form8k_employeeagreements.htm
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) January 1, 2009
GSE SYSTEMS,
INC.
(Exact
name of registrant as specified in its charter)
Delaware
|
001-14785
|
52-1868008
|
(State
or other jurisdiction
|
(Commission
File Number)
|
(I.R.S.
Employer
|
of
incorporation)
|
|
Identification
No.)
|
1332 Londontown Blvd,
Sykesville, MD 21784
(Address
of principal executive office and zip code)
(410)
970-7800
Registrant's
telephone number, including area code
Check the appropriate box below if
the Form 8-K filing is intended to
simultaneously satisfy the filing obligation or 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
1.01 Entry into a Material Definitive Agreement.
Employment
Agreements
The
Company’s Compensation Committee approved formal Employment Agreements and the
Company entered into the Agreements as of January 1, 2009 with each of the
following officers: Chin-our Jerry Jen, Jeffery G.
Hough, Michael D. Feldman, and Gill R. Grady. The period of
each Agreement runs from January 1, 2009 through December 31, 2010.
In
recognition of each officer’s responsibilities and based on comparisons to peer
organizations with similar activities and risk profiles, the Company agreed to
pay the following base salaries effective January 1,
2009:
Chin-our
Jerry Jen
|
$205,000
|
Jeffery
G. Hough
|
185,000
|
Michael
D. Feldman
|
170,000
|
Gill
R. Grady
|
175,000
|
On the
one-year anniversary date of each Agreement, the Company shall increase the
amount of compensation by three percent (3%) or an amount equal to the
percentage increase in the Consumer Price Index over the preceding twelve (12)
month period.
For each
year each Agreement is in effect, the Compensation Committee of the Board of
Directors and the Company’s Chief Executive Officer shall determine the bonus
amount for the most recently completed fiscal year and payment shall be made by
March 15 of the subsequent year. The bonus is performance based and
the performance goals shall be as jointly agreed to by each officer and the
Chief Executive Officer and the Board of Directors. For the 2009
fiscal year, the target bonuses are as follows:
Chin-our
Jerry Jen
|
$50,000
|
Jeffery
G. Hough
|
50,000
|
Michael
D. Feldman
|
50,000
|
Gill
R. Grady
|
50,000
|
On the
one-year anniversary date of each Agreement, the Company’s Board of Directors
shall increase the bonus target by three percent (3%) of an amount equal to the
percentage increase in the Consumer Price Index over the preceding twelve (12)
month period.
In
addition, each officer shall receive:
¨
|
an
automobile allowance of seven thousand two hundred dollars ($7,200) per
year and the Company will pay for the gasoline in connection with such
automobile; and
|
¨
|
an
allowance for club membership of four thousand dollars ($4,000) per
year.
|
The
Company shall pay the monthly medical and dental insurance premiums for each
officer in association with Company-provided health insurance
plans. Each officer is entitled to receive vacation in accordance
with the Company’s policy for its senior executives and may participate in other
Company sponsored benefit plans including life insurance and 401(k) retirement
plans. Each officer is entitled to reimbursement by the Company for
all reasonable expenses incurred by him in connection with his
employment. Reimbursable expenses include, but are not limited to,
business travel and customer entertainment expenses.
The
Company may terminate each Agreement for cause. Examples of “cause”
include (i) willful and continued failure to substantially perform contractual
duties after the Company has communicated its demand for substantial
performance; (ii) willfully engaging in misconduct which has a material adverse
effect on the Company’s reputation, operations, prospects or business relations;
(iii) conviction for any felony or entry of a plea of “no contest” for a crime
of moral turpitude; (iv) or breach of the terms and conditions of each
Agreement. Notice of termination must be in writing and must state
the reason for termination and each officer (with his attorney) shall have the
opportunity to be heard by the Company’s Board of Directors. In the
event of termination for cause, each officer shall continue to receive his full
salary through the date of termination. In the event of disability,
each officer will continue to receive his full salary (less any sum payable
under the Company’s disability benefit plan) until his employment is
terminated. Termination of employment due to the death or disability
of the officer shall not constitute a breach of the Agreement.
If the
Company shall terminate the officer's employment in breach of the
terms of this Agreement, then the Company shall pay the officer his
full salary and provide his benefits for one year from the Date of
Termination. Additionally, all options to purchase the Company's common
stock granted to the officer under the Company's option plan or otherwise shall
immediately become fully vested and shall terminate on such date as they would
have terminated if the officer's employment by the Company had not
terminated.
In the
event a Change of Control occurs and the officer is either (1) not
offered employment by the Successor Company or (2) employment is offered upon
conditions that result in the officer's decision to terminate employment for
Good Reason (as defined in the Agreement); then the following shall
occur. The officer shall receive continuation of salary and
bonus programs (average of prior 2 years bonus), and all benefits (including
medical, dental and life insurance coverage and any other Company-provided
benefits, including car and club allowances that Employee is receiving as of the
Effective Date) from the Date of Termination of employment for a period of
twelve months.
The
foregoing is a brief description of the terms of the various agreements and
documents described herein and by its nature is incomplete. It is
qualified in its entirety by the text of the respective agreements and
documents, copies of which are included herewith as Exhibits to this Current
Report. All readers of this Current Report are encouraged to read the
entire text of the documents referred to in the text.
Item
9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit
Number
|
Description
|
|
10.1
|
Employment
Agreement dated as of January 1, 2009 between GSE Systems, Inc. and
Chin-our Jerry Jen, filed herewith.
|
10.2
|
Employment
Agreement dated as of January 1, 2009 between GSE Systems, Inc. and
Jeffery G. Hough, filed herewith.
|
10.3
|
Employment
Agreement dated as of January 1, 2009 between GSE Systems, Inc. and
Michael D. Feldman, filed herewith.
|
10.4
|
Employment
Agreement dated as of January 1, 2009 between GSE Systems, Inc. and Gill
R. Grady, filed herewith.
|
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.
GSE SYSTEMS, INC.
Date:
January 7,
2009 /s/
Jeffery G. Hough
-----------------------
Jeffery G. Hough
Senior Vice President and Chief
Financial Officer