Filed
pursuant to 424(b)(3)
Registration
No. 333-141853
PROSPECTUS
SUPPLEMENT NO. 8
TO
PROSPECTUS DATED JULY 31, 2007
(as
supplemented by Prospectus Supplement No. 1 dated August 21,
2007,
Prospectus
Supplement No. 2 dated September 17, 2007,
Prospectus
Supplement No. 3 dated September 24, 2007,
Prospectus
Supplement No. 4 dated October 3, 2007,
Prospectus
Supplement No. 5 dated October 22, 2007,
Prospectus
Supplement No. 6 dated November 14, 2007, and
Prospectus
Supplement No. 7 dated December 4, 2007.)
SMART
ONLINE, INC.
8,707,051
SHARES
OF COMMON STOCK
This
prospectus supplement supplements our prospectus dated July 31, 2007 as
previously supplemented, which we generally refer to as the prospectus, relating
to the resale of up to 8,707,051 shares of our common stock by the selling
security holders named in this prospectus and the person(s) to whom such
security holders may transfer their shares. These shares consist
of:
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7,051,136
currently outstanding shares; and
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1,655,915
shares issuable upon exercise of outstanding warrants held by the
selling
security holders.
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The
selling security holders named in this prospectus are offering all of the shares
of common stock offered through this prospectus. No shares are being offered
by
us.
This
prospectus supplement should be read in conjunction with, and may not be
delivered or utilized without, the prospectus. This prospectus supplement is
qualified in its entirety by reference to the prospectus, except to the extent
that the information in this prospectus supplement supersedes the information
contained in the prospectus.
This
prospectus supplement includes the attached Current Report on Form 8-K, filed
with the Securities and Exchange Commission, or the SEC, on February 1,
2008.
NEITHER
THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS
SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The
date
of this prospectus supplement is February 4, 2008.
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
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Date
of Report (Date of Earliest Event Reported):
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February
1, 2008
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Smart
Online, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-32634
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95-4439334
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(State
or other jurisdiction
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(Commission
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(I.R.S.
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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2530
Meridian Parkway, 2nd Floor, Durham, North Carolina
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27713
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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:
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919-765-5000
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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:
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 240.14a-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 240.13e-4(c))
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On
February 1, 2008, Nicholas A. Sinigaglia, Chief Financial Officer, notified
Smart Online, Inc. (the "Company") of his desire to resign from his position
with the Company and his willingness to assist the Company in the transition
necessitated by his resignation. The reason for Mr. Sinigaglia’s resignation is
his personal desire to return to his native State of New York. The Company
is
now undertaking a search for a new Chief Financial Officer, and Mr. Sinigaglia
has indicated that he will be available until March 30, 2008 to help effect
a
smooth transition and to provide financial advice after the appointment of
a new
Chief Financial Officer.
In
connection with his notification to the Company of his desire to resign, on
February 1, 2008, Mr. Sinigaglia and the Company entered into an amendment
to
his Employment Agreement dated March 21, 2006 (the "Employment Agreement
Amendment"). The Employment Agreement Amendment provides that in appreciation
for his willingness to stay with the Company through March 30, 2008, Mr.
Sinigaglia will receive three months severance, payable in three substantially
equal installments on the last business day of April 2008, May 2008 and June
2008. In addition, the Company will reimburse Mr. Sinigaglia for premium
payments he makes under the Consolidated Budget Reconciliation Act ("COBRA")
to
continue his health insurance coverage for three (3) months after March 30,
2008.
The
Company and Mr. Sinigaglia are also parties to a Restricted Stock Agreement
dated April 18, 2007 (the "RSA"), pursuant to which Mr. Sinigaglia was granted
30,000 shares of restricted stock of the Company. The restrictions had lapsed
as
to one-third of the shares as of April 18, 2007 and the remaining restrictions
were scheduled to lapse in equal installments on April 18, 2008 and April 18,
2009. On February 1, 2008, the Company and Mr. Sinigaglia entered into an
amendment to the RSA (the "RSA Amendment") to accelerate the restriction lapsing
date of April 18, 2008 to March 30, 2008. As he will not continue as an employee
of the Company after March 30, 2008, the 10,000 shares of restricted stock
with
a restriction lapsing date of April 18, 2009 have been forfeited by Mr.
Sinigaglia.
The
descriptions of the Employment Agreement Amendment and the RSA Amendment
contained herein are qualified in their entirety by reference to each agreement,
copies of which are filed herewith as Exhibits 10.1 and 10.2, respectively,
and
are incorporated herein by reference.
Safe
Harbor Statement
Statements
made by the Company in this Current Report on Form 8-K relating to future plans,
events, or financial performance are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on the Company’s current plans and
expectations and involve a number of risks and uncertainties that could cause
actual results and events to vary materially from the results and events
anticipated or implied by such forward-looking statements. Any number of factors
could affect actual results and events, including, without limitation,
uncertainty regarding the timing and outcome of the Company's search for a
new
Chief Financial Officer. These and other risk factors are discussed in the
Company’s Annual Report on Form 10-K and in its other filings with the
Securities and Exchange Commission. In addition, the forward-looking statements
included in this Current Report on Form 8-K are based on the Company’s estimates
and plans as of February 1, 2008. While the Company may elect to update these
forward-looking statements at some point in the future, it specifically
disclaims any obligation to do so.
(d)
Exhibits
| 10.1 |
Amendment
to Employment Agreement, dated February 1, 2008, with Nicholas A.
Sinigaglia
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| 10.2 |
Amendment
to Restricted Stock Award Agreement, dated February 1, 2008, with
Nicholas
A. Sinigaglia
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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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Smart
Online, Inc.
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February
1, 2008
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By:
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/s/
David E. Colburn
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Name:
David E. Colburn
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Title:
Chief Executive Officer
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Exhibit Index
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Exhibit
No.
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Description
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10.1
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Amendment
to Employment Agreement, dated February 1, 2008, with Nicholas A.
Sinigaglia
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10.2
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Amendment
to Restricted Stock Award Agreement, dated February 1, 2008, with
Nicholas
A. Sinigaglia
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EXHIBIT
10.1
AMENDMENT
TO EMPLOYMENT AGREEMENT
THIS
AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment”) is made and entered into as
of the 1
st
day of
February, 2008 by and between SMART ONLINE, INC., a Delaware company (the
“Company”) and NICHOLAS A. SINIGAGLIA (the “Employee”).
WHEREAS,
the Company and Employee are parties to an Employment Agreement dated
March 21, 2006 (the “Employment Agreement”);
WHEREAS,
the current term of employment under the Employment Agreement will end
March 30, 2008;
WHEREAS,
pursuant to Section 5(b) of the Employment Agreement, Employee has the right
to
terminate employment at any time upon the giving of thirty (30) days notice
to the Company of Employee’s intent to do so;
WHEREAS,
Employee has no entitlement to any severance benefits under the Employment
Agreement;
WHEREAS,
Employee has expressed a desire to resign from his current position as Chief
Financial Officer, but is willing to remain employed with the Company until
March 30, 2008 in exchange for the severance payment and continuation of
health benefits provided by this Amendment; and
WHEREAS,
the Company and Employee have agreed to amend the Employment Agreement as set
forth below.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
below, and other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the Company and Employee agree that the
Employment Agreement shall be amended as follows:
1. The
Employment Agreement is amended by the deletion of Section 1 in its
entirety and the insertion in lieu thereof the following:
1.
EMPLOYMENT PERIOD.
The
Company shall employ the Employee, and the Employee shall serve the Company,
on
the terms and conditions set forth in this Agreement. Such employment pursuant
to the terms of this Agreement shall commence on March 21, 2006, and shall
terminate on the first to occur of (i) the termination of this Agreement as
provided herein, or (ii) March 30, 2008. The term during which this
Agreement is in effect is referred to herein as the “Employment
Period.”
2. The
Employment Agreement is amended by the addition of a new Section 17, which
shall read as follows:
17.
SEVERANCE.
If
Employee refrains from exercising his right to terminate his employment
hereunder pursuant to Section 5(b) (with 30 days notice) hereof and remains
employed until March 30, 2008, then the Company shall pay him a severance
payment in an amount equal to three (3) times his then current monthly
salary (the “Severance Payment”). The Severance Payment shall be paid in three
(3) substantially equal installments on the last business day of
April 2008, May 2008 and June 2008. In addition, the Company
shall reimburse Employee for premium payments he makes under the Consolidated
Budget Reconciliation Act (“COBRA”) to continue his health insurance coverage
for three (3) months. All reimbursements for COBRA payments shall be made
as soon as practicable following Employee’s submission of proof of timely
payments to the Company; provided, however, that all such claims for
reimbursement shall be submitted by Employee and paid by the Company no later
than six (6) months following Employee’s termination of
employment.
The
Company’s obligation to provide the Severance Payment and the COBRA
reimbursements is conditioned upon Employee’s execution and non-revocation of a
release of all claims and his compliance with Sections 7, 8, 9 and 10
hereof.
3. The
Employment Agreement is further amended by the addition of a new
Section 18, which shall read as follows:
18.
DELAYED DISTRIBUTION TO KEY EMPLOYEES.
If
the
Company determines, in accordance with Sections 409A and 416(i) of the
Internal Revenue Code of 1986, as amended (the “Code”), and the regulations
promulgated thereunder, in the Company’s sole discretion, that Employee is a Key
Employee of the Company on the date his employment with the Company terminates
and that a delay in payment of the severance pay and benefits provided under
this Agreement is necessary for compliance with Code
Section 409A(a)(2)(B)(i), then any severance payments and any continuation
of benefits or reimbursement of benefit costs provided under this Agreement
and
not otherwise exempt from Section 409A shall be delayed for a period of six
(6) months (the “409A Delay Period”). In such event, any such severance
payments and the cost of any such continuation of benefits provided under this
Agreement that would otherwise be due and payable to Employee during the 409A
Delay Period shall be paid to Employee in a lump sum cash amount in the month
following the end of the 409A Delay Period. For purposes of this Agreement,
“Key
Employee” shall mean an employee who, on an Identification Date (“Identification
Date” shall mean each December 31) is a key employee as defined in Section
416(i) of the Code without regard to paragraph (5) of that section. If
Employee is identified as a Key Employee on an Identification Date, then
Employee shall be considered a Key Employee for purposes of this Agreement
during the period beginning on the first April 1 following the Identification
Date and ending on the following March 31.
4. Except
as amended hereby, the Employment Agreement shall remain in full force and
effect and is hereby ratified and confirmed by the Company and Employee in
all
respects.
[Remainder
of this page intentionally left blank]
IN
WITNESS WHEREOF, this Amendment has been duly executed as of the day and year
set forth above.
SMART
ONLINE, INC.
By:
/s/
David E. Colburn
Name:
David E. Colburn
Title:
CEO
EMPLOYEE:
/s/
Nicholas A. Sinigaglia
Nicholas
A. Sinigaglia
EXHIBIT
10.2
AMENDMENT
TO RESTRICTED STOCK AGREEMENT
THIS
AMENDMENT TO RESTRICTED STOCK AGREEMENT (the “Amendment”) is made and entered
into as of the 1
st
day of
February, 2008 by and between SMART ONLINE, INC., a Delaware company (the
“Company”) and NICHOLAS A. SINIGAGLIA (the “Employee”).
WHEREAS,
the Company and Employee are parties to an Restricted Stock Agreement dated
April 18, 2007 (the “Agreement”); and
WHEREAS,
the Company and Employee have agreed to amend the Agreement as set forth
below.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
below, and other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the Company and Employee agree that the Agreement
shall be amended as follows:
1. The
Agreement is amended by the deletion of Section 4(a)(ii) in its entirety
and the insertion in lieu thereof the following new section
4(a)(ii):
(ii) One-third
of the Securities as of March 30, 2008.
2.
Except
as amended hereby, the Agreement shall remain in full force and effect and
is
hereby ratified and confirmed by the Company and Employee in all
respects.
[Remainder
of the page intentionally left blank.]
IN
WITNESS WHEREOF, this Amendment has been duly executed as of the day and year
set forth above.
SMART
ONLINE, INC.
By:
/s/
David E. Colburn
Name:
David E. Colburn
Title:
CEO
EMPLOYEE:
/s/
Nicholas A. Sinigaglia
Nicholas
A. Sinigaglia