EX-10.6.3 Change in Control Agreement





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	Exhibit 10.6.3
	CHIEF EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT
	EX-3.1.1.1 CERTIFICATE OF DECREASE
	EX-10.6.3 CHANGE IN CONTROL AGREEMENT
	EX-10.29.1 CHANGE IN CONTROL AGREEMENT
	EX-10.30.1 CHANGE IN CONTROL AGREEMENT
	EX-10.31 EMPLOYMENT AGREEMENT
	EX-10.31.1 CHANGE IN CONTROL AGREEMENT
	EX-10.32 EMPLOYMENT AGREEMENT
	EX-10.32.1 CHANGE IN CONTROL AGREEMENT
	EX-10.33 CHANGE IN CONTROL AGREEMENT
	EX-21 SUBSIDIARIES OF THE REGISTRANT
	EX-23 CONSENT OF PRICEWATERHOUSECOOPERS LLP











Exhibit 10.6.3





CHIEF EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT


      THIS AGREEMENT dated August 31, 1999 is made by and between
PictureTel Corporation, a Delaware Corporation, (the “Company”) and Dr.
Norman E. Gaut, 25 Marrett Street, Lexington, MA 02173 (“Executive’’).


      WHEREAS the Company considers it essential to the best interests of
the Company, its shareholders, and its employees generally to foster the
continuous employment of the Executive; and


      WHEREAS the Board of Directors of the Company (the “Board”)
recognizes that, as is the case with many publicly held corporations,
the possibility of a Change in Control (as defined in the last Section
hereof) exists and that such possibility, and the resultant uncertainty,
may result in the departure or distraction of the Executive to the
detriment of the Company and its shareholders; and


      WHEREAS the Board has determined that appropriate steps should be
taken to encourage the continued attention and dedication of the
Executive to his assigned duties without distraction in the face of
potentially disrupting circumstances arising from the possibility of a
Change in Control;


      NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration,
the Company and the Executive hereby agree as follows:


      1.0 Defined Terms. The definition of capitalized terms used in this
Agreement is provided in the last Section hereof.


      2.0 Term of Agreement. This Agreement shall commence on the date
hereof and shall continue in effect through August 31, 2001; provided,
however, that commencing on September 1, 2000 and each September 1st
thereafter, the term of this Agreement shall automatically be extended
for one additional year unless, not later than December 31st preceding
that September 1st, the Company or the Executive shall have given notice
not to extend this Agreement or a Change in Control shall have occurred
prior to such December 31st; provided, however, if a Change in Control
shall have occurred during the term of this Agreement, this Agreement
shall continue in effect for a period of not less than thirty-six (36)
months beyond the date such Change in Control occurred.


      3.0 Company’s Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company and in consideration of
the Executive’s covenants set forth in Section 4.0 hereof, the Company
agrees, under the conditions described herein, to pay the Executive the
“Severance Payments” described in Section 6.1 hereof and the other
payments and benefits described herein in the event the Executive’s
employment with the Company is terminated following a Change in Control
and during the term of this Agreement. No amount or benefit shall be
payable under this Agreement unless there shall have been (or, under the
terms hereof, there shall be deemed to have been) a termination of the
Executive’s employment with the Company following a Change in Control.
This Agreement shall not be construed as creating an express or implied
contract of employment prior to the date of a Change in Control and,
except as otherwise agreed in writing between the Executive and the
Company, the Executive shall not have any right to be retained in the
employ of the Company.


      4.0 The Executive’s Covenants. The Executive agrees that, subject
to the terms and conditions of this Agreement, in the event of a
Potential Change in Control during the term of this Agreement, the
Executive will remain in the employ of the Company until the earliest of
(A) a date which is six (6) months from the date of such Potential
Change of Control, (B) the date of a Change in Control, (C) the date of
termination by the Executive of the Executive’s employment for Good
Reason (determined by treating the Potential Change in Control as a
Change in Control in applying the definition of Good Reason), by reason
of death or Disability, or (D) the termination by the Company of the
Executive’s employment for any reason.


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      5.0 Compensation Other Than Severance Payments.


      5.1 Following a Change in Control during the term of this
Agreement, during any period that the Executive fails to perform the
Executive’s full-time duties with the Company as a result of incapacity
due to physical or mental illness, the Company shall pay the Executive’s
full salary to the Executive at the rate in effect at the commencement
of any such period, together with all compensation and benefits payable
to the Executive under the terms of any compensation or benefit plan,
program or arrangement maintained by the Company during such period,
until the Executive’s employment is terminated by the Company for
Disability.


      5.2 If the Executive’s employment shall be terminated for any
reason following a Change in Control during the term of this Agreement,
the Company shall pay the Executive’s full salary to the Executive
through the Date of Termination at the rate in effect at the time the
Notice of Termination is given, together with all compensation and
benefits payable to the Executive through the Date of Termination under
the terms of any compensation or benefit plan, program or arrangement
maintained by the Company prior to the Date of Termination.


      5.3 If the Executive’s employment shall be terminated for any
reason following a Change in Control during the term of this Agreement,
the Company shall pay the Executive’s normal post-termination
compensation and benefits to the Executive as such payments become due.
Such post-termination compensation and benefits shall be determined
under, and paid in accordance with, the Company’s retirement, insurance
and other compensation or benefit plans, programs and arrangements;
provided however, that the Severance Payments under Section 6.0 of this
Agreement shall be the only severance paid following a Change in Control
during the term of this Agreement.


      6.0 Severance Payments.


      6.1 Subject to Section 6.2 hereof, the Company shall pay the
Executive the payments described in this Section 6.1 (“Severance
Payments”) upon the termination of the Executive’s employment following
a Change in Control during the term of this Agreement, in addition to
the payments and benefits described in Section 5.0 hereof, unless such
termination is (A) by the Company for Cause, (B) by reason of Death or
Disability, or (C) by the Executive without Good Reason. The Executive’s
employment shall be deemed to have been terminated following a Change in
Control by the Company without Cause or by the Executive with Good
Reason if the Executive’s employment is terminated prior to a Change in
Control without Cause at the direction (or action which constitutes a
direction) of a Person who has entered into an agreement with the
Company the consummation of which will constitute a Change in Control or
if the Executive terminates his employment with Good Reason prior to a
Change in Control (determined by treating a Potential Change in Control
as a Change in Control in applying the definition of Good Reason) if the
circumstance or event which constitutes Good Reason occurs at the
direction (or action which constitutes a direction) of such Person.



		
	 	      (i) Subsequent to the Date of Termination, the Company shall make
cash severance payments to the Executive over a thirty-six (36)
month period in substantially equal bi-weekly installments, in an
amount equal to three (3) times the sum of (a) the higher of the
Executive’s annual base salary in effect immediately prior to the
occurrence of the event or circumstance upon which the Notice of
Termination is based or in effect immediately prior to the Change
in Control, and (b) the higher of the highest annual bonus paid to
the Executive in the three years preceding the year in which the
Date of Termination occurs or paid in the three years preceding
the year in which the Change in Control occurs.




		
	 	      (ii) For a thirty-six (36) month period after the Date of
Termination, the Company shall arrange to provide the Executive
with medical and dental insurance benefits substantially similar
to those which the Executive is receiving on the same premium cost
share basis immediately prior to the Notice of Termination
(without giving effect to any reduction in such benefits
subsequent to a Change in Control which reduction constitutes Good
Reason). Benefits otherwise receivable by the Executive pursuant
to this Section 6.1(ii) shall be reduced to the extent comparable
benefits are actually received by or made available to the
Executive without cost during the thirty-six (36) month period
following the Executive’s termination of employment (and any such
benefits actually received by the Executive shall be reported to
the Company by the Executive). If the benefits provided to the
Executive under this Section 6.1(ii) shall result in a decrease,
pursuant to Section 6.2, in the Change in Control Payments and
these Section 6.1(ii) benefits are thereafter reduced pursuant to
the immediately preceding sentence because of the receipt of
comparable benefits, the Company shall, at the time of such
reduction, pay to the Executive the lesser of (a) the amount of
the decrease made in the Severance Payments pursuant to Section
6.2, or (b) the maximum amount which can be paid to the Executive
without being, or causing any other payment to be, nondeductible
by reason of section 28OG of the Code.



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      6.2 Notwithstanding any other provisions of this Agreement, in the
event that any payment or benefit received or to be received by the
Executive in connection with a Change in Control or the termination of
the Executive’ s employment (whether or not received pursuant to the
terms of this Agreement) (all such payments and benefits, including but
not limited to the Severance Payments, being hereinafter called the
“Total Payments”) would be subject in whole or in part to the Excise
Tax, then the Severance Payments shall be reduced to the extent, but
only to the extent, necessary so that no portion of the Total Payments
is subject to the Excise Tax; provided, that no such reduction shall be
effected unless the net amount of the Total Payments after such
reduction in the Severance Payments and after deduction of the net
amount of federal, state and local income taxes on such reduced Total
Payments would be greater than the excess of (A) the net amount of the
Total Payments without such reduction in the Severance Payments but
after deduction of the net amount of federal, state and local income
taxes (other than the Excise Tax) on such unreduced Total Payments, over
(B) the Excise Tax to which the Total Payments are subject. The
determination as to whether a reduction in Severance Payments is to be
made under this Section 6.2 and, if so, the amount of any such reduction
shall be made by the Company’s auditors or by such other firm of
certified public accountants, benefits consulting firm or legal counsel
as the Board may designate prior to the Change in Control.


      The Company shall provide the executive with its calculations of
the amounts referred to in this Section 6.2 and such supporting
materials as are reasonably necessary for the Executive to evaluate the
Company’s calculations.


      6.3 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive as a result of a termination which
entitles the Executive to the Severance Payments (including all such
fees and expenses, if any, incurred in disputing any such termination or
in seeking in good faith to obtain or enforce any benefit or right
provided by this Agreement or in connection with any tax audit or
proceeding to the extent attributable to the application of section 4999
of the Code to any payment or benefit provided hereunder). Such payments
shall be made within five (5) business days after delivery of the
Executive’s written requests for payment accompanied with such evidence
of fees and expenses incurred as the Company reasonably may require.


      7.0 Termination Procedures and Compensation During Dispute.


      7.1 Notice of
Termination. After a Change in Control and during the
term of this Agreement, any purported termination of the Executive’s
employment (other than by reason of death) shall be communicated by
written Notice of Termination from one party hereto to the other party
hereto in accordance with Section 10.0 hereof. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall
indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated. Further, a
Notice of Termination for Cause is required to include a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership (excluding the Executive,
if a Director) of the Board at a meeting of the Board which was called
and held for the purpose of considering such termination (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive’s counsel, to be heard before the Board)
finding that, in the good faith opinion of the Board, the Executive was
guilty of conduct set forth in clause (i) or (ii) of the definition of
Cause herein, and specifying the particulars thereof in detail.


      7.2 Date of Termination. “Date of Termination”, with respect to any
purported termination of the Executive’s employment after a Change in
Control during the term of this Agreement, shall mean:



		
	 	      (A) if the Executive’s employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided
that the Executive shall not have returned to the full-time
performance of the Executive’s duties during such thirty (30) day
period), and




		
	 	      (B) if the Executive’s employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in
the case of a termination by the Company, shall not be less than
thirty (30) days (except in the case of a termination for Cause)
and, in the case of a termination by the Executive, shall not be
less than fifteen (15) days nor more than sixty (60) days,
respectively, from the date such Notice of Termination is given).



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      7.3 Dispute Concerning
Termination. If within fifteen (15) days
after any Notice of Termination is given, or, if later, prior to the
Date of Termination (as determined without regard to this Section 7.3),
the party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally resolved,
either by mutual written agreement of the parties, by arbitrator’s
award, or, to the extent permitted by Section 14.0, by a final judgment,
order or decree of a court of competent jurisdiction on the arbitrator’s
award (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); provided
further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving
such notice pursues the resolution of such dispute with reasonable
diligence.


      7.4 Compensation During
Dispute. If a purported termination occurs
following a Change in Control and during the term of this Agreement and
such termination is disputed in accordance with Section 7.3 hereof, the
Company shall continue to pay the Executive the full compensation in
effect when the notice giving rise to the dispute was given (including,
but not limited to, salary) and continue the Executive as a participant
in all compensation, benefit and insurance plans in which the Executive
was participating when the notice giving rise to the dispute was given,
until the dispute is finally resolved in accordance with Section 7.3
hereof. Amounts paid under this Section 7.4 are in addition to all other
amounts due under this Agreement (other than those due under Section 5.2
hereof) and shall not be offset against or reduce any other amounts due
under this Agreement.


      8.0 No Mitigation. The Company agrees that, if the Executive’s
employment by the Company is terminated during the term of this
Agreement, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive by the
Company pursuant to Section 6.0 or Section 7.4. Further, the amount of
any payment or benefit provided for in Section 6.0 (other than Section
6.1(ii)) or Section 7.4 shall not be reduced by any compensation earned
by the Executive as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be owed by
the Executive to the Company, or otherwise.


      9.0 Successors; Binding Agreement.


      9.1 In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and / or assets
of the Company to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of
the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement
and shall entitle the Executive to compensation from the Company in the
same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive’s employment
for Good Reason after a Change in Control, except that, for purposes of
implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. In any event
this agreement shall be binding upon the Company and any successors or
assignee.


      9.2 This Agreement shall inure to the benefit of and be enforceable
by the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
If the Executive shall die while any amount would still be payable to
the Executive hereunder (other than amounts which, by their terms,
terminate upon the death of the Executive) if the Executive had
continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the Executive’s
estate.


      10.0 Notices. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered in hand or
when delivered or mailed by United States certified mail, return receipt
requested, postage prepaid, addressed to the respective addresses set
forth below, or to such other address as either party may have furnished
to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual receipt:


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            To the Company:




            PictureTel Corporation

            100 Minuteman Road

            Andover, Massachusetts 01810

            Attention: General Counsel




            To the Executive:




            Dr. Norman E. Gaut

            25 Marrett Street

            Lexington, MA 02173



      11.0 Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may
be specifically designated by the Board. No waiver by either party
hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the Commonwealth of
Massachusetts and the Agreement shall be an instrument under seal. All
references to sections of the Exchange Act or the Code shall be deemed
also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding
required under federal, state or local law and any additional
withholding to which the Executive has agreed. The obligations of the
Company and the Executive under Sections 6.0, 7.0, 8.0 and 14.0 shall
survive the expiration of the term of this Agreement.


      12.0 Validity. The invalidity or unenforceability or any provision
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force and
effect. In addition, if any provision of this Agreement is held invalid
or unenforceable by a court of competent jurisdiction, then such
provision shall be deemed modified to the extent necessary to enable
such provision to be valid and enforceable.


      13.0 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.


      14.0 Settlement of Disputes; Arbitration. All claims by the
Executive for benefits under this Agreement shall be directed to the
Board and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to the Executive in
writing and shall set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon. The Board then shall
afford a reasonable opportunity to the Executive for a review of the
decision denying a claim and shall further allow the Executive to appeal
to the Board a decision of the Board within sixty (60) days after
notification by the Board that the Executive’s claim has been denied.
Any further dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in Boston,
Massachusetts in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator’s
award in any court having jurisdiction; provided, however, that the
Executive shall be entitled to seek specific performance of the
Executive’s right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection
with this Agreement in such arbitration or by a proceeding in the
federal court in Boston or the Massachusetts state court in Essex
County.


      15.0 Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated below:



		
	 	      (A) “Base Amount” shall have the meaning defined in section
28OG(b)(3) of the Code.




		
	 	      (B) “Beneficial Owner” shall have the meaning defined in Rule
13d-3 under the Exchange Act.




		
	 	      (C) “Board” shall mean the Board of Directors of the Company.



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	 	      (D) “Cause” for termination by the Company of the Executive’s
employment, after any Change in Control, shall mean:




		
	 	      (i) the willful and continued failure by the Executive to
substantially perform the Executive’s duties with the Company
(other than any such failure resulting from the Executive’s
incapacity due to physical or mental illness or any such actual
or anticipated failure after the issuance of a Notice of
Termination for Good Reason by the Executive pursuant to
Section 7.1) for thirty (30) days after a written demand for
substantial performance is delivered to the Executive by the
Board, which demand specifically identifies the manner in which
the Board believes that the Executive has not substantially
performed the Executive’s duties, or




		
	 	      (ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise.



For purposes of clauses (i) and (ii) of this definition, no act,
or failure to act, on the Executive’s part shall be deemed
“Willful” unless done, or omitted to be done, by the Executive not
in good faith and without reasonable belief that the Executive’s
act, or failure to act, was in the best interest of the Company.



		
	 	      (E) A “Change in Control”, shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall
have been satisfied:




		
	 	      (i) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing
twenty-five (25) percent or more of the combined voting power
of the Company’s then outstanding securities; or




		
	 	      (ii) during any period of not more than two consecutive years
(not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period
constitute the Board and any new director (other than a
director designated by a Person who has entered into an
agreement with the Company to effect a transaction described in
clause (i), (ii) or (iii) of this Section 15(E)) whose election
by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds (2 /
3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for
any reason to constitute a majority thereof; or




		
	 	      (iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other
than (a) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) sixty (60) percent or more of the combined
voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or (b) a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no Person acquires twenty-five (25)
percent or more of the combined voting power of the Company’s
then outstanding securities; or




		
	 	      (iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the
Company’s assets.




		
	 	      (F) “Code” shall mean the Internal Revenue Code of 1986, as
amended from time to time.




		
	 	      (G) “Company” shall mean PictureTel Corporation and any successor
to its business and/or assets which assumes and agrees to perform
this Agreement by operation of law, or otherwise (except in
determining, under Section 15(E) hereof, whether or not any Change
in Control of the Company has occurred in connection with such
succession).




		
	 	      (H) “Date of Termination” shall have the meaning stated in
Section 7.2 hereof.



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	 	      (I) “Disability” shall be deemed the reason for the termination by
the Company of the Executive’s employment, if, as a result of the
Executive’s incapacity due to physical or mental illness, the
Executive shall have been absent from the full-time performance of
the Executive’s duties with the Company for a period of six (6)
consecutive months, the Company shall have given the Executive a
Notice of Termination for Disability, and, within thirty (30) days
after such Notice of Termination is given, the Executive shall not
have returned to the full-time performance of the Executive’s
duties.




		
	 	      (J) “Exchange Act” shall mean the Securities Exchange Act of 1934,
as amended from time to time.




		
	 	      (K) “Excise Tax” shall mean any excise tax imposed under section
4999 of the Code.




		
	 	      (L) “Executive” shall mean the individual named in the first
paragraph of this Agreement.




		
	 	      (M) “Good Reason” for termination by the Executive of the
Executive’s employment shall mean:




		
	 	      (i) during the period commencing thirty days after the Change
in Control and terminating six (6) months after the Change in
Control, a good faith determination by the Executive that, as a
result of the Change in Control, the Executive is unable to
discharge his duties effectively, or




		
	 	      (ii) the occurrence (without the Executive’s express written
consent) of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act
or failure to act described in paragraph (a), (e), (f), or (g),
below, such act or failure to act is corrected prior to the
Date of Termination specified in the Notice of Termination
given in respect thereof:




		
	 	      (a) the assignment to the Executive of any duties
inconsistent with the Executive’s status as a senior
executive officer of the Company or a substantial adverse
alteration in the nature or status of the Executive’s
responsibilities from those in effect immediately prior to
the Change in Control;




		
	 	      (b) a reduction by the Company in the Executive’s annual
base salary as in effect on the date hereof or as the same
may be increased from time to time;




		
	 	      (c) the relocation of the Company’s principal executive
offices to a location more than thirty (30) miles] from the
location of such offices immediately prior to the Change in
Control or the Company’s requiring the Executive to be based
anywhere other than the Company’s principal executive
offices, except for required travel on the Company’s
business to an extent substantially consistent with the
Executive’s present business travel obligations;




		
	 	      (d) the failure, not corrected within five (5) days after
written notice thereof to the Company, by the Company,
without the Executive’s consent, to pay to the Executive any
portion of the Executive’s current compensation, or to pay
to the Executive any portion of an installment of deferred
compensation under any deferred compensation program of the
Company, within seven (7) days of the date such compensation
is due;




		
	 	      (e) the failure, not corrected within five (5) days after
written notice thereof to the Company, by the Company to
continue in effect any compensation plan in which the
Executive participates immediately prior to the Change in
Control which is material to the Executive’s total
compensation, including but not limited to the Company’s
Equity Incentive Plan and Employee Stock Purchase Plan or
any substitute plans adopted prior to the Change in Control,
unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect
to such plan, or the failure by the Company to continue the
Executive’s participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable,
both in terms of the amount of benefits provided and the
level of the Executive’s participation relative to other
participants, as existed at the time of the Change in
Control;



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	 	      (f) the failure, not corrected within five (5) days after
written notice thereof to the Company, by the Company to
continue to provide the Executive with benefits
substantially similar to those enjoyed by the Executive
under any of the Company’s pension, life insurance, medical,
health and accident, or disability plans in which the
Executive was participating at the time of the Change in
Control (other than changes required by law), the taking of
any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the
Executive at the time of the Change in Control, or the
failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is
entitled on the basis of years of service with the Company
in accordance with the Company’s normal vacation policy in
effect at the time of the Change in Control; or




		
	 	      (g) any purported termination of the Executive’s employment
which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 7.1; for purposes of
this Agreement, no such purported termination shall be
effective.





	 	 	The Executive’s right to terminate the Executive’s
employment for Good Reason shall not be affected by the
Executive’s incapacity due to physical or mental illness.
The Executive’s continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act
or failure to act constituting Good Reason hereunder.





		
	 	      (N) “Notice of Termination” shall have the meaning stated in
Section 7.1 hereof.




		
	 	      (O) “Person” shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof; however, a Person shall not include:




		
	 	      (i) the Company,




		
	 	      (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or




		
	 	      (iii) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.




		
	 	      (P) “Potential Change in Control’, shall be deemed to have
occurred if the conditions set forth in any one of the following
paragraphs shall have been satisfied:




		
	 	      (i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;




		
	 	      (ii) the Company or any Person publicly announces an intention
to take or to consider taking actions which, if consummated,
would constitute a Change in Control;




		
	 	      (iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has
occurred.




		
	 	      (Q) “Severance Payments” shall mean those payments described in
Section 6.1 hereof.




		
	 	      (R) “Total Payments” shall mean those payments described in Section
6.2 hereof.



For the Board of Directors

of PictureTel Corporation



	 	 	 
	 	 	
        Executive:
	
	 	

	
        
        Lawrence Bornstein

        	 	
                      Norman Gaut
	
        
        Vice President, Human Resources

        	 	 



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