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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
- --- Exchange Act of 1934
For the quarterly period ended: September 30, 1995
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___ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period from __________ to __________
Commission File Number 1-5677
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Wang Laboratories, Inc.
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(Exact Name of Registration as Specified in its Charter)
Delaware 04-2192707
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(State or Other Jurisdiction (I.R.S. Employer
of Organization or Incorporation) Identification Number)
600 Technology Park Drive 01821-4130
Billerica, Massachusetts ----------
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(Address of Principal Executive Offices) (Zip Code)
(508) 967-5000
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(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO ___
---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date (September 30,
1995).
Common Stock, par value $.01 per share 34,036,851
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PART II.
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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(a) The following exhibits are included herein:
Exhibit No. Description
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10.31 Form of Contingent Severance Compensation Agreements
with Stephen G. Jerritts and Ronald E. Cuneo.
10.32 Form of Amendment to Contingent Severance Compensation
Agreements with Joseph M. Tucci, Donald P. Casey, Albert
A. Notini, William P. Ferry, David I. Goulden, James J.
Hogan, Stephen G. Jerritts and Franklyn A. Caine, each
an executive officer of the Company.
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SIGNATURES
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 thereunto duly authorized.
WANG LABORATORIES, INC.
/s/ Franklyn A. Caine
Date: February 1, 1996 ____________________________
Franklyn A. Caine,
Executive Vice President and
Chief Financial Officer
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Exhibit 10.31
AGREEMENT
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THIS AGREEMENT dated as of [ ], is made by and between Wang
Laboratories, Inc., a Delaware corporation (the "Company"), and
_______________________________________ (the "Executive").
WHEREAS the Company considers it essential to the best interests of
its shareholders to foster the continuous employment of key management
personnel; and
WHEREAS the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly-held corporations, the possibility of a
Change in Control (as defined in the last Section hereof) exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its shareholders; and
WHEREAS the Board has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication of members of
the Company's management, including the Executive, to their assigned duties
without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. DEFINED TERMS. The definition of capitalized terms used in this
Agreement is provided in the last Section hereof.
2. TERMS OF AGREEMENT. This Agreement shall commence as of _________
____ and shall continue in effect while the Executive is employed by the
Company for a period of three years, provided, however, that commencing on the
third anniversary of the commencement of the term of this Agreement and on each
anniversary thereafter, the term of this Agreement shall automatically be
extended for one additional year unless, not later than ninety days prior to
any such anniversary date either party shall have given notice that it does not
wish to extend this Agreement (provided that no such notice may be given by
the Company during the pendency of or within one year following a Potential
Change in Control); provided, further, if a Change in Control shall have
occurred during the original or extended term of this Agreement, this
Agreement shall continue in effect for a period of thirty-six months beyond the
month in which such Change in Control occurred. It is
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intended, and the parties hereto agree, that (i) the benefit, if any,
payable to the Executive under any other severance or termination pay
plan, arrangement or agreement of or with the Company shall be reduced
by the amount of any payment actually provided under Section 6.1 hereof
and (ii) any option to acquire shares of the Company's common stock
awarded to the Executive under any stock option or other long-term
incentive plan of the Company shall become fully exercisable upon the
occurrence of a Change in Control during the term of this Agreement,
provided that nothing herein shall otherwise affect or modify the terms
of any such option or the Executive's rights or obligations with respect
thereto.
3. COMPANY'S COVENANTS SUMMARIZED. In order to induce the
Executive to become employed by or remain in the employ of the Company
as the case may be, and in consideration of the Executive's covenant set
forth in Section 4 hereof, the Company agrees, under the conditions
described herein, to pay the Executive the "Severance Payment"
described herein in the event the Executive's employment with the
Company is terminated under the circumstances described below following
a Change in Control and during the term of this Agreement. No amount or
benefit shall be payable under this Agreement unless there shall have
been (or under the terms hereof, there shall be deemed to have been) a
termination of the Executive's employment with the Company following a
Change in Control.
4. THE EXECUTIVE'S COVENANTS. The Executive agrees that,
subject to the terms and conditions of this Agreement, in the event of a
Potential Change in Control during the term of this Agreement, the
Executive will remain in the employ of the Company until the earliest of
(i) a date which is six (6) months from the date of such Potential
Change in Control, (ii) the date of a Change in Control, (iii) the date
of termination by the Executive of the Executive's employment for Good
Reason (determined by treating the Potential Change in Control as a
Change in Control in applying the definition of Good Reason), or by
reason of Death, Disability or Retirement, or (iv) the termination by
the Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payment.
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5.1 Following a Change in Control during the term of this
Agreement, during any period that the Executive fails to perform the
Executive's full-time duties with the Company as a result of incapacity
due to physical or mental illness, the Company shall continue to pay
the Executive's full salary to the Executive at the rate in effect at
the commencement of any such period, together with all compensation and
benefits payable to the Executive under the terms of any compensation or
benefit plan, program or arrangement maintained by the Company during
such period, until the Executive's employment is terminated by the
Company for Disability.
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5.2 If the Executive's employment shall be terminated for any
reason following a Change in Control and during the term of this
Agreement, the Company shall pay the Executive's full salary to the
Executive through the Date of Termination at the rate in effect at the
time the Notice of Termination is given, together with all compensation
and benefits payable to the Executive through the Date of Termination
under the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such period.
5.3 If the Executive's employment shall be terminated for any
reason following a Change in Control and during the term of this
Agreement, the Company shall, except as provided in Section 2 above, pay
the Executive's normal post-termination compensation and benefits to the
Executive as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in
accordance with, the Company's retirement, insurance and other
compensation or benefit plans, programs, agreements or arrangements.
6. Severance Payment.
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6.1 Subject to Section 6.2 hereof, the Company shall pay the
Executive the payment described in this Section 6.1 (the "Severance
Payment") upon the termination of the Executive's employment following
a Change in Control during the term of this Agreement, in addition to
the payments and benefits described in Section 5 hereof, unless such
termination is (i) by the Company for Cause, (ii) by reason of the
Executive's Death or Disability or (iii) by the Executive without Good
Reason. Moreover, the Executive's employment shall be deemed to have
been terminated following a Change in Control by the Company without
Cause or by the Executive with Good Reason if the Executive's employment
is terminated without Cause prior to a Change in Control at the
direction of a Person who has entered into an agreement with the Company
the consummation of which will constitute a Change in Control or if the
Executive terminates his employment with Good Reason prior to a Change
in Control (determined by treating a Potential Change in Control as a
Change in Control in applying the definition in Good Reason) if the
circumstance or event which constitutes Good Reason occurs at the
direction of such Person. In lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu
of any severance benefit otherwise payable to the Executive, the Company
shall pay to the Executive a lump sum severance payment, in cash, equal
to 2.99 times the average of the Executive's base salary and annual
bonus received in (i) each of the 2 calendar years preceding the
calendar year in which occurs the Date of Termination or, (ii) in the
event the Executive has been employed by the Company for less than 2
full calendar years, such lesser number of calendar years during any
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part of which the Executive has been so employed, with his base salary
taken into account at its full annual rate for any partial year or
years.
6.2 Notwithstanding any other provisions of this Agreement,
in the event that any payment or benefit received or to be received by
the Executive in connection with a Change in Control or the termination
of the Executive's employment, whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company,
any Person whose actions result in a Change in Control or any Person
affiliated with the Company or such Person (all such payments and
benefits, including the Severance Payments, being hereinafter called
"Total Payments"), would be subject (in whole or part), to the excise
tax imposed under section 4999 of the Code (the "Excise Tax"), then the
Severance Payments shall be reduced to the extent necessary so that no
portion of the Total Payments is subject to the Excise Tax (after taking
into account any reduction in the Total Payments provided by reason of
section 280G of the Code in such other plan, arrangement or agreement)
if (A) the net amount of such Total Payments, as so reduced, (and after
deduction of the net amount of federal, state and local income tax on
such reduced Total Payments) is greater than (B) the excess of (i) the
net amount of such Total Payments, without reduction (but after
deduction of the net amount of federal, state and local income tax on
such Total Payments), over (ii) the amount of Excise Tax to which the
Executive would be subject in respect of such Total Payments. For
purposes of determining whether and the extent to which the Total
Payments will be subject to the Excise Tax, (i) no portion of the Total
Payments the receipt or enjoyment of which the Executive shall have
effectively waived in writing prior to the Date of Termination shall be
taken into account, (ii) no portion of the Total Payments shall be taken
into account which in the opinion of tax counsel selected by the Company
does not constitute a "parachute payment" within the meaning of section
280G(b)(2) of the Code, (including by reason of section 280G(b)(4)(A) of
the Code) and, in calculating the Excise Tax, no portion of such Total
Payments shall be taken into account which constitutes reasonable
compensation for services actually rendered, within the meaning of
section 280G(b)(4)(B) of the Code, in excess of the Base Amount
allocable to such reasonable compensation, and (iii) the value of any
non-cash benefit or any deferred payment or benefit included in the
Total Payments shall be determined by the Company in accordance with the
principles of sections 280G(d)(3) and (4) of the Code. Prior to the
payment date set forth in Section 6.3 hereof, the Company shall provide
the Executive with its calculation of the amounts referred to in this
Section and such supporting materials as are reasonably necessary for
the Executive to evaluate the Company's calculations.
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6.3 The payment provided for in Section 6.1 hereof shall be
made not later than the fifth day following the Date of Termination,
provided, however, that if the amount of such payment, and the
limitation on such payment set forth in Section 6.2 hereof, cannot be
finally determined on or before such day, the Company shall pay to the
Executive on such day an estimate, as determined in good faith by the
Company, of the minimum amount of such payment to which the Executive is
clearly entitled and shall pay the remainder of such payment (together
with interest at the rate provided in section 1274(b)(2)(B) of the Code)
as soon as the amount thereof can be determined but in no event later
than the thirtieth (30th) day after the Date of Termination. In the
event that the amount of the estimated payment exceeds the amount
subsequently determined to have been due, such excess shall constitute a
loan by the Company to the Executive, payable on the fifth (5th)
business day after demand by the Company (together with interest at the
rate provided in section 1274(b)(2)(B) of the Code). At the time that
payments are made under this Section, the Company shall provide the
Executive with a written statement setting forth the manner in which
such payments were calculated and the basis for such calculations
including, without limitation, any opinions or other advice the Company
has received from outside counsel, auditors or consultants (and any such
opinions or advice which are in writing shall be attached to the
statement).
6.4 The Company also shall pay to the Executive all legal
fees and expenses incurred by the Executive as a result of or in
connection with a termination of employment following a Change in
Control and during the term of this Agreement (including all such fees
and expenses, if any, incurred in good faith in disputing any such
termination or in seeking in good faith to obtain or enforce any benefit
or right provided by this Agreement or in connection with any tax audit
or proceeding to the extent attributable to the application of section
4999 of the Code to any payment or benefit provided hereunder). Such
payments shall be made within five (5) business days after delivery of
the Executive's written requests for payment accompanied with such
evidence of fees and expenses incurred as the Company reasonably may
require.
7. Termination Procedures and Compensation During Dispute.
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7.1 NOTICE OF TERMINATION. After a Change in Control and
during the term of this Agreement, any purported termination of the
Executive's employment (other than by reason of death) shall be
communicated by written Notice of Termination from one party hereto to
other party hereto in accordance with Section 10 hereof. For purposes
of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so
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indicated. Further, a Notice of Termination for Cause is required to include
a copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a meeting
of the Board which was called and held for the purpose of considering
such termination (after reasonable notice to the Executive and an
opportunity for the Executive, together with his counsel, to be heard
before the Board) finding that, in the good faith opinion of the Board,
the Executive was guilty of conduct set forth in the definition of Cause
herein, and specifying the particulars thereof in detail.
7.2 DATE OF TERMINATION. "Date of Termination", with
respect to any termination of the Executive's employment after a Change
in Control and during the term of this Agreement, shall mean (i) if the
Executive's employment is terminated for Disability, thirty (30) days
after Notice of Termination is given (provided that the Executive shall
not have returned to the full-time performance of the Executive's
duties during such thirty (30) day period), and (ii) if the Executive's
employment is terminated for any other reason, the date specified in the
Notice of Termination (which, in the case of a termination by the
Company, shall not be less than thirty (30) days (except in the case of
a termination for Cause) and, in the case of a termination by the
Executive, shall not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of Termination is
given).
7.3 DISPUTE CONCERNING TERMINATION. Notwithstanding any
provision of Section 7.2 hereof to the contrary, if within fifteen (15)
days after any Notice of Termination is received, or, if later, prior to
the Date of Termination (as determined without regard to this Section
7.3), the party receiving such Notice of Termination notifies the other
party in writing that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is finally
resolved, either by mutual written agreement of the parties or by a
final judgment, order or decree of a court of competent jurisdiction
(which is not appealable or with respect to which the time for appeal
therefrom has expired and no appeal has been perfected); provided that
the Date of Termination shall be extended by a notice of dispute only if
such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence. For
the purposes of the preceding sentence, a dispute concerning termination
tion shall be deemed finally resolved if neither party commences an
action in any court within thirty (30) days of an arbitration award
concerning such dispute seeking the modification of or other relief from
such award.
7.4 COMPENSATION DURING DISPUTE. If a purported termination
occurs following a Change in Control and during the term of this
Agreement, and such termination is disputed in accordance with Section
7.3 hereof, the Company shall continue to pay the Executive the full
compensation in effect when the notice giving
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rise to the dispute was given (including, but not limited to, salary) and
continue the Executive as a participant in all compensation, benefit and
insurance plans in which the Executive was participating when the notice giving
rise to the dispute was given, until the dispute is finally resolved in
accordance with Section 7.3 hereof. Amounts paid under this Section 7.4 are in
addition to all other amounts due under this Agreement (other than those due
under Section 5.2 hereof) and shall not be offset against or reduce any other
amounts due under this Agreement.
8. NO MITIGATION. The Company agrees that, if the Executive's
employment by the Company is terminated during the term of this Agreement,
the Executive is not required to seek other employment or to attempt in any
way to reduce any amounts payable to the Executive by the Company pursuant to
this Agreement. Further, the amount of any payment or benefit provided for in
this Agreement shall not be reduced by any compensation earned by the Executive
as the result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Executive to the Company,
or otherwise.
9. SUCCESSORS.
9.1 In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle the Executive to compensation from the
Company in the same amount and on the same terms as the Executive would be
entitled to hereunder if the Executive were to terminate the Executive's
employment for Good Reason after a Change in Control, except that, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
10. NOTICES. For the purpose of this Agreement, notices and
all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered or
mailed by United Stated registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth below,
or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notice of change of
address shall be effective only upon actual receipt:
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To the Company:
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Wang Laboratories, Inc.
One Industrial Avenue
Lowell, Massachusetts 01851
Attention: Chief Executive Officer
Copy to: General Counsel
To the Executive:
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11. MISCELLANEOUS. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and such
officer as may be specifically designated by the Board. No waiver by
either party hereto at any time of any breach by the other party hereto
of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or any prior or
subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the Commonwealth of
Massachusetts. Any payments provided for hereunder shall be paid net of
any applicable withholding required under federal, state or local law
and any additional withholding to which the Executive has agreed. The
obligations of the Company and the Executive under Sections 5, 6 and 7
shall survive the expiration of the term of this Agreement.
12. VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
13. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
14. ARBITRATION. Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by
arbitration conducted before a panel of three arbitrators in Boston,
Massachusetts in accordance with the commercial rules of the American
Arbitration Association ("AAA") then in effect. Unless the panel of
arbitrators shall have been selected by agreement of the parties within
thirty (30) days of the initiation of arbitration proceedings, each
party shall be entitled to select one arbitrator within ten (10)
business days of the lapse of such thirty (30) day period and the third
arbitrator shall be
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selected by agreement of the two arbitrators so selected within seven (7)
business days after the selection of the two arbitrators. In the event that
either party does not timely designate an arbitrator or that the two
arbitrators do not timely select a third arbitrator in accordance with
the preceding sentence, then upon application of either party to the
Boston office of the AAA, the AAA shall designate such arbitrator.
Judgment may be entered on the arbitrators' award in any court having
jurisdiction, provided, however, that the Executive shall be entitled to
seek specific performance of his right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising
under or in connection with this Agreement.
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. The Executive
shall keep secret and confidential and shall not disclose to any third
party in any fashion or for any purpose whatsoever, any information
regarding this Agreement, or any other information regarding the Company
which is (i) not available to the general public, and/or (ii) not
generally known outside the Company, to which he has or will have had
access at any time during the course of his employment by the Company,
including, without limitation, any information relating to: the
Company's business or operations; its plans, strategies, prospects or
objectives; its products, technology, processes or specifications; its
research and development operations or plans; its customers and customer
lists; its manufacturing, distribution, sales, service, support and
marketing practices and operations; its financial condition and results
of operations; its operational strengths and weaknesses; and, its
personnel and compensation policies and procedures. Notwithstanding
the foregoing provisions of this Section 15, the Executive may discuss
this Agreement with the members of his immediate family and with his
personal legal and tax advisors, provided that, prior to disclosing any
term or condition of this Agreement to any person, the Executive shall
obtain from such person for the benefit of the Company his or her
agreement to observe the foregoing provisions.
16. DEFINITIONS. For purposes of this Agreement, the following shall
have the meanings indicated below:
(A) "Base Amount" shall have the meaning defined in section 280G(b)(3)
of the Code.
(B) "Beneficial Owner" and "Beneficial Ownership" shall have the
meaning defined in, and shall be determined pursuant to, Rule 13d-3 under the
Securities Exchange Act of 1934, as amended.
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(C) "Board" shall mean the Board of Directors of the Company.
(D) "Cause" for termination by the Company of the Executive's
employment, after any Change in Control, shall mean the willful and continued
failure by the Executive to substantially perform the Executive's duties with
the Company, a substantial, and not de minimis, violation of the Company's
Standards of Ethics and Business Conduct or its Rules of Employee Conduct (and
any successor documents, however titled), as the same are in effect from time
to time, the Executive's conviction of a felony or engaging in conduct that
constitutes a violation of Section 15 hereof.
(E) A "Change in Control" shall be deemed to have occurred if any one
of the conditions set forth in any one of the following paragraphs shall have
been satisfied:
(i) any Person (other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company) is
or becomes the Beneficial Owner, directly or indirectly, of securities
of the Company (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its
affiliates) representing 20% or more of the combined voting power of
the Company's then outstanding securities; or
(ii) during any period of twenty-four consecutive months (not
including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board
and any new director (other than a director designated by a Person
who has entered into an agreement with the Company to effect a
transaction constituting a Change in Control as described in clause
(I), (III) or (IV) of this paragraph) whose election by the Board or
nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
(i) a merger or consolidations which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity), in
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combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, at
least 75% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after
such merger or consolidation, or (ii) a merger or consolidation
effected to implement a recapitalization of the Company (or similar
transaction) in which no Person acquires more than 20% of the combined
voting power of the Company's then outstanding securities; or
(iv) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's
assets or the Company is dissolved and its assets distributed in a
judicial proceeding.
(F) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time. All references to the Code shall be deemed also to refer
to any successor provisions to such sections.
(G) "Company" shall mean Wang Laboratories, Inc., and any successor to
its business and/or assets which assumes and agrees to perform this Agreement
by operation of law, or otherwise (except in determining, under Section 16(E)
hereof, whether or not any Change in Control of the Company has occurred in
connection with such succession).
(H) "Date of Termination" shall have the meaning stated in Sections
7.2 and 7.3 hereof.
(I) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the
Company for a period of six (6) consecutive months, the Company shall have
given the Executive a Notice of Termination for Disability, and, within thirty
(30) days after such Notice of Termination is given, the Executive shall not
have returned to the full-time performance of the Executive's duties.
(J) "Executive" shall mean the individual named in the first paragraph
of this Agreement.
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(K) "Good Reason" for termination by the Executive of the Executive's
employment shall mean the occurrence (without the Executive's express written
consent) of any one of the following acts by the Company, or failures by the
Company to act, unless, in the case of any act or failure to act described in
paragraph (i), (v), (vi), (vii), or (viii) below, such act or failure to act is
corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(i) the assignment to the Executive of any duties inconsistent
with the Executive's status as a senior officer of the Company or a
substantial adverse alteration in the nature or status of the
Executive's position or responsibilities from those in effect
immediately prior to the Change in Control;
(ii) a reduction by the Company in the Executive's annual base
salary as in effect on the date hereof or as the same may be increased
from time to time except for across-the-board salary reductions
similarly affecting all senior executives of the Company and all
senior executives of any Person in control of the Company;
(iv) the failure by the Company to pay to the Executive any
portion of the Executive's current compensation except pursuant to an
across-the-board compensation deferral similarly affecting all senior
executives of the Company and all senior executives of any Person in
control of the Company, or to pay to the Executive any portion of an
installment of deferred compensation under any deferred compensation
program of the Company, within fourteen (14) days of the date such
compensation is due;
(v) the failure by the Company to continue in effect any
compensation plan in which the Executive participates immediately
prior to the Change in Control which is material to the Executive's
total compensation, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to
such plan, or the failure by the Company to continue the Executive's
participation therein (or in a substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amount of
benefits provided and the level of the Executive's participation
relative to other participants, as existed at the time of the Change
in Control;
(vi) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed by
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the Executive under any of the Company's pension, life insurance,
medical, health and accident, or disability plans in which the
Executive was participating at the time of the Change in Control, the
taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive the Executive of
any material fringe benefit enjoyed by the Executive at the time of
the Change in Control, or the failure by the Company to provide the
Executive with the number of paid vacation days to which the Executive
is entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect at the
time of the Change in Control;
(vii) any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 7.1; for purposes of this Agreement, no
such purported termination shall be effective; or
(viii) the failure by the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this
Agreement, as contemplated in Section 9 hereof.
The Executive's right to terminate the Executive's employment for Good
Reason shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(L) "Notice of Termination" shall have the meaning stated in Section
7.1 hereof.
(M) "Person" shall have the meaning defined in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended.
(N) "Potential Change in Control" shall be deemed to have occurred if
any one of the conditions set forth in any one of the following paragraphs
shall have been satisfied:
(i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
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(ii) the Company or any other Person publicly announces an
intention to take or to consider taking actions which, if consummated,
would constitute a Change in Control;
(iii) any Person (other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company) who
is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or more of the combined
voting power of the Company's then outstanding securities, increases
such Person's Beneficial Ownership of such securities by 5% or more
over the percentage so owned by such Person on the date hereof; or
(iv) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has
occurred.
(O) "Retirement" shall mean retirement after attaining "normal
retirement age" under any pension or retirement plan maintained by the Company
in which the Executive participates.
(P) "Severance Payment" shall mean the payment described in Section
6.1 hereof.
(Q) "Total Payment" shall mean those payments described in Section 6.2
hereof.
WANG LABORATORIES, INC.
By:
-------------------------
Joseph M. Tucci
Chairman of the Board and
Chief Executive Officer
AGREED:
- -------------------------
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EXHIBIT 10.32
FIRST AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT
Reference is made to that certain Agreement dated _____________, (the
"Agreement"), between the undersigned, ________________________, as "Executive"
and Wang Laboratories, Inc. as the "Company".
Based on good and valid consideration, the receipt and sufficiency of
which is hereby acknowledged, and with the intent to be bound hereby, the
parties agree as follows:
(1) Paragraph 6.2 of the Agreement is hereby amended and restated in full
as follows:
6.2.(a) In the event that the Executive's Total Payments (not
including the Gross-Up Payment), as hereinafter defined, are subject in
whole or in part to the excise tax imposed under Section 4999 of the
Code (the "Excise Tax"), then the Company shall pay to the Executive an
additional amount (the "Gross-Up Payment") such that the net amount
retained by the Executive after payment of any Excise Tax on the Total
Payments and any federal, state and local income taxes on the Gross-Up
Payment equals the Total Payments, (not including the Gross-Up
Payment). Exhibit 6.2 attached hereto is an example of the calculation
of a Gross-Up Payment.
(b) For purposes of determining whether and the extent to which the
Total Payments will be subject to the Excise Tax, (i) no portion of the
Total Payments the receipt or enjoyment of which the Executive shall
have effectively waived in writing prior to the Date of Termination
shall be taken into account, (ii) no portion of the Total Payments
shall be taken into account which in the opinion of tax counsel
selected by the Company does not constitute a "parachute payment"
within the meaning of Section 280G(b)(2) of the Code, (including by
reason of Section 280G(b)(4)(A) of the Code) and, in calculating the
Excise Tax, no portion of such Total Payments shall be taken into
account which constitutes reasonable compensation for services actually
rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in
excess of the Base Amount allocable to such reasonable compensation,
and (iii) the value of any non-cash benefit or any deferred payment or
benefit included in the Total Payments shall be determined by the
Company in accordance with the principles of Sections 280G(d)(3) and
(4) of the Code.
(c) For purposes of determining the amount of the Gross-Up Payment,
the Executive shall be deemed to pay federal income taxes at the highest
marginal rate of
<PAGE> 2
federal income taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the
Executive's residence on the Date of Termination, net of the maximum
reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.
(d) For purposes of this Agreement, "Total Payments" means any payment
or benefit received or to be received by the Executive in connection
with a Change in Control or the termination of the Executive's
employment, whether pursuant to the terms of this Agreement or any other
plan, arrangement, or agreement with (i) the Company, (ii) any Person
whose actions result in a Change in Control, or (iii) any Person
affiliated with the Company or the Person whose actions resulted in a
Change in Control. Total Payments includes, but is not limited to
Severance Payments and Gross-Up Payments.
(2) Paragraph 6.3 of the Agreement is hereby amended and restated in full
as follows:
6.3 (a) The Severance Payment and the Gross-Up Payment, if any, shall
be made not later than the fifth day following the Date of Termination,
provided, however, that if the amount of such payments cannot be
finally determined on or before such day, the Company shall pay to the
Executive on such day an estimate, as determined in good faith by the
Company, of the minimum amount of such payments to which the Executive
is clearly entitled. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account in originally
computing the Gross-Up Payment, the Executive shall repay to the
Company at the time that the amount of such reduction in Excise Tax is
finally determined the portion of the Gross-Up Payment attributable to
such reduction (plus the portion of the Gross-Up Payment attributable
to the Excise Tax imposed on the Gross-Up Payment being repaid by the
Executive if such repayment results in a reduction in Excise Tax) plus
interest on the amount of such repayment at the rate provided in
Section 7872(f)(2) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account in originally
computing the Gross-Up Payment (including any increase as the result of
any payment which cannot be determined, or did not exist, at the time
of the original computation), the Company shall recalculate the
Gross-Up Payment and pay the additional amount to the Executive (plus
any interest payable by the Executive on such additional Excise Tax or
on any additional federal, state and local income taxes) at
<PAGE> 3
the time that such additional amount is finally determined.
(b) Prior to the payment date set forth in this Section 6.3, the
Company shall provide the Executive with the Company's calculation of
the Total Payments and the Gross-Up Payments, if any, and such
supporting materials as are reasonably necessary for the Executive to
evaluate the Company's calculations, including, without limitation, any
opinions or other advice the Company has received from outside counsel,
auditors or consultants (and any such opinions or advice which are in
writing shall be attached to the statement).
The parties hereby ratify the Agreement as amended and restated hereby
without further changes. This First Amendment to the Agreement is executed as
a document under seal this _______ day of _______, 1995.
WANG LABORATORIES, INC.
By: ____________________________
____________________________
[Executive]
