ZapMe! Zaps 42 Employees

Forty-two of ZapMe.com’s U.S.-based employees lost their jobs Wednesday
as the company moved to a service-fee model.

The restructuring includes the re-tasking of select employees and a
workforce reduction of about 23 percent, including the elimination of eight
employees at the vice president level and above.

ZapMe.com, a provider of online educational content to schools and
communities nationwide, announced on October 3 that it would apply its
r)Star technology and multicasting technologies to deliver high-speed
Internet applications and services to vertical business market segments.

r)Star develops, provides and manages satellite-based network for
large-scale deployment across corporate enterprises, educational systems and
specific user communities.

“We have streamlined operations and eliminated management layers to more
effectively pursue our new market opportunities through our r)Star
subsidiary,” said Lance Mortenson, CEO, ZapMe! “We are quickly moving to
bring our structure ion line with the service-fee business model to build
and manage large-scale broadband networks for commercial and public
markets.”

Areas of concentration for the remaining employees will include the
automotive, food, hospitality and government arenas.

As part of its retasking, ZapMe is exploring alternatives, including
divestiture, for its educational network.

In related news, the company announced a tender offer statement for its
common stock was filed on Tuesday with the Securities and Exchange
Commission, On October 3, ZapMe had revealed an agreement under which Gilat
Satellite Networks Ltd. is tendering to acquire 51 percent of its 44.3
million outstanding shares at $2.32 per share for cash. The transaction is
valued at about $50 million.