SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
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CONCURRENT COMPUTER CORPORATION
(Name of Registrant as Specified In Its Charter)
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Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1 Title of each class of securities to which transaction applies:
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2 Aggregate number of securities to which transaction applies:
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3 Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4 Proposed maximum aggregate value of transaction:
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5 Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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1 Amount Previously Paid:
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2 Form, Schedule or Registration Statement No.:
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3 Filing Party:
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4 Date Filed:
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<PAGE>
[CONCURRENT COMPUTER CORPORATION LOGO]
NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
RETURN OF PROXY
Please complete, sign, date and return the enclosed proxy promptly in the
enclosed addressed envelope even if you plan to attend the meeting. Postage
need not be affixed to the enclosed envelope if mailed in the United States. If
you attend the meeting and vote in person, the proxy will not be used. The
immediate return of your proxy will be of great assistance in preparing for the
meeting and is therefore urgently requested.
<PAGE>
[CONCURRENT COMPUTER CORPORATION LOGO]
Dear Fellow Stockholder:
It's my pleasure to invite you to attend the Concurrent Computer
Corporation 1998 Annual Meeting of Stockholders to be held at the Sheraton
Suites, Fort Lauderdale, Florida, at 2:00 p.m., on Friday, October 30, 1998.
Your vote is important. To be sure your shares are voted at the meeting,
even if you plan to attend the meeting in person, please sign and return the
enclosed proxy card today. This will not prevent you from voting your shares in
person if you are able to attend. Your cooperation is appreciated since a
majority of the outstanding Common Stock must be represented, either in person
or by proxy, to constitute a quorum.
If you plan to attend, please mark the enclosed proxy card in the
designated space and return it today.
We look forward to meeting with you and sharing our views on the progress
of Concurrent Computer Corporation.
E. COURTNEY SIEGEL
Chairman, President and Chief
Executive Officer
Fort Lauderdale, Florida
October 1, 1998
<PAGE>
[CONCURRENT COMPUTER CORPORATION LOGO]
NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FRIDAY, OCTOBER 30, 1998
The 1998 Annual Meeting of Stockholders of Concurrent Computer Corporation
will be held at the Sheraton Suites, 555 N.W. 62nd Street, Fort Lauderdale,
Florida, at 2:00 p.m., on Friday, October 30, 1998. The Annual Meeting is being
held to consider and act upon the following matters:
1. To elect directors.
2. To ratify the selection by the Board of Directors of KPMG Peat Marwick
LLP as the Company's independent auditors for the fiscal year ending
June 30, 1999.
3. To transact such other business as may properly come before the meeting
or any adjournment of the meeting.
The Board of Directors has established September 18, 1998 as the record
date for the determination of stockholders entitled to vote at the Annual
Meeting. Only holders of Common Stock of record at the close of business on
that date will be entitled to vote. A list of stockholders as of the record
date will be available for inspection by stockholders at the Company's
headquarters, 2101 West Cypress Creek Road, Fort Lauderdale, Florida, during
regular business hours in the ten-day period prior to the Annual Meeting and at
the place of the Annual Meeting on the day of the meeting. The stock transfer
books of the Company will remain open.
All stockholders are cordially invited to attend the meeting.
By order of the Board of Directors,
KAREN G. FINK
Vice President, General
Counsel and Secretary
October 1, 1998
<PAGE>
CONCURRENT COMPUTER CORPORATION
2101 WEST CYPRESS CREEK ROAD
FORT LAUDERDALE, FLORIDA 33309
PROXY STATEMENT
This proxy statement and the proxy card are first being sent to
stockholders on or about October 1, 1998 and are furnished in connection with
the solicitation of proxies to be voted at the 1998 Annual Meeting of
Stockholders of Concurrent Computer Corporation (the "Company" or "Concurrent")
to be held at the Sheraton Suites, Fort Lauderdale, Florida, at 2:00 p.m. on
Friday, October 30, 1998.
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of the Company
and will be voted at the Annual Meeting and any adjournments thereof by the
proxy holders (E. Courtney Siegel, Chairman, President and Chief Executive
Officer; Daniel S. Dunleavy, Executive Vice President, Chief Operating Officer
and Chief Financial Officer; and Karen G. Fink, Vice President, General Counsel
and Secretary of the Company) (the "Proxy Holders"). All proxies will be voted
in accordance with the instructions contained in the proxy, and if no choice is
specified, the proxies will be voted in favor of the proposals set forth in the
Notice of Annual Meeting (the "Notice"), including the nominees for directors.
Any proxy may be revoked by a stockholder at any time before it is exercised by
delivering to the Company a proxy bearing a later date or a written notice of
revocation, or by voting in person at the meeting.
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's Directors, officers and
employees, without additional remuneration, may solicit proxies by telephone and
personal interviews. Brokers, custodians and fiduciaries will be requested to
forward proxy soliciting material to the owners of stock held in their names,
and the Company will reimburse them for their related out-of-pocket expenses.
VOTING INFORMATION
Only the holders of Common Stock of record at the close of business on
September 18, 1998 are entitled to vote at the meeting. On that date 47,708,939
shares of Common Stock were outstanding, each of which entitles the holder to
one vote on each matter properly to come before the meeting. The presence, in
person or by proxy, of the holder of a majority of such outstanding shares will
constitute a quorum at the meeting. Abstentions and "broker non-votes" will be
counted for purposes of determining the presence or absence of a quorum for the
transaction of business. All matters, other than the election of directors,
will be decided by the affirmative vote of a majority of the shares present or
represented at the meeting and entitled to vote on that matter. Abstentions
are counted in tabulations of the votes cast on proposals presented to
stockholders and, consequently, have the same effect as a vote against a
proposal, whereas broker non-votes are not counted in tabulations of the votes
cast and, consequently, have no effect on determining whether a proposal has
been approved. With regard to the election of directors, votes may be cast in
favor or withheld. Assuming the presence of a quorum, the five nominees for
Director receiving the highest number of votes cast by stockholders entitled to
vote for the election of Directors shall be elected.
1999 STOCKHOLDER PROPOSALS
Proposals of stockholders for possible consideration at the 1999 Annual
Meeting of Stockholders (expected to be held in October 1999) must be received
by the Secretary of the Company at 2101 West Cypress Creek Road, Fort
Lauderdale, Florida 33309 not later than June 3, 1999 to be considered for
inclusion in the proxy statement for that meeting if appropriate for
consideration under applicable securities laws. The proxy for the 1999 Annual
Meeting of Stockholders may confer discretionary authority to the proxy holders
for that meeting with respect to voting on any stockholder proposal received by
the Secretary of the Company after August 17, 1999. The Company will consider
responsible recommendations by stockholders of candidates to be nominated as
directors of the Company. All such recommendations must be in writing and
addressed to the Secretary of the Company. By accepting a stockholder
<PAGE>
recommendation for consideration, the Company does not undertake to adopt or
take any other action concerning the recommendation or to give the proponent its
reasons for any action or failure to act.
ELECTION OF DIRECTORS
(ITEM 1 OF NOTICE)
The authorized number of Directors is presently fixed at five. All five
Directors are nominees standing for reelection to the Board of Directors at the
Annual Meeting and all have agreed to serve if elected. Directors will be
elected to hold office until the 1999 Annual Meeting and until their successors
have been elected and qualified. Unless a contrary direction is indicated on
the proxy card, the Proxy Holders will vote the proxies received by them for the
nominees or, in the event of a contingency not presently foreseen, for the
election of such substitute nominee(s), if any, as the Board of Directors may
propose. There are no other arrangements or understandings between any nominee
and any other person pursuant to which he was or is to be selected as a Director
or nominee. None of the nominees nor any of the incumbent Directors is related
to any other nominee or Director or to any executive officer of the Company or
any of its subsidiaries by blood, marriage or adoption.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES
Information on each Director's principal occupation and business experience
for at least the last five years and the name of other publicly held companies
in which he serves as a director is set forth below.
MICHAEL A. BRUNNER. Age 65 and a Director since November 1994. Mr.
Brunner is the former President, AT&T Federal Systems from 1986-1992, a division
of AT&T focused on federal communications and computer systems programs. He
served in additional management, operating, sales, accounting and personnel
positions with AT&T over a career spanning 37 years. Mr. Brunner serves as a
director of Westell Technologies, Inc. and as a director and past Chairman of
The Leonard Center for Excellence in Engineering at Pennsylvania State
University.
MORTON E. HANDEL. Age 63 and a Director since June 1991. Mr. Handel
served as Chairman of the Board from November 1996 through October 1997. He is
President of S&H Consulting, Ltd., a privately held investment and consulting
company. He also is President and Chief Executive Officer of Ranger Industries,
Inc., formerly Coleco Industries, Inc. From 1988 to 1990, he served as Chairman
of the Board and Chief Executive Officer of Coleco Industries, Inc., a publicly
held company and formerly a manufacturer of toys and games. Prior to that time,
and from 1983, he served as Executive Vice President and, from 1974 to 1983, as
Chief Financial Officer of Coleco. He is Vice Chairman, Board of Regents,
University of Hartford and serves as a director of CompUSA Inc., a Dallas-based
computer products retailer, Ithaca Industries Inc., a private-label manufacturer
of mens and ladies underwear and hosiery, and ToyBiz Inc., a New York Stock
Exchange-listed manufacturer of toys and games, as well as several
not-for-profit entities.
C. SHELTON JAMES. Age 58 and Director since July 1996. Mr. James served
as Chief Executive Officer of Elcotel, Inc., a public company that manufactures
telecommunications equipment, from May 1991 to December 1997. Mr. James is also
President of Fundamental Management Corporation, an investment management firm
specializing in active investment in small capitalization companies, where he
served as Executive Vice President from 1990 to April 1993. Prior to 1990, Mr.
James was Executive Vice President of Gould, Inc., a diversified electronics
company, and President of Gould's Computer Systems Division. Mr. James is
Chairman of the Board of Directors of Elcotel, Inc. and a Director of CyberGuard
Corporation, CSPI, NAI Technologies, Inc., Fundamental Management Corporation,
SK Technologies, Inc. and Group Long Distance Inc.
2
<PAGE>
RICHARD P. RIFENBURGH. Age 66 and a Director since June 1991. Mr.
Rifenburgh is Chairman of the Board of Moval Management Corporation, a privately
held company specializing in restoring companies in financial distress. He is,
or in the past five years has been, a director of the following public
companies: Tristar Corporation (formerly known as Ross Cosmetics Distribution
Centers, Inc.) since June 1992 and Chairman since August 1992; Miniscribe
Corporation (manufacturer of disc drives for personal computers), Chairman and
CEO from 1989 to 1991; Library Bureau (manufacturer of library furniture) from
1976 to 1995; Aris Technologies Inc., an industry leader in proprietary digital
audio watermarking systems and solutions; and CyberGuard Corporation since June
1996. His experience also includes three years as a General Partner of
Hambrecht & Quist Venture Partners; one year as Chairman of the Board and CEO of
GCA Corporation, a publicly held manufacturer of semiconductor manufacturing
equipment; founding Mohawk Data Sciences Corporation, a publicly held
manufacturer of computer equipment in 1964 and later serving as Chairman of the
Board through 1974; and two years (1975 and 1976) as Chairman of the Board of
the Communications and Computer Industry Association.
E. COURTNEY SIEGEL. Age 48 and a Director since July 1996. He has been
President and Chief Executive Officer of Concurrent since June 1996, and
Chairman of the Board since October 1997. Mr. Siegel served as Chairman,
President and Chief Executive Officer of Harris Computer Systems Corporation
from October 1994 to June 1996. Prior to that time, and since 1990, Mr. Siegel
served as a Vice President, General Manager of the Harris Computer Systems
Division of Harris Corporation. Mr. Siegel's twenty year career in the computer
technology field includes serving as Vice President of standoff weapons at
Rockwell International Corporation, a producer of electronics, aerospace,
automotive and graphics equipment, and as Vice President of Harris Government
Support Systems Division's Orlando Operation.
CORPORATE GOVERNANCE
Concurrent is a corporation created and chartered under the laws of
Delaware. It is governed by a Board of Directors and its Committees. As
permitted under Delaware law and the Certificate of Incorporation and By-laws of
the Company, the Board of Directors has established and delegated certain
authority and responsibility to three standing committees: the Executive
Committee; the Audit Committee; and the Compensation Committee. The Board
annually reviews the membership of and the authority and responsibility
delegated to each Committee at the organizational meeting of Directors
immediately following the Annual Meeting of Stockholders. Mr. Siegel is a
non-voting ex officio member of all Committees of which he is not otherwise a
member. From time to time as required, the Chairman of the Board has the
authority from the Board of Directors to establish a nominating committee to
recommend nominees to fill vacancies on the Board, newly created directorships,
and expired terms of Directors.
The current members of the Executive Committee are Messrs. Siegel
(Chairman), Handel and Rifenburgh. The Committee has, to the extent legally
permitted, the power and authority of the Board of Directors in periods between
meetings of the full Board. No meetings of the Executive Committee were held
during the Company's fiscal year ended June 30, 1998. All matters that could
have been addressed by the Committee during the fiscal year were addressed by
the full Board of Directors.
The current members of the Audit Committee are Messrs. Rifenburgh
(Chairman), Handel and James. The current principal responsibilities of the
Committee are to review the Company's financial statements contained in filings
with the Commission, matters relating to the examination of the Company by its
independent auditors, accounting procedures and controls, and the use and
security of the Company's liquid assets through the review of the Treasurer's
function, and to recommend the appointment of independent accountants to the
Board for its consideration and approval subject to ratification by the
stockholders. The Audit Committee held three meetings during the fiscal year
ended June 30, 1998.
3
<PAGE>
The current members of the Compensation Committee are Messrs. Brunner
(Chairman) and Handel. The current principal responsibilities of the Committee
are to make recommendations with respect to executive officer and senior
management compensation and incentive compensation programs and, subject to
limitations, to administer the Company's stock option plans, stock purchase plan
and stock bonus plan, including the issuance of stock in connection with the
Company's retirement savings plan and incentive bonus plans, and to review
management development and succession programs. The Compensation Committee held
two meetings during the fiscal year ended June 30, 1998.
During the fiscal year ended June 30, 1998, there were six meetings of the
Board of Directors and five meetings of the standing committees of the Board.
All of the Directors attended more than 75% of the aggregate number of meetings
of the Board and the Committees on which they served during their tenure.
DIRECTORS' COMPENSATION
Non-employee Directors receive a $15,000 annual retainer payable upon
election as Director of the Company at the Annual Meeting of Stockholders (and a
pro rata amount to any non-employee who becomes a Director of the Company
thereafter, payable at the time of becoming a non-employee Director), and $2,000
per meeting (including supplemental meetings in person with management where the
business to be conducted cannot be reasonably accomplished during any scheduled
meeting times and is necessary in furtherance of the required duties of a
Director) not to exceed $2,000 per day for attendance at Board, Committee and
supplemental meetings regardless of the number of meetings attended on a given
day, payable following such meetings. Non-employee Directors who serve as a
chairman of a Committee of the Board of Directors receive $4,000 per annum,
payable quarterly at the end of a quarter. For the period from July 1, 1997,
through October 30, 1997, during which time Mr. Handel served as Chairman of the
Board, he received additional compensation of $8,750.
The Concurrent 1991 Restated Stock Option Plan currently provides that
options may not be granted to non-employee Directors except that upon the
initial election of a non-employee Director, such non-employee Director will
automatically receive an option to purchase 20,000 shares of Concurrent Common
Stock and on the date of each successive Annual Meeting of Concurrent
Stockholders each non-employee Director will automatically receive an option to
purchase 10,000 shares of Concurrent Common Stock. The options are fully vested
non-statutory options and are priced at 100% of the fair market value of
Concurrent Common Stock on the date of grant. In addition, each option
terminates, to the extent not exercised prior thereto, upon the earlier to occur
of (i) the tenth anniversary of the date of grant and (ii) three years following
retirement from the Board of Directors.
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<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain required summary compensation
information for services to the Company for the fiscal years ended June 30,
1998, 1997 and 1996, for Mr. Siegel and the four most highly compensated
executive officers for fiscal 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------- ------------
AWARDS
----------
SECURITIES
UNDERLYING ALL OTHER
NAME AND FISCAL SALARY BONUS OTHER OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) (A) ($) (B) (#) (C) ($) (D)
- ----------------------------- ---------- ---------- -------- ------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
E.C. Siegel (e) 1998 300,000 185,250 - 60,000 9,600
Chairman, President and 1997 300,000 200,000 - 250,000 17,898
Chief Executive Officer 1996 1,615 - - 1,250,000 -
D.S. Dunleavy (f)
Executive Vice President, 1998 186,000 76,000 - 130,000 11,159
Chief Operating Officer and 1997 160,000 64,000 - 80,000 9,561
Chief Financial Officer 1996 969 - - 400,000 -
F.R. Lee (f)(g) 1998 145,000 64,600 - 20,000 9,600
Vice President, Production 1997 145,000 58,000 - 80,000 32,700
Operations and Logistics 1996 - - - 400,000 -
R. T. Menzel (f) 1998 139,200 64,600 - 20,000 9,740
Vice President, Real-Time 1997 134,600 61,000 - 80,000 8,077
Systems 1996 888 - - 400,000 -
M. N. Smith (f) 1998 145,600 62,700 - 20,000 9,600
Vice President, Video-On- 1997 145,600 65,520 - 80,000 8,701
Demand 1996 888 - - 400,000 -
<FN>
_________________
(a) No incentive compensation under the Company's Executive Bonus Plan for
fiscal 1996 was earned or paid.
(b) None of the executive officers named in the Summary Compensation Table
received personal benefits in excess of the lesser of $50,000 or 10%
of total compensation for fiscal 1998, 1997 or 1996.
(c) For fiscal 1998, includes a special grant of stock options for 100,000
shares awarded to Mr. Dunleavy in consideration of his assumption
of the additional position of Chief Operating Officer in October 1997.
For fiscal 1997, consists of options issued to each named executive
officer to replace a corresponding number of performance-based options
granted in fiscal 1996 (which were cancelled in fiscal 1997).
(d) Represents the Company's matching contribution during the year to such
person under the Company's Retirement Savings Plan, a defined
contribution plan. For fiscal 1997, for Mr. Lee, also includes
$24,167 paid in connection with relocation.
(e) Elected President and Chief Executive Officer on June 27, 1996. The
compensation reported for fiscal 1996 reflects only the remaining two
work-days of the year.
(f) Elected as an executive officer on June 27, 1996. The compensation
reported for fiscal 1996 reflects only the remaining two work-days of
the year.
(g) Retired from the Company as of July 1, 1998.
</TABLE>
5
<PAGE>
OPTION GRANTS
The following table shows all grants of stock options to the executive
officers named in the Summary Compensation Table during fiscal 1998. No stock
appreciation rights were granted during fiscal 1998.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
----------------------------------------------- AT ASSUMED ANNUAL
PERCENT OF RATES OF STOCK PRICE
TOTAL OPTIONS APPRECIATION FOR OPTION
GRANTED TO EXERCISE OR TERM
OPTIONS EMPLOYEES BASE PRICE EXPIRATION ----------------
NAME GRANTED (#)(A) IN FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ------------- ------------------------- --------------------- ----------------------- ---------------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
E.C. Siegel 60,000 9.5% 1.36 8/20/07 51,295 129,992
D.S. Dunleavy 30,000 20.6% 1.36 8/20/07 25,630 64,978
100,000 2.13 12/17/07 133,140 338,170
F.R. Lee 20,000 3.2% 1.36 8/20/07 17,086 43,319
R.T. Menzel 20,000 3.2% 1.36 8/20/07 17,086 43,319
M.N. Smith 20,000 3.2% 1.36 8/20/07 17,086 43,319
<FN>
__________________
(a) The term of each stock option is 10 years and each option is exercisable
in installments of one-third over three years. The exercise price is
the fair market value of a share of Common Stock on the date of grant.
</TABLE>
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table provides information with respect to the number and
value of unexercised options to purchase the Company's Common Stock held by the
executive officers named in the Summary Compensation Table at June 30, 1998.
None of the named executive officers exercised any options during fiscal 1998.
<TABLE>
<CAPTION>
FISCAL YEAR-END OPTION VALUES
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END (A)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------- ----------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
E.C. Siegel 666,666 643,334 $ 1,119,999 $ 1,080,801
D.S. Dunleavy 213,333 316,667 388,639 532,001
F.R. Lee 213,333 206,667 358,399 347,201
R.T. Menzel 213,333 206,667 358,399 347,201
M.N. Smith 213,333 206,667 358,399 347,201
<FN>
(a) Based on the fair market value of the Company's Common Stock on
June 30, 1998 ($3.78).
</TABLE>
6
<PAGE>
EXECUTIVE EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with its executive
officers. With the exception of the employment agreement with Mr. Siegel, these
agreements contain generally the same terms and provide for a base salary to be
reviewed for increase annually with such increases as shall be awarded at the
discretion of the Board of Directors. The agreements also provide for an annual
bonus opportunity in a target amount to be established by the Board of Directors
at the recommendation of the Compensation Committee, the actual amounts to be
paid depending upon the degree of achievement of various objectives reasonably
consistent with the Company's business plan to be approved annually by the Board
of Directors.
Employment under the employment agreements with executive officers of the
Company may be terminated by either the Company or the respective executive
officer at any time. In the event the executive officer voluntarily resigns
(except as described below) or is terminated for cause, compensation under the
employment agreement will end. In the event an agreement is terminated directly
by the Company without cause or in certain circumstances constructively by the
Company, the terminated employee will receive severance compensation for a
one-year period, in an annualized amount equal to the respective employee's base
salary then in effect plus an amount equal to the then most recent annual bonus
paid or, if determined, payable, to such employee.
Concurrent and Mr. Siegel entered into an employment agreement dated as of
March 26, 1996 (the "Siegel Employment Agreement"), which became effective on
June 27, 1996. The Siegel Employment Agreement provides for the employment of
Mr. Siegel as President and Chief Executive Officer of Concurrent at an initial
annual base salary of $300,000 subject to annual review by the Concurrent Board
(or any committee delegated by the Concurrent Board to review executive
compensation). Pursuant to the Siegel Employment Agreement, Mr. Siegel has been
granted equity participation options to purchase 1,250,000 shares of Concurrent
Common Stock. The Siegel Employment Agreement provides for Mr. Siegel to have
an initial target bonus for the achievement of certain performance objectives
established by the Concurrent Board, or a committee thereof, of 65% of his
annual base salary, and subsequent target bonuses that may be increased by no
more than an additional 50% of the initial target bonus.
The Concurrent Board may terminate the Siegel Employment Agreement for
"cause." The Siegel Employment Agreement defines "cause" as willful acts
against Concurrent intended to enrich Mr. Siegel at the expense of Concurrent,
the conviction of Mr. Siegel for a felony involving moral turpitude, willful and
gross neglect by Mr. Siegel of his duties or the intentional failure of Mr.
Siegel to observe policies of the Concurrent Board that have or will have a
material adverse effect on Concurrent. If the Siegel Employment Agreement is
terminated by Concurrent other than for "cause" or the death, disability or
normal retirement of Mr. Siegel or by Mr. Siegel for "good reason," Mr. Siegel
will receive severance pay of two times his annual base salary and two times his
target bonus as in effect immediately prior to termination, and at least
one-third of Mr. Siegel's stock options and stock appreciation rights, if any,
will be exercisable at termination. If Mr. Siegel's employment with Concurrent
is terminated within three years following a "change in control" by Concurrent
other than for "cause" or the death, disability or normal retirement of Mr.
Siegel or by Mr. Siegel for "good reason," Mr. Siegel will receive severance pay
of three times his annual base salary and three times his target bonus as in
effect immediately prior to termination, and all of Mr. Siegel's stock options
and stock appreciation rights, if any, will become exercisable at termination.
If Mr. Siegel's employment is terminated at any time by Concurrent for "cause"
or by Mr. Siegel other than for "good reason," the Siegel Employment Agreement
prohibits Mr. Siegel from engaging in any business competitive with the business
of Concurrent for a one-year period following the effective date of termination.
If Mr. Siegel's employment is terminated by Concurrent other than for "cause" or
the death, disability or normal retirement of Mr. Siegel or by Mr. Siegel for
"good reason," other than within three years of a "change in control," the
Siegel Employment Agreement prohibits Mr. Siegel from engaging in any business
competitive with the business of Concurrent for a two-year period following the
effective date of termination.
7
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY
The Company's primary objective is to maximize stockholder value over time
by developing and implementing a comprehensive business strategy. The
Compensation Committee's primary objective is to review compensation programs,
employee benefit plans, and personnel policies applicable to officers and other
members of senior management of the Company to assure that they support the
Company's objectives and are in the long-term interests of the stockholders.
The Compensation Committee reviews performance of executive officers and
recommends appropriate compensation, including cash and incentive compensation,
and stock option grants for approval by the Board. The Compensation Committee's
overall compensation philosophy is to provide rewards that (1) are linked to the
achievement of Company and individual performance objectives, (2) align employee
interests with the interests of its stockholders, (3) are sufficient to attract
and retain needed, high-quality employees, and (4) provide a mix of cash and
potential stock ownership tied to the immediate and long term business strategy.
The Compensation Committee solicits and analyzes periodic reports from
independent consultants retained by management regarding the appropriateness of
compensation levels.
EXECUTIVE OFFICER COMPENSATION
The Compensation Committee uses the following key principles in
structuring, reviewing and revisiting compensation targets and packages of
executive officers:
EQUITY AT-RISK LINK of Company performance and individual rewards to
instill ownership (stockholder) thinking. Recognition of individual
contributions toward achievement of specific business objectives as well as
overall Company results.
COMPETITIVE POSITION of both base salary and total compensation with the
high technology computer industry.
MANAGEMENT DEVELOPMENT programs designed to successfully attract and retain
individuals who can maximize the creation of stockholder value, and motivate
employees to attain Company and individual performance objectives.
COMPONENTS OF EXECUTIVE COMPENSATION
The three components of executive compensation are (1) base salary, (2)
annual incentive (bonus) awards and (3) equity participation.
BASE SALARY. Base salary is determined based on competitive factors and
individual and Company performance. It is targeted to be at approximately the
average of the high technology computer industry for comparable positions of
responsibility. Annual increases are intended to be consistent with individual
and Company performance and competitive with industry trends.
ANNUAL INCENTIVE (BONUS) AWARDS. At the beginning of each fiscal year, the
Compensation Committee establishes Company performance objectives for the fiscal
year and target bonus opportunities for each executive officer based on the
achievement of Company performance objectives. The target bonus opportunity is
a percentage of base salary initially established at the time the person became
an executive officer, generally 30 to 50% for executive officers other than the
chief executive officer and 65% for the chief executive officer. The target
bonus opportunity is reviewed periodically for increase based on level of
responsibility, potential contribution to the achievement of Company objectives
and competitive practices. Under recent plans, the target bonus is earned based
on the achievement of Company performance objectives set annually, for example,
the achievement of a certain level of revenue and before tax income or
8
<PAGE>
profitability. Minimum thresholds of achievement are also established. Actual
awards are determined at the end of the fiscal year based on achievement of the
established Company. Based on corporate performance results against targeted
objectives, $483,550 was paid to the six current executive officers of the
Company for fiscal 1998.
EQUITY PARTICIPATION. Equity participation is in the form of stock option
grants with exercise prices equal to the fair market value of a share of Common
Stock at the effective date of grant. The Committee supports aggregate
executive officer equity participation in the range of 10% of outstanding equity
and, accordingly, the Board has granted stock options to purchase an aggregate
of 3,735,000 shares to the six current executive officers of the Company.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Siegel was elected to the position of President and Chief Executive
Officer of the Company effective on June 27, 1996, and to the additional
position of Chairman of the Board on October 30, 1997. His employment agreement
with Concurrent provides for a base salary for fiscal 1998 of $300,000, and for
a target bonus based upon achievement of certain performance objectives of 65%
of his base salary. For fiscal 1998, the Company established higher performance
objectives for purposes of its annual incentive plan than for its strategic
plan. Because the Company's performance exceeded the strategic plan objectives,
but did not meet the higher annual incentive plan objectives, the Compensation
Committee approved payment to Mr. Siegel of $185,250, which is 95% of his target
bonus.
CONCLUSION
The Compensation Committee believes the executive compensation policies and
programs serve the interest of the stockholders and the Company. The
Compensation Committee also believes the base salary amounts, bonus awards and
equity participation grants for executive officers have been linked to and are
commensurate with Company performance and individual efforts in achieving the
strategic goals of the Company.
COMPENSATION COMMITTEE FOR FY'98
Michael A. Brunner, Chairman
Morton E. Handel
9
<PAGE>
PERFORMANCE GRAPH
The graph below compares the total returns (assuming reinvestment of
dividends) of the Company's Common Stock, the NASDAQ Stock Market (U.S.
companies), the NASDAQ Computer Manufacturers Index and a peer group of
companies determined by the Company. As a result of consolidation in the
real-time computer industry, the Company does not believe that the peer group
index will continue to provide an adequate basis for comparison of the total
returns of the Company's Common Stock on an on-going basis. Accordingly, the
Company, commencing this year, is presenting the NASDAQ Computer Manufacturers
Index. The graph assumes $100 invested on June 30, 1993 in Concurrent Common
Stock and each of the indices.
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
CONCURRENT COMPUTER CORPORATION
Fiscal year ended 6/30/93 6/30/94 6/30/95 6/28/96 6/30/97 6/30/98
- ---------------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Concurrent Computer Corporation $ 100.00 $ 48.39 $ 64.52 $ 51.61 $ 46.77 $ 97.57
Nasdaq Stock Market (US Companies) $ 100.00 $ 100.96 $ 134.77 $ 173.03 $ 210.38 $ 277.69
Self-Determined Peer Group $ 100.00 $ 73.82 $ 127.01 $ 108.56 $ 101.41 $ 75.98
Nasdaq Computer Manufacturers $ 100.00 $ 81.93 $ 146.74 $ 208.94 $ 262.98 $ 428.05
- ---------------------------------- -------- -------- -------- -------- -------- --------
</TABLE>
COMPANIES IN THE SELF-DETERMINED PEER GROUP
DATA GENERAL SEQUENT COMPUTER SYSTEMS INC.
ENCORE COMPUTER CORP. STRATUS COMPUTER INC.
SILICON GRAPHICS INC.
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on June 30, 1993.
E. Digital Equipment Corporation and Tandem Computers Incorporated, each of
which was included in the self-determined peer group in prior years,
have been omitted from the self-determined peer group because such
companies were acquired by Compaq Computer Corporation.
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, to the knowledge of the Company, the
beneficial owners of more than 5% of the Company's securities as of September
18, 1998.
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS NUMBER OF COMMON STOCK
OF BENEFICIAL OWNER SHARES OWNED OUTSTANDING
- ---------------------------------- ------------- -------------
<S> <C> <C>
Astoria Capital Partners, L.P. (a) 2,740,500 5.7%
735 Second Avenue common
San Francisco, California 94118
White Rock Capital (b) 2,756,500 5.8%
3131 Turtle Creek Blvd. common
Suite 800
Dallas, Texas 75219
<FN>
(a) The information reported is based on Schedule 13D filed by Astoria
Capital Partners, L.P. with the Securities and Exchange Commission on July 11,
1997 and is as of July 10, 1997. Astoria Capital Partners, L.P., an investment
limited partnership, reported that it exercises sole voting power and sole
dispositive power with respect to all 2,740,500 shares.
(b) The information reported is based on Schedule 13G filed collectively on
behalf of each of the below-named persons with the Securities and Exchange
Commission on March 27, 1998 and is as of March 20, 1998. Each of the
below-named persons reported that it exercises voting power and dispositive
power as indicated opposite its name:
</TABLE>
<TABLE>
<CAPTION>
SOLE SHARED SOLE SHARED
REPORTING PERSON TYPE OF REPORTING PERSON VOTING POWER VOTING POWER DISPOSITIVE POWER DISPOSITIVE POWER
- ------------------------ ------------------------ ------------ ------------ ----------------- -----------------
<S> <C> <C> <C> <C> <C>
White Rock Capital
Partners, L.P. Limited Partnership 280,000 0 280,000 0
White Rock Capital
Management, L.P. Limited Partnership 39,000 2,707,500 39,000 2,707,500
White Rock Capital, Inc. Corporation 0 2,746,500 0 2,746,500
Thomas U. Barton Individual 0 2,746,500 0 2,746,500
Joseph U. Barton Individual 10,000 2,746,500 10,000 2,746,500
</TABLE>
11
<PAGE>
The following table sets forth for each Director, and each of the persons
named in the Summary Compensation Table, the number of shares and percentage of
Common Stock of the Company which he reported as beneficially owned by him as of
August 29, 1998, including the number of shares of Common Stock he has the right
to purchase during the 60 days thereafter (through October 28, 1998) upon the
exercise of existing stock options. Except as otherwise noted, the named
individuals have sole voting and investment power with respect to such shares.
<TABLE>
<CAPTION>
COMMON STOCK PERCENTAGE OF
BENEFICIALLY OWNED COMMON STOCK
NAME DIRECTLY OR INDIRECTLY OUTSTANDING
- ------------------------------ ---------------------- --------------
<S> <C> <C>
Michael A. Brunner (a) 36,000 *
Daniel S. Dunleavy (b) 231,282 *
Morton E. Handel (c) 46,000 *
C. Shelton James (d) 48,000 *
Fred R. Lee (b) 225,455 *
Robert T. Menzel (b) 226,405 *
Richard P. Rifenburgh (c) 46,000 *
E. Courtney Siegel (b) 732,575 1.5%
Michael N. Smith (b) 231,906 *
Directors, named executive
officers, and other current
executive officers as a group
(11 persons) (e) 2,303,706 4.8%
<FN>
(a) Represents currently exercisable stock options.
(b) Includes: (i) currently exercisable stock options to purchase shares as
follows:
Mr. Dunleavy - 218,333; Mr. Lee - 220,000; Mr. Menzel - 220,000;
Mr. Siegel- 686,666; and Mr. Smith - 220,000;
and (ii) shares held in the Company's Retirement Savings Plan as follows:
Mr. Dunleavy - 7,949; Mr. Lee - 5,455; Mr. Menzel - 6,405;
Mr. Siegel - 7,209; and Mr. Smith - 6,906.
(c) Includes currently exercisable stock options to purchase 36,000 shares.
(d) Includes currently exercisable stock options to purchase 33,000 shares.
Excludes 612,900 shares held by various limited partnerships of
Which Fundamental Management Corporation is the General Partner, as to
which Mr. James disclaims beneficial ownership.
(e) Includes 2,145,999 shares available for purchase under stock options
granted under the Company's 1991 Restated Stock Option Plan which
are exercisable within 60 days of August 29, 1998.
* Less than 1% of the Company's outstanding Common Stock.
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who beneficially own more than ten percent
of a registered class of the Company's equity securities ("ten percent
stockholders"), to file reports of ownership of the Company's securities and
changes in such ownership with the Securities and Exchange Commission (the
"Commission"). Officers, directors and ten percent stockholders are required by
the Commission's regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based solely upon its review of copies of such filings received by it and
written representations from certain reporting persons that either a Form 5 was
filed by such persons or that no Form 5 was required for those persons, the
Company believes that during its fiscal year ended June 30, 1998 all filing
requirements applicable to its officers, directors and ten percent stockholders
were satisfied.
12
<PAGE>
RATIFICATION OF AUDITORS
(ITEM 2 OF NOTICE)
Upon the recommendation of the Audit Committee, the Board of Directors has
selected the firm of KPMG Peat Marwick LLP, independent public accountants, as
auditors of the Company for the fiscal year ending June 30, 1999 and is
submitting the selection to stockholders for ratification.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
Annual Meeting of Stockholders. They will have an opportunity to make a
statement if they desire to do so and will also be available to respond to
appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
OTHER MATTERS
(ITEM 3 OF NOTICE)
The Board of Directors had not received notice by August 17, 1998, and does
not know, of any other matters which may come before the meeting. However, if
any other matters are properly presented to the meeting, it is the intention of
the Proxy Holders to vote, or otherwise to act, in accordance with their
judgment on such matters.
October 1, 1998
13
<PAGE>
CONCURRENT COMPUTER CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS FOR
ANNUAL MEETING OCTOBER 30, 1998
The undersigned stockholder hereby appoints E. Courtney Siegel, Daniel S.
Dunleavy and Karen G. Fink, or any of them, attorneys and proxies for the
undersigned with power of substitution in each to act for and to vote, as
designated on the reverse, with the same force and effect as the undersigned,
all shares of Concurrent Computer Corporation Common Stock standing in the
name of the undersigned at the Annual Meeting of Stockholders to be held at
Sheraton Suites, 555 N.W. 62nd Street, Fort Lauderdale, Florida, at 2:00 p.m.
on October 30, 1998 and at any adjournments thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. If NO DIRECTION IS GIVEN, THIS PROXY
WILL GRANT AUTHORITY TO THE PROXY HOLDERS TO VOTE ON BEHALF OF THE UNDERSIGNED
STOCKHOLDER AND WILL BE VOTED "FOR" THE NOMINEES FOR DIRECTOR AND "FOR" THE
OTHER PROPOSAL.
IN THEIR DISCRETION, THE PROXY HOLDERS ARE AUTHORIZED TO VOTE ON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS
THEREOF. THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE PROXY HOLDERS' BEST
JUDGMENT AS TO ANY OTHER MATTER.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
CONCURRENT COMPUTER CORPORATION
October 30, 1998
Please Detach and Mail in the Envelope Provided
A /X/ Please mark your
votes as indicated
in this example
<TABLE>
<CAPTION>
<C> <C>
FOR AGAINST ABSTAIN
1. Election of FOR WITHHELD Nominees: Brunner 2. Ratify KPMG Peat Marwick LLP as indepen- / / / / / /
Directors / / / / Handel dent auditors for fiscal year 1999.
For all nominees except as noted below James
Rifenburgh MARK HERE / / MARK HERE IF / /
Siegel FOR ADDRESS YOU PLAN TO
------------------------------------ CHANGE AND ATTEND THE
NOTE AT LEFT MEETING
Signature Date Signature Date
--------------------------- -------------- -------------------------------- ------------------
IMPORTANT: Please mark, date and sign exactly as your name appears hereon. Joint owners should each sign. If the signer is a
corporation, please sign in full corporate name by duly authorized officer. Executors, administrators, trustees etc.
should give full title as such.
</TABLE>
