UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
June 22, 2005
Delaware 0-13150 04-2735766
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(State or Other (Commission (IRS Employer
Jurisdiction File Number) Identification Number)
of Incorporation)
4375 River Green Parkway, Suite 100, Duluth, Georgia 30096
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(Address of Principal Executive Offices) (Zip Code)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On June 22, 2005, the Compensation Committee of the Board of Directors ("the Board") of Concurrent Computer Corporation (the "Company") granted options to purchase an aggregate of 2,064,676 shares of the Company's common stock, par value $.01 per share, with an exercise price of $2.15 per share to current employees and executive officers pursuant to the Company's Amended and Restated 2001 Stock Option Plan. The options were fully vested on the date of grant, but the shares issued upon the exercise of the options may not be transferred or encumbered until certain transfer restrictions lapse. For most employees, the transfer restrictions allow 50% of the shares underlying the options to be transferable on each one year anniversary of the date of grant. For senior management, the transfer restrictions allow 25% of the shares underlying the options to be transferable on each one year anniversary of the date of grant. The options granted to senior management will have a 10 year term whereas all other options granted will have a 4 year term.
This option grant differs from prior grants in that all employees were granted options and the restriction schedules and option terms differ for distinct groups of employees. This one-time initiative was undertaken by the Compensation Committee to provide a rentention incentive to general employees and to motivate them to approach their jobs from the perspective of shareholders while providing a traditional long-term incentive to senior management.
The Company granted such options to the following executive officers to purchase the number of shares set forth opposite the respective executive officer's name:
Number of Shares
Name Subject to Option
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T. Gary Trimm 219,010
Warren Neuburger 136,099
Gregory S. Wilson 65,703
Kirk L. Somers 55,065
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A form of the option agreement for the option grants is attached hereto as Exhibit 10.1 and is incorporated by reference herein in its entirety.
The decision to grant these fully vested stock options with limits on transferability, which the Company believes to be in the best interest of the Company and its shareholders, was made primarily to limit compensation expense that would be expected to be recorded in future periods following the Company's adoption on July 1, 2005 of Financial Accounting Standards Board ("FASB") Statement No. 123, "Share-Based Payment (revised 2004)" ("SFAS 123(R)"). The Company currently accounts for stock-based compensation using the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," under which the Company has not recognized any compensation expense for its stock option grants. SFAS 123(R) will require the Company to record compensation expense equal to the fair value of all equity-based compensation over the vesting period of each such award. As a result of the immediate vesting of this grant of stock options, the Company expects that it will have no expense associated with these stock options in fiscal year 2006 and beyond. However, the Company will disclose the pro forma effect of this compensation expense in the pro forma footnote disclosure in its fiscal year 2005 annual report, as permitted under the transition guidance provided by the FASB.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit Number Description -------------- ----------- 10.1 Form of Option Agreement with Transfer Restrictions for Officers. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CONCURRENT COMPUTER CORPORATION
Date: June 22, 2005 By: /s/ Greg Wilson
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Greg Wilson
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT 10.1
FORM OF OPTION AGREEMENT WITH TRANSFER RESTRICTIONS
CONCURRENT COMPUTER CORPORATION
NOTICE OF GRANT OF STOCK OPTIONS ID: #04-2735766
AND OPTION AGREEMENT 4375 River Green Parkway
Duluth, Georgia 30096
Phone: 678-258-4000
Employee Name Option Number: 015329 Address Plan: 2001 City, State and Zip Code ID: XXXXXXXXX
Effective 6/22/2005, you have been granted a(n) Non-Qualified Stock Option to buy XX,XXX shares of CONCURRENT COMPUTER CORPORATION (the Company) stock at $2.1500 per share.
The total option price of the shares granted is $XXX,XXX.XX
Shares in each period will become fully vested on the date shown.
Shares Vest Type Full Vest Expiration
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XX,XXX On Vest Date 6/22/2005 6/22/2015
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BY YOUR SIGNATURE AND THE COMPANY'S SIGNATURE BELOW, YOU AND THE COMPANY AGREE THAT THESE OPTIONS ARE GRANTED UNDER AND GOVERNED BY THE TERMS AND CONDITIONS OF THE COMPANY'S STOCK OPTION PLAN AS AMENDED AND THE OPTION AGREEMENT, ALL OF WHICH ARE ATTACHED AND MADE A PART OF THIS DOCUMENT.
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ADDENDUM TO OPTION AGREEMENT
For the purposes of this Addendum, capitalized terms used but not defined in this Addendum or the Option Agreement are used as defined in the Amended and Restated 2001 Stock Option Plan (the "Plan").
The optionee may not assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Stock acquired upon the exercise of the Option (the "Option Shares") and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance (a "Transfer") shall be void and unenforceable against the Company; provided; however, that the optionee may Transfer: (i) (A) 25% of the total number of Option Shares underlying the original Option on the first anniversary of the date of grant, (B) 50% of the total number of Option Shares underlying the original Option on the second anniversary of the date of grant, (C) 75% of the total number of Option Shares underlying the original Option on the third anniversary of the date of grant, and (D) all the remaining Option Shares underlying the Option on the fourth anniversary of the date of grant. Notwithstanding the foregoing, all restrictions on Transfer described in this Addendum will lapse upon a Change of Control.