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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, Xxxxxx X. Xxxxx, 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 Xxxxxx X. Xxxxx (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
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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.
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(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:
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(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: _________________________
Xxxxxx X. Xxxxx
Chairman of the Board and
Chief Executive Officer
and
AGREED:
By: ____________________
Xxxxxx X. Xxxxx
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