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): June 8,
2009
Network-1
Security Solutions, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-14896
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11-3027591
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(State or other
jurisdiction of incorporation)
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(Commission File
Number)
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(IRS
Employer Identification No.)
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445 Park
Avenue, Suite 1018,
New
York,
New
York 10022
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (212)
829-5700
N/A
(Former
name or former address, if changed since last report.)
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
1.01 Entry into a Material
Definitive Agreement
On
June 8, 2009, the Registrant entered into an Employment Agreement (the
“Agreement”) with Corey M. Horowitz pursuant to which he continues to serve as
the Registrant’s Chairman and Chief Executive Officer for a three year term at
an annual base salary of $375,000 (retroactive to April 1, 2009) for the
first year and increasing 5% on each of April 1, 2010 and April 1,
2011.Mr. Horowitz also receives a cash bonus in an amount no less than
$150,000 on an annual basis for the three year term of the
Agreement. In connection with the Agreement, Mr. Horowitz was issued
a ten (10) year option to purchase 750,000 shares of the Registrant’s common
stock at an exercise price of 0.83 per share, which vests in equal quarterly
amounts of 62,500 shares beginning June 30, 2009 through March 31,
2012, subject to acceleration upon a change of control. Mr. Horowitz
shall forfeit the balance of unvested shares if his employment has been
terminated “For Cause” (as defined) by the Registrant or without Good Reason (as
defined) by Mr. Horowitz. In addition to the aforementioned
option grant, the Registrant extended for an additional five (5) years the
expiration dates of all options (an aggregate of 417,500 shares) expiring in the
calendar year 2009 owned by Mr. Horowitz.
Under the
terms of the Agreement, Mr. Horowitz shall also receive additional bonus
compensation in an amount equal to 5% of the Registrant’s royalties or other
payments (exclusive of proceeds from the sale of the Registrant’s patents which
is covered below) with respect to the Registrant’s remote power patent (U.S.
Patent No. 6,218,930), (the “Remote Power Patent”) and 12.5% of the Registrant’s
royalties and other payments with respect to the Registrant’s other patents
besides the Remote Power Patent (the “Additional Patents”) (all before deduction
of payments to third parties including, but not limited to, legal fees and
expenses and third party license fees) actually received from licensing its
patented technologies (including patents owned as of the date of the Agreement
and acquired or licensed on an exclusive basis during the period in which
Mr. Horowitz continues to serve as an executive officer of the Company)
(the “Royalty Bonus Compensation”). In addition, during the term of
his employment, Mr. Horowitz shall also be entitled to additional bonus
compensation equal to (i) 5% of the gross proceeds from the sale of the
Registrant’s Remote Power Patent and 12.5% of the gross proceeds from the sale
of the Additional Patents, and (ii) 5% of the gross proceeds from the
merger of the Registrant with or into another entity. The Royalty
Bonus Compensation shall continue to be paid to Mr. Horowitz for the life
of each of the Registrant’s patents with respect to licenses entered into with
third parties during Mr. Horowitz’s term of employment or at anytime
thereafter, whether Mr. Horowitz is employed by the Registrant or
not; provided, that, Mr. Horowitz’s
employment has not been terminated by the Registrant “For Cause” (as defined) or
terminated by Mr. Horowitz without “Good Reason” (as defined). In the
event that Mr. Horowitz’s employment is terminated by the Registrant “Other Than
For Cause” (as defined) or by Mr. Horowitz for “Good Reason” (as defined), Mr.
Horowitz shall also be entitled to (i) a lump sum severance payment of 12 months
base salary, (ii) the minimum annual bonus of $150,000 and (iii) accelerated
vesting of all unvested options and warrants.
In
connection with the Agreement, Mr. Horowitz has agreed not to compete with the
Registrant as follows: (i) during the term of the agreement and for a period of
12 months thereafter if his employment is terminated “Other Than For Cause” (as
defined) provided he is paid his 12 month base salary severance amount and (ii)
for a period of two years from the
termination
date, if terminated “For Cause” by the Registrant or “Without Good Reason” by
Mr. Horowitz.
Item
9.01 Financial Statements
are Exhibits
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Exhibit
Number
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Description
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10.1
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Employment
Agreement, dated June 8, 2009, between the
Registrant and Corey M. Horowitz (including
exhibits).
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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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NETWORK-1
SECURITY SOLUTIONS, INC. |
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Dated: June 11,
2009
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By:
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/s/ Corey
M. Horowitz |
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Name:
Corey M. Horowitz |
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Title:
Chairman & Chief Executive Officer |
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EXHIBIT
INDEX
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10.1
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Employment
Agreement, dated June 8, 2009, between the Registrant
and Corey M. Horowitz (including
exhibits).
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