Exhibit 10.12
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT, made and entered into as of the 17th day of
June, 2002 by and between CONCURRENT COMPUTER CORPORATION, a Delaware
corporation ("Concurrent" or the "Company"), and Xxxxxxx X. Necessary (the
"Employee").
W I T N E S S E T H :
- - - - - - - - - - -
WHEREAS, the Company desires to employ the Employee and the Employee
desires to accept such employment with the Company;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Employment
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The Company hereby employs the Employee and the Employee hereby
accepts employment with the Company for the term set forth in Section 2 below,
in the position and with the duties and responsibilities set forth in Section 3
below, and upon other terms and conditions hereinafter stated. Should employee
be prohibited from performing the services as detailed herein due to any
obligation(s) to a prior employer, all compensation due under this Agreement
shall be suspended until such obligations are extinguished.
2. Term
----
The term of employment hereunder shall commence on the date hereof and
shall continue until otherwise terminated by either party at any time in
accordance with the terms hereof.
3. Position; Duties; Responsibilities
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3.1 It is intended that at all times during the term of employment
hereunder, the Employee shall serve as President, Xstreme Division, reporting to
the Chief Executive Officer of the Company (the "Chief Executive Officer"). The
Employee agrees to perform such senior executive officer and managerial services
customary to such position as are necessary to the operations of the Company and
as may be assigned to him from time to time by the Chief Executive Officer or by
the Company's Board of Directors (the "Board of Directors").
3.2 Throughout the term of employment hereunder, the Employee shall
devote his full time and undivided attention during normal business hours to the
business and affairs of the Company, as appropriate to his responsibilities and
duties hereunder, except for reasonable vacations and illness or other
disability
4. Compensation
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4.1 Salary
------
For services rendered by the Employee during the term of
employment hereunder, the Employee shall be paid a salary, payable in equal
biweekly installments (or, if different, payable in accordance with the then
existing applicable payroll policy of the Company, but in no event less
frequently than equal monthly installments) at an annualized rate of no less
than $285,000.00, such salary to be reviewed for increase annually with such
increases, if any, as shall be awarded taking into account such factors as
corporate and individual performance and general business conditions.
4.2 Annual Bonus Opportunity
--------------------------
During the term of employment hereunder, the Employee will be
provided an annual bonus opportunity in a target amount of 50% of base salary
(pro-rated based on the Employee's start date). The objectives for each year and
other terms and conditions of the bonus opportunity shall be established by the
Board of Directors or a committee thereof and shall be reasonably consistent
with the business plan of the Company for such year established in advance.
4.3 Employee Benefit Plans
------------------------
During the term of employment hereunder, the Employee will be
eligible to participate in all employee benefit programs of the Company now or
hereafter made available to senior executives, in accordance with the provisions
thereof as in effect from time to time. In any event, the Employee shall be
entitled to vacation days at the rate of four weeks per calendar year or such
greater amount as may be provided by Company policies in effect from time to
time.
4.4 Stock Options
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Employee has initially been granted an option to purchase 400,000
shares of the Company's common stock. The per share exercise price of the option
is the fair market value of the Company's common stock at the close of business
on the Employees start date and the option vests over a 4 year term at the rate
of 25% on each of the employees first 4 anniversary dates. The remaining terms
and conditions of this grant are as provided in the Company's Stock Option Plan.
4.5 Signing Bonus
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The Employee will be eligable for a signing bonus equal to
$75,000 payable within 120 days of Employee's start date, if employment begins
on or before June 17, 2002. If the Employee's employment with the Company is
terminated within the first three years of
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employment, the Employee shall reimburse the Company a prorated portion of this
signing bonus, unless the termination is pursuant to paragraphs 5.1, 5.2, or
5.4.
4.6 Business Expense Reimbursements
---------------------------------
During the term of employment hereunder, the Employee will be
entitled to receive reimbursement by the Company for all reasonable
out-of-pocket expenses incurred by him (in accordance with the policies and
procedures established by the Company for its senior level executives), in
connection with his performing services hereunder.
5. Consequences of Termination of Employment
---------------------------------------------
5.1 Death
-----
In the event of the death of the Employee during the term of
employment hereunder, the estate or other legal representatives of the Employee
shall be entitled to continuation of the salary provided for in Section 4.1 for
a period of 6 months from the date of the Employee's death, at the rate in
effect at such date.
5.2 Continuing Disability
----------------------
Notwithstanding anything in this Agreement to the contrary, the
Company is hereby given the option to terminate the Employee's employment in the
event of the Employee's Continuing Disability. Such option shall be exercised
by the Company by giving notice to the employee of the Company's intention to
terminate his employment due to Continuing Disability not earlier than 15 days
from the receipt of such notice.
In the event of the termination of the Employee's employment due
to Continuing Disability, the Employee shall be entitled to compensation in
accordance with the terms of all disability plan(s) made available to the
Employee in which he is a participant at the time of such termination, if any;
provided, however, that for a period of 6 months from such date of termination,
the Employee shall receive an amount at least equal to the salary provided for
in Section 4.1 above, at the rate in effect at the time of such termination, to
the extent not provided under any such disability plan. Other rights and
benefits under employee benefit plans and programs of the Company, generally,
will be determined in accordance with the terms and provisions of such plans and
programs.
For purposes hereof, Continuing Disability shall mean the
inability to perform the essential functions connected with the Employee's
duties hereunder, with or without reasonable accommodation, which inability
shall have existed for a period of 250 days, even though not consecutive, in any
24 month period. In the event the Employee does not agree with the Company
that his inability may reasonably be expected to exist for such period, the
opinion of a qualified medical doctor selected by the Employee and reasonably
satisfactory to the Company shall be determinative.
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If, following a termination of employment hereunder due to
Continuing Disability, the Employee becomes otherwise employed (whether as an
employee, consultant or otherwise, but not solely as a member of a board of
directors), any salary or other benefits earned by him from such employment
shall be offset against any disability compensation or salary continuation due
hereunder.
5.3 Termination by the Company for Due Cause
----------------------------------------------
Nothing herein shall prevent the Company from terminating the
employment of the employee for Due Cause. The Employee shall continue to
receive salary and any accrued and due bonus payments provided for herein only
through the period ending with the date of such termination and any other rights
and benefits he may have under employee benefit plans and programs of the
Company, generally, shall be determined in accordance with the terms of such
plans and programs. The term "Due Cause", as used herein, shall mean that (a)
the Employee has committed a willful serious act, such as embezzlement, against
the Company intended to enrich himself at the expense of the Company or has been
convicted of a felony involving moral turpitude or (b) the Employee has (i)
willfully and grossly neglected his duties hereunder or (ii) intentionally
failed to observe specific directives or policies of the Board of Directors or
CEO, which directives or policies were consistent with his positions, duties and
responsibilities hereunder, and which failure had, or continuing failure will
have, a material adverse effect on the Company. Prior to any such termination,
the Employee shall be given written notice by the Board of Directors or CEO that
the Company intends to terminate his employment for Due Cause under this Section
5.3, which written notice shall specify the particular acts or omissions on the
basis of which the Company intends to so terminate the Employee's employment,
and the Employee (with his counsel, if he so chooses) shall be given the
opportunity, within 15 days of his receipt of such notice, to have a meeting
with the Board of Directors to discuss such acts or omissions and given
reasonable time to remedy the situation, if it is deemed by the Board of
Directors, in their good faith business judgment, to be remediable. In the
event of such termination, the Employee shall be promptly furnished written
specification of the basis therefor in reasonable detail.
5.4 Termination by the Company other than for Due Cause
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The foregoing notwithstanding, the Company may terminate the
Employee's employment for whatever reason it deems appropriate; provided,
however, that in the event such termination is not based on death or disability
as provided in Sections 5.1 or 5.2, above, or on Due Cause as provided in
Section 5.3 above, the Employee will be entitled to receive Severance
Compensation (as defined below).
For purposes of the foregoing, Severance Compensation shall
consist, at employee's option, of either (1) Salary Continuation for a period of
12 months from the date of such termination (the "Salary Continuation Period"),
payable in equal biweekly installments (or, if different, payable in accordance
with the then existing applicable payroll policy of the
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Company, but in no event less frequently than equal monthly installments), at
the rate in effect, pursuant to Section 4.1 above, immediately prior to such
termination or (2) Benefits Continuation (further defined below), in lieu of the
12 months of Salary Continuation, until the employee reaches the age of 65 (the
"Benefits Continuation Period"). "Benefits Continuation" means maintaining
Employee's enrollment in the group life insurance, hospitalization, medical, and
dental programs offered to other employees or substantially similar programs for
the Benefits Continuation Period.
During the period beginning with the Employee's termination and
continuing through the Salary Continuation Period, the Company will use its best
efforts to continue the Employee's eligibility under its group life insurance,
hospitalization, medical and dental plans. In order to obtain such benefits, the
Employee will have to pay the amount that would be the Employee's responsibility
if he was still employed. To the extent Employee is not eligible under the
terms of one or more of such plans and programs, the Company will provide the
Employee with the economic equivalent for the Salary Continuation Period. For
this purpose, "economic equivalent" shall mean the cost the Employee would incur
if he were to provide himself with a benefit comparable to the reduced or
eliminated benefit. The amount paid to the Employee as the economic equivalent,
less the amount of the premium payment which is the Employee's responsibility in
accordance with the Company benefit plan, will be "grossed-up", if taxable (that
is, the amount necessary to make the Employee whole after taking into account
(i) the cost of the benefit and (ii) additional income taxes, if any, incurred
by the employee on amounts paid to him pursuant to this sentence)).
The foregoing notwithstanding, upon a termination triggering
Severance Compensation payments hereunder the Company shall be under no
obligation to continue the Employee's coverage under any long term disability
plan or program; and the date of such termination shall be considered a
termination for purposes of participation in the Company's Retirement Savings
Plan.
Except as specifically set forth in this Section 5.4, the
Employee shall not be entitled to any other compensation or benefits following a
termination of employment by the Company as provided in this Section 5.4.
5.5 Constructive Termination of Employment by the Company without
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Due Cause
--------
Anything herein to the contrary notwithstanding, if the Company:
(A) demotes or otherwise elects or appoints the Employee to a
lesser office than set forth in Section 3.1 or fails to elect or appoint him to
such position;
(B) causes a material change in the nature or scope of the
authorities, powers, functions, duties or responsibilities attached to the
Employee's position as described in Section 3.1;
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(C) decreases the Employee's salary or annual bonus
opportunity below the levels provided for by the terms of Sections 4.1 and 4.2
(taking into account any salary increases made from time to time in accordance
with Section 4.1);
(D) materially reduces the Employee's benefits under any
employee benefit plan, program, or arrangement of the Company (other than a
change that affects all employees similarly situated) from the level in effect
upon the Employee's commencement of participation; or
(E) commits any other material breach of this Agreement,
then such action (or inaction) by the Company, unless consented to in writing by
the Employee, shall constitute a termination of the Employee's employment by the
Company other than for Due Cause pursuant to Section 5.4 above. If, within
thirty (30) days of learning of the action (or inaction) described herein as a
basis for a constructive termination of employment, the Employee (unless he has
given written consent thereto) notifies the Company in writing that he wishes to
effect a constructive termination of his employment pursuant to this Section
5.5, and such action (or inaction) is not reversed or otherwise remedied by the
Company within 30 days following receipt by the Company of such written notice,
then effective at the end of such second 30 day period, the employment of the
Employee hereunder shall be deemed to have terminated pursuant to Section 5.4
above.
5.6 Voluntary Termination by Employee
------------------------------------
In the event the Employee terminates his employment of his own
volition (other than as provided in Section 5.5 above), such termination shall
constitute a voluntary termination and in such event the Employee shall be
limited to the same rights and benefits as provided in connection with
termination for Due Cause under the second sentence of Section 5.3 above. For
the purposes hereof, a decision by the Employee to voluntarily retire shall
constitute a voluntary termination.
6. Protective Agreement
---------------------
Concurrently with entering into this Agreement, the Employee will
enter into a Protective Agreement in favor of the Company substantially in the
form attached as Exhibit A hereto (the "Protective Agreement").
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7. Successors and Assigns
------------------------
7.1 Assignment by the Company
----------------------------
This Agreement shall be binding upon and inure to the benefit of
the Company or any corporation or other entity to which the Company may transfer
all or substantially all its assets and business and to which the Company may
assign this Agreement, in which case "Company" as used herein shall mean such
corporation or other entity.
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7.2 Assignment by the Employee
-----------------------------
The Employee may not assign this Agreement or any part thereof
without the prior written consent of the Company, which consent may be withheld
by the Company for any reason it deems appropriate; provided, however, nothing
herein shall preclude the Employee from designating one or more beneficiaries to
receive any amount that may be payable following the occurrence of his legal
incompetency or his death and shall not preclude the legal representative of his
estate from assigning any right hereunder to the person or persons entitled
thereto under his will or, in the case of intestacy, to the person or persons
entitled thereto under the laws of intestacy applicable to his estate. The term
"beneficiaries", as used in this Agreement, shall mean a beneficiary or
beneficiaries so designated to receive any such amount or if no beneficiary has
been so designated the legal representative of the Employee (in the event of his
incompetency) or the Employee's estate.
8. Arbitration
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Any dispute or controversy arising out of, in connection with, or
relating to this Agreement or the Employee's employment by the Company or its
termination shall be settled exclusively by arbitration in Atlanta, Georgia by
one arbitrator in accordance with the employment arbitration rules of the
American Arbitration Association then in effect; provided, however, that this
arbitration agreement shall not preclude the Company from seeking to enforce the
Protective Agreement in any court of competent jurisdiction without resort to
arbitration. The arbitrator's award may include the manner in which fees of
counsel and other expenses in connection with the dispute or controversy are to
be borne by the parties. The arbitrator's authority and jurisdiction is limited
to interpreting and applying the express provisions of this Agreement and the
arbitrator shall not have the authority to alter or add to the provisions of
this Agreement. Judgment may be entered upon the arbitrator's award in any
court of competent jurisdiction.
9. Governing Law
--------------
This Agreement shall be deemed a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of Georgia
(without reference to the principles of conflicts of law).
10. Entire Agreement
-----------------
This Agreement, including the Protective Agreement, contains all the
understandings and representations between the parties hereto pertaining to the
subject matter hereof and supersedes all undertakings and agreements, whether
oral or in writing, if any there be, previously entered into by them with
respect thereto.
11. Amendment or Modification; Waiver
------------------------------------
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No provision in this Agreement may be amended or waived unless such
amendment or waiver is agreed to in writing, signed by the Employee and an
officer of the Company thereunto duly authorized. Except as otherwise
specifically provided in the Agreement, no waiver by any party hereto of any
breach by another party hereto of any condition or provision of the Agreement to
be performed by such other party shall be deemed a waiver of a similar or
dissimilar provision or condition at the same or any prior or subsequent time.
12. Notices
-------
Any notice to be given hereunder shall be in writing and delivered
personally or sent by certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently give notice of hereunder in writing:
COMPANY: Concurrent Computer Corporation
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxx, XX 00000
Attn: Chief Executive Officer
With a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
ATTN: Xxxx Xxxxxx
EMPLOYEE: Xxxxxxx X. Necessary
000 Xxxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
13. Severability
------------
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
14. Withholding
-----------
Anything to the contrary notwithstanding, all payments required to be
made by the Company hereunder to the Employee or his estate or beneficiaries,
shall be subject to withholding of such amounts relating to taxes as the Company
may reasonably determine it should withhold pursuant to any applicable law or
regulation. In lieu of withholding such amounts, in whole or in part, the
Company may, in its sole discretion, accept other provision for
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payment of taxes as required by law, provided it is satisfied that all
requirements of law affecting its responsibilities to withhold such taxes have
been satisfied.
15. Survivorship
------------
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
16. References
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In the event of the Employee's death or judicial determination of his
incompetence, reference in this Agreement to the Employee shall be deemed, where
appropriate, to refer to his legal representatives, or, where appropriate, to
his beneficiary or beneficiaries.
17. Titles
------
Titles to the sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the title of any section.
18. Counterparts
------------
This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CONCURRENT COMPUTER CORPORATION
By: /s/ Xxxx Xxxxxx
-------------------------
Xxxx Xxxxxx
President and CEO
EMPLOYEE
/s/ Xxxxxxx X. Necessary
----------------------------
Xxxxxxx X. Necessary
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Exhibit 10.12
Exhibit A
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PROTECTIVE AGREEMENT
--------------------
I, the undersigned, in consideration of and as a condition to my employment
by Concurrent Computer Corporation (the "Company), do hereby agree with the
Company as follows:
1. Noncompete and Nonsolicitation of Customers or Employees. During my
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employment by the Company, I will devote my full time and best efforts to the
business of the Company and I will not, directly or indirectly, alone or as a
partner, officer, director, employee or holder of more than 5% of the common
stock of any other organization, engage in any business activity which competes
directly or indirectly with the products or services being developed,
manufactured or sold by the Company. I also agree that, following any
termination of such employment, I will not, directly or indirectly, for any
period in which I receive severance payments from the Company, plus one (1)
year, (a) engage in or provide any services substantially similar to the
services that I provided to the Company at any time during the last twelve (12)
months of my employment to or on behalf of any person or entity that competes
with the Company in the "real time" or "video-on-demand" businesses anywhere in
the continental United States, which I acknowledge and agree is the primary
geographic area in which the Company competes in these businesses and thus, by
virtue of my senior executive position and responsibilities with the Company,
also the primary geographic area of my employment with the Company, (b) solicit
or attempt to solicit, for the purpose of competing with the Company in its
"real time" or "video-on-demand" businesses, any customers or active prospects
of the Company with which I had any material business contact for or on behalf
of the Company at any time during the last twelve (12) months of my employment,
or (c) recruit or otherwise seek to induce any employees of the Company to
terminate their employment or violate any agreement with the Company.
2. Trade Secrets and Other Confidential Information. Except as may be
--------------------------------------------------
required in the performance of my duties with the Company, or as may be required
by law, I will not, whether during or after termination of my employment with
the Company, reveal to any person or entity or use any of the trade secrets of
the Company for as long as they remain trade secrets. I also agree to these
same restrictions, during my employment with the Company and for a period of
three (3) years thereafter, with respect to all other confidential information
of the Company, including its technical, financial and business information,
unless such confidential information becomes publicly available through no fault
of mine or unless it is disclosed by the Company to third parties without
similar restrictions.
Further, I agree that any and all documents, disks, databases, notes, or
memoranda prepared by me or others and containing trade secrets or confidential
information of the Company shall be and remain the sole and exclusive property
of the Company, and that upon termination of my employment or prior request of
the Company I will immediately deliver all of such documents, disks, databases,
notes or memoranda, including all copies, to the Company at its main office.
3. Inventions and Copyrights. If at any time or times during my
----------------------------
employment (or within six (6) months thereafter if based on trade secrets or
confidential information within the meaning of Paragraph 2 above), I make or
discover, either alone or with others, any invention, modification, development,
improvement, process or secret, whether or not patented or patentable
(collectively, "inventions") in the field of computer science or
instrumentation, I will disclose in reasonable detail the nature of such
invention to the Company in writing, and if it relates to the business of the
Company or any of the products or services being developed, manufactured or sold
by the Company, such invention and the benefits thereof shall immediately become
the sole and absolute property of the Company provided the Company notifies me
in reasonable detail within ninety (90) days after receipt of my disclosure of
such invention that it believes such invention relates to the business of the
Company or any of the products or services being developed, manufactured or sold
by the Company. I also agree to transfer such inventions
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and benefits and rights resulting from such inventions to the Company without
compensation and will communicate without cost, delay or prior publications all
available information relating to the inventions to the Company. At the
Company's expense I will also, whether before or after termination of my
employment, sign all documents (including patent applications) and do all acts
and things that the Company may deem necessary or desirable to effect the full
assignment to the Company of my right and title to the inventions or necessary
to defend any opposition thereto. I also agree to assign to the Company all
copyrights and reproduction rights to any materials prepared by me in connection
with my employment.
4. Conflicting Agreements. I represent that I have attached to this
------------------------
Agreement a copy of any written agreement, or a summary of any oral agreement,
which presently affects my ability to comply with the terms of this Agreement,
and that to the best of my knowledge my employment with the Company will not
conflict with any agreement to which I am subject. I have returned all
documents and materials belonging to any of my former employers. I will not
disclose to the Company or induce any of the Company's employees to use trade
secrets or confidential information of any of my former employers.
5. Miscellaneous.
--------------
(a) I hereby give the Company permission to use photographs of me,
during my employment, with or without using my name, for any reasonable business
purposes the Company deems necessary or desirable.
(b) The Company shall have, in addition to any and all remedies of
law, the right to an injunction, specific performance and other equitable relief
as may be appropriate to prevent the violation of my obligations hereunder.
(c) I understand that this Agreement does not create an obligation
on the Company or any other person to continue my employment for any period of
time.
(d) This Agreement shall be construed in accordance with the laws
of the State of Georgia. I agree that each provision of this Agreement shall be
treated as a separate and independent clause, and the unenforceability of any
clause shall in no way impair the
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enforceability of any of the other clauses. Moreover, if one or more of the
provisions contained in this Agreement shall for any reason be held to be
extensively broad as to scope, activity, time, geographical area or subject so
as to be unenforceable at law, such provision or provisions shall be construed
by the appropriate judicial body by limiting and reducing it or them so as to be
enforceable to the maximum extent compatible with applicable law as it shall
then appear.
(e) My obligations under this Agreement shall survive the
termination of my employment regardless of the manner of such termination for
the time periods set forth in this Agreement, and shall be binding upon my
heirs, executors and administrators.
(f) The term "Company" as used in this Agreement includes
Concurrent Computer Corporation and any of its subdivisions or affiliates. The
Company shall have the right to assign this Agreement to its successors and
assigns.
(g) The foregoing is the entire agreement between the Company and
me with regard to its subject matter, and may not be amended or supplemented
except by a written instrument signed by both the Company and me. The section
headings are inserted for convenience only, and are not intended to affect the
meaning of this Agreement.
/s/ Xxxxxxx X. Necessary
---------------------------
Xxxxxxx X. Necessary
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