Conference 7.286::digital

    �Just what DOES happen to the employees of the part of a company that
    �gets sold?
    
    There are about as many answers to the question as countries we operate
    in. I assume you're in US - and can't answer the question. Here in
    Germany, is covered by law - mainly �613a BGB.
    

    re -1
    
    You're quite right, and I apologize to all who read this notes file who
    are NOT in the US.  My view was/is very myopic... 
    
    Yes, I am in the U.S. 
    
    tony

>    What happens to the pension fund for those employees who leave this
>    way?  Do I have to become vested in the new owner's company all over
>    again to be elegible for retirement?

I'm interested in knowing what happens to those employees who are not *quite*
100% vested in the DEC pension plan - I assume they just plain lose it...

Rick

    In the US, the rules about vesting are on a graduated scale up to 100%
    for the years of service completed 1-5.  Upon 5 yrs, you get 100%.
    
    BTW, The old law about 10 yrs of service didn't allow for any graduated
    scale.  If you left in the 9th yr of service, tough darts.

    	
    	Here's a question that I hope someone can answer for me. I will be
    TFSO'ed by the end of next week. 
    
    	Here's the question:
    	  	
    	With the talk of different business groups "spinning-off" from 
    DEC....er.......Digital, would it be possible to actually be hired into
    this new company without any repercussions from Digital?
    
JJC

>>    In the US, the rules about vesting are on a graduated scale up to 100%
>>    for the years of service completed 1-5.  Upon 5 yrs, you get 100%.
    
>>    BTW, The old law about 10 yrs of service didn't allow for any graduated
>>    scale.  If you left in the 9th yr of service, tough darts.


I am not sure you are talking about a U.S. law or the old policy that Digital
used to use for vesting (perhaps they are the same).  But...

If memory serves me correctly, under the old system at Digital, you were 50%
vested after 5 years, then an additional 10% each year up to year 10, at which
time you were 100% vested.  Therefore, under this scheme, someone who left in
the 9th year of service would get 90% of their entitlement.

Under the new (current) rules, you have *no* vesting until you've completed
your 5th year, at which time you become 100% vested.  If you leave prior to that
I assume you get nothing.

    .6
    I am sorry you are incorrect.  

    
    ref .7
    
              What is incorrect about the statement in .6 ?

    refer to .5
    

    
    You answer a question with pointing me to another question.
    If you donot know the answer just say so!
    
    bc
    

    re: .10
    
    I think he meant to point you to .4.  But don't bother, because .6 is
    correct.
    
    	Steve

    
    Thanks, I knew .6 was correct; I just wanted to know why he thought
    it was not correct. With such a short come back one never knows.
    
    bc
    

    .6 is incorrect and if you want, call the Pension plan number and get
    it from the horses mouth.
    
    Back to the program...

RETIREMENT BENEFITS

Years of vesting        Nonforfeitable portion of your pension benefit
service

1 year                  0%

2 years                 0%

3 years                 0%

4 years                 0%

5 years                 100%*

*At age 65 with one year of vesting service, you automatically are 100%
vested.

    ok, .13 agrees with .6; does the pension plan administraotr say
    something different??
    
    ...tom

    My understanding (I don't know about any US laws on the subject of
    pension and acquisitions) is everything's up for grabs.  I was with an
    actuarial consulting firm several years ago when they decided to be
    acquired by a larger benefits/insurance consulting firm.  My company
    was privately-owned by its principals (top consultants).  I had only a
    year of seniority with the company.  When we merged, I was 100% vested
    in the pension plan.  (In the year 2020, I'll get a few extra bucks. 
    Better than nothing, I guess.)
    
    So, I believe that the pension decisions were all part of the merger
    negotiations.  They were negotiable.
    
    -Pete

    RE: .-*

    The pension benefits brochure for US employees, revised 1982, states:

	Vesting Service

	Vesting service is the number of years you have worked
	at Digital.  Each year you work after your fifth year of
	service, you earn a right to receive a certain benefit, even
	if you leave the company before reaching retirement
	age.  Your vesting service determines the percentage of
	your benefit that you're entitled to receive.

	Employees with less than five years of sevice are not
	vested in any portion of their benefit.  After five years
	of vesting service, you are 50% vested.  For each year
	after that, you vest in another 10%.  After 10 years of
	vesting service, you are fully (100%) vested.

	___________________________________________________________
	    Years of Service			Vested Benefit
	___________________________________________________________
	    Under 5 years				  0%
		 5 years				 50%
		 6 years				 60%
		 7 years				 70%
		 8 years				 80%
		 9 years				 90%
		10 years				100%
	___________________________________________________________

	...

    As I recall, this schedule stayed in effect until the current schedule
    (outlined in .6) was adopted in the late 80s.

    This seems to substantiate the information provided in .6.

	-AJ

    FWIW: The last revision prior to July 1982 appears to have been
    September 1978.

    The September 1978 pension benefits brochure for US employees states:

	The amount of your vested pension shall be the amount
	of your accrued benefit at the time you leave Digital.
	This amount is them multiplied by the applicable per-
	centage taken from the following table:

	    Completed Years		    Percentage of
		of Service		    Vested Benefit
	    ---------------		    --------------
	       less than 5			   0
	       5				  25
	       6				  30
	       7				  35
	       8				  40
	       9				  45
	      10				  50
	      11				  60
	      12				  70
	      13				  80
	      14				  90
	      15 or more years			 100%


    I should really clean out my files.

    The "Your Benefits Book" for 1991 (I'm sure in the following years of
    "economy", we received something, but it's missing and presumed
    crumbled), says on page 8.6, (in agreement with .-?)
    					 Nonforfeitable portion
    	Years of vesting service	 of your pension benefits
    		1 year				      0%
    		2 years				      0%
    		3 years				      0%
    		4 years				      0%
    		5 years				    100% ,
    and is preceeded with the statement that "If you leave Digital before
    working for five years, you will NOT (italics) receive a pension
    benefit from the company unless you are age 65 or older when you leave. 
    That is beacuse you are not 'vested' in the plan." 
    
    Since this information is more recent than 1981(!), I presume it is
    more likly to be the current policy; I remember the change from .-1,
    and cannot recall any change being mentioned since.  Please cite your
    reference, if you find a source more recent than Jan 1, 1991.  	

    
    
      I think federal law was revised around 85 or so  which forced
    a change in vesting scheme.  I think the 2 options permitted
    under (US) federal law were linear vesting up to 5 years,  or
    a longer vesting time with a bigger upfront chunk in the first
    couple of years.
    
      I don't think the 1982 reference cited here is still valid...
    
    
    						-al
    
    

I've not looked up in any detail, but I did a 


        $ VTX BENEFITS_US

        Choose option 1

        Enter 'pension' as keyword

This revealed a number of sections containing information that one would
assume is current.

Lee

From .4:
>    BTW, The old law about 10 yrs of service didn't allow for any graduated
                  ^^^
>   scale.  If you left in the 9th yr of service, tough darts.
From .6:
>If memory serves me correctly, under the old system at Digital, you were 50%
                                              ^^^^^^^^^^^^^^^^^^
>vested after 5 years, then an additional 10% each year up to year 10, at which
>time you were 100% vested.  Therefore, under this scheme, someone who left in
>the 9th year of service would get 90% of their entitlement.

"law" does not equal "system at Digital".  Corporations were/are free to have
vesting schedules more liberal to the employees than the law's standards,
just not less.

    I still contend that the policy as stated is not in lines with the 1993
    Omnibus Budget Reconciliation Act and the section dealing specifically
    with revisions in pension plans effective 1-1-94.  I will look up my
    reference tonite and post tomorrow.

    Federal law requires pension plans to be 100% vested after five years
    of service.  Companies may offer proportional vesting for less than
    five years of service, but the law does not require this, and Digital
    doesn't do it.
    
    

    My husbands's company was recently bought out.  Employees participate
    in a profit-sharing plan as a pension plan.  They also have a 401K
    plan.  
    
    The new company has informed the employees that all monies now in the
    pension plan and 401K will be paid out in full.  After that, the new
    company will announce the new pension plan, etc.
    
    Folks have to roll the money into IRA's, etc., to avoid paying the
    income tax.
    
    

    Seems like .0 was asking if his vested pension benefit was protected if
    that portion of the company he works for is sold to an outside firm,
    rather that inquiring about vesting rights. I seem to recall that
    during the merger frenzy of the early to mid-80's, a number of
    companies were bought simply for their well-funded pension plans. The
    buying company then purchased annuitites that paid out benefits
    equivalent to what the pension plan would have paid. These annuities
    were purchased at fairly deep discounts, allowing the 'raider' to
    pocket the difference. In some cases the windfall was substantial. The
    employee didn't actually lose, other than his/her pension benefit
    was fixed. I believe that Congress passed some laws that guarantee your
    vested pension rights are not diminished by take-overs or buyouts.
    Seems like I received a benefits report once that referenced these laws.
    
    Of course, I could be totally wrong, but that's what I think is the
    current situation regarding take-overs and buy-outs.
    
    George
    
    

    re -1
    thanks...
    
    actuall, what i am also wondering is "do I have to start all over
    again"?
    
    hell, i'm nearly retirement age now.  i've been with DEC for nearly 14
    years, and i really don't FEEL like having to start all over again. 
    I'm "vested" in Burroughs (aka Unisys) from a previous stint there. 
    I'm "vested" in Digital.  By the time I'm 55 I can't possibly be
    "vested" in another company (who might own my piece of the pie by
    then).  So, if XYZ buys DC (of which I'm a part), and I stay with
    XYZ/DC do I continue my current vestiture (is that the word?) or does
    XYZ make me start all over again?
    
    tony

    When Digital aquired Telstar from Kodak. The years of service at Kodak
    counted as years of service at Digital.
    
                           Steve J.

    
    
    i have long heard that the BOD put in place several 'poison pills' 
    that preclude, or at least make very unlikely, the possibility of
    digital ever being taken over in a hostile manner.  i would like to
    know the details of said pills if anyone can shed some light on this.
    
    i am inclined to believe that these pills due exist given that the
    value of the campanies assets/share has been much below the current
    trading price of the stock.  does anyone have any specific details?
    
    mark
    

See Para. 4
    
         <<< HUMANE::DISK$CONFERENCES:[NOTES$LIBRARY]DIGITAL.NOTE;1 >>>
                        -< The Digital way of working >-
================================================================================
Note 1611.28               DEC Takeover Rumors Again
                   28 of 42
IOSG::MEREWOOD "Richard, REO/D4-5A, DTN 830-3352"    40 lines   2-OCT-1991 05:12
                 -< Simple guide to margers and acquisitions >-
--------------------------------------------------------------------------------
The process by which one company acquires another is -- in principle at least --
quite simple. The inactivity around our stock in the last week was a pretty sure
sign that the Mitsubishi rumour was false.

A publicly owned company is actually owned by its shareholders - that's why they
are called share-holders. Thus for one company to acquire another, it must
puchase the target from the people who own it. In other words, to acquire
Digital, you must buy all of the shares in it. You will not be able to get the
shares at the market price. If you're interested, we shareholders would like to
sell at premium - that's if we want to sell to you at all. If we think our
investment is safer without you we may choose not to accept the offer. In
practice this process is managed by the board of directors (our elected
representatives) who will recommend rejection of the bid, or acceptance of a
price negotiated with the aspiring purchaser. A takeover therefore cannot occur
without the agreement of both the BOD and the shareholders.

In a hostile takeover, the acquirer tries to get around the intransigent BOD by
buying a sufficient amount of stock to call extraordinary general meetings and
replace intransigent directors with their own people. Other matters can be
placed on the agenda and voted.

In the late '80s Digital altered its byelaws to protect itself from hostile
takeover. The rules are extremely complex but they basically achieve two things:
(1) Directors can't be summarily replaced and the board can't be "packed" by
a majority shareholder; (2) In the event of a hostile acquisition of stock, the
BOD has the right to massively dilute the stockholders' equity making a takeover
prohibitively expensive. This latter is called the "poison pill" defence because
as well as preventing the takeover, it also wrecks the company's financial
structure.

The bottom line here is that if Digital is ever acquired or merged (never say
never), it will be a "friendly" affair. As soon as negotiations between boards
commence, the stock price will begin to rise to reflect the value signified by
the acquirer's desire to purchase and driven by investor's desire to profit from
the deal.

No indication of this occurred last week. That's not to say it will never
happen. Digital is probably a good acquisition target.

	Richard.

    I think - just an opinion - that the poison pill was just an implied
    poison pill.  Years ago when the annual rumor came around that XYZ was
    going to do a hostile takeover, it was said that Digital had enough
    cash on hand to buy Digital stock, running up the price of stock shares
    so high that it would cost far too much to 'buy' Digital.  Of course,
    conditions have changed.

    
    
    hmmm...as a significant stockholder i think a takeover might be a great
    thing.  as an engineer i am less sure but i'd be willing to see it
    happen to see where things went.  do others think that a buyout and/or
    hostile takeover would be a bad thing?
    
    also, this sort of ad hoc ruling in -2 seems a bit odd to me.  that is
    to say that the BOD can do this and that in order to ward off any
    hostile takeover attempts, because we say we can, seems a bit iffy to
    me.
    
    mark
    

    I think we can be pretty sure there is little prospect of any "hostile"
    takeover...
    
    Digital seems to be actively beating the bushes looking for buyers... 

    the most poisson is probably our appr. 10% stake in Olivetti....

There's something fishy about that last reply.

In all probability, .33 was just a nicely distributed random note.

;-}

    
    	As a significant stockholder myself, I like this thought of
    actually getting some money for my shares. If our time/money slope
    continues, my kids will be able to buy pizza and beer with my DEC
    shares, not a college education.
    
    	My favorite purchaser is General Electric - for almost any reason
    you can think of. They also have lots of cash.
    
    	Second favorite has to be Siemens. While saleswise, I'd be history.
    For our engineering people, you'ld be in heaven.
    
    		the Greyhawk 

    re .36:
    
    �	Second favorite has to be Siemens. While saleswise, I'd be history.
    �For our engineering people, you'ld be in heaven.
    
    As long as they learn German... :-)
    
    Siemens has enough trouble swallowing Nixdorf, why would they buy
    another failing company?
    
    On the other had, they have cash... as the saying goes here in Germany,
    Siemens is one of the worlds largest banks with their own computer
    comany...
    
    They have a huge, almost empty office building just a couple of
    kilometers from my house - maybe I can walk to work then...

    I've come to apologize for the error I made in previous notes
    concerning vesting and pension funds in general.  The law was changed a
    few years back shortening the time frame from 10 yrs to 5 yrs when a
    person could become vested.  Policies vary by company as to timeframes
    and %'s of vesting under 5 yrs.
    
    I remembered a change that took place with the Tax Law enacted last
    summer.  I researched it last night and the changes with pensions
    effective 1-1-94 deal with funding provisions, no vesting provisions.
    
    Sorry for the confusion.

    re: .36 Greyhawk.
    
    I do not understand your comment about being history saleswise if
    Digital were purchased by Siemens.
    
    What have I missed?
    
    rww
    

    
    	rww -
    
    		Not much, really. It is just that I refuse to put my
    talents to work for any non-US based company. Call me whatever.
    We all have our prejudices.
    
    		the Greyhawk

General Electric is in the business of buying up faltering companies.
I wouldn't be too excited about them buying us, however.  Look at RCA.
RCA doesn't exist anymore...only the brand name, sold by various
third parties.  RCA was completely dismembered.

They buy the company, liquidate assets, dessimate the workforce, and
sell off the leftovers for a profit.  G.E. is the Great White Shark of
big business.  If G.E. buys us, we're dead.

tim

    re .40
    >It is just that I refuse to put my talents to work for any non-US
    >based company.
    
    Is the same valid for non-US_Digital products???
    You sound like a nationalist to me.
    
    Ronald (who by the way LOVES Nederland)

    re: .40
>    		Not much, really. It is just that I refuse to put my
>    talents to work for any non-US based company. Call me whatever.
>    We all have our prejudices.
    
    	Curious idea. The majority of our sales are outside the U.S., I
    would guess that the majority of our manufacturing is outside the U.S.,
    and with holding companies and corporate shareholders I doubt if you could
    say that most of the company was owned by U.S. citizens without a long
    investigation.
    
    	Is it the place where the company is registered, the nationality of
    the CEO, or the country  in which he spends most of his time that is
    most important?
    
    	Dave, who knows several people who are happy to work for companies
    registered in tax-free havens.

Re. .40

Isn't this a little bit 'colonialist' attitude? Like saying, that you want
to conquer the world, so that the world works FOR you?? How about a 
partnership so that the world can work WITH you???

BTW. In other contexts, we seem to have more than our share of people, who
want everybody else to work for them, not with them. Could almost be a
description of 'a Digital team model' ;^).

--Ritva

    re .40: What do you think if all non-US DECcies would refuse to put
    their talents to work for a US based company?
    

Please keep in mind that Greyhawk was speaking about his own attitude in
response to a question and IMO was not trying to espouse his views to anyone
else; that point seems to have been lost in subsequent replies.

    re: last few.
    
    .46 is correct.  I asked Greyhawk for a clarification to a statement. 
    He reponded.  No more, no less.
    
    He is entitled to his view.
    
    rww

    	I wasn't questioning his view. I was just querying what (in his
    opinion) made DEC a U.S. company. As far as I know, the only thing that
    is certain is that the top of the tree structure of subsidiaries is
    registered in the U.S., and that therefore any profit the subsidiaries
    return to the top of the tree (as opposed to retaining for their own
    development) will be taxed in the U.S..
    
    	As I hinted, having the top of the tree registered in a country
    that  doesn't have corporation taxes might be preferrable if we were
    actually making a profit to be taxed.

    
    re: -last 8
    
    	It is my humble opinion that working for foreign national companies
    puts the individual at career risk. Kind of a glass ceiling concept for
    non-nationals of the non-US-based company. Digital is somewhat unique
    in that we actively promote non-US citizens. Most companies do not.
    	On the other hand, if I left Digital I'd get out of this business
    altogether. And in that regard, working for a non-US based firm would
    be impossible for the type of position I would prefer and its attendent
    career path. I honestly believe no one wants to work anywhere on the
    concept that you can only advance so far and that's that because you
    are not a citizen of a certain country. The Japanese are famous for
    this.
    	Otherwise who cares.....
    
    	On the other hand, has anyone heard what the sales compensation
    plan is for FY95?
    
    		the Greyhawk

    I've only heard that it will be 'different'.
    
    The PC sales people are moving from 60/40 to 50/50.  I don't know how
    much you can draw from that since the PCBU anounced a new compensation
    plan for everyone in the business unit (not just sales).
    
    Peter Dillard

  .49> 	It is my humble opinion that working for foreign national companies
  .49>  puts the individual at career risk. 


For the majority of Digital employees (who do not live or work in the US) this
is exactly the position we are currently in!

	Stuart

re: .51

Thank you very  much for a perfect example of quoting out of context to distort
what was said.  The complete text in context from .49 is as follows:


>    	It is my humble opinion that working for foreign national companies
>    puts the individual at career risk. Kind of a glass ceiling concept for
>    non-nationals of the non-US-based company. Digital is somewhat unique
>    in that we actively promote non-US citizens. Most companies do not.

Bob

    I think US Digital employees are more sanguine about the opportunities
    afforded non-US DECcies than are the non-US DECcies.  
    
    Yeah, we've got a couple of high-profile high-level veeps who came up
    through the European side, but how many from Latin America, Asia, Oz?
    
    --bonnie

    Me thinks we got our fair share from Oz:').