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: June
18, 2007
(Date
of earliest event reported)
21ST
CENTURY HOLDING COMPANY
(Exact
name of registrant as specified in its charter)
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Florida
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0-2500111
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65-0248866
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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3661
West Oakland Park Blvd., Suite 300
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Lauderdale
Lakes, FL
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33311
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (954)
581-9993
NOT
APPLICABLE
(Former
Name or Former Address, if Changed Since Last Report)
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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ÿ
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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ÿ
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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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ÿ
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Pre-commencement
communications pursuant to Rule 13e-4( c) under the Exchange Act
(17 CFT
240.13e-4( c))
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Item
5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers; Compensatory Arrangements of Certain
Officers
Appointment
of Peter J. Prygelski as Chief Financial Officer and Reassignment of James
Gordon Jennings, III, as Chief Accounting Officer
Peter
J.
Prygelski, who currently serves on the Board of Directors of 21st
Century
Holding Company (the “Company”) and as Chairman of its Audit Committee, has been
appointed to serve as the Company’s Chief Financial Officer, effective as of
June 25, 2007. Mr. James Gordon Jennings, III, who has served as the Company’s
Chief Financial Officer since August 2002 will remain with the Company in the
role of Chief Accounting Officer and will provide support to Mr. Prygelski.
Mr.
Prygelski (age 38) has served as a Director of the Company and as the Chairman
of the Audit Committee and the Company's designated financial expert since
January 2004. He has also served as a member of our Investment Committee and
Independent Director's Committees since March 2004. Mr. Prygelski most recently
served as a Senior Manager in the Enterprise Risk Services practice of Deloitte
and Touche from May 2006 to May 2007. Prior to joining Deloitte and Touche,
Mr.
Prygelski served in a similar capacity with Ernst & Young from April 2004 to
April 2006. Previously, Mr. Prygelski was a Director of Audit for American
Express Centurion Bank (a subsidiary of American Express), where he began his
career in Corporate Finance and was a member of their Enterprise Risk and
Assurance function from November 1991 to August 2003. Mr. Prygelski has no
family relationship with any of the Company's executive officers or directors
and has not engaged in any related party transactions with the
Company.
In
connection with his employment, the Company and Mr. Prygelski have entered
into
an Employment Agreement, an Annual Review Agreement and a Non-Compete Agreement
effective as of June 25, 2007. Additionally, Mr. Prgyelski will resign from
the
Board of Directors and all Board committees on which he currently serves,
effective as of June 25, 2007.
Under
his
Employment Agreement, Mr. Prygelski will receive an annual salary of $160,000
per year. Mr. Prygelski’s Employment Agreement is for a term of three (3) years
from the effective date, unless otherwise terminated as specified therein.
It
contains standard termination provisions. If Mr. Prygelski’s employment with the
Company is terminated
without cause, we must make a lump-sum severance payment to him in an amount
equal to one (1) year’s base salary or the base salary through the balance of
term remaining on his employment agreement, whichever is a lesser amount,
and
all
of
his unvested options would become immediately exercisable and vested. It has
been the Company’s practice if an executive is terminated without cause, to
accelerate any unvested options. Based on this policy, if we terminated Mr.
Prygelski without cause, his unvested options would be automatically
accelerated.
Pursuant
to his Employment
Agreement, Mr. Prygelski will be granted options to purchase 20,000 shares
of
the Company’s common stock with a grant date on June 25, 2007, the grant price
will be 2% over the fair market value (FMV) on the grant date, the options
will
vest 20% per year and expire on June 25, 2013. Additional stock option grants
may be awarded to Mr. Prygelski in the future at the discretion and
authorization of the Compensation Committee. In addition to this grant of 20,000
options, Mr. Prygelski currently owns options to purchase 15,000 fully vested
shares of the Company’s common stock at an exercise price of $15.413 which
expire on January 26, 2010 and options to purchase 10,000 shares of the
Company’s stock at an exercise price of $15.79, vesting 20% per year beginning
on December 5, 2006 and expiring December 5, 2011.
The
Non-Compete Agreement contains standard non-competition,
non-solicitation and confidentiality provisions. The Annual Review Agreement
stipulates that Mr. Prygelski’s performance will be reviewed on an annual basis
and that based on the conclusions of such review and the Company’s overall
performance, Mr. Prygelski may be entitled to a base salary increase of up
to
five percent (5%) over the previous year. Also, there is currently in place
an
Indemnification Agreement dated January 26, 2004 between the Company and Mr.
Prygelski, which was entered into when Mr. Prygelski joined the Board.
The
foregoing description of Mr. Prygelski's Employment Agreement and related
documents are qualified in their entirety by reference to Mr. Prygelski's
Employment Agreement, Annual Review Agreement, Non-Compete Agreement and
Indemnification Agreement attached hereto as Exhibits 10.1, 10.2, 10.3 and
10.4
and incorporated herein by reference.
Appointment
of New Director
The
Board
of Directors has appointed Anthony C. Krayer, III to serve as a director of
the
Company to fill the vacancy created by Mr. Prygelski's resignation. Mr. Krayer
will serve as a Class II director and will stand for reelection at the 2009
Annual Meeting of Shareholders. Mr. Krayer will serve as a member of the Audit
Committee, the Investment Committee and the Independent Director's
Committee.
Mr.
Krayer (age 62) has served as the Executive Vice-President and Chief
Administrative Officer of the South Broward Hospital District since August
1997.
Prior to 1997, Mr. Krayer spent five years with OrNda of South Florida. He
held
the title of Senior Vice-President from 1993-1994, Senior Vice-President of
Acquisitions and Development (OrNda Healthcorp) from 1994-1997 and President
from 1996-1997. Additionally, Mr. Krayer has served as the Chief Operating
Officer/Chief Financial Officer of Florida Medical Center from 1989-1993 and
as
a partner of Ernst and Whinney from 1968-1989. Mr. Krayer has no family
relationship with any of the Company's executive officers or directors and
has
not engaged in any related party transactions with the Company.
Mr.
Krayer has served on several boards of directors throughout his career. He
currently serves on the Board of Directors and Audit Committee of Coconut Grove
Bankshares, Inc., a privately held bank holding company and Coconut Grove Bank,
its subsidiary. He was their Audit Committee Chairman from 2002-2005.
As
a
non-employee director, Mr. Krayer will receive an annual retainer of $40,000,
payable in quarterly installments of $10,000, beginning in July 2007. In
addition to the annual retainer, Mr. Krayer will be granted options to purchase
10,000 shares of the Company’s common stock with a grant date on June 25, 2007,
the grant price will be 2% over the fair market value (FMV) on the grant date,
the options will vest 20% per year and expire on June 25, 2013. Additional
stock
option grants may be awarded to Mr. Krayer in the future at the discretion
and
authorization of the Compensation Committee.
Mr.
Krayer will enter into an Indemnification Agreement with the Company as soon
as
is reasonably possible.
Item
9.01
Financial Statements and Exhibits.
(d)
Exhibits.
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10.1
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Employment
Agreement between the Company and Peter J. Prygelski, effective June
25,
2007
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10.2
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Annual
Review Agreement between the Company and Peter J. Prygelski, effective
June 25, 2007
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10.3
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Non-Compete
Agreement between the Company and Peter J. Prygelski, effective June
25,
2007
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10.4
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Indemnification
Agreement between the Company and Peter J. Prygelski, dated January
26,
2004
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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 hereunto
duly authorized.
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21ST
CENTURY HOLDING COMPANY
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Date:
June 19, 2007
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By:
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/s/
JAMES GORDON JENNINGS, III
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Name: James
Gordon Jennings, III
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Title:
Chief Financial Officer
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(Principal
Accounting and Financial Officer)
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EXHIBIT
INDEX
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Exhibit No.
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Exhibit
Title
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10.1
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Employment
Agreement between 21st
Century Holding Company and Peter J. Prygelski, effective June 25,
2007
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10.2
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Annual
Review Agreement between the Company and Peter J. Prygelski, effective
June 25, 2007
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10.3
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Non-Compete
Agreement between the Company and Peter J. Prygelski, effective June
25,
2007
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10.4
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Indemnification
Agreement between the Company and Peter J. Prygelski, dated January
26,
2004
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