Tuesday September 9
SOURCE: GameTech International, Inc.
Entry Material Agreement, Notice of Delisting or Transfer, Change in D
Item 1.01. Entry into a Material Definitive Agreement.
On September 2, 2004, GameTech International, Inc. (the "Company") entered
into an employment agreement with John B. Furman providing for the
employment of Mr. Furman as the Company's Chief Executive Officer and
President. The employment agreement has an initial term of two years and is
subject to renewal for successive one-year periods. The employment agreement
provides that throughout his employment, Mr. Furman shall serve on the Board
of Directors of the Company. The employment agreement provides for Mr.
Furman to receive an annual base salary of $262,000. The base salary will be
reviewed annually, and may be increased based on prevailing market
conditions, Mr. Furman's performance, and other considerations. As part of
his initial compensation package, the Company granted to Mr. Furman options
to purchase 210,000 shares of the Company's common stock at an exercise
price equal to the closing price of the Company's common stock on September
2, 2004. The options vest as follows: (a) 100,000 of such options were
vested on the date of grant; (b) 100,000 of such options shall vest in
25,000 share increments on each six-month anniversary following the date of
grant; and (c) 10,000 of such options shall vest on September 2, 2005. Under
the employment agreement, the Company will provide Mr. Furman with
reasonable living expenses in Reno, Nevada during a three-month period,
travel expenses, reimbursement for personal and family health insurance and
disability insurance, and other benefits and perquisites as may from time to
time be provided to other executives of the Company. The agreement contains
provisions that prohibit Mr. Furman from competing with the Company or
soliciting the Company's customers, employees, or vendors for a period of 12
months following the termination of his employment with the Company.
The employment agreement provides that either the Company or Mr. Furman may
terminate the agreement at any time. If Mr. Furman's employment is
terminated without cause by the Company or voluntarily by him within 12
months following a change of control of the Company or for good reason (as
defined in the agreement), Mr. Furman will receive (i) all previously unpaid
base salary and bonus earned pursuant to any plan through the date of
termination, (ii) the benefit of the immediate vesting of all stock options,
and (iii) a lump sum payment over a period of time of a severance amount
equal to his base salary as of the date of termination, together with
continued reimbursement of his family health insurance and disability
insurance for either 18 months or the remainder of the term of the
agreement, whichever is greater. If Mr. Furman's employment is terminated
for reason of disability or death, he will receive (i) above and the
continued reimbursement of his family health insurance and disability
insurance up to the date of termination. If Mr. Furman's employment is
terminated by him voluntarily without good reason and there has not been a
change of control, or by the Company for cause (as defined in the
agreement), he will receive (i) above and the right to exercise all options
previously granted, provided that such options have vested as of the date of
termination. In addition, upon termination of his employment, Mr. Furman
will resign from the Company's Board of Directors.
In the event of a change of control of the Company, the employment agreement
will be automatically extended for a period of 24 months following the
effective date of the change of control, or such longer period equal to the
remaining term of the agreement.
The employment agreement is attached hereto as Exhibit 10.25.
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing
Rule or Standard; Transfer of Listing.
John B. Furman has served as an independent member of the Company's Board of
Directors and a member of the Audit, Compensation, and Nominating
Committees. As the result of his appointment as President and Chief
Executive Officer of the Company as described in Items 1.01 and 5.02 of this
Current Report on Form 8-K, Mr. Furman will no longer qualify as an
independent director or as a member of the Audit, Compensation, or
Nominating Committees under Nasdaq marketplace Rules 4200(a)(15). On
September 8, 2004, Nasdaq notified the Company that as a result of Mr.
Furman's appointment, the Company does not meet the independent director and
Audit committee requirements for continued listing on the Nasdaq Stock
Market under Marketplace Rules 4350-1(c) and 4350-1(d)(2), respectively.
Nasdaq has asked the Company to submit to Nasdaq by September 22, 2004 a
specific plan that will enable the Company to comply with the applicable
Nasdaq rules. The Nominating Committee of the Board of Directors currently
is seeking one or more independent directors to recommend for service on the
Company's Board of Directors.
Item 5.02. Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
(b) Clarence H. Thiesen retired as Chief Executive Officer of the Company,
effective September 1, 2004.
(c) The Company has appointed Mr. John B. Furman to replace Mr. Thiesen as
Chief Executive Officer effective as of September 2, 2004. Mr. Furman will
also serve as President of the Company. In connection with Mr. Furman's
appointment, the Company and Mr. Furman have entered into an employment
agreement, a description of which is set forth in Item 1.01 of this Current
Report on Form 8-K and incorporated in this Item 5.02 by reference. Mr.
Furman has served as a member of the Company's Board of Directors since May
2003 and has served as Chairman of the Company's Compensation Committee as
well as a member of the Company's Nominating and Audit Committees. Mr.
Furman has been, since February 2000, a consultant to public and private
companies, where he has primarily been involved in product
commercialization, business transactions, and financial restructurings. Mr.
Furman is a director, Chairman of the Compensation Committee, and member of
the Audit Committee of MarineMax, Inc., a NYSE-listed company that is the
nation's largest boat dealer; and, a director and member of the Audit
Committee of Smith & Wesson Holding Corporation, an AMEX-listed manufacturer
of firearms and related accessories. Mr. Furman served as President and
Chief Executive Officer and a director of Rural/Metro Corporation, a
publicly held provider of emergency and fire protection services, from
August 1998 until January 2000. Mr. Furman was a senior member of the
Phoenix-based law firm of O'Connor, Cavanagh, Anderson, Killingsworth &
Beshears, a professional association, from January 1983 until August 1998;
he was Associate General Counsel of Waste Management, Inc., a New York Stock
Exchange-listed provider of waste management services, from May 1977 until
December 1983; and Vice President, Secretary, and General Counsel of the
Warner Company, a New York Stock Exchange-listed company involved in
industrial mineral extractions and processing, real estate development, and
solid and chemical waste management, from November 1973 until April 1977. On
September 2, 2004, the Company issued a press release announcing the
retirement of Mr. Thiesen as Chief Executive Officer and the appointment of
Mr. Furman as Chief Executive Officer and President. A copy of the press
release is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits. Exhibit No. Description
10.25 Employment Agreement dated September 2, 2004 between the Registrant
and John B. Furman.
99.1 Press Release dated September 2, 2004 entitled "GameTech Announces New
President and CEO, John B. Furman".