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| GNET > SEC Filings for GNET > Form 8-K on 13-Mar-2009 | All Recent SEC Filings |
13-Mar-2009
Change in Directors or Principal Officers
Employment Agreement with Gary L. Worobow
On March 11, 2009, Gary L. Worobow was appointed as an executive officer of
the Company and the Company entered into an employment agreement with
Mr. Worobow governing the terms of his employment. Pursuant to this agreement,
which is deemed to be effective as of March 1, 2009, Mr. Worobow will serve as
the Company's Executive Vice President, Business and Legal Affairs through
June 30, 2012 and is required to devote substantially all of his working time to
the Company. During the term of the employment agreement, Mr. Worobow is
entitled to receive an annualized base salary of $250,000 through January 2010,
which will be subject to 5% annual increases commencing February 1, 2010. In
addition, Mr. Worobow received a one time bonus equal to one month's salary upon
commencing employment. Mr. Worobow is also entitled to receive an annual
performance-based bonus of up to one-third of his base salary for each of fiscal
2010, 2011 and 2012. The amount of each year's bonus, if any, will be determined
and paid based upon satisfaction of certain operating profit goals to be
determined by the compensation committee for the applicable fiscal year and is
contingent upon Mr. Worobow remaining an active employee of the Company through
the end of the applicable fiscal year. In addition to reimbursing Mr. Worobow
for reasonable expenses incurred in performing his duties, including maintaining
bar association membership and satisfying continuing legal education
requirements, the employment agreement provides that unless and until the
Company elects to provide its United States based employees with medical
insurance, the Company will pay Mr. Worobow $1,000 per month in lieu providing
him with medical insurance.
In the event the Company terminates Mr. Worobow's employment for "cause,"
he will be entitled to compensation and benefits accrued through the effective
date of termination. In the event that Mr. Worobow's employment is terminated
without "cause" or if Mr. Worobow terminates his employment as a result of our
material breach of his employment agreement or our requiring him to report
directly to anyone other than our Chief Executive Officer, President or our
Board of Directors, Mr. Worobow will also be entitled to severance in the form
of continuation of his then current base salary for the remaining term of the
employment agreement payable in accordance with the Company's normal payroll
business practices. If the Company determines not to renew Mr. Worobow's
employment agreement, it is required to provide him with notice of such
determination four months prior to the expiration of the agreement or to
continue to pay Mr. Worobow his then current annualized salary for a period of
four months following such expiration. The term "cause" under Mr. Worobow's
employment agreement includes the following events: (i) Mr. Worobow's conviction
of a felony; (ii) Mr. Worobow's material breach of the employment agreement;
(iii) Mr. Worobow's habitual intoxication, drug use or chemical substance abuse
by any intoxicating or chemical substance.
The employment agreement contains standard provisions regarding protection
of the Company's confidential information (as defined in the employment
agreement) and, subject to specific exceptions, prohibits Mr. Worobow from
directly or indirectly engaging in the following actions during the period he is
employed by the Company and continuing for one year following the termination of
the employment agreement, without the Company's prior express written consent:
• providing services to any of the Company's competitors anywhere outside of
the United States similar to those provided to the Company during his
employment;
• soliciting or attempting to induce any of the Company's customers, suppliers, licensees, licensors or other business relations to cease doing business with the Company; or
• soliciting or attempting to induce any of the Company's employees to leave their employ, or to work for, render services or provide advice to or supply the Company's confidential business information or trade secrets to any third person or entity.
The preceding summary of Mr. Worobow's employment agreement with the Company
is qualified by reference to the full employment agreement, which is attached as
Exhibit 10.1 to this report and incorporated herein by reference.
Director Resignation
In conjunction with entering into his employment agreement with the
Company, Mr. Worobow resigned as a member of the Company's Board of Directors,
including his positions on the Company's compensation and governance and
nominating committees, effective March 11, 2009. Upon such resignation, the
Company granted Mr. Worobow a 50,000 share employee stock option in exchange for
a 50,000 share director stock option granted to Mr. Worobow upon his initial
election to the Board. The employee stock option has an exercise price equal to
$4.66 (which amount is equal to or in excess of the fair market value of the
Company's common stock on March 11, 2009), is immediately exercisable with
respect to 33,333 shares and will vest with respect to the remaining 16,667
shares on December 8, 2009. The exercise price and the vesting are consistent
with the exercise price and vesting of Mr. Worobow's prior director stock
option.
Election of New Director
Effective March 11, 2009, the Company filled the vacancy on the Board of
Directors resulting from Mr. Worobow's resignation by electing Mr. William M.
Mower to serve as a director until the Company's next annual stockholders'
meeting. Mr. Mower has also been appointed to replace Mr. Worobow as a member of
the Company's compensation and governance and nominating committees.
In conjunction with his election to the Board, and consistent with the
Company's director compensation practices, on March 11, 2009, the Company
granted to Mr. Mower 20,000 shares of restricted common stock. The restricted
shares are subject to transfer and forfeiture restrictions that lapse in three
equal annual installments on the February 26, 2010, 2011 and 2012. The Company's
other non-employee directors received similar grants upon their February 26,
2009 re-election to the Board.
Mr. Mower, age 50, has been engaged in the private practice of law since
1982, practicing primarily in the areas of corporate, securities and real estate
law, with the Minneapolis, Minnesota law firm of Maslon Edelman Borman & Brand,
LLP, which has rendered and is continuing to render legal services to the
Company.
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