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Item 1.01
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Entry into a Material Definitive Agreement.
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Exchange and Financing Transactions
On November 10, 2017, TheStreet, Inc. (the “Company”)
entered into an Exchange Agreement (the “Exchange Agreement”) with TCV VI, L.P., a Delaware limited partnership (“TCV
VI”), and TCV Member Fund, L.P., a Cayman Islands exempted limited partnership (“TCV Member Fund” and, together
with TCV VI, the “TCV Holders”), which provided for, among other things, the exchange by the TCV Holders of all shares
of Series B Preferred Stock of the Company held by them for an aggregate of (i) 6,000,000 shares of newly issued common stock,
par value $0.01 per share of the Company (“Common Stock”) and (ii) cash consideration in the amount of $20,000,000
(the “Exchange Transaction”). The Exchange Transaction closed on November 10, 2017. The retirement of the Series B
Preferred Stock removes, among other rights of the TCV Holders and restrictions on the Company, a $55 million liquidation preference
previously held by TCV.
On November 10, 2017, the Company entered into
a Securities Purchase Agreement (the “Purchase Agreement”) with 180 Degree Capital Corp. and (“180 Degree Capital”)
and TheStreet SPV Series, a limited liability company series of 180 Degree Capital Management, LLC (the “Investors”),
pursuant to which the Company agreed to issue and sell an aggregate of 7,136,363 shares of Common Stock to the Investors at a purchase
price of $1.10 per share, for aggregate gross proceeds of $7,849,999 (the “Financing Transaction”). The closing bid
price of the Company’s Common Stock as reported by NASDAQ on November 9, 2017, was $0.92 per share, and the Financing Transaction
closed on November 10, 2017.
The Common Stock issued in the Exchange Transaction
and the Financing Transaction have not been registered under the Securities Act of 1933, as amended (the “Securities Act”),
and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
In connection with the Exchange and Financing Transaction, the Company agreed to register the shares for resale and the Company
has agreed to prepare and file a registration statement with the Securities and Exchange Commission within 90 days of the closing.
The TCV Holders and the Investors received additional registration rights as set forth in the transaction documents filed as exhibits
to the Form 8-K.
The above description of the materials terms
of the Exchange Transaction and the Financing Transaction are qualified in their entirety by reference to the Exchange Agreement,
the Purchase Agreement and a Registration Rights Agreement attached hereto as Exhibits 10.1, 10.2 and 10.3 respectively.
Amended and Restated Employment Agreement
On November 8, 2017, the Company and James
Cramer entered into an amended and restated employment agreement with a new four-year term commencing January 1, 2018 (the
“Employment Agreement”). Pursuant to the Employment Agreement, Mr. Cramer will author articles for the
Company’s publications, provide online video content for the Company’s websites, participate in events and
provide reasonable promotional and other services, subject to his personal and professional availability, effective January
1, 2018 through December 31, 2021.
In consideration for providing these services, Mr. Cramer will receive a royalty based on the total net revenues
of the Company’s consumer subscription products as well as revenues from investor and conference programs, presentations
or events offered by the Company in which Mr. Cramer is advertised or serves as a presenter, speaker, participant or panelist.
The annual minimum royalty shall not be less than $2.0 million and effective January 1, 2018, the Company will pay Mr. Cramer a
monthly draw against the annual royalty payment equal to $2.5 million. At the end of each year, the Company will prepare a royalty
statement and calculate and pay the total royalty payable to Mr. Cramer for such year. To the extent the annual royalty amount
exceeds the total monthly draw we paid during the period, then such excess amount will be paid to Mr. Cramer. To the extent the
total monthly draws paid during the period exceed the annual royalty amount, such excess (up to a maximum of $500,000) shall be
recoverable by the Company as set forth in the agreement. In addition, during the term of the Employment Agreement, the Company
will pay Mr. Cramer an annual license fee in the amount of $300,000 for the use of his name and likeness, payable in four equal
installments of $75,000 on each of January 1, April 1, July 1 and October 1.
Effective January 2, 2018, Mr. Cramer will be
granted restricted stock units (“RSUs”) under the Company’s 2007 Performance Incentive Plan covering 1,000,000
shares of the Company’s Common Stock. The RSUs will be payable in shares of Common Stock and will vest and become payable
as to 25% of the shares in four equal installments on December 31 of each of 2018, 2019, 2020 and 2021, respectively, subject to
Mr. Cramer’s continued service through each such vesting date and other terms as set forth in the applicable award agreement.
Upon (i) the consummation of a “change of control” of the Company, (ii) a termination of Mr. Cramer’s employment
by the Company without “cause” or (iii) Mr. Cramer’s resignation for “good reason” (as such terms
are defined in the Employment Agreement or the award agreement, as applicable), all of the unvested RSUs held by Mr. Cramer will
become fully vested.
Mr. Cramer has agreed that, during the term
of the Employment Agreement and, if, during the term of the Employment Agreement, either the Company terminates Mr. Cramer’s
employment for cause or Mr. Cramer resigns without good reason, for a period of 18 months following such termination of employment,
Mr. Cramer will not author articles or columns for any other digital financial publication that competes with the Company without
first obtaining the Company’s consent. In addition, subject to certain exceptions, during the term of the Employment Agreement
and for a period of 18 months after the cessation of his employment, he will not solicit for employment, in any business enterprise
or activity, any person who was employed by the Company during the six months prior to the cessation of his employment.
The Employment Agreement may be terminated by
the Company for cause, by Mr. Cramer for good reason, upon Mr. Cramer’s death or disability, upon the dissolution or liquidation
of the Company, or by Mr. Cramer for specified events provided under the employment agreement.
In determining Mr. Cramer’s compensation,
the Company’s Compensation Committee engaged Frederick W. Cook, as its independent compensation consultant. Among other things,
the Company and its consultant considered:
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Mr. Cramer’s unique role as the founder of the Company;
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his status as a well-known American television personality and author of financial advice;
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his development of the Company’s brand; and
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the competitive pay for similarly situated individuals.
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The Compensation Committee determined that the
total compensation that may be paid to secure Mr. Cramer’s services over the next four years is necessary and appropriate.
Other than as described above, the provisions
of Mr. Cramer’s prior employment agreement generally continue. The foregoing description of the Employment Agreement is qualified
in its entirety by the Employment Agreement, to be filed at a later date.