8-K

 

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): August 1, 2013

Cogent Communications Group, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	1-31227	52-2337274
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
1015 31st St. NW, Washington, District of Columbia		20007
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 202-295-4200

Not Applicable
______________________________________________
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:

[  ]  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 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 1, 2013, Ernest Ortega, age 48, joined Cogent as Vice President and Chief Revenue Officer. Prior to joining Cogent, Mr. Ortega served as Executive Vice President of Sales and Marketing at XO Communications where he had previously served as President of Carrier Sales from 2004 until 2011 and as Vice President of national accounts from 1999 until 2003.

Mr. Ortega will receive a salary of $300,000 per year and be eligible for certain performance based commissions. Mr. Ortega will receive a grant of 40,000 shares of restricted stock. Under certain circumstances following a separation of service, Mr. Ortega will be entitled to receive three months salary and continued employee benefits. The restricted stock grant and the severance agreement are attachment as exhibits hereto.

A copy of the press release announcing the hiring of Mr. Ortega is attached as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits:

Exhibit
Number Description

10.1 Ernest Ortega Severance Agreement with Cogent Communications Group, Inc., filed herewith.
10.2 Restricted Stock Award to Ernest Ortega, filed herewith.
99.1 Press Release Dated August 1, 2013.

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.

	Cogent Communications Group, Inc.
August 1, 2013	By:	David Schaeffer
		Name: David Schaeffer
		Title: Chairman, President & Chief Executive Officer

Exhibit Index

Exhibit No.	Description
10.1	Ernest Ortega Severance Agreement with Cogent Communications Group, Inc., filed herewith.
10.2	Restricted Stock Award to Ernest Ortega, filed herewith.
99.1	Press Release Dated August 1, 2013.

EX-10.1

EXHIBIT 10.1

Severance Agreement

1. This agreement is entered into by Cogent Communications, Inc. (“Cogent”) and the executive employee signing this Agreement, below (“Executive”).

2. As an inducement for Executive to focus his or her full efforts on Cogent’s business without undue concern for future employment the Compensation Committee of the Cogent Board of Directors has approved the following minimum severance provisions for Executive.

3. If Executive is terminated other than for Cause (as defined below) or Executive terminates his or her employment for Good Reason (as defined below), Executive shall continue to receive his or her salary (reduced by all mandatory withholdings for taxes or other governmentally required payments such as garnishments) for 3 months following the date of termination, i.e. Executive shall be paid through the 91st day following the date of termination. Executive shall be paid commission earned through Executive’s date of termination. However, if the termination follows a Change of Control (as defined below) such payment shall be made as a lump sum within 5 days of termination. Salary means Executive’s regular salary (excluding bonuses, income from vesting of restricted stock, dividends paid on unvested and vested stock, and other similar elements of compensation that are not regular salary) before voluntary withholdings and reductions (such as those for parking, 401(k) plan, medical, dental, and life insurance) and before mandatory withholdings for taxes and other governmentally required payments such as garnishments. At the election of Executive, the employee share of the cost of benefits (provided in paragraph 4) may be paid through a salary reduction agreement (in order to make such payments with pre-tax income).

4. If Executive is terminated other than for Cause or Executive terminates his or her employment for Good Reason, Executive shall continue to receive through the last day of the third month following the month in which termination occurs health insurance, dental insurance, life insurance (to the extent paid by the company), and long term disability insurance. Cogent shall pay the company share of such benefits and Executive shall pay the employee share, e.g. the employee portion of the premium for health and dental insurance. The employee share and company share shall be the same as currently applicable to the benefits at the time of termination.

5. For purposes of this agreement, Cogent shall have “Cause” to terminate the Executive’s employment hereunder (i) upon the Executive’s conviction for the commission of an act or acts constituting a felony under the laws of the United States or any state thereof, or (ii) upon the Executive’s willful and continued failure to substantially perform his or her duties hereunder (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness), after written notice has been delivered to the Executive by Cogent, which notice specifically identifies the manner in which the Executive has not substantially performed his duties, and the Executive’s failure to substantially perform his duties is not cured within ten (10) business days after notice of such failure has been given to the Executive. No act or failure to act on the Executive’s part shall be deemed “willful” unless done or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of Cogent.

6. “Good Reason” shall mean the occurrence (without the Executive’s express written consent) of any one of the following:

a. the assignment to Executive of duties inconsistent with the Executive’s status as a senior executive officer of the Company or a substantial adverse alteration in the nature or status of the Executive’s responsibilities; or

b. a reduction in Executive’s regular salary; or

c. relocation of Executive’s principal place of employment outside of the Washington, DC area.

7. “Change of Control” shall mean any of the following: (i) a consolidation, merger or reorganization of Cogent Communications Group, Inc. with or into any other corporation or corporations in which the stockholders of Cogent Communications Group, Inc. immediately before such event shall own fifty percent (50%) or less (calculated on an as converted basis, fully diluted) of the voting securities of the surviving corporation; (ii) a transaction or series of related transactions, other than an underwritten public offering, in which at least fifty percent (50%) of Cogent Communications Group, Inc.’s voting power is transferred; (iii) the sale, transfer or lease of all or substantially all of the assets of Cogent Communications Group, Inc.; (iv) the acquisition of shares of capital stock of Cogent Communications Group, Inc. (whether through a direct issuance by Cogent Communications Group, Inc., negotiated stock purchase, a tender for such shares, merger, consolidation or otherwise) by any party or group that did not beneficially own a majority of the voting power of the outstanding shares of capital stock of Cogent Communications Group, Inc. immediately prior to such purchase, the effect of which is that such party or group beneficially owns at least a majority of such voting power immediately after such event; or (v) the consummation by Cogent Communications Group, Inc. of a plan of complete liquidation of Cogent Communications Group, Inc.

8. Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to any act or failure to act constituting Good Reason hereunder. Notwithstanding the foregoing, a termination shall not be treated as a Termination for Good Reason if the Executive shall have consented in writing to the occurrence of the event giving rise to the claim of Termination for Good Reason.

9. Executive shall be entitled to the indemnification set forth in the certificate of organization of any entity for which he or she performs services to the maximum extent permitted by law. Executive shall also be entitled to the protection of any insurance policies Cogent may elect to maintain generally for the benefit of its directors and officers.

10. Executive agrees that he or she remains an employee at will whose employment may be terminated at any time with or without cause.

11. Cogent agrees that Executive is giving consideration for this agreement by relying upon its provisions in determining whether or not to seek other employment.

2
Accepted and agreed to:

	Cogent Communications, Inc.		Executive
By:	/s/Dave Schaeffer		/s/ Ernest Ortega
Name:	Dave Schaeffer	Name:	Ernest Ortega
Title:	CEO	Date:	July 1, 2013
Date:	August 1, 2013

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EHHIBIT 10.2

RESTRICTED STOCK AWARD

Name: Ernie Ortega	Cogent Communications Group, Inc.
Grant Date: August 1, 2013	2004 Incentive Award Plan (the “Plan”)

1. Grant: Effective as of the Grant Date specified above you have been granted 40,000 (forty thousand) shares of common stock $.001 par value (the “Restricted Stock”) of Cogent Communications Group, Inc. (the “Company”) subject to the vesting requirement described below.

2. Normal Vesting: You will become vested in 25% of the shares of Restricted Stock on August 1, 2014 and in an additional 6.25% of the shares of Restricted Stock on the 1st day of November, February, May, and August thereafter, with full vesting on the 12^th quarter thereafter.

3. Accelerated Vesting: Notwithstanding the foregoing, you will become fully vested upon the termination of your employment by reason of death or disability. You will also become fully vested upon a Change of Control (even without termination of employment).If the accelerated vesting is due to a Change of Control the number the shares that vest in such event shall be limited to the number shares that when multiplied by the closing price of the Company’s common stock on August 1, 2013 yield a dollar value not in excess of three times your annual compensation on the date of the Change of Control. If the acceleration of vesting due to a Change of Control would trigger the excise tax provided for in Section 280G and 4999 of the U.S. Internal Revenue Code such vesting shall be delayed by a time sufficient to not trigger the excise tax. The shares for which vesting accelerates shall be allocated from the last shares to vest and the remaining unvested shares shall continue to vest under the normal vesting rule. Upon termination of employment other than as provided above you will forfeit any unvested shares of Restricted Stock that have not vested by the end of your severance period, i.e. you continue vesting during your severance period and lose the remaining unvested shares. Your severance period is the number of months compensation specified in your employment agreement for use in calculating your severance, e.g. 3 months. Change of Control has the meaning set forth in the Plan. Annual compensation means your average compensation as calculated for U.S. income tax purposes for the last three complete calendar years.

4. Nontransferable: The Restricted Stock or any interest or right therein or part thereof may not be disposed of by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means, whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), until vested, and any attempted disposition prior thereto shall be null and void and of no effect. The foregoing notwithstanding, transfers of the Restricted Stock may be permitted for estate planning purposes with the prior written consent of the Compensation Committee and subject in each case to the provisions of the Plan and the same restrictions and forfeiture provisions under this Agreement that the Restricted Stock had in your hands.

5. Dividends/Voting: You will be entitled to vote the shares of Restricted Stock. However, you will only be entitled to receive any dividends that are paid on shares of the Restricted Stock once they are vested. Any dividends paid on unvested shares of Restricted Stock shall be held by the Company, without interest thereon and paid to you at the time the shares of Restricted Stock on which such dividends were paid vest.

6. Certificates: The Company shall cause the Restricted Stock to be issued and a stock certificate or certificates representing the Restricted Stock to be registered in your name or held in book entry form, but if a stock certificate or certificates are issued, they shall be delivered to, and held in custody by the Company until the shares of Restricted Stock vest. You agree to give to the Company a stock power for all unvested shares of Restricted Stock. If issued, each such certificate will bear such legends as the Company may determine.

7. No Other Rights: The grant of Restricted Stock under the Plan is a one-time benefit and does not create any contractual or other right to receive an award of Restricted Stock or benefits in lieu of Restricted Stock in the future. Future awards of Restricted Stock, if any, will be at the sole discretion of the Company, including, but not limited to, the timing of the award, the number of shares and vesting provisions. The grant of Restricted Stock under the Plan does not entitle you to any rights to remain employed with the Company, nor does it constitute a contract of employment.

8. Miscellaneous: The shares of Restricted Stock are granted under and governed by the terms and conditions of the Plan, as may be amended from time to time. Defined terms used herein shall have the meaning set forth in the Plan, unless otherwise defined herein.

Cogent Communications Group, Inc.

/s/David Schaeffer
by: Dave Schaeffer
Chief Executive Officer

EXHIBIT 99.1

[Cogent logo] FOR IMMEDIATE RELEASE

Cogent Contacts:

For Public Relations: For Investor Relations:
Travis Wachter            John Chang
+ 1 (202) 295-4217 + 1 (202) 295-4212
twachter@cogentco.com            investor.relations@cogentco.com

Cogent Communications Hires New Chief Revenue Officer

WASHINGTON, D.C. August 1, 2013 – Cogent Communications Group, Inc. (NASDAQ: CCOI) today announced that Ernest Ortega has been hired as Vice President of Global Sales and Chief Revenue Officer.

“Ernie is a great addition to our senior team and we know his experience in the industry will contribute to further sales growth,” said Dave Schaeffer, Cogent’s Chief Executive Officer and Chairman of the Board of Directors.

Prior to joining Cogent, Mr. Ortega served as Executive Vice President of Sales and Marketing at XO Communications where he had been employed since 2003.

About Cogent Communications

Cogent Communications (NASDAQ: CCOI) is a multinational, Tier 1 facilities-based ISP, consistently ranked as one of the top five Internet backbone networks in the world. Cogent specializes in providing businesses with high speed Internet access, Ethernet transport and colocation services. Cogent’s facilities-based, all-optical IP network provides services in over 180 markets globally.

Since its inception, Cogent has unleashed the benefits of IP technology, building one of the largest and highest capacity IP networks in the world. This network enables Cogent to offer large bandwidth connections at highly competitive prices. Cogent also offers superior customer support by virtue of its end-to-end control of service delivery and network monitoring.

Cogent Communications is headquartered at 1015 31st Street, NW, Washington, D.C. 20007. For more information, visit www.cogentco.com. Cogent Communications can be reached in the United States at (202) 295-4200 or via email at info@cogentco.com.

# # #

Information in this release may involve expectations, beliefs, plans, intentions or strategies regarding the future. These forward-looking statements involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Cogent Communications Group, Inc. as of the date of the release, and we assume no obligation to update any such forward-looking statement. The statements in this release are not guarantees of future performance and actual results could differ materially from our current expectations. Numerous factors could cause or contribute to such differences. Some of the factors and risks associated with our business are discussed in Cogent’s registration statements filed with the Securities and Exchange Commission and in its other reports filed from time to time with the SEC.

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