EXHIBIT 10.5
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT, made and entered into as of the 4th day of
February 2005 by and between CONCURRENT COMPUTER CORPORATION, a Delaware
corporation ("Concurrent" or the "Company"), and John Welch (the "Employee").
W I T N E S S E T H :
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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.
2. Term
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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 Vice President - Research & Development
reporting to the Chief Operating Officer of the Company. The Employee agrees to
perform such senior executive 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 Operating Officer or 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, but nothing in this Agreement shall preclude the Employee from
devoting reasonable periods required for serving as a director or member of any
advisory committee of not more than two (at any time) "for profit" organizations
involving no conflict of interest with the interests of the Company (subject to
approval by the Chief Executive Officer, which approval shall not be
unreasonably withheld), or from engaging in charitable and community activities,
or from managing his personal investments, provided such activities do not
materially interfere with the performance of his duties and responsibilities
under this Agreement.
4. Compensation
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4.1 Salary
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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 $215,000, 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
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During the term of employment hereunder, the Employee will be
provided an annual bonus opportunity in a target amount of 40% of base
compensation (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 Chief Executive Officer and shall be reasonably consistent
with the business plan of the Company for such year established in advance.
4.3 Employee Benefit Plans
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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 Business Expense Reimbursements
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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
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5.1 Death
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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
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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.
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.
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5.3 Termination by the Company for Due Cause
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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 Employee's immediate
superior, the Chief Executive Officer or Board of Directors, 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 Chief Executive Officer 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
therefore 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 of salary continuation for a period of six (6) months from the date of
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 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.
During the period beginning with the Employee's termination and
continuing through the Salary Continuation Period, the Company will use its
reasonable 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 were 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.
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5.5 Constructive Termination of Employment by the Company without
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Due Cause
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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;
(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
(F) 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
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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
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Employee agrees that, following any termination of employment
with Company, Employee will not, directly or indirectly, for the Salary
Continuation Period, plus one (1) year, (a) engage in or provide any services
substantially similar to the services that Employee provided to the Company at
any time during the last twelve (12) months of Employee's employment to or on
behalf of any person or entity offering products or services competitive with
the Company Business (defined below) anywhere in the continental United States.
The Employee acknowledges and agrees the continental United States is the
primary geographic area in which the Company competes in its business and thus,
by virtue of Employee's senior executive position and responsibilities with the
Company, also the primary geographic area of Employee's employment with the
Company. "Business" means the sale of products and services that enable (1)
broadband providers to stream video to customers, and (2) high performance
computing designed to acquire, process, store, analyze, and display large
amounts of rapidly changing information with microsecond response as changes
occur.
7. Successors and Assigns
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7.1 Assignment by the Company
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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.
7.2 Assignment by the Employee
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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.
Employee's Initials_______________ Company's Initials_________________________
As a condition precedent to any arbitration hereunder, prior to the commencement
of any formal arbitration proceeding, the parties shall participate in a one-day
mediation session in an attempt to amicably resolve the disagreement that is to
be the subject matter of the arbitration proceeding.
9. Governing Law
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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
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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 the
Chief Executive Officer of the Company. 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
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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
4375 River Green Parkway
Duluth, GA 30096
Attn: Suzanne Smith, VP - Human Resources &
Administrative Services
With a copy to:
King & Spalding
191 Peachtree Street
Atlanta, GA 30303-1763
ATTN: Jack Capers
EMPLOYEE: John Welch
4495 Burgess Hill Lane
Alpharetta, GA 30022
13. Severability
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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
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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 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
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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
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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
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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/ T. Gary Trimm
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T. Gary Trimm
Chief Executive Officer
EMPLOYEE
/s/ John Welch
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John Welch
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