<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ---- to ----
Commission file number 1-5677
WANG LABORATORIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 04-2192707
------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
290 Concord Road
Billerica, Massachusetts 01821-4130
- - ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(978) 625-5000
----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 l934 during
the preceding twelve months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X No
---
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practical date (September 30, 1998):
Common stock, par value $0.01 per share 46,192,607 shares
<PAGE> 2
WANG LABORATORIES, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
<S> <C>
Part I. FINANCIAL INFORMATION PAGE NO.
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets -
September 30, 1998 and June 30, 1998 3
Consolidated Statements of Operations -
Three months ended September 30, 1998 and 1997 4
Consolidated Statements of Cash Flows -
Three months ended September 30, 1998 and 1997 5
Notes to Consolidated Financial Statements -
September 30, 1998 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 25
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 26
SIGNATURE 31
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
WANG LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
September 30, June 30,
1998 1998
------------- --------
(Dollars in millions)
<S> <C> <C>
ASSETS
Current assets
Cash and equivalents $ 178.1 $ 225.0
Accounts receivable, net of allowance for
doubtful accounts of $22.9 million and
$20.9 million, respectively 847.5 838.7
Inventories 173.7 168.3
Other current assets 201.0 202.7
-------- --------
Total current assets 1,400.3 1,434.7
Depreciable assets, net of accumulated
depreciation of $159.5 million and
$155.7 million, respectively 234.5 214.1
Intangible assets, net of accumulated
amortization of $68.2 million and
$43.5 million, respectively 443.2 448.7
Other 80.4 91.7
-------- --------
Total assets $2,158.4 $2,189.2
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Borrowings due within one year $ 36.4 $ 26.3
Accounts payable 410.7 451.5
Accrued expenses 272.7 250.0
Deferred service revenue 178.0 164.6
Other current liabilities 381.9 503.0
-------- --------
Total current liabilities 1,279.7 1,395.4
-------- --------
Long-term liabilities
Debt 233.2 116.9
Other long-term liabilities 258.4 272.6
-------- --------
Total long-term liabilities 491.6 389.5
-------- --------
Commitments and contingencies
Minority interest 7.0 6.6
-------- --------
Series A preferred stock 86.4 86.2
-------- --------
Stockholders' equity
Series B preferred stock, $0.01 par value,
143,750 shares authorized and outstanding,
liquidation preference of $143.8 million 138.3 138.3
Common stock, $0.01 par value,
100,000,000 shares authorized; 46,192,607 and
46,150,302 shares outstanding, respectively 0.5 0.5
Capital in excess of par value 481.5 484.1
Cumulative translation adjustment (22.7) (19.1)
Accumulated deficit (303.9) (292.3)
-------- --------
Total stockholders' equity 293.7 311.5
-------- --------
Total liabilities and stockholders' equity $2,158.4 $2,189.2
======== ========
</TABLE>
See notes to the consolidated financial statements.
<PAGE> 4
WANG LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Unaudited)
Three Months Ended
September 30,
1998 1997
-------- --------
(Dollars in millions, except per share data)
<S> <C> <C>
REVENUES
Services $ 475.4 $ 244.5
Products 310.6 67.7
-------- --------
786.0 312.2
-------- --------
COSTS AND EXPENSES
Cost of services 377.6 193.1
Cost of products 251.7 52.9
Research and development 3.1 0.7
Selling, general and administrative 135.2 49.1
Amortization of acquisition-related intangibles 22.9 6.3
-------- --------
Total costs and expenses 790.5 302.1
-------- --------
OPERATING INCOME (LOSS) (4.5) 10.1
-------- --------
OTHER (INCOME) EXPENSE
Interest (income) expense, net 4.9 (0.9)
Other (income) expense, net (2.1) (6.8)
-------- --------
Total other (income) expense 2.8 (7.7)
-------- --------
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES
AND MINORITY INTERESTS (7.3) 17.8
Income taxes 3.6 6.4
-------- --------
INCOME (LOSS) FROM OPERATIONS BEFORE MINORITY INTERESTS (10.9) 11.4
Minority interests in earnings of subsidiaries (0.4) --
-------- --------
NET INCOME (LOSS) (11.3) 11.4
Dividends and accretion on preferred stock (3.5) (3.5)
-------- --------
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS $ (14.8) $ 7.9
======== ========
PER SHARE AMOUNTS
Primary $ (0.32) $ 0.21
======== ========
Diluted $ (0.32) $ 0.20
======== ========
SHARES USED TO COMPUTE PER SHARE AMOUNTS
(in millions)
Basic 46.2 38.1
Diluted 46.2 39.7
</TABLE>
See notes to the consolidated financial statements.
<PAGE> 5
WANG LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
Three Months Ended
September 30,
1998 1997
-------- --------
(Dollars in millions)
<S> <C> <C>
OPERATING ACTIVITIES
Income (loss) from continuing operations $ (11.3) $ 11.4
Depreciation 26.5 15.3
Amortization 23.8 7.0
Gain on asset sales -- (6.5)
Non-cash provision for income taxes 2.6 5.6
Payments for acquisition-related charges (30.4) (6.4)
Payments for restructuring charges -- (0.6)
------- -------
11.2 25.8
------- -------
CHANGES IN OTHER ACCOUNTS AFFECTING OPERATIONS
Accounts receivable 5.8 (10.1)
Inventories (23.9) (1.4)
Other current assets (24.9) (2.9)
Accounts payable and other current liabilities (42.2) (23.4)
Other (5.4) (1.1)
------- -------
Net changes in other accounts affecting operations (90.6) (38.9)
------- -------
Cash used in continuing operations (79.4) (13.1)
Cash used in discontinued operations (0.9) (3.8)
------- -------
Cash used in operations (80.3) (16.9)
------- -------
INVESTING ACTIVITIES
Depreciable assets (43.3) (15.3)
Proceeds from asset sales -- 9.9
Business acquisitions, net of cash acquired (27.7) (0.3)
Other (0.7) (4.2)
------- -------
Cash used in investing activities (71.7) (9.9)
------- -------
FINANCING ACTIVITIES
Net borrowings under line-of-credit agreement 108.6 --
Increase (decrease) in short-term borrowings -- (34.7)
Increase in long-term borrowings 1.6 --
Proceeds from stock plans 0.2 1.8
Dividends paid on preferred stock (3.3) (3.3)
------- -------
Cash provided by (used in) financing activities 107.1 (36.2)
------- -------
Effect of changes in foreign exchange rates on cash (2.0) (1.4)
------- -------
DECREASE IN CASH AND EQUIVALENTS (46.9) (64.4)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 225.0 242.2
------- -------
CASH AND EQUIVALENTS AT END OF PERIOD $ 178.1 $ 177.8
======= =======
</TABLE>
See notes to the consolidated financial statements.
<PAGE> 6
WANG LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1998
NOTE A - BASIS OF PRESENTATION
The balance sheet at June 30, 1998 has been derived from the audited financial
statements at that date but does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
The financial information included herein for the periods ended September 30,
1998 and 1997 has not been audited. However, in the opinion of management, all
material adjustments necessary for a fair presentation of the results for the
periods presented have been reflected and consist only of normal recurring
accruals.
The accompanying financial information should be read in conjunction with the
consolidated financial statements and notes thereto contained in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange Commission for
the fiscal year ended June 30, 1998.
The Company completed the purchase of Olivetti Solutions ("Olsy"), the
wholly-owned information technology ("IT") solutions and service subsidiary of
Olivetti S.p.A. ("Olivetti"), on March 17, 1998, except for Olivetti Corporation
of Japan ("OCJ"), Olsy's subsidiary in Japan, which was completed April 7, 1998.
Accordingly, the Company's Consolidated Statements of Operations and of Cash
Flows for the three months ended September 30, 1998, include the results of Olsy
and OCJ.
On August 31, 1998, the Company acquired The Parian Development Group, Inc.
("Parian") for $12.5 million in cash and accounted for the transaction as a
purchase in accordance with Accounting Principles Board Statement No. 16,
"Business Combinations". Parian is a leading Microsoft Solutions provider, with
annual revenues of approximately $8 million. The pro forma effects for the
statement of operations are not material.
Certain amounts in the prior year period have been reclassified to conform to
current presentations.
During 1997, the Financial Accounting Standards Board issued Statement No. 130,
"Reporting Comprehensive Income" ("FAS 130"). The Company will adopt the
provisions of FAS 130 for the six month period ended December 31, 1998.
Comprehensive income is generally defined as all changes in stockholders' equity
exclusive of transactions with owners such as capital investments and dividends.
Comprehensive income (loss) for the quarters ended September 30, 1998 and
September 30, 1997 was $(14.9) million and $10.0 million, respectively.
In June 1997, the Financial Accounting Standards Board issued Statement No. 131,
"Disclosures About Segments of an Enterprise and Related Information" ("FAS
131"). The Company will adopt the provisions of FAS 131 for the six month period
ended December 31, 1998. It is not anticipated that FAS 131 will have a
significant impact on segment information disclosures.
<PAGE> 7
WANG LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1998
NOTE A (CONTINUED)
In connection with the Company's filing of a Current Report on Form 8-K, dated
March 17, 1998, as amended June 1, 1998, and Annual Report on Form 10-K for the
year ended June 30, 1998, the Company is engaged in discussions with the staff
of the Securities and Exchange Commission ("SEC") regarding the purchase price
allocation related to the Company's acquisition of Olsy and other charges
recorded in the June 1998 quarter. The Company, in concurrence with its
auditors, Ernst & Young LLP, believes that the purchase price allocation and
related amortization charges, as well as the other charges recorded in the
September 1998 and prior quarters, are in accordance with generally accepted
accounting principles. However, it is possible these discussions could result in
changes to the non-cash charges recorded in the September 1998 and prior quarter
operating results. Such changes could also affect non-cash charges included in
future operating results.
NOTE B - BUSINESS ACQUISITION
OLSY ACQUISITION
The Company has recorded a total of $209.8 million of restructuring and
integration liabilities in connection with the purchase accounting in the Olsy
acquisition, of which $149.4 million is workforce-related, $26.2 million is for
facilities, and $34.2 million is for other. The Company has utilized $75.7
million of the liabilities established in connection with the Olsy acquisition,
and believes that remaining reserves are adequate to complete actions identified
in connection with the restructuring and integration plan.
In connection with the acquisition of Olsy, the following pro forma results of
operations have been prepared as though the acquisition had occurred as of the
beginning of the period presented (in millions except per share data):
<TABLE>
<CAPTION>
Three Months Ended
September 30, 1997
------------------
<S> <C>
Revenues $821.4
Loss from continuing operations $(39.3)
Loss attributable to common stockholders $(42.8)
Net loss per share applicable to common stockholders $(0.96)
</TABLE>
<PAGE> 8
WANG LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1998
NOTE C - EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Three months ended
September 30,
1998 1997
-------- --------
(In millions except per share data)
<S> <C> <C>
Numerator:
Net income (loss) $ (11.3) $ 11.4
Dividends and accretion on the Series A
Preferred Stock (1.2) (1.2)
Dividends on the Series B Preferred Stock (2.3) (2.3)
-------- --------
Numerator for basic and diluted earnings
per share - net income (loss) available
to common shareholders $ (14.8) $ 7.9
======== ========
Denominator:
Denominator for basic earnings per share -
Weighted average shares 46.2 38.1
-------- --------
Effect of dilutive securities:
Stock options -- 1.6
Stock warrants -- --
-------- --------
Dilutive potential common shares -- 1.6
-------- --------
Denominator for diluted earnings per share -
Adjusted weighted-average shares and
assumed conversions 46.2 39.7
======== ========
Basic earnings per share $ (0.32) $ 0.21
Diluted earnings per share $ (0.32) $ 0.20
</TABLE>
<PAGE> 9
WANG LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1998
NOTE D - CONTINGENCIES
The Company is a defendant in a number of lawsuits arising from the conduct of
its business. Although the Company is not in a position to predict accurately
the results of specific matters, the Company does not currently believe that its
liability, if any, for all current litigation will be material to the Company's
consolidated financial position or results of operations.
As part of its consideration for Olsy, the Company has the potential to pay an
additional amount (an "earnout") of up to $56.0 million payable in the year
2000, subject to meeting mutually-agreed performance targets for the calendar
years 1998 and 1999. The earnout will be recorded at the time it becomes
probable that a payment will be required and the amount can be reasonably
estimated.
NOTE E - SUBSEQUENT EVENTS
On November 3, 1998, the Company announced its board of directors had authorized
the use of up to $50 million for repurchase of its common stock or publicly
traded warrants via open market purchases. The Company is also authorized to
enter into hedging transactions designed to reduce the potential dilutive impact
of its Series A Convertible Preferred Stock, Series B Convertible Preferred
Stock and warrants.
<PAGE> 10
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This discussion includes certain forward-looking statements about matters such
as the Company's expected revenue, expenses, operating results and the need for
additional investment. Any such statements are subject to normal business risks
that could cause the actual results or needs to differ from those described
herein. For a further discussion of the various risks affecting the business,
refer to "Risks and Uncertainties" appearing at the end of this Management's
Discussion and Analysis of Financial Condition and Results of Operations.
BASIS OF PRESENTATION
In connection with the Company's filing of a Current Report on Form 8-K dated
March 17, 1998, as amended on June 1, 1998, and Annual Report on Form 10-K for
the year ended June 30, 1998, the Company is engaged in discussions with the
staff of the Securities and Exchange Commission ("SEC") regarding the purchase
price allocation related to the Company's acquisition of Olsy and other charges
recorded in the June 1998 quarter. The Company, in concurrence with its
auditors, Ernst & Young LLP, believes that the purchase price allocation and
related amortization charges, as well as the other charges recorded in the
September 1998 and prior quarters, are in accordance with generally accepted
accounting principles. However, it is possible these discussions could result in
changes to the non-cash charges recorded in the September and prior quarter
operating results. Such changes could also affect non-cash charges included in
future operating results.
In connection with the Company's acquisition of Olsy, the management of the
Company began doing business under the name Wang Global. The change of the name
of the Company is subject to shareholder approval. During the interim, the
Company's legal name will continue to be Wang Laboratories, Inc., although the
Company will conduct its business under the name Wang Global.
RESULTS OF CONTINUING OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1997
OVERVIEW
For the three months ended September 30, 1998, the Company reported revenues of
$786.0 million, a $473.8 million increase compared to revenues of $312.2 million
for the same prior year period, primarily attributable to the Olsy acquisition.
The Company reported an operating loss of $4.5 million for the three months
ended September 30, 1998, compared to operating income of $10.1 million for the
three months ended September 30, 1997.
<PAGE> 11
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - (Continued)
The decline in operating income is primarily attributable to increases in
amortization expense of intangible assets associated with the acquisition of
Olsy.
EBITDA (earnings before interest, income taxes, depreciation and amortization)
was $53.1 million and $39.2 million in the three month periods ended September
30, 1998 and 1997, respectively. EBITDA, which some investors believe to be a
meaningful measure for assessing a company's ability to meet its cash
requirements, is calculated by excluding from net income (loss):
acquisition-related, Chapter 11-related and restructuring costs and other
nonrecurring charges, including certain period costs related to the integration
of Wang and Olsy; income taxes; interest expense; interest income; and
depreciation and amortization. EBITDA in the immediately preceding quarter and
full fiscal year ended June 30, 1998 was $44.4 million and $159.5 million,
respectively. EBITDA previously reported for these periods was $47.2 million and
$162.3 million, respectively. The difference is a result of post-closing
adjustments to integration-related period costs and minority interests for both
the quarter and year ended June 30, 1998.
REVENUES
The Company's revenues are classified and defined as follows: (a) networked
technology services and solutions, comprised of services and products related
to the design, installation, operation and maintenance of global computing and
telecommunications networks; (b) traditional products and services, comprised of
VS, GCOS and Olsy proprietary products and services; and (c) standard products,
which are commodity products (primarily related to Olsy) sold without
accompanying services.
The Company expects traditional revenues associated with VS and GCOS products
and services to continue to decline at a rate approximating 30% per year on a
constant dollar basis, but that rate may accelerate as the Company's customers
make systems decisions regarding Year 2000 compliance. Additionally, from one
period to the next, the rate of decline could be highly variable.
Services revenues increased by 94.4%, to $475.4 million, compared to
$244.5 million in the same prior year period. The increase in networked
technology services revenues was $182.6 million, or 94.0%, to $376.8 million,
and was primarily attributable to the acquisition of Olsy. Traditional services
revenues increased by 96.0%, to $98.6 million. The anticipated decline in
traditional VS and GCOS services was more than offset by the addition of Olsy
traditional services revenues. The Company anticipates that the shift in revenue
mix and the decline in traditional revenues will continue.
Product revenues increased by $242.9 million, to $310.6 million. Networked
technology product revenues more than doubled to $123.3 million, compared to
$53.3 million in the same quarter of the prior year. Traditional product
revenues increased by $97.3 million, to $111.7 million, compared to
$14.4 million in the same prior year period. The increase in traditional product
revenues is primarily due to the acquisition of Olsy, offset by the anticipated
decline in VS and GCOS product revenues. Standard product revenues were
$75.6 million in the quarter ended September 30, 1998.
GROSS MARGIN
Services gross margin decreased to 20.6%, from 21.0% in the comparable prior
year period. Margins were negatively affected by the increase in lower-margin
maintenance revenues on multi-vendor services products, the decline in
higher-margin revenues from traditional maintenance contracts and Olsy's lower-
margin revenue mix. The services gross margin continues to be adversely affected
by
<PAGE> 12
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - (Continued)
consolidation in the industry, resulting in competitive and technological
pressures. Pressure will continue to be exerted on the Company's services gross
margin as a result of increased networked technology maintenance revenues, which
have historically lower margins than the Company's traditional VS and GCOS
business, coupled with the inclusion of certain lower-margin services from Olsy.
Although it is anticipated that these factors will continue to exert pressure on
services gross margin, the Company believes that the effect can be managed by
the continuing implementation of cost reduction, integration and consolidation
initiatives and by enriching its revenue mix by expanding in high end solutions
integration and network integration services.
Product gross margin was 19.0%, compared to 21.9% in the comparable prior year
period. This decrease is primarily the result of the decline in traditional VS
and GCOS product sales, which have historically higher margins than the margins
on resold client-server products, coupled with Olsy's lower margin standard
product revenues. The Company anticipates that the decline in traditional VS and
GCOS product revenues will continue to exert downward pressure on product gross
margin.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development costs increased by $2.4 million, from $0.7 million in
the comparable prior year period. The Company's current quarter research and
development spending is primarily related to Olsy's development of software
technology for the banking industry and, to a lesser extent, continuing support
for its traditional VS products and specialized client server products sold to
the U.S. government.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased by $86.1 million,
compared to the prior year period, and also increased as a percentage of
revenues, to 17.2% in the three months ended September 30, 1998, compared to
15.7% in the three months ended September 30, 1997. This increase is primarily
attributable to the inclusion of Olsy. The Company expects that ongoing
integration activities will contribute to the management of selling, general and
administrative costs in the future.
AMORTIZATION
Amortization of acquired intangible assets totaled $22.9 million in the three
months ended September 30, 1998, including $18.8 million for intangible assets
related to the Olsy acquisition. This compares to amortization of acquired
intangible assets of $6.3 million in the three months ended September 30, 1997.
INTEREST INCOME AND EXPENSE
Net interest expense of $4.9 million in the three months ended September 30,
1998 is comprised of $6.9 million of interest expense, including $5.0 million
related to the Company's Revolving Credit Facility with Bankers Trust Company
("BTC"), net of $2.0 million of interest income. This compares to net interest
income of $0.9 million in the same period of the prior year, which was comprised
of $2.6 million of interest income, primarily due to higher cash balances
resulting from the sale of the Company's software business unit to Eastman Kodak
Company in the third quarter of fiscal 1997, net of $1.7 million of interest
expense, principally the result of imputed interest recorded on the notes issued
to the selling stockholders of I-NET.
<PAGE> 13
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - (Continued)
OTHER INCOME AND EXPENSE
Net other income of $2.1 million was primarily comprised of foreign exchange
gains in the three months ended September 30, 1998. Net other income of $6.8
million in the prior year period primarily consisted of a $6.5 million gain
realized on the sale of certain land and facilities owned by the Company in
Billerica, Massachusetts.
INCOME TAXES
The provision for income taxes in the three months ended September 30, 1998 was
$3.6 million. This compares to a provision of $6.4 million for the three months
ended September 30, 1997. The provision in the current year period is
attributable to taxes on income of foreign subsidiaries which do not have
available net operating loss carryforwards. The provision included $2.6 million
and $5.6 million of non-cash tax expense for the three months ended
September 30, 1998 and 1997, respectively.
EMPLOYEES
At September 30, 1998, the Company had approximately 20,000 employees.
LIQUIDITY AND SOURCES OF CAPITAL
Cash and equivalents were $178.1 million, a decrease of $46.9 million during the
three months ended September 30, 1998.
Cash used in operations during the three months ended September 30, 1998 was
$80.3 million, including $79.4 million from current operating activities and
$0.9 million used for transaction costs associated with discontinued operations.
Cash used in investing activities during the three months ended September 30,
1998 is primarily comprised of $43.3 million for capital additions, including
$19.0 million for purchases of non-consumable spares and $5.7 for the completion
of the Company's new corporate headquarters located in Billerica, Massachusetts.
Cash provided by financing activities was $107.1 million during the three months
ended September 30, 1998, and was comprised of $108.6 million of net borrowings
under the Company's line-of-credit agreement, $1.6 million of net long-term
borrowings, cash dividends on preferred stock paid of $3.3 million, and proceeds
of $0.2 million proceeds from stock plans.
In connection with the acquisition, on March 13, 1998, the Company entered into
a multi-currency, revolving credit facility with Bankers Trust Company ("BTC")
and certain other financial institutions. The five-year facility provides
borrowings up to $500.0 million, including up to $200.0 million for letters of
credit. At September 30, 1998, $228.7 million of the line was in use.
In addition to normal operating activities, capital expenditures and payment of
preferred dividends, the Company estimates that total expenditures of as much as
$380 million will be required in connection with the integration of Olsy and
rightsizing of the combined company over the next two years. The Company has
recorded a total of $298.1 million for these activities, of which $88.3 million
was recorded as a charge to operations and $209.8 million was recorded as part
of purchase accounting for the acquisition of Olsy, as of September 30, 1998.
The $298.1 million includes approximately $164 million related to organizational
redundancies, $45 million related to facilities and $89 million related to
systems and other costs. A total of approximately $161
<PAGE> 14
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - (Continued)
million remains to be expended. The Company currently estimates that such
expenditures will approximate $70 million in the remainder of calendar year 1998
and $85 million and $6 million in calendar years 1999 and 2000, respectively.
The Company estimates that the $380 million will be recovered through cost
savings through calendar year 2000.
On November 3, 1998, the Company announced its board of directors had authorized
the use of up to $50 million for repurchase of its common stock or publicly
traded warrants via open market purchases. The Company is also authorized to
enter hedging transactions designed to reduce the potential dilutive impact of
its Series A Convertible Preferred Stock, Series B Convertible Preferred Stock
and warrants. In addition, if the Company's shareholders do not approve the
issuance of the 1.5 million shares of the Company's common stock due to Olivetti
as part of the consideration for Olsy by December 15, 1998, the Company will be
required to settle the outstanding obligation in cash. The amount will be based
on the average trading price of the common stock of the Company during the 10
days prior to that date.
Additionally, the Company estimates that approximately $4 million remains to be
spent for its previously announced advertising, branding and positioning
initiatives to launch the newly combined company, and approximately $0.5 million
for the completion of the construction and fit-up of the Company's new Corporate
headquarters in Billerica, Massachusetts. The estimated total cost of the
construction activities is $20 million, which approximates the cumulative
proceeds, realized or expected to be realized, from the disposition of other
land and facilities. The Company expects to spend approximately $5 million,
principally through the remainder of calendar 1998, to attain technological
feasibility on Olsy in-process research and development activities.
The Company believes that existing cash balances, cash generated from
operations, and borrowing availability under its Revolving Credit Facility will
be sufficient to meet the Company's operational cash requirements as well as the
integration and restructuring initiatives previously discussed, and for pursuing
potential investments, acquisitions and other expansion opportunities. As part
of furthering its business strategy, the Company explores acquisitions and
strategic relationships with other businesses on an ongoing basis. One or more
of these opportunities could have an impact on the Company's liquidity through
the use of cash or could involve the issuance of debt or equity securities of
the Company. While the Company believes that its credit facility provides
sufficient capital availability there can be no assurance that sufficient
capital will be available on terms acceptable to the Company.
<PAGE> 15
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- (Continued)
YEAR 2000
OVERVIEW. Ensuring that the Company's business and service delivery processes
are not disrupted by Year 2000 ("Y2K") related problems is a top priority. The
Company is taking necessary steps to ensure that the products and services of
its suppliers and sub-contractors upon whom the Company relies will not be
adversely affected by millennium problems.
Prior to the acquisition of Olsy, the Company was in the process of replacing
many of the systems used to operate its business. Olsy was involved in a similar
venture to achieve Y2K compliance for its systems. Although Y2K compliance is a
key consideration, the driving force behind the introduction of new systems has
been the need to consolidate multiple service management and delivery systems
into a new generation of systems that allow the Company to operate as a larger
enterprise in the service environment.
Wang's IT strategy has been to select and implement Y2K compliant solutions to
replace the majority of legacy systems currently in use in the Company. In many
cases, the rollout of these systems is well underway. For the remaining
applications the Company is implementing and piloting programs in 1998 and plans
to complete a rollout in the first half of 1999. For functions where replacement
systems cannot be deployed before the third quarter of 1999, the Company is
upgrading existing legacy based systems to be Y2K compliant. This strategy will
allow Wang to continue its program of development, while minimizing risk through
continued use of its existing systems during the transition.
IMPLEMENTATION. In describing the detailed plans for implementing compliance of
the Company's major Management Information Systems, support systems can be
divided into two general categories:
- - - Infrastructure, including network, network and mail servers and desktop
systems; and
- - - Business Application Systems, including Service Support Systems and
Enterprise, Resource & Planning (ERP) Systems.
<PAGE> 16
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- (Continued)
Infrastructure. Wang operates more than 20,000 personal computers and 400 NT
servers. Since 1996, the Company has been implementing a common operating
environment that is Y2K compliant. Desktop systems are being migrated to Windows
95, NT and 98 with Microsoft Office, Explorer and Outlook applications. Servers
will be migrated to compliant releases of Windows NT. The underlying
infrastructure is implemented on routers which have been certified as Y2K
compliant from the Company's strategic partner, CISCO. The Company plans to
complete this project by early 1999, at a cost of $11 million for Infrastructure
and $9 million to bring Olsy into Wang's common operating environment. The
roll-out of this new infrastructure is already well under way.
Business Applications. Business applications fall into two categories: corporate
(addressing common global business practices) and local (reflecting unique
geographic, business and operating needs). The comments below relate to the
corporate or common systems assessment.
1. SERVICE DELIVERY SYSTEMS. The Company is consolidating multiple service
delivery systems in the United States into a single service delivery system
model ("SDSM") that has been certified as Y2K compliant. In Europe there is
a consolidation around the three Olsy legacy service delivery systems
(already Y2K compliant). This consolidation activity is expected to be
completed before the end of 1998, with the exception of Italy, which is
expected to be compliant in the first quarter of calendar year 1999.
Between 1999 and 2001, Wang will migrate from these systems to the
corporate service delivery system model in North America. The process in
Asia Pacific is the same as in Europe.
The Company plans to implement its SDSM in North America in 1999, and
partially in the international arena in the same timeframe. A contingency
plan, around using Y2K compliant legacy systems, exists and addresses
unforeseen delays in rolling out the SDSM.
A major component of its contingency plan involves Wang enhancing certain
legacy service delivery systems in order to allow them to operate past
2000. This will both allow International to deploy the SDSM at a pace and
sequence that accommodates the intensive management attention required to
integrate Wang and Olsy while serving to mitigate the risk associated with
any SDSM implementation delay.
2. Enterprise Resource Planning Systems. Wang has chosen SAP R/3 as its
strategic ERP solution, and has already installed the software in many of
its subsidiaries. The Company plans to implement SAP R/3 as a replacement
for the Olsy subsidiary legacy systems in the United States, Italy, and the
U.K. in the second half of 1998. Other SAP modules will be used to replace
a number of systems previously used in
<PAGE> 17
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- (Continued)
Olsy headquarters. During 1999, The Company plans to roll out the SAP
systems to the eighteen remaining countries, replacing all the Olsy legacy
ERP systems. SAP has certified SAP R/3 as Y2K compliant. Twenty-three small
countries will migrate to a smaller scale worldwide standard system
(Solomon IV) that provides full functionality and a stepping stone towards
future SAP migration, when those operations reach sufficient size to
justify the SAP investment. Solomon reports that its system is Y2K
compliant, but the Company is awaiting formal certification from Solomon.
Costs to Address Y2K Issues. The Company has invested nearly $60 million in its
internal systems since 1996 and plans to invest approximately $20 million over
the next twelve months to complete its systems initiatives.
Risks to the Company of Y2K Issues. Y2K noncompliance by the Company, if not
quickly remedied, would seriously damage its image and credibility within the
marketplace and adversely affect Wang's operating results and growth plans.
Specifically, failure to complete the required work in a timely manner may
result in the following:
Wang Service Delivery Impact: Service delivery at the Company would be
forced to move to manual processes, impacting Wang's ability to meet
service level agreement obligations. At best, such a move would cause the
projected profit margin on key contracts to erode and at worst the
contracts would be terminated for failure to perform. Reverting to manual
processes would add cost and reduce gross margin.
Customer Compliance Failure Impact: The Company relies on its customers to
be Y2K compliant and to rectify any internal compliance problems. In the
event such customers fail to become compliant they likely would be forced
to move to manual processes to work around the issues. Although it is
unlikely that Wang would lose such contracts, it is likely that the
Company's service delivery costs would increase and gross margin would
erode.
Supplier Compliance Failure Impact: Wang relies on key information
technology suppliers (Microsoft, Dell, Hewlett-Packard, SAP, Siemens
Nixdorf, EMC, Northern Telecomm and Cisco) to provide products and software
to help implement the Company's Y2K strategy. While Wang is performing some
independent testing, the Company expects its suppliers to test all affected
products extensively. If products produced by these suppliers prove not to
be compliant, then Wang's service delivery and internal operations would be
impacted as described herein.
Wang Internal Systems Impact: In the event that one or more of the
Company's internal systems do not comply with Y2K standards, it would
support those processes with manual reporting and processing. The cost to
the Company would be limited to the incremental support costs for the
affected systems only for as long as those systems remained non-compliant.
COMPANY'S CONTINGENCY PLAN. In the event that Wang is unable to implement its
Y2K plan fully, manual processes would be used until the failed systems can be
fixed. For example, automated service call tracking and dispatch would be
handled manually until the automated systems become available.
<PAGE> 18
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- (Continued)
Given the Company's reliance on replacement programs, continual close monitoring
of their progression is essential. Any replacement program slippage will require
increased investment in Y2K remediation of legacy systems.
The Company is committed to assisting its customers in managing the compliance
of their IT systems purchased from or serviced by the Company in order to meet
the Year 2000 challenge. The compliance of products and services supplied by the
Company has been given the highest priority.
The Company is committed to providing its customers with products that are
supportable beyond the Y2K and has engaged in a development effort to bring its
principal products into Y2K compliance.
The Company has developed a suite of products designed to provide VS users the
information, products, and tools required to update their VS systems as well as
to assist users in identifying and resolving issues with their own or third
party VS applications.
The Company believes that its development effort and communications campaign has
minimized its potential exposure to Y2K claims and liability. Moreover, the
Company believes that the standard terms and conditions of its customer
contracts provide substantial protection against potential claims by customers.
The Company recognizes, however, that there continue to be risks associated with
the sale and use of Wang products that may not be Y2K compliant. The Company is
unable to assess the extent of the risk at this time. No claim has been filed
against the Company relating to Y2K issues and no customer has asserted losses
associated with any products of the Company.
The Company has engaged in a communications campaign to notify its customers of
the compliance status of its products. This communications campaign has
consisted of written notices sent directly to customers, meetings with
customers, open forums for customers, and numerous postings on the Company's web
site. Although the Company cannot ensure that every customer has received all of
the necessary information, the Company believes that its communications effort
has been successful in informing its customers about the compliance status of
the Company's products and solutions.
THIRD PARTY PRODUCTS. It is the Company's goal to supply only products made by
other companies that are Y2K compliant. Where products originate from third
parties, the Company will seek to verify that the supplier has certified the
product as Y2K compliant. If an upgrade or future release of a product is
required, the Company will work with its customers to establish a plan for
obtaining the required upgrade or release. The Company has implemented a
certification program in which it has requested certifications from its
principal strategic suppliers. The Company is committed to providing its
customers with all of the relevant information available regarding Y2K status of
products and provides information about standard PCs and links to a number of
our strategic partners and suppliers.
The Company recognizes, however, that there continue to be risks associated with
the sale of third-party hardware and software products that may not be Year 2000
compliant. The Company is unable to assess the extent of the risk at this time.
No claim has been filed against the Company relating to Year 2000 issues of
third party products and no customer has asserted losses caused by any sales of
third party products by the Company.
<PAGE> 19
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- (Continued)
MULTI-VENDOR MAINTENANCE SERVICES. The Company provides maintenance services for
customers around the world who are using hundreds of different hardware and
software products made by dozens of companies. Although the Company will assist
its maintenance customers in addressing their Y2K related problems, the Company
does not intend to provide hardware maintenance or software support for products
that will not be Y2K compliant or will not be supported by the manufacturer
beyond the year 2000. Through its field service engineering work force and its
professional services teams, Wang will help customers analyze the impact of the
year 2000 on its systems. Such services will be available on a project basis at
current commercial rates and terms.
Because the Company's standard maintenance contracts do not cover problems
associated with the year 2000, the Company does not believe that it has material
exposure for providing maintenance services. The Company recognizes, however,
that there continue to be risks associated with the maintenance of hardware and
software products that may not be Y2K compliant. The Company is unable to assess
the extent of the risk at this time. No claim has been filed against the Company
relating to Y2K maintenance issues and no customer has asserted losses due to
any actions of the Company.
All Year 2000 statements contained herein or in any of the Company's prior
public filings or announcements, including its Form 10-K for the period ended
June 30, 1998, are designated as "Year 2000 Readiness Disclosures" pursuant to
the Year 2000 Information and Readiness Disclosure Act (P.L. 105-271).
RISKS AND UNCERTAINTIES
Certain statements in this Form 10-Q may be deemed "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995 (the
"Act"). The Company desires to take advantage of the safe harbor provisions of
the Act and is including this statement for the express purpose of availing
itself of the protection of the safe harbor with respect to all forward-looking
statements that involve risks and uncertainties. The Company or its
representatives may also make forward looking statements in other written
reports filed with the Securities and Exchange Commission ("SEC"), in materials
delivered to stockholders, in press releases and in oral statements to security
analysts, investors and others. Such forward-looking statements may relate to
various matters, including, without limitation, the Company's business, revenue,
expenses, profitability, acquisitions, dispositions, products, services,
intellectual property, expenses, labor matters, effective tax rate, the impact
of Year 2000 issues and operating and capital requirements. Forward looking
statements provide current expectations of future events based on certain
assumptions and include any statement that does not directly relate to any
historical or current fact. Words such as "anticipates," "believes," "expects,"
"estimates," "intends," "plans," "projects," and similar expressions, may
identify such forward-looking statements. In accordance with the Act, set forth
below are cautionary statements that accompany those forward-looking statements.
Readers should carefully review these cautionary statements as they identify
certain important factors that could cause actual results to differ materially
from those in the forward-looking statements and from historical trends. The
following cautionary statements are not exclusive and are in addition to other
factors discussed elsewhere in the Company's filings with the SEC and in
materials incorporated therein by reference.
<PAGE> 20
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- (Continued)
IMPLEMENTATION OF BUSINESS STRATEGY. The Company's business strategy is to
increase the revenues and margins it realizes from providing networked
technology services and solutions to customers and clients and to build upon
that growth through acquisitions and alliances with other companies. The
Company's ability to implement successfully this strategy over the long term,
and the ultimate success of this strategy and the achievement of sustained
profitable growth, is uncertain and subject to a broad range of variables and
contingencies, many of which are beyond the Company's control. The Company may
not be able to achieve the revenue growth it is seeking as a result of an
inability to obtain new customer contracts, recruit, train and retain required
skilled personnel or the inability to deliver the required services or solutions
in a timely and satisfactory manner to customers. In addition, there can be no
assurance that the Company will be able to implement strategic relationships or
acquisitions, or, if entered into, that such strategic relationships or
acquisitions will in fact further the implementation of the Company's business
strategy. The Company's existing strategic relationships with Dell Computer
Corporation, Microsoft Corporation, and Cisco Systems, Inc. are subject to a
variety of uncertainties, including possible evolutions in technology, business
relationships or strategic plans of the parties which may, in the future, result
in the termination of, or a change in the nature of or in the expectations with
respect to, such strategic relationships. The Company's relationships with Dell,
Microsoft and Cisco also include certain contractual obligations, which, if not
satisfied, could allow Dell, Microsoft and Cisco, respectively, to terminate all
or a portion of their relationships.
Currently, a significant portion of the Company's revenues and gross margins are
attributable to the servicing, upgrading and enhancement of its installed base
of VS and other traditional systems and the resale of certain hardware products,
including banking peripherals. The Company expects revenues from traditional
sources, including the acquired Bull traditional product and service revenue
streams, to decline at a rate approximating 30% per year on a constant currency
basis, but that rate may accelerate as the Company's customers make systems
decisions regarding Year 2000 compliance. Additionally, from one period to the
next, the decline rate could be highly variable. As the Company's traditional
revenues decline, the loss of individual customers will have an increasingly
significant effect on the rate of decline for any particular measurement period.
The Company's continued growth is predicated on the business strategy described
above (including the acquisition of new customer service and network integration
businesses) more than offsetting the decline in revenues and gross margins from
traditional sources. There can be no assurance that delays or difficulties in
the implementation of the Company's strategy, or a higher than anticipated
decline in revenues and gross margins from traditional sources will not
adversely impact the Company's results of operations or the market value of its
securities.
RISKS OF NEWLY ACQUIRED BUSINESSES. In March and April 1998, the Company
completed its acquisition of the wholly-owned IT solutions and services business
of Olivetti Solutions ("Olsy") from the Olivetti Corporation. The transaction
more than doubled the annualized revenue and number of employees of the Company.
The Company will confront a number of risks as it operates the Olsy business and
integrates it with the Company's existing business. As with any significant
acquisition or merger, the Company confronts challenges in retaining employees,
customer relationships, synchronizing service delivery systems and business
processes, and integrating logistics, marketing, and product offerings to
achieve greater efficiencies as well as unforeseen liabilities. Moreover, the
Company may be unable to implement all anticipated cost savings in the Olsy
business.
<PAGE> 21
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- (Continued)
Finally, there can be no assurance that the acquisition of Olsy or any of the
Company's other acquisitions or strategic alliances will result in long-term
benefits to the Company, or that the Company and its management will be able to
effectively assimilate and manage the business of such acquired companies. The
Company continues to evaluate such opportunities regularly, and one or more
other transactions could occur at any time.
The transfer of Company shares to Olivetti as part of the purchase price for
Olsy increases the risk that the Company's use of its net operating loss may be
limited in the future. Federal tax rules impose an annual limitation on the use
of a net operating loss when the change of ownership of shares in a corporation
exceeds a certain limit. The transfer of Company shares to Olivetti brings the
aggregate change of ownership closer to, but not in excess of, that stated
limit.
Other unforeseen changes of ownership may push the aggregate change of ownership
over the stated limit. The Company believes that even if the annual limitation
on the use of its net operating loss were imposed, such limitation would be of
no consequence as the projected annual limitation on the use of a net operating
loss exceeds the projected federal taxable income of the Company.
DEPENDENCE ON KEY PERSONNEL. The Company depends to a significant extent on key
management personnel and technical employees. The Company's growth and future
success will depend in large part on its ability to attract, motivate and retain
highly qualified personnel, particularly trained and experienced technical
professionals capable of providing sophisticated network and desktop outsourcing
and integration services. In particular, the Company's new relationships with
Microsoft and CISCO contemplate that the Company will train a significant number
of qualified Microsoft- and CISCO-certified personnel. Competition for such
personnel is intense and there can be no assurances that the Company will be
successful in hiring, training, motivating or retaining such qualified
personnel. The loss of key personnel or the inability to hire, train or retain
qualified personnel could have a material adverse effect on the Company's
business, financial condition or results of operations.
COMPETITION. The information technology ("IT") services and solutions industry,
including the network and desktop services markets, is intensely competitive and
undergoing continual change. Worldwide competition is vigorous in all of the
markets in which the Company does business. The Company's competitors are
numerous and vary widely in market position, size and resources. Competitors
differ significantly depending upon the market, customer and geographic area
involved. In many of the Company's markets, traditional computer hardware
manufacturing, communications and consulting companies provide the most
significant competition. The Company must also compete with smaller IT services
businesses and solution providers, that have been able to develop strong local
or regional customer bases. Many of the Company's competitors have substantially
greater resources, including larger research and engineering staffs and larger
marketing organizations, than those of the Company. The Company may have
difficulty implementing the leading edge technology required to service its
customers. There can be no assurance that the Company will be able to compete
successfully against other companies that provide similar IT services and
solutions.
<PAGE> 22
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- (Continued)
YEAR 2000 LIABILITY. The Company supplies computer systems to large
organizations in the commercial and government markets, which include federal,
state and local customers. Any failure of the Company's products to perform,
including system malfunctions due to the onset of the calendar year 2000 (caused
by a data structure problem that will prevent software from properly recognizing
dates after the year 1999), could result in claims against the Company. Although
the Company maintains computer software and services errors and omissions
insurance, a claim brought against the Company could have a material adverse
effect on the Company's business, financial condition or results of operations.
Moreover, an increasing number of the Company's installed base of VS and other
traditional proprietary systems could choose to convert to other calendar year
2000 compliant systems in order to avoid such malfunctions. An increasing rate
of conversion would accelerate the decline of revenue associated with such
proprietary systems, and could have a material adverse effect on the Company's
business, financial condition or results of operations. In addition, the Company
operates internal legacy systems and applications that contain year 2000
limitations. Initiatives are underway to replace existing systems and address
existing year 2000 limitations. There can be no assurance that the conversion
will be completed in a timely manner.
In the course of providing complex, integrated solutions to customers, the
Company frequently forms alliances with third parties that supply both hardware
and software products and services. Future results of the Company will in part
depend upon the performance and capabilities of these parties, including their
ability to deal effectively with the year 2000 issue. The Company is evaluating
the impact of the year 2000 compliance on its suppliers and is working with its
suppliers and customers on resolving year 2000 compliance issues. Because the
Company relies on the cooperation and assistance of its suppliers in addressing
year 2000 matters, there remains a possibility that year 2000 problems
experienced by its suppliers could have a material adverse impact on the
Company's business and operating results.
See "Year 2000" above.
POSSIBLE VOLATILITY OF PRICE OF COMMON STOCK. The market price of the Company's
Common Stock has fluctuated significantly in the past and may continue to
fluctuate in the future. Factors such as announcements of acquisitions,
technological innovations or other developments concerning the Company, its
competitors or other third parties, quarterly variations in the Company's
results of operations, non-recurring transactions and changes in overall
industry and economic conditions may all affect the market prices of the Common
Stock and cause it to fluctuate significantly. Moreover, the Company's expense
levels are based in part on expectations of future revenue levels, and a
shortfall in expected revenue could therefore have a disproportionate adverse
effect on the Company's net income. Furthermore, the market prices of the stocks
of many high technology companies have experienced wide fluctuations that have
not necessarily been related to the operating performance of the individual
companies.
DEPENDENCE ON GOVERNMENT REVENUE. In the three months ended September 30, 1998
and the year ended June 30, 1998, the Company derived approximately 12% and 20%,
respectively, of its revenues from branches or agencies of the United States
government, and derived significant additional revenues from agencies of various
foreign governments. The Company expects that a significant
<PAGE> 23
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- (Continued)
portion of the revenue from the newly-acquired Olsy operations will be
attributable to the sale of products and services to governments of other
countries and their agencies. A significant portion of the Company's U.S. and
non-U.S. government revenues comes from orders under government contract or
subcontract awards, which involves the risk that the failure to obtain or renew
an award due to the change in ownership or other factors, or a delay on the part
of the government agency in making the award or of ordering or paying for
products or services under an awarded contract, could have a material adverse
effect on the financial performance of the Company for the period in question.
Other risks involved in government sales are the larger discounts (and thus
lower margins) often involved in government sales, the unpredictability of
funding for various government programs, and the ability of government agencies
to unilaterally terminate the contract. Revenues from the government of the
United States and other foreign governments and their instrumentalities and
agencies, are received under a number of different contracts and from a number
of different contracting authorities.
INTERNATIONAL OPERATIONS. International revenues in recent years have accounted
for a substantial portion of the Company's total revenues. As a result of the
acquisition of Olsy, the Company expects to derive more than fifty percent of
its revenue from affiliates operating outside of the United States. The
Company's international entities are subject to all of the risks normally
associated with international operations, including changes in regulatory
compliance requirements, compliance costs associated with International
Standards Organization (ISO) 9000 quality control standards, special standards
requirements, exposure to currency fluctuations, exchange controls, tariffs and
other barriers, difficulties in staffing and managing international subsidiary
operations, potentially adverse tax consequences and country-specific product
requirements. The introduction of the Euro may result in changes to business
practices throughout Europe affecting pricing, systems and competition. While
the Company attempts to reduce its currency exposure, there can be no assurance
that it will not experience losses due to international currency fluctuations.
The Company's results of operations could also be affected by economic
conditions and changes in foreign countries and by macro-economic changes,
including recession and inflation. For example, weakness in some Asian economies
may have an adverse impact on the Company's business. In addition, effective
intellectual property protection may not be available in every foreign country
in which the Company distributes its own and other products and the loss of such
protection could have a material adverse effect on the business of the Company.
NATURE OF CONTRACTS. Some of the Company's contracts are for a fixed price and
are long-term in duration, which subjects the Company to substantial risks
relating to unexpected cost increases and other factors outside the control of
the Company. Revenues and profits on such contracts are recognized using
estimates and actual results, when known, may differ materially from such
estimates. Additionally, some of the customer relationships in the international
arena, particularly those acquired through the Olsy acquisition, are supported
by periodic purchase orders in lieu of contracts of a predetermined duration.
Revenues supported by purchase orders are often less predictable and may be
jeopardized by the change of ownership of Olsy. Finally, IT outsourcing
contracts in particular, often contain provisions that allow for termination for
convenience, service level agreement compliance, liquidated damages and
penalties and are awarded based on a competitive procurement process. Such
contracts often require high pre-award expenditures and long lead times with no
assurance of success.
<PAGE> 24
WANG LABORATORIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- (Continued)
SUPERIOR RIGHTS OF PREFERRED STOCK. The Board of Directors of the Company is
authorized under the Company's Certificate of Incorporation, without stockholder
approval, to issue from time to time up to an aggregate of 5 million shares of
preferred stock, $0.01 par value per share (the "Preferred Stock"), in one or
more series. Of the 5 million authorized shares of Preferred Stock, 90,000
shares have been designated as 4 1/2% Series A Cumulative Convertible Preferred
Stock (the "Series A Preferred Stock"), all of which shares have been issued,
and 143,750 shares have been designated as 6 1/2% Series B Cumulative
Convertible Preferred Stock ("Series B Preferred Stock"), all of which shares
have been issued. The rights of holders of Common Stock are subject to, and may
be adversely affected by, the rights of holders of the Series A Preferred Stock
and the Series B Preferred Stock and any other series of Preferred Stock that
the Company may designate and issue in the future. In particular, before any
payment or distribution is made to holders of Common Stock upon the liquidation,
dissolution or winding-up of the Company, holders of both the Series A Preferred
Stock and the Series B Preferred Stock are entitled to receive a liquidation
preference of $1,000.00 per share, plus accrued and unpaid dividends. The
holders of the Series A Preferred Stock and the Series B Preferred Stock also
have various rights, preferences and privileges with respect to dividends,
redemption, voting, conversion and registration under the Securities Act.
MARKET RISK. The Company is exposed to market risk from changes in interest
rates and foreign exchange rates. The Company does not use derivative
instruments unless there is an underlying business transaction. The Company
monitors foreign exchange and interest rate risks and manages such risks on
specific transactions. The risk management process uses analytical techniques
including market value, sensitivity analysis, and value at risk estimates. The
Company does not believe that the potential exposure is significant in light of
the size of the Company and its business. While the Company does not expect to
incur material losses as a result of this market risk, there can be no assurance
that losses will not result.
AVAILABILITY OF FINANCING. The Company may need to raise additional funds
through public or private debt or equity offerings in order to make other
acquisitions and otherwise implement its strategy. The Company has recently
entered into a $500 million secured credit facility in conjunction with the
completion of the transaction with Olivetti. While the Company believes that the
facility provides sufficient capital availability for the foreseeable future
there can be no assurance that sufficient capital will be available on terms
acceptable to the Company.
ANTI-TAKEOVER PROVISIONS. The Company's Certificate of Incorporation and By-laws
and the Delaware General Corporation Law contain certain provisions which could
have the effect of delaying or preventing transactions that might result in a
change in control of the Company, including transactions in which stockholders
might otherwise receive a premium for their shares over the then-current market
price, and may limit the ability of stockholders to approve transactions that
they deem to be in their best interests. In addition, the Company has recently
adopted a shareholder rights plan which is intended to deter coercive or unfair
takeover tactics and to prevent a potential acquirer from gaining control of the
Company without offering a fair price to all of the Company's shareholders which
could have the same effect as the provisions referred to above.
<PAGE> 25
WANG LABORATORIES, INC. AND SUBSIDIARIES
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from changes in interest rates and foreign
exchange rates. The Company does not use derivative instruments unless there is
an underlying business transaction. The Company monitors foreign exchange and
interest rate risks and manages such risks on specific transactions. The risk
management process uses analytical techniques including market value,
sensitivity analysis and value at risk estimates. The Company does not believe
that the potential exposure is significant in light of the size of the Company
and its business. While the Company does not expect to incur material losses as
a result of this market risk, there can be no assurance that losses will not
result.
<PAGE> 26
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are included herein:
Exhibit No. Description
- - ----------- -----------
2.1(1) The Amended and Restated Reorganization Plan of Wang Laboratories,
Inc. and Official Committee of Unsecured Creditors dated
September 30, 1993
3.1(2) Certificate of Incorporation
3.2(8) Certificate of Incorporation, as Amended
3.3(10) Certificate of Stock Designation with respect to the 4 1/2% Series
A Cumulative Convertible Preferred Stock
3.4(14) Certificate of Elimination of the Registrant's 11% Exchangeable
Preferred Stock
3.5(14) Certificate of Stock Designation with respect to the 6 1/2% Series
B Cumulative Convertible Preferred Stock
3.6(23) Certificate of Stock Designation with respect to the Series C
Junior Participating Preferred Stock
3.7(13) By-Laws of the Registrant
4.1(23) Rights Agreement
10.1(3) 1993 Directors' Stock Option Plan
10.2(4) Form of Contingent Severance Compensation Agreements with Donald
P. Casey, J.J. Van Vuuren, Albert A. Notini, David I. Goulden, and
James J. Hogan, each an executive officer of the Company
10.3(5) Contingent Severance Compensation Agreement with Joseph M. Tucci
10.4(6) Employment Agreement with James J. Hogan
10.5(3) Consulting Agreement of Raymond C. Kurzweil
10.6(5) Employee Retention Agreement with James J. Hogan
10.7(7) Stock Incentive Plan, as Amended
10.8(8) Contingent Severance Compensation, as Amended with Franklyn A.
Caine (Employment Agreement)
10.9(8) Employees' Stock Incentive Plan
10.10(8) 1995 Director Stock Option Plan
10.11(9) Employment Agreement with Donald P. Casey, as Amended
<PAGE> 27
Exhibit No. Description
- - ----------- -----------
10.12(10) Form of Amendment to Contingent Severance Compensation Agreements
with Joseph M. Tucci, Donald P. Casey, Albert A. Notini, David I.
Goulden, James J. Hogan, and Franklyn A. Caine, each an executive
officer of the Company
10.13(11) 1994 Employees' Stock Incentive Plan, as Amended
10.14(11) Form of Amendment to Employment Letter Agreement for David I.
Goulden, Albert A. Notini and Franklyn A. Caine
10.15(12) Form of Non-Qualified Long Term Incentive Option to Purchase
Shares of Common Stock for Messrs. Tucci, Caine, Casey, Goulden,
Hogan, Notini, and Van Vuuren
10.16(12) Registration Rights Agreement 6 1/2% Cumulative Convertible
Preferred Stock
10.17(14) Employment Agreement of Lucy A. Flynn
10.18(15) 1995 Employees' Stock Purchase Plan, as Amended
10.19(15) Employees' Stock Incentive Plan, as Amended
10.20(1) 1995 Director Stock Option Plan, as Amended
10.21(16) Asset Purchase Agreement, as amended, with respect to the
Registrant's sale of its software business unit to Eastman Kodak
Company
10.22(17) Amended and Restated Employment Agreement of Joseph M. Tucci
10.23(17) Restricted Stock Agreement of Joseph M. Tucci
10.24(17) Non-Qualified Long Term Incentive Stock Option Agreement of Joseph
M. Tucci
10.25(17) Second Amendment to the Change in Control Severance Agreement of
Joseph M. Tucci
10.26(17) Form of Non-Qualified Long Term Incentive Stock Option Agreement
with Messrs. Caine, Goulden and Notini, each an executive officer
of the Registrant
10.27(17) Form of Restricted Stock Agreement with Messrs. Caine, Goulden and
Notini, each an executive officer of the Registrant
10.28(17) Letter Agreement of Employment of Jose Ofman
10.29(17) Amendment Number 1 to Letter Agreement of Employment of Jose Ofman
10.30(17) Non-Qualified Long Term Stock Option Agreement with Jeremiah J. J.
Van Vuuren
10.31(17) Letter Agreement for Special Bonus of Franklyn A. Caine
10.32(17) Change in Control Severance Agreement, as amended of Franklyn A.
Caine
10.33(17) Letter Agreement for Special Bonus of Albert A. Notini
2
<PAGE> 28
Exhibit No. Description
- - ----------- -----------
10.34(17) Change in Control Severance Agreement, as amended of Albert A.
Notini
10.35(17) Letter Agreement for Special Bonus of David I. Goulden
10.36(17) Change in Control Severance Agreement, as amended of David I.
Goulden
10.37(17) Amendment Number 1 to the 1993 Directors' Stock Option Plan
10.38(17) Amendment Number 2 to the Stock Incentive Plan
10.39(17) Amendment Number 3 to the Employees' Stock Incentive Plan
10.40(18) Restricted Stock Agreement of Jeremiah J. J. Van Vuuren with
Registrant
10.41(18) Employment Agreement of Jeremiah J. J. Van Vuuren with Wang
Laboratories Ireland B.V.
10.42(18) Employment Agreement of Jeremiah J. J. Van Vuuren
10.43(18) Change in Control Severance Agreement, as amended of Jeremiah J.
J. Van Vuuren
10.44(19) Form of Change in Control Severance Agreement with Messrs.
Buckingham and Brauneis
10.45(20) Amendment No. 4 to the 1995 Employee Stock Incentive Plan
10.46(20) Amendment No. 5 to the 1995 Employee Stock Incentive Plan
10.47(20) Amendment No. 2 to the 1995 Director Stock Option Plan
10.48(20) Amendment No. 2 to the 1995 Employee Stock Purchase Plan
10.49(20) Short Term Incentive Plan
10.50(21) Stock Purchase Agreement and Wang Laboratories, Inc. and Wang
Nederlands B.V., Ing. C. Olivetti SpA and certain subsidiaries
10.51(21) Credit Agreement among Wang Laboratories, Inc., various subsidiary
borrowers and Bankers Trust Company and various financial
institutions
10.52(22) Olsy Employees Stock Incentive Plan
10.53(23) Rights Agreement, dated April 22, 1998, between Wang Laboratories,
Inc. and American Stock Transfer & Trust Company, as Rights Agent,
including all exhibits thereto
10.54 Amendment to Employment Agreement with Franklyn A. Caine
10.55 Amendment to Employment Agreement with Donald P. Casey
10.56 Amendment to Employment Agreement with Lucy A. Flynn
10.57 Amendment to Employment Agreement with David I. Goulden
3
<PAGE> 29
Exhibit No. Description
- - ----------- -----------
10.58 Amendment to Employment Agreement with James J. Hogan
10.59 Amendment to Employment Agreement with Albert A. Notini
10.60 Amendment to Employment Agreement with Jose Ofman
10.61 Amendment to Employment Agreement of Jeremiah J.J. Van Vuuren with
Wang Laboratories Ireland B.V.
10.62 Amendment to Employment Agreement of Jeremiah J.J. Van Vuuren with
Wang Laboratories Inc.
10.63 Amendment to Change of Control Severance Agreement with Franklyn
A. Caine
10.64 Amendment to Change of Control Severance Agreement with Donald P.
Casey
10.65 Amendment to Change of Control Severance Agreement with Lucy A.
Flynn
10.66 Amendment to Change of Control Severance Agreement with David I.
Goulden
10.67 Amendment to Change of Control Severance Agreement with James J.
Hogan
10.68 Amendment to Change of Control Severance Agreement with Albert A.
Notini
10.69 Amendment to Change of Control Severance Agreement with Jose Ofman
10.70 Amendment to Change of Control Severance Agreement with Jeremiah
J.J. Van Vuuren
12.1 Calculation of Ratio of Earnings to Fixed Charges
27.1 Financial Data Schedule
27.2 Financial Data Schedule
(1) Filed as an Exhibit to the Registrant's Registration Statement on Form 8-A
(File No. 0-22470), filed on September 27, 1993.
(2) Filed as an Exhibit to the Registrant's Registration Statement on Form S-8
(File No. 33-73210), filed on December 21, 1993.
(3) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended December 31, 1993.
(4) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended March 31, 1994.
(5) Filed as an Exhibit to the Registrant's Registration Statement on Form S-1,
as amended (File No. 33-81526) filed September 13, 1994.
(6) Filed as an Exhibit to the Registrant's annual report on Form 10-K for the
fiscal year ended June 30, 1994.
(7) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended September 30, 1994.
(8) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended December 31, 1994.
(9) Filed as an Exhibit to the Registrant's annual report on Form 10-K for the
fiscal year ending June 30, 1995.
4
<PAGE> 30
(10) Filed as an Exhibit to the Registrant's report on Form 10-Q/A for the
quarter ended September 30, 1995.
(11) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended December 31, 1995.
(12) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended March 31, 1996.
(13) Filed as an Exhibit to the Registrant's Current Report on Form 8-K dated
May 3, 1996.
(14) Filed as an Exhibit to the Registrant's annual report on Form 10-K for the
fiscal year ended June 30, 1996.
(15) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended December 31, 1996.
(16) Filed as an Exhibit to the Registrant's Current Report on Form 8-K dated
March 17, 1997.
(17) Filed as an Exhibit to the Registrant's quarterly report a Form 10-Q for
the quarter ended March 31, 1997.
(18) Filed as an Exhibit to the Registrant's annual report on Form 10-K for the
fiscal year ended June 30, 1997.
(19) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended September 30, 1997.
(20) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended December 31, 1997.
(21) Filed as an Exhibit to the Registrant's Current Report on Form 8-k dated
March 17, 1998.
(22) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended March 31, 1998.
(23) Filed as an Exhibit to the Registrant's Registration Statement on Form 8-A
dated May 15, 1998.
5
<PAGE> 31
SIGNATURE
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.
DATE: November 16, 1998
WANG LABORATORIES, INC.
/s/ Franklyn A. Caine
----------------------------
Franklyn A. Caine,
Executive Vice President and
Chief Financial Officer
<PAGE> 32
EXHIBIT INDEX
Exhibit No. Description
- - ----------- -----------
2.1(1) The Amended and Restated Reorganization Plan of Wang Laboratories,
Inc. and Official Committee of Unsecured Creditors dated
September 30, 1993
3.1(2) Certificate of Incorporation
3.2(8) Certificate of Incorporation, as Amended
3.3(10) Certificate of Stock Designation with respect to the 4 1/2% Series
A Cumulative Convertible Preferred Stock
3.4(14) Certificate of Elimination of the Registrant's 11% Exchangeable
Preferred Stock
3.5(14) Certificate of Stock Designation with respect to the 6 1/2% Series
B Cumulative Convertible Preferred Stock
3.6(23) Certificate of Stock Designation with respect to the Series C
Junior Participating Preferred Stock
3.7(13) By-Laws of the Registrant
4.1(23) Rights Agreement
10.1(3) 1993 Directors' Stock Option Plan
10.2(4) Form of Contingent Severance Compensation Agreements with Donald
P. Casey, J.J. Van Vuuren, Albert A. Notini, David I. Goulden, and
James J. Hogan, each an executive officer of the Company
10.3(5) Contingent Severance Compensation Agreement with Joseph M. Tucci
10.4(6) Employment Agreement with James J. Hogan
10.5(3) Consulting Agreement of Raymond C. Kurzweil
10.6(5) Employee Retention Agreement with James J. Hogan
10.7(7) Stock Incentive Plan, as Amended
10.8(8) Contingent Severance Compensation, as Amended with Franklyn A.
Caine (Employment Agreement)
10.9(8) Employees' Stock Incentive Plan
10.10(8) 1995 Director Stock Option Plan
10.11(9) Employment Agreement with Donald P. Casey, as Amended
<PAGE> 33
Exhibit No. Description
- - ----------- -----------
10.12(10) Form of Amendment to Contingent Severance Compensation Agreements
with Joseph M. Tucci, Donald P. Casey, Albert A. Notini, David I.
Goulden, James J. Hogan, and Franklyn A. Caine, each an executive
officer of the Company
10.13(11) 1994 Employees' Stock Incentive Plan, as Amended
10.14(11) Form of Amendment to Employment Letter Agreement for David I.
Goulden, Albert A. Notini and Franklyn A. Caine
10.15(12) Form of Non-Qualified Long Term Incentive Option to Purchase
Shares of Common Stock for Messrs. Tucci, Caine, Casey, Goulden,
Hogan, Notini, and Van Vuuren
10.16(12) Registration Rights Agreement 6 1/2% Cumulative Convertible
Preferred Stock
10.17(14) Employment Agreement of Lucy A. Flynn
10.18(15) 1995 Employees' Stock Purchase Plan, as Amended
10.19(15) Employees' Stock Incentive Plan, as Amended
10.20(1) 1995 Director Stock Option Plan, as Amended
10.21(16) Asset Purchase Agreement, as amended, with respect to the
Registrant's sale of its software business unit to Eastman Kodak
Company
10.22(17) Amended and Restated Employment Agreement of Joseph M. Tucci
10.23(17) Restricted Stock Agreement of Joseph M. Tucci
10.24(17) Non-Qualified Long Term Incentive Stock Option Agreement of Joseph
M. Tucci
10.25(17) Second Amendment to the Change in Control Severance Agreement of
Joseph M. Tucci
10.26(17) Form of Non-Qualified Long Term Incentive Stock Option Agreement
with Messrs. Caine, Goulden and Notini, each an executive officer
of the Registrant
10.27(17) Form of Restricted Stock Agreement with Messrs. Caine, Goulden and
Notini, each an executive officer of the Registrant
10.28(17) Letter Agreement of Employment of Jose Ofman
10.29(17) Amendment Number 1 to Letter Agreement of Employment of Jose Ofman
10.30(17) Non-Qualified Long Term Stock Option Agreement with Jeremiah J. J.
Van Vuuren
10.31(17) Letter Agreement for Special Bonus of Franklyn A. Caine
10.32(17) Change in Control Severance Agreement, as amended of Franklyn A.
Caine
10.33(17) Letter Agreement for Special Bonus of Albert A. Notini
2
<PAGE> 34
Exhibit No. Description
- - ----------- -----------
10.34(17) Change in Control Severance Agreement, as amended of Albert A.
Notini
10.35(17) Letter Agreement for Special Bonus of David I. Goulden
10.36(17) Change in Control Severance Agreement, as amended of David I.
Goulden
10.37(17) Amendment Number 1 to the 1993 Directors' Stock Option Plan
10.38(17) Amendment Number 2 to the Stock Incentive Plan
10.39(17) Amendment Number 3 to the Employees' Stock Incentive Plan
10.40(18) Restricted Stock Agreement of Jeremiah J. J. Van Vuuren with
Registrant
10.41(18) Employment Agreement of Jeremiah J. J. Van Vuuren with Wang
Laboratories Ireland B.V.
10.42(18) Employment Agreement of Jeremiah J. J. Van Vuuren
10.43(18) Change in Control Severance Agreement, as amended of Jeremiah J.
J. Van Vuuren
10.44(19) Form of Change in Control Severance Agreement with Messrs.
Buckingham and Brauneis
10.45(20) Amendment No. 4 to the 1995 Employee Stock Incentive Plan
10.46(20) Amendment No. 5 to the 1995 Employee Stock Incentive Plan
10.47(20) Amendment No. 2 to the 1995 Director Stock Option Plan
10.48(20) Amendment No. 2 to the 1995 Employee Stock Purchase Plan
10.49(20) Short Term Incentive Plan
10.50(21) Stock Purchase Agreement and Wang Laboratories, Inc. and Wang
Nederlands B.V., Ing. C. Olivetti SpA and certain subsidiaries
10.51(21) Credit Agreement among Wang Laboratories, Inc., various subsidiary
borrowers and Bankers Trust Company and various financial
institutions
10.52(22) Olsy Employees Stock Incentive Plan
10.53(23) Rights Agreement, dated April 22, 1998, between Wang Laboratories,
Inc. and American Stock Transfer & Trust Company, as Rights Agent,
including all exhibits thereto
10.54 Amendment to Employment Agreement with Franklyn A. Caine
10.55 Amendment to Employment Agreement with Donald P. Casey
10.56 Amendment to Employment Agreement with Lucy A. Flynn
10.57 Amendment to Employment Agreement with David I. Goulden
3
<PAGE> 35
Exhibit No. Description
- - ----------- -----------
10.58 Amendment to Employment Agreement with James J. Hogan
10.59 Amendment to Employment Agreement with Albert A. Notini
10.60 Amendment to Employment Agreement with Jose Ofman
10.61 Amendment to Employment Agreement of Jeremiah J.J. Van Vuuren with
Wang Laboratories Ireland B.V.
10.62 Amendment to Employment Agreement of Jeremiah J.J. Van Vuuren with
Wang Laboratories Inc.
10.63 Amendment to Change of Control Severance Agreement with Franklyn
A. Caine
10.64 Amendment to Change of Control Severance Agreement with Donald P.
Casey
10.65 Amendment to Change of Control Severance Agreement with Lucy A.
Flynn
10.66 Amendment to Change of Control Severance Agreement with David I.
Goulden
10.67 Amendment to Change of Control Severance Agreement with James J.
Hogan
10.68 Amendment to Change of Control Severance Agreement with Albert A.
Notini
10.69 Amendment to Change of Control Severance Agreement with Jose Ofman
10.70 Amendment to Change of Control Severance Agreement with Jeremiah
J.J. Van Vuuren
12.1 Calculation of Ratio of Earnings to Fixed Charges
27.1 Financial Data Schedule
27.2 Financial Data Schedule
(1) Filed as an Exhibit to the Registrant's Registration Statement on Form 8-A
(File No. 0-22470), filed on September 27, 1993.
(2) Filed as an Exhibit to the Registrant's Registration Statement on Form S-8
(File No. 33-73210), filed on December 21, 1993.
(3) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended December 31, 1993.
(4) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended March 31, 1994.
(5) Filed as an Exhibit to the Registrant's Registration Statement on Form S-1,
as amended (File No. 33-81526) filed September 13, 1994.
(6) Filed as an Exhibit to the Registrant's annual report on Form 10-K for the
fiscal year ended June 30, 1994.
(7) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended September 30, 1994.
(8) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended December 31, 1994.
(9) Filed as an Exhibit to the Registrant's annual report on Form 10-K for the
fiscal year ending June 30, 1995.
4
<PAGE> 36
(10) Filed as an Exhibit to the Registrant's report on Form 10-Q/A for the
quarter ended September 30, 1995.
(11) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended December 31, 1995.
(12) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended March 31, 1996.
(13) Filed as an Exhibit to the Registrant's Current Report on Form 8-K dated
May 3, 1996.
(14) Filed as an Exhibit to the Registrant's annual report on Form 10-K for the
fiscal year ended June 30, 1996.
(15) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended December 31, 1996.
(16) Filed as an Exhibit to the Registrant's Current Report on Form 8-K dated
March 17, 1997.
(17) Filed as an Exhibit to the Registrant's quarterly report a Form 10-Q for
the quarter ended March 31, 1997.
(18) Filed as an Exhibit to the Registrant's annual report on Form 10-K for the
fiscal year ended June 30, 1997.
(19) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended September 30, 1997.
(20) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended December 31, 1997.
(21) Filed as an Exhibit to the Registrant's Current Report on Form 8-k dated
March 17, 1998.
(22) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for
the quarter ended March 31, 1998.
(23) Filed as an Exhibit to the Registrant's Registration Statement on Form 8-A
dated May 15, 1998.
5
<PAGE> 1
EXHIBIT 10.54
July 1, 1998
Mr. Franklyn Caine
60 Cherry Brook Lane
Weston, MA 02193
Dear Frank:
You and Wang Laboratories, Inc. ("Wang") are parties to a Letter Agreement
dated June 24, 1994, pursuant to which you are employed by Wang (the "Employment
Letter"). The Employment Letter was subsequently amended, ratified and confirmed
by letter dated November 20, 1995. You and Wang have now agreed to further amend
the Employment Letter as follows:
1. Paragraph 2 of the Employment Letter, as amended by the November 20,
1995 letter, is hereby deleted in its entirety. The following paragraph is added
in substitution thereof:
The terms and conditions of this letter will be in full force and effect
for a three (3) year period commencing on July 1, 1998 and terminating on
June 30, 2001, unless otherwise terminated as provided in paragraph 5
below. As of June 30, 2001, your employment status will be at will.
2. Paragraph 3(a) of the Employment Letter, as amended by the
November 20, 1995 letter, is hereby deleted in its entirety. The following
paragraph is added in substitution thereof:
(a) Yearly Payments
Your yearly base salary and bonus will be as authorized from time to time
by Wang's Chief Executive Officer and Organization, Compensation and
Nominating Committee, and as reflected in the minutes of that Committee's
meetings maintained in the ordinary course of business.
<PAGE> 2
Your salary and bonus plan target percentages will be reviewed annually for
possible upward adjustment at the discretion of the Company.
3. Paragraph 5 of the Employment Letter is hereby deleted in its
entirety. The following is added in substitution thereof:
(a) In the event that your employment with the Company is involuntarily
terminated (other than "for cause" (a term which includes but is not
limited to the standards set forth in Wang's Standards of Ethics and
Business Conduct booklet) or because of your death) or (b) (i) if your work
location is moved more than thirty (30) miles from your current work
location, (ii) if you cease to be either an Executive Vice President or
Chief Financial Officer of the Company, as set forth in Paragraph 1 of this
Agreement, or if you cease to report directly to me as Chairman of the
Board and Chief Executive Officer of the Company, or cease to be a member
of the Senior Operations Committee of the Company, or (iii) if, during the
term of this Agreement, either or both of your annual base salary or target
bonus is decreased from the level it was at immediately prior to such
decrease (a "Decrease Event"), and upon the occurrence of an event
specified in subparts (i) through (iii), you resign, then (c) Wang will pay
you (i) immediately upon termination or resignation, a lump sum payment
equal to six (6) months of your salary and target bonus, plus (ii)
commencing one month after termination or resignation and ending eighteen
months thereafter, eighteen (18) monthly payments. Each monthly payment
shall be equal to one-twelfth of your annual salary plus target bonus at
100% performance at the time of your termination, (provided that if your
termination follows the occurrence of a Decrease Event, then the salary and
the target bonus levels will be those immediately in effect prior to any
such decrease), plus (iii) at such time as Wang pays executives generally
under the applicable annual management incentive plan, the pro rata share
of your target bonus (and in the case of a Decrease Event at the target
level immediately prior to such decrease), calculated at the 100%
achievement for individual objectives and at an achievement level equal to
Wang's actual performance (as used for calculating the payout to other
executives measured on the same basis) for financial targets for the year
in which your employment was terminated through the
Page 2 of 5
<PAGE> 3
date of your termination (less any amount thereof previously paid to you).
During the salary continuation period, Wang will continue to provide you
with health and dental benefits pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act ("COBRA"). Wang shall pay
the applicable COBRA premium for you during this continuance period. Other
employee benefits will not be continued during this salary continuance
period.
In the event you become employed at any time during the balance of the
salary continuance period, all remaining salary continuance payments shall
terminate as of your date of hire by your new employer, except to the
extent that the total annual compensation for your new employment is less
that the total of your remaining salary continuance payments and, in such
event, the Company shall only pay that amount equal to the difference.
4. The following paragraph 10 is added to the Employment Letter:
10. NON-COMPETITION
By signing this letter, you agree as follows:
(a) During the period of your employment with Wang, and for a period of
eighteen (18) months following the termination of your employment, you
agree that you will not, without the prior written consent of Wang, which
shall not unreasonably be withheld, directly or indirectly, whether as a
principal, agent, employee, consultant, contractor, advisor,
representative, stockholder (other than as a holder of an interest of one
percent (1%) or less in the equity of any corporation whose stock is traded
on a public stock exchange), or in any other capacity:
(1) provide services, advice or assistance to any business, person or
entity which competes in the United States directly, as a primary focus
of its business, with Wang or any of its subsidiaries or affiliates in
the offer, sale or delivery of those desktop and network services which
constitute more than
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<PAGE> 4
twenty percent (20%) of Wang's revenues in the prior twelve month
period or, with respect to new product or service offerings, those
which are material to Wang and for which you had responsibility and
material and direct involvement ("Competes") (except that this
restriction shall not apply if you provide services, advice or
assistance to or within a separate division or operating unit, of any
such business, person or entity, that does not itself Compete with Wang
or any of its subsidiaries or affiliates, and you have no substantive
involvement with any part of such business, person or entity that does
Compete with Wang); or
(2) intentionally entice, induce or solicit, or attempt to entice,
induce or solicit, any individual or entity having a business
relationship with Wang, whether as an employee, consultant, customer or
otherwise, to terminate or cease such relationship.
(b) If your employment is involuntarily terminated other than for cause or
as a result of your death or if you resign as the result of one of the
reasons set forth in paragraph 5(b) herein, the restrictions set forth in
subparagraph 10(a) above shall apply only during your employment and for
six (6) months thereafter.
(c) The parties represent and agree that any breach of this paragraph 10 is
likely to cause irreparable injury to Wang, and that damages for any breach
of this paragraph are difficult to calculate. Therefore, upon breach of
this paragraph Wang shall, at its election, be entitled to injunctive and
other equitable relief. However nothing in this subparagraph shall limit
Wang's right to seek any relief or remedies, including damages, to which it
may be entitled.
(d) It is the intention of the parties that the restrictions contained in
this paragraph 10 be reasonable as to time, geographic scope, and in all
other respects. The parties also
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<PAGE> 5
intend that this paragraph be enforced to the fullest extent permissible.
Therefore, in the event that any provision of this paragraph shall be
determined by the court to be unreasonable, invalid or unenforceable such
determination shall not invalidate or render unenforceable the remainder of
this paragraph, and the restrictions of this paragraph shall be enforced
insofar as possible.
(e) Notwithstanding the provisions of paragraph 2 of this agreement, this
paragraph 10 shall survive the termination of this agreement.
(f) In the event of any inconsistency or conflict between the language of
this paragraph and the provisions of the Wang General Employment Agreement
signed by you on or about June 26, 1994, and in the event that this
paragraph 10 imposes obligations on you in excess of those imposed by said
General Employment Agreement, the provisions of this paragraph shall
govern.
(g) This paragraph 10 shall be governed by the laws of the Commonwealth of
Massachusetts, and you agree that any suit for violation of this paragraph
may be brought in any court of competent jurisdiction located within the
Commonwealth of Massachusetts.
The Employment Letter is hereby ratified and confirmed, except as expressly
modified herein.
WANG LABORATORIES, INC.
- - ---------------------------- ----------------------------
Franklyn A. Caine Joseph M. Tucci
Page 5 of 5
<PAGE> 1
EXHIBIT 10.55
July 1, 1998
Mr. Donald P. Casey
61 Jordan Road
Brookline, MA 02146
Dear Don:
You and Wang Laboratories, Inc. ("Wang") are parties to a Letter Agreement
dated February 12, 1997, pursuant to which you are employed by Wang (the
"Employment Letter"). The Employment Letter superceded and restated a prior
employment agreement dated March 9, 1993, and amended on April 26, 1995. You and
Wang have now agreed to amend the Employment Letter as follows:
1. Paragraph 2 of the Employment Letter is hereby deleted in its
entirety. The following paragraph is added in substitution thereof:
The terms and conditions of this letter will be in full force and effect
for a three (3) year period commencing on July 1, 1998 and terminating on
June 30, 2001, unless otherwise terminated as set forth in paragraph 4
below. As of June 30, 2001, your employment status will be at will.
2. Paragraph 3(a) of the Employment Letter is hereby deleted in its
entirety. The following paragraph is added in substitution thereof:
(a) Yearly Payments
Your yearly base salary and bonus will be as authorized from time to time
by Wang's Chief Executive Officer and Organization, Compensation and
Nominating Committee, and as reflected in the minutes of that Committee's
meetings maintained in the ordinary course of business. Your salary and
bonus plan target percentages will be
<PAGE> 2
reviewed annually for possible upward adjustment at the discretion of the
Company.
3. Paragraph 4 of the Employment Letter is hereby deleted in its
entirety. The following paragraph is added in substitution thereof:
(a) In the event that your employment with the Company is involuntarily
terminated (other than "for cause" (a term which includes but is not
limited to the standards set forth in Wang's Standards of Ethics and
Business Conduct booklet) or because of your death) or (b) (i) if your work
location is moved more than thirty (30) miles from your current work
location, (ii) there is an adverse change in your job responsibilities
(other than a mere change in title), (iii) if, without your consent, you
cease to be the principal technology officer of the Company, unless you
remain the senior operating officer of a significant operating unit of the
Company, or (iv) if, during the term of this Agreement, either or both of
your annual base salary or target bonus is decreased from the level it was
at immediately prior to such decrease (a "Decrease Event"), and upon the
occurrence of an event specified in subparts (i) through (iv), you resign,
then (c) Wang will pay you (i) immediately upon termination or resignation,
a lump sum payment equal to six (6) months of your salary and target bonus,
plus (ii) commencing on the termination or resignation date and ending
twelve (12) months thereafter, a salary continuance of twenty-four (24)
semi-monthly payments. Each such payment shall be equal to one twenty-forth
(1/24) of your annual salary plus target bonus at 100% performance, at the
time of your termination, (provided that if your termination follows the
occurrence of a Decrease Event, then the salary and target bonus levels
will be those in effect immediately prior to any such decrease), plus (iii)
at such time as Wang pays executives generally under the applicable annual
management incentive plan, the pro rata share of your target bonus (and in
the case of a Decrease Event at the target level immediately prior to such
decrease), calculated at the 100% achievement for individual objectives and
at an achievement level equal to Wang's actual performance (as used for
calculating the payout to other executives measured on the same basis) for
financial targets for the year in which your employment was terminated
through the date of your termination (less any amount thereof previously
paid to you). During this salary continuation
Page 2 of 5
<PAGE> 3
period, Wang will continue to provide you with health and dental benefits
pursuant to the provisions of the Consolidated Omnibus Budget
Reconciliation Act ("COBRA"). Wang shall pay the applicable COBRA premium
for you during this continuance period. Other employee benefits will not be
continued during this salary continuance period. If your work location is
moved more than thirty (30) miles from your current work location and you
choose to relocate, the Company will reimburse your moving expenses in
accordance with the Company Relocation Policy-Domestic.
In the event you become employed at any time during the twelve (12)-month
salary continuance period, all remaining salary continuance payments shall
terminate as of your date of hire by your new employer, except to the
extent that the total annual compensation for your new employment is less
than the total of your remaining salary continuance payments and, in such
event, the Company shall only pay that amount equal to the difference.
4. The following paragraph 7 is added to the Employment Letter:
7. NON-COMPETITION
By signing this letter, you agree as follows:
(a) During the period of your employment with Wang, and for a period of
twelve (12) months following the termination of your employment, you agree
that you will not, without the prior written consent of Wang, which shall
not unreasonably be withheld, directly or indirectly, whether as a
principal, agent, employee, consultant, contractor, advisor,
representative, stockholder (other than as a holder of an interest of one
percent (1%) or less in the equity of any corporation whose stock is traded
on a public stock exchange), or in any other capacity:
(1) provide services, advice or assistance to any business, person or
entity which competes in the United States directly, as a primary focus
of its business, with Wang or any of its subsidiaries or affiliates in
the offer, sale or delivery of those desktop and network services which
constitute more than twenty percent
Page 3 of 5
<PAGE> 4
(20%) of Wang's revenues in the prior twelve month period or, with
respect to new product or service offerings, those which are material
to Wang and for which you had responsibility and material and direct
involvement ("Competes") (except that this restriction shall not apply
if you provide services, advice or assistance to or within a separate
division or operating unit, of any such business, person or entity,
that does not itself Compete with Wang or any of its subsidiaries or
affiliates and you have no substantive involvement with any part of
such business, person or entity that does Compete with Wang); or
(2) intentionally entice, induce or solicit, or attempt to entice,
induce or solicit, any individual or entity having a business
relationship with Wang, whether as an employee, consultant, customer or
otherwise, to terminate or cease such relationship.
(b) If your employment is involuntarily terminated
other than for cause or as a result of your death or if you resign as the
result of one of the reasons set forth in paragraph 4(b) herein, the
restrictions set forth in subparagraph 7(a) above shall apply only during
your employment and for six (6) months thereafter.
(c) The parties represent and agree that any breach of this paragraph 7 is
likely to cause irreparable injury to Wang, and that damages for any breach
of this paragraph are difficult to calculate. Therefore, upon breach of
this paragraph Wang shall, at its election, be entitled to injunctive and
other equitable relief. However nothing in this sub-paragraph shall limit
Wang's right to seek any relief or remedies, including damages, to which it
may be entitled.
(d) It is the intention of the parties that the restrictions contained in
this paragraph 7 be reasonable as to time, geographic scope, and in all
other respects. The parties
Page 4 of 5
<PAGE> 5
also intend that this paragraph be enforced to the fullest extent
permissible. Therefore, in the event that any provision of this paragraph
shall be determined by the court to be unreasonable, invalid or
unenforceable such determination shall not invalidate or render
unenforceable the remainder of this paragraph, and the restrictions of this
paragraph shall be enforced insofar as possible.
(e) Notwithstanding the provisions of paragraph 2 of this agreement, this
paragraph 7 shall survive the termination of this agreement.
(f) In the event of any inconsistency or conflict between the language of
this paragraph and the provisions of the Wang General Employment Agreement
signed by you on or about October 2, 1991, and in the event that this
paragraph 7 imposes obligations on you in excess of those imposed by said
General Employment Agreement, the provisions of this paragraph shall
govern.
(g) This paragraph 7 shall be governed by the laws of the Commonwealth of
Massachusetts, and you agree that any suit for violation of this paragraph
may be brought in any court of competent jurisdiction located within the
Commonwealth of Massachusetts.
The Employment Letter is hereby ratified and confirmed, except as expressly
modified herein.
WANG LABORATORIES, INC.
- - ---------------------------- ---------------------------
Donald P. Casey Joseph M. Tucci
Page 5 of 5
<PAGE> 1
EXHIBIT 10.56
July 1, 1998
Ms. Lucy A. Flynn
371 Main Street
Winchester, MA 01890
Dear Lucy:
You and Wang Laboratories, Inc. ("Wang") are parties to a Letter Agreement
dated June 12, 1996, pursuant to which you are employed by Wang (the "Employment
Letter"). You and Wang have now agreed to amend the Employment Letter as
follows:
1. Paragraph 2 of the Employment Letter is hereby deleted in its
entirety. The following paragraph is added in substitution thereof:
The terms and conditions of this letter will be in full force and effect
for a three (3) year period commencing on July 1, 1998 and terminating on
June 30, 2001, unless otherwise terminated as set forth in paragraph 4. As
of June 30, 2001, your employment status will be at will, meaning that your
employment at Wang will be for an indefinite period of time and will be
terminable at any time, with or without cause being shown, by either you or
the Company. Therefore, unless this Agreement is extended in writing, the
terms and conditions contained in paragraph 4 of this letter will conclude
at the end of the three (3) year period set forth herein and the original,
unmodified terms of paragraph 6 of the attached, modified standard Wang
Employment Agreement will be in full force and effect. Wang agrees to meet
with you to discuss the extension of this Agreement in writing and on
mutually acceptable terms not earlier than nine (9) to twelve (12) months
prior to the expiration of the three (3) year period described in this
letter.
<PAGE> 2
2. Paragraph 3(a) of the Employment Letter is hereby deleted in its
entirety. The following paragraph is added in substitution thereof:
(a) Yearly Payments
Your yearly base salary and bonus will be as authorized from time to time
by Wang's Chief Executive Officer and Organization, Compensation and
Nominating Committee, and as reflected in the minutes of that Committee's
meetings maintained in the ordinary course of business. Your salary and
bonus plan percentages will be reviewed annually for possible upward
adjustment at the discretion of the Company.
3. Paragraph 3(c)(v) of the Employment Letter is hereby deleted in its
entirety.
4. Paragraph 4 of the Employment Letter is hereby deleted in its
entirety. The following paragraph is added in substitution thereof:
(a) In the event that your employment with the Company is involuntarily
terminated (other than "for cause" (a term which includes but is not
limited to the standards set forth in Wang's Standards of Ethics and
Business Conduct booklet) or because of your death) or (b) if, during the
term of this Agreement, either or both of your annual base salary or target
bonus is decreased from the level it was at immediately prior to such
decrease (a "Decrease Event") and you resign, then (c) Wang will pay you
semi-monthly, a twelve (12) month salary continuance equal to your then
base pay plus the target bonus contained in your bonus plan, at 100%
performance, at the time of your termination (provided that if your
termination follows the occurrence of a Decrease Event, then the salary and
target bonus levels will be those in effect immediately prior to any such
decrease). Wang shall also pay to you, at such time as Wang pays executives
generally under the applicable annual management incentive plan, the pro
rata share of your target bonus (and in the case of a Decrease Event at the
target level immediately prior to such decrease), calculated at the 100%
achievement for individual objectives and at an achievement level equal to
Wang's actual performance (as used for calculating the payout to other
executives measured on the same basis) for financial
Page 2 of 5
<PAGE> 3
targets for the year in which your employment was terminated through the
date of your termination (less any amount thereof previously paid to you).
During this salary continuation period, Wang will continue to provide you
with health and dental benefits pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act ("COBRA"). Wang shall pay
the applicable COBRA premium for you during this continuance period. Other
employee benefits will not be continued during this salary continuance
period.
In the event you become employed at any time during the twelve (12)-month
salary continuance period, all remaining salary continuance payments shall
terminate as of your date of hire by your new employer, except to the
extent that the total annual compensation for your new employment is less
than the total of your remaining salary continuance payments and, in such
event, the Company shall only pay that amount equal to the difference.
5. The following paragraph 8 is added to the Employment Letter:
8. NON-COMPETITION
By signing this letter, you agree as follows:
(a) During the period of your employment with Wang, and for a period of
twelve (12) months following the termination of your employment, you agree
that you will not, without the prior written consent of Wang, which shall
not unreasonably be withheld, directly or indirectly, whether as a
principal, agent, employee, consultant, contractor, advisor,
representative, stockholder (other than as a holder of an interest of one
percent (1%) or less in the equity of any corporation whose stock is traded
on a public stock exchange), or in any other capacity:
(1) provide services, advice or assistance to any business, person or
entity which competes in the United States directly, as a primary focus
of its business, with Wang or any of its subsidiaries or affiliates in
the offer, sale or delivery of those desktop and network services
Page 3 of 5
<PAGE> 4
which constitute more than twenty percent (20%) of Wang's revenues in
the prior twelve month period or, with respect to new product or
service offerings, those which are material to Wang and for which you
had responsibility and material and direct involvement ("Competes")
(except that this restriction shall not apply if you provide services,
advice or assistance to or within a separate division or operating
unit, of any such business, person or entity, that does not itself
Compete with Wang or any of its subsidiaries or affiliates and you have
no substantive involvement with any part of such business, person or
entity that does Compete with Wang); or
(2) intentionally entice, induce or solicit, or attempt to entice,
induce or solicit, any individual or entity having a business
relationship with Wang, whether as an employee, consultant, customer or
otherwise, to terminate or cease such relationship.
(b) If your employment is involuntarily terminated other than for cause or
as a result of your death or if you resign as the result of one of the
reasons set forth in paragraph 4(b) herein, the restrictions set forth in
subparagraph 8(a) above shall apply only during your employment and for six
(6) months thereafter.
(c) The parties represent and agree that any breach of this paragraph 8 is
likely to cause irreparable injury to Wang, and that damages for any breach
of this paragraph are difficult to calculate. Therefore, upon breach of
this paragraph Wang shall, at its election, be entitled to injunctive and
other equitable relief. However nothing in this sub-paragraph shall limit
Wang's right to seek any relief or remedies, including damages, to which it
may be entitled.
(d) It is the intention of the parties that the restrictions contained in
this paragraph 8 be reasonable as to time,
Page 4 of 5
<PAGE> 5
geographic scope, and in all other respects. The parties also intend that
this paragraph be enforced to the fullest extent permissible. Therefore, in
the event that any provision of this paragraph shall be determined by the
court to be unreasonable, invalid or unenforceable such determination shall
not invalidate or render unenforceable the remainder of this paragraph, and
the restrictions of this paragraph shall be enforced insofar as possible.
(e) Notwithstanding the provisions of paragraph 2 of this agreement, this
paragraph 8 shall survive the termination of this agreement.
(f) In the event of any inconsistency or conflict between the language of
this paragraph and the provisions of the Wang General Employment Agreement
signed by you on or about March 29, 1996, and in the event that this
paragraph 8 imposes obligations on you in excess of those imposed by said
General Employment Agreement, the provisions of this paragraph shall
govern.
(g) This paragraph 8 shall be governed by the laws of the Commonwealth of
Massachusetts, and you agree that any suit for violation of this paragraph
may be brought in any court of competent jurisdiction located within the
Commonwealth of Massachusetts.
The Employment Letter is hereby ratified and confirmed, except as expressly
modified herein.
WANG LABORATORIES, INC.
- - ---------------------------- ----------------------------
Lucy A. Flynn Joseph M. Tucci
Page 5 of 5
<PAGE> 1
EXHIBIT 10.57
July 1, 1998
Mr. David I. Goulden
73 Caterina Heights
Concord, MA 01742
Dear David:
You and Wang Laboratories, Inc. ("Wang") are parties to a Letter Agreement
dated January 1, 1994, pursuant to which you are employed by Wang (the
"Employment Letter"). The Employment Letter was subsequently amended, ratified
and confirmed by letter dated November 20, 1995. You and Wang have now agreed to
further amend the Employment Letter as follows:
1. Paragraph 2 of the Employment Letter, as amended by the November 20,
1995 letter, is hereby deleted in its entirety. The following paragraph is added
in substitution thereof:
The terms and conditions of this letter will be in full force and effect
for a three (3) year period commencing on July 1, 1998 and terminating on
June 30, 2001, unless otherwise terminated as set forth in paragraph 4
below. As of June 30, 2001, your employment status will be at will.
2. Paragraph 3(a) of the Employment Letter, as amended by the
November 20, 1995 letter, is hereby deleted in its entirety. The following
paragraph is added in substitution thereof:
(a) Yearly Payments
Your yearly base salary and bonus will be as authorized from time to time
by Wang's Chief Executive Officer and Organization, Compensation and
Nominating Committee, and as reflected in the minutes of that Committee's
meeting maintained in the ordinary course of business. Your salary and
bonus plan target percentages will be reviewed
Page 1 of 5
<PAGE> 2
annually for possible upward adjustment at the discretion of the Company.
3. Paragraph 4 of the Employment Letter is hereby deleted in its
entirety. The following paragraph is added in substitution thereof:
(a) In the event that your employment with the Company is involuntarily
terminated (other than "for cause" (a term which includes but is not
limited to the standards set forth in Wang's Standards of Ethics and
Business Conduct booklet) or because of your death) or (b) (i) if your work
location is moved more than thirty (30) miles from your current work
location, (ii) you cease to be either the Senior Vice President, Business
Development, an officer of the Company, or a member of the Senior Operating
Group of the Company, or (iii) if, during the term of this Agreement,
either or both of your annual base salary or target bonus is decreased from
the level it was at immediately prior to such decrease (a "Decrease
Event"), and upon the occurrence of an event specified in subparts (i)
through (iii), you resign, then (c) Wang will pay you (i) immediately upon
termination or resignation, a lump sum payment equal to six (6) months of
your salary and target bonus, plus (ii) commencing one month after
termination or resignation and ending eighteen months thereafter, eighteen
(18) monthly payments. Each monthly payment shall be equal to one-twelfth
of your annual salary plus target bonus, at 100% performance, at the time
of your termination (provided that if your termination follows the
occurrence of a Decrease Event, then the salary and target bonus levels
will be those in effect immediately prior to any such decrease), plus (iii)
at such time as Wang pays executives generally under the applicable annual
management incentive plan, the pro rata share of your target bonus (and in
the case of a Decrease Event at the target level immediately prior to such
decrease), calculated at the 100% achievement for individual objectives and
at an achievement level equal to Wang's actual performance (as used for
calculating the payout to other executives measured on the same basis) for
financial targets for the year in which your employment was terminated
through the date of your termination (less any amount thereof previously
paid to you). During this salary continuation period, Wang will continue to
provide you with health and dental benefits pursuant to the provisions of
the
Page 2 of 5
<PAGE> 3
Consolidated Omnibus Budget Reconciliation Act ("COBRA"). Wang shall pay
the applicable COBRA premium for you during this continuance period. Other
employee benefits will not be continued during this salary continuance
period. If your work location is moved more than thirty (30) miles from
your current work location and you choose to relocate, the Company will
reimburse your moving expenses in accordance with the Company Relocation
Policy-Domestic.
In the event you become employed at any time during the eighteen (18)-month
salary continuance period, all remaining salary continuance payments shall
terminate as of your date of hire by your new employer, except to the
extent that the total annual compensation for your new employment is less
than the total of your remaining salary continuance payments and, in such
event, the Company shall only pay that amount equal to the difference.
4. The following paragraph 8 is added to the Employment Letter:
8. NON-COMPETITION
By signing this letter, you agree as follows:
(a) During the period of your employment with Wang, and for a period of
eighteen (18) months following the termination of your employment, you
agree that you will not, without the prior written consent of Wang, which
shall not unreasonably be withheld, directly or indirectly, whether as a
principal, agent, employee, consultant, contractor, advisor,
representative, stockholder (other than as a holder of an interest of one
percent (1%) or less in the equity of any corporation whose stock is traded
on a public stock exchange), or in any other capacity:
(1) provide services, advice or assistance to any business, person or
entity which competes in the United States directly, as a primary focus
of its business, with Wang or any of its subsidiaries or affiliates in
the offer, sale or delivery of those desktop and network services which
constitute more than twenty percent (20%) of Wang's revenues in the
prior twelve month period or, with respect to new product or
Page 3 of 5
<PAGE> 4
service offerings, those which are material to Wang and for which you
had responsibility and material and direct involvement ("Competes")
(except that this restriction shall not apply if you provide services,
advice or assistance to or within a separate division or operating
unit, of any such business, person or entity, that does not itself
Compete with Wang or any of its subsidiaries or affiliates and you have
no substantive involvement with any part of such business, person or
entity that does Compete with Wang); or
(2) intentionally entice, induce or solicit, or attempt to entice,
induce or solicit, any individual or entity having a business
relationship with Wang, whether as an employee, consultant, customer or
otherwise, to terminate or cease such relationship.
(b) If your employment is involuntarily terminated other than for cause or
as a result of your death or if you resign as the result of one of the
reasons set forth in paragraph 4(b) herein, the restrictions set forth in
subparagraph 8(a) above shall apply only during your employment and for six
(6) months thereafter.
(c) The parties represent and agree that any breach of this paragraph 8 is
likely to cause irreparable injury to Wang, and that damages for any breach
of this paragraph are difficult to calculate. Therefore, upon breach of
this paragraph Wang shall, at its election, be entitled to injunctive and
other equitable relief. However nothing in this subparagraph shall limit
Wang's right to seek any relief or remedies, including damages, to which it
may be entitled.
(d) It is the intention of the parties that the restrictions contained in
this paragraph 8 be reasonable as to time, geographic scope, and in all
other respects. The parties also intend that this paragraph be enforced to
the fullest extent permissible. Therefore, in the event that any provision
of this paragraph shall be determined by the court to be unreasonable,
invalid or unenforceable such determination
Page 4 of 5
<PAGE> 5
shall not invalidate or render unenforceable the remainder of this
paragraph, and the restrictions of this paragraph shall be enforced insofar
as possible.
(e) Notwithstanding the provisions of paragraph 2 of this agreement, this
paragraph 8 shall survive the termination of this agreement.
(f) In the event of any inconsistency or conflict between the language of
this paragraph and the provisions of the Wang General Employment Agreement
signed by you on or about September 19, 1990, and in the event that this
paragraph 8 imposes obligations on you in excess of those imposed by said
General Employment Agreement, the provisions of this paragraph shall
govern.
(g) This paragraph 8 shall be governed by the laws of the Commonwealth of
Massachusetts, and you agree that any suit for violation of this paragraph
may be brought in any court of competent jurisdiction located within the
Commonwealth of Massachusetts.
The Employment Letter is hereby ratified and confirmed, except as expressly
modified herein.
WANG LABORATORIES, INC.
- - ---------------------------- ----------------------------
David I. Goulden Joseph M. Tucci
Page 5 of 5
<PAGE> 1
EXHIBIT 10.58
July 1, 1998
Mr. James J. Hogan
7 Westcott Road
Andover, MA 01810
Dear Jim:
You and Wang Laboratories, Inc. are parties to a Letter Agreement dated
February 20, 1997, pursuant to which you are employed by Wang Laboratories (the
"Employment Letter"). The Employment Letter superceded your prior employment
agreement dated December 15, 1993, and amended on May 3, 1995. You and Wang and
Wang Government Services, Inc. (collectively "Wang") have now agreed to further
amend the Employment Letter as follows:
1. Paragraph 2 of the Employment Letter is hereby deleted in its
entirety. The following paragraph is added in substitution thereof:
The terms and conditions of this letter will be in full force and effect
for a three (3) year period commencing on July 1, 1998 and terminating on
June 30, 2001, unless otherwise terminated as set forth in paragraph 4
below. As of June 30, 2001, your employment status will be at will.
2. Paragraph 3(a) of the Employment Letter is hereby deleted in its
entirety. The following paragraph is added in substitution thereof:
(a) Yearly Payments
Your yearly base salary and bonus will be as authorized from time to time
by Wang's Chief Executive Officer and Organization, Compensation and
Nominating Committee, and as reflected in the minutes of that Committee's
meetings maintained in the ordinary course of business. Your salary and
bonus plan target percentages will be
<PAGE> 2
reviewed annually for possible upward adjustment at the discretion of the
Company.
3. Paragraph 4 of the Employment Letter is hereby deleted in its
entirety. The following paragraph is added in substitution thereof:
(a) In the event that your employment with the Company is involuntarily
terminated (other than "for cause" (a term which includes but is not
limited to the standards set forth in Wang's Standards of Ethics and
Business Conduct booklet) or because of your death) or (b) (i) if you cease
to be either a Senior Vice President or Officer of the Company, (ii) you
cease to have independent responsibility for Wang's federal systems
business as set forth in Paragraph 1 hereof, or (iii) if, during the term
of this Agreement, either or both of your annual base salary or target
bonus is decreased from the level it was at immediately prior to such
decrease (a "Decrease Event"), and, as a result of the occurrence of one of
the events set forth in subparts (i) through (iii), you resign your
employment, then (c) Wang will pay you (i) immediately upon termination or
resignation, a lump sum payment equal to six (6) months of your salary and
target bonus, plus (ii) commencing one month after termination or
resignation and ending eighteen months thereafter, eighteen (18) monthly
payments. Each monthly payment shall be equal to one-twelfth of your annual
salary plus target bonus, at 100% performance, at the time of your
termination (provided that if your termination follows the occurrence of a
Decrease Event, then the salary and target bonus levels will be those in
effect immediately prior to such decrease), plus (iii) at such time as Wang
pays executives generally under the applicable annual management incentive
plan, the pro rata share of your target bonus (and in the case of a
Decrease Event at the target level immediately prior to such decrease),
calculated at the 100% achievement for individual objectives and at an
achievement level equal to Wang's actual performance (as used for
calculating the payout to other executives measured on the same basis) for
financial targets for the year in which your employment was terminated
through the date of your termination (less any amount thereof previously
paid to you). During this salary continuation period, Wang will continue to
provide you with health and dental benefits pursuant to the provisions of
the Consolidated Omnibus Budget
Page 2 of 5
<PAGE> 3
Reconciliation Act ("COBRA"). Wang shall pay the applicable COBRA premium
for you during this continuance period. Other employee benefits will not be
continued during this salary continuance period.
In the event you become employed at any time during the eighteen (18)-month
salary continuance period, all remaining salary continuance payments shall
terminate as of your date of hire by your new employer, except to the
extent that the total annual compensation for your new employment is less
than the total of your remaining salary continuance payments and, in such
event, the Company shall only pay that amount equal to the difference.
4. The following paragraph 8 is added to the Employment Letter:
8. NON-COMPETITION
By signing this letter, you agree as follows:
(a) During the period of your employment with Wang, and for a period of
eighteen (18) months following the termination of your employment, you
agree that you will not, without the prior written consent of Wang, which
shall not unreasonably be withheld, directly or indirectly, whether as a
principal, agent, employee, consultant, contractor, advisor,
representative, stockholder (other than as a holder of an interest of one
percent (1%) or less in the equity of any corporation whose stock is traded
on a public stock exchange), or in any other capacity:
(1) provide services, advice or assistance to any business, person or
entity which competes in the United States directly, as a primary focus
of its business, with Wang or any of its subsidiaries or affiliates in
the offer, sale or delivery of those desktop and network services which
constitute more than twenty percent (20%) of Wang's revenues in the
prior twelve month period or, with respect to new product or service
offerings, those which are material to Wang and for which you had
responsibility and material and direct involvement ("Competes") (except
that this restriction shall not apply if
Page 3 of 5
<PAGE> 4
you provide services, advice or assistance to or within a separate
division or operating unit, of any such business, person or entity,
that does not itself Compete with Wang or any of its subsidiaries or
affiliates and you have no substantive involvement with any part of
such business, person or entity that does Compete with Wang); or
(2) intentionally entice, induce or solicit, or attempt to entice,
induce or solicit, any individual or entity having a business
relationship with Wang, whether as an employee, consultant, customer or
otherwise, to terminate or cease such relationship.
(b) If your employment is involuntarily terminated other than for cause or
as a result of your death or if you resign as the result of one of the
reasons set forth in paragraph 4(b) herein, the restrictions set forth in
subparagraph 8(a) above shall apply only during your employment and for six
(6) months thereafter.
(c) The parties represent and agree that any breach of this paragraph 8 is
likely to cause irreparable injury to Wang, and that damages for any breach
of this paragraph are difficult to calculate. Therefore, upon breach of
this paragraph Wang shall, at its election, be entitled to injunctive and
other equitable relief. However nothing in this sub-paragraph shall limit
Wang's right to seek any relief or remedies, including damages, to which it
may be entitled.
(d) It is the intention of the parties that the restrictions contained in
this paragraph 8 be reasonable as to time, geographic scope, and in all
other respects. The parties also intend that this paragraph be enforced to
the fullest extent permissible. Therefore, in the event that any provision
of this paragraph shall be determined by the court to be unreasonable,
invalid or unenforceable such determination shall not invalidate or render
unenforceable the remainder of this paragraph, and the restrictions of this
paragraph shall be enforced insofar as possible.
Page 4 of 5
<PAGE> 5
(e) Notwithstanding the provisions of paragraph 2 of this agreement, this
paragraph 8 shall survive the termination of this agreement.
(f) In the event of any inconsistency or conflict between the language of
this paragraph and the provisions of the Wang General Employment Agreement
signed by you on or about September 24, 1994, and in the event that this
paragraph 8 imposes obligations on you in excess of those imposed by said
General Employment Agreement, the provisions of this paragraph shall
govern.
(g) This paragraph 8 shall be governed by the laws of the Commonwealth of
Massachusetts, and you agree that any suit for violation of this paragraph
may be brought in any court of competent jurisdiction located within the
Commonwealth of Massachusetts.
The Employment Letter is hereby ratified and confirmed, except as expressly
modified herein.
WANG LABORATORIES, INC.
- - ---------------------------- --------------------------------
James J. Hogan Joseph M. Tucci
WANG GOVERNMENT SERVICES, INC.
--------------------------------
Albert A. Notini
Page 5 of 5
<PAGE> 1
EXHIBIT 10.59
July 1, 1998
Mr. Albert A. Notini
6 Pomeroy Road
Andover, MA 01810
Dear Bert:
You and Wang Laboratories, Inc. ("Wang") are parties to a Letter Agreement
dated January 13, 1994, pursuant to which you are employed by Wang (the
"Employment Letter"). The Employment Letter was subsequently amended, ratified
and confirmed by letter dated November 20, 1995. You and Wang have now agreed to
further amend the Employment Letter as follows:
1. Paragraph 2 of the Employment Letter, as amended by the November 20,
1995 letter, is hereby deleted in its entirety. The following paragraph is added
in substitution thereof:
The terms and conditions of this letter will be in full force and effect
for a three (3) year period commencing on July 1, 1998 and terminating on
June 30, 2001, unless otherwise terminated as set forth in paragraph 4
below. As of June 30, 2001, your employment status will be at will.
2. Paragraph 3(a) of the Employment Letter, as amended by the
November 20, 1995 letter, is hereby deleted in its entirety. The following
paragraph is added in substitution thereof:
(a) Yearly Payments
Your yearly base salary and bonus will be as authorized from time to time
by Wang's Chief Executive Officer and Organization, Compensation and
Nominating Committee, and as reflected in the minutes of that Committee's
meetings maintained in the ordinary course of business. Your salary and
bonus plan target percentages will be
<PAGE> 2
reviewed annually for possible upward adjustment at the discretion of the
Company.
3. Paragraph 4 of the Employment Letter is hereby deleted in its
entirety. The following paragraph is added in substitution thereof:
(a) In the event that your employment with the Company is involuntarily
terminated (other than "for cause" (a term which includes but is not
limited to the standards set forth in Wang's Standards of Ethics and
Business Conduct booklet) or because of your death) or (b) (i) if your work
location is moved more than thirty (30) miles from your current work
location, (ii) you cease to be Senior Vice President, General Counsel and
Secretary of the Company, as set forth in Paragraph 1 of this Agreement, or
if you cease to report directly to me as Chairman of the Board and Chief
Executive Officer of the Company, or cease to be a member of the Senior
Operations Committee of the Company, or (iii) if, during the term of this
Agreement, either or both of your annual base salary or target bonus is
decreased from the level it was at immediately before such decrease (a
"Decrease Event"), and upon the occurrence of an event specified in
subparts (i) through (iii), you resign, then (c) Wang will pay you (i)
immediately upon termination or resignation, a lump sum payment equal to
six (6) months of your salary and target bonus, plus (ii) commencing one
month after termination or resignation and ending eighteen months
thereafter, eighteen (18) monthly payments. Each monthly payment shall be
equal to one-twelfth of your annual salary plus target bonus, at 100%
performance, at the time of your termination (provided that if your
termination follows the occurrence of a Decrease Event, then the salary and
target bonus levels will be those in effect immediately prior to such
decrease), plus (iii) at such time as Wang pays executives generally under
the applicable annual management incentive plan, the pro rata share of your
target bonus (and in the case of a Decrease Event at the target level
immediately prior to such decrease), calculated at the 100% achievement for
individual objectives and at an achievement level equal to Wang's actual
performance (as used for calculating the payout to other executives
measured on the same basis) for financial targets for the year in which
your employment was terminated through the date of your termination (less
any amount thereof
Page 2 of 5
<PAGE> 3
previously paid to you). During this salary continuation period, Wang will
continue to provide you with health and dental benefits pursuant to the
provisions of the Consolidated Omnibus Budget Reconciliation Act ("COBRA").
Wang shall pay the applicable COBRA premium for you during this continuance
period. Other employee benefits will not be continued during this salary
continuance period. If your work location is moved more than thirty (30)
miles from your current work location and you choose to relocate, the
company will reimburse your moving expenses in accordance with the Company
Relocation Policy-Domestic.
In the event you become employed at any time during the eighteen (18)-month
salary continuance period, all remaining salary continuance payments shall
terminate as of your date of hire by your new employer, except to the
extent that the total annual compensation for your new employment is less
than the total of your remaining salary continuance payments and, in such
event, the Company shall only pay that amount equal to the difference.
4. The following paragraph 8 is added to the Employment Letter:
8. NON-COMPETITION
By signing this letter, you agree as follows:
(a) During the period of your employment with Wang, and for a period of
eighteen (18) months following the termination of your employment, you
agree that you will not, without the prior written consent of Wang, which
shall not unreasonably be withheld, directly or indirectly, whether as a
principal, agent, employee, consultant, contractor, advisor,
representative, stockholder (other than as a holder of an interest of one
percent (1%) or less in the equity of any corporation whose stock is traded
on a public stock exchange), or in any other capacity:
(1) provide services, advice or assistance to any business, person or
entity which competes in the United States directly, as a primary focus
of its business, with Wang or any of its subsidiaries or affiliates in
the offer, sale or delivery of those desktop and network services
Page 3 of 5
<PAGE> 4
which constitute more than twenty percent (20%) of Wang's revenues in
the prior twelve month period or, with respect to new product or
service offerings, those which are material to Wang and for which you
had responsibility and material and direct involvement ("Competes")
(except that this restriction shall not apply if you provide services,
advice or assistance to or within a separate division or operating
unit, of any such business, person or entity, that does not itself
Compete with Wang or any of its subsidiaries or affiliates and you have
no substantive involvement with any part of such business, person or
entity that does Compete with Wang); or
(2) intentionally entice, induce or solicit, or attempt to entice,
induce or solicit, any individual or entity having a business
relationship with Wang, whether as an employee, consultant, customer or
otherwise, to terminate or cease such relationship.
(b) If your employment is involuntarily terminated other than for cause or
as a result of your death or if you resign as the result of one of the
reasons set forth in paragraph 4(b) herein, the restrictions set forth in
subparagraph 8(a) above shall apply only during your employment and for six
(6) months thereafter.
(c) The parties represent and agree that any breach of this paragraph 8 is
likely to cause irreparable injury to Wang, and that damages for any breach
of this paragraph are difficult to calculate. Therefore, upon breach of
this paragraph Wang shall, at its election, be entitled to injunctive and
other equitable relief. However nothing in this subparagraph shall limit
Wang's right to seek any relief or remedies, including damages, to which it
may be entitled.
(d) It is the intention of the parties that the restrictions contained in
this paragraph 8 be reasonable as to time, geographic scope, and in all
other respects. The parties also intend that this paragraph be enforced to
the fullest extent
Page 4 of 5
<PAGE> 5
permissible. Therefore, in the event that any provision of this paragraph
shall be determined by the court to be unreasonable, invalid or
unenforceable such determination shall not invalidate or render
unenforceable the remainder of this paragraph, and the restrictions of this
paragraph shall be enforced insofar as possible.
(e) Notwithstanding the provisions of paragraph 2 of this agreement, this
paragraph 8 shall survive the termination of this agreement.
(f) In the event of any inconsistency or conflict between the language of
this paragraph and the provisions of the Wang General Employment Agreement
signed by you on or about January 18, 1994, and in the event that this
paragraph 8 imposes obligations on you in excess of those imposed by said
General Employment Agreement, the provisions of this paragraph shall
govern.
(g) Nothing in this paragraph 8 shall be construed as a restriction on your
ability to practice law and advise or represent clients on legal matters,
including clients that may compete with the Company, to the extent such a
restriction would be deemed a violation of a statute, regulation,
disciplinary rule or other law of any jurisdiction whose law may be
applicable.
(h) This paragraph 8 shall be governed by the laws of the Commonwealth of
Massachusetts, and you agree that any suit for violation of this paragraph
may be brought in any court of competent jurisdiction located within the
Commonwealth of Massachusetts.
The Employment Letter is hereby ratified and confirmed, except as expressly
modified herein.
WANG LABORATORIES, INC.
- - ---------------------------- ---------------------------
Albert A. Notini Joseph M. Tucci
Page 5 of 5
<PAGE> 1
EXHIBIT 10.60
July 1, 1998
Mr. Jose Ofman
17620 Harbord Oaks Circle
Dallas, Texas 75252
Dear Jose:
You and Wang Laboratories, Inc. ("Wang") are parties to a Letter Agreement
dated March 6, 1997, pursuant to which you are employed by Wang (the "Employment
Letter"). You and Wang have now agreed to amend the Employment Letter as
follows:
1. Paragraph 1 of the Employment Letter is hereby deleted in its entirety
and restated as follows:
You are to be employed as the President of Wang's America's
International business, (which includes Mexico, Central and South America
and Canada) and the United States banking solutions business. You will
report directly to the Chief Executive Officer of Wang and be a member of
the Senior Operations Committee.
2. The first sentence of Paragraph 4 of the Employment Letter is hereby
deleted and restated as follows:
In the event that your employment with the Company is involuntarily
terminated other than for cause (a term which includes but is not limited
to a material violation of the standards set forth in Wang's "Standards of
Ethics and Business Conduct" booklet) or is terminated because of your
death or substantial inability to work or if your position, referred to in
paragraph 1 hereof, is reduced without your consent, other than a mere
change in title, Wang will pay to you (i) immediately upon termination or
resignation, a lump sum payment equal to six (6) months of your salary and
target bonus, plus (ii) commencing one month after termination or
resignation and ending eighteen (18) months thereafter, thirty-six (36)
semi-monthly payments. Each semi-monthly payment shall be equal to
one-twelfth of your annual salary plus target bonus at 100% performance at
the time of
<PAGE> 2
your termination, plus (iii) at such time as Wang pays executives generally
under the applicable annual management incentive plan, the pro rata share
of your target bonus, calculated at the 100% achievement for individual
objectives and at an achievement level equal to Wang's actual performance
(as used for calculating the payout to other executives measured on the
same basis) for financial targets for the year in which your employment was
terminated through the date of your termination (less any amount thereof
previously paid to you).
The Employment Letter is hereby ratified and confirmed, except as expressly
modified herein.
WANG LABORATORIES, INC.
- - ---------------------------- ----------------------------
Jose Ofman Joseph M. Tucci
Page 2 of 2
<PAGE> 1
EXHIBIT 10.61
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
Reference is made to that certain Agreement dated August 28, 1997 between
the undersigned, Jeremiah J.J. van Vuuren, as "Executive" and Wang Laboratories
Ireland B.V. 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 8 of the Agreement is hereby amended and restated in full as
follows:
The terms and conditions of (i) this Agreement, (ii) that certain agreement
between you and Wang Laboratories, Inc., entered into contemporaneously with
this Agreement, regarding your employment within the United Kingdom, and (iii)
that certain Agreement between you and WLI, dated as of February 23, 1994, and
as amended, set forth the entire understanding of the parties in connection with
your employment by the Company and its affiliates and, by your signature below,
you expressly acknowledge that such terms and conditions supersede and restate
the terms and conditions set forth in the 1993 Employment Agreement.
The parties hereby ratify the Agreement as amended hereby without further
changes. This Amendment to the Agreement is executed as a document under seal
this __ day of July, 1998.
Wang Laboratories Ireland B.V.,
By: ___________________________
Albert A. Notini
Director
AGREED:
By: ________________________
Jeremiah J.J. van Vuuren
<PAGE> 1
EXHIBIT 10.62
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
Reference is made to that certain Agreement dated August 28, 1997 between
the undersigned, Jeremiah J.J. van Vuuren, 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 8 of the Agreement is hereby amended and restated in full as
follows:
The terms and conditions of (i) this Agreement, (ii) that certain agreement
between you and Wang Laboratories Ireland B.V., entered into contemporaneously
with this Agreement, regarding your employment outside of the United Kingdom,
and (iii) that certain Agreement between you and WLI, dated as of February 23,
1994, and as amended, set forth the entire understanding of the parties in
connection with your employment by the Company and its subsidiaries and, by your
signature below, you expressly acknowledge that such terms and conditions
supersede and restate the terms and conditions set forth in the 1993 Employment
Agreement.
The parties hereby ratify the Agreement as amended hereby without further
changes. This Amendment to the Agreement is executed as a document under seal
this __ day of July, 1998.
Wang Laboratories, Inc.,
By: _________________________
Joseph M. Tucci
Chairman of the Board and
Chief Executive Officer
AGREED:
By: ________________________
Jeremiah J.J. van Vuuren
<PAGE> 1
EXHIBIT 10.63
THIRD AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT
Reference is made to that certain Agreement dated May 31, 1994 and
amended October 19, 1995 and March 27, 1997, between the undersigned, Franklyn
A. Caine, as "Executive" and 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) The first sentence of the Agreement is hereby amended and restated in full
as follows:
THIS AGREEMENT dated as of May 31, 1994, is made by and between the
Company and Franklyn A. Caine (the "Executive").
(2) The second "WHEREAS" clause of the Agreement is hereby amended and
restated in full as follows:
WHEREAS the Board of Directors of Wang Laboratories, Inc. (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 such management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders; and
(3) Paragraph 2 of the Agreement is hereby amended and restated in full as
follows:
2. TERMS OF AGREEMENT.
(a) This Agreement, which commenced as of August 15, 1994, shall be
renewed as of July 1, 1998 (the "Renewal Date") and shall continue in effect
while the Executive is employed by the Company for a period of three years from
the Renewal Date, provided, however, that commencing on the second anniversary
of the Renewal Date 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, renewed 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.
(b) It is 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
<PAGE> 2
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 options to
acquire shares of the Company's stock ("Options") awarded to the Executive, any
shares of the Company's stock awarded to the Executive and subject to one or
more restrictions on the Executive's full ownership or right to transfer or
enjoy the economic benefit of such shares ("Restricted Shares") or any
contractual agreement with the Executive pursuant to which the Executive will
receive shares of the Company's stock, subject to one or more restrictions (a
"Restricted Stock Unit"), shall become fully exercisable or all restrictions
thereon shall terminate, as the case may be, upon occurrence of a Change in
Control during the term of this Agreement.
(c) The acceleration provisions of subparagraph (b)(ii) above (the
"Subparagraph (b)(ii) Acceleration Provisions") shall not apply (i) to Options,
Restricted Shares or Restricted Stock Units that are not fully exercisable or
are not free of restrictions until a target share price performance has been
reached if such target price has not been reached at the time of the Change in
Control or (ii) to the extent that the Subparagraph (b)(ii) Acceleration
Provisions conflict with any specific provisions related to the accelerated
exercisability of or lapse of restrictions on any Options, Restricted Shares or
Restricted Stock Units in the event of a Change in Control set forth in
agreements, plans or instruments evidencing such Options, Restricted Shares or
Restricted Stock Units (collectively , the "Grant Instruments"). The definition
of Change in Control set forth in this Agreement shall prevail over any contrary
definition in a Grant Instrument unless such Grant Instrument specifically
refers to this Agreement and states that the definition of Change in Control in
the Grant Instrument prevails.
(4) The phrase "Subject to Section 6.02 hereof," is hereby deleted from the
beginning of Paragraph 6.1 of the Agreement, which shall now begin "The Company
shall pay...."
(5) In Paragraph 6.1 of the Agreement, the phrase "equal to 2.99 times the
average of the Executive's base salary and annual bonus received in" is hereby
amended and restated as: "equal to 2.99 times the average of the Executive's
base salary and annual bonus paid in...."
(6) Paragraph 6.2(a) of the Agreement is hereby amended and restated in full
as follows:
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 and Excise Tax 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.
Page 2 of 4
<PAGE> 3
(7) The last sentence of Exhibit 6.2 to the First Amendment to Change of
Control Severance Agreement is hereby amended and restated in full as follows:
Accordingly, the net amount retained by the Executive after payment of
Excise Tax on the Total Payments and income taxes and Excise Tax on the Gross-Up
Payment equals $400,000 [600,000 - 200,000], which equals the Executive's Total
Payments before calculation of the Gross-Up Payment.
(8) Section (A) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(A) "Affiliate" shall mean an entity that is controlled by Wang
Laboratories, Inc.
(9) Paragraph 16 of the Agreement is hereby amended to add Section 16(A1) as
follows:
(A1) "Base Amount" shall have the meaning defined in section 280G(b)(3)
of the Code.
(10) Section (C) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(C) "Board" shall mean the Board of Directors of Wang Laboratories,
Inc.
(11) Section (ii) of paragraph 16(E) of the Agreement is hereby amended and
restated in full as follows:
(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 whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the company) 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 was previously so approved, cease for any reason to constitute a
majority thereof; or
(12) The following language is hereby inserted before subsection (i) within
Section (E)(iii) of Paragraph 16 of the Agreement, so as to replace the existing
language:
(iii) the Company or any Subsidiary or Affiliate merges or consolidates
with any other corporation, other than
Page 3 of 4
<PAGE> 4
(13) Section (E)(iv) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or there is consummated the sale or disposition by
the Company of all or substantially all of the Company's assets or the Company
is dissolved and its assets distributed in a judicial proceeding.
(14) Section (G) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(G) Except with respect to Sections 16(E) and (N) hereof, "Company"
shall mean Wang Laboratories, Inc. or one of its Subsidiaries or Affiliates,
both as defined herein, and any successor to their business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
For the purposes of Sections 16(E) and (N) hereof, "Company" shall mean Wang
Laboratories, Inc. and any successors thereto or any parent thereof.
(15) Paragraph 16 of the Agreement shall be amended to add Section 16(Q) as
follows:
(Q) "Subsidiary" shall mean an entity that is controlled by Wang
Laboratories, Inc.
The parties hereby ratify the Agreement as amended hereby without further
changes. This Amendment to the Agreement is executed as a document under seal
this __ day of August, 1998.
WANG LABORATORIES, INC.
By: _________________________
Joseph M. Tucci
Chairman of the Board and
Chief Executive Officer
and
AGREED:
By: ______________________
Franklyn A. Caine
Page 4 of 4
<PAGE> 1
EXHIBIT 10.64
SECOND AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT
Reference is made to that certain Agreement dated February 23, 1994 and
amended October 18, 1995 between the undersigned, Donald P. Casey, as
"Executive" and 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) The first sentence of the Agreement is hereby amended and restated in
full as follows:
THIS AGREEMENT dated as of February 23, 1994, is made by and between the
Company and Donald P. Casey (the "Executive").
(2) The second "WHEREAS" clause of the Agreement is hereby amended and
restated in full as follows:
WHEREAS the Board of Directors of Wang Laboratories, Inc. (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 such management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders; and
(3) The first sentence of Paragraph 2 of the Agreement is hereby amended and
restated in full as follows:
2. TERMS OF AGREEMENT.
(a) This Agreement, which commenced as of March 1, 1994, shall be
renewed as of July 1, 1998 (the "Renewal Date") and shall continue in effect
while the Executive is employed by the Company for a period of three years from
the Renewal Date, provided, however, that commencing on the second anniversary
of the Renewal Date 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, renewed 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.
(b) It is 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
<PAGE> 2
actually provided under Section 6.1 hereof and (ii) any options to acquire
shares of the Company's stock ("Options") awarded to the Executive, any shares
of the Company's stock awarded to the Executive and subject to one or more
restrictions on the Executive's full ownership or right to transfer or enjoy the
economic benefit of such shares ("Restricted Shares") or any contractual
agreement with the Executive pursuant to which the Executive will receive shares
of the Company's stock, subject to one or more restrictions (a "Restricted Stock
Unit"), shall become fully exercisable or all restrictions thereon shall
terminate, as the case may be, upon occurrence of a Change in Control during the
term of this Agreement.
(c) The acceleration provisions of subparagraph (b)(ii) above (the
"Subparagraph (b)(ii) Acceleration Provisions") shall not apply (i) to Options,
Restricted Shares or Restricted Stock Units that are not fully exercisable or
are not free of restrictions until a target share price performance has been
reached if such target price has not been reached at the time of the Change in
Control or (ii) to the extent that the Subparagraph (b)(ii) Acceleration
Provisions conflict with any specific provisions related to the accelerated
exercisability of or lapse of restrictions on any Options, Restricted Shares or
Restricted Stock Units in the event of a Change in Control set forth in
agreements, plans or instruments evidencing such Options, Restricted Shares or
Restricted Stock Units (collectively , the "Grant Instruments"). The definition
of Change in Control set forth in this Agreement shall prevail over any contrary
definition in a Grant Instrument unless such Grant Instrument specifically
refers to this Agreement and states that the definition of Change in Control in
the Grant Instrument prevails.
(4) The phrase "Subject to Section 6.02 hereof," is hereby deleted from the
beginning of Paragraph 6.1 of the Agreement, which shall now begin "The Company
shall pay...."
(5) In Paragraph 6.1 of the Agreement, the phrase "equal to 2.99 times the
average of the Executive's base salary and annual bonus received in" is hereby
amended and restated as: "equal to 2.99 times the average of the Executive's
base salary and annual bonus paid in...."
(6) Paragraph 6.2(a) of the Agreement is hereby amended and restated in full
as follows:
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 and Excise Tax 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.
Page 2 of 4
<PAGE> 3
(7) The last sentence of Exhibit 6.2 to the First Amendment to Change of
Control Severance Agreement is hereby amended and restated in full as follows:
Accordingly, the net amount retained by the Executive after payment of
Excise Tax on the Total Payments and income taxes and Excise Tax on the Gross-Up
Payment equals $400,000 [600,000 - 200,000], which equals the Executive's Total
Payments before calculation of the Gross-Up Payment.
(8) Section (A) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(A) "Affiliate" shall mean an entity that is controlled by Wang
Laboratories, Inc.
(9) Paragraph 16 of the Agreement is hereby amended to add Section 16(A1) as
follows:
(A1) "Base Amount" shall have the meaning defined in section 280G(b)(3)
of the Code.
(10) Section (C) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(C) "Board" shall mean the Board of Directors of Wang Laboratories,
Inc.
(11) Section (ii) of paragraph 16(E) of the Agreement is hereby amended and
restated in full as follows:
(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 whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the company) 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 was previously so approved, cease for any reason to constitute a
majority thereof; or
(12) The following language is hereby inserted, so as to replace the existing
language, before subsection (i) within Section (E)(iii) of Paragraph 16 of the
Agreement:
(iii) the Company or any Subsidiary or Affiliate merges or consolidates
with any other corporation, other than
(13) Section (E)(iv) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
Page 3 of 4
<PAGE> 4
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or there is consummated the sale or disposition by
the Company of all or substantially all of the Company's assets or the Company
is dissolved and its assets distributed in a judicial proceeding.
(14) Section (G) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(G) Except with respect to Sections 16(E) and (N) hereof, "Company"
shall mean Wang Laboratories, Inc. or one of its Subsidiaries or Affiliates,
both as defined herein, and any successor to their business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
For the purposes of Sections 16(E) and (N) hereof, "Company" shall mean Wang
Laboratories, Inc. and any successors thereto or any parent thereof.
(15) Paragraph 16 of the Agreement shall be amended to add Section 16(Q) as
follows:
(Q) "Subsidiary" shall mean an entity that is controlled by Wang
Laboratories, Inc.
(16) The first sentence of the First Amendment to Change of Control Severance
Agreement is hereby amended to replace the date "April 26, 1995" with
"February 23, 1994."
The parties hereby ratify the Agreement as amended hereby without further
changes. This Amendment to the Agreement is executed as a document under seal
this __ day of August, 1998.
WANG LABORATORIES, INC.
By: _________________________
Joseph M. Tucci
Chairman of the Board and
Chief Executive Officer
and
AGREED:
By: ____________________
Donald P. Casey
Page 4 of 4
<PAGE> 1
EXHIBIT 10.65
FIRST AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT
Reference is made to that certain Agreement dated June 26, 1996 between
the undersigned, Lucy A. Flynn, as "Executive" and 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) The first sentence of the Agreement is hereby amended and restated in
full as follows:
THIS AGREEMENT dated as of June 26, 1996, is made by and between the
Company and Lucy A. Flynn (the "Executive").
(2) The second "WHEREAS" clause of the Agreement is hereby amended and
restated in full as follows:
WHEREAS the Board of Directors of Wang Laboratories, Inc. (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 such management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders; and
(3) Paragraph 2 of the Agreement is hereby amended and restated in full as
follows:
2. TERMS OF AGREEMENT.
(a) This Agreement, which commenced as of June 26, 1996, shall be
renewed as of July 1, 1998 (the "Renewal Date") and shall continue in effect
while the Executive is employed by the Company for a period of three years from
the Renewal Date, provided, however, that commencing on the second anniversary
of the Renewal Date 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, renewed 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.
(b) It is 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
<PAGE> 2
actually provided under Section 6.1 hereof and (ii) any options to acquire
shares of the Company's stock ("Options") awarded to the Executive, any shares
of the Company's stock awarded to the Executive and subject to one or more
restrictions on the Executive's full ownership or right to transfer or enjoy the
economic benefit of such shares ("Restricted Shares") or any contractual
agreement with the Executive pursuant to which the Executive will receive shares
of the Company's stock, subject to one or more restrictions (a "Restricted Stock
Unit"), shall become fully exercisable or all restrictions thereon shall
terminate, as the case may be, upon occurrence of a Change in Control during the
term of this Agreement.
(c) The acceleration provisions of subparagraph (b)(ii) above (the
"Subparagraph (b)(ii) Acceleration Provisions") shall not apply (i) to Options,
Restricted Shares or Restricted Stock Units that are not fully exercisable or
are not free of restrictions until a target share price performance has been
reached if such target price has not been reached at the time of the Change in
Control or (ii) to the extent that the Subparagraph (b)(ii) Acceleration
Provisions conflict with any specific provisions related to the accelerated
exercisability of or lapse of restrictions on any Options, Restricted Shares or
Restricted Stock Units in the event of a Change in Control set forth in
agreements, plans or instruments evidencing such Options, Restricted Shares or
Restricted Stock Units (collectively , the "Grant Instruments"). The definition
of Change in Control set forth in this Agreement shall prevail over any contrary
definition in a Grant Instrument unless such Grant Instrument specifically
refers to this Agreement and states that the definition of Change in Control in
the Grant Instrument prevails.
(4) In Paragraph 6.1 of the Agreement, the phrase "equal to 2.0 times the
average of the Executive's base salary and annual bonus received in" is hereby
amended and restated as: "equal to 2.0 times the average of the Executive's base
salary and annual bonus paid in...."
(5) Section (A) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(A) "Affiliate" shall mean an entity that is controlled by Wang
Laboratories, Inc.
(6) Paragraph 16 of the Agreement is hereby amended to add Section 16(A1) as
follows:
(A1) "Base Amount" shall have the meaning defined in section 280G(b)(3)
of the Code.
(7) Section (C) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(C) "Board" shall mean the Board of Directors of Wang Laboratories,
Inc.
Page 2 of 4
<PAGE> 3
(8) Section (ii) of paragraph 16(E) of the Agreement is hereby amended and
restated in full as follows:
(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 whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the company) 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 was previously so approved, cease for any reason to constitute a
majority thereof; or
(9) The following language is hereby inserted, so as to replace the existing
language, before subsection (i) of Section (E)(iii) of Paragraph 16 of the
Agreement:
(iii) the Company or any Subsidiary or Affiliate merges or consolidates
with any other corporation, other than
(10) Section (E)(iv) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or there is consummated the sale or disposition by
the Company of all or substantially all of the Company's assets or the Company
is dissolved and its assets distributed in a judicial proceeding.
(11) Section (G) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(G) Except with respect to Sections 16(E) and (N) hereof, "Company"
shall mean Wang Laboratories, Inc. or one of its Subsidiaries or Affiliates,
both as defined herein, and any successor to their business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
For the purposes of Sections 16(E) and (N) hereof, "Company" shall mean Wang
Laboratories, Inc. and any successors thereto or any parent thereto.
(12) Paragraph 16 of the Agreement shall be amended to add Section 16(P1) as
follows:
(P1) "Subsidiary" shall mean an entity that is controlled by Wang
Laboratories, Inc.
Page 3 of 4
<PAGE> 4
The parties hereby ratify the Agreement as amended hereby without
further changes. This Amendment to the Agreement is executed as a document under
seal this __ day of August, 1998.
WANG LABORATORIES, INC.
By: _________________________
Joseph M. Tucci
Chairman of the Board and
Chief Executive Officer
and
AGREED:
By: ______________________
Lucy A. Flynn
Page 4 of 4
<PAGE> 1
EXHIBIT 10.66
THIRD AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT
Reference is made to that certain Agreement dated May 10, 1994 and
amended October 17, 1995 and March 27, 1997, between the undersigned, David I.
Goulden, as "Executive" and 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) The first sentence of the Agreement is hereby amended and restated in
full as follows:
THIS AGREEMENT dated as of May 10, 1994, is made by and between the
Company and David I. Goulden (the "Executive").
(2) The second "WHEREAS" clause of the Agreement is hereby amended and
restated in full as follows:
WHEREAS the Board of Directors of Wang Laboratories, Inc. (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 such management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders; and
(3) Paragraph 2 of the Agreement is hereby amended and restated in full as
follows:
2. TERMS OF AGREEMENT.
(a) This Agreement, which commenced as of March 1, 1994, shall be
renewed as of July 1, 1998 (the "Renewal Date") and shall continue in effect
while the Executive is employed by the Company for a period of three years from
the Renewal Date, provided, however, that commencing on the second anniversary
of the Renewal Date 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, renewed 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.
(b) It is 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
options to acquire shares of the Company's stock ("Options") awarded to the
Executive, any shares of the Company's
<PAGE> 2
stock awarded to the Executive and subject to one or more restrictions on the
Executive's full ownership or right to transfer or enjoy the economic benefit of
such shares ("Restricted Shares") or any contractual agreement with the
Executive pursuant to which the Executive will receive shares of the Company's
stock, subject to one or more restrictions (a "Restricted Stock Unit"), shall
become fully exercisable or all restrictions thereon shall terminate, as the
case may be, upon occurrence of a Change in Control during the term of this
Agreement.
(c) The acceleration provisions of subparagraph (b)(ii) above (the
"Subparagraph (b)(ii) Acceleration Provisions") shall not apply (i) to Options,
Restricted Shares or Restricted Stock Units that are not fully exercisable or
are not free of restrictions until a target share price performance has been
reached if such target price has not been reached at the time of the Change in
Control or (ii) to the extent that the Subparagraph (b)(ii) Acceleration
Provisions conflict with any specific provisions related to the accelerated
exercisability of or lapse of restrictions on any Options, Restricted Shares or
Restricted Stock Units in the event of a Change in Control set forth in
agreements, plans or instruments evidencing such Options, Restricted Shares or
Restricted Stock Units (collectively , the "Grant Instruments"). The definition
of Change in Control set forth in this Agreement shall prevail over any contrary
definition in a Grant Instrument unless such Grant Instrument specifically
refers to this Agreement and states that the definition of Change in Control in
the Grant Instrument prevails.
(4) The phrase "Subject to Section 6.02 hereof," is hereby deleted from the
beginning of Paragraph 6.1 of the Agreement, which shall now begin "The Company
shall pay...."
(5) In Paragraph 6.1 of the Agreement, the phrase "equal to 2.99 times the
average of the Executive's base salary and annual bonus received in" is hereby
amended and restated as: "equal to 2.99 times the average of the Executive's
base salary and annual bonus paid in...."
(6) Paragraph 6.2(a) of the Agreement is hereby amended and restated in full
as follows:
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 and Excise Tax 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.
(7) The last sentence of Exhibit 6.2 to the First Amendment to Change of
Control Severance Agreement is hereby amended and restated in full as follows:
Accordingly, the net amount retained by the Executive after payment of
Excise Tax on the Total Payments and income taxes and Excise Tax on the Gross-Up
Payment equals $400,000 [600,000 - 200,000], which equals the Executive's Total
Payments before calculation of the Gross-Up Payment.
Page 2 of 4
<PAGE> 3
(8) Section (A) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(A) "Affiliate" shall mean an entity that is controlled by Wang
Laboratories, Inc.
(9) Paragraph 16 of the Agreement is hereby amended to add Section 16(A1) as
follows:
(A1) "Base Amount" shall have the meaning defined in section 280G(b)(3)
of the Code.
(10) Section (C) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(C) "Board" shall mean the Board of Directors of Wang Laboratories,
Inc.
(11) Section (ii) of paragraph 16(E) of the Agreement is hereby amended and
restated in full as follows:
(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 whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the company) 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 was previously so approved, cease for any reason to constitute a
majority thereof; or
(12) The following language is inserted, so as to replace the existing
language, before subsection (i) of Section (E)(iii) of Paragraph 16 of the
Agreement:
(iii) the Company or any Subsidiary or Affiliate merges or consolidates
with any other corporation, other than
(13) Section (E)(iv) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or there is consummated the sale or disposition by
the Company of all or substantially all of the Company's assets or the Company
is dissolved and its assets distributed in a judicial proceeding.
(14) Section (G) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
Page 3 of 4
<PAGE> 4
(G) Except with respect to Sections 16(E) and (N) hereof, "Company"
shall mean Wang Laboratories, Inc. or one of its Subsidiaries or Affiliates,
both as defined herein, and any successor to their business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
For the purposes of Sections 16(E) and (N) hereof, "Company" shall mean Wang
Laboratories, Inc. and any successors thereto, provided, however, that for the
purposes of determining whether a Change in Control or Potential Change in
Control has occurred, the "Company" shall mean the entity that has experienced
one of the conditions set forth in Sections 16(E) or (N).
(15) Paragraph 16 of the Agreement shall be amended to add Section 16(Q) as
follows:
(Q) "Subsidiary" shall mean an entity that is controlled by Wang
Laboratories, Inc.
(16) The first sentence of the Second Amendment to Change of Control Severance
Agreement is hereby amended to replace the date "October 12, 1995" with "October
17, 1995."
The parties hereby ratify the Agreement as amended hereby without further
changes. This Amendment to the Agreement is executed as a document under seal
this __ day of August, 1998.
WANG LABORATORIES, INC.
By: _________________________
Joseph M. Tucci
Chairman of the Board and
Chief Executive Officer
and
AGREED:
By: ______________________
David I. Goulden
Page 4 of 4
<PAGE> 1
EXHIBIT 10.67
SECOND AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT
Reference is made to that certain Agreement dated May 10, 1994 and
amended October 17, 1995 between the undersigned, James J. Hogan, as "Executive"
and 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) The first sentence of the Agreement is hereby amended and restated in
full as follows:
THIS AGREEMENT dated as of May 10, 1994, is made by and between the
Company and James J. Hogan (the "Executive").
(2) The second "WHEREAS" clause of the Agreement is hereby amended and
restated in full as follows:
WHEREAS the Board of Directors of Wang Laboratories, Inc. (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 such management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders; and
(3) Paragraph 2 of the Agreement is hereby amended and restated in full as
follows:
2. TERMS OF AGREEMENT.
(a) This Agreement, which commenced as of March 1, 1994, shall be
renewed as of July 1, 1998 (the "Renewal Date") and shall continue in effect
while the Executive is employed by the Company for a period of three years from
the Renewal Date, provided, however, that commencing on the second anniversary
of the Renewal Date 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, renewed 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.
(b) It is 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
options to acquire shares of the
<PAGE> 2
Company's stock ("Options") awarded to the Executive, any shares of the
Company's stock awarded to the Executive and subject to one or more restrictions
on the Executive's full ownership or right to transfer or enjoy the economic
benefit of such shares ("Restricted Shares") or any contractual agreement with
the Executive pursuant to which the Executive will receive shares of the
Company's stock, subject to one or more restrictions (a "Restricted Stock
Unit"), shall become fully exercisable or all restrictions thereon shall
terminate, as the case may be, upon occurrence of a Change in Control during the
term of this Agreement.
(c) The acceleration provisions of subparagraph (b)(ii) above (the
"Subparagraph (b)(ii) Acceleration Provisions") shall not apply (i) to Options,
Restricted Shares or Restricted Stock Units that are not fully exercisable or
are not free of restrictions until a target share price performance has been
reached if such target price has not been reached at the time of the Change in
Control or (ii) to the extent that the Subparagraph (b)(ii) Acceleration
Provisions conflict with any specific provisions related to the accelerated
exercisability of or lapse of restrictions on any Options, Restricted Shares or
Restricted Stock Units in the event of a Change in Control set forth in
agreements, plans or instruments evidencing such Options, Restricted Shares or
Restricted Stock Units (collectively , the "Grant Instruments"). The definition
of Change in Control set forth in this Agreement shall prevail over any contrary
definition in a Grant Instrument unless such Grant Instrument specifically
refers to this Agreement and states that the definition of Change in Control in
the Grant Instrument prevails.
(4) The phrase "Subject to Section 6.02 hereof," is hereby deleted from the
beginning of Paragraph 6.1 of the Agreement, which shall now begin "The Company
shall pay...."
(5) In Paragraph 6.1 of the Agreement, the phrase "equal to 2.99 times the
average of the Executive's base salary and annual bonus received in" is hereby
amended and restated as: "equal to 2.99 times the average of the Executive's
base salary and annual bonus paid in...."
(6) Paragraph 6.2(a) of the Agreement is hereby amended and restated in full
as follows:
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 and Excise Tax 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.
(7) The last sentence of Exhibit 6.2 to the First Amendment to Change of
Control Severance Agreement is hereby amended and restated in full as follows:
Accordingly, the net amount retained by the Executive after payment of
Excise Tax on the Total Payments and income taxes and Excise Tax on the Gross-Up
Payment
Page 2 of 4
<PAGE> 3
equals $400,000 [600,000 - 200,000], which equals the Executive's Total Payments
before calculation of the Gross-Up Payment.
(8) Section (A) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(A) "Affiliate" shall mean an entity that is controlled by Wang
Laboratories, Inc.
(9) Paragraph 16 of the Agreement is hereby amended to add Section 16(A1) as
follows:
(A1) "Base Amount" shall have the meaning defined in section 280G(b)(3)
of the Code.
(10) Section (C) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(C) "Board" shall mean the Board of Directors of Wang Laboratories,
Inc.
(11) Section (ii) of paragraph 16(E) of the Agreement is hereby amended and
restated in full as follows:
(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 whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the company) 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 was previously so approved, cease for any reason to constitute a
majority thereof; or
(12) The following language is hereby inserted, so as to replace the existing
language, before subsection (i) of Section (E)(iii) of Paragraph 16 of the
Agreement:
(iii) the Company or any Subsidiary or Affiliate merges or consolidates
with any other corporation, other than
(13) Section (E)(iv) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or there is consummated the sale or disposition by
the Company of all or substantially all of the Company's assets or the Company
is dissolved and its assets distributed in a judicial proceeding.
Page 3 of 4
<PAGE> 4
(14) Section (G) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(G) Except with respect to Sections 16(E) and (N) hereof, "Company"
shall mean Wang Laboratories, Inc. or one of its Subsidiaries or Affiliates,
both as defined herein, and any successor to their business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
For the purposes of Sections 16(E) and (N) hereof, "Company" shall mean Wang
Laboratories, Inc. and any successors thereto or any parent thereof.
(15) Paragraph 16 of the Agreement shall be amended to add Section 16(Q) as
follows:
(Q) "Subsidiary" shall mean an entity that is controlled by Wang
Laboratories, Inc.
(16) The first sentence of the First Amendment to Change of Control Severance
Agreement is hereby amended to replace the date "May 3, 1995" with "May 10,
1994."
The parties hereby ratify the Agreement as amended hereby without further
changes. This Amendment to the Agreement is executed as a document under seal
this __ day of August, 1998.
WANG LABORATORIES, INC.
By: __________________________
Joseph M. Tucci
Chairman of the Board and
Chief Executive Officer
WANG GOVERNMENT SERVICES, INC.
By: __________________________
Albert A. Notini
Senior Vice President and
Secretary
AGREED:
By: ______________________
James J. Hogan
Page 4 of 4
<PAGE> 1
EXHIBIT 10.67
SECOND AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT
Reference is made to that certain Agreement dated May 10, 1994 and
amended October 17, 1995 between the undersigned, James J. Hogan, as "Executive"
and 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) The first sentence of the Agreement is hereby amended and restated in
full as follows:
THIS AGREEMENT dated as of May 10, 1994, is made by and between the
Company and James J. Hogan (the "Executive").
(2) The second "WHEREAS" clause of the Agreement is hereby amended and
restated in full as follows:
WHEREAS the Board of Directors of Wang Laboratories, Inc. (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 such management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders; and
(3) Paragraph 2 of the Agreement is hereby amended and restated in full as
follows:
2. TERMS OF AGREEMENT.
(a) This Agreement, which commenced as of March 1, 1994, shall be
renewed as of July 1, 1998 (the "Renewal Date") and shall continue in effect
while the Executive is employed by the Company for a period of three years from
the Renewal Date, provided, however, that commencing on the second anniversary
of the Renewal Date 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, renewed 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.
(b) It is 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
options to acquire shares of the
<PAGE> 2
Company's stock ("Options") awarded to the Executive, any shares of the
Company's stock awarded to the Executive and subject to one or more restrictions
on the Executive's full ownership or right to transfer or enjoy the economic
benefit of such shares ("Restricted Shares") or any contractual agreement with
the Executive pursuant to which the Executive will receive shares of the
Company's stock, subject to one or more restrictions (a "Restricted Stock
Unit"), shall become fully exercisable or all restrictions thereon shall
terminate, as the case may be, upon occurrence of a Change in Control during the
term of this Agreement.
(c) The acceleration provisions of subparagraph (b)(ii) above (the
"Subparagraph (b)(ii) Acceleration Provisions") shall not apply (i) to Options,
Restricted Shares or Restricted Stock Units that are not fully exercisable or
are not free of restrictions until a target share price performance has been
reached if such target price has not been reached at the time of the Change in
Control or (ii) to the extent that the Subparagraph (b)(ii) Acceleration
Provisions conflict with any specific provisions related to the accelerated
exercisability of or lapse of restrictions on any Options, Restricted Shares or
Restricted Stock Units in the event of a Change in Control set forth in
agreements, plans or instruments evidencing such Options, Restricted Shares or
Restricted Stock Units (collectively , the "Grant Instruments"). The definition
of Change in Control set forth in this Agreement shall prevail over any contrary
definition in a Grant Instrument unless such Grant Instrument specifically
refers to this Agreement and states that the definition of Change in Control in
the Grant Instrument prevails.
(4) The phrase "Subject to Section 6.02 hereof," is hereby deleted from the
beginning of Paragraph 6.1 of the Agreement, which shall now begin "The Company
shall pay...."
(5) In Paragraph 6.1 of the Agreement, the phrase "equal to 2.99 times the
average of the Executive's base salary and annual bonus received in" is hereby
amended and restated as: "equal to 2.99 times the average of the Executive's
base salary and annual bonus paid in...."
(6) Paragraph 6.2(a) of the Agreement is hereby amended and restated in full
as follows:
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 and Excise Tax 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.
(7) The last sentence of Exhibit 6.2 to the First Amendment to Change of
Control Severance Agreement is hereby amended and restated in full as follows:
Accordingly, the net amount retained by the Executive after payment of
Excise Tax on the Total Payments and income taxes and Excise Tax on the Gross-Up
Payment
Page 2 of 4
<PAGE> 3
equals $400,000 [600,000 - 200,000], which equals the Executive's Total Payments
before calculation of the Gross-Up Payment.
(8) Section (A) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(A) "Affiliate" shall mean an entity that is controlled by Wang
Laboratories, Inc.
(9) Paragraph 16 of the Agreement is hereby amended to add Section 16(A1) as
follows:
(A1) "Base Amount" shall have the meaning defined in section 280G(b)(3)
of the Code.
(10) Section (C) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(C) "Board" shall mean the Board of Directors of Wang Laboratories,
Inc.
(11) Section (ii) of paragraph 16(E) of the Agreement is hereby amended and
restated in full as follows:
(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 whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the company) 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 was previously so approved, cease for any reason to constitute a
majority thereof; or
(12) The following language is hereby inserted, so as to replace the existing
language, before subsection (i) of Section (E)(iii) of Paragraph 16 of the
Agreement:
(iii) the Company or any Subsidiary or Affiliate merges or consolidates
with any other corporation, other than
(13) Section (E)(iv) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or there is consummated the sale or disposition by
the Company of all or substantially all of the Company's assets or the Company
is dissolved and its assets distributed in a judicial proceeding.
Page 3 of 4
<PAGE> 4
(14) Section (G) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(G) Except with respect to Sections 16(E) and (N) hereof, "Company"
shall mean Wang Laboratories, Inc. or one of its Subsidiaries or Affiliates,
both as defined herein, and any successor to their business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
For the purposes of Sections 16(E) and (N) hereof, "Company" shall mean Wang
Laboratories, Inc. and any successors thereto or any parent thereof.
(15) Paragraph 16 of the Agreement shall be amended to add Section 16(Q) as
follows:
(Q) "Subsidiary" shall mean an entity that is controlled by Wang
Laboratories, Inc.
(16) The first sentence of the First Amendment to Change of Control Severance
Agreement is hereby amended to replace the date "May 3, 1995" with "May 10,
1994."
The parties hereby ratify the Agreement as amended hereby without further
changes. This Amendment to the Agreement is executed as a document under seal
this __ day of August, 1998.
WANG LABORATORIES, INC.
By: __________________________
Joseph M. Tucci
Chairman of the Board and
Chief Executive Officer
WANG GOVERNMENT SERVICES, INC.
By: __________________________
Albert A. Notini
Senior Vice President and
Secretary
AGREED:
By: ______________________
James J. Hogan
Page 4 of 4
<PAGE> 1
EXHIBIT 10.69
FIRST AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT
Reference is made to that certain Agreement dated March 24, 1997 between
the undersigned, Jose Ofman, as "Executive" and 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) The first sentence of the Agreement is hereby amended and restated in
full as follows:
THIS AGREEMENT dated as of March 24, 1997, is made by and between the
Company and Jose Ofman (the "Executive").
(2) The second "WHEREAS" clause of the Agreement is hereby amended and
restated in full as follows:
WHEREAS the Board of Directors of Wang Laboratories, Inc. (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 such management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders; and
(3) The first sentence of Paragraph 2 of the Agreement is hereby amended and
restated in full as follows:
2. TERMS OF AGREEMENT. This Agreement, which commenced as of March 24,
1997, shall be renewed as of July 1, 1998 (the "Renewal Date") and shall
continue in effect while the Executive is employed by the Company for a period
of three years from the Renewal Date, provided, however, that commencing on the
second anniversary of the Renewal Date 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, renewed 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.
(4) In Paragraph 6.1 of the Agreement, the phrase "equal to 2.99 times the
average of the Executive's base salary and annual bonus received in" is hereby
amended and restated as: "equal to 2.99 times the average of the Executive's
base salary and annual bonus paid in...."
<PAGE> 2
(5) Section (A) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(A) "Affiliate" shall mean an entity that is controlled by Wang
Laboratories, Inc.
(6) Paragraph 16 of the Agreement is hereby amended to add Section 16(A1) as
follows:
(A1) "Base Amount" shall have the meaning defined in section 280G(b)(3)
of the Code.
(7) Section (C) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(C) "Board" shall mean the Board of Directors of Wang Laboratories,
Inc.
(8) Section (ii) of paragraph 16(E) of the Agreement is hereby amended and
restated in full as follows:
(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 whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the company) 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 was previously so approved, cease for any reason to constitute a
majority thereof; or
(9) The following language is hereby inserted, so as to replace the existing
language, before subsection (i) of Section (E)(iii) of Paragraph 16 of the
Agreement:
(iii) the Company or any Subsidiary or Affiliate merges or consolidates
with any other corporation, other than
(10) Section (E)(iv) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or there is consummated the sale or disposition by
the Company of all or substantially all of the Company's assets or the Company
is dissolved and its assets distributed in a judicial proceeding.
Page 2 of 3
<PAGE> 3
(11) Section (G) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(G) Except with respect to Sections 16(E) and (N) hereof, "Company"
shall mean Wang Laboratories, Inc. or one of its Subsidiaries or Affiliates,
both as defined herein, and any successor to their business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
For the purposes of Sections 16(E) and (N) hereof, "Company" shall mean Wang
Laboratories, Inc. and any successors thereto or any parent thereof.
(12) Paragraph 16 of the Agreement shall be amended to add Section 16(P1) as
follows:
(P1) "Subsidiary" shall mean an entity that is controlled by Wang
Laboratories, Inc.
The parties hereby ratify the Agreement as amended hereby without further
changes. This Amendment to the Agreement is executed as a document under seal
this __ day of August, 1998.
WANG LABORATORIES, INC.
By: _________________________
Joseph M. Tucci
Chairman of the Board and
Chief Executive Officer
and
AGREED:
By: ______________________
Jose Ofman
Page 3 of 3
<PAGE> 1
EXHIBIT 10.70
SECOND AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT
Reference is made to that certain Agreement dated February 23, 1994 and
amended August 28, 1997 between the undersigned, Jeremiah J.J. van Vuuren, as
"Executive" and 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) The first sentence of the Agreement is hereby amended and restated in
full as follows:
THIS AGREEMENT dated as of February 23, 1994, is made by and between the
Company and Jeremiah J.J. van Vuuren (the "Executive").
(2) The second "WHEREAS" clause of the Agreement is hereby amended and
restated in full as follows:
WHEREAS the Board of Directors of Wang Laboratories, Inc. (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 such management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders; and
(3) Paragraph 2 of the Agreement is hereby amended and restated in full as
follows:
2. TERMS OF AGREEMENT.
(a) This Agreement, which commenced as of March 1, 1994, shall be
renewed as of July 1, 1998 (the "Renewal Date") and shall continue in effect
while the Executive is employed by the Company for a period of three years from
the Renewal Date, provided, however, that commencing on the second anniversary
of the Renewal Date 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, renewed 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.
(b) It is 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
<PAGE> 2
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 options to
acquire shares of the Company's stock ("Options") awarded to the Executive, any
shares of the Company's stock awarded to the Executive and subject to one or
more restrictions on the Executive's full ownership or right to transfer or
enjoy the economic benefit of such shares ("Restricted Shares") or any
contractual agreement with the Executive pursuant to which the Executive will
receive shares of the Company's stock, subject to one or more restrictions (a
"Restricted Stock Unit"), shall become fully exercisable or all restrictions
thereon shall terminate, as the case may be, upon occurrence of a Change in
Control during the term of this Agreement.
(c) The acceleration provisions of subparagraph (b)(ii) above (the
"Subparagraph (b)(ii) Acceleration Provisions") shall not apply (i) to Options,
Restricted Shares or Restricted Stock Units that are not fully exercisable or
are not free of restrictions until a target share price performance has been
reached if such target price has not been reached at the time of the Change in
Control or (ii) to the extent that the Subparagraph (b)(ii) Acceleration
Provisions conflict with any specific provisions related to the accelerated
exercisability of or lapse of restrictions on any Options, Restricted Shares or
Restricted Stock Units in the event of a Change in Control set forth in
agreements, plans or instruments evidencing such Options, Restricted Shares or
Restricted Stock Units (collectively , the "Grant Instruments"). The definition
of Change in Control set forth in this Agreement shall prevail over any contrary
definition in a Grant Instrument unless such Grant Instrument specifically
refers to this Agreement and states that the definition of Change in Control in
the Grant Instrument prevails.
(4) In Paragraph 6.1 of the Agreement, the phrase "equal to 2.99 times the
average of the Executive's base salary and annual bonus received in" is hereby
amended and restated as: "equal to 2.99 times the average of the Executive's
base salary and annual bonus paid in...."
(5) Section (A) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(A) "Affiliate" shall mean an entity that is controlled by Wang
Laboratories, Inc.
(6) Paragraph 16 of the Agreement is hereby amended to add Section 16(A1) as
follows:
(A1) "Base Amount" shall have the meaning defined in section 280G(b)(3)
of the Code.
(7) Section (C) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(C) "Board" shall mean the Board of Directors of Wang Laboratories,
Inc.
Page 2 of 4
<PAGE> 3
(8) Section (ii) of paragraph 16(E) of the Agreement is hereby amended and
restated in full as follows:
(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 whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the company) 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 was previously so approved, cease for any reason to constitute a
majority thereof; or
(9) The following language is hereby inserted, and replaces the existing
language, before subsection (i) of Section (E)(iii) of Paragraph 16 of the
Agreement:
(iii) the Company or any Subsidiary or Affiliate merges or consolidates
with any other corporation, other than
(10) Section (E)(iv) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or there is consummated the sale or disposition by
the Company of all or substantially all of the Company's assets or the Company
is dissolved and its assets distributed in a judicial proceeding.
(11) Section (G) of Paragraph 16 of the Agreement is hereby amended and
restated in full as follows:
(G) Except with respect to Sections 16(E) and (N) hereof, "Company"
shall mean Wang Laboratories, Inc. or one of its Subsidiaries or Affiliates,
both as defined herein, and any successor to their business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
For the purposes of Sections 16(E) and (N) hereof, "Company" shall mean Wang
Laboratories, Inc. and any successors thereto or any parent thereof.
Page 3 of 4
<PAGE> 4
(12) Paragraph 16 of the Agreement shall be amended to add Section 16(Q) as
follows:
(Q) "Subsidiary" shall mean an entity that is controlled by Wang
Laboratories, Inc.
The parties hereby ratify the Agreement as amended hereby without further
changes. This Amendment to the Agreement is executed as a document under seal
this __ day of August, 1998.
WANG LABORATORIES, INC.
By: _______________________
Joseph M. Tucci
Chairman of the Board and
Chief Executive Officer
AGREED:
By: ______________________
Jeremiah J.J. van Vuuren
Page 4 of 4
<PAGE> 1
<TABLE>
<CAPTION>
EXHIBIT 12.1 - CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions except ratios)
Three months Year Year Year Year
ended September 30, ended June 30, ended June 30, ended June 30, ended June 30,
1998 1998 1997 1996 1995
------------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
FIXED CHARGES
Interest expense $ 6.9 $ 10.4 $ 10.9 $ 5.1 $ 3.7
Portion of rent expense
representative of interest 6.0 15.0 9.4 9.4 5.9
------ ------- ------ ------ -----
12.9 25.4 20.3 14.5 9.6
Preferred dividend requirement 3.5 23.5 23.5 37.7 14.5
------ ------- ------ ------ -----
Combined fixed charges and
preferred dividend $ 16.4 $ 48.9 $ 43.8 $ 52.2 $24.1
====== ======= ====== ====== =====
EARNINGS
Income (loss) from continuing
operations before income taxes,
discontinued operations, minority
interest, fresh-start reporting
adjustment and extraordinary item ($7.3) ($267.5)(1) ($22.3)(2) $ 94.9(3) $ 6.9
Fixed charges per above 16.4 25.4 20.3 14.5 9.6
------ ------- ------ ------ -----
($ 9.1) ($242.1) ($ 2.0) $109.4 $16.5
====== ======= ====== ====== =====
Ratio of earnings to combined
fixed charges and preferred dividends -- -- -- 2.1 --
====== ======= ====== ====== =====
Coverage deficiency $(25.5) $(291.0) $(45.8) -- $(7.6)
====== ======= ====== ====== =====
(1) Includes $118.0 million of acquisition-related, restructuring and Chapter 11 charges.
(2) Includes $36.3 million of acquisition-related, restruccturing and Chapter 11-related charges.
(3) Includes $1.1 million of acquisition-related, restructuring and Chapter 11-related credits.
(4) Includes $62.1 million of acquisition-related, restructuring and Chapter 11-related charges.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF OPERATIONS AND
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR
THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 178,100
<SECURITIES> 0
<RECEIVABLES> 870,400
<ALLOWANCES> 22,900
<INVENTORY> 173,700
<CURRENT-ASSETS> 1,400,300
<PP&E> 394,000
<DEPRECIATION> 159,500
<TOTAL-ASSETS> 2,158,400
<CURRENT-LIABILITIES> 1,279,700
<BONDS> 269,600
138,300
86,400
<COMMON> 500
<OTHER-SE> 154,900
<TOTAL-LIABILITY-AND-EQUITY> 2,158,400
<SALES> 310,600
<TOTAL-REVENUES> 786,000
<CGS> 251,700
<TOTAL-COSTS> 629,300
<OTHER-EXPENSES> 26,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,900
<INCOME-PRETAX> (7,300)
<INCOME-TAX> 3,600
<INCOME-CONTINUING> (11,300)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,300)
<EPS-PRIMARY> (0.32)
<EPS-DILUTED> (0.32)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE CONSOLIDATED
BALANCE SHEETS, CONSOLIDATED STATEMENTS OF OPERATIONS AND MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORMS 10-Q FOR THE QUARTERLY
PERIODS ENDED SEPTEMBER 30, 1997 AND 1998.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 177,800
<SECURITIES> 0
<RECEIVABLES> 278,400
<ALLOWANCES> 18,200
<INVENTORY> 21,400
<CURRENT-ASSETS> 521,800
<PP&E> 259,900
<DEPRECIATION> 144,000
<TOTAL-ASSETS> 986,000
<CURRENT-LIABILITIES> 381,200
<BONDS> 29,200
138,300
85,600
<COMMON> 400
<OTHER-SE> 292,500
<TOTAL-LIABILITY-AND-EQUITY> 986,000
<SALES> 67,700
<TOTAL-REVENUES> 312,200
<CGS> 52,900
<TOTAL-COSTS> 246,000
<OTHER-EXPENSES> 7,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,700
<INCOME-PRETAX> 17,800
<INCOME-TAX> 6,400
<INCOME-CONTINUING> 11,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,400
<EPS-PRIMARY> 0.21
<EPS-DILUTED> 0.20
</TABLE>
