SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted
by Rule 14a-6(c)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Amdahl Corporation
(Name of Registrant as Specified in Its Charter)
Patricia A. Boepple
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(l)(ii), 14a-6(i)(l),
14a-6(i)(2)or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
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[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
AMDAHL
CORPORATION
1250 East Arques Avenue
Sunnyvale, California 94088-3470
March 21, 1996
Notice of Annual Meeting of Stockholders
To Be Held May 2, 1996
The Annual Meeting of Stockholders of Amdahl Corporation, a
Delaware corporation (the "Company"), will be held at the
Sunnyvale Hilton, 1250 Lakeside Drive, Sunnyvale, California at
8:00 a.m. on May 2, 1996 to:
1. elect ten directors to serve until the next
Annual Meeting of Stockholders, and until
their successors have been duly elected and
qualified;
2. consider and vote upon an amendment to the Amdahl
Corporation Employee Stock Purchase Plan to
increase the number of shares of common stock
issuable under the plan by 5,000,000;
3. ratify the selection of Arthur Andersen LLP
as independent public accountants for the
Company for the 1996 fiscal year;
4. consider and vote upon a stockholder proposal
relating to an independent nominating
committee of the Board of Directors; and
5. consider and act upon such other business as may
properly come before the meeting or any
adjournment or postponement thereof.
Items 1 through 4 are more fully presented in the Proxy
Statement. The Board of Directors has fixed the close of
business on March 4, 1996 as the record date for determining
those stockholders who will be entitled to vote at the meeting.
A list of stockholders will be kept at the principal executive
office of Amdahl Corporation for ten days before the meeting.
The transfer books will not be closed between the record date and
the date of the meeting.
Representation of at least a majority of all outstanding
shares of Amdahl Corporation common stock, par value of $.05 per
share, is required to constitute a quorum. Accordingly, it is
important that your stock be represented at the meeting. Whether
or not you plan to attend the meeting, please complete, date and
sign the enclosed proxy card and return it in the enclosed
envelope. The giving of such proxy does not affect your right to
vote in person if you attend the Annual Meeting of Stockholders.
By Order of the Board of Directors
/s/ Bruce J. Ryan
BRUCE J. RYAN
Executive Vice President, Chief Financial Officer
and Corporate Secretary
<PAGE>
PROXY STATEMENT
Annual Meeting of Stockholders
Amdahl Corporation
May 2, 1996
These proxy materials are furnished in connection with
solicitation of proxies by the Board of Directors of Amdahl
Corporation, a Delaware corporation ("Amdahl" or the "Company"),
for the Annual Meeting of Stockholders of Amdahl (the "Annual
Meeting") to be held at 8:00 a.m. on May 2, 1996 at the Sunnyvale
Hilton, 1250 Lakeside Drive, Sunnyvale, California, and for any
adjournment or postponement thereof, for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders.
These proxy materials were first mailed to stockholders on or
about March 21, 1996. The address of the principal executive
office of Amdahl is 1250 East Arques Avenue, Sunnyvale,
California 94088-3470.
Amdahl will bear the entire cost of soliciting proxies.
Arrangements may be made with brokerage houses and other
custodians, nominees and fiduciaries to send proxies and proxy
materials to the beneficial owners of stock, and expenses may be
reimbursed. Directors, officers or regular employees of Amdahl
may solicit proxies in person or by telephone or telegraph and
will receive no additional compensation for these services.
It is important that proxies be returned promptly.
Stockholders are requested to complete, sign, date and return the
proxy in the enclosed self-addressed envelope.
Securities and Exchange Commission ("SEC") rules require
that an annual report precede or be included with proxy
materials. However, stockholders with multiple accounts may be
receiving more than one annual report, which is costly to Amdahl
and may be inconvenient to these stockholders. Stockholders may
discontinue receiving extra reports by marking the appropriate
box on the proxy card for the accounts selected. At least one
account must continue to receive an annual report. Eliminating
these duplicate mailings will not affect receipt of future Proxy
Statements and proxy cards. To resume the mailing of an annual
report to an account, please call the Amdahl stockholder services
number, 800-524-4458, at Bank of New York.
VOTING
Shares of Amdahl common stock, par value of $.05 per share
("common stock"), represented by proxies in the accompanying
form, which are properly executed and returned to Amdahl before
the Annual Meeting, will be voted at the meeting in accordance
with the stockholders' instructions contained in the proxies. In
the absence of contrary instructions, proxies representing these
shares will be voted: FOR the nominees listed herein, FOR items
2 and 3, AGAINST item 4 and in the discretion of the proxy
holders on such other matters as may properly come before the
meeting. As of the date of this Proxy Statement, the Board of
Directors knows of no other business that will be presented for
consideration at the Annual Meeting. Any stockholder has the
power to revoke his or her proxy at any time before it is voted
at the meeting.
It is Company policy that proxies, ballots and voting
tabulations be kept confidential except: (i) when disclosure is
necessary to meet applicable legal requirements; (ii) to assert
or defend claims for or against the Company; (iii) when
disclosure is expressly requested by a stockholder; (iv) the
stockholder has made written comments on a proxy card; or (v)
during a contested election for the Board of Directors. It is
also Company policy that the tabulators and inspectors of
election be independent. Bank of New York has been appointed as
the Company's independent tabulators and inspectors of election.
The close of business on March 4, 1996 was the record date
for stockholders entitled to notice of and voting rights at the
Annual Meeting. Shares of common stock outstanding on the record
date are entitled to be voted at the Annual Meeting, and the
holders of record will have one vote for each share held on the
matters to be voted on. Stockholders are entitled to cumulate
their votes for the election of directors. Cumulative voting
enables a stockholder to cumulate his or her votes and give one
nominee a number of votes equal to the number of directors to be
elected (i.e. ten) multiplied by the number of votes to which the
stockholder is entitled, or the stockholder may distribute these
votes among as many nominees as he or she chooses. The proxies
which withhold authority to vote as to specific directors shall
not be deemed to cast votes for any other directors unless, in
order to effect the election of the ten nominees, it is necessary
to cumulate votes to elect such other directors. The proxy
holders shall not cumulate votes for any other purpose. The ten
candidates receiving the highest number of votes will be elected.
Abstentions and broker non-votes are included in the
determination of the number of shares present and voting. Each
is tabulated separately. Abstentions are counted in determining
the number of shares voted on proposals presented to
stockholders, whereas broker non-votes are not counted. The
affirmative vote of a majority of the shares of common stock
represented and entitled to vote at the meeting is required to
approve items 2 through 4.
As of the record date, March 4, 1996, there were 119,774,909
shares of common stock outstanding.
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL STOCKHOLDERS
The following table sets forth the beneficial ownership of Amdahl common stock as of
March 4, 1996 for each person who is known by Amdahl to beneficially own 5 percent or more
of the outstanding shares of the common stock:
Number Approximate
Name and Address of Shares Percent Owned
---------------- --------- -------------
<S> <C> <C>
The Prudential Insurance Company of America (1) 10,714,368 8.95%
Prudential Plaza
Newark, New Jersey 07102-3777
Fujitsu Limited (2) 51,811,664 43.26%
6-1 Marunouchi 1-chome
Chiyoda-ku
Tokyo, 100 Japan
</TABLE>
<PAGE>
- --------------------------------
(1) Pursuant to a Schedule 13G filed with the Securities and
Exchange Commission dated February 14, 1996, as of December
31, 1995, The Prudential Insurance Company of America
("Prudential")may have direct or indirect voting and/or
investment discretion over these shares, which are held for
the benefit of its clients by its separate accounts,
externally managed accounts, registered investment
companies, subsidiaries and/or other affiliates. Prudential
reported the combined holdings of these entities for the
purpose of administrative convenience. Prudential acquired
these shares in the ordinary course of business, and not
with the purpose or effect of changing or influencing
control of Amdahl.
(2) Fujitsu Limited ("Fujitsu") has sole dispositive and voting
power over these shares. In addition to its share
ownership, Fujitsu, a manufacturer of computers,
telecommunication systems and equipment, and semiconductor
and other advanced electronic components, has extensive
business relationships with Amdahl. See "Compensation
Committee Interlocks and Insider Participation."
<PAGE>
CERTAIN INFORMATION WITH RESPECT TO DIRECTORS
AND EXECUTIVE OFFICERS
At the Annual Meeting, stockholders will elect ten directors
to hold office until the next Annual Meeting, and until their
respective successors are duly elected and qualified. The
current Board of Directors' nominees for election as directors
are set forth below. The proxy holders intend to vote all
proxies received by them in the accompanying form for the ten
nominees. If any nominee is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be
voted for any nominee that the present Board of Directors
designates to fill the vacancy. In the event that additional
persons are nominated for election as directors, the proxy
holders intend to vote all proxies received by them cumulatively
to assure the election of as many of the nominees listed below as
possible. If this situation occurs, the proxy holders will
determine the distribution of votes among the nominees. As of
the date of this Proxy Statement, the Board of Directors is not
aware of any nominee who is unable or will decline to serve as a
director.
<PAGE>
<TABLE>
<CAPTION>
Nominees to Board of Directors
Director Age at
of Amdahl February 1,
Name Principal Occupation Since 1996
- ---- -------------------- ----- -----------
<S> <C> <C> <C>
John C. Lewis Chairman of the Board, President
and Chief Executive Officer, 1977 60
Amdahl Corporation
Keizo Fukagawa Senior Vice President,
Fujitsu Limited 1992 59
Michael R. Hallman President and Founder, 1995 50
The Hallman Group
E. F. Heizer, Jr. Private Investor and Business 1972 66
Consultant
Kazuto Kojima Director of the Board, General 1993 53
Manager Corporate Marketing
and Strategy and General Manager
of Digital Media Group,
Fujitsu Limited
Burton G. Malkiel, Ph.D. Chemical Bank Chairman's 1981 63
Professor of Economics,
Princeton University
George R. Packard, Ph.D. Professor and Director, 1987 63
Reischauer Center for East Asian
Studies, School of Advanced
International Studies, The Johns
Hopkins University
Walter B. Reinhold Chairman of the Board, 1981 71
Varco International, Inc.
Takamitsu Tsuchimoto Director of the Board, General 1993 55
Manager Electronic Devices
Group and General Manager of
CAD Group, Fujitsu Limited
J. Sidney Webb Chairman of the Board, 1984 76
The Titan Corporation
</TABLE>
<PAGE>
Mr. Lewis was elected Chairman of the Board in 1987 and was
reelected President and Chief Executive Officer on March 15,
1996. He was President of Amdahl from 1977, when he joined the
Company, until 1987. He was the Company's Chief Executive
Officer from 1983 until 1992. He is a director of Cypress
Semiconductor Corporation; Vitesse Semiconductor Corporation;
Infinity Financial Technology, Inc.; and Pinnacle Systems, Inc.
Mr. Fukagawa has been with Fujitsu since 1960. After having
held managerial positions in a variety of departments and
divisions, he held the office of General Manager of the
Accounting Division from 1986 to 1989, and was appointed as a
Director of the Board of Fujitsu Limited in 1989. He was
appointed as a Managing Director of Fujitsu Limited in 1992 and
is now Senior Vice President responsible for all Corporate
Affairs.
Mr. Hallman is the founder and President of The Hallman
Group, a management consulting firm which focuses on marketing,
sales, business development and strategic planning for the
information systems industry. Mr. Hallman was President and
Chief Operating Officer of Microsoft Corporation from 1990 until
1992, and Vice President of the Boeing Company and President of
Boeing Computer Services from 1987 until 1990. From 1967 until
1987, he worked for IBM Corporation in various sales and
marketing executive positions. Mr. Hallman is currently a
director of Intuit; In Focus Systems, Inc.; Timeline Inc.;
Keytronics Corporation; and Network Appliance, Inc., as well as a
number of private hardware and software technology startups. He
provided consulting services to Amdahl in 1994 and in 1995, prior
to becoming a Board Member. See "Certain Transactions" for
additional information regarding Mr. Hallman.
Mr. Heizer is engaged in the formation and development of
businesses from both a management and investment standpoint. He
was Chairman of the Board of Directors and Chief Executive
Officer of Heizer Corporation, a business development firm, from
1969 until 1985. Mr. Heizer is currently a director of
Chesapeake Energy Corporation and Material Sciences Corporation.
He is also a Director of a number of private companies. He has
been Chairman of Amdahl's Audit Committee since 1974.
Mr. Kojima has been with Fujitsu since 1965. He has held
multiple managerial positions in various departments and
divisions. In 1993 he was appointed General Manager of Corporate
Marketing and Strategy and in 1994 he was appointed as a Director
of the Board of Fujitsu and General Manager of Digital Media
Group.
Dr. Malkiel has been Chemical Bank Chairman's Professor of
Economics at Princeton University since 1988. Dr. Malkiel was
Dean of the Yale School of Organization and Management from 1981
through 1987. Dr. Malkiel served on President Ford's Council of
Economic Advisors. He is currently a director of Baker Fentress
Inc.; the Jeffrey Co.; The Prudential Insurance Company of
America; Southern New England Telecommunications Co.; and the
Vanguard Group of Investment Companies.
Dr. Packard is Professor and Director of the Reischauer
Center for East Asian Studies of the School of Advanced
International Studies at the John Hopkins University. He was
Dean of the School from 1979 through 1993. Since 1994 he has
concurrently served as Professor and Director of the Reischauer
Center and Visiting President of the International University of
Japan. Prior to entering academe, he was a journalist with
Newsweek Magazine (1965-1967), the Philadelphia Bulletin
(1967-1968), and editor of the Philadelphia Evening and Sunday
Bulletin (1968-1975). From 1976 to 1979 he was Deputy Director
of the Woodrow Wilson International Center in Washington, D.C.
He is currently a director of the Mercantile-Safe Deposit and
Trust Funds; OFFITBANK; and GRC International Corp.
Mr. Reinhold has been Chairman of the Board since 1976, and
was Chief Executive Officer from 1976 to 1991, of Varco
International, Inc., a manufacturer of oil tools, drilling
systems, flow-control devices and electronic instrumentation
systems for the oil and gas well drilling and production
industry. He currently is a member of the Board of Directors of
Revco D.S., Inc. and The Petroleum Equipment Suppliers
Association. Mr. Reinhold was Chairman of Amdahl's Compensation
and Benefit Plan Administration Committees from 1983 through
1992. He was appointed Chairman of the new Compensation
Committee and Human Resources Advisory Committee in January 1993.
He was appointed Chairman of the Nominating Committee in February
1996.
Mr. Tsuchimoto has been with Fujitsu since 1963. He has
held managerial positions in a variety of departments and
divisions. He was appointed General Manager of the Technology
Development Group in 1990. In 1994 he was appointed as General
Manager of the Electronic Devices Group and General Manager of
the CAD Group. In addition, he has been serving as Director of
the Board of Fujitsu Limited since 1992.
Mr. Webb has been Chairman of the Board since 1984 of The
Titan Corporation, a supplier of high technology products to
industrial companies and the defense industry, and an independent
consultant since his retirement in 1982 from TRW-Fujitsu Co., a
joint venture between Fujitsu and TRW, Inc. From 1980 to 1982,
Mr. Webb was President of TRW-Fujitsu Co. In addition, he was a
director of TRW from 1966 until 1981. Mr. Webb is a director of
EIP Microwave, Inc.; Plantronics, Inc.; Visigenics; and Data
Tree.
On March 14, 1996, E. Joseph Zemke resigned as President,
Chief Executive Officer and Director of the Company. On March 15,
1996, Chairman John C. Lewis was elected as President and Chief
Executive Officer of the Company.
See "Principal Stockholders" and "Compensation Committee
Interlocks and Insider Participation" for additional information
regarding Fujitsu. See "Certain Transactions" for additional
information regarding Michael R. Hallman.
Security Ownership
The following table sets forth the beneficial ownership of
common stock of Amdahl as of March 4, 1996 by each director and
nominee, the chief executive officer and the four other most
highly compensated executive officers, and all directors and
executive officers as a group.
<TABLE>
<CAPTION>
Number of Approximate
Name Shares(1) Percent Owned
---- --------- -------------
<S> <C> <C>
John C. Lewis 465,767 *
E. Joseph Zemke 438,482 *
Keizo Fukagawa (2) 15,000 *
Michael R. Hallman 5,000 *
E. F. Heizer, Jr. 27,000 *
Kazuto Kojima (2) 10,000 *
Burton G. Malkiel, Ph. D. 21,052 (3) *
George R. Packard, Ph. D. 19,000 *
Walter B. Reinhold 97,605 *
Takamitsu Tsuchimoto (2) 10,000 *
J. Sidney Webb 23,000 *
David L. Anderson 92,468 *
Bruce J. Ryan 48,981 *
David B. Wright 101,272 *
All current directors and executive officers as a group
(26 persons) 1,547,722 1.29%
* Less than 1 percent
</TABLE>
- --------------------------
(1) These shares are subject to the sole voting and investment
power of the indicated person(s). The figures include
shares that could be purchased by exercise of options within
60 days of March 4, 1996 and held by: Mr. Lewis, 333,200
shares; Mr. Zemke, 254,800 shares; Mr. Fukagawa, 15,000
shares; Mr. Hallman, 5,000 shares; Mr. Heizer, 19,000
shares; Mr. Kojima, 10,000 shares; Dr. Malkiel, 19,000
shares; Dr. Packard, 18,000 shares; Mr. Reinhold, 19,000
shares; Mr. Tsuchimoto, 10,000 shares; Mr. Webb, 19,000
shares; Mr. Anderson, 74,100 shares; Mr. Ryan, 10,000
shares; Mr. Wright, 49,410 shares; and all current directors
and executive officers as a group, 1,279,320 shares.
(2) See "Principal Stockholders" for information regarding
securities held by Fujitsu.
(3) Includes 1,000 shares held by the Jonathan P. Malkiel Trust
of which Dr. Malkiel is a trustee, with shared voting, but
sole investment power.
Board Meetings and Committees
The Board of Directors held seven meetings during 1995, four
regularly scheduled meetings and three special meetings, two of
which were teleconference meetings. Mr. Fukagawa was unable to
attend two meetings, one of which was a special meeting, and Mr.
Heizer was unable to participate in the two teleconference
meetings.
The Board has an Audit Committee, a Compensation Committee
and a Nominating Committee.
The Audit Committee is primarily responsible for approving
the services performed by the Company's independent public
accountants and for reviewing and evaluating the Company's
accounting principles and reporting practices and its system of
internal accounting controls. This committee, currently
consisting of Messrs. Fukagawa, Hallman and Heizer and Dr.
Malkiel, held three meetings during 1995. Mr. Fukagawa and Mr.
Heizer each missed one meeting.
The Compensation Committee is responsible for reviewing and
approving the Company's compensation policies and administering
the Company's employee benefit programs. The Committee held four
meetings during 1995, and currently consists of Messrs. Kojima,
Reinhold and Webb and Dr. Packard.
The Nominating Committee, established by the Board of
Directors on February 8, 1996, is responsible for determining and
recommending, to the Board of Directors, candidates to stand for
election to the Board of Directors. This Committee has not yet
held a meeting and currently consists of Messrs. Kojima, Reinhold
and Webb and Dr. Packard.
Director Compensation
Each non-employee director receives an annual fee of $20,000
and fees of $1,000 for full-day and $500 for half-day or
teleconference attendance at Board and committee meetings, and is
reimbursed for expenses incurred in connection with these
meetings. Of these fees, $78,000 earned in 1995 by Messrs.
Fukagawa, Kojima and Tsuchimoto was paid to Fujitsu. These
amounts are not included in the payments to Fujitsu discussed
under "Compensation Committee Interlocks and Insider
Participation." Directors may defer all or part of their
compensation to selected later years to be paid with interest at
a specified formula rate, on a lump sum or annual installment
basis.
Pursuant to the Automatic Option Grant Program in effect
under the Company's 1994 Stock Incentive Plan, each non-employee
Board member will receive an automatic option grant for 5,000
shares of common stock at the time he or she first becomes a
Board member, whether through election by the stockholders or
appointment by the Board, and each continuing non-employee Board
member will also receive, at each Annual Stockholders Meeting at
which he or she is reelected to the Board, an option grant for
5,000 shares. Accordingly, at the Annual Stockholders Meeting
held on May 4, 1995, an automatic option grant for 5,000 shares
of common stock was made to each individual reelected as a
non-employee Board member. Each grant has an exercise price of
$7.125 per share, the fair market value on the grant date, and a
maximum term of fifteen years measured from the grant date,
subject to earlier termination upon the optionee's cessation of
Board service. Each option is immediately exercisable for all of
the option shares, but any shares purchased under the option will
be subject to repurchase by the Company, at the original exercise
price, in the event the optionee ceases service prior to the
earlier of (i) vesting in those shares or (ii) completion of four
years of Board service measured from the date he or she first
joined the Board. In the event the optionee terminates Board
service for any reason (other than removal for cause) after
completion of at least four years of continuous Board service,
the option shares will immediately vest and the option will
remain exercisable for such fully vested option shares until the
expiration of the fifteen year option term. Otherwise, the
option shares will vest in two equal and successive annual
installments over the optionee's period of continued Board
service, with the first installment to vest one year after the
automatic grant date. The option shares will automatically vest
in full upon (i) certain changes in control or ownership of the
Company or (ii) the death or disability of the optionee while
serving as a Board member.
The 1994 Stock Incentive Plan also contains a special stock
acquisition program for the non-employee Board members pursuant
to which they may elect to apply all or any portion of their
annual retainer fee to the purchase of unvested shares of common
stock. In 1995 Dr. Malkiel applied one quarter of his annual
retainer fee, or $5,000, to the acquisition of 451 shares at
$11.08648 per share under this program. On the last day of each
month throughout 1995, one-twelfth of these shares vested to Dr.
Malkiel.
Compensation Committee Interlocks and Insider Participation
There are no "interlocks" as defined by the SEC, with
respect to any member of the Compensation Committee. Messrs.
Reinhold, Kojima and Webb and Dr. Packard, all non-employee
members of the Board, comprise the Compensation Committee.
Mr. Kojima is Director of the Board, General Manager of
Corporate Marketing and Strategy and General Manager of Digital
Media Group of Fujitsu.
Amdahl purchases both components and subassemblies for its
computer systems as well as certain other equipment and supplies
from Fujitsu. The aggregate amount of these purchases during
1995 was approximately $283 million. The Company has been
advised by Fujitsu that because of the difficulty of allocating
expenditures for research and development, creation of new
manufacturing facilities, and general and administrative costs
for the production of the computer subassemblies and other
equipment sold by Fujitsu to the Company, it is difficult to
determine the relative profitability of such sales. However,
subject to the foregoing uncertainties, Fujitsu believes that the
profitability of these sales is approximately equivalent to the
profitability of sales by Fujitsu of computer products to
customers in which it has no ownership interest. Although some
of the materials and other equipment are custom manufactured by
Fujitsu for Amdahl and are not available from third parties,
Amdahl believes that the prices it pays Fujitsu for these
products are comparable to those it would pay to an unaffiliated
supplier.
Amdahl has committed to purchase a minimum number of certain
components, subassemblies and other equipment from Fujitsu. On
December 29, 1995 the aggregate remaining commitment for these
materials and equipment was approximately $51 million. Delivery
of these materials and other equipment, and the related payments,
is generally expected to occur during 1996. In addition, Fujitsu
supplies Amdahl with services and material related to the
Company's development of current and future products, including
the 5995 Series of processors. The Company charged engineering
and development expense for approximately $2 million in 1995
relating to these efforts.
Amdahl has also entered into agreements with Fujitsu or
certain of its subsidiaries for the distribution of Amdahl
computer systems in Brazil, Japan, Malaysia and Spain. In 1995
Amdahl recognized approximately $37 million in revenue from
equipment sales to Fujitsu.
In 1993 Amdahl and Fujitsu entered into an agreement
pursuant to which Amdahl and Fujitsu agreed to participate in the
joint development of the Company's next generation of IBM
compatible systems. Under the agreement, Fujitsu will undertake
primary responsibility for the design and manufacture of these
systems.
In January 1994 the Company and Fujitsu entered into an
agreement under which Fujitsu would provide loans to the Company
in an aggregate amount not to exceed $100 million. On December
29, 1995, $80 million in principal and $1 million in interest was
outstanding under this agreement. In 1995 the interest expense
associated with the loan was approximately $6 million.
In 1995 the Company entered into a contract manufacturing
agreement with HaL Computer Systems, Inc. ("HaL"), a wholly-owned
subsidiary of Fujitsu, whereby Amdahl agreed to manufacture high
end open system workstations for HaL. This agreement contributed
approximately $9 million to equipment sales in 1995.
In the fourth quarter of 1995 Fujitsu agreed to pay Amdahl
$14.8 million for the right and license to use certain software
diagnostic tools developed by Amdahl and $1 million for the right
to market certain storage products in Japan. These amounts were
recognized in the fourth quarter of 1995 as software revenue and
equipment sales revenue, respectively.
CERTAIN TRANSACTIONS
See "Compensation Committee Interlocks and Insider
Participation" for information regarding Fujitsu.
Michael R. Hallman, who was elected by the stockholders at
the 1995 Annual Meeting to serve as a member of the Board of
Directors, was paid $8,000 for consulting services performed in
1995 prior to his becoming a member of the Board.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
The members of the Board of Directors, the executive
officers of the Company and persons who hold more than 10 percent
of the Company's outstanding common stock are subject to the
reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, which require them to file reports with
respect to their ownership of and transactions in the Company's
securities. Officers, directors and greater than 10 percent
stockholders are required to furnish the Company with copies of
all reports they file.
Based upon the copies of those reports furnished to the
Company, and written representations that no other reports were
required to be filed, the Company believes that all reporting
requirements for the fiscal year ended December 29, 1995 were met
in a timely manner by its executive officers, Board members and
greater than 10 percent stockholders.
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table provides certain summary information
concerning compensation paid or accrued to the Company's Chief
Executive Officer and each of the four other most highly
compensated executive officers of the Company (hereafter referred
to as the "named executive officers") for the last three fiscal
years ended December 31, 1993, December 30, 1994 and December 29,
1995:
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------------
Other Securities
Name and Annual Restricted Underlying All Other
Principal Compen- Stock Options/ Compensa-
Position Year Salary Bonus($) sation($) Awards($)(1) SARS(#) tion (2)
- --------- ---- ------ ------- -------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
E. Joseph Zemke
Chief Executive
Officer 1995 $700,024 $202,000 $0 -0- $212,168
1994 $644,361 $900,000 $695,000 -0- $265,107
1993 $616,366 $0 $0 156,000 $3,538
John C. Lewis
Chairman of
the Board 1995 $660,036 $120,000 $0 -0- $171,325
1994 $660,036 $250,000 $0 -0- $210,635
1993 $660,036 $0 $0 148,000 $3,538
David L. Anderson
Chief Technical Officer
& Vice President
1995 $300,040 $195,000 $0 -0- $94,946
1994 $290,426 $265,000 $0 -0- $100,066
1993 $252,794 $65,000 $62,400 75,500 $0
<PAGE>
Bruce J. Ryan(3)
Executive Vice President,
Chief Financial Officer &
Corporate Secretary
1995 $325,000 $74,800 $114,459(4) $0 10,000 $87,076
1994 $151,250 130,000 $41,422 $55,750 40,000 $50,221
David B. Wright
Executive Vice President
1995 $325,000 $74,800 $44,760(5) $0 $15,000 $84,826
1994 $301,823 $280,000 $238,472 $0 -0- $100,969
1993 $253,491 $63,000 $59,322 $62,400 $96,300 $3,538
</TABLE>
<PAGE>
- --------------------------
(1) Restricted shares, subject to the Company's repurchase
rights, were held by the following named executive officers with
an aggregate value (closing price less consideration paid) as of
December 29, 1995: Mr. Zemke, 94,000 shares, $794,300; Mr.
Anderson, 4,000 shares, $33,800; Mr. Ryan, 8,000 shares, $67,600;
and Mr. Wright, 6,000 shares, $50,700. Mr. Zemke was awarded
100,000 shares in 1994, on which the Company's repurchase rights
will lapse on January 26, 1996 for 10,000 shares, January 26,
1997 for 15,000 shares, January 26, 1998 for 15,000 shares,
January 26, 1999 for 25,000 shares and January 26, 2000 for
25,000 shares. The repurchase rights will however lapse on 50%
of the remaining restricted shares should the fair market value
of the Company's common stock average or exceed $15 per share for
three continuous months. Likewise, the repurchase rights shall
lapse on 100% of the remaining restricted shares should the fair
market value of the Company's common stock average or exceed $20
per share for three continuous months. He was also awarded
10,000 shares in 1992 on which the Company's repurchase rights
will lapse in 20 percent increments over five years from the
award date. Mr. Anderson and Mr. Wright were each awarded 12,000
shares in 1993, on which the Company's repurchase rights will
lapse in 33 percent increments over three years from the award
date. Mr. Wright was awarded 5,000 shares in 1992 and Mr. Ryan
was awarded 10,000 shares in 1994, on which the Company's
repurchase rights will lapse in 20 percent increments over five
years from the award date.
Repurchase rights become exercisable by the Company upon an
officer's termination of employment and allow the Company to
repurchase, at the original purchase price paid by the officer to
the Company, any restricted shares as to which the repurchase
rights have not yet lapsed. Shares subject to the Company's
repurchase rights have the same dividend rights as all other
outstanding shares of the Company's common stock held by the
stockholders.
(2) Amounts reported as All Other Compensation for the 1995
fiscal year for each of the named executive officers include (i)
Company matching contributions to the Employee Savings Plan in
the amount of $2,250 for each of the named executive officers,
except Mr. Wright, who did not participate in 1995, and (ii)
awards allocated to the Short-Term Executive Incentive
Performance Plan ("Short-Term Plan") and the Long-Term Executive
Incentive Performance Plan ("Long-Term Plan") accounts maintained
for each officer. The allocation to the Short-Term Plan accounts
of: Mr. Zemke for $74,531; Mr. Lewis for $64,452; Mr. Anderson
for $40,904; Mr. Ryan for $33,034; and Mr. Wright for $33,034
will be paid in 25 percent increments over the next four years,
provided the executive remains in the Company's employ. The
allocation made to the Long-Term Plan account of each officer was
as follows: Mr. Zemke, $135,387; Mr. Lewis, $104,623; Mr.
Anderson, $51,792; Mr. Ryan, $51,792; and Mr. Wright, $51,792.
The Long-Term Plan account will be paid out to each named
executive officer upon his termination of employment, to the
extent the executive is vested in his long-term account at that
time. For further information concerning the vesting and payout
of accounts under both the Short-Term and Long-Term Executive
Incentive Performance Plans, see "Employment Contracts and
Termination of Employment Agreements" .
(3) Mr. Ryan joined the Company as an executive officer on July
1, 1994.
(4) Other Annual Compensation reported for Mr. Ryan includes: (i)
the principal amount of $50,000, which was forgiven in accordance
with the terms of the note for his mortgage loan with the Company
described in the section "Loans to Executive Officers;" (ii)
relocation expenses in the amount of $37,756; (iii) tax
reimbursement payments in the amount of $14,531 for Mr. Ryan's
increased tax liability due to his relocation; and (iv) other
fringe benefits in the aggregate amount of $12,172.
(5) Other Annual Compensation reported for Mr. Wright includes:
(i) housing assistance in the amount of $32,700; (ii) tax
reimbursement payments pursuant to the Company's tax equalization
program for international assignees in the amount of $2,025; and
(iii) other fringe benefits in the aggregate amount of $10,035.
Stock Options
The following table contains information concerning the
grant of stock options during the last fiscal year to the named
executive officers:
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR (1)
Potential
Realizable Value at
Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants for Option Term
----------------------------------------------------- ---------------------
% of
Number of Total
Securities Options
Under- Granted to Exercise
lying Employees or Base
Options In Fiscal Price Expiration
Name Granted (2) Year ($Sh) (3) Date 5%($)(4) 10%($)(4)
- ---- ----------- --------- ---------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
E. Joseph Zemke -0- N/A N/A N/A N/A N/A
John C. Lewis -0- N/A N/A N/A N/A N/A
David L. Anderson -0- N/A N/A N/A N/A N/A
Bruce J. Ryan 10,000 2.629% $11.00 01/24/10 $118,652 $349,377
David B. Wright 15,000 3.944% $11.00 01/24/10 $177,977 $524,066
</TABLE>
<PAGE>
- -------------------------------
(1)No stock appreciation rights have been granted to date.
(2)The options are exercisable in a series of five equal and
successive annual installments over the optionee's period
ofservice with the Company, measured from the grant date. Upon an
acquisition of the Company by a merger or asset sale, each option
becomes immediately and fully exercisable. Each option has a
maximum term of 15 years,subject to earlier termination in the
event of the optionee's cessation of service with the Company.
The Compensation Committee has the discretion to accelerate any
option in whole or in part in connection with the optionee's
cessation of service. The Committee may also grant stock
appreciation rights with respect to one or more outstanding
options. These rights will allow the holders to elect to exercise
the option or to surrender it in exchange for cash or common
stock equal to the fair market value of the shares subject to the
surrendered option less the option exercise price payable for
those shares. To date no stock appreciation rights have been
granted.
(3)The exercise price may be paid in cash, in shares of common
stock valued at fair market value on the exercise date or through
a cashless exercise involving a same-day sale of the purchased
shares. The Company may also finance an option exercise by
loaning the optionee sufficient funds to pay the exercise price
for the purchased shares and the federal and state income tax
liability incurred in connection with the exercise. The optionee
may be permitted, subject to the approval of the Compensation
Committee, to apply a portion of the shares purchased under the
option (or to deliver existing shares of common stock) in
satisfaction of such tax liability. The Compensation Committee
also has the discretion to reprice outstanding options by
cancelling them and granting replacement options with an exercise
price equal to the fair market value of the option shares on the
regrant date.
(3)These columns reflect the potential realizable value of each
grant assuming the market value of the Company's stock
appreciates at 5 percent and 10 percent annually from the date of
grant over the term of the option. There is no assurance that
the actual stock price appreciation over the 15-year option term
will be at the assumed 5 percent or 10 percent levels or at any
other level. Unless the market price of the stock does in fact
appreciate over the option term, no value will be realized from
the option grants.
Option Exercises and Holdings
The following table provides information with respect to the
named executive officers concerning the exercise of options
during the last fiscal year and unexercised options held as of
the end of the fiscal year:
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values (1)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End FY-End ($)(2)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized($)(3) Unexercisable Unexercisable
- ---- --------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
E. Joseph Zemke 40,000 $190,150 266,800/ $304,307/
110,000 $281,080
John C. Lewis 10,600 $105,000 317,600/ $299,432/
113,400 $264,299
David L. Anderson 16,000 $51,719 72,500/ $159,819/
43,000 $138,796
Bruce J. Ryan -0- $0 8,000/ $22,750/
42,000 $91,002
David B. Wright -0- $0 46,410/ $165,988/
58,890 $158,139
</TABLE>
<PAGE>
- --------------------------
(1) No stock appreciation rights have been granted to date.
(2) Fair market value at fiscal year end ($8.3438) less exercise price.
(3) Fair market value at time of exercise less exercise price.
Employment Contracts and Termination of Employment Agreements
The Company currently has no employment contracts with any
of its named executive officers. However, the Company has
implemented the Short-Term Executive Incentive Performance Plan,
which was approved by the stockholders in May 1995, and the Long-Term
Executive Incentive Performance Plan, which provides
benefits some of which are not payable until termination of
employment. Under these plans executive officers and other key
employees may receive incentive awards each year based upon the
Company's progress in achieving long-term business objectives.
The combined total aggregate annual award for the participants
under these plans may not exceed 2 percent of the Company's
consolidated pre-tax earnings for the year. Allocations to the
Short-Term Plan are based upon each participant's compensation
(salary and bonus) for the year, with vesting and payout to occur
generally over four years beginning one year after the award
date.
The Long-Term Plan is a long-term income accumulation
program designed to create a source of retirement income for each
participant in the plan. The Compensation Committee determines
the dollar amount of the retirement income target applicable to
each participant and periodically adjusts that target as
circumstances change. The annual award to the Long-Term Plan is
allocated to each participant's long-term account in proportion
to his or her share of the aggregate retirement income targets in
effect for all participants at that time. Vesting in this
account (including the individual retirement income target) will
begin upon the latest to occur of (i) the participant's
completion of ten years of service with the Company, (ii) the
attainment of age 55 or (iii) the attainment of combined age and
years of service totaling 70. At that time, the participant will
initially vest in the portion of the long-term account equal to
his or her years of service multiplied by 5 percent and will vest
in an additional 5 percent upon completion of each additional
year of service thereafter. Mr. Zemke's account was modified in
1994 by the Compensation Committee ("the Committee"), so that it
will fully vest when he reaches age 60. The Committee modified
Mr. Ryan's account at the time he was hired so that it vests at
the rate of seven and one-half percent (7.5%) per year. No
payments will be made from the participant's account until
termination of service, and the payment at that time may be made
either in a lump sum or in annual installments in accordance with
the participant's prior election. Special vesting provisions
will apply in the event the participant's service with the
Company terminates by reason of death or disability. In
addition, the participant may receive the entire balance credited
to his or her long-term account upon termination of service in
the event that such balance is less than the portion of the
retirement income target in which the participant is vested at
that time.
No trust fund or other segregated account has been
established as an actual funding vehicle for the payment of the
participant's long-term account, and the account is simply a
record entry upon the Company's books. Accordingly, each
participant is a general creditor of the Company with respect to
his or her unpaid account balance.
When Mr. Ryan left his former employer to join Amdahl, he
forfeited the right to substantial future retirement benefits
from that employer. To compensate Mr. Ryan for the loss of those
benefits, Amdahl committed to pay him $45,000 per year, for 20
years, commencing at age 65.
On May 4, 1994 the Compensation Committee adopted Corporate
Officer Severance Guidelines ("Severance Guidelines") which apply
to the executive officers and corporate vice presidents of the
Company (collectively, "Corporate Officers") in the event of a
termination resulting from a change in control or an involuntary
termination for reasons other than cause. A change in control
would include: (i) a merger or consolidation in which the Company
is not the surviving entity; (ii) a sale, transfer or other
disposition of all Company assets; (iii) a reverse merger in
which the Company becomes a subsidiary of another corporation;
(iv) an acquisition of 25 percent of the voting power of the
Company's outstanding securities; (v) an acquisition of
sufficient shares which increases the total holdings of a person
or group to more than 50 percent of the outstanding securities;
(vi) an acquisition of sufficient stock to elect an absolute
majority of the Board of Directors; or (vii) a hostile take-over.
Under the Severance Guidelines, severance benefits will be
provided for a terminated Corporate Officer for a period ranging
from a minimum of one year, in the event of an involuntary
termination in the absence of any change in control, to a maximum
of two years should the involuntary termination occur in
connection with such a change. However, no severance benefits
will be paid if the Corporate Officer's employment is terminated
for cause. During the applicable severance period, the Corporate
Officer will receive the following severance benefits: (i)
continuation of base salary; (ii) the average bonus that would
have been paid to an officer in a comparable position on the
basis of the Company's attainment of the performance goals
established for the fiscal year or years coincident with the
severance period; (iii) continued health care and life insurance
coverage; (iv) vesting of outstanding stock options and
restricted stock awards; (v) vesting and pay-out of installments
from the Corporate Officer's accounts under the Short-Term
Executive Incentive Performance Plan; and (vi) continued vesting
in the Corporate Officer's account under the Long-Term Executive
Incentive Performance Plan, with subsequent payout of the vested
benefit upon the individual's eligibility for benefit
distribution under the plan.
Mr. Zemke resigned as President, Chief Executive Officer and
Director of the Company on March 14, 1996. The Company and Mr.
Zemke are currently finalizing the terms of Mr. Zemke's
separation, which will be in general compliance with the
Severance Guidelines described above.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Introduction
The Compensation Committee of the Board of Directors, which
met four times in 1995, is responsible for the administration of
the compensation programs for the Company's executive officers.
These programs have been designed to ensure that the compensation
paid to the executive officers is linked to both Company and
individual performance. Accordingly, a substantial portion of
the compensation paid to each executive officer is comprised of
various components based upon individual achievement and Company
performance, such as pre-tax profit, attainment of predetermined
goals and the improvement in the market price of the Company's
stock.
In 1994 the Committee retained an independent compensation
consultant to assess the appropriateness of the executive officer
compensation programs. Outlined below are some of the key
recommendations of the consultant, which were factors considered
by the Committee in its decisions related to 1995 executive
compensation.
- An increased percentage of compensation should be tied
to the Company's attainment of predetermined
performance goals.
- The variable portion of compensation should be greater
than was previously allowed for in the existing
programs, and base salaries should be targeted at a
level closer to the median of market.
- Bonuses should correspond to performance against
specific goals.
It was determined that the Compensation Principles adopted
in 1994, as stated below, were still appropriate.
Compensation Principles
The design and implementation of all executive compensation
programs are based on a series of guiding principles derived from
Company values, business strategy and management requirements.
These principles may be summarized as follows:
- Attract and retain key executives essential to the
long-term success of the Company.
- Reward executives for long-term corporate success by
facilitating their ability to acquire an ownership
interest in the Company.
- Provide direct linkage between the compensation payable
to executives and the Company's attainment of annual
and long-term financial goals and targets.
- Emphasize reward for performance at the individual,
team and corporate level.
Consistent with these principles, executive compensation
consists of two components - fixed compensation and variable
compensation. Base Salary, the fixed component, is set at a
level which is competitive in the marketplace. Variable
compensation consists of Annual Bonus and Long-Term Incentives.
Base Salary
Company performance plays a minimal role in the
determination of base salary. The base salary for each executive
officer is based on several factors, including, importance of the
function performed, the scope of responsibility and the salary
levels in effect for comparable positions with the Company's
principal competitors. The weight given to each of these factors
may vary from individual to individual. In general, base salary
is determined to be competitive with the base salary levels paid
by a peer group of companies within the Company's industry which
the Committee has identified for comparative compensation
purposes. The base salary levels in effect for the Company's
executive officers for the 1995 fiscal year ranged from the 50th
percentile to the 75th percentile of the surveyed salaries for
the peer group companies. 34 of the peer group companies are
included in the Standard & Poor's Computer Systems Index (the "S
& P Index") which has been chosen as the Company's industry index
for purposes of the Company Stock Price Performance graph which
follows this report. In selecting the peer group companies to
survey for comparative compensation purposes, the Committee
focused primarily on whether those companies were actually
competitive with the Company in seeking executive talent, whether
those companies had a management style and corporate culture
similar to the Company's and whether similar positions existed
within their corporate structure. For this reason, the number of
companies surveyed for compensation data was less than the number
of companies included in the S & P Index.
Annual Bonus
Annual bonuses for the 1995 fiscal year were calculated by
the use of a structured formula that used the following
components:
- Company Financial Performance
Each year the Board approves the pre-tax profit goals
for the Company, and operating income and revenue goals for
each line of business. The Company's performance against
these goals is assessed by the Committee at the close of the
year. The financial performance component of the annual
bonus is based on the percent of the pre-tax profit goal
achieved (or, for some executives, percent of the operating
income or revenue goal achieved for a line of business).
The award scale is nonlinear and provides the maximum award
for above target performance while reducing the award for
below target performance. The financial performance
component is not paid if less than 75% of the goal is
achieved, and the maximum bonus will be paid only if 125% or
higher of the goal is achieved.
The financial performance component of the CEO's bonus
measures both Company pre-tax profit goal achievement and
line of business revenue goal achievement. Pre-tax profit
bonus may be equal to 2.6% of salary if 76% of the goal is
achieved, 65% of salary at 100% goal achievement, and 97.5%
of salary at 125% or higher goal achievement. Line of
business revenue goal bonus may equal .8% at 76% goal
achievement, 20% at 100% goal achievement, and 30% at 125%
or higher goal achievement. For other executive officers,
the financial performance component of bonus (Company pre-tax
profit goals for some executives, line of business
revenue goals for others) may be equal to 10% of salary at
75% goal achievement, 30% of salary at 100% goal
achievement, and 60% of salary at 125% goal achievement.
- Individual Performance
Each executive officer's individual performance is
measured against goals established for that individual in
various areas, including leadership, planning, management
and innovation. The weight assigned to each of these
factors varies from individual to individual. The
individual performance component of the CEO's annual bonus
may be equal to 15% of salary at 100% goal achievement and
may go up to a maximum of 22.5% of salary at higher than
100% goal achievement. This component for other executive
officers may be equal to 10% of salary at 100% goal
achievement and may go up to a maximum of 20% of salary at
higher than 100% goal achievement.
- Corporate Teamwork
This component applies to executives other than the
CEO. An assessment is made of the individual's contribution
to the corporate team and contribution to future positioning
of the Company. This component may be equal to 10% of
salary at 100% goal achievement and may go to a maximum of
20% of salary at a higher than 100% goal achievement.
- Summary
Bonuses paid to the named executive officers were based
on the above components. Achievement of goals varied from
individual to individual. Bonuses for named executive
officers ranged from 3% of salary to 66% of salary.
Long-Term Incentives
Long-term incentives are provided primarily through annual
option grants, as well as by supplemental option grants,
restricted stock awards, and participation in an income
accumulation program funded out of the Company's pre-tax profits.
These incentives are intended to motivate the executive officer
to improve long-term Company performance. All options currently
outstanding were granted with an exercise price equal to the
market price on the grant date and will be of no value unless the
market price of the Company's common stock appreciates, thereby
aligning a part of the executive officer's compensation with the
return realized by stockholders.
- Stock Options
Stock option grants are designed to create meaningful
stock ownership for key employees of the Company. The
Committee has established general guidelines for granting
options to executive officers, which target a fixed number
of unvested option shares based on an individual's current
position with the Company, comparability with grants made to
other Company executives and an individual's potential for
growth within the Company, i.e. future responsibilities and
possible promotions over the option term. These general
guidelines determine a multiple of the individual's salary
level which may be represented by the value of unvested
options. To maintain the targeted unvested position,
regular grants of options will normally be made. The
guidelines and the granting of options within these
guidelines are not normally based on Company performance.
The Committee does not always strictly adhere to these
guidelines and will occasionally vary the size of the option
grant as circumstances warrant.
Each grant allows the executive officer to acquire
shares of the Company's common stock at a fixed price per
share (traditionally the fair market value on the grant
date) over a specified period of time (up to fifteen years).
The option generally vests in equal installments over a
period of five years, contingent upon the executive
officer's continued employment with the Company.
Accordingly, the option will provide a return to the
executive officer only if he or she remains employed by the
Company through the vesting period and the market price of
the underlying securities appreciates over the option term.
- Restricted Stock
Awards of restricted stock are not made by reference to
formulas or guidelines but are provided solely at the
Committee's discretion. Restricted stock is awarded under
limited circumstances, such as, to recognize a significant
contribution to the Company's performance, to provide an
incentive to achieve performance objectives or in connection
with a significant promotion. The vesting schedules for
restricted stock awards are tailored to meet the particular
purposes of the awards, unlike the more uniform vesting
schedules utilized for stock option grants.
No restricted stock was awarded to any named executive
during 1995.
Executive Incentive Performance Plan
The Short-Term and the Long-Term Executive Incentive
Performance Plans are designed to retain key executives and to
provide retirement income for them through their participation in
an income accumulation program funded out of the Company's pre-tax
profits each year. The Short-Term Plan allows each executive
officer to share in a portion of such pre-tax profits on the
basis of his or her compensation for the year and provides for
vesting and payout of the award in four equal annual installments
beginning one year after the award. The Long-Term Plan serves as
the vehicle to meet the specific retirement income target which
the Committee has established for each participant, and vesting
in this benefit will occur as the age and years of service
requirements of the plan are met.
Actual allocations to the two plans will occur only if the
Company's operations are profitable. Amounts awarded to named
executive officers for 1995 are included in the "All Other
Compensation" area of the Summary Compensation Table, with
details provided in the footnote thereto. See "Employment
Contracts and Termination of Employment Agreements" for
additional information about the plans.
CEO Compensation
In setting the compensation payable to the Chief Executive
Officer in 1995, Mr. E. Joseph Zemke, the Committee's goal was to
provide a package which was competitive with other companies in
the industry and which at the same time tied a significant
percentage of his compensation to positive Company performance
and stock price appreciation. In general, the factors utilized
in determining Mr. Zemke's compensation were similar to those
applied to the other executive officers in the manner described
in the preceding paragraphs, although achievement of Company
financial performance goals had a greater impact on his total
compensation.
In establishing Mr. Zemke's base salary, it was the
Committee's intent to provide him with a level of stability and
certainty each year, and not to have this particular component of
compensation affected to a significant degree by Company
performance. His base salary for the 1995 fiscal year
approximates the 50th percentile of reported base salaries for
chief executive officers from the peer group.
The next component of Mr. Zemke's compensation package, his
annual bonus, was based on Company financial performance, line of
business performance and individual goal achievement, as
described under "Annual Bonus" above. Because Company pre-tax
profits were less than 75% of goal, no company financial
performance component bonus was paid. The level of achievement
in line of business revenue goals and individual goals provided
bonus components of 5.8% and 15%, respectively.
In addition to the financial goals taken into account in
determining Mr. Zemke's annual bonus and awards payable pursuant
to the Short-Term and the Long-Term Executive Incentive
Performance Plans, the Committee considered certain
accomplishments that are qualitative in nature. The Committee
recognized Mr. Zemke's leadership in positioning the Company
strategically for future significant developments in the computer
industry as well as his efforts in successfully directing and
carrying out the restructuring of the Company in 1995.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code, enacted in
1993, generally disallows a tax deduction to publicly held
companies for compensation exceeding $1 million paid to certain
executive officers of such companies. The limitation applies
only to compensation which is not considered to be performance-based.
Both the Company's 1994 Stock Incentive Plan and Short-Term Executive
Incentive Performance Plan are structured so that
any compensation paid or deemed paid to an executive officer
under those Plans will qualify as performance-based compensation
which will not be subject to the $1 million limitation. For the
present, the Compensation Committee has decided not to take any
other action to limit or restructure the other elements of the
compensation package payable to the Company's executive officers.
The Compensation Committee will reconsider this decision in the
future should the non-performance-based compensation of any
executive officer significantly exceed the $1 million level.
Members of the Compensation Committee
Walter B. Reinhold, Chairman
Kazuto Kojima
George R. Packard
J. Sidney Webb
COMPANY STOCK PRICE PERFORMANCE
The following graph shows a five-year comparison of
cumulative total stockholder returns for the Company, the
Standard & Poor's 500 Stock Index and the Standard & Poor's
Computer Systems Index from December 31, 1990 through December
31, 1995:
[GRAPH]
<TABLE>
<CAPTION>
Fiscal Year Ending
------------------
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Amdahl $100 $112 $52 $43 $80 $62
S&P 500 $100 $130 $140 $155 $157 $215
S&P Computer Systems $100 $89 $65 $68 $87 $116
</TABLE>
Notwithstanding anything to the contrary set forth in any of
the Company's previous filings under the Securities Act of 1933,
or the Securities Exchange Act of 1934 that might incorporate
future filings made by the Company under those statutes,
including this Proxy Statement, the preceding Compensation
Committee Report on Executive Compensation and the preceding
Company Stock Price Performance graph shall not be incorporated
by reference into any such filings; nor shall such report or
graph be incorporated by reference into any future filings made
by the Company under those statutes.
LOANS TO EXECUTIVE OFFICERS
Amdahl makes available loans to certain officers under its
Officer Loan Program for the acquisition of shares under the
Company's outstanding employee stock options or for the payment
of tax obligations incurred in connection with the acquisition of
these shares or restricted shares. These loans may not be
outstanding for more than 120 months and bear interest at the
applicable federal rate. Loans are secured by common stock
valued at 150 percent of the principal balance.
In 1995, the Company extended a mortgage loan to Mr.
Carabetta, secured by a second deed of trust on his primary
residence, in the amount of $150,000. The loan bears interest at
6.83%, compounded annually, and the principal balance plus the
accrued interest is due and payable on June 7, 2001, except to
the extent previously forgiven or paid. Under the terms of the
note (i) $25,000 of principal and the then accrued interest is
forgiven on June 7 of each year, beginning in 1996, if Mr.
Carabetta is not in default and the note has not been
accelerated; (ii) the note may be accelerated if Mr. Carabetta's
employment is terminated for any reason other than by agreement
with the Company, if he fails to make a payment under the note,
if he breaches the terms of the second deed of trust or if the
property securing the loan is sold; (iii) the note will be
accelerated in the event of Mr. Carabetta's bankruptcy; and (iv)
the note will be forgiven in the event Mr. Carabetta's employment
is terminated by agreement between Mr. Carabetta and Amdahl.
In 1993, the Company extended to Mr. Cavalier a loan for
$400,000, for the purpose of assisting him with his relocation to
Dallas, Texas, the headquarters of Antares Alliance Group
("Antares"), of which Mr. Cavalier is President and Chief
Executive Officer. The note bears interest at 5.32%, compounded
annually, and the principal balance plus accrued interest is
payable on January 31, 2002, except to the extent previously
forgiven or paid. Under the terms of the note (i) Mr. Cavalier
is required to maintain a life insurance policy on his life
naming Amdahl as a beneficiary and in an amount equal to the
unpaid principal amount of the note; (ii) $25,000 plus one-half
of the then accrued interest is forgiven on January 31 of each
year, beginning in 1995, if Mr. Cavalier is not in default and
the note has not been accelerated; (iii) $25,000 plus one-half of
the then accrued interest is payable on January 31 of each year,
beginning in 1995, with up to one-half of Mr. Cavalier's bonus to
be applied toward such payment; (iv) the note may be accelerated
if Mr. Cavalier is terminated for cause or for other reasons not
involving a change in control of Antares or a change in the
policies of Amdahl or Antares; and (v) the note will be
accelerated in the event of Mr. Cavalier's bankruptcy.
In 1995, the Company extended to Mr. Grodhaus a mortgage
loan, secured by a second deed of trust on his primary residence,
in the amount of $300,000. The loan bears interest at 6.31%,
compounded annually, and the principal balance plus accrued
interest is due and payable on October 9, 2002, except to the
extent previously forgiven or paid. Under the terms of the note
(i) one-half of the principal, plus the accrued interest thereon,
will be paid in seven annual installments by Mr. Grodhaus on
October 9 of each year; (ii) one-half of the principal, plus the
accrued interest thereon, will be forgiven in five annual
installments on October 9 of each year, if Mr. Grodhaus is not in
default and the note has not been accelerated; (iii) the note may
be accelerated if Mr. Grodhaus's employment is terminated for any
reason, if he fails to make a payment under the note, if he
breaches the terms of the second deed of trust or if the property
securing the loan is sold; and (iv) the note will be accelerated
in the event of Mr. Grodhaus's bankruptcy.
In 1994, the Company extended to Mr. Ryan a mortgage loan,
secured by a second deed of trust on his primary residence, in
the amount of $300,000. The loan bears interest at 7.05%,
compounded annually, and the principal balance plus accrued
interest is due and payable on September 26, 2000, except to the
extent previously forgiven or paid. Under the terms of the note
(i) accrued interest is payable each quarter, commencing January
15, 1995; (ii) $50,000 of principal is forgiven on September 26
of each year, beginning in 1995, if Mr. Ryan is not in default
and the note has not been accelerated; (iii) the note may be
accelerated if Mr. Ryan's employment is terminated for any
reason, if he fails to make a payment under the note, if he
breaches the terms of the second deed of trust or if the property
securing the loan is sold; and (iv) the note will be accelerated
in the event of Mr. Ryan's bankruptcy.
The Company has extended loans of more than $60,000 to the
following individuals who were executive officers during the last
fiscal year. Except for the loans to Messrs. Carabetta,
Cavalier, Grodhaus and Ryan described above, the loans on the
table below were extended under the Officer Loan Program:
<TABLE>
<CAPTION>
Maximum Amount Amount
Loaned Since Outstanding on
Name December 30, 1994 March 4,1996
- ---- ----------------- ------------
<S> <C> <C>
Michael R. Carabetta $159,474.34 $159,474.34
John C. Cavalier $378,473.47 $301,463.00
Gregory R. Grodhaus $307,729.75 $307,729.75
Orval J. Nutt $130,694.77 $0
Anthony M. Pozos $185,755.47 $185,755.47
Bruce J. Ryan $313,963.49 $261,334.58
E. Joseph Zemke $157,662.23 $156,853.79
</TABLE>
AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN
The Company's stockholders are being asked to approve an
amendment, adopted by the Board of Directors on February 8, 1996,
to the Amdahl Corporation Employee Stock Purchase Plan (the
"Purchase Plan") to increase the number of shares of common stock
issuable under the Purchase Plan by an additional 5,000,000 shares.
The Purchase Plan was restated in its entirety by the Board on
January 26, 1995, and the restatement was subsequently approved by
the stockholders at the 1995 Annual Stockholders Meeting. The
purpose of the restated Purchase Plan is to provide eligible
employees of the Company and its participating subsidiaries with
the opportunity to acquire a proprietary interest in the Company.
The following is a summary of the principal features of the
Purchase Plan as restated in 1995 and as recently amended by the
Board. The summary, however, does not purport to be a complete
description of all the provisions of the Purchase Plan. Any
stockholder of the Company who wishes to obtain a copy of the
actual plan document may do so upon written request of the
Corporate Secretary at the Company's principal executive office in
Sunnyvale, California.
Share Reserve
Including the share increase which the stockholders are being
asked to approve under this Proposal, 6,634,594 shares of common
stock are currently reserved for issuance under the Purchase Plan.
In the event any change is made to the outstanding shares of
common stock by reason of any recapitalization, stock dividend,
stock split, combination of shares, exchange of shares or other
change in corporate structure effected without the Company's
receipt of consideration, appropriate adjustments will be made to
(i) the maximum number and/or class of securities issuable under
the Purchase Plan, including the number issuable per participant on
any one purchase date; (ii) the class and number of securities
subject to each outstanding purchase right; and (iii) the purchase
price payable per share."
Administration
The Purchase Plan is administered by the Compensation
Committee of the Board. Such committee, as Plan Administrator, has
full authority to adopt administrative rules and procedures and to
interpret the provisions of the Purchase Plan. All costs and
expenses incurred in plan administration will be paid by the
Company without charge to participants.
Offering Periods and Purchase Periods
The Purchase Plan operates with a series of successive
offering periods, each with a maximum duration [not to exceed
twenty-four (24) months] designated by the Plan Administrator prior
to the start date. The current offering period under the Purchase
Plan will run from January 27, 1996 to April 26, 1996, and the next
offering period will commence on April 27, 1996.
Each offering period is comprised of one or more purchase
periods of such duration [not to be less than three (3) months] as
determined by the Plan Administrator prior to the start date of the
offering period. Each offering period under the Purchase Plan
currently consists of a single purchase period, and the offering
periods will accordingly commence on the Saturday following the
last Friday of January, April, July and October each year, and end
on the last Friday of April, July, October and January,
respectively.
Should the Plan Administrator implement an offering period
which is to include two or more successive purchase periods, then
the following special feature will be in effect under the Purchase
Plan. In the event the fair market value per share of common stock
on any purchase date within that offering period is less than the
fair market value per share of common stock on the start date of
that offering period, then the offering period will immediately
terminate upon the purchase of common stock on such purchase date,
and a new offering period will commence on the next business day.
The duration of that new offering period will be established by the
Plan Administrator within five (5) business days thereafter.
Eligibility
Any individual who customarily works for more than twenty (20)
hours per week for more than five (5) months per calendar year in
the employ of the Company or any participating affiliate will
become eligible to participate in an offering period under the
Purchase Plan on the start date of any purchase period (within that
offering period) beginning on or after such individual's completion
of the minimum service requirement established by the Plan
Administrator as a condition for participation in that offering
period. Currently an individual must have been employed for one
full year prior to his or her entry into an offering period. The
date such individual enters the offering period will be designated
his or her Entry Date for that offering period.
Participating affiliates include any parent or subsidiary
corporations of the Company, whether now existing or hereafter
organized, which elect, with the approval of the Plan
Administrator, to extend the benefits of the Purchase Plan to their
eligible employees.
As of March 4, 1996, approximately 4,700 employees, including
15 executive officers, were eligible to participate in the Purchase
Plan.
Purchase Provisions
The participant will have a separate purchase right for each
offering period in which he or she participates. The purchase
right will be granted on his or her Entry Date into that offering
period and will be automatically exercised on the last business day
of each purchase period within that offering period on which the
participant remains an eligible employee.
Each participant may elect payroll deductions in any multiple
of 1% of his or her eligible earnings to the maximum percentage,
not to exceed 10%, as authorized by the Plan Administrator for the
offering period. Currently participants may elect payroll
deductions of 2%, 4% or 6% of their eligible earnings. Eligible
earnings may include not only the participant's base salary but
also, at the Plan Administrator's discretion, bonuses, overtime
payments, commissions and other cash incentive payments. On the
last business day of each purchase period, the accumulated payroll
deductions of each participant will automatically be applied to the
purchase of whole shares of common stock at the purchase price in
effect for that purchase period. However, no participant may, on
any one purchase date within the offering period, purchase more
than the maximum number of shares of common stock which the Plan
Administrator establishes as the per participant limitation prior
to the start of that offering period. Until designated otherwise
by the Plan Administrator, the maximum number of shares of common
stock purchasable per participant on any one purchase date will be
limited to 1,000 shares.
Purchase Price
The purchase price per share at which the common stock will be
purchased on the participant's behalf on each purchase date within
the offering period will be equal to eighty-five percent (85%) of
the lower of (i) the fair market value per share of common stock on
the participant's Entry Date into that offering period or (ii) the
fair market value per share of common stock on the purchase date.
However, for each participant whose Entry Date is other than the
start date of the offering period, the clause (i) amount will not
be less than the fair market value per share of common stock on the
start date of that offering period.
Valuation
The fair market value of the common stock on any relevant date
will be the mean of the highest and lowest quoted trading prices of
the common stock on such date on the principal exchange on which
the common stock is then listed or admitted to trading, as such
prices are officially quoted by the composite tape of transactions
on the exchange. On March 4, 1996, the fair market value per share
of common stock was $8.78125.
Special Limitations
The Purchase Plan imposes certain limitations upon a
participant's rights to acquire common stock, including the
following limitations:
(i) No purchase right may be granted to any individual who
owns stock (including stock purchasable under any outstanding
purchase right) possessing 5% or more of the total combined
voting power or value of all classes of stock of the Company
or any of its affiliates.
(ii) No purchase right granted to a participant may permit such
individual to purchase common stock at a rate greater than
$25,000 worth of such common stock (valued at the time such
purchase right is granted) for each calendar year the purchase
right remains outstanding at any time.
Termination of Purchase Rights
The participant's purchase right will immediately terminate
upon his or her loss of eligible employee status or his or her
affirmative withdrawal from the offering period. A participant who
elects to withdraw from the offering period may have his or her
payroll deductions for the current purchase period either refunded
or applied to the purchase of common stock at the end of that
period. A participant who ceases to be an eligible employee will
receive an immediate refund of his or her payroll deductions for
the purchase period in which such loss of eligibility status
occurs.
Stockholder Rights
No participant will have any stockholder rights with respect
to the shares of common stock covered by his or her purchase right
until the shares are actually purchased on the participant's
behalf. No adjustment will be made for dividends, distributions or
other rights for which the record date is prior to the date of such
purchase.
Assignability
Purchase rights will not be assignable or transferable by the
participant and will be exercisable only by the participant.
Corporate Transaction
Should the Company be acquired by merger or asset sale during
an offering period, all outstanding purchase rights will
automatically be exercised immediately prior to the effective date
of such acquisition. The purchase price will be 85% of the lesser
of (i) the fair market value per share of common stock on the
participant's Entry Date into that offering period or (ii) the fair
market value per share of common stock immediately prior to such
acquisition. However, the clause (i) amount will not, for any
participant whose Entry Date for the offering period is other than
the start date of that offering period, be less than the fair
market value per share of common stock on such start date.
Amendment and Termination
The Purchase Plan will terminate upon the earlier to occur of
(i) the date on which all available shares are issued or (ii) the
date on which all outstanding purchase rights are exercised in
connection with an acquisition of the Company.
The Board may at any time alter, suspend or discontinue the
Purchase Plan. However, the Board may not, without stockholder
approval, (i) materially increase the number of shares issuable
under the Purchase Plan, except in connection with certain changes
in the Company's capital structure, (ii) alter the purchase price
formula so as to reduce the purchase price, (iii) materially
increase the benefits accruing to participants or (iv) materially
modify the requirements for eligibility to participate in the
Purchase Plan.
Federal Tax Consequences
The Purchase Plan is intended to be an "employee stock
purchase plan" within the meaning of Section 423 of the Internal
Revenue Code. Under a plan which so qualifies, no taxable income
will be recognized by a participant, and no deductions will be
allowable to the Company, upon either the grant or the exercise of
the purchase rights. Taxable income will not be recognized until
there is a sale or other disposition of the shares acquired under
the Purchase Plan or in the event the participant should die while
still owning the purchased shares.
If a participant sells or otherwise disposes of shares
purchased under the Purchase Plan within two (2) years after the
participant's Entry Date into the offering period in which the
shares were acquired or within one (1) year of the actual purchase
date of the shares, then the participant will recognize ordinary
income in the year of sale or disposition equal to the amount by
which the fair market value of the shares on the purchase date
exceeded the purchase price paid for those shares, and the Company
will be entitled to an income tax deduction, for the taxable year
in which such disposition occurs, equal in amount to such excess.
If the participant sells or disposes of the purchased shares
more than two (2) years after the participant's Entry Date into the
offering period in which the shares were acquired and more than one
(1) year after the actual purchase date of the shares, then the
participant will recognize ordinary income in the year of sale or
disposition equal to the lesser of (i) the amount by which the fair
market value of the shares on the sale or disposition date exceeded
the purchase price paid for those shares or (ii) 15% of the fair
market value of the shares on the participant's Entry Date into the
offering period in which the shares were acquired, any additional
gain upon the disposition will be taxed as a long-term capital
gain. The Company will not be entitled to an income tax deduction
with respect to such disposition.
If the participant still owns the purchased shares at the time
of death, the lesser of (i) the amount by which the fair market
value of the shares on the date of death exceeds the purchase price
or (ii) 15% of the fair market value of the shares on the
participant's Entry Date into the offering period in which those
shares were acquired will constitute ordinary income in the year of
death.
Accounting Treatment
Under current accounting rules, the issuance of shares of
common stock under the Purchase Plan will not result in a
compensation expense chargeable against the Company's reported
earnings. However, new FASB Release 123 will require footnote
disclosure to the Company's financial statements indicating the
impact which the purchase rights granted under the Purchase Plan
would have upon the Company's reported earnings were the value of
those rights at the time of grant treated as compensation expense.
Stockholder Approval
The affirmative vote of a majority of the shares of common
stock of the Company present or represented and entitled to vote at
the 1996 Annual Meeting is required for approval of the 5,000,000
share increase to the Purchase Plan. Should such stockholder
approval not be obtained, then the 5,000,000 share increase to the
restated Purchase Plan will not be implemented, and no purchase
rights will be granted under the Purchase Plan on the basis of that
increase. However, the Purchase Plan as in existence prior to
such share increase will remain in effect, and purchase rights will
continue to be granted, and stock issuances will continue to be
made, under the Purchase Plan until the available reserve of common
stock under the Plan as last approved by the stockholders is
issued.
The Board of Directors recommends that the stockholders vote
FOR the approval of the share increase to the Purchase Plan. The
Board believes that it is in the best interests of the Company to
maintain an equity incentive program which will allow the Company's
employees to acquire a proprietary interest in the Company and
thereby encourage such individuals to remain in the Company's
service and more closely align their interests with those of the
stockholders.
Plan Benefits
The table below shows, as to each of the named executive
officers and the various indicated groups, the following
information with respect to transactions under the Company's
Purchase Plan effected during the period from October 29, 1994 to
January 26, 1996: (i) the number of shares of common stock
purchased under the Purchase Plan during that period and (ii) the
weighted average purchase price paid per share of common stock in
connection with such purchases.
<TABLE>
<CAPTION>
Number of Weighted
Shares Average
Name Purchased Purchase Price
- ---- --------- --------------
<S> <C> <C>
E. Joseph Zemke -0- N/A
John C. Lewis 3,744 $8.0797
David L. Anderson 3,315 $8.0800
Bruce J. Ryan 1,381 $7.0588
David B. Wright 3,723 $8.0929
All current participating executive officers as a group
(6 persons) 18,856 $7.4789
All participating employees, including current officers
who are not executive officers, as
a group (approximately 1,215 persons)
791,252 $7.9643
</TABLE>
No purchase rights have been granted, and no shares have
been issued, under the Purchase Plan on the basis of the
5,000,000 share increase for which stockholder approval is sought
under this Proposal.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has
recommended that Arthur Andersen LLP, independent public
accountants for Amdahl during fiscal year 1995, serve in the same
capacity for the current fiscal year. A resolution will be
presented at the meeting to ratify the Board of Directors'
selection of Arthur Andersen LLP as independent public
accountants to audit the accounts and records of Amdahl for the
fiscal year ending December 27, 1996 and to perform other
appropriate services.
Representatives of Arthur Andersen LLP are expected to be
present at the Annual Meeting to make a statement if they desire
and to respond to appropriate questions.
The Board of Directors recommends a vote FOR ratification of
the selection of Arthur Andersen LLP as the Company's independent
public accountants.
STOCKHOLDER PROPOSALS
Stockholder Proposal Relating to a Nominating Committee
of the Board of Directors
The Company has been advised that the New York City
Employees' Retirement System ("Proponent"), which owns 220,090
shares of Amdahl common stock, will introduce a proposal at the
1996 Annual Meeting. The address of the Proponent is: The City
of New York, Office of the Comptroller, 1 Centre Street, New
York, NY 10007-2341. The proposal is as follows:
WHEREAS, the board of directors is meant to be an
independent body elected by shareholders and charged by law
and shareholders with the duty, authority and responsibility
to formulate and direct corporate policies, and
WHEREAS, this company has provided that the board may
designate from among its members one or more committees,
each of which, to the extent allowed, shall have certain
designated authority, and
WHEREAS, we believe that directors independent of
management are best qualified to act in the interest of
shareholders and can take steps necessary to seek, nominate
and present new directors to shareholders, and
WHEREAS, we believe the selection of new directors is an
area in which inside directors may have a conflict of
interest with shareholders, and
WHEREAS, we believe that an increased role for the
independent directors would help our company improve its
long-term financial condition, stock performance and ability
to compete,
NOW THEREFORE BE IT RESOLVED THAT: the shareholders
request the company establish a Nominating Committee to
recommend candidates to stand for election to the board of
directors. The Committee shall be composed solely of
independent directors. For these purposes, an independent
director is one who: (1) has not been employed by the
company or an affiliate in an executive capacity within the
last five years; (2) is not a member of a company that is
one of this company's paid advisors or consultants; (3) is
not employed by a significant customer or supplier; (4) is
not remunerated by the company for personal services
(consisting of legal, accounting, investment banking, and
management consulting services (whether or not as an
employee) for a corporation, division, or similar
organization that actually provides the personal services,
nor an entity from which the company derives more than 50
percent of its gross revenues); (5) is not employed by a
tax-exempt organization that receives significant
contributions from the company; (6) is not a relative of the
management of the company; and (7) is not part of an
interlocking directorate in which the CEO or other executive
officers of the corporation serves on the board of another
corporation that employs the director.
Proponent's Statement of Support is as follows:
As long-term shareholders we are concerned about our
company's prospects for profitable growth. This proposal is
intended to strengthen the process by which nominees are
selected. We believe that this will strengthen the board of
directors in its role of advising, overseeing and evaluating
management.
The proponent urges you to vote FOR this proposal.
Amdahl's Position
Amdahl's Board of Directors has established a Nominating
Committee to recommend to the Board candidates to stand for
election to the Board of Directors. The Nominating Committee is
and in the future shall be composed solely of outside directors.
An outside director is one who (i) has not been employed by the
Company in an executive capacity within the last five years; (ii)
is not an employee or director of a company that is one of this
Company's paid advisors or consultants; (iii) is not remunerated
by the Company for personal services (consisting of legal,
accounting, investment banking and management consulting
services); (iv) is not employed by a tax-exempt organization that
receives significant contributions from the Company; (v) is not a
relative of the management of the Company; and (vi) is not part
of an interlocking directorate in which the CEO or other
executive officers of the Company serves on the board of another
corporation that employs the director.
The Company's definition of "outside director" is
essentially the same as Proponent's definition of "independent
director", except that the Company does not prohibit persons who
have been or are employed by an affiliate from serving on the
Nominating Committee, and the Company's characterization of
"personal services" is slightly different from Proponent's
characterization, which the Company believes is confusing.
The Company feels that its Nominating Committee membership
requirements will ensure that the objectives sought by Proponent
in its proposal will be met. Proponent's proposal, however, with
its more restrictive definition of "independent director," could
prevent the Company from utilizing the very resources that are
most helpful in ensuring that the best qualified candidates are
nominated. For example, Fujitsu Limited, a major stockholder in
Amdahl (approximately 43%), has years of experience and many
valuable contacts in the computer industry, and has played an
important role in the director nominating process. Yet, under
Proponent's proposal, none of Fujitsu's representatives on the
Board could be members of the Nominating Committee or participate
in this selection process. This would essentially remove a major
stockholder from any meaningful participation in this process.
The result would conflict with Proponent's stated goal of giving
more control over the process to the Stockholders.
Therefore, the Board of Directors recommends a vote AGAINST
this proposal.
FUTURE STOCKHOLDER PROPOSALS
Amdahl must receive stockholder proposals intended to be
considered at the 1997 Annual Meeting no later than November 22,
1996. These proposals may be included in next year's Proxy
Statement if they comply with applicable regulations under the
Securities Exchange Act of 1934.
INCORPORATION BY REFERENCE
According to the provisions of Schedule 14A under the
Securities Exchange Act of 1934, the following document or
portion thereof is incorporated by reference:
"Executive Officers of Amdahl" from Part 1 of the
Company's Annual Report on Form 10-K for the
fiscal year ended December 29, 1995.
The Board of Directors knows of no other matters that may be
presented for stockholder action at the meeting. However, if
other matters do properly come before the meeting, the persons
named in the proxies will vote them according to their best
judgment.
By Order of the Board of Directors
/s/ Bruce J. Ryan
BRUCE J. RYAN
Executive Vice President, Chief Financial Officer
and Corporate Secretary
March 21, 1996
<PAGE>
AMDAHL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
(Restated Effective July 29, 1995 and Amended February 8, 1996)
I. PURPOSE OF THE PLAN
This Restated Employee Stock Purchase Plan (the "Plan") is
intended to promote the interests of Amdahl Corporation by
providing eligible employees with the opportunity to acquire a
proprietary interest in the Corporation through participation in
a payroll-deduction based employee stock purchase plan designed
to qualify under Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to
such terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Compensation Committee of the Board in its capacity as
Plan Administrator shall have full authority to interpret and
construe any provision of the Plan and to adopt such rules and
regulations for proper administration of the Plan as it may deem
necessary or appropriate. Decisions of the Plan Administrator
shall be final and binding on all parties having an interest in
the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of
the Company's authorized but unissued or reacquired common stock,
par value of $.05 per share, including shares of common stock
purchased on the open market. As of March 4, 1996, the maximum
number of shares of common stock which may be issued over the
remaining term of the Plan shall not exceed 6,634,594 shares*.
___________________
* Adjusted to reflect the 5,000,000 share increase adopted by the
Board on February 8, 1996, subject to stockholder approval at the
1996 Annual Meeting.
<PAGE>
B. Should any change be made to the common stock by reason
of any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the
outstanding common stock as a class without the Corporation's
receipt of consideration, appropriate adjustments shall be made
to (i) the maximum number and class of securities issuable under
the Plan, (ii) the maximum number and class of securities
purchasable per Participant on any one Purchase Date and (iii)
the number and class of securities and the price per share in
effect under each outstanding purchase right in order to prevent
the dilution or enlargement of benefits thereunder.
IV. OFFERING PERIODS
A. Shares of common stock shall be offered for purchase
under the Plan through a series of successive offering periods
until such time as (i) the maximum number of shares of common
stock available for issuance under the Plan shall have been
purchased or (ii) the Plan shall have been sooner terminated.
B. Each offering period under the Plan shall be of such
duration (not to exceed twenty-four (24) months) as determined by
the Plan Administrator prior to the start date. The initial
offering period pursuant to this restatement shall commence on
the Effective Date and terminate on October 27, 1995; the next
offering period shall commence on October 28, 1995; and
subsequent offering periods shall commence as designated by the
Plan Administrator.
C. Each offering period shall be comprised of one or more
Purchase Periods, each of a duration (not less than three (3)
months) determined by the Plan Administrator prior to the start
date of that offering period. Until otherwise designated by the
Plan Administrator, Purchase Periods shall start on the Saturday
following the last Friday of January, April, July and October
each year and shall end on the last Friday of April, July,
October and January, respectively. The first Purchase Period
pursuant to this restatement shall begin on the Effective Date
and terminate on October 27, 1995.
D. Should the Plan Administrator implement an offering
period which includes two or more Purchase Periods, then the
following special provision shall be in effect for that offering
period:
In the event the Fair Market Value per share of common
stock on any Purchase Date within that offering period is
less than the Fair Market Value per share of common stock on
the start date of that offering period, then that offering
period shall automatically terminate immediately with the
purchase of shares of common stock on such Purchase Date,
and a new offering period shall commence on the next
business day following such Purchase Date. The duration of
that new offering period shall be established by the Plan
Administrator within five (5) business days following the start date.
E. Under no circumstances shall any offering period
commence under the Plan, nor shall any shares of common stock be
issued hereunder, until such time as (i) the Plan shall have been
approved by the Corporation's stockholders and (ii) the
Corporation shall have complied with all applicable requirements
of the Securities Act, all applicable listing requirements of
the securities exchange on which shares of the common stock are
listed for trading and all other applicable statutory and
regulatory requirements.
V. ELIGIBILITY
A. Each Eligible Employee shall be eligible to enter an
offering period under the Plan on the start date of any Purchase
Period (within that offering period) which begins on or after his
or her completion of any minimum service period established by
the Plan Administrator as a condition to participation in that
offering period, provided he or she remains an Eligible Employee
on such start date. The date such individual enters the offering
period shall be designated his or her Entry Date for purposes of
that offering period.
B. To participate in the Plan for a particular offering
period, the Eligible Employee must complete the enrollment forms
prescribed by the Plan Administrator (including a Participation
Form) and file such forms with the Plan Administrator (or its
designate) at least two weeks prior to his or her scheduled Entry
Date. However, each individual who is a Participant in an
offering period on the date such offering period terminates
pursuant to Section IV.D shall automatically be enrolled in the
new offering period which commences immediately after such
termination date, provided the Participant is an Eligible
Employee on the start date of that new offering period. Such
start date shall be the Participant's Entry Date for the new
offering period.
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for
purposes of acquiring shares of common stock under the Plan may
be any multiple of one percent (1%) of the Participant's Eligible
Earnings during each Purchase Period within that offering period,
up to the maximum percentage established by the Plan
Administrator prior to the start of such offering period, but in
no event more than ten percent (10%). The deduction rate so
authorized shall continue in effect for the remainder of the
offering period, except to the extent such rate is changed in
accordance with the following guidelines:
(i) The Participant may, at any time during the
offering period, reduce his or her rate of payroll deduction to
become effective as soon as possible after filing the appropriate
form with the Plan Administrator. The Participant may not, however,
effect more than one (1) such reduction per Purchase Period.
(ii) The Participant may, at least two weeks prior to the
commencement of any new Purchase Period within the offering period,
increase the rate of his or her payroll deduction by filing the
appropriate form with the Plan Administrator. The new rate (which
may not exceed the prescribed maximum for that offering period) shall
become effective as of the start date of the Purchase Period following
the filing of such form.
B. Payroll deductions shall begin on the first pay day
following the Participant's Entry Date into the offering period
and shall (unless sooner terminated by the Participant) continue
through the pay day ending with or immediately prior to the last
day of that offering period. The amounts so collected shall be
credited to the Participant's book account under the Plan, but no
interest shall be paid on the balance from time to time
outstanding in such account. The amounts collected from the
Participant shall not be held in any segregated account or trust
fund and may be commingled with the general assets of the
Corporation and used for general corporate purposes.
C. Payroll deductions shall automatically cease upon the
termination of the Participant's purchase right in accordance
with the provisions of the Plan.
D. The Participant's acquisition of common stock under the
Plan on any Purchase Date shall neither limit, except to the
extent limited pursuant to Section VIII, nor require the
Participant's acquisition of common stock on any subsequent
Purchase Date, whether within the same or a different offering
period.
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be
granted a separate purchase right for each offering period in
which he or she participates. The purchase right shall be
granted on the Participant's Entry Date into the offering period
and shall provide the Participant with the right to purchase
shares of common stock, upon the terms and conditions set forth
below, in one or more installments over the remainder of such
offering period. The Participant shall execute a Participation
Form embodying such terms and such other provisions (not
inconsistent with the Plan) as the Plan Administrator may deem
advisable.
Under no circumstances shall purchase rights be granted
under the Plan to any Eligible Employee if such individual would,
immediately after the grant, own (within the meaning of Code
Section 424(d)) or hold outstanding options or other rights to
purchase, stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the
Corporation or any Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right
shall be automatically exercised in one or more installments on
each Purchase Date within the offering period, and shares of
common stock shall accordingly be purchased on behalf of each
Participant (other than any Participant whose payroll deductions
have previously been refunded in accordance with the Termination
of Purchase Right provisions below) on each such Purchase Date.
The purchase shall be effected by applying the Participant's
payroll deductions for the Purchase Period ending on such
Purchase Date (together with any carryover deductions from the
preceding Purchase Period) to the purchase of whole shares of
common stock (subject to the limitation on the maximum number of
shares purchasable per Participant on any one Purchase Date) at
the purchase price in effect for the Participant for that
Purchase Date.
C. PURCHASE PRICE. The purchase price per share at which
common stock will be purchased on the Participant's behalf on
each Purchase Date within the offering period shall be equal to
eighty-five percent (85%) of the lower of (i) the Fair Market
Value per share of common stock on the Participant's Entry Date
into that offering period or (ii) the Fair Market Value per share
of common stock on that Purchase Date. However, for each
Participant whose Entry Date is other than the start date of the
offering period, the clause (i) amount shall in no event be less
than the Fair Market Value per share of common stock on the start
date of that offering period.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of
common stock purchasable by a Participant on each Purchase Date
during the offering period shall be the number of whole shares
obtained by dividing the amount collected from the Participant
through payroll deductions during the Purchase Period ending with
that Purchase Date (together with any carryover deductions from
the preceding Purchase Period) by the purchase price in effect
for the Participant for that Purchase Date. However, the number
of shares of common stock purchasable per Participant on any one
Purchase Date shall not exceed the limit set forth in Section
VIII or the maximum number designated by the Plan Administrator
for that Purchase Date prior to the start date of the offering
period in which such Purchase Date occurs, subject to periodic
adjustments in the event of certain changes in the Corporation's
capitalization. Until otherwise designated by the Plan
Administrator, the maximum number of shares of common stock
purchasable per Participant on any one Purchase Date shall be
limited to one thousand (1,000) shares.
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not
applied to the purchase of shares of common stock on any
Purchase Date because they are not sufficient to purchase a whole
share of common stock shall be held for the purchase of common
stock on the next Purchase Date. However, any payroll deductions
not applied to the purchase of common stock by reason of the
limitation on the maximum number of shares purchasable by the
Participant on the Purchase Date shall be refunded.
F. TERMINATION OF PURCHASE RIGHT. The following
provisions shall govern the termination of outstanding purchase
rights:
(i) A Participant may, at any time at least two weeks
prior to the commencement of any new Purchase Date in the
offering period, terminate his or her outstanding purchase
right by filing the appropriate form with the Plan Administrator
(or its designate), and no further payroll deductions shall be
collected from the Participant with respect to the terminated
purchase right. Any payroll deductions collected during the
Purchase Period termination occurs shall, at the Participant's
election, be refunded or held for the purchase of shares on the
next Purchase Date. If no such election is made at the time such
purchase right is terminated, then the payroll deductions
collected with respect to the terminated right shall be refunded
as soon as possible.
(ii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently rejoin the
offering period for which the terminated purchase right
was granted. In order to resume participation in any
subsequent offering period, such individual must re-enroll
in the Plan by filing a Participation Form at least two
weeks prior to the commencement of any new Purchase Period
within that offering period.
(iii) Should the Participant cease to remain an
Eligible Employee for any reason (including death,
disability or change in status) while his or her purchase
right remains outstanding, then that purchase right shall
immediately terminate, and all of the Participant's payroll
deductions for the Purchase Period in which the purchase right
so terminates shall be immediately refunded. However, should
the Participant cease to remain in active service by reason of
an approved unpaid leave of absence, then the Participant
shall have the election, exercisable until two weeks prior to
the last business day of the Purchase Period in which such leave
commences, to (a) withdraw all the funds in the Participant's
payroll account at the time of the commencement of such leave
or (b) have such funds held for the purchase of shares at the
end of such Purchase Period. In no event, however, shall any
further payroll deductions be added to the Participant's account
during such unpaid leave. Upon the Participant's return to active
service, his or her payroll deductions under the Plan shall
automatically resume at the rate in effect at the time the leave began.
G. CORPORATE TRANSACTION. Each outstanding purchase right
shall automatically be exercised, immediately prior to the
effective date of any Corporate Transaction, by applying the
payroll deductions of each Participant for the Purchase Period in
which such Corporate Transaction occurs to the purchase of whole
shares of common stock at a purchase price per share equal to
eighty-five percent (85%) of the lower of (i) the Fair Market
Value per share of common stock on the Participant's Entry Date
into the offering period in which such Corporate Transaction
occurs or (ii) the Fair Market Value per share of common stock
immediately prior to the effective date of such Corporate
Transaction. However, the applicable limitation on the number of
shares purchasable per Participant shall continue to apply to any
such purchase, and the clause (i) amount above shall not, for any
Participant whose Entry Date for the offering period is other
than the start date of that offering period, be less than the
Fair Market Value per share of common stock on such start date.
The Corporation shall use its best efforts to provide at
least ten (10)-days prior written notice of the occurrence of any
Corporate Transaction, and Participants shall, following the
receipt of such notice, have the right to terminate their
outstanding purchase rights prior to the effective date of the
Corporate Transaction.
H. PRORATION OF PURCHASE RIGHTS. Should the total number
of shares of common stock which are to be purchased pursuant to
outstanding purchase rights on any particular date exceed the
number of shares then available for issuance under the Plan, the
Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and
the payroll deductions of each Participant, to the extent in
excess of the aggregate purchase price payable for the common
stock pro-rated to such individual, shall be refunded.
I. ASSIGNABILITY. During the Participant's lifetime, the
purchase right shall be exercisable only by the Participant and
shall not be assignable or transferable by the Participant.
J. STOCKHOLDER RIGHTS. A Participant shall have no
stockholder rights with respect to the shares subject to his or
her outstanding purchase right until the shares are purchased on
the Participant's behalf in accordance with the provisions of the
Plan and the Participant has become a holder of record of the
purchased shares.
A Participant shall be entitled to receive, as soon as
practicable after each Purchase Date, a stock certificate for the
number of shares purchased on the Participant's behalf. Such
certificate may, upon the Participant's request, be issued in the
names of the Participant and his or her spouse as community
property or as joint tenants with right of survivorship.
Alternatively, the Participant may request the issuance of such
certificate in "street name" for immediate deposit in a
designated brokerage account.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to
acquire common stock pursuant to any purchase right outstanding
under this Plan if and to the extent such accrual, when
aggregated with (i) rights to purchase common stock accrued under
any other purchase right granted under this Plan and (ii) similar
rights accrued under other employee stock purchase plans (within
the meaning of Code Section 423) of the Corporation or any
Corporate Affiliate, would otherwise permit such Participant to
purchase more than Twenty-Five Thousand Dollars ($25,000) worth
of stock of the Corporation or any Corporate Affiliate
(determined on the basis of the Fair Market Value of such stock
on the date or dates such rights are granted) for each calendar
year such rights are at any time outstanding.
B. For purposes of applying such accrual limitations, the
following provisions shall be in effect:
(i) The right to acquire common stock under each
outstanding purchase right shall accrue in one or more
installments on each successive Purchase Date during the
offering period on which such right remains outstanding; and
(ii) No right to acquire common stock under any outstanding
purchase right shall accrue to the extent the Participant has
already accrued in the same calendar year the right to acquire
common stock under one (1) or more other purchase rights at a
rate equal to Twenty-Five Thousand Dollars ($25,000) worth of
common stock, determined on the basis of the Fair Market Value
of such stock on the date or dates of grant (Entry Date), for
each calendar year such rights were at any time outstanding.
C. If by reason of such accrual limitations, any purchase
right of a Participant does not accrue for a particular Purchase
Period, then the payroll deductions which the Participant made
during that Purchase Period with respect to such purchase right
shall be refunded.
D. In the event there is any conflict between the
provisions of this Article VIII and one or more provisions of the
Plan or any instrument issued thereunder, the provisions of this
Article VIII shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan became effective on June 28, 1980. At the
1984, 1986 and 1992 Annual Meetings, the Corporation's
stockholders approved 1,000,000, 500,000 and 5,000,000 share
increases, respectively, in the number of shares of common stock
authorized for issuance over the term of the Plan. The
stockholders are being asked to approve an additional 5,000,000
share increase at the 1996 Annual Meeting.
B. On January 26, 1995 the Board approved and at the 1995
Annual Meeting the stockholders approved this restatement of the
Plan which became effective on July 29, 1995. This restatement
provides the Plan Administrator with more flexibility in
structuring the offering periods and purchase intervals in effect
under the Plan and in establishing the rights and limitations
governing plan participation. In the event stockholder approval
is not obtained at the 1995 Annual Meeting, the Plan will
continue in full force and effect in accordance with the terms
and provisions in effect immediately prior this restatement.
C. Unless sooner terminated by the Board, the Plan shall
terminate upon the earliest of (i) the date on which all shares
available for issuance under the Plan shall have been sold
pursuant to purchase rights exercised under the Plan or (ii) the
date on which all purchase rights are exercised in connection
with a Corporate Transaction. No further purchase rights shall
be granted or exercised, and no further payroll deductions shall
be collected, under the Plan following its termination.
X. AMENDMENT OF THE PLAN
The Board may alter, amend, suspend or discontinue the Plan
at any time to become effective immediately following the close
of any Purchase Period. However, the Board may not, without the
approval of the Corporation's stockholders, (i) materially
increase the number of shares of common stock issuable under the
Plan or the maximum number of shares purchasable per Participant
on any one Purchase Date, except for permissible adjustments in
the event of certain changes in the Corporation's capitalization,
(ii) alter the purchase price formula so as to reduce the
purchase price payable for the shares of common stock purchasable
under the Plan, or (iii) materially increase the benefits
accruing to Participants under the Plan or materially modify the
requirements for eligibility to participate in the Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration
of the Plan shall be paid by the Corporation.
B. Nothing in the Plan shall confer upon the Participant
any right to continue in the employ of the Corporation or any
Corporate Affiliate for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the
Corporation (or any Corporate Affiliate employing such person) or
of the Participant, which rights are hereby expressly reserved by
each, to terminate such person's employment at any time for any
reason, with or without cause.
C. The provisions of the Plan shall be governed by the
laws of the State of California without resort to that State's
conflict-of-laws rules.
XII. DISPOSITION OF SHARES
A. The Plan Administrator may, in its absolute discretion,
impose, as a condition to the issuance of the shares of common
stock purchased under the Plan, the requirement that each
Participant provide the Corporation with prompt notice of any
transfer or other disposition of those shares which is effected
within two (2) years after Participant's Entry Date into the
offering period in which the shares were purchased or within one
year after the Purchase Date on which those shares were in fact
purchased. The Plan Administrator may further require the
certificate evidencing such shares to be endorsed with a legend
indicating the existence of such notice requirement and impose
appropriate stop transfer orders with respect to such certificate
in the absence of such notice.
B. The Corporation shall not record on its books of record
any transfer or other disposition of the shares of common stock
issued under the Plan which is not effected in compliance with
the foregoing notice requirement. Moreover, the Corporation may
impose, as a condition to the recordation of such transfer or
disposition, the requirement that the Participant satisfy all
federal, state and local income and employment tax withholding
obligations applicable to such transfer or disposition.
<PAGE>
Schedule A
Corporations Eligible to Participate in the
Employee Stock Purchase Plan
As of the Effective Date
Amdahl Corporation
Amdahl Federal Service Corporation
Amdahl Australia Pty., Limited
Amdahl Computersysteme Gesellschaft m.b.H.
Amdahl Belgium S.A.
Amdahl Ireland Limited
Amdahl Canada Limited
Amdahl Danmark Computer Systems A/S
Amdahl France S.A.
Amdahl Deutschland GmbH
Amdahl International Corporation, Hong Kong Branch
Amdahl Italia S.p.A.
Amdahl Nederland B.V.
Amdahl International Corporation, New Zealand Branch
Amdahl Norge A/S
Amdahl International Corporation, sucursal em Portugal
Amdahl International Corporation, Singapore Branch
Amdahl Computer Systems, Sucursal en Espana
Amdahl International Corporation U.S.A., filial, Sverige
Amdahl (Schweiz) AG
Amdahl Pacific Basin Operations, Inc. Thailand Branch
Amdahl (U.K.) Limited
<PAGE>
APPENDIX
The following definitions shall be in effect under the Plan:
A. BOARD shall mean the Corporation's Board of Directors.
B. CODE shall mean the Internal Revenue Code of 1986, as
amended.
C. CORPORATE AFFILIATE shall mean any parent or subsidiary
corporation of the Corporation (as determined in accordance with
Code Section 424), whether now existing or subsequently
established.
D. CORPORATE TRANSACTION shall mean either of the
following stockholder approved transactions to which the
Corporation is a party:
(i) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding
securities are transferred to a person or persons different
from the persons holding those securities immediately prior
to such transaction; or
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation.
E. CORPORATION shall mean Amdahl Corporation, a Delaware
corporation, and any corporate successor to all or substantially
all of the assets or voting stock of Amdahl Corporation, which
shall by appropriate action adopt the Plan.
F. EFFECTIVE DATE shall mean July 29, 1995. Any Corporate
Affiliate which becomes a Participating Corporation after such
Effective Date shall designate a subsequent Effective Date with
respect to its employee-Participants.
G. ELIGIBLE EARNINGS shall mean the regular base salary
paid to a Participant by one or more Participating Companies
during such individual's period of participation in the Plan,
plus (i) any commissions paid to the Participant which serve as
base salary equivalents and (ii) any pre-tax contributions made
by the Participant to any Code section 401(k) salary deferral
plan or any Code Section 125 cafeteria benefit program now or
hereafter established by the Corporation or any Corporate
Affiliate. Prior to the start date of any offering period, the
Plan Administrator may determine that the Eligible Earnings for
that offering period shall also include each of the following
items of compensation: all overtime payments, bonuses,
commissions (other than those functioning as base salary
equivalents), profit-sharing distributions and other
incentive-type payments paid to a Participant by one or more Participating
Companies. In no event, however, shall any contributions (other
than Code Section 401(k) or Code Section 125 contributions) made
on the Participant's behalf by the Corporation or any Corporate
Affiliate under any employee benefit or welfare plan now or
hereafter established be included as Eligible Earnings.
H. ELIGIBLE EMPLOYEE shall mean any person who is engaged,
on a regularly-scheduled basis of more than twenty (20) hours per
week for more than five (5) months per calendar year, in the
rendition of personal services to any Participating Corporation
as an employee for earnings considered wages under Code Section
3401(a).
I. ENTRY DATE shall mean the date an Eligible Employee
first commences participation in the offering period in effect
under the Plan. The earliest Entry Date under the Plan shall be
the Effective Date.
J. FAIR MARKET VALUE per share of common stock on any
relevant date shall be the mean between the highest and lowest
quoted trading prices per share on such date on the principal
exchange on which the common stock is then listed or admitted to
trading, as such prices are officially quoted by the composite
tape of transactions on the exchange. If there are no reported
sales for such date, then the mean of the highest and lowest
quoted trading prices for the last previous date for which such
quotations exist will determine the Fair Market Value.
K. PARTICIPANT shall mean any Eligible Employee of a
Participating Corporation who is actively participating in the
Plan.
L. PARTICIPATING CORPORATION shall mean the Corporation
and such Corporate Affiliate or Affiliates as may be authorized
from time to time by the Plan Administrator to extend the
benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan as of the Effective Date
are listed in attached Schedule A.
M. PLAN shall mean the Corporation's Restated Employee
Stock Purchase Plan, as set forth in this document.
N. PLAN ADMINISTRATOR shall mean the Compensation
Committee of the Board in its capacity as the administrator of
the Plan.
O. PURCHASE DATE shall mean the last business day of each
Purchase Period. The initial Purchase Date shall be October 27,
1995.
P. PURCHASE PERIOD shall mean each successive period
within the offering period at the end of which there shall be
purchased shares of common stock on behalf of each Participant.
Q. SECURITIES ACT shall mean the Securities Act of 1933,
as amended.
<PAGE>
AMDAHL CORPORATION
PROXY
Stockholder's Proxy Solicited By
Board of Directors of the Company
The undersigned hereby appoint(s) John C. Lewis and
Bruce J. Ryan, each with power of substitution, as its proxy to
vote all of its share of Amdahl Corporation common stock, par
value of $0.05 per share, at the Annual Meeting of Stockholders
of Amdahl Corporation to be held at the Sunnyvale Hilton, 1250
Lakeside Drive, Sunnyvale, California, on Thursday, May 2, 1996
at 8:00 a.m., and at any adjournment or postponement thereof.
This Proxy when properly executed will be voted in the
manner directed herein. If no direction is made, this Proxy will
be voted FOR items 1 through 3, AGAINST item 4, and in the
discretion of the proxyholder on other matters as may properly
come before the meeting. You are encouraged to specify your
choices by marking the appropriate boxes on the REVERSE SIDE.
Your shares cannot be voted unless you sign and return this card.
Amdahl Corporation
P.O. Box 11180
New York, N.Y. 10203-0180
See Reverse Side
Please ensure address appears in window of return envelope.
<PAGE>
[logo]
Amdahl Corporation
1250 East Arques Avenue
P.O. Box 3470
Sunnyvale, California 94088-3470
March 21, 1996
Dear Amdahl Stockholder:
You are cordially invited to attend the Annual Meeting
of Stockholders to be held at 8:00 a.m. on Thursday, May 2, 1996,
at the Sunnyvale Hilton, 1250 Lakeside Drive, Sunnyvale,
California.
Details with respect to the meeting are set forth in the
attached Notice of Annual Meeting and Proxy Statement.
We urge you to communicate your voting instructions to
us by completing, dating and signing the proxy card below,
detaching it from this letter and returning it in the postage
paid envelope enclosed in this package. The giving of such proxy
does not affect your right to vote in person if you attend the
meeting.
Very truly yours,
/s/ John C. Lewis
JOHN C. LEWIS
Chairman of the Board,
President and
Chief Executive Officer
Detach Proxy Card Here
- -----------------------------------------------------------------
The Board of Directors recommends a vote FOR items 1 through 3
and AGAINST item 4.
1. Election of Directors: FOR all nominees [ ]
listed below.
WITHHOLD AUTHORITY to vote [ ]
for all nominees listed below.
*EXCEPTIONS [ ]
Nominees: John C. Lewis; Keizo Fukagawa; Michael R. Hallman;
E. F. Heizer, Jr.; Kazuto Kojima; Burton G. Malkiel;
George R. Packard III; Walter B. Reinhold;
Takamitsu Tsuchimoto; J. Sidney Webb.
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, mark the "exceptions" box and write that nominee's name
in the space provided below.)
*Exceptions -----------------------------------------------------
FOR AGAINST ABSTAIN
2. Employee Stock Purchase Plan: [ ] [ ] [ ]
Increase shares issuable
under the Plan.
3. Ratification of the selection [ ] [ ] [ ]
of Arthur Andersen LLP as
independent public accountants
for 1996.
4. Stockholder proposal for an [ ] [ ] [ ]
independent nominating committee.
Mark this box if you wish to withhold
discretionary authority to act upon such
business as may properly come before the meeting. [ ]
Mark this box if you receive Amdahl's Annual
Report from some other source and wish not
to receive one with your Proxy Statement in 1997. [ ]
Please sign name exactly as it appears
on this card. Joint owners should each
sign. Attorneys, trustees, executors,
administrators, custodians, guardians or
corporate officers should give full title.
Date: -------------------------, 1996
- -------------------------------------
Signature(s)
- -------------------------------------
Signature(s)
Please sign, date and return the voting instruction card promptly
using the enclosed envelope.
Please mark boxes in blue or black ink as in the example. [X]
