-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NFJO0US6sRB1Yog3fKfeyX6cAHloSYkV8rVzizU+oiZKbFjGNqPAjqrAtMbb21Vr NyGuw1KWjTjwJUAMBEvAjA== 0000950135-99-001777.txt : 19990403 0000950135-99-001777.hdr.sgml : 19990403 ACCESSION NUMBER: 0000950135-99-001777 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WANG LABORATORIES INC CENTRAL INDEX KEY: 0000104519 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 042192707 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 001-05677 FILM NUMBER: 99583554 BUSINESS ADDRESS: STREET 1: 600 TECHNOLOGY PARK DR CITY: BILLERICA STATE: MA ZIP: 01821-4120 BUSINESS PHONE: 9789675000 MAIL ADDRESS: STREET 1: 600 TECHNOLOGY PARK DRIVE STREET 2: MAILSTOP 014-B3C CITY: BILLERICA STATE: MA ZIP: 01821-4120 10-K405 1 WANG LABORATORIES, INC. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ( ) Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (X) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from July 1, 1998 to December 31, 1998 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 incorporation or organization) (I.R.S. Employer Identification No.) 290 CONCORD ROAD, BILLERICA, MASSACHUSETTS 01821 ------------------------------------------ ---------- (Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (978) 625-5000 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.01 par value Common Stock Purchase Warrants Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Section 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 [ ] On February 26, 1999, the aggregate market value of voting stock held by non-affiliates of the Registrant was $623,959,968 based on the closing price of Common Stock on the Nasdaq National Market on February 26, 1999 and assuming a market value of $50.00 per share for the Depositary Shares (each representing a 1/20 interest in a share of the 6 1/2% Cumulative Convertible Preferred Stock) and assuming a market value of $1,000.00 per share for the 4 1/2% Series A Cumulative Convertible Preferred Stock. The number of shares outstanding of Common Stock outstanding as of February 26, 1999 was 46,648,258 2 PART I ITEM 1. BUSINESS Wang Laboratories, Inc., a Delaware corporation (together with its subsidiaries, "Wang Global" or the "Company"), provides information technology ("IT") services and solutions to enhance the ability of its customers to operate efficiently and more cost effectively through common operating environments ("COEs"), common support environments ("CSEs"), specialized solutions and the Internet. These services and solutions include network and desktop computing infrastructure design, integration, security and management, help desk support, maintenance, warranty support, procurement, resale and installation of IT and communications equipment, application software design and support, and standardized and customizable solutions encompassing customer delivery channels for financial services institutions, electronic commerce and Internet-based commercial applications. The Company provides these services and solutions to customers on six continents and in major markets around the world. The Company's customers include banking and other financial services institutions, insurance companies, governments and their affiliates, including the Governments of the United States, Italy, and the European Commission, public authorities and utilities, and commercial enterprises in the retail, oil and gas, computer and telecommunications sectors. The Company has approximately 20,300 employees in 45 countries of which approximately 15,500 have technical skills. The Company is focused on supporting its customers' rapidly evolving network-based IT operations around the world and around the clock, and consequently, Wang Global is focused on providing customers with consistent global offerings. The first, Networked Technology Services, helps customers design and deploy an IT infrastructure which is more productive, efficient and adaptable through the use of COEs, CSEs, management of the total cost of ownership ("TCO") and control over their network. The second, Networked Technology Solutions, draws on the power of advanced networks to connect customers to the Internet. This enables them to reach their customers, vendors and suppliers by utilization of web-based applications and an overall e-business strategy. Finally, the Company continues to provide services to its VS minicomputer customers by offering upgrade products and open system migration products for client/server and Internet/based applications. History of Alliances and Business Combinations; Growing the Business Wang Global has expanded, and intends to continue to expand, its position in the networked technology services and solutions market through alliances with strategic partners as well as through acquisitions and internal development of the skill sets, customers and assets required to deliver on its IT infrastructure services and e-business web based solutions. In August 1998, the Company completed the acquisition of the Parian Development Group, Inc. ("Parian"), based in Chicago, Illinois offering custom business solutions using leading edge tools and technologies. At the time of its acquisition by Wang Global, Parian was a leading midwest regional Microsoft Solution Provider and developer of Internet-based ordering and communications systems. In December 1998, the Company through its Wang Government Services, Inc. subsidiary completed the acquisition of J.G. Van Dyke & Associates, Inc. ("Van Dyke"), a network and security services company based in Bethesda, Maryland. Van Dyke is recognized as a leading-edge network integrator with a specialty in Defense Messaging System (DMS) and Information Security (INFOSEC). In March 1998, the Company completed the purchase of Olsy, the wholly-owned information technology solutions and service subsidiary of Ing. C. Olivetti & Co. S.p.A. ("Olivetti"). At the time of acquisition, Olsy was a provider of IT solutions and services Italy, Europe and in certain markets around the globe. Olsy's primary geographical markets were Italy, U.K., Netherlands, France, Belgium, North America and Japan. Olsy delivered solutions and services based on open computing standards, distributed client server architectures and network infrastructures to customers, principally in the banking, public authority, utility and retail sectors. The solutions ranged from the development of the initial computing environment to systems integration and included analysis, design, validation, procurement and production through to delivery and roll out of complete solutions. The services provided by Olsy included hardware, software and network maintenance and support, on-site support of distributed desktop computing environments and consultancy. The Company also acquired a 19.9% interest in Olivetti Ricerca, the Italian consortium supplying research and development services to both the IT and telecom sectors. In consideration for Olsy, the Company paid Olivetti $68.6 million in cash; issued 8,750,000 shares of Common Stock (of which 1,500,000 are to be delivered subject to approval by the stockholders at the Company's 1999 Annual Meeting of Stockholders) with a value of $197.2 million; issued 5,000,000 stock appreciation rights ("SARs") which give Olivetti value for the increase in the market price of the Company's Common Stock above $30.00 per share at any time from March 2001 to March 2005 and upon exercise by the holders can be satisfied in cash or common stock at the Company's election; and agreed to pay an additional amount of up to $56.0 million payable in the year 2000, subject to meeting mutually-agreed performance targets for the two year period ending December 31, 1999. 1 3 In March 1998, the Company and Microsoft announced the expansion of their strategic alliance. The Company has plans to extend its Microsoft-based services capacity by training and certifying 2,500 professionals as Microsoft Certified Solution Developers or Microsoft Certified Systems Engineers. In addition, the Company plans to open two customer demonstration facilities which are Microsoft Centers of Excellence, one in Billerica, Massachusetts and one in Milan, Italy. As part of the Company's 1995 agreement with Microsoft, Microsoft purchased $90.0 million face amount of 4-1/2% Series A Cumulative Convertible Preferred Stock of Wang Global due in 2002 (the "4-1/2% Preferred Stock") for $84.0 million. The 1998 expansion adds to the worldwide multi-year technical, service and marketing alliance the companies entered into in 1995 pursuant to which Wang Global continues to be an authorized provider of end-user support services for Microsoft products. As one of Microsoft's Authorized Support Centers, Wang Global provides end-user support and training for Microsoft products. This support includes on-site system and integration design and installation, consulting, network integration, migration support, and end-user help desk services. In addition to the Microsoft alliance, the Company has grown its relationship with Cisco Systems, Inc. ("Cisco") and in May 1997, the Company entered into a worldwide arrangement that expanded its relationship with Cisco. As a global partner of Cisco, the Company will be able to supply and service Cisco products to Wang Global customers in specified countries around the world. In March 1997, the Company completed the sale of its software business unit to Eastman Kodak Company ("Kodak") for $260 million in cash. The business sold to Kodak included the Company's software business unit management, employees, products, technology, customers and business partners, as well as its sales, marketing and research and development organizations worldwide. The results of operations of the Company's software business unit have been reported as discontinued operations and the financial statements of the Company have been restated accordingly. In November 1996, the Company acquired Advanced Paradigms, Inc. ("API"), a provider of enterprise-wide Microsoft specific LAN/WAN solutions including network architecture and design installation. In August 1996, the Company acquired I-NET, Inc. ("I-NET"), a vendor-independent provider of outsourced client/server, network and desktop management services for the commercial and federal sectors. These services included enterprise network integration and operations, on-site and remote network management, help desk services, LAN/WAN communications, document management services and IT outsourcing. In May 1996, the Company acquired Dataserv Computer Maintenance, Inc. ("Dataserv"), a provider of computer maintenance and support services for point-of-sale retail scanners and registers and popular industry-standard servers and desktop products, as well as application help desk and network integration services. Dataserv serviced companies in the banking and financial services, retail and manufacturing industries. In October 1995, the Company acquired BISS Limited ("BISS"), a United Kingdom company which specialized in the design, implementation and support of network computing solutions. This organization developed network infrastructure solutions, including local area network ("LAN") and wide area network ("WAN") interconnection, client/server architecture and network management systems. In January 1995, the Company completed a transaction with Compagnie des Machines Bull and certain of its affiliates (collectively, "Bull") in which the Company purchased Bull's U.S. customer services business, U.S. federal systems subsidiary and its sales and service subsidiaries in Canada, Mexico, Australia and New Zealand. The acquired customer services business included multivendor products and the Bull GCOS mainframe systems. The Company is the successor to Wang Laboratories, Inc., a Massachusetts corporation founded in 1955, which implemented a reorganization plan under Chapter 11 of the U.S. Bankruptcy Code that was approved by the bankruptcy court on September 20, 1993 (the "Reorganization Plan"). The predecessor company had filed for reorganization in August 1992. The Reorganization Plan was consummated on December 16, 1993, at which time the reorganized company was reincorporated as a Delaware corporation. On May 12, 1998, the court issued an order (i) authorizing the final distribution of the remaining shares to holders, and (ii) closing the Chapter 11 case. The Company does business under the trade-name "Wang Global" and expects to change its legal name to "Wang Global Corporation" upon approval of the Company's stockholders at the Company's 1999 Annual Meeting. INDUSTRY BACKGROUND The IT market has changed rapidly since the early days of proprietary mainframe and minicomputer systems, with the advent of the client-server "open" architecture, web-enabled applications and Internet-based communications. OPEN SYSTEMS; CLIENT/SERVER TECHNOLOGY; AND COES AND CSES. In the late 1980s and early 1990s, the computer and information technology industry shifted from primarily proprietary and mainframe and minicomputer hardware systems and software products to an emphasis on "open" systems and client/server networks. Client/server architecture enabled an organization to realize both the convenience of desktop systems and the power of shared processing. As users exploit the benefits of open systems, many conclude that by linking multiple personal computers (i.e., clients) and servers into client/server systems, they could achieve the functionality of traditional minicomputers or mainframes at a lower initial cost. Client/server applications combined the power and ease of use of the 2 4 client with the price/performance of the server. Although more flexible, the new open client/server systems often mean that a disparate variety of hardware, software and services are linked together in a complex structure which does not have standard platforms or standard configurations. This variety of products, interfaces and networks results in increased system faults, specialized support requirements and increased maintenance and support costs. Recently, customers have begun to try and streamline their complex IT systems into Common Operating Environments and Common Support Environments, which are designed around a technology blueprint with standard products based on leading technologies having a limited number of configurations. The Company believes that the redesign of IT systems around a common blueprint enables customers to purchase cost-competitive "best-of-breed" hardware and software groupings, to design the hardware and software with a limited number of configurations and to have it installed in a consistent, quality manner. These processes, combined with more cost effective brand of services, facilitate management of TCO. INTRODUCTION OF THE INTERNET, E-BUSINESS AND WEB-BASED APPLICATIONS. The complexity of the network computing environment has been compounded by the advent of and increasing demand for inexpensive "thin-client" applications connected to servers across networks of all types, particularly the Internet, and electronic business solutions as a method of monitoring a network's security and efficiency. The Company believes that the concentration of component-based applications at the server level and the use of the Internet will result in a demand for high quality services to install and support this new class of applications. In addition, increasing sales and other commercial activity (electronic commerce) over Internet Protocol-based ("IP-based") networks will increase the volume of network traffic and the sophistication of web-based computing. The financial services, retail and telecom industries are currently seeking solutions for customer contact, electronic commerce, work management, smart card and point of sale ("POS") applications in order to more effectively service their customers. In the Company's judgment, solutions which focus on the development, customization and deployment of innovative delivery solutions will become increasingly important. The Company believes that the evolution of business in the telecom, retail and banking industries as well as the public sector requires an architectural vision which leverages advanced technologies like Microsoft products and web-based applications that enable a provider to deliver integrated solutions across all delivery channels sharing infrastructure and application components. The creation, roll-out and support of these new solutions requires an intimate understanding of the industry and the customer's business and a dedication to high quality service. The Company believes that the ongoing change from centralized systems to client/server-based networks to IP-based computing as well as the increasing demand for the design and implementation of industry solutions will create challenges across all sectors of industry and government. The market drivers, including financial services and telecommunication deregulation, the growth of the Internet and electronic commerce and the growth of collaborative and remote computing, are resulting in significant investments in information technology. These investments in turn have increased the demand for network and desktop services and integrated solutions which are the Company's core competencies. BUSINESS STRATEGY Wang Global's business strategy is to continue to build a global IT services and solutions business by providing -networked technology services and infrastructure-related services, with an emphasis on planning, deploying, managing and maintaining COEs and CSEs. These services include project services such as network and desktop computing infrastructure design, staging, procurement and installation of IT and communications equipment, and systems migrations and upgrades. They also include managed services such as help desk support and warranty support, equipment maintenance and repair, remote and on-site monitoring and management of network and desktop infrastructures, and software support. -networked technology solutions for the financial services, retail, telecommunications, computer, and oil and gas industries as well as for clients in the government and public sectors. Solutions may be both standardized and customizable, encompassing customer delivery channels for financial services institutions and others, electronic commerce and Internet-based commerce applications. Solution components may include project services as noted above plus custom application software design and support, and standardized, interchangeable software, application templates and methodologies. -continued support for current VS, GCOS and other traditional or legacy customers, and upgrades and interoperability options for those customers. The Company is taking advantage of the opportunities created by recent developments in the IT industry by focusing on particular 3 5 areas in which it has the technological, professional and marketing expertise. It does so to offer customer contact and other industry solutions and network based services, for banking and other financial services institutions, insurance companies, governments and their affiliates, public authorities and utilities, and commercial enterprises in the retail, oil and gas, computer and telecommunications sectors that will permit its customers and clients to increase the performance and reliability of their computing networks. In addition, the Company will continue to support its base of existing VS and GCOS customers in maintaining and enhancing their systems or in transitioning their systems to the open client/server model of computing. PRINCIPAL PRODUCTS AND SERVICES Wang Global provides information technology ("IT") services and solutions, including network and desktop design, integration, security and management, help desk, maintenance, resale and installation of IT and communications equipment, infrastructure support for and integration of electronic commerce solutions, warranty support, procurement, and customer contact solutions for financial services institutions, insurance companies, governments and their affiliates, public authorities and utilities, and commercial enterprises in the retail, oil and gas, computer and telecommunications sectors. Networked Technology Services. Wang Global has a "life cycle" approach to service delivery designed to help customers address their total cost of ownership through planning, deploying, managing and maintaining their network computing infrastructure and providing solutions for complex, often transnational, operations. Under the brand name "NetWorkPlace(TM)" the Company has developed a suite of nineteen (19) managed and project services which help customers manage their total cost of ownership through a common operating environment based on leading technologies which is powerful, adaptable and able to support next generation applications. This suite includes, among other services, TCO assessment, network security assessment, network asset discovery, Windows NT migration, enterprise messaging, help desk, asset management, network management, remote desktop/systems management, multi-vendor support and disaster recovery. The strategy of managing to a Common Operating Environment, efficiently deploying a Common Support Environment and providing reliable service delivery methods are all included in the NetWorkPlace(TM) offering. In addition, the Company offers its Advanced Networks services in order to address the challenge of data/voice/video convergence into the multi-service networks. For telecommunications companies and large enterprise customers, the Company offers, among other services, call center design and integration, Internet infrastructure platforms and security and broadband network design and integration. Wang Global partners with Cisco in the provision of a variety of the telecommunications offerings. In addition to its alliances with Microsoft and Cisco, Wang Global continues to offer quality world-wide support assistance to prominent original equipment manufacturers, including IBM, Dell, Hewlett Packard, Novell, Packard Bell, Bull and Compaq. The Company continues to support and service point of sale retail scanners and registers. As a multi-vendor service company, Wang Global offers end user service and support for more than 3,500 third party products from more than 350 manufacturers through its worldwide network of customer engineers, telephone support centers and logistics operations. The Company continues to earn revenue from the servicing, upgrading and enhancement of its installed base of VS and GCOS systems as well as support for certain Automated Teller Machines ("ATMs") and other self service terminals. The Company's support for the VS line not only allows customers to continue to benefit from their VS investments, but also facilitates their transition to open systems and COEs. The Company has addressed the calendar year 2000 issue (the inability of software to properly recognize dates after the year 1999) by announcing products such as hardware platforms and operating systems software releases together with inventory, assessment and remediation services, to enable VS customers to continue their deployment of VS systems after the year 2000. Wang Global maintains an electronic gateway between Microsoft's Exchange communication server product and Wang Global's VS Office, the Company's internally developed electronic mail system. This allows the large installed base of VS Office to coexist with Microsoft Mail and Exchange. Wang Global provides service and support on an exclusive basis to users of Bull GCOS platforms in the United States (including the United States government), Canada, Mexico and Australia. In addition, the Company sells and services ATMs, banking Kiosks and other banking-related peripherals developed by its affiliates and third parties including Olivetti. The Company supports a strategy of transition from existing proprietary systems to client/server applications for VS and GCOS customers by offering upgrade software, service and open system coexistence and migration software. The Company expects that due to a general move toward client-server solutions and COEs, the Company expects the revenues from servicing and enhancing its installed base of VS systems and Bull GCOS platforms, will continue to decline at a rate of 25% per year or more over the next several years. From one period to the next, the decline rate could be highly variable. Networked Technology Solutions. Wang Global offers a complement of business process solutions both in the financial sector and in the area of electronic commerce. Under the brand name "Globalfs(TM)", the Company offers a web-based application that delivers an integrated multi-channel customer contact solution for financial institutions. It allows customers to migrate to new technology platforms and utilize customized web-enables technologies to fully integrate their own customer delivery channels. The multi-tier 4 6 approach to building solutions is based on Microsoft's DNAfs(TM) architecture. In addition, the Company offers a business-to-business electronic commerce suite of application solutions that are web-based under the brand name "Netprise(TM)". Netprise(TM) solutions connect customers and suppliers, primarily through three high impact applications: direct selling, corporate purchasing and supply chain management. Wang Global's solutions offerings are supported by Wang Global's Networked Technology Services. MARKETING The Company sells its services and solutions predominantly through its direct sales effort to both end-user customers, including governmental agencies, as well as large original equipment manufacturers. The Company markets its products and services in the United States through its nationwide sales and customer service offices. At December 31, 1998, United States operations included approximately 484 sales, sales support and sales administration personnel and approximately 7,482 people in its service and support organization (compared to approximately 480 and 6,830 respectively, at June 30, 1998). The Company's products and services are marketed and serviced in Canada, Europe, Latin America, Asia and the South Pacific regions through subsidiaries that generally are wholly-owned. At December 31, 1998, these subsidiaries employed approximately 1,007 sales, sales support and administrative personnel and approximately 8,320 service personnel (compared to approximately 1,540 and 8,950, respectively, at June 30, 1998). The Company reaches customers directly in over 45 countries and indirectly through independent distributors in approximately 90 additional countries. BACKLOG A majority of the Company's revenues are derived from services and solutions and products stocked for immediate delivery, meaning that a relatively small number of product orders are unfulfilled at any time. In addition, customers generally have the ability to change, reschedule or cancel orders prior to shipment without penalty. Accordingly, the Company believes that backlog information is neither necessarily indicative of future sales levels nor material to an understanding of the Company's business. SEASONALITY The Company's services and solutions business experiences increased volume in the fourth quarter of the calendar year due to the purchasing patterns of its largest government and commercial customers. The nature of the pattern causes the Company's revenue in the months between September and December to exceed the average revenue for the other three quarters. The Company attempts to minimize the effects of such seasonal revenue surges through other sales initiatives and by implementing its service business model. CUSTOMERS The Company's customers include commercial customers, businesses, institutions and public authorities of varying sizes around the world. The Company's sales, marketing and professional services groups focus on customers with network and desktop productivity needs in selected markets. The United States government, together with its various agencies, is a significant customer of the Company, and provided revenues to the Company of approximately $205 million in the six month period ended December 31, 1998 (the "Stub Period"), $383 million in fiscal 1998, and $385 million in fiscal 1997, which represented approximately 11%, 20%, and 30% of consolidated revenues, respectively, in each of those periods. No other customer accounted for more than 10% of the Company's consolidated revenues in any of those periods. COMPETITION Competition is vigorous in all parts of the worldwide market for network computing services and solutions. The Company's competitors are numerous and vary widely in size and resources. Some have substantially greater resources, stronger reference accounts, larger research and engineering staffs and larger marketing organizations than the Company. Competitors differ significantly depending upon the market, customer and geographic area involved. In many of the Company's markets, traditional computer hardware companies provide the most significant competition. In other areas, systems integrators, consulting organizations and telecommunications companies are significant competitors. The Company competes primarily on the basis of service delivery quality, the ability to offer a range of services and solutions at a competitive price, and the geographic breadth and scope of its service and support organizations. The Company competes in a variety of markets with a variety of service and solution offerings. With respect to competitive factors such as service delivery quality, range of services and solutions, geographic breadth and support organization, the Company believes it generally fares favorably as compared to its competitors. Wang believes that the Company's ability to compete on price alone is more limited due to the fact that many of its competitors either have larger organizations and the ability to more fully 5 7 realize economies of scale or because such competitors are regional IT companies that have lower overhead costs. RESEARCH AND DEVELOPMENT The Company has a research and development program that is primarily focused on integration of service delivery technologies and Olsy's support of software technology for the banking industry, continuing support of its VS customers and specialized client-server products sold to the United States Government. The Company's research and development expenses for the Stub Period were $5.4 million. In fiscal 1998, the Company spent $8.7 million on research and development in support of its continuing operations. Approximately $3.7 million was spent in fiscal 1997 in the same operations. These figures include direct labor costs and some allowances for material and overhead expenses. The increase in fiscal 1998 was due primarily to the acquisition of the Olsy operations. PATENTS, TRADEMARKS AND LICENSES The Company owns a number of patents and patent applications, both in the United States and in various foreign countries. The Company has approximately fifteen major U.S. patents, covering Single In-line Memory Modules, database management, and the Internet. These patents will expire at various times during the period 2003 through 2013. The size of the patent portfolio may vary over time, either because certain patents may become abandoned if they no longer are of significant value to the Company, or because new patents may be added if research and development activities yield inventions of particular value, or because patents may be sold pursuant to an ongoing sales program. In addition, the Company receives license royalties from some of these patents and has cross-licensed some of these patents to other companies, in return for receiving usage rights under the other companies' patents and patent applications. Certain software licensed from third parties is important to the internal business operations and to certain services provided by the Company. Where applicable, such software is typically licensed to other parties on reasonable terms and conditions. The Company does not anticipate any difficulty in maintaining its licenses on such terms. The Company believes it will continue to maintain adequate software license rights for the conduct of its business. The Company licenses certain other intellectual property from others for amounts that are not material to the Company's business as a whole. In the event that products, services or internal business operations of the Company may be covered in whole or in part by intellectual property rights owned by others, the Company may find it necessary or desirable to obtain one or more additional licenses. The Company also owns certain copyrights, trademarks, trade secret and other proprietary information used in the conduct of its business operations. The Company has taken, and will continue to take, measures to enforce its intellectual property rights when it deems such action appropriate. The results of such enforcement measures and future awards or royalties, if any, related thereto cannot be predicted with any certainty at this time, but, if successful, one or more of these actions could result in a significant recovery for or other relief granted the Company. In addition, as a result of the recent Olsy acquisition, the Company is now conducting business in countries in which it has not previously had a presence. Therefore, to the extent that the Company introduces any of its traditional products or services into these countries, patents and other forms of intellectual property protection may not be available. Furthermore, to the extent that protection is available under the intellectual property laws of those countries, the level of protection may not be as extensive as that afforded by the intellectual property laws of the United States. Also, the Company's activities in those countries may be subject to the pre-existing intellectual property rights of third parties already present in those countries. MANUFACTURING At December 31, 1998, the Company employed approximately 185 personnel in its manufacturing and related distribution operations (compared to approximately 194 at June 30, 1998). The continuing decline in demand for the Company's proprietary computer hardware products, the decision to discontinue the manufacture of PCs, increased reliance on third-party manufacturing sources and contract fabricators of subassemblies and components, and increasing reliance on direct shipment by suppliers to the Company's customers have allowed the Company to scale back its own manufacturing operations. However, this decline was offset by the Company's acquisition of Olsy and the related increase in its manufacturing operations related to ATMs, banking kiosks and other cash dispensing equipment. The Company is experiencing no substantial difficulties in obtaining necessary components, subassemblies and products, although delays have been experienced from time to time due to temporary shortages of certain components. Except in the case of some banking peripherals, the Company maintains multiple sources of supply for most items. In the case of certain proprietary ATMs, cash dispenser units and other component parts for banking peripherals, the Company relies on a single source supplier. In either case, the 6 8 Company believes that alternative sources which are not cost prohibitive could be developed for most existing single sources of supply, if required. ENVIRONMENTAL COMPLIANCE The Company does not believe that compliance with federal, state and local laws and regulations that have been enacted or adopted regarding the discharge of materials into the environment, or otherwise relating to the protection of the environment, will have a material effect on the capital expenditures, earnings or competitive position of the Company. EMPLOYEES At December 31, 1998, the Company employed approximately 20,300 people in its worldwide operations, compared to approximately 21,000 at June 30, 1998. The Company has not experienced any sustained, material strikes or work stoppages and considers its relations with its employees to be good. ITEM 2. PROPERTIES At December 31, 1998, the Company owned and leased a total of 7.8 million square feet of building space around the world, approximately 1 million square feet of which is leased out. In the U.S. the Company utilizes 1.8 million square feet of which approximately .8 million is used for administration, customer services and training, .6 million is used for field sales and service offices including regional administration and training operations and .4 million is used for distribution warehousing, manufacturing and associated administrative operations. Internationally, the Company owns and leases approximately 5.6 million square feet of which approximately 3.3 million is used for subsidiaries' administrative sales and service operations and approximately .8 million is used for distribution warehousing, manufacturing and associated administrative operations. The Company has excess space in certain operations. Such excess space will continue to be vacated as a result of ongoing restructuring actions. Amounts realized from dispositions of excess facilities and space have been, in general, less than sufficient to retire the Company's obligations with respect to such space. The Company anticipates that this experience will continue in general and will provide restructuring reserves as such space is identified. The Company completed construction of its new 150,000 square foot corporate headquarters in Billerica, Massachusetts in the fall of 1998. ITEM 3. LEGAL PROCEEDINGS The Chapter 11 proceedings were initiated by the predecessor corporation on August 18, 1992, and on September 30, 1993 a formal confirmation order with respect to the Company's Reorganization Plan became effective. On December 16, 1993, the Company was reincorporated as a Delaware corporation. The new corporation issued 30,000,000 shares of the new Common Stock to a Disbursing Agent (American Stock Transfer & Trust Company) for distribution to holders of allowed general unsecured claims in the Chapter 11 case. All shares of capital stock (Class B and Class C Common Stock) of the predecessor Massachusetts corporation were cancelled. Under the Reorganization Plan, 7,500,000 warrants, each to purchase one share of new Common Stock at $21.45 per share, are available to be issued to the record stockholders of the former Massachusetts corporation and the holders of certain securities claims. The warrant distribution began in March 1995 and to date 7,197,980 warrants have been issued. Holders of stock in the predecessor corporation had until December 16, 1998, to redeem such stock for warrants. On May 12, 1998, the Court issued an order (1) authorizing the final distribution of substantially all of the remaining shares to holders; and (2) closing the Chapter 11 case. The final distribution of the shares has been completed. The Company is also a defendant in a number of other routine lawsuits incidental to the conduct of its business. Although it is impossible to predict the results of specific matters, the Company believes that its aggregate liability, if any, for all litigation, in excess of insurance coverage and financial statement provisions, will not be material to the Company's consolidated financial position or its results of operations. 7 9 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The issuance of the Wang Common Stock to Olivetti was exempt from registration pursuant to Section 4 (2) of the Securities Act since it is a transaction by an issuer not involving any public offering. No matters were submitted to a vote of the Company's security-holders during the three-months ended December 31, 1998. In March 1998, in completing the purchase of Olsy, Olivetti's wholly owned information technology solutions and service subsidiary, the Company issued 7,250,000 shares of Wang Common Stock to Olivetti. The Company also agreed to deliver an additional 1,500,000 shares of Wang Common Stock subject to the approval of the Company's stockholders. The 8,750,000 shares of Wang Common Stock together with a cash payment and 5,000,000 Stock Appreciation Rights constituted the consideration paid by Wang in its purchase of Olsy. The following table sets forth the names, ages as of March 15, 1999, and positions of all executive officers of the Company:
OFFICER NAME POSITION(S) AGE SINCE ---- ----------- --- ------- Joseph M. Tucci Chairman of the Board, 51 1990 President and Chief Executive Officer Paul F. Brauneis Vice President and Controller 54 1997 Richard L. Buckingham Vice President and Treasurer 53 1990 Franklyn A. Caine Executive Vice President 49 1994 and Chief Financial Officer Donald P. Casey Chief Technology Officer 53 1991 Lucy A. Flynn Senior Vice President 45 1996 Corporate/Marketing Communications David I. Goulden President, US Operations and 39 1994 Senior Vice President, Marketing and Business Development James J. Hogan President, Wang Government Services 56 1990 And Senior Vice President Albert A. Notini Executive Vice President, Corporate 42 1994 Development and Administration, General Counsel and Secretary Jose Ofman President and Chief Operating 55 1997 Officer, Americas International Jeremiah J.J. van Vuuren President and Chief Operating 55 1993 Officer, International
Mr. Tucci joined the Company in August 1990 as Executive Vice President, Operations, was elected President and Chief Executive Officer in January 1993, and Chairman of the Board and was reaffirmed as President in 1998. Mr. Brauneis joined the Company in August 1997 as Vice President and Controller. He had served from 1995 to 1997 as Vice President and Corporate Controller of BBN Corporation, an internet services and network management company. From 1993 to 1995 he was Vice President and Chief Financial Officer at Softkey International, a consumer software products company. Prior to that he spent 12 years at M/A Com, Inc., an electronic equipment manufacturer, most recently as Vice President, Finance. Mr. Buckingham joined the Company as Vice President and Treasurer in 1990. From 1988 to 1990, he served as Vice President-Treasurer of Prime Computer, Inc., a computer company. Mr. Caine joined the Company as Executive Vice President and Chief Financial Officer in August 1994. Prior to joining the Company, Mr. Caine was employed by United Technologies Corporation, a diversified manufacturing company, serving as Senior Vice President, Planning and Corporate Development, from 1993 to July 1994, as Senior Vice President and Controller from 1991 to 1993, as Senior Vice President, Human Resources, from 1989 to 1991 and as Vice President and Treasurer from 1987 to 1989. Mr. Casey joined the Company as Executive Vice President and Chief Development Officer in September 1991, and was elected 8 10 President and Chief Technology Officer in January 1993. He served as President of the Software Business until December 1995 and since then as Chief Technology Officer. Mr. Casey resigned from his position as Chief Technology Officer on February 12, 1999. He had served as Vice President, Networking and Communications at Apple Computer Inc., a personal computer company, from 1988 to 1990, and as Vice President, Spreadsheet Division at Lotus Development Corporation, a software company, from 1990 to 1991. Ms. Flynn joined the Company in June 1996 as Senior Vice President, Corporate/Marketing Communications. From 1992 through 1996, she served as Senior Vice President and Director of Corporate Affairs at Shawmut National Corporation. Previously she served as Vice President of Public Affairs at Shawmut Bank N.A. from 1989 to 1992. Mr. Goulden joined the Company in 1990 as Director of Marketing Strategies. From 1991 to 1992 he served as Vice President, Marketing and Development and from 1992 to 1993 he served as Vice President, Marketing. Mr. Goulden served the Company as Vice President, Marketing and Business Development from 1993 to June 1994, as Senior Vice President, Business Development from June 1994 to December 1995 and as Senior Vice President, Software Products Division from December 1995 until March 1997. Since March 1997, he has held the position of Senior Vice President, Marketing and Business Development and in February 1999 he was appointed President, U.S. Operations. He previously served as Director of Corporate Strategy and Business Development from 1989 to 1990 at Unisys Corporation, a computer manufacturer. Mr. Hogan joined the Company as Senior Vice President, Personal Computer Systems in October 1990, and became Senior Vice President Human Resources and Operations Support in June 1993. From July 1994 to March 1995 he served as President, Federal Systems Division Business and from March 1995 to December 1996 as Senior Vice President of the Company at which time he was also elected as President of Wang Government Services, Inc. He had served as Vice President-Audio and Communications Division, Americas for Thomson Consumer Electronics when that company acquired General Electric's consumer electronics business in 1988. Previously he served as Product General Manger of Audio/Video Systems for General Electric's consumer electronics business from 1985 through 1987. Mr. Notini joined the Company in February 1994 as Senior Vice President, General Counsel and Secretary and became Executive Vice President, Corporate Development and Administration in March 1999. Mr. Notini is also responsible for all of the Company's, acquisitions and divestitures, legal, human resources, real estate and intellectual property matters. Previously, he had served as a Senior Partner from 1992 to 1994 and a Junior Partner from 1989 to 1992 at the Boston law firm of Hale and Dorr, LLP, which he joined in 1984. Mr. Ofman Joined the Company in March, 1997 as President and Chief Operating Officer, Americas. Prior to that, he held several senior positions at Electronic Data Systems Co., an information technology services company, the most recent of which was Corporate Vice President and Group Executive. Mr. van Vuuren joined the Company in September 1993 as General Manager, Europe, Africa and the Middle East and Senior Vice President of the Company. He served as President of the Company's International Business from July 1994 until March 1997 and has been President and Chief Operating Officer, International since that time. Previously, he served as Vice President of marketing operations for Europe, Africa and the Middle East from 1986 to 1989 for Unisys Corporation, a computer manufacturer, and was appointed Vice President and Group Manager Europe in 1990. 9 11 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Common Stock is quoted on the Nasdaq National Market under the symbol "WANG." The following table sets forth, for the periods indicated, the high and low sales prices per share of the Common Stock as reported on the Nasdaq National Market during fiscal years 1997 and 1998 and the Stub Period.
QUARTER ENDED HIGH LOW - ------------- ---- --- September 30, 1996 $20 1/8 $15 3/8 December 31, 1996 $24 1/16 $18 7/8 March 31, 1997 $23 3/4 $17 1/4 June 30, 1997 $21 1/2 $16 September 30, 1997 $23 1/8 $19 December 31, 1997 $24 13/16 $19 1/8 March 31, 1998 $31 5/8 $21 3/8 June 30, 1998 $31 5/8 $21 September 30, 1998 $26 2/16 $17 3/4 December 31, 1998 $28 1/4 $14 2/16
The number of stockholders of record on March 1, 1999 was approximately 11,700. The Company has paid no cash dividends on the Common Stock since its original issuance in December 1993. Its predecessor Massachusetts corporation had not paid any dividends on its capital stock for several years. The Company currently intends to retain any earnings for future growth, and, therefore, does not anticipate paying any cash dividends on the Common Stock in the foreseeable future. Moreover, the Company's $500,000,000 credit facility with Bankers Trust Company and certain other financial institutions prohibits the payment of cash dividends other than regularly scheduled dividends to the holders of the Company's 6-1/2% Preferred Stock and 4-1/2% Preferred Stock. In March 1998, in completing the purchase of Olsy, Olivetti's wholly owned information technology solutions and service subsidiary, the Company issued 7,250,000 shares of Wang Common Stock to Olivetti. The Company also agreed to deliver an additional 1,500,000 shares of Wang Common Stock subject to the approval of the Company's stockholders. The 8,750,000 shares of Wang Common Stock together with a cash payment and 5,000,000 Stock Appreciation Rights constituted the consideration paid by Wang in its purchase of Olsy. The issuance of the Wang Common Stock was exempt from registration pursuant to Section 4(2) of the Securities Act since it is a transaction by an issuer not involving any public offering. ITEM 6. SELECTED FINANCIAL DATA See EXHIBIT A to be filed as an amendment to this annual report on Form 10-K. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS See EXHIBIT B to be filed as an amendment to this annual report on Form 10-K. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 10 12 See EXHIBIT B to be filed as an amendment to this annual report on Form 10-K. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See EXHIBIT C to be filed as an amendment to this annual report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The response to this item is contained in part under the caption "Executive Officers of the Company" in Part I of this Annual Report on Form 10-K, and in part in the Company's Proxy Statement to be filed for the Annual Meeting of Stockholders to be held on May 26, 1999 (the "1999 Proxy Statement") in the sections "Election of Directors - Directors of the Company," and "Section 16(a) Beneficial Ownership Reporting Compliance," which sections are incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The response to this item is contained in the 1999 Proxy Statement to be filed in the sections "Election of Directors - Compensation of Directors," "-Compensation Committee Interlocks and Insider Participation," "Executive Compensation," and "- Employment Contracts and Change-in-Control Arrangements," which sections are incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The response to this item is contained in the 1999 Proxy Statement to be filed in the section "Beneficial Ownership of Voting Stock," which section is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The response to this item is contained in the 1999 Proxy Statement to be filed in the section "Election of Directors - Certain Transactions," which section is incorporated herein by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) Index to Consolidated Financial Statements. 1. The following documents will be filed as Exhibit C to be filed as an amendment to this annual report on Form 10-K. Financial Statements: Consolidated Statements of Operations for the six months ended December 31, 1998 and fiscal years ended June 30, 1998 and 1997. Consolidated Balance Sheets as of December 31, 1998 and June 30, 1998. Consolidated Statements of Cash Flows for the six months ended December 31, 1998 and the fiscal years ended June 30, 1998, and 1997. Consolidated Statements of Stockholders' Equity for the six months ended December 31, 1998 and the fiscal years ended June 30, 1998 and 1997. 11 13 Notes to Consolidated Financial Statements. 2. The following documents will be filed as Exhibit D to be filed as an amendment to this annual report on Form 10-K. Financial Statement Schedule: Schedule II- Valuation and Qualifying Accounts 3. The list of Exhibits filed as a part of this Annual Report on Form 10-K is set forth in the Exhibit Index immediately preceding such Exhibits, and is incorporated herein by reference. (b) During the quarter ended December 31, 1998, the Registrant did not file any Form 8-Ks. 12 14 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. WANG LABORATORIES, INC. BY: /s/ Franklyn A. Caine ---------------------------- Franklyn A. Caine Executive Vice President and Chief Financial Officer March 31, 1999 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. SIGNATURE TITLE DATE [S] [C] [C] /s/ Joseph M. Tucci Chairman of the Board, President March 31, 1999 - ----------------------- Chief Executive Officer and Director Joseph M. Tucci (Principal Executive Officer) /s/ Franklyn A. Caine Executive Vice President and March 31, 1999 - ----------------------- Chief Financial Officer Franklyn A. Caine (Principal Financial Officer) /s/ Paul F. Brauneis Vice President and Controller March 31, 1999 - ----------------------- (Principal Accounting Officer) Paul F. Brauneis /s/ David A. Boucher Director March 31, 1999 - ----------------------- David A. Boucher /s/ Michael W. Brown Director March 31, 1999 - ----------------------- Michael W. Brown /s/ Roberto Colaninno Director March 31, 1999 - ----------------------- Roberto Colaninno /s/ Sergio Erede Director March 31, 1999 - ----------------------- Sergio Erede /s/ Marcia A. Hooper Director March 31, 1999 - ----------------------- Marcia J. Hooper /s/ Joseph J. Kroger Director March 31, 1999 - ----------------------- Joseph J. Kroger /s/ Raymond C. Kurzweil Director March 31, 1999 - ----------------------- Raymond C. Kurzweil /s/ Axel J. Leblois Director March 31, 1999 - ----------------------- Axel J. Leblois 13 15 /s/ Frederick A. Wang Director March 31, 1999 - ----------------------- Frederick A. Wang /s/ John P. White Director March 31, 1999 - ----------------------- John P. White 14 16 (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(25) Certificate of Stock Designation with respect to the Series C Junior Participating Preferred Stock 3.7(13) By-Laws of the Registrant 4.1 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(5) Employee Retention Agreement with James J. Hogan 10.6(7) Stock Incentive Plan, as Amended 10.7(8) Contingent Severance Compensation, as Amended with Franklyn A. Caine (Employment Agreement) 10.8(8) Employees' Stock Incentive Plan 10.9(8) 1995 Director Stock Option Plan 10.10(9) Employment Agreement with Donald P. Casey, as Amended 10.11(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 10.12(11) 1994 Employees' Stock Incentive Plan, as Amended 10.13(11) Form of Amendment to Employment Letter Agreement for David I. Goulden, Albert A. Notini and Franklyn A. Caine 15 17 Exhibit No. Description - ----------- ----------- 10.14(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 10.15(12) Registration Rights Agreement 6 1/2% Cumulative Convertible Preferred Stock 10.16(14) Employment Agreement of Lucy A. Flynn 10.17(15) 1995 Employees' Stock Purchase Plan, as Amended 10.18(15) Employees' Stock Incentive Plan, as Amended 10.19(1) 1995 Director Stock Option Plan, as Amended 10.20(16) Asset Purchase Agreement, as amended, with respect to the Registrant's sale of its software business unit to Eastman Kodak Company 10.21(17) Amended and Restated Employment Agreement of Joseph M. Tucci 10.22(17) Restricted Stock Agreement of Joseph M. Tucci 10.23(17) Non-Qualified Long Term Incentive Stock Option Agreement of Joseph M. Tucci 10.24(17) Second Amendment to the Change in Control Severance Agreement of Joseph M. Tucci 10.25(17) Form of Non-Qualified Long Term Incentive Stock Option Agreement with Messrs. Caine, Goulden and Notini, each an executive officer of the Registrant 10.26(17) Form of Restricted Stock Agreement with Messrs. Caine, Goulden and Notini, each an executive officer of the Registrant 10.27(17) Letter Agreement of Employment of Jose Ofman 10.28(17) Amendment Number 1 to Letter Agreement of Employment of Jose Ofman 10.29(17) Non-Qualified Long Term Stock Option Agreement with Jeremiah J. J. Van Vuuren 10.30(17) Letter Agreement for Special Bonus of Franklyn A. Caine 10.31(17) Change in Control Severance Agreement, as amended of Franklyn A. Caine 10.32(17) Letter Agreement for Special Bonus of Albert A. Notini 10.33(17) Change in Control Severance Agreement, as amended of Albert A. Notini 10.34(17) Letter Agreement for Special Bonus of David I. Goulden 10.35(17) Change in Control Severance Agreement, as amended of David I. Goulden 10.36(17) Amendment Number 1 to the 1993 Directors' Stock Option Plan 10.37(17) Amendment Number 2 to the Stock Incentive Plan 16 18 Exhibit No. Description - ----------- ----------- 10.38(17) Amendment Number 3 to the Employees' Stock Incentive Plan 10.39(18) Restricted Stock Agreement of Jeremiah J. J. Van Vuuren with Registrant 10.40(18) Employment Agreement of Jeremiah J. J. Van Vuuren with Wang Laboratories Ireland B.V. 10.41(18) Employment Agreement of Jeremiah J. J. Van Vuuren 10.42(18) Change in Control Severance Agreement, as amended of Jeremiah J. J. Van Vuuren 10.43(19) Form of Change in Control Severance Agreement with Messrs. Buckingham and Brauneis 10.44(20) Amendment No. 4 to the 1995 Employee Stock Incentive Plan 10.45(20) Amendment No. 5 to the 1995 Employee Stock Incentive Plan 10.46(20) Amendment No. 2 to the 1995 Director Stock Option Plan 10.47(20) Amendment No. 2 to the 1995 Employee Stock Purchase Plan 10.48(20) Short Term Incentive Plan 10.49(21) Stock Purchase Agreement and Wang Laboratories, Inc. and Wang Nederlands B.V., Ing. C. Olivetti SpA and certain subsidiaries 10.50(21) Credit Agreement among Wang Laboratories, Inc., various subsidiary borrowers and Bankers Trust Company and various financial institutions 10.51(22) Olsy Employees Stock Incentive Plan 10.52(23) Rights Agreement, dated April 22, 1998, between Wang Laboratories, Inc. and American Stock Transfer & Trust Company, as Rights Agent, including all exhibits thereto 10.53(24) Amendment to Employment Agreement with Franklyn A. Caine 10.54(24) Amendment to Employment Agreement with Donald P. Casey 10.55(24) Amendment to Employment Agreement with Lucy A. Flynn 10.56(24) Amendment to Employment Agreement with David I. Goulden 10.57(24) Amendment to Employment Agreement with James J. Hogan 10.58(24) Amendment to Employment Agreement with Albert A. Notini 10.59(24) Amendment to Employment Agreement with Jose Ofman 10.60(24) Amendment to Employment Agreement with Jerimiah J.J. van Vuuren with Wang Laboratories Ireland B.V. 10.61(24) Amendment to Employment Agreement with Jerimiah J.J. van Vuuren with Wang Laboratories, Inc. 10.62(24) Amendment to Change of Control Severance Agreement with Franklyn A. Caine 17 19 Exhibit No. Description - ----------- ----------- 10.63(24) Amendment to Change of Control Severance Agreement with Donald P. Casey 10.64(24) Amendment to Change of Control Severance Agreement with Lucy A. Flynn 10.65(24) Amendment to Change of Control Severance Agreement with David I. Goulden 10.66(24) Amendment to Change of Control Severance Agreement with James J. Hogan 10.67(24) Amendment to Change of Control Severance Agreement with Albert A. Notini 10.68(24) Amendment to Change of Control Severance Agreement with Jose Ofman 10.69(24) Amendment to Change of Control Severance Agreement with Jeremiah J.J. van Vuuren 10.70 Amendment to Employment Agreement with Jose Ofman 10.71 Amendment to Rights Agreement 12.1 Calculation of Ratio of Earnings to Fixed Charges 21.1 Subsidiaries of Registrant 23.1 Consent of Ernst & Young LLP 27.1 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. (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. 18 20 (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. (24) Filed as an Exhibit to the Registrant's quarterly report on Form 10-Q for the quarter ended September 30, 1998. (25) To be filed as part of an amendment to this annual report on Form 10-K for the six months ended December 31, 1998. 19 EX-10.70 2 EMPLOYMENT AGREEMENT WITH JOSE OFMAN 1 Exhibit 10.70 March 30, 1999 Mr. Jose Ofman 72 Beacon Street #2 Boston, MA 02108 Dear Jose, Reference is made to that certain employment letter agreement between you and Wang Laboratories, Inc. ("Wang") dated March 6, 1997, as amended October 1, 1998, (the "Employment Letter"). In order to correct a typographical, you and Wang have now agreed to amend the Employment Letter as follows: 1. Subsection (ii) of the first sentence of Paragraph 4 of the Employment Letter is hereby deleted and restated as follows: "(ii) commencing one month after termination or resignation and ending eighteen (18) 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," The Employment Letter is hereby ratified and confirmed, except as expressly modified herein. Thank you. WANG LABORATORIES, INC. /s/ Albert A. Notini ---------------------------- Albert A. Notini Executive Vice President /s/ Jose Ofman - -------------------- Jose Ofman EX-10.71 3 AMENDMENT TO RIGHTS AGREEMENT 1 Exhibit 10.71 AMENDMENT TO RIGHTS AGREEMENT This AMENDMENT (the "Amendment") is being entered into as of January 20, 1999 between Wang Laboratories, Inc., a Delaware corporation (the "Company"), and American Stock Transfer and Trust Company, as rights agent (the "Rights Agent"). The Company and the Rights Agent are parties to a Rights Agreement dated as of April 22, 1998 (the "Rights Agreement"). Pursuant to Section 27 of the Rights Agreement, the Company and the Rights Agent may, prior to the Distribution Date (as defined therein), amend any provision of the Rights Agreement without the approval of any holders of certificates representing the common stock of the Company. The Company now desires to amend the Rights Agreement as set forth in this Amendment. NOW THEREFORE, in consideration of the premises and the mutual agreement herein set forth, the parties hereby agree as follows: 1. DELETION OF SECTION 23(c). Section 23(c) of the Rights Agreement is hereby deleted in its entirety. 2. EFFECTIVENESS. This Amendment shall be deemed effective as of the date first written above, as if executed on such date. Except as amended hereby, the Rights Agreement shall remain in full force and effect and shall be otherwise unaffected hereby. 3. MISCELLANEOUS. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall governed by and construed in accordance with the laws of the State of Delaware applicable to contracts to be made and performed entirely within the State of Delaware without giving effect to the principles of conflict of laws thereof. This Amendment may be executed in any number of counterparts, each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. If any provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, illegal or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment 2 shall remain in full force and effect and shall in no way be affected, impaired or invalidated. EXECUTED under the seal as of the date first set forth above. Attest: WANG LABORATORIES, INC. /s/ Alan R. Cormier By: /s/ Franklyn A. Caine - ------------------------- -------------------------- Name: Franklyn A. Caine Title: Chief Financial Officer Attest: AMERICAN STOCK TRANSFER AND TRUST COMPANY /s/ Joe Wolf By: /s/ Herbert J. Lemmer - ------------------------- -------------------------- Name: Herbert J. Lemmer Title: Vice President EX-21.1 4 SUBSIDIARIES 1 EXHIBIT 21.1 1 - -------------------------------------------------------------------------------- AUSTRALIA BRAZIL Wang Australia Pty. Ltd. Wang Global Ltda. Wang Global OA Pty. Ltd. Triumph-Adler OA Pty. Ltd. Rua Laguna, 563 3rd andar Open Access Pty. Ltd. CEP 04728-001 Sao Paulo - SP, Brazil Austlink Corporate Park, 2 Tel: 55 11 547 4706 Minna Close Belrose, BNSW 2085 CANADA Australia Wang Global Canada Ltda. Tel: 61-2 9847-7100 I-NET Enterprise Solutions Canada AUSTRIA 150 Middlefield Road Olsy Austria Ges.m.b.H Scarboro, Ontario Open Networks Distr. Ges.m.b.H M1S 4L6 Canada Breitenfurter Str. 317-319 Tel: 416 298 9400 1230 Vienna Austria CHILE Tel: 43 1 866 940 Wang Export Services Inc. Branch Office (US Company) AUSTRIA Las Hortensias 2340 Open Systems Olsy Austria Providencia Information Systems GmbH & Co. KG Santiago, Chile Tel: 56 2 5205300 Eichenstrasse 58-64 A-1122 Vienna COLOMBIA Austria Wang (I-NET) Colombia, branch of I-NET, Inc. Tel: 43 1 811 60 Wang Global Ltd. BAHRAIN Calle 100 No. 8A-55 Advanced Global Communications Torre C., Of. 414 Networks W.L.L. Bogota, Colombia Tel: 571 621 1305 P.O. Box 3282 Manama, Bahrain CROATIA Tel: 873-216-030 Olsy Austria Ges.m.b.H BELGIUM Branch Office (Austria) SPRL Wang Global BVBA Hebrangova 12/11 Cable Print NV 1000 Zagreb Croatia Place Madou 1 - Box 8 Tel: 385 1 455 4844 B-1210 Brussels Tel: 32 2 229 9111 2 2 OFFICES WANG GLOBAL AND SUBSIDIARIES - -------------------------------------------------------------------------------- CZECH REPUBLIC FRANCE Wang Global s.r.o. Wang France S.A. Olsy France S.A. Francouzska 4 Sameca SaRL (Algeria) 120 00 Prague Czech Republic Rue de General Leclerc Tel: 420 2 691 07 13-4 92800 Puteaux Paris la Defense Cedex, France DENMARK Tel: 33 14 906 7111 Olsy A/S GERMANY Telegrafvej 4-6 Wang Deutschland GmbH DK-2750 Ballerup Denmark Am Prime Parc 6-8 Tel: 45 70 201 000 D-65479 Raunheim Germany DENMARK Tel: 49 614 9250 DDI Communications A/S GREECE Telegrafvej 4-6 Wang Global, S.A. DK-2750 Ballerup Denmark 236 Sygrou Ave Tel: 45 70 201 016 176 72 Athens, Greece Tel: 30 1 957 3800 ESTONIA Olsy Eesti AS HONG KONG Wang Pacific Limited Akadeemia Tee 28 Wang Global (HK) Ltd. EE-0026 TALINN ISC Systems Asia Ltd. Estonia Tel: 372 6 779 920 32/F Citicorp Centre 18 Whitfield Road FINLAND Causeway Bay, Hong Kong Wang Global Oy Tel: 852 2979 2702 Microcomputer Support Oy Dilwin Oy HUNGARY Wang Global Hungary Network Luoteisrinne 4 Services Kft FIN-02270 ESPOO Epicom Kft. Finland Tel: 358 9 476100 Terenyi ut 15-17 H-1115 Budapest, Hungary FINLAND Tel: 36 1 206 3250 Dildata Oy INDONESIA Llmeentie 3 PT Wang Global Indonesia Ltd. Fin-02140 ESPOO Finland Komp. Bahan Bangunan Blok F2/19 Tel: 358 9 512 1500 Jakarta 10730 Indonesia Tel: 6221-6012285 3 3 OFFICES WANG GLOBAL AND SUBSIDIARIES - -------------------------------------------------------------------------------- ISRAEL KOREA Wang Global Systems, Ltd. Wang Computers Korea, Ltd. 6 Maskit Str. Herzliya-Pituach 46120, Israel First Securities Building, 25th Floor Tel: 972 9 9527 527 23-5 Yoido-Dong Youngdeungpo-ku IRELAND Seoul 150-010, South Korea Wang Ireland Ltd. Tel: 82 2 784 6111 31 Western Parkway Business Centre LUXEMBOURG Ballymount Road Lower Infotechnique S.A. Walltinstown Dublin 12 Ireland Rue des Scillas, 15 Tel: 353 1 4090822 2529 Howald, Luxembourg ITALY MALAYSIA Wang Global SpA Wang Computers (Malaysia) Sdn. Berhad Wang Italia SpA OMAL (Malaysia) Sdn. Berhad Dr. Ing. Franco Iachello & C. SpA DSI Italia SpA 3-7 Floor, Wisma Tong, Ah No. 1 Olivetti Prodest SpA Jalan Perak Radiel SpA P.O. Box 11229 OSE SpA 50740 Kuala Lumpur, Malaysia Delphi SpA Tel: 603 262 0173 Olivetti Engineering Serv. SpA Unit SpA MEXICO Nomos Sistema SpA Wang Global de Mexico S.A. de C.V. O'Group Technology SpA ORE&L Av. Constituyentes 117 Col. San Miguel Chapultepec Via Lorenteggio 257 Mexico City D.F., 11850 Mexico 20152 Milan, Italy Tel: 525 515 3655 Tel: 390 2 48362411 NETHERLANDS Via G. Jervis 77 Wang Global B.V. 10015 Ivrea (TO) Olsy Nederlands B.V. Italy Demaret B.V. Tel: 390 125 5200 Verbeekstraat 11-21 JAPAN NL-2332 CA Leiden, Netherlands Olivetti Corporation of Japan Tel: 31 71 579 6400 1-24 Himonya 2-Chrome NORWAY Meguro-Ku Wang Global AS Tokyo 152-0003, Japan Ambrasoft AS Tel: 81 45 5937191 UMI AS Tevlingveien 15 N-1081 Furuset, Oslo, Norway Tel: 47 22 79 20 00 4 4 OFFICES WANG GLOBAL AND SUBSIDIARIES - -------------------------------------------------------------------------------- PEOPLE'S REPUBLIC OF CHINA RUSSIA Wang Computer China Ltd. Wang Global Oy Wang Global Information System Engineering Co. Ltd. Branch Office (Finland) Wang Global Tianjin Int. Trading Savvinskaja nab. 5 & Services Co. Ltd. 119121 MOSCOW, Russia Tianjin CISC Computer Co. (50%) Tel: 7 095 248 2775 Beijing Ya Yuen Electronics Co. Ltd. Shenzhen Asia Electronics Co. Ltd. SAUDI ARABIA Advanced Global Communications. (See Hong Kong address) Networks WLL PHILIPPINES Branch Office (Bahrain) Wang Global Philippines Inc. Old Airport Road, Rahid Al Ballaa Building, 4th Fl., Suite 33 5/F Century Tower Riyadh, Saudi Arabia 11461 Tordesillas Cor. H.V. Tel: 966 1 474 0555 ex 117 Della Costa St. Salcedo Village, Makati City, Philippines SINGAPORE Tel: 632 818 1283 Wang Computers (Pte) Limited Wang Global (Singapore) Pte. Ltd. POLAND Wang Global Z.O.O. The Synergy 1 International Business Park U1. Pulawska 352.A 02-14 02819 Warsaw, Poland Singapore 609917 Tel: 48 22 6440845 Tel: 65 665 2928 PORTUGAL SLOVAKIA Wang Global Portugal - Servicos Wang Global s.r.o. e Redesde Informatica, S.A. Zochova 5 811 03 Bratislava Praca Marques de Pombal, 14-4 Slovakia P-1298 Lisboa Codex, Portugal Tel: 421 7 5317 533 Tel: 351 1312 60 00 SLOVENIA PUERTO RICO (See Croatia) Wang Computadoras, Inc. Olsy North America, Inc. (branch office) SOUTH AFRICA Wang Government Services, Inc. Wang Global Africa Pty. Ltd. (branch office) Lole Pty. Ltd. Quintus Pty. Ltd. Avenida Laurel Ensemble Technology AQ-36 Santa Juarita Portion 543 Farm Reitfontein Bayamon, Puerto Rico 00956 (Pty.) Ltd. Tel: 787-787-3357 15 Stiemens Street Braamfontein 2017 South Africa Tel: 27 113399911 5 5 OFFICES WANG GLOBAL AND SUBSIDIARIES - -------------------------------------------------------------------------------- SPAIN UNITED STATES Wang Network Services, S.L Wang Laboratories, Inc. Olsy North America Inc. Torre Espana I-NET, Inc. Paseo de la Castellana, 95 Advanced Paradigm Inc. E-28046 Madrid Bannex Corporation Spain Parian Development Group Tel: 34 91503 9600 290 Concord Road SWITZERLAND Billerica, MA 01821 Wang (Schweiz) AG Tel: 978 967 5000 Olsy (Schweiz) AG Wang Government Services, Inc. Industriestrasse 50 J.G. Van Dyke and Associates, Inc. CH-8304 Wallisellen Switzerland 7900 Westpark Drive Tel: 41 1 839 1611 McLean, VA 22102 Tel: 703 827 3000 SWITZERLAND Datrac AG VIETNAM Netspeed AG Wang Global (HK) Ltda. Grabenweg Branch Office (Hong Kong) CH-3177 Laupen BE (See Hong Kong address) Switzerland Tel: 41 31 740 21 11 VENEZUELA Wang Venezuela C.A. UNITED ARAB EMIRATES Advanced Global Communication Torre Centro Seguro Sud America Networks WLL Avenida Tamanaco, El Rosal - PM Caracas, Venezuela Branch Office (Bahrain) Tel: 582 952 2211 Al-Yasmeen Building - Suite 306 Dubai, United Arab Emirates Tel: 971 4 696 445 UNITED KINGDOM Wang Global Ltd. Wang (UK) Ltd. Wang I-NET Ltd. Recordskill Ltd. Olsy UK Ltd. Oldco UK Ltda. Olsy Financial Services Ltd. 86/88 Upper Richmond Road Putney London SW15 2UR United Kingdom Tel: 44 181 785 6666 -----END PRIVACY-ENHANCED MESSAGE-----