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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): December 15, 2000
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FASTNET CORPORATION
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(Exact Name of Registrant Specified in Charter)
Pennsylvania 000-29255 23-2767197
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(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification No.)
Incorporation)
Two Courtney Place, Suite 130
3864 Courtney St. 18017
Bethlehem, Pennsylvania
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (610) 266-6700
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On December 11, 2000, FASTNET Corporation, a Pennsylvania corporation
("FASTNET"), issued a press release announcing the unanimous approval by the
Board of Directors to the appointment of Stephen Hurly as President and CEO. In
connection with this appointment, FASTNET has entered into an Employment
Agreement, effective as of December 18, 2000 (the "Agreement"), with Mr. Hurly
to employ him as FASTNET's President and CEO. FASTNET is also obligated under
the Agreement to nominate Mr. Hurly to serve on the Board of Directors. Under
the terms of the Agreement, Mr. Hurly will receive an annual base salary of
$150,000, and be eligible for an annual incentive bonus of at least $50,000, as
determined by FASTNET's Compensation Committee and based on the Board's
assessment of his performance for such year. Both FASTNET and Mr. Hurly may
terminate the Agreement at any time after providing notice in the form as
described in the Agreement, and FASTNET may additionally terminate the Agreement
if Mr. Hurly becomes disabled. In the event that Mr. Hurly is terminated upon
the appropriate notice as referred to above, Mr. Hurly will receive any accrued
but unpaid base salary, as well as accrued but unpaid expenses and vacation as
of the date of termination. In addition, under the terms of the Agreement,
FASTNET will sell through a private placement 1,000,000 shares of its common
stock, no par value per share (the "Common Stock"), to Mr. Hurly at a price
equal to $0.4375 per share.
In order to effect the sale of the 1,000,000 shares of Common Stock
issued through the private placement (the "Shares") to Mr. Hurly described
above, FASTNET has also loaned Mr. Hurly a principal amount of $437,500, with
interest at a rate equal to the LIBOR as listed in the Wall Street Journal from
time to time plus 1%, as payment for the shares. Mr. Hurly has executed and
issued to FASTNET a Promissory Note and Restricted Stock Agreement, dated
December 15, 2000, representing Mr. Hurly's obligation to repay the $437,500
(the "Note and Restricted Stock Agreement"). The entire principal amount with
interest is due and payable by December 1, 2005, subject to certain mandatory
prepayment events, including the receipt of any net cash proceeds by Mr. Hurly
in connection with his ownership of the Shares or transaction to sell the
Shares, or Mr. Hurly's termination under the Agreement for any reason. In the
event of a default under the Note and Restricted Stock Agreement, including
failure to pay when due, bankruptcy or termination for cause under the
Agreement, the principal amount will become immediately due and payable. The
Note and Restricted Stock Agreement also provides that upon mr. Hurly's
termination under the Agreement for any reason, he must offer to sell to FASTNET
and FASTNET is obligated to purchase any "unvested" Shares held by Mr. Hurly at
a purchase price equal to the amount paid by Mr. Hurly for such Shares. Under
the terms of the Note and Restricted Stock Agreement, the vesting of the Shares,
for purposes of determining the number of Shares that FASTNET is required to
purchase from Mr. Hurley upon termination, occurs as follows: 25% of the Shares
will vest immediately as of Mr. Hurly's first day of employment, and the
remainder will vest pro rata as of the last day of each calendar month over a
36-month period commencing on the first day of Mr. Hurly's employment. The
vesting of the Shares may also be accelerated upon termination of Mr. Hurly
without cause and in the event of a change of control, as described in the Note
and Restricted Stock Agreement.
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The Agreement and Note and Restricted Stock Agreement are each filed as
Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K and are
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1 Employment Agreement between FASTNET Corporation and Stephen
A. Hurly, dated as of December 15, 2000.
99.2 Promissory Note and Restricted Stock Agreement executed by
Stephen A. Hurly, dated as of December 15, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
FASTNET CORPORATION
By /s/ Stanley F. Bielicki
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Stanley F. Bielicki
Chief Financial Officer
Dated: December 15, 2000
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EXHIBIT INDEX
Exhibit
Number Description
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99.1 Employment Agreement between FASTNET Corporation and Stephen
A. Hurly, dated as of December 15, 2000
99.2 Promissory Note and Restricted Stock Agreement executed by
Stephen A. Hurly, dated as of December 15, 2000.
