form8k_moranagreement.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) May 5, 2008
GSE SYSTEMS,
INC.
(Exact
name of registrant as specified in its charter)
Delaware
|
0-26494
|
52-1868008
|
(State
or other jurisdiction
|
(Commission
File Number)
|
(I.R.S.
Employer
|
of
incorporation)
|
|
Identification
No.)
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7133 Rutherford Rd., Suite
200, Baltimore, MD 21244
(Address
of principal executive office and zip code)
(410)
277-3740
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
Agreement
The
Company’s two-year Employment Agreement with Mr. Moran, the Company’s Chief
Executive Officer (as filed with the U.S. Securities and Exchange Commission in
a current report on Form 8-K on May 2, 2006 and incorporated by reference
herein), expired on April 30, 2008. The Company’s Compensation
Committee approved a new two-year Employment Agreement (the “Agreement”) with
Mr. Moran, and the Company entered into the Agreement with Mr. Moran on May 5,
2008. The period of the Agreement runs from May 1, 2008 through April
30, 2010.
In
addition to Mr. Moran’s title of Chief Executive Officer, Mr. Moran was given
the title of Vice Chairman of the Board of Directors. The Company
agreed to increase Mr. Moran’s base salary from $252,000 to $260,000 commencing
May 1, 2008. On the one-year anniversary date of the 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 the Agreement is in effect, the Company’s Board of Directors shall
determine the bonus amount for the most recently completed fiscal year by March
31 of the subsequent year. The bonus is performance based and the
performance goals shall be as jointly agreed to by Mr. Moran and the
Board. For the 2008 fiscal year, the target bonus is
$150,000. On the one-year anniversary date of the Agreement, the
Company’s Board of Directors 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. The amount of Mr.
Moran’s compensation is competitive with that of other listed companies with
similar activities and risk profiles so that the Company may continue to receive
and enjoy the benefit of Mr. Moran’s services.
In
addition, Mr. Moran shall be provided with an automobile of his choice
(comparable to the one currently provided to him by the Company) at the
Company’s expense. The Company shall pay for all maintenance, gas and
insurance expenses incurred in connection with the automobile. Mr.
Moran is also entitled to receive vacation in accordance with the Company’s
policy for its senior executives. He is also entitled to participate
in the Company’s employee benefits plan for its senior executives or employees
to include the Company’s medical and 401(k) plans. In addition, Mr.
Moran is entitled to reimbursement by the Company for all reasonable expenses
incurred by him in connection with this employment. Reimbursable
expenses include, but are not limited to, business travel and customer
entertainment expenses.
The
Company may terminate the Agreement for cause. Examples of “cause”
include (i) willful and continued failure to 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 the
Agreement. Notice of termination must be in writing and must state
the reason for termination and Mr. Moran (with his attorney) shall have the
opportunity to be heard by the Company’s Board of Directors. In the
event of termination for cause, Mr. Moran shall continue to receive his full
salary through the date of termination. In the event of disability,
Mr. Moran 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 employee shall not constitute a breach of the Agreement.
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
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Description
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10.1
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Employment
Agreement effective as of May 1, 2008 between GSE Systems, Inc. and John
V. Moran, filed herewith.
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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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GSE
SYSTEMS, INC.
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|
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Date: May
7, 2008
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/s/ Jeffery
G. Hough
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Jeffery
G. Hough
|
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Senior
Vice President and CFO
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