<PAGE> 1
As filed with the Securities and Exchange Commission on September __, 1994
Registration No. 33-
__________________________________________________________________________
__________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TANDEM COMPUTERS INCORPORATED
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 94-2266618
------------------------------ ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19333 Vallco Parkway
Cupertino, CA 95014-2599
------------------------------ ------------------------------
(Address of Principal (Zip Code)
Executive Offices)
</TABLE>
TANDEM COMPUTERS INCORPORATED
DEFERRED COMPENSATION PLAN
(Full title of the plan)
<TABLE>
<S> <C>
JOSEPHINE T. PARRY, ESQ. Copy to:
Vice President, General Counsel SCOTT T. SMITH, ESQ.
and Secretary DAVID K. YAO, ESQ.
Tandem Computers Incorporated Pillsbury Madison & Sutro
10435 N. Tantau Avenue 2700 Sand Hill Road
Cupertino, CA 95014-0709 Menlo Park, CA 94025-7020
(408) 725-6000 (415) 233-4500
-------------------------------- ------------------------------
(Name, address and telephone (Counsel to the Registrant)
number, including area code,
of agent for service)
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
_______________________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________________
Title of Amount Proposed Maximum Proposed Amount of
Securities To To Be Offering Price Maximum Aggregate Registration
Be Registered Registered per Share Offering Price(1) Fee
_______________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
General Obligations of Tandem $20,000,000 $20,000,000 $20,000,000 $6,896.60
Computers Incorporated under the
Tandem Computers Incorporated
Deferred Compensation Plan in the
Principal Amount of $20,000,000
_______________________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________________
</TABLE>
(1) This Registration Statement covers the principal amount of $20,000,000 and
the registration fee is based upon such principal amount.
________________
The Registration Statement shall become effective upon filing in
accordance with Rule 462 under the Securities Act of 1933.
________________________________________________________________________________
________________________________________________________________________________
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance
with Rule 428 under the Securities Act of 1933 and the Note to Part I
of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Registrant with the Securities and
Exchange Commission are incorporated by reference in this Registration
Statement:
(1) The Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1993.
(2) All other reports filed by the Registrant since September
30, 1993 with the Commission pursuant to section 13(a) or 15(d) of the
Securities Exchange Act of 1934.
In addition, all documents subsequently filed by Registrant pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities.
The Tandem Computers Incorporated Deferred Compensation Plan (the
"Plan") is an unfunded deferred compensation plan. The securities to be issued
under the Plan constitute general obligations of the Registrant and will be
offered to eligible Plan participants who may elect to defer certain amounts of
their annual compensation. An aggregate principal amount of $20,000,000 is
being registered under the Plan. Further amounts may be registered and issued
as new or existing
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<PAGE> 3
Plan participants elect to defer portions of their compensation in subsequent
years.
Participation in the Plan is limited to employees of the Registrant
electing to defer a portion of their compensation, who either (i) in the
twelve-month period ending on the preceding July 1 had total compensation from
base salary and commissions/bonuses of at least two times the social security
wage base or (ii) have a current base salary of at least $100,000 and have a
base salary plus target bonus of at least two times the social security wage
base. The minimum amount that may be deferred by a participant under the Plan
for any year is $3,000. The maximum amount of compensation that may be
deferred by a participant is 50% of his or her annual base salary and up to
100% of any bonuses or commissions.
Compensation deferred by a participant under the Plan is credited to
a separate bookkeeping account for such participant. Deemed earnings will be
credited to each account for each year of a participant's participation in the
Plan at a rate determined based on the performance of investment funds selected
by participants less any applicable administrative charges determined by the
Registrant. Amounts deferred will not actually be invested in the investment
funds. Instead, deferrals will be contributed to a grantor trust established
under the Plan and trust assets may be invested in life insurance policies.
Participants may elect to have a lump sum amount (not exceeding the
participant's account balance) distributed at any time specified by the
participant after the end of a deferral plan year. Absent an election of such
a specific date distribution, a participant's account balance will be paid to
the participant in installments or in a lump sum upon termination of
employment, as selected by the participant prior to each plan year. In the
case of financial hardship for a participant, the Administrative Committee
established by the Registrant for the Plan, at its sole discretion, may direct
payment to a participant of all or any portion of any amounts deferred.
Amounts paid under the Plan will be paid from the trust established
in connection with the Plan or from the general funds of the Registrant, and in
the event of the bankruptcy or insolvency of the Registrant each participant
and his or her beneficiaries have the status of unsecured general creditors of
the Registrant with no special or prior right to any assets of the Registrant
for payment of any obligations under the Plan. Except as otherwise provided by
law, Plan benefits are not assignable, may not be used as security for loans or
otherwise alienated and are exempt from the claims of participants' creditors
and other claimants. Under the Plan, there is no limitation on the
Registrant's right to issue senior debt or
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<PAGE> 4
other securities. No events of default exist under the Plan nor is any absence
of default evidence required.
The Plan may be terminated or amended at any time by an action of the
majority of the Registrant's Board of Directors. Any amendment will be
prospective, so that benefits attributable to prior compensation deferrals will
not be affected by such amendment.
A copy of the Plan is filed as Exhibit 4.1 hereto and is incorporated
herein by reference.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Paragraph B(i) of Article XI of the Registrant's Certificate of
Incorporation provides that the corporation shall, to the fullest extent
permitted by Delaware Law, indemnify any person (the "Indemnitee") who is or
was involved in any manner (including, without limitation, as a party or a
witness) in any threatened, pending or completed investigation, claim, action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including, without limitation, any action, suit or proceeding brought by or in
the right of the corporation to procure a judgment in its favor) (a
"Proceeding"), by reason of the fact that Indemnitee is or was a director,
officer, employee, agent, fiduciary or other official of the Registrant, or is
or was serving another entity or enterprise in such capacity at the request of
the Registrant, against all expenses and liabilities actually and reasonably
incurred by Indemnitee in connection with such Proceeding.
Paragraph B(ii) of Article XI of the Registrant's Certificate of
Incorporation provides that the corporation may enter into contracts to provide
individual Indemnitees with specific rights of indemnification to the fullest
extent permitted by Delaware Law and may create trust funds, grant security
interests, obtain letters of credit or use other means to ensure the payment of
such amounts as may be necessary to effect the rights provided by the
Certificate of Incorporation or in any such contract.
Under Section 145 of the General Corporation Law of the State of
Delaware, the state in which the Registrant is incorporated, a Delaware
corporation has the power, under specified circumstances, to indemnify its
directors, officers, employees and agents in connection with actions, suits or
proceedings brought against them by a third party, or by or in the right of the
corporation, by reason of the fact that they were or are such directors,
officers, employees or agents. In
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<PAGE> 5
general, Section 145 provides that a corporation has the power to indemnify
directors, officers, employees or agents where the individual acted in good
faith and in a manner such individual reasonably believed to be in, or not
opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such
individual's conduct was unlawful. In circumstances where the individual shall
have been adjudged to be liable for negligence or misconduct in the performance
of such individual's duty to the corporation, indemnification will be allowed
only to the extent that the court considering the action decides, in view of
the circumstances, the individual is entitled to indemnity.
The directors and officers of the Registrant and its subsidiaries are
covered by policies of insurance under which they are insured, within limits
and subject to the limitations of the policies, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, in which they are parties by reason of being or having been
directors or officers; the Registrant is similarly insured, with respect to
certain payments it might be required to make its directors or officers under
the applicable statutes and its charter provisions. In addition, pursuant to
authority contained in the Registrant's Certificate of Incorporation (as set
forth above), the Registrant has entered into indemnification agreements with
its directors and officers.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
See Index to Exhibits.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
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<PAGE> 6
change in the information set forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby further undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful
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<PAGE> 7
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cupertino, State of California, on September 9,
1994.
TANDEM COMPUTERS INCORPORATED
By /s/ JAMES G. TREYBIG
--------------------------
James G. Treybig
President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James G. Treybig and David J. Rynne,
and each of them, his or her true and lawful attorneys-in-fact and agents, each
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments,
including post-effective amendments, to this Registration Statement, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ JAMES G. TREYBIG President, Chief September 9, 1994
- -------------------------------------------- Executive Officer and
James G. Treybig Director (Principal
Executive Officer)
</TABLE>
-8-
<PAGE> 9
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ DAVID J. RYNNE Senior Vice September 9, 1994
- -------------------------------------------- President and
David J. Rynne Chief Financial
Officer (Prin-
cipal Financial
Officer)
/s/ ANTHONY H. LEWIS, JR. Vice President September 9, 1994
- -------------------------------------------- and Corporate
Anthony H. Lewis, Jr. Controller (Prin-
cipal Accounting
Officer)
/s/ JACK F. BENNETT
- --------------------------------------------
Jack F. Bennett Director September 9, 1994
/s/ MORTON COLLINS
- --------------------------------------------
Morton Collins Director September 9, 1994
/s/ SIR CAMPBELL FRASER
- --------------------------------------------
Sir Campbell Fraser Director September 9, 1994
/s/ FRANKLIN P. JOHNSON, JR.
- --------------------------------------------
Franklin P. Johnson, Jr. Director September 9, 1994
/s/ ROBERT C. MARSHALL
- --------------------------------------------
Robert C. Marshall Director September 9, 1994
- --------------------------------------------
Thomas J. Perkins Director
/s/ VERA STEPHANIE SHIRLEY
- --------------------------------------------
Vera Stephanie Shirley Director September 9, 1994
</TABLE>
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<PAGE> 10
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
- --------------------------------------------
Robert G. Stone, Jr. Director
/s/ THOMAS I. UNTERBERG
- --------------------------------------------
Thomas I. Unterberg Director September 9, 1994
/s/ WALTER B. WRISTON
- --------------------------------------------
Walter B. Wriston Director September 9, 1994
</TABLE>
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<PAGE> 11
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Exhibit Numbered Page
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
4.1 Tandem Computers Incorporated Deferred
Compensation Plan
5.1 Opinion regarding legality of
securities to be offered
23.1 Consent of Ernst & Young LLP,
Independent Auditors
23.2 Consent of Pillsbury Madison &
Sutro (included in Exhibit 5.1 to this Registration Statement)
24.1 Powers of Attorney (see pages 8-10)
</TABLE>
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<PAGE> 1
EXHIBIT 4.1
TANDEM COMPUTERS INCORPORATED
DEFERRED COMPENSATION PLAN
EFFECTIVE AS OF OCTOBER 1, 1994
<PAGE> 2
TANDEM COMPUTERS INCORPORATED
DEFERRED COMPENSATION PLAN
ARTICLE 1
INTRODUCTION
1.1 Establishment of Plan. Tandem Computers Incorporated hereby
establishes the Tandem Computers Incorporated Deferred Compensation Plan
effective as of October 1, 1994.
1.2 Purpose of Plan. Tandem Computers Incorporated has established this
Plan to provide select executives with the opportunity to defer the receipt of
compensation and a vehicle through which to do so. Tandem Computers
Incorporated intends to maintain the Plan primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees, within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended.
The Plan will be interpreted in a manner consistent with these intentions.
ARTICLE 2
DEFINITIONS
Definitions are contained in this article and throughout other sections of
the Plan. The location of a definition is for convenience only and should not
be given any significance. A word or term defined in this article (or in any
other article) will have the same meaning throughout the Plan unless the
context clearly requires a different meaning.
2.1 "Base Salary" means a participant's base salary for a Plan Year, and
excludes any other form of compensation such as bonuses, commissions, proceeds
from the exercise of stock options or stock appreciation rights, severance
payments, moving expenses, car or other special allowances, or any other
amounts included in an Eligible Employee's taxable income that is not
compensation for services. For purposes of applying base salary reduction
elections, a Participant's Base Salary is determined before taking into account
any reduction in taxable income by salary reduction under Code Section 125 or
401(k), or under this Plan.
2.2 "Beneficiary" means the individual(s) or entity designated by a
Participant, or by the Plan, to receive any benefit payable upon the death of a
Participant or Beneficiary.
A Beneficiary designation must be completed by the Participant and delivered
to the Committee on such form as specified by the Committee. In the absence of
a valid or
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<PAGE> 3
effective Beneficiary designation, the Beneficiary will be the Participant's
surviving spouse, or if there is no surviving spouse, the Participant's estate.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Bonus" means the compensation paid to a Participant with the respect
to a Plan Year in accordance with the applicable bonus program sponsored by the
Company.
2.5 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
2.6 "Commission" means variable compensation related to sales revenue.
2.7 "Committee" means the Deferred Compensation Plan Committee, the
members of which to be appointed by Tandem Computers Incorporated. The
Committee will serve as the "plan administrator" to manage and control the
operation and administration of the Plan, within the meaning of ERISA Section
3(16)(A).
2.8 "Company" means Tandem Computers Incorporated, a corporation organized
under the laws of the state of Delaware, and any successor thereto.
2.9 "Deferral Account" means a bookkeeping account established for and
maintained on behalf of a Participant to which deferred compensation amounts,
and net income (or losses) thereon, are credited.
2.10 "Deferred Compensation Agreement" means an agreement entered into by a
Participant and the Company to reduce the Participant's Base Salary, Bonus
and/or Commissions for a specified period and contribute such amounts to the
Plan, in accordance with Article III.
2.11 "Disability" means "disability" (or similar term) as defined in the
Company's long-term disability program and which results in payments to the
Participant under such program.
2.12 "Eligible Employee" means a common law employee of the Company who
has: (i) in the 12 month period preceding July 1 had total compensation from
Base Salary, Bonus and Commissions of at least two (2) times the social security
wage base, or (ii) had Base Salary of $100,000 and Base Salary plus target
Bonus of at least two (2) times the social security wage base. The Company
reserves the right to exclude any employee to comply with any applicable laws
or any exemption from applicable laws, including ERISA.
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<PAGE> 4
2.13 "Enrollment Period" means the months of August and September during
which the enrollment for the upcoming Plan Year takes place.
2.14 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
2.15 "Hardship" means an unforeseeable and unanticipated emergency which is
caused by an event beyond the control of the Participant or Beneficiary, and
which would result in severe financial hardship to the Participant or
Beneficiary if a distribution or revocation of a deferral election were not
permitted. Hardship conditions will be evaluated in accordance with the terms
of Treasury Regulation Section 1.457-2(h)(4). The Committee will have sole
discretion to determine whether a Hardship condition exists and the Committee's
determination will be final.
A Participant or Beneficiary must submit a written request for a Hardship to
the Committee on such form and in such manner as the Committee prescribes. The
Hardship request must: (i) certify as to the Hardship condition and the severe
financial need; (ii) state whether the Participant desires to reduce or cease
any Base Salary, Bonus and/or Commissions that otherwise would be deferred
after the Hardship request is approved; and (iii) state whether the Participant
requests a withdrawal of all or a portion of his Deferral Account to meet the
severe financial need. The Committee will have sole discretion to determine
whether a Hardship exists and to determine the appropriate action, if any.
Regardless of whether the Participant desires to reduce or cease any Base
Salary, Bonus and/or Commissions to be deferred after the Hardship request is
made, the Participant will be precluded from deferring compensation until the
enrollment period following one year from the date of the Hardship approval.
2.16 "Insolvent" means the Company is (a) unable to pay its debts as they
become due, or (b) subject to a pending proceeding as a debtor under the U.S.
Bankruptcy Code.
2.17 "Investment Fund" or Funds mean the investment funds designated by the
Committee as the basis for determining the investment return to the allocated
Participant's Deferral Accounts. The Committee may change the Investment Funds
at such times as it deems appropriate.
2.18 "Participant" means a current or former Eligible Employee who has been
designated by the Committee to participate in the Plan in accordance with
Section 3.1.
2.19 "Plan" means the Tandem Computers Incorporated Deferred Compensation
Plan, as set forth in this document, as amended from time to time.
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<PAGE> 5
2.20 "Plan Year" means the twelve-month period from October 1 through
September 30.
2.21 "Retirement Age" means, while employed by the Company, attaining
age 55 with 10 Years of Vesting Service, or attaining age 65.
ARTICLE 3
PARTICIPATION
3.1 Eligibility. An Eligible Employee of the company shall participate
in the Plan only to the extent and for the period that the Eligible Employee is
selected by the Committee and is a member of a select group of management or
highly compensated employees as such group is described under Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA. An individual who commenced participation as
an Eligible Employee and is not an Eligible Employee after such commencement
shall, as of the first day of the Plan Year in which such individual is no
longer an Eligible Employee, continue to participate in the Plan with respect
to any Deferred Compensation Agreements in effect as of such Plan Year, but
shall not be permitted to enter into any new Deferred Compensation Agreements
with the Company until the individual again becomes an Eligible Employee.
3.2 Participation. An Eligible Employee who is selected to participate
in the Plan may elect to defer the receipt of Base Salary, Bonus and
Commissions that otherwise would be earned by the Eligible Employee. The
Eligible Employee may make such election in accordance with Section 3.3. The
Company shall withhold amounts deferred by the Participant in accordance with
this election. The Participant's deferred amounts shall be credited to the
Deferral Account as provided in Article IV and distributed in accordance with
Article V. An election to defer receipt of compensation shall continue in
effect unless the Participant terminates or modifies the election by written
request in accordance with the provisions of Section 3.5.
3.3 Election Procedure. An election to defer Base Salary, Bonus and/or
Commissions is made by executing a Deferred Compensation Agreement on such form
and in such manner as prescribed by the Committee. Such Agreement must be
properly completed, signed and delivered to the Company prior to the first day
of the Plan Year for which compensation shall be earned; provided however, that
(i) an individual who becomes a Participant for the first time shall be
permitted, within the thirty-day period that begins on the day the individual
becomes eligible to participate in the Plan, to make an election to defer Base
Salary, Bonus and/or Commissions that will be earned after the effective date
of such election; and (ii) the individuals who are eligible to participate in
the Plan when the Plan is initially adopted shall be permitted, within the
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<PAGE> 6
thirty-day period that begins on the date the Plan is adopted, to make an
election to defer Base Salary, Bonus and/or Commissions that will be earned
after the effective date of such election.
3.4 Deferred Compensation Agreement. A Deferred Compensation Agreement
shall remain in effect and shall be applicable to Base Salary earned during the
Plan Year following the delivery of the Deferred Compensation Agreement. A
Deferred Compensation Agreement shall remain in effect and shall be applicable
to Bonus and/or Commissions earned during the calendar year commencing Plan
Year following the delivery of the Deferred Compensation Agreement. The
Agreement shall set forth the percentage of Base Salary, Bonus and Commissions
that shall be deferred for the Plan Year or calendar year, as applicable,
subject to the following:
(a) Base Salary. A Participant shall be permitted to defer a
maximum of fifty percent (50%) of Base Salary earned in a Plan Year, taking
into account all Base Salary deferrals under all Company-sponsored programs
with respect to such Plan Year.
(b) Commission and Bonus. A Participant shall be permitted to
defer a maximum of one hundred percent (100%) of Commissions and/or one
hundred percent (100%) of "target bonus" (as such term is used in the
applicable Company sponsored program) with respect to a Plan Year.
(c) Minimum Deferral. A Participant must elect to defer a
minimum of $3,000 for the Plan Year.
(d) Hardship Withdrawal Request. All Base Salary, Bonus and
Commissions deferrals with respect to a Plan Year shall cease in the event
the Committee approves a request for Hardship withdrawal for that Plan Year.
No reduction or cessation of Base Salary, Bonus and Commission deferrals
shall affect the limits set forth above, and no deferral amounts so reduced
or not made shall be required to be made by such Hardship request.
3.5 Irrevocable Elections. Except to the extent provided in this Section
3.5, a Participant's Deferred Compensation Agreement shall be irrevocable and
cannot be amended by the Participant. A Participant may request to amend or
revoke a Deferred Compensation Agreement in the event of a Hardship. Such
request will be made in writing on such form and in such manner as prescribed
by the Committee. The Committee may grant such request if and to the extent
that it determines that the revocation of the election would serve to alleviate
the Hardship, in a manner consistent with Section 2.13.
-5-
<PAGE> 7
The Company reserves the right to modify any Deferred Compensation Agreement
in any case or class of cases to reflect a change in Plan provisions or for
administrative convenience.
A Participant's Deferred Compensation Agreements shall become null and void
upon the Participant's separation from employment with the Company, and no Base
Salary, Bonus or Commissions that may be payable after the Participant
separates from employment with the Company and otherwise would be subject to
such Agreements shall be deferred under this Plan.
3.6 Community and Marital Property. The spouse of a Participant may have
a community or marital property interest in the Participant's Deferral Account
which the spouse may pass to a third party upon his or her death. If it is
intended that a spouse relinquish his or her community or marital property
interest in the Participant's Deferral Account, the spouse must execute a
waiver in which he or she clearly states an intention to relinquish his or her
rights under community or marital property law with respect to the Deferral
Account. A spouse's consent to a Participant's designation of a nonspouse
Beneficiary is not sufficient to effect such a waiver.
ARTICLE 4
PARTICIPANT ACCOUNT BALANCES
4.1 Establishment of Accounts. The Committee will select an independent
recordkeeper who will establish and maintain a Deferral Account on behalf of
each Participant. Contributions and net income (or losses) will be credited to
such accounts in accordance with the provision of this Article.
4.2 Bookkeeping. Deferral Accounts will be primarily for accounting
purposes and will not restrict the operation of the Plan or require separate
earmarked assets to be allocated to any account. The establishment of a
Deferral Account will not give any Participant the right to receive any asset
held by the Company in connection with the Plan or otherwise.
4.3 Crediting Deferred Compensation. The Committee will credit to a
Participant's Deferral Account the amount of any Base Salary, Bonus and/or
Commissions deferred by the Participant as soon as administratively possible
following the month to which such Base Salary, Bonus and/or Commissions would
have been paid absent a Deferred Compensation Agreement.
4.4 Establishment of Investment Funds. The Committee will establish one
or more Investment Funds which will be maintained for the purpose of
determining the investment return to be credited to a Participant's Deferral
Account. The Committee may change the number, identity or composition of the
Investment Funds from time to time.
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Each Participant will indicate the Investment Funds to which contributions
under Sections 4.3 and 4.4 and any existing Deferral Account balance are to be
credited. Investment fund elections must be made in whole percentage
increments and at such times and in such manner as the Committee will specify.
A Participant may change his or her Investment Fund election periodically in
such manner as the Committee may specify.
4.5 Crediting Investment Results. No less frequently than as of the last
day of each quarter, a Participant's Deferral Account balance will be increased
or decreased to reflect investment results. Deferral Accounts will be credited
with the investment return of the Investment Funds in which the Participant
elected to be deemed to participate. The credited investment return is
intended to reflect the actual performance of the Investment Funds net of any
applicable administrative charges determined by the Company.
4.6 Notification to Participants. The Committee shall notify each
Participant with respect to the status of such Participant's Deferral Account
as soon as practical after the end of a quarter, but in no event less than once
for each Plan Year. Neither the Company nor the Committee to any extent
warrants, guarantees or represents that the value of any Participant's Deferral
Account at any time will equal or exceed the amount previously allocated or
contributed thereto.
ARTICLE 5
DISTRIBUTION OF ACCOUNTS
5.1 Distribution in the Event of Hardship. Prior to a distribution under
Section 5.2, 5.3, 5.4, 5.5 or 5.6, payment of all or a portion of a
Participant's Deferral Account may be made in the event of Hardship. The
amount of any Hardship distribution will not exceed the amount required to meet
the Hardship, including any taxes or penalties due on the distribution. A
Hardship distribution shall be made in a single lump sum cash payment as soon
as practical after the Committee approves the Hardship withdrawal request.
5.2 Distribution Upon Separation From Employment. A Participant who
separates from employment with the Company shall receive amounts credited to
his Deferral Account in the manner selected by the Participant when the
Participant first commenced participation in the Plan or as modified in
accordance with Section 5.7. An election regarding the time and manner of
payment of the Participant's Deferral Account balance must be made concurrent
with the Participant's initial election to defer compensation under Section 3.1
and can only be modified as allowed under Section 5.1 ,5.6 and 5.7.
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(a) Time of Payment. A Participant's Deferral Account balance
shall be paid (or commence to be paid) within sixty (60) after the end of the
month in which separation of employment occurs. Notwithstanding the
foregoing, a Participant's Deferral Account balance shall be paid (or
commence to be paid) no later than the April 1st following the year in which
the Participant attains age 70-1/2.
(b) Manner of Payment. A Participant's Deferral Account will be
paid in a monthly installment over a fifteen (15) year period, commencing
within 60 days after the end of the month in which the Participant separated
from employment, unless the Participant has elected to receive payment in:
(i) a lump sum cash payment; or (ii) substantially equal monthly installment
payments over a period of five (5) or ten (10) years (as selected by the
Participant).
(c) Value of Deferred Account Balance. The value of a
Participant's Deferral Account to be distributed shall be determined as of
the last day of the month preceding the date a payment is made, and shall be
credited with interest through such date. To the extent payment shall be made
in installments, the amount of the installment for a particular month shall
be adjusted to take into account the value of the Participant's Deferral
Account (as adjusted) and the number of remaining months over which the
installments payments are to be made.
5.3 Distribution of Small Accounts. At the Committee's discretion,
following the date a Participant separates from employment with the Company, if
amounts credited to the participant's Deferral Account are $10,000 or less, the
value of the Deferral Account shall be distributed to the Participant by check
in a lump sum in cash. For purposes of this Section 5.3, the value of a
Participant's Deferral Account to be distributed shall be determined as of the
last day of the month preceding the date any lump sum payment is made, and
shall be credited with interest through such date.
5.4 Distribution Upon Death. The Beneficiary of a Participant who dies
prior to receiving any payments under this Article V (except for Hardship
distributions), shall receive the Participant's Deferral Account: (1) in a lump
sum cash payment if the total is $10,000 or less, or (2) in the manner selected
by the Participant when the Participant first commenced in the Plan or later
modified under the Plan and commencing within sixty (60) days after the month
in which the Participant dies and the Committee is provided with written proof
of the Participant's death. For purposes of this Section 5.4, the value of a
Participant's Deferral Account to be distributed shall be determined as of the
last day of the month preceding the date the payment is made, and shall be
credited with
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interest through such date. To the extent payment shall be made in
installments, the amount of the installment for a particular month shall be
adjusted to take into account the value of the Participant's Deferral Account
(as adjusted) and the number of remaining months over which the installments
payments are to be made.
If a Participant dies after installment payments have begun, the
Participant's Beneficiary will continue to receive the Participant's unpaid
Deferred Account balance in installment payments for the remaining period of
time.
5.5 Distribution at a Specific Date. A Participant can elect to receive
a lump sum distribution of his Deferral Account at any date after the end of
the Plan Year when the Participant first commenced participation in the Plan;
provided that no distributions shall be made under the Plan prior to March 1,
1995. If a Participant terminates employment prior to the elected distribution
date, the lump sum distribution of his Deferral Account will be paid out within
sixth (60) days after the month in which termination occurred.
5.6 Unscheduled distribution. A Participant may request in writing a
lump sum distribution of a Participant's entire Deferred Account balance with a
ten percent (10%) penalty forfeited to the Company. The value of a
Participant's Deferral Account less the ten percent (10%) penalty to be
distributed shall be determined as of the last day of the month preceding the
date the payment is made, and shall be credited with interest through such
date.
The request for an unscheduled distribution must be approved by the Committee
and will be paid out within sixty (60) days after the month in which the
distribution is approved.
The Participant will not be allowed to participate under the Plan until the
enrollment period following one year from the date of distribution.
5.7 Modification of distribution. A Participant may request in writing a
change regarding the time and manner of payment of the Participant's Deferral
Account balance following attainment of Retirement Age which will be submitted
to the Committee for approval and if the modification is elected more than
twelve (12) months preceding Retirement Age; or within twelve (12) months of
Retirement Age, with a ten percent (10%) penalty forfeited to the Company.
5.8 Cash Payments Only. All distributions under the Plan will be made in
cash by check.
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ARTICLE 6
PLAN ADMINISTRATION
6.1 Plan Administrator. This Plan shall be administered by the
Committee, which will be the Plan Administrator. The Committee members shall
be appointed by and serve at the pleasure of the Company.
6.2 Amendment or Termination. The Board may amend all or any provision
of this Plan, and may terminate the Plan in its entirety, at any time and for
any reason. No amendment or termination of the Plan will reduce any
Participant's Deferral Account balance as of the effective date of such
amendment or termination.
6.3 Administration of the Plan. The Committee shall have the sole
authority to control and manage the operation and administration of the Plan
and have all powers, authority and discretion necessary or appropriate to carry
out the Plan provisions, and to interpret and apply the terms of the Plan to
particular cases or circumstances. All decisions, determinations and
interpretations of the Committee will be binding on all interested parties,
subject to the claims and appeal procedure necessary to satisfy the minimum
standard of ERISA Section 503, and will be given the maximum deference allowed
by law. The Committee may delegate in writing its responsibilities as it sees
fit.
Committee members who are Participants will abstain from voting on any Plan
matters that relate primarily to themselves or that would cause them to be in
constructive receipt of amounts credited to their respective Deferral Account.
The Board will identify three or more individuals to serve as a temporary
replacement of the Committee members in the event that all three members must
abstain from voting.
6.4 Indemnification. The Company will and hereby does indemnify and hold
harmless any of its employees, officers, directors or members of the Committee
who have fiduciary or administrative responsibilities with respect to the Plan
from and against any and all losses, claims, damages, expenses and liabilities
(including reasonable attorneys' fees and amounts paid, with the approval of
the Board, in settlement of any claim) arising out of or resulting from the
implementation of a duty, act or decision with respect to the Plan, so long as
such duty, act or decision does not involve gross negligence or willful
misconduct on the part of any such individual.
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ARTICLE 7
MISCELLANEOUS
7.1 Funding. Such amounts as the Committee deems necessary or
appropriate to fund the obligation to pay Deferral Accounts will be held in
trust by an independent third party trustee selected by the Committee of the
Board, and as such are earmarked to pay benefits under the terms of the Plan.
The Committee will direct the Company to make periodic contributions to the
trust at such times and in such amounts as the Committee deems appropriate.
Trust assets can not be diverted to, or used for, any purpose except payments
to Participants and Beneficiaries under the terms of the Plan or, if the
Company is Insolvent, to pay the Company's creditors. Participants and
Beneficiaries will have no right against the Company with respect to the
payment of any portion of the Participant's Deferral Account, except as a
general unsecured creditor of the Company.
7.2 Nonalienation. No benefit or interest of any Participant or
Beneficiary under this Plan will be subject to any manner of assignment,
alienation, anticipation, sale transfer, pledge or encumbrance, whether
voluntary or involuntary. Notwithstanding the foregoing, the Committee will
honor a court order regarding the payment of alimony or other support payments,
or the establishment of community property or other marital property rights, to
the extent required by law. Prior to distribution to a Participant or
Beneficiary, no Deferral Account balance will be in any manner subject to the
debts, contracts, liabilities, engagements or torts of the Participant or
Beneficiary. Assets held in trust to fund this Plan may, however, be diverted
to pay the Company's creditors, if the Company is Insolvent.
7.3 Limitation of Rights. Nothing in this Plan will be constructed to
give a Participant the right to continue in the employ of the Company at any
particular position or to interfere with the right of the Company to discharge,
lay off or discipline a Participant at any time and for any reason, or to give
the Company the right to require any Participant to remain in its employ or to
interfere with the Participant's right to terminate his or her employment.
7.4 Governing Law. To the extent that state law applies, the provisions
of this Plan will be construed, enforced and administered in accordance with
the laws of the state of California, except to the extent preempted by ERISA.
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(PILLSBURY MADISON & SUTRO LETTERHEAD)
EXHIBIT 5.1
September 9, 1994
Tandem Computers Incorporated
19333 Vallco Parkway
Cupertino, CA 95014-2599
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
With reference to the Registration Statement on Form S-8 to be filed by
Tandem Computers Incorporated, a Delaware corporation (the "Company"), with the
Securities and Exchange Commission under the Securities Act of 1933, for the
purpose of registering under the Securities Act of 1933, as amended, General
Obligations of the Company in the principal amount of $20,000,000 pursuant to
the Company's Deferred Compensation Plan, it is our opinion that the General
Obligations of the Company described above, when issued and sold in accordance
with the Plan, will be legally issued, fully paid and nonassessable and will be
binding obligations of the Company.
We hereby consent to the filing of this opinion with the
Securities and Exchange Commission as Exhibit 5.1 to the Registration
Statement.
Very truly yours,
PILLSBURY MADISON & SUTRO
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors
Tandem Computers Incorporated
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Tandem Computers Incorporated Deferred
Compensation Plan of our report dated October 26, 1993, with respect to the
consolidated financial statements and schedules of Tandem Computers
Incorporated included in its Annual Report (Form 10-K) for the year ended
September 30, 1993, filed with the Securities and Exchange Commission.
Ernst & Young LLP
San Jose, California
September 7, 1994
