Unassociated Document
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 (Date of earliest event reported): September 25, 2009
The
Orchard Enterprises, Inc.
(Exact
Name of Registrant as Specified in its Charter)
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Delaware
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000-51761
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20-3365526
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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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23
East 4th
Street
3rd
Floor
New
York, New York
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10003
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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): (212)
201-9280
(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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□
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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□
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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□
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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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□
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.05. Costs Associated With Exit or Disposal Activities.
On September 29,
2009, The Orchard Enterprises, Inc. (the “Company”) announced a restructuring
action to further reduce expenses. On September 25, 2009, the Board
of Directors of the Company approved a staff reduction
initiative which will result in (1) the elimination of 16 staff positions, 5
consultants and certain temporary positions and (2) any current open positions
not being filled, representing approximately 20% of the Company’s pre-reduction
headcount. This reduction, among other cost savings initiatives taken throughout
the year, is to take advantage of technology efficiencies and to align costs
with a slower than expected digital music market growth rate. Substantially all
affected personnel were notified on or immediately prior to September 29,
2009. The Company expects to record an estimated total pre-tax net
cash charge of approximately $0.36 million attributable to this staff reduction initiative in the third quarter of fiscal 2009 related
to severance and related severance benefits. The Company expects that this
charge will result in cash expenditures of approximately $0.36 million over the
third and fourth fiscal quarters.
Item
5.02. Departure of
Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On
September 25, 2009, Greg Scholl resigned, effective November 1, 2009, as
President and Chief Executive Officer of the Company and as a member of the
Board of Directors (the “Board”), to accept a new position with another
company. Mr. Scholl will remain employed by the Company until October
31, 2009 to assist in structuring an orderly transition. Pursuant to Mr.
Scholl’s employment agreement with the Company, Mr. Scholl will not receive any
severance benefits.
In
connection with Mr. Scholl’s resignation, the Board formed a search committee to
identify qualified candidates to serve as the Company’s chief executive officer
and appointed Michael Donahue, Chairman of the Board, to head the
committee. In addition, the Board appointed Danny Stein, a member of
the Board, as Interim Chief Executive Officer effective October 1, 2009 for a
three month period. In addition, Mr. Stein will assist in structuring
an orderly transition beginning on October 1, 2009. Mr. Stein will receive
$50,000 as compensation for his role as Interim CEO.
Mr.
Stein, 40, has served as a member of our Board since November 2007. Mr. Stein
serves as President of JDS Capital Management, Inc., an investment firm based in
New York that invests in private and public debt and equity, and he has held
this position since 2003. In addition, Mr. Stein has served as chief executive
officer of eMusic.com, one of our customers, since March 2009 and prior to that
served as interim chief executive officer of eMusic.com from October 2008. Mr.
Stein also serves as a director of Dimensional Associates, the majority
stockholder of the Company, and he was a director of Orchard Enterprises NY,
Inc. from April 2003 until its acquisition by the Company in November 2007. From
May 2001 through October 2002, Mr. Stein was the chief executive officer of TTR
Technologies, a company that specialized in copy-protection technologies whose
assets were sold to Macrovision (MVSN). From 2000 to 2001, Mr. Stein was
President of Javu Technologies, which licenses software and services to
corporations that store, manage, deliver or repurpose video assets. From 1999 to
May 2000, Mr. Stein was president, chief operating officer and a director of the
Wedding List Company, an Internet company with retail outlets specializing in
the wedding gift and registry business. Mr. Stein has a B.S. degree from Cornell
University.
The description of certain transactions
between the Company and eMusic.com and other parties related to Mr. Stein set
forth under the heading “Transactions with Related Persons” in the Company’s
Proxy Statement for its 2009 Annual Meeting of Stockholders are incorporated
herein by reference.
Item 7.01
Regulation FD Disclosure.
On
September 29, 2009, the Company issued a press release to announce its staff
reduction initiative and the resignation of its president and chief executive
officer, a copy of which is attached to this Current Report on Form 8-K as
Exhibit 99.1.
The
information contained in the attached press release is “furnished” but not
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended.
Item 9.01 Financial Statements and
Exhibits.
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Exhibit
Number
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Description
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99.1
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Press
Release dated September 29, 2009
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Signatures
Pursuant
to the requirements of the Securities and Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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The
Orchard Enterprises, Inc.
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Date:
September 29, 2009
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By:
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/s/ Nathan
Fong
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Name:
Nathan Fong
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Title: Chief
Financial Officer
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Exhibit
Index
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Exhibit
Number
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Description
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99.1
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Press
Release dated September 29, 2009
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