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EXHIBIT 10.72
March 12, 1999
Xx. Xxxxxxx Xxxxxxxx
00 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Dear Xxxx:
This letter, along with Wang's Standard Employment Agreement, as
presently modified and attached hereto, sets forth the terms of your employment
with Wang Laboratories, Inc. ("Wang" or "the Company"). The Company agrees to
employ you, and you agree to remain in the employ of the Company, upon the
following terms and conditions.
1. POSITION
You will be employed as Senior Vice President, Marketing, effective as
of April 12, 1999 ("Hire Date").
2. TERM
The terms and conditions of this letter will be in full force and
effect for a three (3) year period commencing on your Hire Date and terminating
on April 11, 2002, unless otherwise terminated as set forth in paragraph 4.
3. COMPENSATION AND BENEFITS
(a) YEARLY PAYMENTS
Your initial base salary will be $285,000 on an annualized
basis, and you will be eligible to participate in an annualized fiscal year
bonus plan targeted at fifty percent (50%) of your base salary, depending upon
your performance against the objectives specified in the plan. For calendar year
1999 you will be eligible for seventy-five percent (75%) of the targeted annual
bonus, fifty percent (50%) of which is guaranteed. Your salary and bonus plan
percentages will be reviewed annually for possible upward adjustment at the
discretion of the Company and as applicable the Board of Directors of the Wang
(the "Board") or a committee of the Board authorized to act on such matters.
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(b) STOCK INCENTIVES
Subject to final approval by the Organization, Compensation and
Nominating Committee of the Board, you will be eligible to receive an option to
purchase one hundred and sixty thousand (160,000) shares of Wang Common Stock.
The option, having a seven (7) year term, will vest in four (4) equal
installments over a four (4) year period, the first installment vesting on the
one (1) year anniversary of the grant date, and the other installments on the
second, third and fourth anniversaries thereafter. The exercise price of this
option will be based on the fair market value of the Common Stock when approved
by the Committee or an authorized designee thereof.
Further, you will receive a grant of twenty-five thousand (25,000)
restricted registered shares of Wang Common Stock (the "Restricted Shares")
which will vest and be freely transferable (subject to applicable law) on the
third anniversary of the date of the grant, subject to (i) the acceleration of
one third of the Restricted Shares, on or after the first anniversary of the
grant date, if the average of the Closing Prices of Wang Common Stock for any
period of 40 consecutive trading days ending on or prior to the first
anniversary of the grant date is $32 per share, (ii) the acceleration of two
thirds of the Restricted Shares, on or after the second anniversary of the grant
date, if the average of the Closing Prices of Wang Common Stock for any period
of 40 consecutive trading days ending on or prior to the second anniversary of
the grant date is $40 per share and (iii) the acceleration of one-half of the
unvested Restricted Shares in the event your employment with the Company is
terminated on a basis which entitles to you to the severance payments as set
forth in paragraph 4 of this letter.(1)
(c) OTHER PROVISIONS
(i) The Company will provide health, vision, dental and disability
coverage to you in accordance with existing Company plans available to all
employees generally. You are eligible to participate in Wang's Retirement
Savings Plan effective as of your Hire Date. You will also be eligible to
participate in Wang's Senior Executive Retirement Plan ("SERP")
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1 For the purposes of this paragraph, "Closing Price" for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case
reported in the principal consolidated transaction reporting system with respect
to shares of Common Stock listed or admitted to trading on the New York Stock
Exchange, or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system or as quoted by the Nasdaq National
Market with respect to securities listed or admitted to trading on another
national securities exchange or quoted by the Nasdaq National Market,
respectively, or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange or quoted by the Nasdaq National
Market, the last quoted price, or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers Automated Quotation System or such other
system then in use, or, if on any such date the shares of Common Stock are not
quoted by an such organization, the average of the closing bid and asked prices
as furnished by a professional market marker making a market in the Common Stock
selected by the Committee. "Common Stock" when used herein shall mean the common
stock, par value $0.01 per share, of the Company.
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according to the terms and conditions of that plan. The Company will provide
term life insurance to you based on your insurability in the amount of five
times your base salary plus target bonus (50% of base salary) compensation.
Further, you will receive the Company's standard personal holiday benefit as
well as four weeks of vacation, accruable ratably over the calendar year. It is
understood and agreed that you will be taking a vacation of three consecutive
weeks in 1999. To arrange for your benefits and receive your Wang Benefits
Enrollment Kit, please contact Xxxxx Xxxxxx, Human Resources Consultant, at
(000) 000-0000 upon acceptance of this offer.
(ii) During your employment, the Company will pay you a monthly
automobile allowance of $585.00 per month. In connection therewith, you may
elect one of two options:
Option 1: Wang will pay the automobile insurance
premium for one automobile if the automobile is
leased through the Wang automobile lease
program.
Option 2: You may lease or buy an automobile in your
own personal name (and not through the Wang
automobile lease program), in which case Wang
will not pay the automobile insurance premium
in connection with such an arrangement.
(iii) During your employment, the company will also reimburse you, at
regular intervals and in accordance with Company policy, for all business
travel, telephone and out-of-pocket expenses incurred by you in the performance
of your duties as an employee of the Company.
4. TERMINATION/SEVERANCE COMPENSATION AND BENEFITS
(a) (i) In the event that your employment with the Company is
involuntarily terminated, (other than a termination "for cause," a term which
includes but is not limited to a violation of the standards set forth in Wang's
Standards of Ethics and Business Conduct booklet, or because of your death, in
which case this paragraph is inapplicable), or (ii) if during the term of this
Agreement and without your consent (x) you cease to be a Senior Vice President,
Marketing of the Company (y), either or both of your annual base salary or
target bonus is decreased from the level it was at immediately prior to such
decrease without your consent (a "Decrease Event") (z) your job location is
changed to someplace other than Massachusetts (other than in connection with a
relocation of the Company's worldwide headquarters), and upon the occurrence of
an event set forth in items (x),(y) or (z) above you resign, then Wang will pay
you semi-monthly an eighteen (18) month salary continuance equal to your then
base pay plus the target 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
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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 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). Finally, the restrictions on 50% of your then unvested
Restricted Shares will vest and such shares shall become freely transferable,
subject to applicable law.
(b) During this salary continuation period, Wang will continue
to provide you with health, vision 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.
(c) 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.
(d) In the event of any dispute between you and the Company as to
whether you have been terminated "for cause" as that term is used in
subparagraph 4(a)(i) above, (i) the Company agrees to pay you, on a semi-monthly
basis, the severance amount set forth in subparagraph 4(a) above during the time
period of any such dispute; and (ii) you and the Company agree that in any such
dispute the party prevailing in a final, non-appealable judgment on the merits
shall bear the other party's reasonable attorneys' fees (the "Prevailing
Party"). In addition, you agree to repay promptly to the Company any funds paid
to you during the period of any such dispute if you are not the Prevailing
Party.
(e) As of April 12, 2002, 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 whether you and Wang wish to extend this Agreement and the terms
of any such extension not later than six (6) months prior to the expiration of
the three (3) year period described in this letter.
(f) You will also be granted a contingent severance agreement
applicable in the event of a change in control of the Company.
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5. NO CONFLICTS OF INTEREST
By signing this letter, you represent that you are not subject to any
restrictions, particularly, but without limitation, in connection with any
previous employment, which prevent you from entering into and performing your
obligations under this letter or which materially and adversely affect (or may
in the future, so far as you can reasonably foresee, materially and adversely
affect) your right to participate in the affairs of the Company.
6. STANDARDS OF ETHICS AND BUSINESS CONDUCT
You are required to comply with the Company's Standards of Ethics and
Business Conduct (a copy of which is enclosed herewith), and a completed
Standard of Ethics and Business Conduct form (enclosed) is a condition of your
employment.
7. I-9, EXPORT FORMS
Your employment is also contingent upon your ability to provide, within
three (3) business days after commencement of employment, the completed enclosed
I-9 form, and acceptable original documents that will establish your employment
authorization and identity in compliance with the Immigration Reform and Control
Act of 1986. In addition, you are required to complete the U.S. Export
Administration Employment Compliance Form I. If you answer "NO" to question 1
you are required to call H.R. Administration at (000) 000-0000 before you report
to work to complete a U.S. Export Administration Employment Compliance Form II.
Copies of your Visa and Form I-94, will also be required. Your response to the
questions in Form II may affect your eligibility for employment.
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
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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 per cent (20%) of
Wang's revenues in the prior twelve month period or, with respect
to identifiable new product or service offerings (and not
categories thereof), 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
and 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 a result of one of
the reasons set forth in paragraph 4(a)(ii) 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.
(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, the provisions of this paragraph shall govern. In light of the more
detailed provisions of this
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paragraph of this letter, is agreed that the provisions of Paragraph 8 of the
Wang Global Employment Agreement are deleted and will have no force or effect
on you.
(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.
9. CONFIDENTIALITY
By our signatures below, we agree to treat the details of this letter
with utmost confidentiality and that we will not disclose them to any third
parties except your immediate family, or respective financial and/or legal
advisors, and such Wang personnel and/or agents as have a need to know this
information for business purposes and as may otherwise be required by law.
Confirmation of your acceptance of these terms and of your Hire Date by
your signature below would be appreciated within seven (7) business days from
receipt of this letter. By your signature, you acknowledge that you have read
and understand the terms of this agreement and that you are entering into it
knowingly and voluntarily.
Xxxx, on a more personal note, welcome to the Wang Global. I have no
doubt that you will add a positive new dimension to the team, help us reach our
goals and have a lot of fun doing it. We are all looking forward to working with
you. If you have any questions, please call me at (000) 000-0000.
Regards,
Xxxxxx X. Xxxxx
Chairman and Chief Executive Officer
Enclosures: Standard Employment Agreement (as presently modified)
New Hire Forms
ACCEPTED AND AGREED TO:
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Xxxxxxx Xxxxxxxx
Dated: _________________
