Employment Agreement - Carberry

EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of the 5th day of March, 1996 by and between HARRIS COMPUTER SYSTEMS CORPORATION, a Florida corporation ("Company"), and ROBERT L. CARBERRY ("Employee").


WHEREAS, the Company, through its Board of Directors, desires to retain the services of Employee, and Employee desires to be retained by the Company, on the terms and conditions set forth in this Agreement;


NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:


1. EMPLOYMENT. The Company hereby employs Employee, and Employee hereby accepts employment, as President, Chief Executive Officer and Chairman of the Board of the Company upon the terms of and subject to this Agreement.


2. TERM. The term ("Term") of this Agreement shall commence and this Agreement shall become effective on the 12th day of April 1996 (the "Effective Date") and shall continue until otherwise terminated by either party at any time in accordance with the terms hereof.


3. DUTIES. During his employment hereunder, Employee initially will be appointed President and General Manager of the Trusted Systems Division of Harris Computer Systems Corporation, reporting to Corky Siegel, until closing ("Closing") under the Purchase and Sale Agreement that is currently under negotiations between the Company and Concurrent Computer Corporation providing for the sale to Concurrent of the assets of the Company's real-time computer business. The anticipated date of Closing is June, 1996. After the Closing, Employee will serve as the President, Chief Executive Officer and Chairman of the Board of the Company and the Company will take such actions as necessary to cause his nomination as a member of the Board of Directors of the Company. Employee shall have general and active charge of the business and affairs of the Company and, in such capacity, shall have responsibility for the day-to-day operations of the Company, subject to the authority and control of the Board of Directors of the Company.


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Employee shall report directly to the Board of Directors of the Company. 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 duties and responsibilities 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 Board of Directors, 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.


a. Salary: During his employment hereunder, Employee shall be paid a as follows, payable in equal installments not less than monthly: two hundred thousand dollars ($200,000.00) per annum for the first twelve month period; two hundred twenty-five thousand dollars ($225,000.00) per annum for the second twelve month period; two hundred fifty thousand dollars ($250,000) per annum for the third twelve month period. Thereafter, the Employee's salary shall be reviewed at least annually by the Board of Directors or any Committee of the Board delegated the authority to review executive compensation.


b. Stock Option/Bonus: In addition to salary, Employee shall be entitled to participate in the Company's Stock Option Plan (the "Stock Option Plan") and Employee shall be initially granted, as of the date of this Agreement (such grant subject to Employee's actually joining the Company as an employee), an option to purchase 339,000 post-March 1996 three-for-one split shares of common stock of the Company ("Common Stock") (such number to be subject to further adjustment as provided in the Stock Option Plan). The per share exercise price of the option shall be the fair market value of the Company's Common Stock as of the date of this Agreement (which is $10.67 per share), and the option shall vest in three equal annual installments over the three-year period beginning on the first anniversary of the Effective Date; upon a "Change of Control" (as defined below), the option shall become immediately fully vested and exercisable in full. The Employee shall be additionally granted, as of the Effective Date, long-term incentive compensation as described on the attached Schedule A, with vesting based on the achievement of Company performance objectives. The objectives for each year of such long-term incentive compensation plan, and other terms and conditions of the long-term incentive compensation plan, shall be


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established by the Board of Directors or a committee thereof. Further, Employee will be provided with an annual bonus opportunity representing 50% of Employee's annual salary as set forth in Paragraph 4.a above, (initially, $100,000.00) (hereafter the "Executive Bonus Plan"), the actual amount to be paid depending upon the degree of achievement of various objectives. The objectives for each year and other terms and conditions of the Executive Bonus Plan 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, or portion thereof, established in advance.


c. Insurance: During his employment hereunder, Employee shall be entitled to participate in such health, life, disability and other insurance programs, if any, that the Company may offer to other key executive employees of the Company from time to time.


d. Other Benefits: During his employment hereunder, Employee shall be entitled to such other benefits, if any, that the Company may offer to other key executive employees of the Company from time to time.


e. Vacation: Employee shall be entitled to four weeks vacation leave (in addition to holidays) in each calendar year during the Term, or such additional amount as may be set forth in the vacation policy that the Company shall establish from time to time.


f. Expense Reimbursement: Employee shall, upon submission of appropriate supporting documentation, be entitled to reimbursement of reasonable out-of-pocket expenses incurred in the performance of his duties hereunder in accordance with policies established by the Company. Such expenses shall include, without limitation, reasonable entertainment expenses, gasoline and toll expenses and cellular phone use charges, if such charges are directly related to the business of the Company.


5. GROUNDS FOR TERMINATION. The Board of Directors of the Company may terminate this Agreement for Cause. As used herein, "Cause" shall mean any of the following: (a) the Employee has committed a willful serious act against the Company intended to enrich himself at the expense of the Company, such as embezzlement, or has been convicted of a felony involving moral turpitude; or (b) 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, 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, Employee shall be given written notice by the Board of Directors that the Company intends to terminate his employment for Cause under this


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Section 5, which written notice shall specify the particular acts or omissions on the basis of which the Company intends to so terminate Employee's employment, and 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 be given reasonable time to remedy the situation. In the event of such termination, the Employee shall be promptly furnished written specification of the basis therefor in reasonable detail.


6. TERMINATION BY EMPLOYEE. Employee may terminate this Agreement at any time with Good Reason. "Good Reason" shall exist if:


a. the Company demotes or otherwise elects or appoints the Employee to lesser offices than set forth in Section 3, or fails to elect or appoint him to such positions;


b. the Company causes a material change in the nature or scope of the authorities, powers, functions, duties or responsibilities attached to the Employee's positions as described in Section 3;


c. at any time the Employee is required, without his written consent, to relocate his office more than seventy-five miles from the location of the Company's current corporate headquarters;


d. the Company decreases the Employee's compensation below the levels provided for by the terms of Section 4 (taking into account increases made from time to time in accordance with Section 4);


e. the Company 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 or participation;


f. the Company commits any other material breach of the provisions of this Agreement (except those set forth in Paragraph 4.a.) and Employee provides at least 15 days' prior written notice to at least two members of the Company's Board of Directors of the existence of such breach and his intention to terminate this Agreement (no such termination shall be effective if such breach is cured during such period);


g. the Company fails to comply with the provisions of Paragraph 4.a. for an uninterrupted 10 day period; or


h. the Closing fails to occur on or before September 30, 1996; provided, however, that if the Closing has not occurred by September 30, 1996 but an officer of the Company delivers a notice to Employee stating that there are no unresolved material issues between the Company and Concurrent


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Computer Corporation and that the Closing is expected to occur no later than November 15, 1996, then Good Reason shall not exist unless the Closing shall not have occurred by such date.


7. PAYMENT AND OTHER PROVISIONS UPON TERMINATION.


a. In the event Employee's employment with the Company (including its subsidiaries) is terminated by the Company for Cause as provided in Paragraph 5 then, on or before Employee's last day of employment with the Company, the provisions of this Paragraph 7.a shall apply. These same provisions shall apply if the Employee terminates his employment other than for Good Reason in accordance with the provisions of Paragraph 6 hereof.


i. Compensation: The Company shall pay in a lump sum to Employee such amount of compensation due Employee for services rendered to the Company, as well as compensation for unused vacation time, as has accrued but remains unpaid. Any and all other rights to compensation of any kind granted to Employee under this Agreement shall terminate as of the date of termination, except as may be otherwise required by statute.


ii. Noncompetition/Nonsolicitation Period: The provisions of Paragraphs 13 and 14 shall continue to apply with respect to Employee for a period of one year following the date of termination.


b. In the event Employee's employment with the Company (including its subsidiaries) is terminated by the Company for any reason other than for Cause as provided in Paragraph 5 and other than as a consequence of Employee's death, disability, or normal retirement under the Company's retirement plans and practices, then the following provisions apply. These same provisions shall apply if Employee terminates his employment with Good Reason in accordance with the provisions of Paragraph 6 hereof.


i. Salary and Bonus Payments: On or before Employee's last day of employment with the Company, the Company shall promptly pay in a lump sum to Employee as compensation for services rendered to the Company a cash amount equal to twice the amount of Employee's annual base salary and twice the target bonus ...