Unassociated Document
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): September 22,
2009
I.D. SYSTEMS,
INC.
(Exact
Name of Registrant as Specified in Charter)
Delaware
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001-15087
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22-3270799
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(State
Or Other
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(Commission
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(IRS
Employer
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Jurisdiction
Of
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File
Number)
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Identification
No.)
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Incorporation)
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One University Plaza,
Hackensack, New
Jersey 07601
(Address
of Principal Executive
Offices) (Zip
Code)
Registrant’s
telephone number, including area code (201)
996-9000
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 Instruction A.2.
below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On September 22, 2009, I.D. Systems,
Inc. (the “Company”) entered into severance agreements with each of Jeffrey M.
Jagid, the Company’s Chairman and Chief Executive Officer, Kenneth S. Ehrman,
the Company’s President and Chief Operating Officer, Ned Mavrommatis, the
Company’s Chief Financial Officer, Treasurer and Corporate Secretary, and
Michael L. Ehrman, the Company’s Executive Vice President of Engineering
(collectively, the “Severance Agreements,” and each, a “Severance
Agreement”). Jeffrey M. Jagid, Kenneth S. Ehrman, Ned Mavrommatis and
Michael L. Ehrman are sometimes collectively referred to herein as the
“Executives” and each, an “Executive.” The Severance Agreements were
previously approved by the Compensation Committee of the Company’s Board of
Directors and presented to the full Board of Directors.
The
following is a summary of the terms of the Severance Agreements, each of which
is substantially identical in form. Capitalized terms used and not
otherwise defined herein have the meanings set forth in the Severance
Agreements.
The Severance Agreements provide each
Executive with certain severance and change in control benefits upon the
occurrence of a Trigger Event. Under the Severance Agreements, a
Trigger Event shall have occurred if (i) the Company terminates the Executive
without Cause or (ii) the Executive resigns for Good Reason within six months
following a Change in Control Event (provided, however, that the termination of
the Executive’s employment due to his death or Disability shall in no event be
considered a Trigger Event).
Within 45
days after the occurrence of a Trigger Event (or such shorter period as may be
required under the terms of a general release agreement (“Release”) to be
entered into by the Executive in order to obtain benefits under the Severance
Agreement, a form of which is attached to the Severance Agreement), the
Executive shall execute and deliver the Release to the Company. Upon
the earlier of the expiration of any applicable revocation period required for
the Release to be effective with respect to age discrimination claims and the
date on which it is otherwise permitted to be effective and irrevocable under
applicable law, the Executive shall be entitled to the following: (i)
a cash payment at the rate of the Executive’s annual base salary as in effect
immediately prior to the Trigger Event for a period of 18 months (in the case of
Mr. Jagid) and 12 months in the case of the other Executives (such period, the
“Severance Period”), made as a series of payments that are payable in accordance
with the Company’s standard payroll practices; (ii) a waiver of any remaining
portion of the Executive’s healthcare continuation payments under COBRA for the
Severance Period, provided that the Executive timely elects COBRA coverage and
continues to make contributions for such coverage equal to his contribution
amount in effect immediately preceding the date of his termination of
employment; (iii) partial accelerated vesting of the Executive’s previously
granted stock options and restricted stock awards, such that (to the extent not
already then vested) a portion of these awards shall vest and/or become
exercisable, in each case on a pro-rated basis that takes into account the
number of months elapsed since the date of grant as compared to the scheduled
vesting date (provided that the terms of the Company’s 2007 Equity Compensation
Plan shall continue to govern acceleration of vesting in the event of a “Change
of Control” as defined therein); and (iv) an award of “Performance Shares” under
the Restricted Stock Unit Award Agreement previously entered into between the
Company and the Executive, in an amount and to the extent of the sum of the
“Interim Shares” determined (and defined) in accordance with Exhibit A to that
agreement.
As a
condition to the Company’s obligations under the Severance Agreements, each
Executive is required to execute and deliver to the Company a restrictive
covenants agreement, a form of which is attached to the Severance Agreements,
containing covenants regarding confidentiality, assignment of inventions,
non-competition and non-solicitation. These restrictive covenants
shall be in effect during the Severance Period.
The foregoing summary of the Severance
Agreements does not purport to be complete and is qualified in its entirety by
reference to the Severance Agreements, copies of which will be filed as exhibits
to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2009.
SIGNATURE
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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I.D. SYSTEMS,
INC. |
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By:
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/s/ Ned
Mavrommatis |
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Name: Ned
Mavrommatis
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Title: Chief
Financial Officer
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Date: September
22, 2009