
authorized.
| |
|
|
| |
Mace
Security International, Inc. |
|
|
|
| Dated:
August
22, 2006 |
By: |
/s/ Gregory
M. Krzemien |
| |
Gregory
M. Krzemien |
| |
Chief
Financial Officer and Treasurer
|
EXHIBIT
INDEX
Exhibit
No. Description
10.1 Employment
Agreement dated August 21, 2006, between Mace
Security International, Inc., and Louis D. Paolino, Jr.