SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
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
FILING BY:
CONCURRENT COMPUTER CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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.
(1) Amount Previously Paid:
-----------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------
(3) Filing Party:
----------------------------------------------------
(4) Date Filed:
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<PAGE>
[GRAPHIC OMITTED
CONCURRENT COMPUTER CORPORATION]
NOTICE OF 2000 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>
[GRAPHIC OMITED
CONCURRENT COMPUTER CORPORATION]
Dear Fellow Stockholder:
It's my pleasure to invite you to attend the Concurrent Computer
Corporation 2000 Annual Meeting of Stockholders to be held at the Hilton Atlanta
Northeast, 5993 Peachtree Industrial Boulevard, Norcross, Georgia, at 2:00 p.m.,
on Thursday, October 26, 2000.
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 the meeting, 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.
Sincerely,
Steve G. Nussrallah
President and Chief Executive Officer
Duluth, Georgia
September 18, 2000
<PAGE>
CONCURRENT COMPUTER CORPORATION
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, OCTOBER 26, 2000
The 2000 Annual Meeting of Stockholders of Concurrent Computer Corporation
will be held at the Hilton Atlanta Northeast, 5993 Peachtree Industrial
Boulevard, Norcross, Georgia, at 2:00 p.m., on Thursday, October 26, 2000. The
Annual Meeting is being held to consider and act upon the following matters:
1. To elect six (6) directors to serve until the next annual meeting of
stockholders.
2. To ratify the selection by the Board of Directors of Deloitte &
Touche LLP as the Company's independent auditors for the fiscal year
ending June 30, 2001.
3. To approve an amendment to the Company's 1991 Restated Stock Option
Plan.
4. 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 15, 2000 as the record
date for the determination of stockholders entitled to vote at the Annual
Meeting. Only holders of record of common stock at the close of business on
September 15, 2000 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, 4375 River Green Parkway, Duluth, Georgia, 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.
All stockholders are cordially invited to attend the meeting.
By order of the Board of Directors,
Steven R. Norton
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
September 18, 2000
<PAGE>
CONCURRENT COMPUTER CORPORATION
4375 RIVER GREEN PARKWAY
DULUTH, GEORGIA 30096
PROXY STATEMENT
This proxy statement and proxy card are first being sent to stockholders on
or about September 22, 2000 and are furnished in connection with the
solicitation of proxies to be voted at the 2000 Annual Meeting of Stockholders
of Concurrent Computer Corporation (the "Company" or "Concurrent") to be held at
the Hilton Atlanta Northeast, 5993 Peachtree Industrial Boulevard, Norcross,
Georgia, at 2:00 p.m. on Thursday, October 26, 2000. The enclosed proxy is
solicited by the Board of Directors of the Company.
ABOUT THE ANNUAL MEETING
WHY AM I RECEIVING THIS PROXY STATEMENT AND PROXY CARD?
You are receiving a proxy statement and proxy card because you own shares
of common stock in Concurrent. This proxy statement describes issues on which
Concurrent would like you, its stockholder, to vote. It also gives you
information on these issues so that you can make an informed decision.
When you sign the proxy card, you appoint Steve G. Nussrallah and Steven R.
Norton as your representatives at the meeting. Mr. Nussrallah and Mr. Norton
will vote your shares, as you have instructed them on the proxy card, at the
meeting. This way, your shares will be voted whether or not you attend the
annual meeting. Even if you plan to attend the meeting, it is a good idea to
complete, sign and return your proxy card in advance of the meeting in case your
plans change.
If an issue comes up for vote at the meeting that is not on the proxy card,
Mr. Nussrallah and Mr. Norton will vote your shares, under your proxy, in
accordance with their best judgment.
WHAT AM I VOTING ON?
You are being asked to vote on (1) the election of six directors, (2) the
ratification of the selection of Deloitte & Touche LLP as our independent
auditors, and (3) the approval of an amendment to the Company's 1991 Restated
Stock Option Plan. No cumulative voting rights are authorized and dissenters'
rights are not applicable to these matters.
WHO IS ENTITLED TO VOTE?
Stockholders as of the close of business on September 15, 2000. This is
referred to as the "record date." Each share of common stock is entitled to one
vote.
HOW DO I VOTE?
You may vote by mail. You do this by signing your proxy card and mailing
it in the enclosed, prepaid and addressed envelope.
You may vote in person at the meeting. Written ballots will be passed out
to anyone who wants to vote at the meeting. If you hold your shares in "street
name" (through a broker or other nominee), you must request a legal proxy from
your stockbroker in order to vote at the meeting.
<PAGE>
HOW MANY VOTES DO YOU NEED TO HOLD THE MEETING?
Shares are counted as present at the meeting if the stockholder either is
present and votes in person at the meeting or has properly submitted a proxy
card.
As of September 15, 2000, 54,088,200 shares of our common stock were issued
and outstanding. A majority of our outstanding shares as of the record date,
equal to 27,044,101 shares, must be present at the meeting either in person or
by proxy in order to hold the meeting and conduct business. This is called a
quorum.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
It means that you have multiple accounts at the transfer agent and/or with
brokers. Please sign and return all proxy cards to ensure that all your shares
are voted. You may wish to consolidate as many of your transfer agent or
brokerage accounts as possible under the same name and address for better
customer service.
WHAT IF I CHANGE MY MIND AFTER I RETURN MY PROXY?
You may revoke your proxy and change your vote at any time before the polls
close at the meeting. You may do this by:
- sending written notice to our Secretary at 4375 River Green Parkway,
Duluth, Georgia 30096;
- signing another proxy with a later date; or
- voting again at the meeting.
HOW MAY I VOTE FOR THE NOMINEES FOR ELECTION OF DIRECTOR?
With respect to the election of nominees for director, you may:
- vote FOR the election of the six nominees for director;
- WITHHOLD AUTHORITY to vote for the six nominees; or
- WITHHOLD AUTHORITY to vote for one or more of the nominees and vote
FOR the remaining nominees.
HOW MANY VOTES MUST THE NOMINEES FOR ELECTION OF DIRECTOR RECEIVE TO BE ELECTED?
The six nominees receiving the highest number of affirmative votes will be
elected as directors. This number is called a plurality.
WHAT HAPPENS IF A NOMINEE IS UNABLE TO STAND FOR RE-ELECTION?
The board of directors may, by resolution, provide for a lesser number of
directors or designate a substitute nominee. In the latter event, shares
represented by proxies may be voted for a substitute nominee.
HOW MAY I VOTE FOR THE RATIFICATION OF THE SELECTION OF THE INDEPENDENT
AUDITORS?
With respect to the proposal to ratify the selection of Deloitte & Touche
LLP as our independent auditors for fiscal year 2001, you may:
- vote FOR ratification;
- vote AGAINST ratification; or
- ABSTAIN from voting on the proposal.
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<PAGE>
HOW MANY VOTES MUST THE RATIFICATION OF THE SELECTION OF THE INDEPENDENT
AUDITORS RECEIVE TO PASS?
The ratification of the selection of the independent auditors must receive
the affirmative vote of a majority of shares present or represented at the
Annual Meeting.
HOW MAY I VOTE FOR THE RATIFICATION OF THE AMENDMENT TO THE 1991 RESTATED STOCK
OPTION PLAN?
With respect to the proposal to ratify the amendment to the 1991 Restated
Stock Option Plan, you may:
- vote FOR ratification;
- vote AGAINST ratification; or
- ABSTAIN from voting on the proposal.
HOW MANY VOTES MUST THE APPROVAL OF THE AMENDMENT TO THE 1991 RESTATED STOCK
OPTION PLAN RECEIVE TO PASS?
The approval of the amendment to the 1991 Restated Stock Option Plan must
receive the affirmative vote of a majority of shares present or represented at
the Annual Meeting.
WHAT HAPPENS IF I SIGN AND RETURN MY PROXY CARD BUT DO NOT PROVIDE VOTING
INSTRUCTIONS?
If you return a signed card but do not provide voting instructions, your
shares will be voted FOR the six named director nominees, FOR the ratification
of the appointment of the independent auditors and FOR the ratification of the
amendment to the 1991 Restated Stock Option Plan.
If you mark your voting instructions on the proxy card, your shares will be
voted as you instruct.
WILL MY SHARES BE VOTED IF I DO NOT SIGN AND RETURN MY PROXY CARD?
If your shares are held in street name, your brokerage firm may vote your
shares under certain circumstances. These circumstances include certain
"routine" matters, such as the election of directors. Therefore, if you do not
vote your proxy, your brokerage firm may either vote your shares on routine
matters, or leave your shares unvoted. When a brokerage firm votes its
customers' unvoted shares on routine matters, these shares are counted for
purposes of establishing a quorum to conduct business at the meeting.
A brokerage firm cannot vote customers' shares on non-routine matters.
Therefore, if your shares are held in street name and you do not vote your
proxy, your shares will not be voted on non-routine matters and will not be
counted in determining the number of shares necessary for approval. Shares
represented by such "broker non-votes" will, however, be counted in determining
whether there is a quorum.
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<PAGE>
ELECTION OF DIRECTORS
(ITEM 1 OF NOTICE)
In accordance with the Company's Bylaws, the Board of Directors has reduced
the number of directors constituting the Board of Directors from seven members
to six members. The following Directors are nominees standing for re-election
to the Board of Directors at the Annual Meeting: Michael A. Brunner, Morton E.
Handel, Bruce N. Hawthorne, C. Shelton James, Steve G. Nussrallah and Richard P.
Rifenburgh. Directors will be elected to hold office until the 2001 Annual
Meeting of Stockholders and until their successors have been elected and
qualified. E. Courtney Siegel, who has served the Company for over four years,
resigned from the Board effective August 16, 2000 and has decided not to stand
for re-election. The Board thanks him for his dedicated efforts on behalf of
the Company.
There are no 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.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES FOR
DIRECTOR.
NOMINEES FOR ELECTION OF DIRECTOR
Information on each of the nominees for the Board of Directors, including
each nominee'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 67 and a Director since November 1994. From
1986 to 1992, Mr. Brunner was President of AT&T Federal Systems, 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 during a career that spanned over 37 years.
MORTON E. HANDEL. Age 65 and a Director since June 1991. Mr. Handel has
served as Chairman of the Board since April 2000. Mr. Handel previously 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. He is currently
Chairman of the Board of Marvel Enterprises, Inc., a New York Stock
Exchange-listed toy and entertainment company, and a director of Linens 'n
Things, Inc. Until February 2000, Mr. Handel was a director of CompUSA Inc., a
New York Stock Exchange-listed technology products retailer, and until September
1999, Mr. Handel was a director of Ithaca Industries Inc., a private-label
manufacturer of mens and ladies under and outerwear. He is also a former Vice
Chairman of the Board of Regents of the University of Hartford, and serves on
the boards of several not-for-profit entities.
BRUCE N. HAWTHORNE. Age 50 and a Director since February 2000. Mr.
Hawthorne has been a partner at the law firm of King & Spalding since 1982. He
chairs King & Spalding's telecommunications industry practice and has broad
experience in mergers and acquisitions, strategic joint ventures and corporate
finance.
C. SHELTON JAMES. Age 60 and a Director since July 1996. From May 1991 to
October 1999, Mr. James served as Chief Executive Officer of Elcotel, Inc., a
public company that manufactures telecommunications equipment. Mr. James was
also President of Fundamental Management Corporation until February 2000, an
investment management firm specializing in active investment in small
capitalization companies, where he also 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 a Director of CSPI, DRS Technologies,
SK Technologies, Inc. and Technisource, Inc.
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<PAGE>
STEVE G. NUSSRALLAH. Age 50, President and Chief Executive Officer since
January 2000 and a Director since January 2000. From January 1999 to December
1999, Mr. Nussrallah was the President of the Xstreme division of the Company.
From March 1996 to March 1998, he served as President and Chief Operating
Officer of Syntellect Inc., a publicly-held supplier of call center solutions to
the cable television industry. From January 1990 to March 1996, Mr. Nussrallah
served as President and Chief Operating Officer of Telecorp Systems Inc., a
privately held supplier of call center solutions, which was acquired by
Syntellect Inc. in March 1996. From 1984 to 1990, Mr. Nussrallah was employed
by Scientific-Atlanta, a publicly held provider of digital communications
equipment. He initially served as vice president of engineering for
Scientific-Atlanta's cable television operation and later served in positions of
increasing responsibility, including Vice President and General Manager of its
Subscriber Business Unit.
RICHARD P. RIFENBURGH. Age 68 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 since June 1992 and Chairman since August 1992;
Aris Technologies Inc., an industry leader in proprietary digital audio
watermarking systems and solutions, since 1997; and CyberGuard Corporation from
June 1996 to 1999. His experience also includes three years as a General
Partner of Hambrecht & Quist Venture Partners; one year as Chairman of the Board
and Chief Executive Officer of GCA Corporation, a publicly held manufacturer of
semiconductor manufacturing equipment; founder of Mohawk Data Sciences
Corporation, a publicly held manufacturer of computer equipment in 1964, later
serving as Chairman of the Board through 1974; and from 1975 to 1976, Chairman
of the Board of the Communications and Computer Industry Association.
CORPORATE GOVERNANCE AND COMMITTEES OF THE BOARD OF DIRECTORS
Concurrent is organized under the laws of Delaware. It is governed by a
Board of Directors. As permitted under Delaware law and the Company's
Certificate of Incorporation and Bylaws, 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.
Nussrallah 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.
Executive Committee. The current members of the Executive Committee are
Messrs. Handel (Chairman) 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, 2000. All matters that
could have been addressed by the Committee during the fiscal year were addressed
by the full Board of Directors.
Audit Committee. The current members of the Audit Committee are Messrs.
James (Chairman), Rifenburgh and Handel. The principal responsibilities of the
Committee are:
- to review the Company's financial statements contained in filings
with the Securities and Exchange Commission (the "Commission");
- to review matters relating to the examination of the Company by its
independent auditors, accounting procedures and controls;
- to review the use and security of the Company's liquid assets through
the review of the Treasurer's function; and
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<PAGE>
- to recommend the appointment of independent accountants to the Board
for its consideration and approval subject to ratification by the
stockholders.
There were four meetings of the Audit Committee during the fiscal year ended
June 30, 2000.
Compensation Committee. The current members of the Compensation Committee
are Messrs. Brunner (Chairman) and Handel. The principal responsibilities of
the Committee are:
- to make recommendations with respect to executive officer and senior
management compensation and incentive compensation programs;
- 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,
subject to certain limitations; and
- to review management development and succession programs.
There were two meetings of the Compensation Committee during the fiscal year
ended June 30, 2000.
During the fiscal year ended June 30, 2000, there were six meetings of the
Board of Directors. 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 the fiscal year ended June 30, 2000.
COMPENSATION OF DIRECTORS
Non-employee Directors receive a $15,000 annual retainer payable upon
election as Director of the Company at the annual meeting of stockholders. A
non-employee who becomes a Director of the Company after the annual meeting of
stockholders receives a pro rata portion of the annual retainer, payable at the
time of becoming a non-employee Director. In addition, non-employee Directors
receive $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 each quarter.
Concurrent's 1991 Restated Stock Option Plan provides that upon the initial
election of a non-employee Director, such non-employee Director automatically
receives an option to purchase 20,000 shares of Concurrent common stock. On the
date of each successive annual meeting of stockholders, each non-employee
Director automatically receives 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. Each option terminates, to the extent not exercised prior
thereto, upon the earlier to occur of (a) the tenth anniversary of the date of
grant and (b) 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,
2000, 1999 and 1998 for (1) our former and current Chief Executive Officers and
(2) our four other most highly compensated executive officers who earned more
than $100,000 in salary and bonus during the fiscal year ended June 30, 2000
(collectively, the "Named Executive Officers", for purposes of SEC regulations
only).
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------- AWARDS
-----------
SECURITIES
UNDERLYING ALL OTHER
NAME AND FISCAL SALARY BONUS OTHER OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) (1) (#) ($) (2)
---------------------------- ------ -------- -------- ------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
S. G. Nussrallah (3) 2000 284,859 130,552 - 50,000 11,853
President and Chief 1999 122,000 46,875 - 1,250,000 6,347
Executive Officer 1998 -- - - -- --
E. C. Siegel (4) 2000 236,540 95,160 - 35,000 113,318
Former Chairman, President 1999 300,000 97,500 - 75,000 9,600
and Chief Executive Officer 1998 300,000 185,250 - 60,000 9,600
D. S. Dunleavy 2000 212,844 73,200 - 35,000 10,708
President, Real-Time 1999 200,000 40,000 - 40,000 9,241
Division 1998 186,000 76,000 - 130,000(5) 11,159
R. E. Chism 2000 160,000 43,920 - 26,000 76,901
Vice President, 1999 135,000 30,000 - 25,000 9,749
Research & Development, 1998 135,000 52,000 - 20,000 9,043
Xstreme Division
R. T. Menzel 2000 154,000 49,776 - 25,000 10,020
Vice President, Worldwide 1999 140,000 34,000 - 25,000 9,600
Sales and Marketing, Real- 1998 139,200 64,600 - 20,000 9,740
Time Division
D. M. Nicholas (6) 2000 170,000 51,240 - - 33,775
Vice President, North 1999 52,000 16,666 - 400,000 3,139
America Cable Television 1998 -- -- - - -
Sales, Xstreme Division
<FN>
(1) 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 2000, 1999 or 1998.
(2) Represents the Company's matching contribution during the year to such
person under the Company's Retirement Savings Plan, a defined contribution
plan. Also includes $109,025, $22,574, and $67,565 for relocation and
household disruption costs in fiscal year 2000 for Mr. Siegel, Mr. Nicholas
and Mr. Chism, respectively.
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<PAGE>
(3) Effective January 1, 1999, Mr. Nussrallah joined the Company as the
President of the Xstreme division, and the compensation reported for fiscal
1999 is for six months of that year. Effective January 1, 2000, Mr.
Nussrallah became the President and Chief Executive Officer.
(4) Effective January 1, 2000, Mr. Siegel ceased to be the President and Chief
Executive Officer. Effective April 1, 2000, Mr. Siegel ceased to be the
Chairman of the Board. Effective August 16, 2000, Mr. Siegel resigned from
the Board of Directors.
(5) Includes a special grant of stock options for 100,000 shares awarded to Mr.
Dunleavy in consideration of his assumption of the additional position of
Chief Operating Officer in October 1997.
(6) Effective March 1, 1999, Mr. Nicholas joined the Company as the Vice
President of Sales for the Xstreme division.
</TABLE>
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<PAGE>
OPTION GRANTS
The following table shows all grants of stock options to the Named
Executive Officers during fiscal 2000. No stock appreciation rights were
granted during fiscal 2000.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
--------------------------------------------------- AT ASSUMED ANNUAL
NUMBER OF PERCENT OF RATES OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM
OPTIONS EMPLOYEES PRICE PER EXPIRATION ------------------------
NAME GRANTED (1) IN FISCAL 2000 SHARE DATE 5% ($)(2) 10% ($)(2)
--------------- ----------- --------------- --------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
S.G. Nussrallah 50,000 3.7% $ 8.00 8/17/09 $ 251,558 $ 637,497
E.C. Siegel 35,000 2.6% $ 8.00 8/17/09 176,090 446,248
D.S. Dunleavy 35,000 2.6% $ 8.00 8/17/09 176,090 446,248
R. Chism 26,000 1.8% $ 8.00 8/17/09 130,810 331,498
R.T. Menzel 25,000 1.8% $ 8.00 8/17/09 125,779 318,748
D.M. Nicholas __ __ __ __ __ __
<FN>
(1) Options granted in 1999 were made under the 1991 Restated Stock Option
Plan. These options:
- are granted at an exercise price equal to 100% of the fair market
value of the common stock on the date of the grant;
- expire ten years from the date of the grant; and
- vest in increments of one-third on each anniversary date of the
grant, subject to the terms and conditions of the Plan.
(2) The Company is required by the Commission to use a 5% and 10% assumed rate
of appreciation over the ten-year option terms. This does not represent the
Company's projection of the future common stock price. If the common stock
does not appreciate, the Named Executive Officers will receive no benefit
from the options.
</TABLE>
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<PAGE>
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 exercised and unexercised options held by the Named Executive Officers
at June 30, 2000.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
NUMBER OF NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES ACQUIRED VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ON EXERCISE REALIZED(1) OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END (2)
--------------- ----------- ------------- ------------ --------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------- ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
S.G. Nussrallah 296,971 $3,637,939 36,363 966,666 $ 377,266 $ 9,766,659
E.C. Siegel 608,457 6,411,711 741,543 70,000 8,070,887 616,959
D.S. Dunleavy 352,144 3,965,452 __ 104,999 __ 935,915
R. Chism __ __ 421,668 49,332 4,625,007 381,919
R.T. Menzel 373,668 5,324,261 48,000 48,332 523,430 376,794
D. Nicholas __ __ 107,000 293,000 932,505 2,553,495
<FN>
(1) This number is calculated by averaging the high and low market prices on the date of
exercise to get the "average market price," subtracting the option exercise price
from the average market price to get the "average value realized per share," and
multiplying the average value realized per share by the number of options exercised.
The amounts in this column may not represent amounts actually realized by the
Named Executive Officers.
(2) This number is calculated by subtracting the option exercise price from the closing
price of the common stock on June 30, 2000 ($13.125) to get the "average value per
option", and multiplying the average value per option by the number of exercisable
and unexercisable options. The amounts in this column may not represent amounts
actually realized by the Named Executive Officers.
</TABLE>
EXECUTIVE EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with its executive
officers. With the exception of the employment agreements with Mr. Nussrallah
and Mr. Dunleavy, these agreements contain generally the same terms and provide
for a base salary to be reviewed for increase annually with such increases as
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 paid depend upon the degree of achievement of various objectives
reasonably consistent with the Company's business plan, which is approved
annually by the Board of Directors.
Pursuant to the terms of the employment agreements with the executive
officers of the Company, employment 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.
10
<PAGE>
Steve G. Nussrallah. In January 2000, Concurrent entered into an amended
and restated employment agreement with Steve G. Nussrallah, the President and
Chief Executive Officer.
- Mr. Nussrallah is paid an annual salary of $318,000 and is entitled to
receive an annual target bonus for achieving performance objectives
established by the board of directors, or a committee thereof, equal
to 65% of his annual base salary. For superior performance, the bonus
opportunity may be increased to twice his annual target bonus.
- The term of his employment will continue until terminated by the
Company or Mr. Nussrallah.
- The agreement provides for the payment of two times his annual salary
and target bonus to be paid in accordance with the Company's normal
salary payment procedures and immediate vesting of one-third of his
1,250,000 options if his employment is terminated by the Company other
than:
(1) for cause, such as the commission of a felony, embezzlement,
material dishonesty against the Company, or gross negligence in
the performance of duties;
(2) due to Mr. Nussrallah's disability or death; or
(3) within three years after a change of control.
- If Mr. Nussrallah resigns subsequent to June 15, 2000, he will be
entitled to the same benefits as if he was terminated without cause.
- If Mr. Nussrallah's employment is terminated for cause or disability,
or if he resigns, he is prohibited from competing with the Company or
trying to hire its employees, for the lesser period of 2 years or
until the Company has failed to pay his severance in accordance with
his employment agreement.
- If Mr. Nussrallah's employment is terminated within three years after
a change of control for any reason other than for cause, disability or
death, the agreement provides for the payment of three times his
annual salary and target bonus in a single lump sum on the date of
termination and immediate vesting of all of his unvested options.
Daniel S. Dunleavy. In December 1999, the Company entered into an amended
and restated employment agreement with Daniel S. Dunleavy, President of the
Real-Time division.
- Mr. Dunleavy is paid an annual salary of $220,000 and an annual target
bonus of $100,000. The objectives for each year and other terms and
conditions of the bonus opportunity are established by the board of
directors or a committee thereof. For superior performance, the bonus
opportunity may be increased up to two times his annual target bonus.
- The term of his employment will continue until terminated by the
Company or Mr. Dunleavy.
- The agreement provides for the payment of two times his annual salary
and target bonus to be paid in accordance with the Company's normal
salary payment procedures and immediate vesting of at least one-third
of his unvested options if the termination was other than:
(1) for cause, such as the commission of a felony, embezzlement,
material dishonesty against the Company, or gross negligence in
the performance of duties;
11
<PAGE>
(2) due to Mr. Dunleavy's disability or death; or
(3) within three years after a change of control.
- If Mr. Dunleavy's employment is terminated for cause or disability, or
if he resigns, he is prohibited from competing with the Company or
trying to hire its employees, for the lesser period of 2 years or
until the Company has failed to pay his severance in accordance with
his employment agreement.
- If Mr. Dunleavy resigns subsequent to July 1, 2002, he will be
entitled to the same benefits as if he was terminated by the Company
without cause.
- If Mr. Dunleavy's employment is terminated within three years after a
change of control for any reason other than for cause, disability or
death, the agreement provides for the payment of two times his annual
salary and target bonus in a single lump sum on the date of
termination and immediate vesting of all of his unvested options.
Steven R. Norton. In October 1999, the Company entered into an employment
agreement with Steven R. Norton, the Executive Vice President, Chief Financial
Officer, Secretary and Treasurer.
- Mr. Norton is paid an annual salary of $175,000 and an annual target
bonus of $70,000 per year. The objectives for each year and other
terms and conditions of the bonus opportunity are established by the
board of directors of a committee thereof. For superior performance,
the bonus opportunity may be increased up to two times his annual
target bonus.
- The term of his employment will continue until terminated by the
Company or Mr. Norton.
- The agreement provides for the payment of salary for twelve months
after the date of termination payable in equal biweekly installments
or in accordance with the Company's normal salary payment procedures
if the termination was other than:
(1) for cause, such as the commission of a felony, embezzlement,
material dishonesty against the Company, or gross negligence in
the performance of duties; or
(2) due to Mr. Norton's disability or death.
- If Mr. Norton's employment is terminated for cause or disability, or
if he resigns, he is prohibited from competing with the Company or
trying to hire its employees for a period of one year.
E. Courtney Siegel. Mr. Siegel, the former Chairman, President and Chief
Executive Officer, is entitled to certain benefits under his employment
agreement with the Company.
- Mr. Siegel will receive severance compensation of $660,000, equal to
two times the aggregate amount of his annual base salary and annual
target bonus in effect on March 31, 2000, to be paid in periodic
installments in accordance with the normal salary payment procedures
and continued coverage under the group life, hospitalization, medical
and dental plans for two years from March 31, 2000.
- One-third of Mr. Siegel's unvested options vested immediately on March
31, 2000. Mr. Siegel may exercise his options prior to March 31, 2003
or with respect to each option, the remainder of the period of
exercisability under the terms of the original grant.
12
<PAGE>
- Mr. Siegel's noncompetition and nonsolicitation period is equal to the
shorter of 2 years (March 31, 2002) or when the Company has failed to
pay severance for an uninterrupted 10-day period and has not cured
within 15 days of notice.
Jack Bryant. In July, 2000, the Company entered into an employment
agreement with Jack Bryant, the President of the Xstreme Division.
- Mr. Bryant is paid an annual salary of $223,200 and an annual target
bonus of 50% of his annual base salary. The objectives for each year
and other terms and conditions of the bonus opportunity are
established by the board of directors or a committee thereof.
- The term of his employment will continue until terminated by the
Company or Mr. Bryant.
- The agreement provides for the payment of salary for twelve months
after the date of termination payable in equal biweekly installments
or in accordance with the Company's normal salary payment procedures
if the termination was other than:
(1) for cause, such as the commission of a felony, embezzlement,
material dishonesty against the Company, or gross negligence in
the performance of duties; or
(2) due to Mr. Bryant's disability or death.
- If Mr. Bryant's employment is terminated for any reason, he is
prohibited from competing with the Company, soliciting the Company's
customer or recruiting the Company's employees for any period in which
Mr. Bryant receives severance payments, plus a period of one year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Brunner and Handel, neither
of whom have ever been an officer or employee of the Company. Before
establishing the Compensation Committee, the Board as a whole performed the
functions now delegated to the Compensation Committee. None of the Company's
executive officers serves as a member of a board of directors or compensation
committee of any entity that has one or more executive officers who serves on
the Company's Board or on the Compensation Committee.
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 the Company's senior management 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:
13
<PAGE>
- are linked to the achievement of Company and individual performance
objectives;
- align employee interests with the interests of its stockholders;
- are sufficient to attract and retain needed, high-quality employees;
and
- 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 base salary, annual
incentive (bonus) awards and 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 an 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 profitability before income taxes. 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 performance objectives.
- 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.
14
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Nussrallah was elected to the position of President and Chief Executive
Officer of the Company effective January 1, 2000 His employment agreement with
Concurrent provides for a base salary for fiscal 2000 of $318,000, and for a
target bonus based upon achievement of certain performance objectives of 65% of
his base salary. For fiscal 2000, the Compensation Committee approved payment
to Mr. Nussrallah of $130,552, which is 73% of his pro-rated 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 FISCAL YEAR 2000
Michael A. Brunner, Chairman
Morton E. Handel
September 18, 2000
15
<PAGE>
COMMON STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth, to the knowledge of the Company, the
beneficial ownership of the Company's common stock as of September 1, 2000 for
directors, the Named Executive Officers, directors and officers as a group, and
each person who is a stockholder holding more than a 5% interest in Concurrent's
common stock. Unless otherwise indicated, the address of each of the above
persons is 4735 River Green Parkway, Duluth, Georgia 30096.
<TABLE>
<CAPTION>
NUMBER OPTIONS
OF SHARES EXERCISABLE PERCENT OF
BENEFICIALLY WITHIN OUTSTANDING
OWNED(1) 60 DAYS(2) SHARES(3)
------------- ------------ ------------
DIRECTORS AND EXECUTIVE OFFICERS:
---------------------------------
<S> <C> <C> <C>
Michael A. Brunner - 20,000 *
Morton E. Handel - 81,000 *
Bruce N. Hawthorne 1,250 20,000 *
C. Shelton James 28,000 17,000 *
Steven G. Nussrallah 1,664(4) 53,030 *
Richard P. Rifenburgh - 10,000 *
E. Courtney Siegel 186,789(5) 779,321 1.8%
Daniel S. Dunleavy 180,593(6) 5,717 *
Steven R. Norton 437(7) 125,000 *
Robert E. Chism 6,363(8) 446,001 *
Robert T. Menzel 173,626 48,000 *
David S. Morales 601(9) 80,000 *
David Nicholas 1,203(10) 107,000 *
Directors, named executive officers,
and other current officers as a group
(14 persons) 2,186,373 1,822,069 7.4%
FIVE PERCENT SHAREHOLDERS:
--------------------------
PRIMECAP Management Co. (11) 4,465,000 - 8.3%
225 South Lake Ave. #400
Pasadena, California 91101
White Rock Capital, Inc. (12) 3,095,600 - 5.7%
3131 Turtle Creek Blvd.
Suite 800
Dallas, Texas 75219
Vanguard Horizon Funds (13) 4,465,000 - 8.3%
Capital Opportunity Fund
Post Office Box 2600
Valley Forge, Pennsylvania 19482
16
<PAGE>
Wellington Management 3,655,900 - 6.8%
Company, LLP (14)
75 State Street
Boston, Massachusetts 02109
<FN>
* Less than 1.0%.
(1) Unless otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, the Company believes that each of
the shareholders named in this table has sole voting and investment power
with respect to the shares indicated as beneficially owned. This table is
based upon information supplied by executive officers, directors and
principal shareholders, and Schedules 13D and 13G filed with the
Commission.
(2) Represents shares that can be acquired through stock option exercises on or
prior to November 1, 2000.
(3) Based on an aggregate of 54,051,022 shares of common stock issued and
outstanding as of September 1, 2000. Assumes that all options owned by the
person are exercised. The total number of shares outstanding used in
calculating this percentage also assumes that none of the options owned by
other persons are exercised.
(4) Represents shares held for the benefit of Mr. Nussrallah in the Company's
Retirement Savings Plan.
(5) Includes 8,232 shares held for the benefit of Mr. Siegel in the Company's
Retirement Savings Plan.
(6) Includes 8,453 shares held for the benefit of Mr. Dunleavy in the Company's
Retirement Savings Plan.
(7) Represents shares held for the benefit of Mr. Norton in the Company's
Retirement Savings Plan.
(8) Represents shares held for the benefit of Mr. Chism in the Company's
Retirement Savings Plan.
(9) Represents shares held for the benefit of Mr. Morales in the Company's
Retirement Savings Plan.
(10) Represents shares held for the benefit of Mr. Nicholas in the Company's
Retirement Savings Plan.
(11) Based on a Schedule 13G filed with the Commission on January 31, 2000.
(12) Each of White Rock Capital, Inc., White Rock Capital Management L.P.,
Thomas U. Barton and Joseph U. Barton may be deemed to be the beneficial
owner of 3,095,600 shares. This number consists of (a) 2,477,600 shares
held for the accounts of clients by White Rock Capital Management, L.P. and
(b) 648,000 shares held for the account of White Rock Capital Partners L.P.
White Rock Partners may be deemed to be the beneficial owner of the 648,000
shares held for its account. Based on a Schedule 13G/A filed with the
Commission on February 7, 2000.
(13) Based on a Schedule 13G filed with the Commission on February 8, 2000.
(14) Based on a Schedule 13G filed with the Commission on February 11, 2000.
</TABLE>
17
<PAGE>
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(ITEM 2 OF NOTICE)
Upon the recommendation of the Audit Committee, the Board of Directors has
selected the firm of Deloitte & Touche LLP, independent public accountants, as
auditors of the Company for the fiscal year ending June 30, 2001 and is
submitting the selection to stockholders for ratification. A representative of
Deloitte & Touche LLP will be present at the Annual Meeting, will have the
opportunity to make a statement, and will be available to respond to appropriate
questions.
On August 18, 1999, the accounting firm of Deloitte & Touche was selected
as the independent accountants for the Company for the fiscal year ended June
30, 2000. Deloitte & Touche replaced the accounting firm of KPMG LLP. KPMG was
notified of this decision on August 19, 1999. The decision to change auditors
was approved by the Board of Directors upon recommendation of the Audit
Committee.
During fiscal years 1999 and 1998, KPMG's report did not contain an adverse
opinion or a disclaimer opinion, nor was it qualified or modified as to
uncertainty, audit scope or accounting principles. In addition, during fiscal
years 1999 and 1998 and any subsequent period, there were no disagreements
between the Company and KPMG on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE SELECTION OF THE INDEPENDENT AUDITORS.
AMENDMENT TO THE COMPANY'S
1991 RESTATED STOCK OPTION PLAN
(ITEM 3 OF NOTICE)
A proposal will be presented at the Annual Meeting of Stockholders to
approve an amendment to the Company's 1991 Restated Stock Option Plan (the
"Plan") to increase the number of shares of Concurrent common stock authorized
for issuance under the Plan from 12,000,000 to 13,500,000. The amendment was
adopted by the Board of Directors on August 16, 2000, subject to approval by the
Company's stockholders. The text of the Plan, as amended, is set forth in
Exhibit A to this Proxy Statement, and stockholders are urged to review it
----------
together with the following summary, which is qualified in its entirety by
reference to Exhibit A.
----------
1991 RESTATED STOCK OPTION PLAN
Introduction. The purpose of the Plan is to advance the interests of the
Company by enabling officers, employees, non-employee directors and consultants
of the Company and its affiliates to participate in the Company's future and to
enable the Company to attract and retain such persons by offering them
proprietary interests in the Company.
The Plan provides for the grant of stock options ("Options") intended to
qualify as incentive stock options ("ISOs") under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), and Options not intended to
qualify under Section 422 of the Code ("NSOs"). The Plan also allows for the
grant, in connection with Options, of stock appreciation rights ("Stock
Appreciation Rights"), the grant of restricted common stock awards ("Restricted
Stock"), and the cash out of Options granted under the Plan. Options, Stock
Appreciation Rights and Restricted Stock awards are referred to below
collectively as "Awards."
18
<PAGE>
Plan Administration and Shares Subject to the Plan. The Plan is
administered by the Compensation Committee of the Board, members of which serve
at the discretion of the Board. The Compensation Committee has the power to
construe and interpret the Plan and determine the terms of the Options and other
Awards granted under the Plan, including which eligible individuals are to
receive Options, the time or times when grants are to be made, the number of
shares subject to an Option, the exercise price for an Option, the status of an
Option as either an ISO or a NSO, and the vesting (exercise) schedule of each
Option. In addition, the Compensation Committee may substitute new Options for
previously granted Options, including Options previously granted with higher
exercise prices.
The Plan provides for the issuance of an aggregate of 13,500,000 shares of
common stock pursuant to Awards, which shares may consist, in whole or in part,
of authorized and unissued shares or treasury shares. In the event of certain
corporate transactions, the Compensation Committee may make adjustments it
determines appropriate to the number of shares of common stock reserved for
issuance under the Plan, the number and exercise price of shares subject to
outstanding Options and Stock Appreciation Rights, and the number of shares
subject to other outstanding Awards granted under the Plan. With limited
restrictions, shares of common stock subject to Options or other Awards that are
not exercised during their term, or that are otherwise forfeited, will again
become available for the grant of new Awards under the Plan.
Eligibility. ISOs only may be granted to Company employees and to
employees of subsidiaries of the Company. NSOs and other Awards may be granted
to employees and consultants of the Company, and employees and consultants of
designated affiliated companies. The Plan also provides for automatic grants of
NSOs to Directors who are not Company employees or employees of a designated
affiliated company, in accordance with a formula set forth in the Plan.
Options. Subject to the terms of the Plan, the Compensation Committee
determines the terms of Options granted under the Plan. In the case of an ISO,
the purchase price of common stock purchased pursuant to the exercise of the
Option must at least equal 100% of fair market value (as defined in the Plan) of
common stock on the date of grant of the Option. In the case of a NSO, the
purchase price of the common stock purchased pursuant to its exercise must be no
less than 50% of fair market value. The term of an ISO may not exceed ten years
and the term of a NSO may not exceed ten years and one day.
Upon the exercise of an Option, the purchase price must be fully paid in
cash, certified or bank check, or such other instrument as the Company may
accept or, subject to the approval of the Compensation Committee, in shares of
common stock equal in fair market value to the purchase price. The Compensation
Committee also may provide for an Option to be exercised through a
broker-facilitated cashless exercise procedure.
If the employment of an optionee terminates on account of death or
"disability" (as defined in the Plan), the optionee's Option generally will
remain exercisable, to the extent exercisable at the time of death or
termination on account of disability, for one year and one day after termination
(or for the balance of the Option's term if less). In the case of a termination
by death or disability, the Compensation Committee, in its discretion, also may
provide for an Option to be exercisable on an accelerated basis. If the
employment of an optionee terminates for any reason other than death or
disability, the optionee's Option generally will expire immediately, unless such
termination is involuntary and without "cause" (as defined in the Plan) in which
case the Option will remain exercisable, to the extent exercisable at the time
of termination of employment, for three months and one day after termination (or
for the balance of the Option's term if less).
Upon the initial election of a non-employee Director to the Board, he or
she automatically will receive an Option under the Plan to purchase 20,000
shares of common stock. On the date of each successive Annual Meeting of
Stockholders, such Director automatically will receive an additional Option
under the Plan to purchase 10,000 shares of common stock. These Options are
fully vested NSOs, priced at 100% of fair market value of common stock on the
date of grant, and each Option terminates upon the earlier to occur of the tenth
anniversary of the date of grant or three years following retirement from the
Board.
19
<PAGE>
Options granted under the Plan are not transferable by an optionee other
than by will or the laws of descent and distribution, and an Option may be
exercised during the lifetime of an optionee only by the optionee or the
optionee's guardian or legal representative.
Stock Appreciation Rights. Subject to the terms of the Plan, the
Compensation Committee determines the terms of Stock Appreciation Right grants
that may be made in the Compensation Committee's discretion in connection with
Options granted under the Plan. A Stock Appreciation Right granted under the
Plan is exercisable only at such time or times, and to the extent that, the
Option to which it relates is exercisable. Upon the exercise of a Stock
Appreciation Right, the Stock Appreciation Right holder will receive an amount
in cash, common stock or both (as determined by the Compensation Committee)
equal in value to the excess of the fair market value per share of the common
stock on the date of exercise over the purchase price per share specified in the
related Option, multiplied by the number of shares with respect to which the
Stock Appreciation Right is exercised.
Restricted Stock Awards. Subject to the terms of the Plan, the
Compensation Committee determines the terms of Awards of Restricted Stock made
under the Plan. A Restricted Stock Award made under the Plan is an award of
common stock on which the Compensation Committee imposes such restrictions and
conditions as the Compensation Committee deems appropriate, which may include,
for example, continuous employment with the Company for a specified term or the
attainment of specific goals. The Compensation Committee, in its discretion,
may waive any restrictions and conditions imposed on Awards of Restricted Stock.
Effects of Certain Changes of Control. Subject to such additional
conditions and restrictions as the Compensation Committee may determine at the
time of granting an Award, the Plan provides that in the event of a "change of
control" of the Company, all outstanding Options will become exercisable
immediately and all restrictions imposed on outstanding Restricted Stock Awards
under the Plan will lapse. Under the Plan, a "change of control" in general
will occur upon (1) the acquisition, directly or indirectly, of 20% or more of
the Company's voting securities by a specified person or group, (2) a change in
the majority membership of the Board, where the majority members have not been
approved by "continuing directors" (as defined in the Plan) or (3) the approval
by stockholders of the merger or consolidation of the Company with or into
another corporation, the Company's liquidation or the sale or disposition of
substantially all of the Company's assets.
Amendment; Termination. The Board may amend or terminate the Plan at any
time, except that no amendment or termination may be made (1) without
stockholder approval, where the approval of stockholders is required by law or
agreement, (2) which would disqualify the Plan from the exemption provided by
Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or (3) which would impair the rights of an Award previously granted
without the Award holder's consent (except for amendments made to cause the Plan
to qualify for the exemption provided by Rule 16b-3 of the Exchange Act). The
Plan automatically will terminate on January 31, 2002, unless earlier terminated
by the Board.
Payment of Taxes. When an amount becomes includible in the gross income of
an Award holder for income tax purposes relating to such Award, the Award holder
is required to pay to the Company the taxes required by law to be withheld with
respect to such amount. The Company may deduct such taxes from any payment
otherwise due the Award holder. Unless otherwise determined by the Company, an
Award holder also may satisfy withholding requirements by electing to have the
Company withhold from delivery shares of common stock having a value equal to
the amount of tax to be withheld.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief general summary of certain federal income tax
consequences applicable to Options, Stock Appreciation Rights and Restricted
Stock Awards granted under the Plan, based on current federal income tax laws,
regulations (including proposed regulations), and judicial and administrative
interpretations thereof. The federal income tax law and regulations are
frequently amended, and such amendments may or may not be retroactive.
Individual circumstances also may vary these results.
20
<PAGE>
Non-Qualified Stock Options. An optionee will not recognize taxable income
upon the grant of a NSO. Upon the exercise of a NSO, however, an optionee
generally will recognize ordinary income in an amount equal to the excess of the
fair market value of the shares transferred to the optionee over the Option
exercise price. The Company normally will be entitled to a federal income tax
deduction equal to the amount of income recognized by the optionee, provided
applicable federal income tax reporting requirements are satisfied and subject
potentially to a $1,000,000 deduction limitation under Section 162(m) of the
Code with respect to certain executives. If shares acquired upon exercise of a
NSO are later sold, then the difference between the sales price and the fair
market value of the shares on the date that ordinary income previously was
recognized on the shares generally will be taxable as long-term or short-term
capital gain or loss (depending upon whether the stock has been held for more
than one year).
Additional special rules not addressed above apply to an optionee who
exercises a NSO by paying the Option exercise price, in whole or in part, by the
transfer of common stock to the Company.
Incentive Stock Options. An optionee will not recognize taxable income
upon the grant of an ISO. In addition, an optionee generally will not recognize
taxable income upon the exercise of an ISO. However, upon exercise of an ISO,
an optionee's alternative minimum taxable income is increased by the amount that
the fair market value of shares transferred to the optionee upon exercise
exceeds the Option exercise price, and an optionee's federal income tax
liability may be increased as a result under the alternative minimum tax rules
of the Code. Furthermore, except in the case of an optionee's death, if an ISO
is exercised more than three months after the optionee's termination of
employment, the Option ceases to be treated as an ISO and is subject to taxation
under the rules applicable to NSOs. (See "Non-Qualified Options" above.)
If an optionee sells the common stock acquired upon exercise of an ISO, the
tax consequences of the sale (a "disposition") depend upon whether the
disposition is a qualifying or disqualifying disposition. A taxable disposition
of the shares is qualifying if it is made at least two years after the date the
ISO was granted and at least one year after the date the ISO was exercised (the
"holding periods"). If the disposition of the shares is a qualifying
disposition, any excess of the sale price of the common stock over the Option
exercise price of the ISO is treated as long-term capital gain taxable to the
optionee at the time of the disposition. If the disposition is a disqualifying
disposition (made prior to expiration of the holding periods), the optionee
generally will recognize ordinary income at the time of the disposition equal to
the lesser of (1) the excess of the fair market value of the shares on the date
the ISO was exercised over the Option exercise price or (2) the gain realized on
the disposition (i.e., the excess of the amount realized on the disposition over
the Option exercise price), and any excess of the sale price of the shares over
the fair market value of the shares on the date the ISO was exercised will be
taxed as short-term or long-term capital gain.
Unless an optionee engages in a disqualifying disposition of common stock,
the Company will not be entitled to a federal income tax deduction with respect
to an ISO. If an optionee engages in a disqualifying disposition, the Company
normally will be entitled to a federal income tax deduction equal to the amount
of ordinary income recognized by the optionee, provided applicable Federal
income tax reporting requirements are satisfied and subject potentially to a
$1,000,000 deduction limitation under Section 162(m) of the Code with respect to
certain executives.
Additional special rules not addressed above apply to an optionee who
exercises an ISO by paying the Option exercise price, in whole or in part, by
the transfer of common stock to the Company.
Restricted Stock Awards. A Plan participant generally will not be taxed
upon the grant of a Restricted Stock Award if the shares are subject to
restrictions that amount to a substantial risk of forfeiture (as defined in the
Code), but rather will recognize ordinary income in an amount equal to the fair
market value of the common stock at the time the shares are no longer subject to
a substantial risk of forfeiture. The Company normally will be entitled to a
deduction at the time when, and in the amount that, the Participant recognizes
ordinary income, provided applicable federal income tax reporting requirements
are satisfied and subject potentially to a $1,000,000 deduction limitation under
Section 162(m) of the Code with respect to certain executives. However, an
Award holder may elect (not later that 30 days after acquiring shares subject to
a substantial risk of forfeiture) to recognize ordinary income at the time the
restricted shares are awarded in an amount equal to their fair market value at
that time, notwithstanding that such shares are subject to a substantial risk of
forfeiture. If such an election is made, no additional taxable income will be
recognized by the Award holder at the time the restrictions lapse. However, if
shares with respect to which such an election was made are later forfeited, no
tax deduction is allowable to the Award holder for the forfeited shares.
21
<PAGE>
Stock Appreciation Rights. The grant of Stock Appreciation Rights
ordinarily will not result in taxable income to a Plan participant or a federal
income tax deduction to the Company. Upon exercise of a Stock Appreciation
Right, the Award holder will recognize ordinary income and the Company normally
will have a corresponding deduction in an amount equal to the cash or the fair
market value of the shares of common stock received by the Award holder, subject
potentially to a $1,000,000 deduction limitation under Section 162(m) of the
Code with respect to certain executives. If an Award holder allows a Stock
Appreciation Right to expire, other than as a result of exercise of a related
Option, the Internal Revenue Service may contend that the Award holder has
ordinary income in the year of expiration equal to the amount of cash or the
fair market value of the common stock that the Award holder would have received
if he or she had exercised the Stock Appreciation Right immediately before it
expired.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ADOPTION OF
THE AMENDMENT TO THE COMPANY'S 1991 RESTATED STOCK OPTION PLAN.
22
<PAGE>
STOCK PRICE 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), and the Nasdaq Computer Manufacturers Index. The graph assumes $100
invested on June 30, 1995 in Concurrent common stock and each of the indices.
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
CONCURRENT COMPUTER CORPORATION
[GRAPHIC OMITED]
<TABLE>
<CAPTION>
---------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Fiscal Year Ended 6/30/1995 6/30/1996 6/30/1997 6/30/1998 6/30/1999 6/30/2000
---------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
CCUR $ 100.00 $ 80.00 $ 72.50 $ 151.25 $ 252.50 $ 525.00
Nasdaq Stock Market (US Companies) $ 100.00 $ 128.39 $ 156.15 $ 205.58 $ 296.02 $ 437.30
Nasdaq Computer Manufacturers $ 100.00 $ 142.21 $ 178.59 $ 289.77 $ 540.11 $ 993.56
---------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
OTHER MATTERS
EXPENSES OF SOLICITATION
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.
23
<PAGE>
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 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, the Company believes
that during its fiscal year ended June 30, 2000 all filings were timely.
2001 STOCKHOLDER PROPOSALS
Proposals of stockholders for possible consideration at the 2001 Annual
Meeting of Stockholders (expected to be held in October 2001) must be received
by the Secretary of the Company at 4375 Rivergreen Parkway Duluth, Georgia
30096, not later than June 1, 2001 to be considered for inclusion in the proxy
statement for that meeting if appropriate for consideration under applicable
securities laws. The proxy for the 2001 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, 2001.
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 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.
OTHER MATTERS
The Board of Directors had not received notice by August 17, 2000, and does
not know, of any other matters which may come before the Annual Meeting. If any
other matters are properly presented to the Annual Meeting, the Proxy Holders
intend to vote, or otherwise to act, in accordance with their judgment on such
matters.
By Order of the Board of Directors,
Steven R. Norton
Secretary
September 18, 2000
Duluth, Georgia
24
<PAGE>
CONCURRENT COMPUTER CORPORATION
1991 RESTATED STOCK
OPTION PLAN
SECTION 1. Purpose.
--------
The purpose of the Concurrent Computer Corporation 1991 Restated Stock
Option Plan is to advance the interests of Concurrent Computer Corporation (the
"Company") by enabling officers, employees, non-employee directors and
consultants of the Company and its Affiliates to participate in the Company's
future and to enable the Company to attract and retain such persons by offering
them proprietary interests in the Company.
SECTION 2. Amendment and Restatement of Prior Plans.
---------------------------------------------
The Concurrent Computer Corporation 1982 Stock Option Plan ("1982
Plan") and the Concurrent Computer Corporation 1984 Non-Qualified Common Stock
Option Plan ("NSO Plan") are hereby amended and restated on a combined basis
into the Plan.
SECTION 3. Definitions.
------------
For purposes of the Plan, the following terms are defined as set forth
below:
a. "Affiliate" means a corporation or other entity controlled
----------
directly, or indirectly through one or more intermediaries, by
the Company and designated by the Committee as such.
b. "Award" means an award granted to a Participant in the form of
------
a Stock Appreciation Right, Stock Option, or Restricted
Stock, or any combination of the foregoing.
c. "Board" means the Board of Directors of the Company.
-------
d. "Cause" shall have the meaning set forth in Section 10.
-------
e. "Change in Control" shall have the meaning set forth in Section
-------------------
13.
f. "Code" means the Internal Revenue Code of 1986, as amended from
-----
time to time, and any successor thereto.
g. "Commission" means the Securities and Exchange Commission or
-----------
any successor agency.
h. "Committee" means the Committee referred to in Section 6.
-----------
i. "Common Stock" means common stock, $.01 per share par value, of
--------------
the Company.
j. "Company" means Concurrent Computer Corporation, a Delaware
---------
corporation.
25
<PAGE>
k. "Disability" means permanent and total disability as determined
------------
under procedures established by the Committee for purposes
of the Plan.
l. "Disinterested Person" means a director who comes within the
-----------------------
definition of a "non-employee director" under Rule 16b-3(b)(3),
as promulgated by the Commission under the Exchange Act, or as
such term is defined under any successor rule adopted by the
Commission.
m. "Exchange Act" means the Securities Exchange Act of 1934, as
---------------
amended from time to time, and any successor thereto.
n. "Fair Market Value" means the average, as of any given date,
---------------------
between the highest and lowest reported closing bid and asked
price of the Stock on The Nasdaq National Market or the closing
sale price as of any given date if the Stock is listed on a
national securities exchange or quoted on The Nasdaq National
Market System. If there is no regular public trading market
for such Stock under circumstances specified above, the Fair
Market Value of the Stock shall be determined by the Committee
in good faith.
o. "Incentive Stock Option" means any Stock Option intended to be
-------------------------
and designated as an "incentive stock Option" within the
meaning of Section 422 of the Code.
p. "Non-Qualified Stock Option" means any Stock Option that is not
----------------------------
an Incentive Stock Option.
q. "Normal Retirement" means retirement from active employment
--------------------
with the Company or an Affliliate at or after age 65 or at such
other age as may be specified by the Committee.
r. "Participant" means an employee or non-employee director or
-------------
consultant of the Company of an Affiliate to whom an Award
has been granted which has not terminated, expired or been
fully exercised.
s. "Plan" means the Concurrent Computer Corporation 1991 Restated
------
Stock Option Plan, as set forth herein and as hereinafter
amended from time to time.
t. "Restricted Period" means the period of time, which may be a
--------------------
single period or multiple periods, during which Restricted
Stock awarded to a Participant remains subject to the
restrictions imposed on such Stock, as determined by the
Committee.
u. "Restrictions" means the restrictions and conditions imposed on
--------------
Restricted Stock awarded to a Participant, as determined by the
Committee, which must be satisfied in order for the Restricted
Stock to vest, in whole or in part, in the Participant.
v. "Restricted Stock" means an Award of Stock on which are imposed
------------------
Restriction Periods(s) and Restrictions whereby a Participant's
rights to full enjoyment of the Stock are conditioned upon
the future performance of substantial services by any
individual or are otherwise subject to a "substantial risk
of forfeiture" within the meaning of Section 83 of the Code,
as amended.
w. "Restricted Stock Agreement"means a written agreement between a
----------------------------
Participant and the Company evidencing an award of Restricted
Stock.
26
<PAGE>
x. "Restricted Stock Award Date" means the date on which the
--------------------------------
Committee awarded Restricted Shares to a Participant.
y. "Retirement" means Normal Retirement or early retirement if the
-----------
Company's Profit Sharing and Savings Plan provides for same.
z. "Rule 16b-3" means Rule 16b-3, as promulgated by the Commission
------------
under Section 16(b) of the Exchange Act, as amended from
time to time.
aa. "Stock" means the Common Stock.
-------
bb. "Stock Appreciation Right" means a right granted under Section
--------------------------
11.
cc. "Stock Option" or "Option" means an option granted under
--------------- --------
Section 8 or 10.
dd. "Termination of Employment" means the termination of a
-----------------------------
Participant's employment with the Company and any Affiliate.
A Participant employed by an Affiliate shall also be deemed
to incur a Termination of Employment if the Affiliate ceases
to be an Affiliate and the Participant does not immediately
thereafter become an employee of the Company or another
Affiliate.
In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.
SECTION 4. Effective Date.
----------------
The effective date of the Plan shall be the date upon which the Plan
is approved by the stockholders of the Company.
SECTION 5. Stock Subject to Plan.
-------------------------
The total number of shares of Stock reserved and available for
distribution pursuant to Awards under the Plan shall be 13,500,000 shares of
Stock. Such shares may consist, in whole or in part, of authorized and
unissued shares or treasury shares.
If any shares of Stock that have been Optioned cease to be subject to
a Stock Option, if any shares of Stock that are subject to any Award are
forfeited or if any Award otherwise terminates without a distribution being made
to the Participant in the form of Stock, such shares shall again be available
for distribution in connection with Awards under the Plan. In addition, any
Stock purchased by a Participant upon exercise of an Option under the Plan,
which is subsequently repurchased by the Company pursuant to the terms of such
Option, may again be the subject of an Option under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization (including, but not limited to, the issuance of Stock or any
securities convertible into Stock in exchange for securities of the Company),
stock dividend, stock split or reverse stock split, extraordinary distribution
with respect to the Stock or other similar change in corporate structure
affecting the Stock, such substitution or adjustments shall be made in the
aggregate number of shares reserved for issuance under the Plan and in the
number and Option price of shares subject to outstanding Awards granted under
the Plan as may be determined to be appropriate by the Committee, in its sole
discretion; provided, however, that the number of shares subject to any Award
shall always be a whole number. Such adjusted Option price shall also be used
to determine the amount payable by the company upon the exercise of any Stock
Appreciation Right associated with any Stock Option.
27
<PAGE>
SECTION 6. Administration.
---------------
The Plan shall be administered by the Stock Award Committee ("Committee")
of the Board or such other committee of the Board, composed of not less than two
Disinterested Persons, each of whom shall be appointed by and serve at the
pleasure of the Board. If at any time no Committee shall be in place, the
functions of the Committee specified in the Plan shall be exercised by the
Board.
The Committee shall have plenary authority to grant Awards to officers,
employees, non-employee directors and consultants of the Company or an
Affiliate.
Among other things, the Committee shall have the authority, subject to the
terms of the Plan:
(a) to select the officers, employees, non-employee directors, and
consultants to whom Awards may from to time be granted;
(b) to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights and
Restricted Stock, or any combination thereof are to be granted
hereunder;
(c) to determine the number of shares of Stock to be covered by each
Award granted hereunder;
(d) to determine the terms and conditions of any Award granted
hereunder (including, but not limited to, the Option price, any
vesting restriction or limitation, any repurchase rights in favor
of the Company and any vesting acceleration or forfeiture waiver
regarding any Award and the shares of Stock relating thereto,
based on such factors as the Committee shall determine);
(e) to adjust the terms and conditions, at any time or from time to
time, of any Award, including with respect to performance goals
and measurements applicable to performance-based Awards pursuant
to the terms of the Plan;
(f) to determine under what circumstances an Award may be settled in
cash or Stock;
(g) if appropriate, to determine Fair Market Value; and
(h) to substitute new Stock Options for previously granted Stock
Options, including previously granted Stock Options having higher
Option prices.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from to time, deem advisable, to interpret the terms and provisions of the Plan
and any Award issued under the Plan (and any agreement relating thereto) and to
otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then in office,
except that the members thereof may authorize any one or more of their number or
any officer of the Company to execute and deliver documents on behalf of the
Committee.
Any determination made by the Committee pursuant to the provisions of the
Plan with respect to any Award shall be made in its sole discretion at the time
of the grant of the Award or, unless in contravention of any express term of the
Plan, at any time thereafter. All decisions made by the Committee pursuant to
the provisions of the Plan shall be final and binding on all persons, including
the Company and Participants.
28
<PAGE>
SECTION 7. Eligibility.
------------
Officers, employees, non-employee directors, and consultants of the Company
and its Affiliates (but excluding members of the Committee other than as
expressly provided by Section 8) who are responsible for or contribute to the
management, growth and profitability of the business of the Company and its
Affiliates are eligible to be granted Awards under the Plan. Any person who
files with the Committee, in a form satisfactory to the Committee, a written
waiver of eligibility to receive any Award under the Plan shall not be eligible
to receive an Award under the Plan for the duration of the waiver.
SECTION 8. Options Granted to Non-Employee Directors.
----------------------------------------------
The provisions of this Section 8 govern the granting and terms of Options
for any director of the Company who is not an employee of the Company or any of
its Affiliates ("Eligible Director"). No Option may be granted to Eligible
Directors other than pursuant to this Section 8.
Upon the initial election of an Eligible Director to the Board, without
further action by the Board or the stockholders of the Company, such Eligible
Director shall be automatically granted Options to purchase 20,000 shares of
stock (subject to adjustment in accordance with the provisions of Section 5 of
the Plan). On the date of each annual meeting of stockholders of the Company,
each Eligible Director who has previously been awarded an Option under the
preceding sentence shall be granted automatically, without further action by the
Board or the stockholders of the Company, Options to purchase 10,000 shares of
stock (subject to adjustment in accordance with the provisions of Section 5 of
the Plan).
The purchase price per share deliverable upon the exercise of such Options
under this Section 8 shall be 100% of the Fair Market Value of such shares as of
the date of such Option. Each Option granted under this Section 8 shall become
immediately exercisable and no Option shall be exercisable after the expiration
of ten (10) years from the date of grant. Each Option granted pursuant to this
Section 8 shall be exercisable during the period the Eligible Director remains a
member of the Board and for a period of three (3) years following retirement,
provided that only those Options exercisable at the date of retirement may be
exercised during the period following retirement, and, provided further, that in
no event shall any such Option be exercisable beyond the tenth (10th)
anniversary of the date of grant.
SECTION 9. Duration of the Plan.
------------------------
The Plan shall terminate ten (10) years from the effective date specified
in Section 4 of the Plan, unless terminated earlier pursuant to Section 14
hereto, and no Options may be granted thereafter.
SECTION 10. Stock Options.
---------------
Stock Options granted under the Plan may be of two types: Incentive Stock
Options and Non-Qualified Stock Options. Any Stock Option granted under the
Plan shall be in such form as the Committee may from time to time approve.
The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options or both types of Stock Options (in
each case with or without Stock Appreciation Rights). Incentive Stock Options
may be granted only to employees of the company and its subsidiaries (within the
meaning of Section 424(f) of the Code). To the extent that any Stock Option is
not designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.
29
<PAGE>
Stock Options shall be evidenced by Option agreements, the terms and
provisions of which may differ. An Option agreement shall indicate on its face
whether it is an agreement for an Incentive Stock Option or a Non-Qualified
Stock Option. The grant of a Stock Option shall occur on the date the Committee
by resolution selects an individual to be a Participant in any grant of a Stock
Option, determines the number of shares of Stock to be subject to such Stock
Option to be granted to such individual and specifies the terms and provisions
of the Option agreement. The Company shall notify a Participant of any grant of
a Stock Option, and a written Option agreement or agreements shall be duly
executed and delivered by the Company to the Participant. Such agreement or
agreements shall become effective upon execution by the Participant. Anything
in the Plan to the contrary notwithstanding, no term of the Plan relating to
Incentive Stock Options shall be interpreted, amended or altered nor shall any
discretion or authority granted under the Plan be exercised so as to disqualify
the Plan under Section 422 of the Code or, without the consent of the optionee
affected, to disqualify any Incentive Stock Option under such Section 422.
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions as the
Committee shall deem desirable:
(a) Option Price. The Option price per share of Stock purchasable
------------
under an Option shall be determined by the Committee and set forth in the Option
agreement, and shall not be less than the Fair Market Value of the Stock subject
to the Option on the date of grant in the case of Incentive Stock Options and
not less than 50% of the Fair Market Value of the Stock subject to the Option on
the date of grant in the case of Non-Qualified Stock Options.
(b) Option Term. The term of each Stock Option shall be fixed by
-------------
the Committee, but no Incentive Stock Option shall be exercisable more than 10
years after the date of grant; and no Non-Qualified Stock Option shall be
exercisable more than 10 years and one day after the date the Stock Option is
granted.
(c) Exercisability. Subject to Section 13, Stock Options shall
---------------
otherwise be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part, based
on such factors as the Committee may determine. In addition, the Committee may
at any time, accelerate the exercisability of any Stock Option.
(d) Method of Exercise. Subject to the provisions of this Section
-------------------
10, Stock Options may be exercised, in whole or in part, at any time during the
Option period by giving written notice of exercise to the Company specifying the
number of shares of Stock subject to the Stock Option to be purchased.
Such notice shall be accompanied by payment in full of the purchase
price by certified or bank check or such other instrument as the Company may
accept. If approved by the Committee, payment in full or in part may also be
made in the form of unrestricted Stock already owned by the optionee of the same
class as the Stock subject to the Stock Option; provided, however, that, in the
case of an Incentive Stock Option, the right to make a payment in the form of
already owned shares of Stock of the same class as the Stock subject to the
Stock Option shall be authorized only at the time the Stock Option is granted.
An optionee shall have all of the rights of a stockholder of the
Company holding the class or series of Stock that is subject to such Stock
Option (including, if applicable, the right to vote the shares and the right to
receive dividends) when the optionee has given written notice of exercise and
has paid in full for such shares. In the discretion of the Committee, payment
for any Stock subject to an Option may also be made by delivering a properly
executed exercise notice to the Company together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds to pay the purchase price. To facilitate the foregoing, the
Company may enter into agreements for coordinated procedures with one or more
brokerage firms. The value of previously owned Stock exchanged in full or
partial payment for the shares purchased upon the exercise of an Option shall be
equal to the aggregate Fair Market Value of such shares on the date of the
exercise of such Option.
30
<PAGE>
(e) Non-transferability of Options. No Stock Option shall be
---------------------------------
transferable by the optionee other than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee or by the guardian or legal representative of the
optionee, it being understood that the terms "holder" and "optionee" include the
guardian and legal representative of the optionee named in the Option agreement
and any person to whom an Option is transferred by will or the laws of descent
and distribution.
(f) Termination by Death. If an optionee's employment terminates
----------------------
by reason of death, any Stock Option held by such optionee may thereafter be
exercised, to the extent then exercisable or on such accelerated basis as the
Committee may determine, for a period of one year and one day (or such other
period as the Committee may specify) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter.
(g) Termination by Reason of Disability. If any optionee's
---------------------------------------
employment terminates by reason of Disability, any Stock Option held by such
optionee may thereafter be exercised by the optionee, to the extent it was
exercisable at the time of termination or on such accelerated basis as the
Committee may determine, for a period of one year and one day (or such shorter
period as the Committee may specify at grant) from the date of such termination
of employment or until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if the optionee dies
within such one year and one day period (or such shorter period ending upon the
expiration of the stated term of the Stock Option), any unexercised Stock Option
held by such optionee shall, notwithstanding the expiration of such one year and
one day period, continue to be exercisable to the extent to which it was
exercisable at the time of death for a period of one year and one day from the
date of such death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter. In the event of termination of
employment by reason of Disability, if an Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of Section
422 of the Code, such Stock Option will thereafter be treated as a Non-Qualified
Stock Option.
(h) Other Termination. Unless otherwise determined by the
-------------------
Committee and subject to the provisions of Section 13 of the Plan, if an
optionee incurs a Termination of Employment for any reason other than death or
Disability, any Stock Option held by such optionee shall thereupon terminate,
except that such Stock Option, to the extent then exercisable, may be exercised
for the lesser of three months and one day from the date of such Termination of
Employment or the balance of such Stock Option's term if such Termination of
Employment of the optionee is involuntary and without cause. Unless otherwise
determined by the Committee, for the purposes of the Plan "Cause" shall have the
same meaning as that set forth in any employment or severance agreement in
effect between the Company and the Participant. Otherwise, it shall mean (1)
the conviction of the optionee for committing a felony under federal law or the
law of the state in which such action occurred, (2) dishonesty in the course of
fulfilling the optionee's employment duties or (3) willful and deliberate
failure on the part of the optionee to perform his or her employment duties in
any material respect.
(i) Cashing out of Option. On receipt of written notice of
------------------------
exercise, the Committee may elect to cash out all or part of any Stock Option to
be exercised by paying the optionee an amount, in cash or Stock, equal to the
excess of the Fair Market Value of the Stock that is the subject of the Option
over the Option price times the number of shares of Stock subject to the Option
on the effective date of such cash out.
Cash outs relating to Options held by optionees who are actually or
potentially subject to Section 16(b) of the Exchange Act shall comply with the
"window period" provisions of Rule 16b-3, to the extent applicable, and, in the
case of cash outs of Non-Qualified Stock Options held by such optionees, the
Committee may determine Fair Market Value with reference to the pricing
provision of Section 11(b)(ii)(2).
31
<PAGE>
SECTION 11. Stock Appreciation Rights.
----------------------------
(a) Grant and Exercise. Stock Appreciation Rights may be granted
--------------------
in conjunction with all or part of a Stock Option granted under the Plan. In
the case of a Non-Qualified Stock Option, such rights may be granted either at
or after the time of grant of such Stock Option. In the case of an Incentive
Stock Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option.
A Stock Appreciation Right may be exercised by an optionee in accordance
with Section 11(b) by surrendering the applicable portion of the related Stock
Option in accordance with procedures established by the Committee. Upon such
exercise and surrender, the optionee shall be entitled to receive an amount
determined in the manner prescribed in Section 11(b). Stock Options, which have
been so surrendered, shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be
-----------------------
subject to such terms and conditions as shall be determined by the Committee,
including the following:
(i) Stock Appreciation Rights shall be exercisable only as such time
or times and to the extent that the Stock Options to which they
relate are exercisable in accordance with the provisions of
Section 10 and this Section 11; provided, however, that a Stock
Appreciation right shall not be exercisable during the first six
months of its term by an optionee who is actually or potentially
subject to Section 16(b) of the Exchange Act, except that this
limitation shall not apply in the event of death or Disability of
the optionee prior to the expiration of the six-month period.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee
shall be entitled to receive an amount in cash, shares of Stock
or both equal in value to the excess of the Fair Market Value of
one share of Stock over the option price per share specified in
the related Stock Option multiplied by the number of shares in
respect of which the Stock Appreciation Right shall have been
exercised, with the Committee having the right to determine the
form of payment.
In the case of Stock Appreciation Rights relating to Stock
Options held by optionees who are actually or potentially subject
to Section 16(b) of the Exchange Act, the Committee:
(1) may require that such Stock Appreciation Rights be exercised
only in accordance with the applicable "window period"
provisions of Rule 16b-3; and
(2) in the case of Stock Appreciation Rights relating to
Non-Qualified Stock Options, may provide that the amount to
be paid upon exercise of such Stock Appreciation Rights
during a Rule 16b-3 "window period" shall be based on the
highest mean sales price of the Stock on The Nasdaq National
Market, or on such national securities exchange upon which
the Stock may be traded, on any day during such "window
period".
(iii)Stock Appreciation Rights shall be transferable only when and to
the extent that the underlying Stock Option would be transferable
under Section 10(e).
(iv) Upon the exercise of a Stock Appreciation Right, the Stock Option
or part thereof to which such Stock Appreciation Right is related
shall be deemed to have been exercised for the purpose of
determining the number of shares of Stock available for issuance
under the Plan in accordance with Section 5 of the Plan, but only
to the extent of the number of shares resulting from dividing the
value of the Stock Appreciation Right at the time of exercise by
the Fair Market Value of one share of Stock determined in
accordance with this Section 11.
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SECTION 12. Terms of Restricted Stock Awards.
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Subject to and consistent with the provisions of the Plan, with respect to
each Award of Restricted Stock to a participant, the Committee shall determine:
(a) the terms and conditions of the Restricted Stock Agreement
between the Company and the Participant evidencing the Award;
(b) the Restriction Period for all or a portion of the Award;
(c) the Restriction applicable to the Award, including, but not
limited to, continuous employment with the Company for a specified term or the
attainment of specific corporate, divisional or individual performance standards
or goals, which Restriction Period and Restrictions may differ with respect to
each Participant;
(d) whether the Participant shall receive the dividends and other
distributions paid with respect to an award of the Restricted Stock as declared
and paid to the holder of the stock during the Restriction Period or shall be
withheld by the Company for the account of the Participant until the Restriction
Periods have expired or the restrictions have been satisfied, and whether
interest shall be paid on such dividends and other distributions withheld, and
if so, the rate of interest to be paid;
(e) the percentage of the Award which shall vest in the
Participant in the event of death, Disability or Retirement prior to the
expiration of the Restriction Period or the satisfaction of the Restrictions
applicable to an award of Restricted Stock: and
(f) notwithstanding the Restriction Period and the Restrictions
imposed on the Restricted Shares, as set forth in a Restricted Stock Agreement,
whether to shorten the Restriction Period or waive any Restrictions, if the
Committee concludes that it is in the best interests of the Company to do so.
Upon an award of Restricted Stock to a Participant, the stock certificate
representing the Restricted Stock shall be issued and transferred to and in the
name of the Participant, whereupon the Participant shall become a stockholder of
the Company with respect to such Restricted Stock and shall be entitled to vote
the Stock. Such stock certificates shall be held in custody by the Company,
together with stock powers executed by the Participant in favor of the Company,
until the Restriction Period expires and the Restrictions imposed on the
Restricted Stock are satisfied.
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SECTION 13. Change of Control.
--------------------
Upon the occurrence of an event of "Change of Control", as defined below
and subject to such additional conditions and restrictions as the Committee may
determine at the time of the granting of the Award:
(a) any and all outstanding Options shall become immediately
exercisable;
(b) the Restriction Period and Restrictions imposed on the
Restricted Stock shall lapse, and the Restricted Stock shall vest in the
Participant to the extent determined by the Committee; and
(c) within ten business days after the occurrence of a Change of
Control, the certificates representing the Restricted Stock so vested, without
any restrictions or legend thereon, other than as required by law, shall be
delivered to the Participant, and any dividends and distributions paid with
respect to the Restricted Stock which were escrowed during the Restriction
Period and the earnings thereon shall be paid to the Participant.
A "Change of Control" shall occur when, in addition to the occurrence
of such other events as the Committee may determine at the time of the grant of
the Award:
(a) any "Person" (which term, when used in this Section 13, shall
mean two or more persons acting as a partnership, limited partnership, syndicate
or other group for the purpose of acquiring, holding or disposing of securities
of the issuer or shall have such other meaning assigned to it in a successor
provision to Section 13d of the Exchange Act) is or becomes the "Beneficial
Owner" (which term, when used in this Section 13, shall include any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares (i) voting power which includes the
power to vote or to direct the voting of such security; and/or (ii) investment
power which includes the power to dispose or to direct the disposition of such
security, or such other meaning assigned to it in a successor provision to Rule
13d-3 promulgated under the Exchange Act) directly or indirectly, of Voting
Stock (as defined below) representing twenty percent or more of the votes
entitled to be cast by the holders of all then outstanding shares of the
Company; or
(b) the stockholders of the Company approve a definitive agreement
or plan to merge or consolidate the Company with or into another corporation, or
to sell, or otherwise dispose of, all or substantially all of the Company's
property and assets, or to liquidate the Company or the business of the Company
for which the Participant's services are principally performed is disposed of by
the Company pursuant to a sale of assets (including stock of a subsidiary of the
Company), a merger or consolidation or otherwise; or
(c) the individuals who are Continuing Directors of the Company
(as defined below) cease for any reason to constitute at least a majority of the
Board of the Company.
The term "Continuing Director" means (i) any member of the Board who is a
member of the Board on February 1, 1992, or (ii) any person who subsequently
becomes a member of the Board whose nomination for election or election to the
Board is recommended or approved by a majority of the Continuing Directors. The
term "Voting Stock" means all capital stock of the Company, which by its terms
may be voted on all matters, submitted to stockholders of the Company generally.
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SECTION 14. Amendments and Termination.
-----------------------------
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would (i) impair the rights of
an Award theretofore granted without the Participant's consent, except such an
amendment made to cause the Plan to qualify for the exemption provided by Rule
16b-3, or (ii) disqualify the Plan from the exemption provided by Rule 16b-3.
In addition, no such amendment shall be made without the approval of the
Company's stockholders to the extent such approval is required by law or
agreement.
The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment shall
impair the rights of any holder without the holder's consent except such an
amendment made to cause the Plan or Award to qualify for the exemption provided
by Rule 16b-3. The Committee may also substitute new Stock Options for
previously granted Stock Options, including previously granted Stock Options
having higher Option prices.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without shareholder approval.
SECTION 15. General Provisions.
--------------------
(a) Nothing contained in the Plan shall prevent the Company or an
Affiliate from adopting other or additional compensation arrangements for its
employees.
(b) The Plan shall not confer upon any employee any right to
continued employment nor shall it interfere in any way with the right of the
Company or an Affiliate to terminate the employment of any employee at any time.
(c) No later than the date as of which an amount first becomes
includible in the gross income of the Participant for federal income tax
purposes with respect to any Award under the Plan, the Participant shall pay to
the Company, or make arrangements satisfactory to the Company regarding the
payment of, any federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount. Unless otherwise determined by
the company, withholding obligations may be settled with Stock, including Stock
that is part of the Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to the participant.
(d) The Committee shall establish such procedures, as it deems
appropriate for a Participant to designate a beneficiary to whom any amounts
payable in the event of the Participant's death are to be paid.
(e) Agreements entered into by the Company and Participants
relating to Awards under the Plan, in such form as may be approved by the
Committee from time to time, to the extent consistent with or permitted by the
Plan shall control with respect to the terms and conditions of the subject
Award. If any provisions of the Plan or any agreement entered into pursuant to
the Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions of the Plan or the
subject agreement.
(f) The Plan and all Awards made and actions taken thereunder
shall be governed by and construed in accordance with the laws of the State of
Delaware.
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SECTION 16. Certain Awards.
----------------
The approval by the stockholders of the Company of the Plan shall be deemed
approval by said stockholders of the terms and conditions of the Awards
(including, but not limited to, terms and conditions relating to the Option
price, exercisability, vesting and acceleration of vesting, including
acceleration upon a change of control as defined in the option agreements
evidencing the Awards) previously made to non-employee directors of the Company
and ratification of the terms and conditions of the other Awards previously
made, which are identified in a list maintained at the offices of the Company.
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