UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest reported): April 26, 2006
EUROWEB INTERNATIONAL CORP.
(Exact name of registrant as specified in charter)
Delaware 1-1200 13-3696015
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1138 Budapest, Vaci ut 141. Hungary
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: +36-1-8897000
Copies to:
Gregory Sichenzia, Esq.
Stephen M. Fleming, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
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 Instructions A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events
On April 26, 2006, a lawsuit was filed in Delaware Court of Chancery (the
"Court") by a stockholder of Euroweb International Corp. (the "Company") against
the Company, each of the Company's directors and CORCYRA d.o.o., a stockholder
of the Company that beneficially owns 39.81% of the Company's outstanding common
stock of the Company. The Complaint is entitled Laurence Paskowitz v. Csaba Toro
et al., C.A. No. 2110-N and was brought individually and as a class action on
behalf of certain of the Company's common stockholders excluding defendants and
their affiliates. The plaintiff alleges the proposed sale of 100% of the
Company's interest in the Company's two Internet and telecom related operating
subsidiaries (the "Subsidiaries") constitutes a sale of substantially all of the
Company's assets and requires approval by a majority of the voting power of the
Company's outstanding common stock under Section 271 of the Delaware General
Corporation Law. The plaintiff also alleges the defendants breached their
fiduciary duties in connection with the sale of the subsidiaries and the
disclosures contained in the proxy statement filed on April 24, 2006. The
plaintiff applied for a temporary restraining order seeking to enjoin the
special meeting on May 15, 2006.
The Company denies any and all allegations of wrongdoing; however, in the
interests of conserving resources, on April 28, 2006, the parties to the
litigation entered into a Memorandum of Understanding providing for, subject to
confirmatory discovery by plaintiff, the negotiation of a formal stipulation of
a settlement of the litigation. Pursuant to the proposed settlement, the Board
of Directors of the Company has determined to: (i) increase the vote required to
approve the sale of 100% of the Company's interest in the Subsidiaries, (ii)
revise the disclosure within the proxy statement to state that the bonus of up
to US $400,000, which the Compensation Committee of the Company had the option
to pay to select members of management, as the Board of Directors had previously
elected to terminate the ability to pay such bonus and (iii) provide
supplemental disclosure as contained in the Supplemental Proxy Statement to be
mailed to stockholders and filed with the Securities and Exchange Commission on
May 3, 2006. The settlement will provide for dismissal of the litigation with
prejudice and is subject to Court approval. As part of the settlement, the
Company has agreed to pay an amount of attorneys' fees and expenses that is to
be negotiated between the two parties or, lieu of such agreement between the two
parties, will be determined by the Court.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
EUROWEB INTERNATIONAL CORPORATION
By: /s/ MOSHE SCHNAPP
-----------------------------
Name: Moshe Schnapp
Title: President
Date: May 2, 2006