SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 29, 1996
Commission file no. 1-7713
AMDAHL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-1728548
(State of incorporation) (I.R.S. Employer
Identification No.)
1250 East Arques Avenue
Sunnyvale, California 94088-3470
(Address of principal executive offices) (Zip code)
Registrant's telephone number: (408) 746-6000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X
No
Number of shares of common stock, $.05 par value, outstanding at
May 3, 1996: 120,442,859.
<PAGE>
PART I. FINANCIAL INFORMATION
AMDAHL CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following unaudited consolidated financial statements
reflect, in the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present
fairly the financial position as of the dates and results of
operations for the periods indicated.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to the Securities and Exchange Commission rules and
regulations. Amdahl Corporation (the Company) believes the
information included in the following report on Form 10-Q, when
read in conjunction with the financial statements and related
notes included in the Company's 1995 Annual Report to
Stockholders, not to be misleading.
Certain of the statements contained in this report on Form 10-Q
are forward looking and involve a number of risks and
uncertainties which are described in the section of this report
titled Management's Discussion and Analysis of Financial
Condition and Results of Operations, the Company's 1995 Annual
Report to Stockholders and in other documents filed from time to
time with the U.S. Securities and Exchange Commission, including
without limitation, the report on Form 10-K for the year ended
December 29, 1995.
The results of operations for the three months ended March 29,
1996, are not necessarily indicative of results for the entire
year ending December 27, 1996.
<PAGE>
<TABLE>
<CAPTION>
AMDAHL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 29, 1996 AND DECEMBER 29, 1995
----------------------------------------
(Dollars in thousands)
1996 1995
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 172,518 $ 192,980
Short-term investments 390,279 444,006
Receivables, net of allowances 274,693 319,777
Inventories -
Purchased materials 28,865 18,879
Systems in process 127,964 168,322
Finished goods 113,851 87,612
Prepaid expenses and deferred tax benefit 84,150 69,115
--------- ---------
Total current assets 1,192,320 1,300,691
--------- ---------
Long-term receivables and other assets 30,142 28,083
--------- ---------
Property and equipment, at cost:
Leased systems 53,942 37,937
System spares 366,935 379,797
Production and data processing equipment 337,550 327,051
Office furniture, equipment, and improvements 158,034 173,691
Land and buildings 111,235 111,715
--------- ---------
1,027,696 1,030,191
Less - Accumulated depreciation and amortization (746,811) (757,523)
--------- ---------
Property and equipment, net 280,885 272,668
--------- ---------
Excess of cost over net assets acquired, net of amortization 105,669 106,756
--------- ---------
$ 1,609,016 $ 1,708,198
============ ===========
Liabilities and stockholders' equity
Current liabilities:
Notes payable and short-term debt $ 22,275 $ 22,026
Short-term debt - stockholder (Fujitsu Limited) 80,000 -
Accounts payable 99,656 111,871
Accounts payable - stockholder (Fujitsu Limited) 24,646 29,152
Accrued liabilities 398,685 431,600
---------- --------
Total current liabilities 625,262 594,649
---------- --------
Long-term debt - stockholder (Fujitsu Limited) - 80,000
---------- --------
Long-term liabilities 41,903 51,152
---------- --------
Deferred income taxes 49,726 48,573
---------- --------
Stockholders' equity:
Common stock, $.05 par value -
Authorized - 200,000,000 shares
Outstanding - 119,818,000 shares in 1996
and 119,259,000 shares in 1995 5,991 5,963
Additional paid-in capital 544,291 542,269
Retained earnings 332,472 370,995
Cumulative translation adjustments 9,238 10,932
Unrealized holding gains on securities 133 3,665
---------- --------
Total stockholders' equity 892,125 933,824
---------- --------
$ 1,609,016 $ 1,708,198
=========== ===========
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
AMDAHL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(In thousands, except per common share amounts)
FOR THE THREE MONTHS ENDED
MARCH 29, 1996 MARCH 31, 1995
-------------- ---------------
<S> <C> <C>
REVENUES
Equipment sales $ 94,464 $ 216,775
Service, software and other 222,564 154,751
---------- ---------
317,028 371,526
---------- ---------
COST OF REVENUES
Equipment sales 85,584 144,963
Service, software and other 158,862 81,248
---------- ---------
244,446 226,211
---------- ---------
Gross margin 72,582 145,315
---------- ---------
OPERATING EXPENSES
Engineering and development 30,563 42,920
Marketing, general and administrative 96,353 84,525
---------- ---------
126,916 127,445
---------- ---------
Income (loss) from operations (54,334) 17,870
---------- ---------
INTEREST
Income 8,396 11,298
Expense (2,216) (2,774)
---------- ---------
6,180 8,524
---------- ---------
Income (loss) before provision for
(benefit from) income taxes (48,154) 26,394
PROVISION FOR (BENEFIT FROM) INCOME TAXES (9,631) 5,800
---------- ---------
NET INCOME (LOSS) $ (38,523) $ 20,594
================ ===============
PER COMMON SHARE AMOUNTS:
Net income (loss) $ (.32) $ .17
================ ===============
Average outstanding shares 119,566 119,660
================ ===============
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
AMDAHL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(In thousands)
FOR THE THREE MONTHS ENDED
MARCH 29, 1996 MARCH 31, 1995
-------------- --------------
<S> <C> <C>
Cash and cash equivalents at beginning of period $192,980 $358,006
---------- ----------
Cash flows from operating activities:
Net income (loss) (38,523) 20,594
Adjustments to reconcile net income (loss) to net
cash provided by (used for) operating activities:
Depreciation and amortization 25,948 34,788
Deferred income tax provision 1,153 692
Gain on dispositions of assets (432) (1,318)
Changes in assets and liabilities:
Decrease in receivables 44,191 57,040
(Increase) decrease in inventories (3,108) 723
(Increase) decrease in prepaid expenses and
deferred tax benefit (15,155) 5,702
(Increase) decrease in long-term receivables
and other assets (3,301) 1,441
Decrease in accounts payable (16,460) (7,824)
Decrease in accrued liabilities (31,652) (63,438)
Decrease in long-term liabilities (2,396) (2,746)
---------- ---------
Net cash provided by (used for) operating activities (39,735) 45,654
---------- ---------
Cash flows from investing activities:
Purchases of available-for-sale short-term investments (84,623) (70,242)
Purchases of held-to-maturity short-term investments - (156,892)
Proceeds from sales and maturities of
available-for-sale short-term investments 134,270 -
Proceeds from maturities of held-to-maturity
short-term investments - 151,864
Capital expenditures:
Leased systems (12,644) (5,128)
System spares (3,384) (5,776)
Other property and equipment (12,131) (13,204)
Proceeds from property and equipment sales 1,359 6,176
---------- ---------
Net cash provided by (used for) investing activities 22,847 (93,202)
---------- ---------
Cash flows from financing activities:
Increase (decrease) in notes payable and short-term debt (3,986) 1,403
Repayments of long-term borrowings (746) -
Sale of common stock and exercise of options 2,050 8,872
---------- ---------
Net cash provided by (used for) financing activities (2,682) 10,275
---------- ---------
Effect of exchange rate changes on cash (892) 3,069
---------- ---------
Net decrease in cash and cash equivalents (20,462) (34,204)
---------- ---------
Cash and cash equivalents at end of period $172,518 $323,802
========== =========
</TABLE>
See accompanying notes.
<PAGE>
AMDAHL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The accompanying interim financial statements and related notes
should be read in conjunction with the financial statements and
related notes included in the Company's 1995 Annual Report to
Stockholders.
RELATIONSHIP WITH FUJITSU LIMITED
During the first quarter of 1996 the Company recognized equipment
sales to Fujitsu Limited (Fujitsu) under distributorship and
other arrangements which contributed $7,486,000 and $964,000 to
equipment sales and gross margin, respectively, compared to
$19,966,000 and $7,743,000 in the first quarter of 1995.
In the second quarter of 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. The
Company also performs circuit board assembly for Ross Technology,
Inc., a majority-owned subsidiary of Fujitsu. These arrangements
contributed $4,427,000 and a negative $1,536,000 to equipment
sales and gross margin, respectively, in the first quarter of
1996.
Fujitsu reimburses Amdahl for certain specific engineering
development activities performed by Amdahl from time to time
related to products which are being jointly developed by Amdahl
and Fujitsu. In connection with these development efforts,
Amdahl recorded $6,200,000 as an offset to engineering and
development expenses in the first quarter of 1996.
Amounts due from Fujitsu and their subsidiaries included in
receivables were $50,236,000 and $35,795,000 as of March 29, 1996
and December 29, 1995, respectively.
At March 29, 1996 and December 30, 1995, $80,000,000 was
outstanding under the loan agreement with Fujitsu. This amount
was reclassified from long-term debt to current debt in the first
quarter of 1996, as the amount outstanding is payable in January
1997. Interest expense associated with the loan was $1,558,000
and $1,418,000 in the first quarters of 1996 and 1995,
respectively, of which $915,000 and $958,000 was payable and
included in accrued liabilities at March 29, 1996 and December
29, 1995, respectively.
<PAGE>
SUPPLEMENTARY CASH FLOW DISCLOSURE
Income taxes of $4,555,000 (net of taxes paid of $2,466,000) were
refunded to the Company in the first three months of 1996, and
income taxes of $12,488,000 were paid by the Company in the first
three months of 1995. Interest paid on all borrowings was
$2,231,000 and $2,311,000 for the first three months of 1996 and
1995, respectively.
Noncash Investing Activities
Transfers of Amdahl-manufactured systems from inventories to
property, plant and equipment were $6,942,000 in the first three
months of 1996. Transfers of Amdahl-manufactured systems from
net property, plant and equipment to inventories were $8,049,000
in the first three months of 1995.
SUBSEQUENT EVENT
On April 22, 1996 the Company acquired all of the outstanding
shares of TRECOM Business Systems, Inc., a provider of
information technology services, for approximately $131 million,
of which $66 million was paid in April 1996 and $65 million is
payable in the second quarter of 1997. In April 1996 the Company
also paid down $15 million of TRECOM's debt. The Company funded
the April 1996 payments and intends to fund the April 1997
payment with existing cash. The acquisition will be accounted
for in the second quarter of 1996 using the purchase method of
accounting.
<PAGE>
AMDAHL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis should be read
in conjunction with the Management's Discussion and Analysis
included in the Company's 1995 Annual Report to Stockholders.
Results of Operations
First quarter of 1996 compared to first quarter of 1995:
Total revenues decreased 15% to $317,028,000 in the first quarter
of 1996 from $371,526,000 in the first quarter of 1995, and
equipment sales revenues decreased 56% in the first quarter of
1996 from the first quarter of 1995. Equipment sales were 30%
and 58% of total revenues in the first quarters of 1996 and 1995,
respectively. Revenues from equipment sales of 5995M mainframe
systems decreased 67% in the first quarter of 1996 from the first
quarter of 1995 due to aggressive competitive pressures and as
customers added computing capacity through purchases of upgrades
rather than complete new systems, as the Company continued to
transition from older ECL mainframe technology to CMOS
technology. Revenues from storage product equipment sales
decreased 47% in the first quarter of 1996 when compared to the
same period of 1995 as a result of pricing and volume declines
associated with previously reported delays in the introduction of
new storage products, which will not be available in volume until
the second half of 1996.
Service, software and other revenues were 70% and 42% of total
revenues in the first quarters of 1996 and 1995, respectively.
Service, software and other revenues increased 44% in the first
quarter of 1996 from the first quarter of 1995, primarily
reflecting increased consulting services revenues from DMR Group
Inc. (DMR), acquired in the fourth quarter of 1995.
The impact on revenues from a weakened U.S. dollar was immaterial
in the first quarter of 1996.
The gross margin was 23% of revenues in the first quarter of
1996, compared to 39% in the first quarter of 1995. The gross
margin percentage on equipment sales decreased to 9% in the first
quarter of 1996 from 33% in the first quarter of 1995, reflecting
deterioration in mainframe and storage product pricing. The
gross margin percentage on service, software and other revenues
decreased to 29% in the first quarter of 1996 from 47% in the
first quarter of 1995 because consulting and professional
services contributed a greater proportion of revenues in the
first quarter of 1996, and these revenues generate lower gross
margins than the Company's traditional maintenance revenues.
First quarter 1996 engineering and development expenses decreased
$12 million or 29% when compared to the first quarter of 1995,
due in part to reimbursements received from Fujitsu (see the
Notes to the Consolidated Financial Statements) and due to the
increased reliance on Fujitsu for the development of the
Company's future mainframe and storage products. First quarter
1996 marketing, general and administrative expenses increased $12
million or 14% when compared to the first quarter of 1995, due to
increased marketing efforts and the additional expenses
associated with DMR.
In the first quarter of 1996 the Company adopted Statement of
Financial Accounting Standard No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of. Adoption of the standard did not have a material
impact on the Company's financial position or results of
operations.
In the third quarter of 1995 the Financial Accounting Standards
Board issued Statement of Financial Accounting Standard No. 123,
Accounting for Stock-Based Compensation, effective for the first
quarter of 1996. In complying with the standard, the Company has
elected to continue to account for its employee stock-based
compensation awards under Accounting Principles Bulletin No. 25,
Accounting for Stock Issued to Employees.
First quarter 1996 net interest income decreased $2,344,000 from
the first quarter of 1995 due primarily to lower cash levels
after the acquisition of DMR.
The effective income tax rate was 20% in the first quarter of
1996, compared to 22% in the first quarter of 1995. The rate was
lower than the statutory federal rate because the Company
continued to utilize deferred tax assets consisting primarily of
reserves.
Factors That May Affect Future Operating Results
The Company is phasing out the production of its current
generation of bipolar mainframes in anticipation of the
changeover to lower cost CMOS technology. The Company will be
closely monitoring both demand and pricing during the second
quarter of 1996 with the expectation that an adjustment to
inventory valuations may well be required.
The Company expects that revenues attributable to the maintenance
of its new hardware systems will be less than revenues that have
been historically realized from maintenance of its existing
generation of mainframes. The Company is unable to predict the
extent to which this would negatively affect future operating
results.
The Company anticipates that the write-off of in-process
engineering and development expenses associated with the
acquisition of TRECOM Business Systems, Inc. will result in a
significant charge to earnings in the second quarter of 1996 (see
the Notes to the Consolidated Financial Statements).
FINANCIAL CONDITION
MARCH 29, 1996 COMPARED TO DECEMBER 29, 1995
The Company's net cash position (cash and short-term investments
net of short-term and long-term debt, excluding capitalized lease
obligations) decreased by $68 million from December 29, 1995 to
March 29, 1996. Cash, cash equivalents and short-term
investments decreased $74 million, reflecting cash used for
operations. Receivables decreased $45 million, due to lower
revenues.
Net property and equipment increased $8 million due to increased
operating leases of 5995M systems.
Accrued liabilities decreased $33 million due to decreased
payroll-related accruals and accrued restructuring costs.
Charges against accrued restructuring costs resulted in a
decrease in the balance from $55 million at December 29, 1995 to
$46 million at March 29, 1996.
At March 29, 1996 and December 29, 1995, $80,000,000 was
outstanding under the loan agreement with Fujitsu. This amount
was reclassified from long-term debt to current debt in the first
quarter of 1996, as the amount outstanding is payable in January
1997.
<PAGE>
LIQUIDITY
The nature of the computer industry, combined with the current
economic environment, make it very difficult for the Company to
predict future liquidity requirements with certainty. However,
the Company believes that existing cash and short-term
investments will be adequate to finance continuing operations,
investments in property and equipment, inventories and spare
parts, expenditures for the development of new products, and the
acquisition of Trecom (see the Notes to the Consolidated
Financial Statements) at least through 1997.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings:
Not applicable.
Item 2. Changes in Securities:
Not applicable.
Item 3. Defaults upon Senior Securities:
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders:
Not applicable.
Item 5. Other information:
Not applicable.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
3(a) Restated By-Laws.
10(a) Summary of Terms of Resignation
Agreement with Named Executive Officer
dated March 14, 1996.
10(b) Amdahl Corporation, 1996 Bonus Program
for Officers, Vice Presidents, Seniors
and Keys.
10(c) Amdahl Corporation Long-Term Executive
Incentive Performance Plan, as amended.
10(d) Amdahl Corporation Restricted Stock
Purchase Agreement with Named Executive
Officer
10(e) Amdahl Corporation Stock Option
Agreement with Named Executive Officer
27 Financial Data Schedule.
(b) Reports on Form 8-K:
Form 8-K filed March 22, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AMDAHL CORPORATION
Date: May 10, 1996 By: /s/ John C. Lewis
------------ -----------------
John C. Lewis
Chairman of the Board,
President and
Chief Executive Officer
(Principal Executive Officer)
Date: May 10, 1996 By: /s/ Ernest B. Thompson
------------ ----------------------
Ernest B. Thompson
Vice President and Controller
(Principal Accounting Officer)
<PAGE>
Exhibit Index
Item Description
----- -------------
3(a) Restated By-Laws.
10(a) Summary of Terms of Resignation Agreement with
Named Executive Officer dated March 14, 1996.
10(b) Amdahl Corporation, 1996 Bonus Program for
Officers, Vice Presidents, Seniors and Keys.
10(c) Amdahl Corporation Long-Term Executive Incentive
Performance Plan, as amended.
10(d) Amdahl Corporation Restricted Stock Purchase
Agreement with Named Executive Officer
10(e) Amdahl Corporation Stock Option Agreement with
Named Executive Officer
27 Financial Data Schedule.
Exhibit 3(a)
AMDAHL CORPORATION
RESTATED BY-LAWS
Article I
OFFICES
SECTION 1. The registered office shall be in the City of
Wilmington, County of New Castle, State of Delaware.
SECTION 2. The Corporation may also have offices at such other
places both within and without the State of Delaware as the Board of the
Directors may from time to time determine or the business of the
Corporation may require.
Article II
MEETING OF STOCKHOLDERS
SECTION 1. All meetings of the stockholders for the election of
directors shall be held in the City of Sunnyvale, State of California,
at such place as may be fixed from time to time by the Board of
Directors, or at such other place either within or without the State of
Delaware as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting. Meetings of
stockholders for any other purpose may be held at such time and place,
within or without the State of Delaware, as shall be stated in the
notice of the meeting or in a duly executed waiver of notice thereof.
SECTION 2. Annual meetings of stockholders shall be held on the
third Tuesday in April, if not a legal holiday, and if a legal holiday,
then on the next secular day following, at 10:00 a.m., or at such other
date and time as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting, at which they shall
elect a Board of Directors and transact such other business as may
properly be brought before the meeting.
SECTION 3. Written notice of the Annual Meeting stating the
place, date and hour of the meeting shall be given to each stockholder
entitled to vote at such meeting not less than ten nor more than fifty
days before the date of the meeting.
SECTION 4. The office who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every
meeting of the stockholders, and complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, and
showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten
days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of
the meeting, or, if not so specified, at the place where the meeting is
to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected
by any stockholder who is present.
SECTION 5. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the Chairman of the Board
or any two directors and shall be called by the Chairman of the Board or
Secretary at the request in writing of one or more shareholders holding
not less than one-third of the voting power of the Corporation. Such
request shall state the purpose or purposes of the proposed meeting.
SECTION 6. Written notice of a special meeting stating the
place, date and hour of the meeting and the purpose or purposes for
which the meeting is called, shall be given not less than ten nor more
than fifty days before the date of the meeting, to each stockholder
entitled to vote at such meeting.
SECTION 7. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
SECTION 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise
provided by statute or by the Certificate of Incorporation. If,
however, such quorum shall not be present or represented at any meeting
of the stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such
adjourned meeting, at which a quorum shall be present or represented,
any business may be transacted which might have been transacted at the
meeting as originally noticed. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.
SECTION 9. When a quorum is present at any meeting, the vote of
the holders of a majority of the stock having voting power present in
person or represented by proxy shall decide any question brought before
such meeting, unless the question is one upon which by express provision
of the statutes or of the Certificate of Incorporation, a different vote
is required in which case such express provision shall govern and
control the decision of such question.
SECTION 10. Except as may be otherwise provided in the Certificate
of Incorporation, each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for every
share of the capital stock having voting power held by such stockholder,
but no proxy shall be voted on or after three years from its date,
unless the proxy provides for a longer period.
SECTION 11. Any action required or permitted, by statute or
otherwise, to be taken at any annual or special meeting of the
shareholders of this Corporation, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of such corporate action without a meeting
by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
Article III
DIRECTORS
SECTION 1. The number of directors which shall constitute the
whole Board shall be ten (10). The directors shall be elected at the
Annual Meeting of the stockholders, except as provided in Section 2 of
this Article, and each director elected shall hold office until his
successor is elected and qualified. Directors need not be stockholders.
SECTION 2. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by
a majority of the directors then in office, though less than a quorum,
or by a sole remaining director, and the directors so chosen shall hold
office until the next annual election and until their successors are
duly elected and shall qualify, unless soon displaced. If there are no
directors in office, then an election of directors may be held in the
manner provided by statute. If, at the time of filling any vacancy or
any newly created directorship, the directors then in office shall
constitute less than a majority of the whole board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders holding at least ten
percent of the total number of the shares at the time outstanding having
the right to vote for such directors, summarily order an election to be
held to fill any such vacancies or newly created directorships, or to
replace the directors chosen by the directors then in office.
SECTION 3. The business of the Corporation shall be managed by
its Board of Directors which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute
or by the Certificate of Incorporation or by these by-laws directed or
required to be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
SECTION 4. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State
of Delaware.
SECTION 5. The first meeting of each newly elected Board of
Directors shall be held immediately following and at the same place as
the Annual Meeting of the stockholders and no notice of such meeting
shall be necessary to the newly elected directors in order legally to
constitute the meeting, provided a quorum shall be present. In the
event such meeting is not held at the time and place set forth above,
the meeting may be held at such time and place as shall be specified in
a notice given as hereinafter provided for special meetings of the Board
of Directors, or as shall be specified in a written waiver signed by all
of the directors.
SECTION 6. Regular meetings of the Board of Directors may be
held without notice at such time and at such place as shall from time to
time be determined by the Board.
SECTION 7. Special meetings of the Board may be called by the
Chairman of the Board on three days' notice to each director, either
personally or by telegram or on five days' notice to each director by
mail; special meetings shall be called by the Chairman of the Board or
Secretary in like manner and on like notice on the written request of
two directors.
SECTION 8. At all meetings of the Board a majority of the total
number of directors shall constitute a quorum for the transaction of
business and the act of a majority of the directors present at any
meeting at which there is a quorum shall be the act of the Board of
Directors, except as may be otherwise specifically provided by statute
or by the Certificate of Incorporation. If a quorum shall not be
present at any meeting of the Board of Directors, the directors present
thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present.
SECTION 9. Unless otherwise restricted by the Certificate of
Incorporation or these by-laws, any action required or permitted to be
taken at any meeting of the Board of Directors or of any Committee
thereof may be taken without a meeting, if all members of the Board or
Committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the
Board or Committee.
COMMITTEES OF DIRECTORS
SECTION 10. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, each
committee to consist of two or more of the directors of the Corporation.
The Board may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any
meeting of the committee. Any such committee, to the extent provided in
the resolution, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed
to all papers which may require it; provided, however, that in the
absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member.
Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of
Directors.
SECTION 11. Each committee shall keep regular minutes of its
meeting and report the same to the Board of Directors when required.
COMPENSATION OF DIRECTORS
SECTION 12. The directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors or a
stated salary as director. No such payment shall preclude any director
from serving the Corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be
allowed like compensation for attending committee meetings.
Article IV
NOTICES
SECTION 1. Whenever, under the provisions of the statutes or of
the Certificate of Incorporation or of these by-laws, notice is required
to be given to any director or stockholder, it shall not be construed to
mean personal notice, but such notice may be given in writing, by mail,
addressed to such director or stockholder, at his address as it appears
on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall
be deposited in the United States mail. Notice to directors may also be
given personally or by telegram.
SECTION 2. Whenever any notice is required to be given under
the provisions of the statutes or of the Certificate of Incorporation or
of these by-laws, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
Article V
OFFICERS
SECTION 1. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a Chairman of the Board, a
President, a Vice-President, a Secretary, and a Treasurer. The Board of
Directors may also choose additional Vice-Presidents, and one or more
Assistant Secretaries and Assistant Treasurers. Any number of offices
may be held by the same person, unless the Certificate of Incorporation
or these by-laws otherwise provide.
SECTION 2. The Board of Directors at its first meeting after
each Annual Meeting of stockholders shall choose a Chairman of the
Board, a President, one or more Vice-Presidents, a Secretary, and a
Treasurer.
SECTION 3. The Board of Directors may appoint such other
officers and agents as it shall deem necessary who shall hold their
offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the board.
SECTION 4. The salaries of all officers and agents of the
Corporation shall be fixed by the Board of Directors. The Board of
Directors may appoint a committee of its members to fix such salaries.
It may also appoint an officer to fix the salaries of subordinate
officers and agents.
SECTION 5. The officers of the Corporation shall hold office
until their successors are chosen and qualify. Any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors. Any vacancy
occurring in any office of the Corporation shall be filled by the Board
of Directors.
THE CHAIRMAN OF THE BOARD
SECTION 6. The Chairman of the Board shall, subject to the
control of the board, and subject to the provisions below, and the
by-laws of the Corporation, have and be vested with supervision and
control over the business, affairs and property of the Corporation and
over its other officers, agents and employees. The Chairman of the
Board shall:
(a) Have the right to preside at all meetings of the Board of
Directors.
(b) Have the right to preside at all meetings of stockholders.
(c) Be responsible for all resolutions, orders and directives of
the Board of Directors being carried into effect.
(d) Keep the Board of Directors and any committees of the board
fully informed as to all matters within his knowledge which
the interests of the Corporation may require to be brought to
their notice and shall freely consult them concerning the
affairs of the Corporation.
(e) Be an ex-officio member of all committees of the board of
which he is not otherwise a member.
(f) Execute bonds, mortgages and other contracts requiring a seal,
under the seal of the Corporation, and upon specific approval
of the board for each instance, where required or permitted by
law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by
the board of directors to some other officer or agent of the
Corporation.
(g) Perform such other duties as these by-laws prescribe or as the
Board of Directors may prescribe from time to time.
THE PRESIDENT
SECTION 7. The President shall, subject to the control of the
Board, and subject to the provisions below and the by-laws of the
Corporation, have and be vested with supervision and control over the
Corporation's manufacturing and domestic marketing operations, as well
as the design and development of the Corporation's products. The
President shall:
(a) In the absence of the Chairman of the Board, or at his
request, preside at meetings of the Board of Directors or act
as Chairman of meetings of stockholders.
(b) At the request of the Chairman of the Board, or in the case of
his absence or inability to act, perform the duties of the
Chairman of the Board and when so acting shall have all the
powers of, and be subject to all the restrictions upon, the
Chairman of the Board.
(c) From time to time report to the Chairman of the Board and the
Board of Directors upon all matters within his knowledge which
the interests of the Corporation may require to be brought to
their notice.
(d) Keep the Chairman of the Board, the Board of Directors and any
committees of the Board fully informed as to all matters
within his knowledge which the interests of the Corporation
may require to be brought to their notice including, but not
limited to, the operations of the Corporation, and shall
freely consult them concerning the affairs of the Corporation.
(e) Execute bonds, mortgages and other contracts requiring a seal,
under the seal of the Corporation, and upon specific approval
of the Board for each instance, where required or permitted by
law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by
the Board of Directors to some other officer or agent of the
Corporation.
(f) Perform all duties incident to the office President and such
other duties as these by-laws prescribe, as the Board of
Directors may prescribe from time to time and as may be
assigned to him by the Chairman of the Board.
THE VICE-PRESIDENTS
SECTION 8. The Vice-President (or in the event there be more
than one Vice-President, the Vice-Presidents in the order designated by
the Board of Directors, or in the absence of such designation, then in
the order designated by the Chairman of the Board) may assume and
perform the duties of the President and when so acting, shall have all
the powers of and be subject to all the restrictions upon the President
in the absence of the President or in the event of his inability to act.
The Vice-Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
SECTION 9. The Secretary shall attend all meetings of the Board
of Directors and all meetings of the stockholders and record all the
proceedings of the meetings of the Corporation and of the Board of
Directors in a book to be kept for that purpose and shall perform like
duties for the standing committees when required. He shall give, or
cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors, and shall perform such other
duties as may be prescribed by the Board of Directors or the Chairman of
the Board, under whose supervision he shall be. He shall have custody
of the corporate seal of the Corporation and he, or an Assistant
Secretary, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by his signature or
by the signature of such Assistant Secretary. The Board of Directors
may give general authority to any officer to affix the seal of the
Corporation and to attest the affixing by his signature.
SECTION 10. The Assistant Secretary, or if there be more than one,
the Assistant Secretaries in the order determined by the Board of
Directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the Secretary or in the event
of his inability or refusal to act, perform the duties and exercise the
powers of the Secretary and shall perform such other duties and have
such other powers as the Board of Directors may from time to time
prescribe.
THE TREASURER AND ASSISTANT TREASURERS
SECTION 11. The Treasurer shall have the custody of the
Corporation's funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the Corporation in such depositories as
may be designated by the Board of Directors.
SECTION 12. He may disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chairman of the Board and the
Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an account of transactions and of the financial
condition of the Corporation.
SECTION 13. If required by the Board of Directors, the Treasurer
may give the Corporation a bond (which shall be renewed every six years)
in such sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of his
office and for the restoration to the Corporation, in case of his death,
resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or
under his control belonging to the Corporation
SECTION 14. The Assistant Treasurer, or if there shall be more
than one, the Assistant Treasurers in the order determined by the Board
of Directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the Treasurer or in the event
of his inability or refusal to act, perform the duties and exercise the
powers of the Treasurer and shall perform such other duties and have
such other powers as the Board of Directors may from time to time
prescribe.
Article VI
CERTIFICATES OF STOCK
SECTION 1. Every holder of stock in the Corporation shall be
entitled to have a certificate, signed by, or in the name of the
Corporation by, the Chairman of the Board or the President or a
vice-president and the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Corporation, certifying the
number of shares owned by him in the Corporation.
SECTION 2. Where a certificate is countersigned (1) by a
transfer agent other than the Corporation or its employee, or, (2) by a
registrar other than the Corporation or its employee, any other
signature on the certificate may be facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be
issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
SECTION 3. The Board of Directors may direct a new certificate
or certificates to be issued in place of any certificate or certificates
theretofore issued by the Corporation alleged to have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board
of Directors, may in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or give the Corporation
a bond in such sum as it may direct as indemnity against any claim that
may be made against the Corporation with respect to the certificate
alleged to have been lost, stolen or destroyed.
TRANSFERS OF STOCK
SECTION 4. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority
transfer, it shall be the duty of the Corporation, subject to
restrictions on transfer of such shares, if any, to issue a new
certificate to the person entitled thereto, cancel the old certificate
and record the transaction upon its books.
FIXED RECORD DATE
SECTION 5. In order that the Corporation may determine the
stockholders entitled to notice or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote
at meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
REGISTERED STOCKHOLDERS
SECTION 6. The Corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of
shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the
owner of shares, and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any
other person, whether or not it shall express or other notice thereof,
except as otherwise provided by the laws of Delaware.
Article VII
GENERAL PROVISIONS DIVIDENDS
SECTION 1. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Certificate of Incorporation, if any,
may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property,
or in shares of the capital stock, subject to the provisions of the
Certificate of Incorporation. Upon the declaration of any dividend, the
Board of Directors shall set a record date upon which the transfer agent
of the Corporation shall take a record of all stockholders entitled to
the dividend; the stock transfer books of the Corporation shall not be
closed; and, all stockholders of record on the record date shall be
entitled to the dividend notwithstanding any transfer on the books of
the Corporation after the record date.
SECTION 2. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such
sum or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies,
or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for such other purpose as the directors
shall think conducive to the interest of the Corporation, and the
directors may modify or abolish any such reserve in the manner in which
it was created.
SECTION 3. The Board of Directors shall present at each annual
meeting, and at any special meeting of the stockholders when called for
by vote of the stockholders, a full and clear statement of the business
and condition of the Corporation.
CHECKS
SECTION 4. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time
designate.
FISCAL YEAR
SECTION 5. The fiscal year of the Corporation shall begin on
the Saturday immediately following the last Friday in December of each
calendar year, and shall end on the last Friday in December of the
following calendar year.
SEAL
SECTION 6. The Corporate Seal shall have inscribed thereon the
name of the Corporation, the date of its organization and the name of
the State of Delaware. The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
Article VIII
AMENDMENTS
SECTION 1. These by-laws may be altered, amended or repealed or
new bylaws may be adopted by the stockholders or by the Board of
Directors, when such power is conferred upon the Board of Directors by
the Certificate of Incorporation, at any regular meeting of the
stockholders or of the Board of Directors or at any special meeting of
the stockholders or of the Board of Directors if notice of such
alteration, amendment, repeal or adoption of new by-laws be contained in
the notice of such special meeting.
Article IX
INDEMNIFICATION
SECTION 1. Each person who is or was a director or officer of
the Corporation and is or was made a party or is threatened to be made
a party to or is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she, or a person of whom
he or she is the legal representative, is or was a director, officer,
employee or agent of the Corporation or is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
Corporation or a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists
or may hereafter be amended, against all expense, liability and loss
(including attorney's fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection with the
investigation, defense or appeal thereof and such indemnification shall
continue as to a person who has ceased to be a director or officer and
shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that except as provided in Section 3
hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.
SECTION 2. Each person who may have a right to indemnification
under this Article shall also have the right to be paid by the
Corporation the expenses incurred in defending any proceeding in advance
of its final disposition; provided, however, that if the Delaware
General Corporation Law requires, the payment of such expenses incurred
by a director or officer in his or her capacity as a director or officer
(and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation,
service to an employee benefit plan) in advance of the final disposition
of a proceeding, shall be made only upon delivery to the Corporation of
an undertaking, by or on behalf of such director or officer, to repay
all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Article
or otherwise. The Corporation may, by action of the Board of Directors,
provide indemnification to employees and agents of the Corporation with
the same scope and effect as the foregoing indemnification of directors
and officers.
SECTION 3. If a claim under this Article is not paid in full by
the Corporation within thirty days after a written claim has been
received by the Corporation, the claimant may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the
claim and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending any proceeding in
advance of its final disposition where the required undertaking, if any
is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the
Delaware General Corporation Law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense
shall be on the Corporation.
SECTION 4. The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article shall not be exclusive of any
other right which any person may have or hereafter acquire under any
statute, provision of the Certificate of Incorporation, by-law,
agreement, vote of stockholders or disinterested directors or otherwise.
SECTION 5. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent
of the Corporation or another Corporation, partnership, joint venture,
trust or other enterprise against any such expense, liability or loss,
whether or not the Corporation would have the power to indemnify such
person against such expense, liability or loss under the Delaware
General Corporation Law.
SECTION 6. The Corporation shall have the express authority to
enter such agreements as the Board of Directors deems appropriate for
the indemnification of present or future directors or officers of the
Corporation in connection with their service to, or status with, the
Corporation or any other Corporation, entity or enterprise with whom
such person is serving at the express written request of the
Corporation.
Exhibit 10(a)
Summary of Terms of
Resignation Agreement
This Summary of Terms is between E. Joseph Zemke and Amdahl
Corporation ("Company"). Mr. Zemke resigned as President, CEO
and Director of the Company for personal reasons effective March
14, 1996. Although he has resigned, Mr. Zemke will be entitled
to the following benefits and will agree to the following
consulting services and non-competition and release provisions:
1. Mr. Zemke will be paid an aggregate of $2,502,000
representing two years salary and bonuses, payable over 24
months in equal installments starting March 31, 1996.
2. The Company will, at its expense, provide Mr. Zemke and his
eligible dependents with continued health care coverage
under the Company's medical/dental plan until the earlier of
March 14, 1998 or the first date Mr. Zemke is covered under
another employer's health benefit program providing similar
benefits without exclusion for pre-existing medical
conditions.
3. Each of Mr. Zemke's outstanding stock options will become
fully exercisable as of March 14, 1996 or such other times
as the Company and Mr. Zemke agree. All accelerated options
and vested options will remain fully exercisable for 2 years
but not beyond the end of the option term.
4. All restrictions applicable to Company stock held by Mr.
Zemke will lapse as of March 14, 1996 or on such other dates
as the Company and Mr. Zemke agree.
5. Mr. Zemke will vest in all of his accounts under the short-term
Performance Unit Plan, and he will be credited with 2
additional years of service under the long-term Performance
Unit Plan. The entire short-term account and the vested
balance of the long-term account will be paid to Mr. Zemke
in accordance with applicable pay out provisions.
6. Mr. Zemke will make himself available for consulting
services reasonably requested of him until March 14, 1998.
Five thousand dollars per month of the monthly compensation
provided in paragraph 1 will be for the consulting services.
In addition, the Company will reimburse Mr. Zemke for all
reasonable out of pocket expenses in connection with his
consulting services.
7. Until March 14, 1998
(i) Mr. Zemke will not act as an employee,
director, consultant or advisor to any
business enterprise which is at the time in
competition with the Company's existing or
formally planned product lines and which is
located geographically in an area where the
Company maintains substantial business
activities, without the prior written consent
of the Board of Directors.
(ii) Mr. Zemke will not directly or indirectly
encourage or solicit any individual to leave
the Company's employ for any reason or
interfere in any other manner with the
employment relationships at the time existing
between the Company and its current or
prospective employees.
(iii) Mr. Zemke will not induce or attempt to
induce any customer, supplier, distributor,
licensee or other business relation of the
Company to cease doing business with the
Company or in any way interfere with the
existing business relationship between any
such customer, supplier, distributor licensee
or other business relation and the Company.
8. In the event of Mr. Zemke's death before payment of all
amounts he is entitled to under this agreement, the payments
will nevertheless be made to Mr. Zemke's estate on the due
dates as if he had survived. Outstanding options may be
exercised by the executor of Mr. Zemke's estate.
9. Mr. Zemke agrees to release the Company and Fujitsu Limited,
and their affiliates, and each of their directors, officers,
employees, agents and consultants from all claims except
claims for the Company obligations under the terms of this
Agreement.
10. Any controversy of any kind under this Resignation Agreement
will be submitted to arbitration.
It is understood that a defenitive agreement containing the
foregoing terms will be prepared and executed as promptly as
practical.
AMDAHL CORPORATION
/s/ E. Joseph Zemke By: /s/ J. S. Webb
- ----------------------- ---------------------------
E. Joseph Zemke 3-14-96
Exhibit 10(b)
AMDAHL CORPORATION
1996 BONUS PROGRAM FOR
OFFICERS, VICE PRESIDENTS, SENIORS AND KEYS
Principles:
1. Maintain a tiered approach to bonus plans to reflect market
practice
2. Raise the threshold at which bonuses begin to be paid
3. Strengthen the link between performance and compensation by
trending salaries towards the 50th percentile and targeting base
salary plus bonus to the 75th percentile of the market
4. Increase the bonus opportunity to make possible greater
variability in pay
5. Make pre-tax profit, operating income or other financial
measures the determinant at target of 60 percent of bonus
opportunity for Seniors and Keys and 80 percent for Vice
Presidents and Officers
6. Make performance against other operational goals the
determinant at target of 40 percent of bonus opportunity for
Seniors and Keys and 20 percent for Vice Presidents and Officers
7. Persons managing or assigned to the various lines of
business may earn 60 percent of bonus based on their units'
operating income or other financial measures at target
8. Persons managing or assigned to the corporate functions may
earn 60 percent of bonus based on corporate pre-tax income profit
at target
Bonus Eligible Population
Approximately nine percent of the company's employees would be
bonus eligible. These employees have been assigned to various
levels of incentive participation based on competitive
positioning and internal organization.
<PAGE>
Representative Bonus
Participants Range
Executive VP's 0-120%
Sr. Officers 0-100%
& LOB GM's
Other Officers 0-75%
& Senior VP's
Other VP's 0-60%
Seniors 0-30%
Keys 0-15%
Exhibit 10(c)
AMDAHL CORPORATION
LONG-TERM EXECUTIVE INCENTIVE PERFORMANCE PLAN
REVISED AND RESTATED EFFECTIVE JANUARY 25, 1995
AND AMENDED EFFECTIVE JANUARY 1, 1996
1. PURPOSE OF THE PLAN
1.1 This Long-Term Executive Incentive Performance Plan
(the "Plan") is intended to promote the interests of AMDAHL
CORPORATION (the "Corporation") and its Subsidiaries by providing
a select group of employees of the Corporation and its
Subsidiaries who are primarily responsible for the management,
growth and success of the business with the opportunity to
participate in a retirement income accumulation program designed
to reward them for their contribution to the Corporation's
financial success and to provide them with an incentive to
continue in the employ of the Corporation and its Subsidiaries
through Normal Retirement Age.
2. ADMINISTRATION OF THE PLAN
2.1 The Plan shall administered by a committee (the
"Committee") of two (2) or more non-employee members of the
Corporation's Board of Directors (the "Board") appointed from
time to time by the Board. Each member of the Committee shall be
a disinterested person who satisfies the requirements of an
"outside director" within the meaning of Section 162(m) of the
Internal Revenue Code(the "Code"). However, until the first
stockholder meeting at which members of the Board are to be
elected which is held on or after January 1, 1996, the Committee
may be comprised of two (2) or more non-employee Board members
appointed by the Board who are disinterested persons within the
meaning of Rule 16b-3(c)(2) of the Securities and Exchange
Commission. The Committee shall have full authority to
administer the Plan and shall from time to time select the
eligible employees who are to participate in the Plan.
2.2 The interpretation and construction of any provision of
the Plan and the adoption of rules and regulations for plan
administration shall be made by the Committee. Decisions of the
Committee shall be final and binding on all parties who have an
interest in the Plan.
2.3 For purposes of the Plan, the following definitions
shall be in effect:
Active Participant: An Active Participant shall, for
each fiscal year the Plan remains in effect, be any individual
selected for participation in the Plan, whether in the current
fiscal year or in any earlier fiscal year, who has not otherwise
been excluded by the Committee from receiving an allocation of
the incentive award made under the Plan for the current fiscal
year.
Consolidated Pre-Tax Earnings: The consolidated
pre-tax income of the Corporation and the Subsidiaries for each
fiscal year, as computed for financial reporting purposes in
accordance with generally accepted accounting principles,
consistently applied, adjusted, however, to exclude (i) any or
all items of income, gain, loss or expense for such fiscal year
which the Committee determines, in its sole and absolute
discretion, to be extraordinary or unusual in nature and not
otherwise incurred or realized in the ordinary course of
business, whether or not such items would otherwise be considered
to be extraordinary in accordance with the standards established
by Opinion No. 30 of the Accounting Principles Board, or (ii) any
expenses incurred in such fiscal year by the Corporation in
connection with the acquisition or disposition of any subsidiary
or business unit or any profit or loss attributable to the
business operations of any entity acquired by the Corporation
during such fiscal year, but only to the extent that the
Committee determines, in its sole and absolute discretion, that
those expenses or profits or losses should not be taken into
account under the Plan.
Eligible Earnings: The Participant's Eligible Earnings
for any relevant fiscal year under the Plan shall be equal to (i)
his/her base salary for such fiscal year plus (ii) any cash bonus
(other than awards under this Plan or the Corporation's Short-
Term Executive Incentive Performance Plan) earned for services
rendered in such fiscal year and payable in the immediately
succeeding fiscal year.
Employee: A participant shall be deemed to continue in
Employee status for so long as the participant remains in the
active employ of the Corporation or one or more of its
Subsidiaries.
Long-Term Account: The Long-Term Account of each
participant shall be the account maintained in his/her name on
the books of the Corporation to which there shall be credited the
participant's share of the Long-Term awards made for the 1988 and
all subsequent fiscal years.
Normal Retirement Date The participant's Normal
Retirement Date shall be the latest to occur of (i) the first
date on which the sum of the participant's age and Years of
Service total at least seventy (70) years, (ii) the date on which
the participant attains age fifty-five (55) or (iii) the date on
which the participant completes ten (10) Years of Service.
Permanent Disability: A participant shall be deemed
to have terminated Employee status by reason of Permanent
Disability if he/she is unable, by reason of any physical or
mental impairment or illness expected to result in death or to
continue for a period of twenty-four (24) consecutive months or
more, to perform his/her usual duties for the Corporation or
Subsidiary employing such individual.
Retirement Fund Objective: Effective with the 1988
fiscal year the Committee shall establish a fixed-dollar
retirement income pool for each individual participant in order
to provide such individual with replacement income upon his/her
retirement from the Corporation following his/her Normal
Retirement Date.
Separate Account: The Separate Account of each
participant shall be the account maintained in his/her name on
the books of the Corporation to which there is credited the
participant's share of the long-term awards made for the 1986 and
1987 fiscal years.
Subsidiary: Each corporation (other than the
Corporation) in any unbroken chain of corporations beginning with
the Corporation shall be considered to be a Subsidiary of the
Corporation, provided such corporation (other than the last
corporation in the unbroken chain) owns, at the time of
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
Year of Service: The participant shall be credited
with one Year of Service under the Plan for each twelve (12)-
month period, measured from his/her date of hire, during which
he/she remains an Employee (whether or not the months of Employee
status included within such period were rendered consecutively).
Any period intervening between the participant's termination of
Employee status and his/her subsequent rehire shall not be taken
into account for Year of Service purposes.
3. DETERMINATION OF PARTICIPANTS
3.1 The persons who shall be eligible to participate in the
Plan shall be those Corporate Officers and other key employees
primarily responsible for the management, growth and success of
the business who are recommended for participation in the Plan by
the Chairman of the Board and approved by the Committee.
3.2 Each individual selected for participation in the Plan
shall remain an Active Participant for each fiscal year during
which that individual continues in Employee status, except to the
extent the Committee should, by appropriate resolution, elect to
exclude such individual from Active Participant status for one or
more of those fiscal years. The Committee shall have complete
discretion to exclude one or more existing participants from
Active Participant status for any fiscal year or years the
Committee deems appropriate, including the entire period the
participant continues in Employee status following such
exclusion. However, no such exclusion authorized by the
Committee shall become effective until the first day of the first
fiscal year coincident with or next following the date of the
Committee resolution authorizing such exclusion. If any
individual is excluded from Active Participant status for one or
more fiscal years, then such individual shall not receive any
allocation of the incentive awards made to the Plan for those
fiscal years. However, each participant who remains in Employee
status shall, in accordance with the applicable vesting schedule,
continue to vest with respect to any incentive awards already
allocated to his/her Separate Account under the Plan and his/her
Retirement Fund Objective, whether or not that participant
remains an Active Participant for the current or any subsequent
fiscal year.
4. INCENTIVE PERFORMANCE AWARDS
4.1 For each fiscal year of the Corporation for which the
Plan is in effect, the Corporation shall make an aggregate
incentive award to the Plan in an amount equal to one percent
(1%) of the Corporation's Consolidated Pre-Tax Earnings for such
fiscal year.
4.2 The incentive award for the fiscal year shall be
allocated among the individuals who are Active Participants for
that fiscal year in accordance with the following provisions:
(a) The Retirement Fund Objective established for each
participant shall be reviewed periodically by the
Committee and adjusted upward and downward from time to
time by the Committee as circumstances warrant.
However, in no event shall the Retirement Fund
Objective in effect for a participant be reduced to a
dollar amount such that the portion of the Retirement
Fund Objective in which the participant is vested
immediately after such reduction would be less than the
dollar amount of the Long-term Account balance to which
that participant would otherwise be entitled under
Section 6.3 were he/she to terminate Employee status
immediately before such reduction becomes effective.
(b) The Committee shall, as soon as reasonably
practicable after the aggregate long-term award for the
fiscal year has been determined, allocate to each
Active Participant who has continued in Employee status
through the last day of such year, the allocation to
each Active Participant shall be that portion of the
actual long-term award which is in the same ratio as
the Retirement Fund Objective then in effect for such
Active Participant bears to the aggregate dollar amount
of the Retirement Fund Objectives then in effect for
all Active Participants in the Plan.
(c) The long-term award allocated to each individual
Active Participant (the "Long-Term Award") shall in no
event exceed in dollar amount the sum necessary to
bring the existing balance of the Long-Term Account
maintained for such Active Participant under the Plan
(as adjusted in accordance with Sections 4.3 and 4.4
below) up to the dollar amount of the Retirement Fund
Objective then in effect for that individual.
4.3 Once an individual becomes a participant in this Plan,
he/she may not participate in any other pension or retirement
plan sponsored by the Corporation or its Subsidiaries (other than
the Individual Deferred Compensation Program and the Employee
Savings Program) during any fiscal year for which he/she is
eligible for a Long-Term Award. If such individual has
participated in the Capital-Accumulation Program of the Amdahl
Savings Program prior to his/her entry into this Plan, the
balance from time to time outstanding in his/her capital-accumulation
account under the Capital-Accumulation Program shall
be added to the balance of his/her Long-Term Account under this
Plan for purposes of determining whether the combined sum exceeds
the participant's Retirement Fund Objective. To the extent the
combined sum equals or exceeds the participant's Retirement Fund
Objective, no further long-term awards under the Plan shall, by
reason of the limitations of Section 4.2(c), be allocated to
his/her Long-Term Account.
4.4 Effective as November 15, 1988, the balance credited to
the participant's Long-Term Account as of the close of the 1987
fiscal year shall be maintained as his/her Separate Account under
the Plan, and the participant shall continue to vest in this
Separate Account in accordance with the vesting schedule in
effect immediately prior to the November 15, 1988 restatement of
the Plan (100% vesting when age and Years of Service total at
least 70 years with at least 10 Years of Service, but in no event
earlier than April 1, 1989). However, no payment from the vested
portion of such Separate Account shall be made prior to the
participant's attainment of age 55. The following additional
provisions shall be applicable to the Separate Account:
(a) Until paid, the balance in the Separate Account
shall continue to accrue interest in accordance with
the applicable provisions of Section 6.1.
(b) The balance from time to time outstanding in the
Separate Account shall be added to the balance of the
participant's post-1987 Long-Term Account under the
Plan for purposes of determining whether the combined
sum exceeds the participant's Retirement Fund
Objective. To the extent the combined sum equals or
exceeds the participant's Retirement Fund Objective, no
further long-term awards under the Plan shall, by
reason of the limitations of Section 4.2(c), be
allocated to his/her Long-Term Account.
(c) To the extent any portion of the Separate Account
is paid to the participant prior to his/her actual
retirement from the Corporation, the amount
distributed, together with interest imputed thereon at
the rate specified in Section 6.1 from the date of
distribution, shall continue to be treated as part of
the outstanding balance of the participant's Separate
Account for purposes of applying the provisions of
Sections 4.2(c) and 4.4(b).
4.5 Should any portion of an aggregate or individual
incentive award for a particular fiscal year remain unallocated
by reason of one or more of the foregoing limitations, then such
portion shall not be allocated to any other participant (whether
for the current or any subsequent fiscal year) nor used for any
other purpose under the Plan.
5. VESTING AND PAYMENT OF LONG-TERM AWARD
5.1 The Corporation shall establish on its books a
Long-Term Account for each participant as a special deferred
compensation account to which there shall be credited each annual
Long-Term Award allocated to the participant under Section 4.2
for purposes of meeting his/her Retirement Fund Objective.
5.2 The participant's interest in his/her particular
Retirement Fund Objective (to the extent attributable to Long-
Term Awards for the 1988 and all subsequent fiscal years) shall
initially vest upon his/her Normal Retirement Date, provided the
participant continues in Employee status through such date. At
such vesting date, the participant shall be vested in that
percentage of his/her Retirement Fund Objective obtained by
multiplying his/her Years of Service by 5%.l the participant
shall vest in an additional 5% of the Retirement Fund Objective
for each Year of Service subsequently completed until he/she
becomes 100% vested upon completion of 20 Years of Service.
Should the participant terminate Employee status by reason of
death or Permanent disability prior to his/her Normal Retirement
Date, such individual shall thereupon vest in that percentage of
his/her Retirement Fund Objective obtained by multiplying his/her
Years of Service (whether or not in excess of 10 years) by 5%.
Such vesting shall occur on the basis of the Years of Service
completed by the Participant, whether or not the participant
remains in Active Participant status for one or more of those
Years of Service.
5.3 Upon the participant's termination of Employee status
on or after his/her Normal Retirement Date, benefit payments from
his/her Long-Term Account shall be made in accordance with the
following provisions:
(a) If the participant is at the time of his/her
termination of Employee status vested in 100% of
his/her Retirement Fund Objective, then the entire
balance at that time credited to his/her Long-Term
Account shall be paid to him/her in a lump sum within
ninety (90) days.
(b) If the participant is at the time of his/her
termination of Employee status vested in less than 100%
of his/her Retirement Fund Objective, then the
participant shall be entitled to a lump sum payment,
due within ninety (90) days after such termination of
Employee status, equal to the lesser of (i) the dollar
amount obtained by multiplying the Retirement Fund
Objective in effect for him/her at the time by the
percentage to which he/she is at that time vested in
such Retirement Fund Objective, less any amount paid or
payable to such individual from his/her Separate
Account in accordance with Section 5.5, or (ii) the
entire balance credited to his/her Long-Term Account at
the time of such termination.
(c) The participant may, by filing an irrevocable
election with the Committee at least 24 months prior to
attainment of his/her Normal Retirement Date, elect to
receive, his/her subparagraph (a) or (b) benefits in
substantially equal annual installments over a 5 or
10-year period. To the extent such an installment
payout is elected, any unpaid balance of the Long-Term
Account owed the participant shall accrue interest at
the rate specified in Section 6.1 for the period
commencing with the participant's actual retirement
date and ending with the date of the payment.
5.4 The participant's interest in the Separate Account
attributable to the Long-Term Awards made for the 1986 and 1987
fiscal years shall vest upon the latest to occur of (i) his/her
completion of 10 Years of Service, (ii) the first date on which
the sum of the participant's age and Years of Service totals 70
years, or (iii) April 1, 1989. However, the participant's
interest in the Separate Account shall immediately vest if
his/her Employee status is terminated by reason of death or
Permanent Disability. The balance from time to time outstanding
in the Separate Account shall accrue interest in accordance with
the provisions of Section 6.1.
5.5 The balance credited to the participant's Separate
Account, to the extent vested pursuant to the provisions of
Section 5.4, shall be paid to such participant either in one lump
sum or in a series of annual installments over a designated
period of years (not to exceed ten (10) years). The method of
distribution and commencement date shall be irrevocably
designated by the participant in an election filed with the
Committee no later than the earlier of (i) eighteen (18) months
prior to the earliest date on which he/she will vest in the
Separate Account pursuant to the provisions of Section 5.4 or
(ii) the first day of the first calendar year immediately
preceding the calendar year in which the participant's vesting
date under Section 5.4 will occur. In the absence of such a
timely-filed election, the vested balance of the Separate Account
shall be paid in one lump sum upon the participant's termination
of Employee status. However, no payment shall be made from the
participant's Separate Account prior to his/her attainment of age
fifty-five (55), except to the limited extent otherwise provided
in Section 5.6.
5.6 Notwithstanding either the provisions of Section 5.5 or
any election made by the participant to receive payment of
his/her Long-Term Account or the Separate Account in two or more
installments, in the event of such participant's death or
Permanent Disability (whether or not he/she is still in Employee
status), any remaining balances owed to him/her under the Long-
Term Account and Separate Account shall be paid to him/her (or to
the designated beneficiary in the event of the participant's
death) in one lump sum payment within ninety (90) days after the
date of the participant's death or Permanent Disability.
5.7 If either the Long-Term Account or the Separate Account
is to be paid in two or more annual installments, then the amount
payable at the time of each installment shall be equal to the
aggregate balance outstanding in such account at the time of the
installment payment, divided by the number of unpaid installments
(including the current installment).
6. PAYMENT OF INTEREST
6.1 Applicable Rate
(a) Pre-1988 Awards. The balance from time to time
outstanding in each Separate Account maintained
hereunder or Long-Term Awards made for the 1986 and
1987 fiscal years shall accrue interest each calendar
year at the weighted average rate at which interest is
earned for such year on the assets of the Employee
Savings Plan invested in one or more guaranteed
insurance contracts thereunder during such year
("Applicable Rate"). The Applicable Rate shall be
calculated at the end of each calendar year, and
interest earned on outstanding account balances for
such year shall be credited to the participant's
Separate Account at that time.
(b) Post-1987 Awards. The individual unvested
balance of the Long-Term Account to which each
participant's share of the Long-Term Awards made for
the 1988 and all subsequent fiscal years is to be
allocated shall not bear any interest during the period
the participant remains in Employee status. Any unpaid
balance of the Long-Term Account owed to such
participant shall bear interest at the Applicable Rate
during any installment period in excess of ninety (90)
days which may be in effect for the payment of such
account balance.
6.2 Pro-Rated Interest
To the extent an amount is paid out of a particular account
prior to the last day of a calendar year, the interest accruable
on such amount for the portion of such calendar year preceding
the payment date shall, in accordance with Section 6.1 or Section
6.2 (whichever is applicable), be calculated and credited at the
end of such year, and payment of such accrued interest shall be
made within ninety (90) days after the close of the year.
7. GENERAL PROVISIONS
7.1 Upon the participant's cessation of Employee status
prior to attainment of his/her Normal Retirement Date, the entire
balance of his/her Long-Term Account and the unvested balance of
his/her Separate Account in which the participant is not at such
time vested shall be immediately forfeited, except as otherwise
specifically provided in the event of the participant's death or
Permanent Disability while in Employee status, and the
participant shall have no further rights or interest with respect
to any amounts so forfeited.
7.2 Should a Participant incur a severe financial hardship
after his/her Normal Retirement Date, the participant may apply
to the Committee for an immediate distribution of an amount not
to exceed the sum of (i) the vested balance of his/her Separate
Account and (ii) the entire balance credited to his/her Long-Term
Account, to the extent that latter balance does not exceed the
dollar amount of the vested portion of his/her Retirement Fund
Objective at that time. The Committee shall have complete
discretion to accept or reject the request.
7.3 Except to the extent the Committee may in its sole
discretion elect to implement a so-called "Rabbi Trust" for the
payment of benefits hereunder, the obligation to pay the balance
credited to the participant's Long-Term Account and Separate
Account shall at all times be an unfunded and unsecured
obligation of the Corporation or Subsidiary employing such
individual; and the participant shall look solely and exclusively
to the general assets of the Corporation or Subsidiary employing
the participant for the payment of his/her accounts under the
Plan.
7.4 The most recent restatement of the Plan became
effective with respect to the eligible employees of the
Corporation immediately upon adoption by the Board on January 25,
1995 and shall become effective with respect to the eligible
employees of one or more Subsidiaries upon adoption by the board
of directors of such Subsidiary or Subsidiaries. The board of
directors of any participating corporation may at any time amend,
suspend or terminate the Plan with respect to its participants;
provided, however, that such action shall not adversely affect
rights and interests existing under the Plan at the time of such
action.
7.5 No participant shall have the right to alienate, pledge
or encumber his/her interest in any Long-Term Account or Separate
Account maintained hereunder, and no such account shall be
subject to the claims of the participant's creditors or to
attachment, execution or other process of law.
7.6 A participant may designate a beneficiary to receive
any unpaid vested balance owed to the participant under his/her
Long-Term Account or Separate Account at the time of such
participant's death. In the absence of such designation, such
unpaid balance shall be paid in accordance with the participant's
will or pursuant to the laws of descent and distribution. The
participant may from time to time revoke his/her beneficiary
designation and file a new beneficiary designation. All
beneficiary designations, however, must be on the form prescribed
by the Committee.
7.7 Neither the action of the Corporation in establishing
the Plan, nor any action taken under the Plan by the board of
directors of any participating company or by the Committee, nor
any provision of the Plan itself, shall be construed so as to
grant any person the right to remain in the employ of the
Corporation or any of its Subsidiaries for any period of specific
duration, and the Employee status of such individual may be
terminated at any time, with or without cause.
7.8 All costs and expenses incurred in the operation and
administration of the Plan shall be borne by the Corporation.
Payment of applicable withholding taxes on benefits paid under
the Plan shall be the responsibility of the recipients.
7.9 The provisions of the Plan shall be governed by the
Employee Retirement Income Security Act of 1974 (as amended) and,
to the extent not thereby pre-empted, by the laws of the State of
California without resort to the conflict-of-laws rules of such
State.
7.10 The obligations of the Corporation and its Subsidiaries
to make the payments required hereunder shall be binding upon any
successor or assign of the Corporation or any such Subsidiary,
whether by merger, consolidation, acquisition or other
reorganization. No amendment or termination of the Plan by the
Corporation or any of its Subsidiaries (or any successor or
assign) shall adversely affect or otherwise impair the rights of
participants to receive benefit payments hereunder, to the extent
attributable to Awards made prior to the date of such amendment
or termination, in accordance with the applicable vesting and
payment provisions of Articles 4 and 5 hereof.<PAGE>
AMDAHL CORPORATION
EXECUTIVE INCENTIVE PERFORMANCE PLAN
DESIGNATION OF BENEFICIARY
--------------------------
I hereby designate the following individual or individuals
as the beneficiary or beneficiaries of all my right, title and
interest in and to all monies in which I am vested under the
Executive Incentive Performance Plan at the time of my death,
hereby revoking any prior designation of beneficiaries made by
me:
Name Relationship Percent of Total
(1)
---------------------- ---------------- ----------------
(2)
---------------------- ---------------- ----------------
(3)
---------------------- ---------------- ----------------
(4)
---------------------- ---------------- ----------------
The beneficiary must survive me; otherwise, his or her
designated share is to be divided equally among the beneficiaries
who do survive me.
Signature:
------------------------------
Name:
------------------------------
Date:
------------------------------
Exhibit 10(d)
AMDAHL CORPORATION
RESTRICTED STOCK PURCHASE AGREEMENT
-------------------------------------
This document sets forth the agreement between Amdahl
Corporation, a Delaware corporation (the "Company"), and E.
Joseph Zemke(the "Participant") made as of the 7th day of
February, 1996 pursuant to the provisions of the Amdahl
Corporation 1994 Stock Incentive Plan (the "Plan").
1. PURCHASE OF SHARES
------------------
A. PURCHASE. The Participant hereby purchases from the
Company, and the Company hereby sells to the Participant, 50,000
shares of the Company's common stock, par value of $0.05 per
share (the "Shares"), at the purchase price of $0.05 per share
(the "Purchase Price") pursuant to the provisions of the Plan.
B. PAYMENT. Concurrently with the execution of this
Agreement, the Participant shall deliver to the Company the
aggregate Purchase Price payable for the Shares in cash or check
payable in United States currency to Amdahl Corporation.
C. STOCKHOLDER RIGHTS. Until such time as the Company
actually exercises its Repurchase Right under this agreement (as
defined in Section 2C), the Participant (or any successor in
interest) shall have all the rights of a stockholder (including
voting, dividend and liquidation rights) with respect to the
purchased Shares, including the Shares held in escrow hereunder,
subject, however, to the transfer restrictions of this Agreement.
Any new, additional or different shares of stock which the
Participant may have the right to receive with respect to the
purchased Shares by reason of a stock dividend, stock split or
reclassification of common stock or by reason of a merger,
consolidation or other change in the capital structure of the
Company shall be held in escrow, subject to the same release
schedule applicable to the Shares and subject to the escrow
requirements of Section 5 in accordance with the provisions of
this Agreement.
2. RELEASE SCHEDULE
----------------
Provided the Participant remains in the Service of the
Company or its subsidiaries through the close of business on each
of the "Restriction Lapse Dates" listed below, the restrictions
on the Shares shall be released in accordance with the following
schedule:
RESTRICTION LAPSE DATES SHARES TO BE RELEASED
February 7, 1997 12,500
February 7, 1998 12,500
February 7, 1999 12,500
February 7, 2000 12,500
A. For purposes of this Agreement, the Participant shall be
deemed to remain in "Service" for so long as the Participant
continues to render periodic services to the Company or any
subsidiary (as determined in accordance with the provisions of
the Plan), whether as an employee, a non-employee member of a
board of directors or an independent consultant or advisor.
B. Should the Participant cease Service to the Company or
its subsidiaries, by reason of death or permanent disability,
prior to the close of business on February 6, 2000 , then the
restrictions on the Shares shall fully and immediately lapse upon
such cessation of Service. For purposes of this agreement, the
Participant shall be deemed to be permanently disabled if the
Participant is, by reason of any medically determinable physical
or mental impairment expected to result in death or to be of
continuous duration of not less than 12 months, unable to engage
in any substantial gainful Service to the Company.
C. The Company is hereby granted the right, exercisable at
any time following the date The Participant ceases Service to the
Company or its subsidiaries for any reason, except in the case of
death or permanent disability as defined above, to repurchase
(the "Repurchase Right") at the Purchase Price any or all of the
Shares which remain restricted pursuant to the schedule listed
above (the "Restricted Shares").
3. RESTRICTIONS
------------
A. The Participant may not, under any circumstances,
transfer any of the Restricted Shares. In the event the
Participant should attempt to transfer any of the Restricted
Shares or any interest therein, then the Company shall have the
right, exercisable immediately, to repurchase the Restricted
Shares and neither the Participant nor any other person shall any
longer possess stockholder rights with respect to the Restricted
Shares. In exchange for the repurchased Restricted Shares the
Participant shall receive a cash amount from the Company equal to
the Purchase Price paid by the Participant for the repurchased
Restricted Shares.
B. As used in this agreement, the term "transfer" shall
include, without limitation, any sale, pledge, encumbrance, gift
or other disposition of the Restricted Shares, but shall exclude
any conversion of the common stock in accordance with Section 3C.
C. In the event the Company's common stock is converted
into cash or other shares or securities of the Company or any
other corporation as a result of a merger, consolidation,
reorganization, liquidation or other transaction, any Restricted
Shares held by the Participant at the time of such transaction
shall likewise be converted into cash or other shares or
securities of the Company or such other corporation, and such
assets shall be held in escrow by the Company or its successor in
accordance with the same terms and conditions applicable
hereunder to the common stock prior to the conversion and shall
be released to the Participant in accordance with the schedule
listed above.
D. Until the Restricted Shares are released to the
Participant, the Restricted Shares shall be held in an escrow
account, administered by the Company or by an Agent appointed by
the Company for this purpose, subject to the escrow requirements
of Section 5 of this Agreement.
4. WAIVER
------
The administrator of the Restricted Stock Plan may in its
sole discretion waive, in whole or in part, any loss of
Restricted Shares or other assets which the Participant would
otherwise incur under the provisions of Section 3 hereof. Such a
waiver shall result in the immediate release of the Participant's
interest in the shares of common stock or other assets to which
the waiver applies.
5. ESCROW OF RESTRICTED SHARES
---------------------------
A. The Company shall establish an escrow account for the
Participant and maintain on deposit in such account all shares
and other assets received from the Participant in accordance with
the requirements of Section 5B. The Company shall upon request
inform the Participant of the number of his shares held in the
escrow account and shall provide a description of any other
assets held in the escrow account.
B. Any new, additional or different shares of stock issued
to the Participant with respect to the Restricted Shares held in
escrow shall likewise be maintained in escrow with the Company.
Any other assets received by the Participant upon the conversion
of his Restricted Shares by means of a transaction described
above in Section 3C shall be delivered to the Company to be held
in escrow.
C. When and if the Restricted Shares are released from the
escrow account to the Participant, the Company shall deliver
certificates which shall not contain a restrictive legend. Any
other assets held in the escrow account shall also be distributed
to the Participant in accordance with the Release Schedule. The
Participant shall execute whatever documents and take whatever
additional action the Company may request to enable it to effect
the appropriate distribution of stock and other assets.
6. CORPORATE TRANSACTION
---------------------
Upon the occurrence of any of the following stockholder-approved
transactions to which the Company is a party (a "Corporate Transaction"):
i. a merger or consolidation in which the Company is
not the surviving entity, except for a transaction the
principal purpose of which is to change the state in which
the Company is incorporated;
ii. the sale, transfer or other disposition of all or
substantially all of the assets of the Company in complete
liquidation and dissolution of the Company; or
iii. any reverse merger in which the Company is the
surviving entity but in which securities possessing more
than fifty percent (50%) of the total combined voting power
of the Company's outstanding securities are transferred to
person or persons different from the persons holding those
securities immediately prior to such merger,
the Repurchase Right of the Company shall
automatically and completely terminate, and all remaining
Restricted Shares shall immediately be released to the
Participant, except to the extent the Repurchase Right is
expressly assigned to the successor corporation (or its parent
company) in connection with the Corporate Transaction.
To the extent the Repurchase Right remains in effect
following such Corporate Transaction, the Repurchase Right shall
apply to the new securities or other property (including money
paid other than as a regular cash dividend) issued in exchange
for the Restricted Shares in consummation of the Corporate
Transaction. Appropriate adjustments shall be made to the price
per share payable upon exercise of the Repurchase Right to
reflect the effect of the Corporate Transaction upon the
Company's capital structure; provided, however, that the
aggregate purchase price payable under the Repurchase Right shall
remain the same.
<PAGE>
7. GENERAL PROVISIONS
------------------
A. Under no circumstances shall shares of common stock or
other assets be issued or delivered to the Participant pursuant
to the provisions of this agreement unless and until, in the
opinion of counsel for the Company or its successors, there shall
have been compliance with all applicable requirements of the
federal securities law, all applicable listing requirements of
any securities exchange on which stock of the same class is then
listed, and all other requirements of law or of any regulatory
bodies having jurisdiction over such issuance and delivery.
B. The rights of the Participant to acquire common stock or
other assets pursuant to the provisions of this agreement may not
be assigned, encumbered or otherwise transferred by him until the
shares or other assets are no longer restricted in accordance
with this agreement.
C. This agreement and the purchase and sale of the Shares
evidenced herein are made pursuant to the provisions of the
Company's 1994 Stock Incentive Plan and are in all respects
limited by and subject to the provisions of the Plan.
D. Neither the action of the Company in establishing the
1994 Stock Incentive Plan, nor any action taken thereunder, nor
any provision of the 1994 Stock Incentive Plan or this agreement
shall be construed so as to grant the Participant any right to
remain in the Service of the Company or its subsidiaries for any
period of specific duration or interfere with or otherwise
restrict in any way the rights of the Company or its subsidiaries
or the Participant, which rights are hereby expressly reserved by
each, to terminate the Participant's Service at any time for any
reason whatsoever, with or without cause.
E. This agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
AMDAHL CORPORATION
By
-----------------------
Anthony M. Pozos
Senior Vice President
Human Resources and
Corporate Services
----------------------
Participant Signature
E. Joseph Zemke
----------------------
Participant Printed Name
<PAGE>
ADDENDUM
TO
RESTRICTED STOCK PURCHASE AGREEMENT
There is hereby incorporated into that certain Restricted
Stock Purchase Agreement dated February 7, 1996 (the "Agreement")
by and between Amdahl Corporation (the "Company") and E. Joseph
Zemke (the "Employee") the special tax election provisions
specified below, effective immediately. All capitalized terms in
this Addendum shall have the meanings assigned to such terms in
the Agreement.
SPECIAL TAX ELECTIONS
A. Stock Withholding. The Employee is hereby granted the
election to have the Company withhold, as and when the Employee
vests in the purchased shares of Amdahl Corporation common stock
("common stock") a portion of those vested shares with an
aggregate fair market value equal to the designated percentage
(any multiple of 5 percent up to 100 percent as specified by the
Employee) of the applicable Federal, Sate and local income,
employment and other tax withholding liabilities incurred by the
Employee in connection with the vesting of those shares
(collectively the "Withholding Taxes"). Such election shall only
be exercisable in the event the employee does not otherwise make
an Internal Revenue Code Section 83(b) election to be taxed on
the purchased shares of common stock at the time of initial
issuance to him under the Agreement.
Any such exercise of the election must be effected in
accordance with the following terms and conditions:
(i) The election must be made on or before the date
the amount of the Withholding Taxes incurred by the
Employee in connection with the vesting of the
purchased shares is determined (the "Tax Determination
Date").
(ii) The election shall be irrevocable.
(iii) The election shall be subject to the approval
of the Restricted Stock Plan Administrator, and none of
the purchased shares shall be withheld in satisfaction
of the Withholding Taxes incurred in connection with
the vesting of such shares, except to the extent the
election is approved by the Restricted Stock Plan
Administrator.
(iv) The vested shares withheld pursuant to the
election shall be valued at the mean of the lowest and
highest selling prices per share of common stock on the
Tax Determination 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 such exchange. If
there are no reported sales of common stock on the
principal exchange on such date, then the mean of the
lowest and highest selling prices on such exchange on
the next preceding day for which there do exist such
quotations shall be determinative of the value of the
withheld shares.
(v) In no event may the value of the shares of common
stock requested to be withheld exceed the dollar amount
of the Withholding Taxes incurred in connection with
the vesting of the purchased shares.
If the stock withholding election is made by the Employee at
a time when such individual is an officer or director of the
Company subject to the short-swing profit restrictions of Section
16(b) of the Securities Exchange Act of 1934, then the following
limitations, in addition to the preceding provisions, shall also
be applicable:
(i) The election shall not become effective at any
time prior to the expiration of the six (6) month
period measured from the grant date of the stock
withholding election evidenced by this Addendum, and
none of the purchased shares of common stock shall
accordingly be withheld in connection with any Tax
Determination Date which occurs before the expiration
of such six (6) month period.
(ii) The stock withholding election must be made in
accordance within the following limitations:
- Such election must be made at least six (6)
months before the Tax Determination Date, or
- Such election must be exercised in the
quarterly "window" period in which or
immediately prior to which the Tax
Determination Date occurs. Quarterly window
periods shall begin on the third (3rd)
business day following the date of public
release of each quarterly or annual statement
of the Company's sales and earnings and end
on the earlier of the twelfth (12th) business
day following such release date or the Tax
Determination Date.
(iii) The six (6) month periods specified in
clauses (i) and (ii) shall not be applicable in the
event of the Employee's death or disability.
B. Stock Delivery. The Employee is hereby granted the
election to deliver to the Company, as and when the Employee
vests in the shares of common stock purchased under the
Agreement, other shares of the Company's common stock, previously
acquired by such individual (other than as part of the common
stock purchase to which the election relates) and held as fully-
vested shares, with an aggregate Fair Market Value equal to the
designated percentage (any multiple of 5 percent up to 100
percent as specified by the Employee) of the Withholding Taxes
incurred by the Employee in connection with the vesting of the
purchased shares. Such election shall only be exercisable in the
event the Employee does not otherwise make an Internal Revenue
Code Section 83(b) election to be taxed on the purchased shares
of common stock at the time of initial issuance to him under the
Agreement.
Any such exercise of the election must be effected in
accordance with the following terms and conditions:
(i) The election must be made on or before the date
the amount of the Withholding Taxes incurred in
connection with the vesting of the purchased shares of
common stock is determined (the "Tax Determination
Date").
(ii) The election shall be irrevocable.
(iii) The election shall be subject to the approval
of the Restricted Stock Plan Administrator, and none of
the delivered shares shall be accepted in satisfaction
of the Withholding Taxes, except to the extent the
election is approved by the Restricted Stock Plan
Administrator. However, the Restricted Stock Plan
Administrator has pre-approved any and all stock
delivery elections made by the Employee in accordance
with the provisions of this Addendum, provided such
election relates to Withholding Taxes incurred on one
or more Tax Determination Dates occurring after the
effective date of this Addendum. Such pre-approval
may be revoked at any time by the Restricted Stock Plan
Administrator with respect to any stock delivery
elections made after the Employee is notified of such
revocation.
(iv) The delivered shares shall be valued at the mean
of the lowest and highest selling prices per share of
common stock on the Tax Determination 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 such exchange. If there are no reported sales of
common stock on the principal exchange on such date,
then the mean of the lowest and highest selling prices
on such exchange on the next preceding day for which
there do exist such quotations shall be determinative
of the value of the delivered shares.
(v) In no event may the value of the delivered shares
exceed the dollar amount of the Withholding Taxes
incurred in connection with the vesting of the
purchased shares.
No additional restrictions or limitations shall be
applicable to any stock delivery election made by the Employee,
whether or not such individual is at the time an officer or
director of the Company subject to the short-swing profit
restrictions of Section 16(b) of the Securities Exchange Act of
1934.
Except for the special tax elections provided herein,
nothing in this Addendum shall affect or otherwise modify the
existing terms and provisions of the Agreement.
IN WITNESS WHEREOF, Amdahl Corporation and the Employee have
executed this Addendum on February 7, 1996.
AMDAHL CORPORATION
By
---------------------------------
Patricia A. Boepple
Assistant Corporate Secretary
----------------------------------
Employee Signature
E. Joseph Zemke
----------------------
Employee Printed Name
Exhibit 10(e)
AMDAHL CORPORATION
NOTICE OF GRANT OF STOCK OPTION
AND GRANT AGREEMENT
Optionee:
Employee ID:
Department No:
You have been granted an option under the Amdahl Corporation 1994
Stock Incentive Plan to acquire Amdahl Corporation common stock,
par value of $.05 per share, as follows:
Grant Date: February 7, 1996
Option price per share (FMV at grant date): $7.9375
Total number of shares of common stock granted: 40,000
(Collectively the "Option")
Your schedule and term of exercisability for this stock option
grant is as follows:
May be Must be
Number Exercised On Exercised
of Shares or After Before
- --------- ------------ ---------
10,000 02/07/97 02/06/11
10,000 02/07/98 02/06/11
10,000 02/07/99 02/06/11
10,000 02/07/00 02/06/11
Optionee hereby agrees that the Option to acquire shares of
Amdahl Corporation common stock, par value of $.05 per share, is
granted pursuant to and in accordance with the terms of the
Amdahl Corporation 1994 Stock Incentive Plan (the "1994 Plan")
and the Stock Option Agreement (such Stock Option Agreement being
attached hereto as Exhibit A)(the "Agreement"), both of which are
incorporated herein and made an integral part of the agreement.
Optionee further acknowledges receipt of the Amdahl Corporation
Prospectus covering shares issuable under the 1994 Plan and a
copy of the current Amdahl Corporation Annual Report to
Stockholders.
Dated: OPTIONEE:
-----------------------
<PAGE>
AMDAHL CORPORATION
By:
Anthony M. Pozos
Senior Vice President
Human Resources
& Corporate Services
<PAGE>
Exhibit A
AMDAHL CORPORATION
STOCK OPTION AGREEMENT
WITNESSETH:
RECITALS
A. The Corporation's Board of Directors (the "Board")
has adopted, and the stockholders have approved, the
Corporation's 1994 Stock Incentive Plan (the "Plan") for the
purpose of attracting and retaining the services of key employees
(including officers and directors), non-employee Board members
and consultants and other independent advisors.
B. Optionee is an individual who is to render
valuable services to the Corporation or one or more parent or
subsidiary corporations, and this Agreement is executed pursuant
to, and is intended to carry out the purposes of, the Plan in
connection with the grant of a stock option to purchase shares of
the Corporation's common stock ("Common Stock") under the Plan.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms
and conditions set forth in this Agreement, the Corporation
hereby grants to Optionee, as of the grant date (the "Grant
Date") specified in the accompanying Notice of Grant of Stock
Option (the "Grant Notice"), a stock option to purchase up to
that number of shares of the Corporation's Common Stock (the
"Option Shares") as is specified in the Grant Notice. Such
Option Shares shall be purchasable from time to time during the
option term at the exercise price (the "Exercise Price")
specified in the Grant Notice.
2. OPTION TERM. This option shall expire at the
close of business on the expiration date (the "Expiration Date")
specified in the Grant Notice, unless sooner terminated in
accordance with the provisions of this Agreement.
3. LIMITED TRANSFERABILITY. This option shall be
exercisable only by Optionee during Optionee's lifetime and shall
not be transferable or assignable by Optionee other than by will
or by the laws of descent and distribution following Optionee's
death.
4. EXERCISABILITY. This option shall become
exercisable for the Option Shares in accordance with the
installment schedule specified in the Grant Notice. As the
option becomes exercisable for one or more installments, those
installments shall accumulate, and the option shall remain
exercisable for the accumulated installments until the Expiration
Date or sooner termination of this option in accordance with the
provisions of this Agreement. In no event shall this option
become exercisable for any additional Option Shares following
Optionee's cessation of Service.
5. CESSATION OF SERVICE. This option shall terminate
prior to the Expiration Date in accordance with the following
provisions:
a. This option shall immediately terminate and
cease to remain outstanding for any Option Shares for which
it is not exercisable at the time of Optionee's cessation of
Service.
b. Should Optionee cease Service for any reason
other than death, permanent disability or retirement while
this option remains outstanding, then Optionee shall have a
three (3)-month period measured from the date of such
cessation of Service in which to exercise this option for
any or all of the Option Shares for which this option is
exercisable at the time of such cessation of Service. In no
event, however, may this option be exercised at any time
after the specified Expiration Date of the option term.
Upon the expiration of such three (3)-month period or (if
earlier) upon the specified Expiration Date of the option
term, this option shall terminate and cease to remain
outstanding.
c. Should Optionee die while in Service or
within three (3) months after cessation of Service, then the
personal representative of Optionee's estate or the person
or persons to whom this option is transferred pursuant to
Optionee's will or in accordance with the laws of descent
and distribution shall have the right to exercise the option
for any or all of the Option Shares for which this option is
exercisable at the time of Optionee's cessation of Service.
Such right shall lapse, and this option shall terminate and
cease to remain outstanding, upon the earlier of (i) the
expiration of the twelve (12)-month period measured from the
date of Optionee's death or (ii) the Expiration Date.
d. Should Optionee cease Service by reason of
permanent disability while this option is outstanding, then
Optionee shall have a period of twelve (12) months
(commencing with the date of such cessation of Service)
during which to exercise this option for any or all of the
Option Shares for which this option is exercisable at the
time of such cessation of Service, but in no event shall
this option be exercisable at any time after the Expiration
Date. Upon the expiration of such twelve (12)-month period
or (if earlier) upon the Expiration Date, this option shall
terminate and cease to remain outstanding.
e. Should Optionee cease Service by reason of
retirement at a time when this option is outstanding, then
this option shall continue to remain outstanding until the
Expiration Date, if not sooner terminated upon a Corporate
Transaction, and may be exercised during such period for any
or all of the Option Shares for which this option is
exercisable at the time of such cessation of Service,
f. During the applicable period of post-Service
exercisability under subparagraphs b. through e. above, this
option may not be exercised in the aggregate for more than
the number of Option Shares (if any) for which this option
is, at the time of Optionee's cessation of Service,
exercisable in accordance with either the normal exercise
provisions specified in the Grant Notice or the special
acceleration provisions of Paragraph 6 of this Agreement.
g. Upon the termination of Optionee's Service
for Misconduct, this option shall terminate immediately and
cease to remain outstanding.
h. For purposes of this Agreement, the following
definitions shall be in effect:
Optionee shall be deemed to remain in Service for
so long as such individual provides services on a periodic
basis to the Corporation or any subsidiary in the capacity
of an Employee, a non-employee member of the Board or an
independent consultant or advisor.
Optionee shall be considered to be an Employee for
so long as such individual performs services while in the
employ of the Corporation or any subsidiary, subject to the
control and direction of the employer entity not only as to
the work to be performed but also as to the manner and
method of performance.
Optionee shall be deemed to be permanently
disabled and to have incurred a permanent disability if
Optionee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or
mental impairment expected to result in death or to be of
continuous duration of twelve (12) months or more.
Optionee shall be deemed to have terminated
Service by reason of retirement if such termination occurs
after Optionee's attainment of age sixty (60) and completion
of fifteen (15) years of Service.
Misconduct means the commission of any act of
fraud, embezzlement or dishonesty by the Optionee, any
unauthorized use or disclosure by such individual of
confidential information or trade secrets of the Corporation
or its subsidiaries, or any other intentional misconduct by
such individual adversely affecting the business or affairs
of the Corporation in a material manner. The foregoing
definition shall not be deemed to be inclusive of all the
acts or omissions which the Corporation or any Subsidiary
may consider as grounds for the dismissal or discharge of
the Optionee or other individual in the Service of the
Corporation.
A corporation shall be deemed to be a subsidiary
of the Corporation in accordance with the applicable
provisions of the Plan.
6. CORPORATE TRANSACTION.
a. In the event of any of the following
stockholder-approved transactions to which the Corporation
is a party (a "Corporate Transaction"):
(1) a merger or consolidation in which the
Corporation is not the surviving entity, except for a
transaction the principal purpose of which is to change the
state in which the Corporation is incorporated;
(2) 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;
or
(3) any reverse merger in which the
Corporation is the surviving entity but 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 merger,
this option, to the extent outstanding at such
time but not otherwise exercisable, shall automatically
accelerate so that such option shall, immediately prior to the
specified effective date for the Corporate Transaction, become
fully exercisable for all the Option Shares at the time subject
to such option and may be exercised for all or any portion of
such shares. No such acceleration of this option, however, shall
occur if and to the extent: (i) this option is, in connection
with the Corporate Transaction, either to be assumed by the
successor corporation or parent thereof or to be replaced with a
comparable option to purchase shares of the capital stock of the
successor corporation or parent thereof or (ii) such option is to
be replaced with a cash incentive program of the successor
corporation which preserves the option spread existing at the
time of the Corporate Transaction (the excess of the Fair Market
Value of the Option Shares at the time subject to this option
over the aggregate Exercise Price payable for such shares) and
provides for subsequent pay-out in accordance with the same
vesting schedule in effect for the option pursuant to the option
exercise schedule set forth in the Grant Notice. The
determination of option comparability under clause (i) shall be
made by the Plan Administrator, and such determination shall be
final, binding and conclusive.
b. The portion of this option accelerated in
connection with any Corporate Transaction shall remain
exercisable as an incentive stock option under the Federal tax
laws (if the option is designated as such in the Grant Notice)
only to the extent the applicable dollar limitation on the
initial exercisability of such option is not exceeded in the
calendar year of the Corporate Transaction. To the extent such
dollar limitation is exceeded, the accelerated portion of this
option shall be exercisable as a non-statutory option under the
Federal tax laws.
c. This option, to the extent not previously
exercised, shall terminate immediately after the consummation of
such Corporate Transaction and cease to remain outstanding,
except to the extent assumed by the successor corporation or
parent thereof.
d. This Agreement shall not in any way affect
the right of the Corporation to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES.
a. In the event any change is made to the Common
Stock issuable under the Plan 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 effected without the Corporation's receipt of
consideration, the Plan Administrator shall make appropriate
adjustments to (i) the number and/or class of securities subject
to this option and (ii) the Exercise Price payable per share in
order to prevent any dilution or enlargement of rights and
benefits hereunder. Such adjustments shall be final, binding and
conclusive.
b. If this option is to be assumed in connection
with any Corporate Transaction or is otherwise to continue
outstanding, then this option shall, immediately after such
Corporate Transaction, be appropriately adjusted to apply and
pertain to the number and class of securities which would have
been issued to Optionee in the consummation of such Corporate
Transaction had the option been exercised immediately prior to
such Corporate Transaction. Appropriate adjustments shall also
be made to the Exercise Price payable per share, provided the
aggregate Exercise Price payable hereunder shall remain the same.
8. PRIVILEGE OF STOCK OWNERSHIP. The holder of this
option shall not have any stockholder rights with respect to the
Option Shares until such individual shall have exercised the
option and paid the Exercise Price for the purchased Option
Shares.
9. MANNER OF EXERCISING OPTION.
a. In order to exercise this option with respect
to all or any part of the Option Shares for which this option is
at the time exercisable, Optionee (or in the case of exercise
after Optionee's death, Optionee's executor, administrator, heir
or legatee, as the case may be) must take the following actions:
(1) Deliver to the Corporate Secretary of
the Corporation an executed notice of exercise in
substantially the form of Exhibit I to this Agreement (the
"Exercise Notice") in which there is specified the number of
Option Shares which are to be purchased under the exercised
option.
(2) Pay the aggregate Exercise Price for the
purchased shares through one or more of the following alternatives:
(a) full payment in cash or by check
made payable to the Corporation's order;
(b) full payment in shares of Common
Stock held for the requisite period necessary to avoid
a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on
the Exercise Date (as such term is defined below);
(c) full payment through a combination
of shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at
Fair Market Value on the Exercise Date and cash or
check payable to the Corporation's order; or
(d) full payment effected through a
broker-dealer sale and remittance procedure pursuant to
which Optionee shall provide concurrent irrevocable
written instructions (i) to a Corporation-designated
brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price
payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes
required to be withheld in connection with such
purchase and (ii) to the Corporation to deliver the
certificates for the purchased shares directly to such
brokerage firm in order to complete the sale
transaction.
(3) Furnish to the Corporation appropriate
documentation that the person or persons exercising the
option (if other than Optionee) have the right to exercise
this option.
b. For purposes of this Agreement, the Exercise
Date shall be the date on which the executed Exercise Notice
shall have been delivered to the Corporation. Except to the
extent the sale and remittance procedure specified above is
utilized in connection with the option exercise, payment of the
Exercise Price for the purchased shares must accompany such
Exercise Notice.
c. For all valuation purposes under this
Agreement, the Fair Market Value per share of Common Stock on any
relevant date shall be the mean between the highest and lowest
selling prices per share on the date in question on the principal
exchange on which the Common Stock is then listed or admitted to
trading, as the prices are officially quoted by the composite
tape of transactions on such exchange. If there are no reported
sales of the Common Stock on the date in question, then the Fair
Market Value shall be the mean between the highest and lowest
selling prices on the last previous date for which quotations
exist.
d. As soon as practical after receipt of the
Exercise Notice, the Corporation shall mail or deliver to or on
behalf of Optionee (or any other person or persons exercising
this option in accordance herewith) a certificate or certificates
representing the purchased Option Shares.
e. In no event may this option be exercised for
any fractional share.
10. GOVERNING LAW. The interpretation, performance
and enforcement of this Agreement shall be governed by the laws
of the State of California without resort to that State's
conflict-of-laws provisions.
11. COMPLIANCE WITH LAWS AND REGULATIONS. The
exercise of this option and the issuance of Option Shares upon
such exercise shall be subject to compliance by the Corporation
and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any securities
exchange on which shares of the Corporation's Common Stock may be
listed at the time of such exercise and issuance.
12. SUCCESSORS AND ASSIGNS. Except to the extent
otherwise provided herein, the provisions of this Agreement shall
inure to the benefit of, and be binding upon, the successors,
administrators, heirs and legal representatives of Optionee and
the successors and assigns of the Corporation.
13. LIABILITY OF CORPORATION.
a. If the Option Shares covered by this
Agreement exceed, as of the Grant Date, the number of shares
which may without shareholder approval be issued under the Plan,
then this option shall be void with respect to such excess shares
unless shareholder approval of an amendment sufficiently
increasing the number of shares issuable under the Plan is
obtained in accordance with the applicable provisions of the
Plan.
b. The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the
Corporation to be necessary to the lawful issuance and sale of
any Common Stock pursuant to this option shall relieve the
Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have
been obtained. The Corporation shall use its best efforts to
obtain all such approvals.
14. NO EMPLOYMENT/SERVICE CONTRACT. Nothing in this
Agreement or in the Plan shall confer upon Optionee any right to
continue in the Service of the Corporation (or any subsidiary
employing or retaining Optionee) for any period of specific
duration or interfere with or otherwise restrict in any way the
rights of the Corporation (or any such subsidiary) or Optionee,
which rights are hereby expressly reserved by each party, to
terminate Optionee's Service at any time for any reason
whatsoever, with or without cause.
15. NOTICES. Any notice required to be given or
delivered to the Corporation under the terms of this Agreement
shall be in writing and addressed to the Corporation in care of
the Corporate Secretary at the Corporation's principal offices at
1250 East Arques Avenue, Sunnyvale, California 94088. Any notice
required to be given or delivered to Optionee shall be in writing
and addressed to Optionee at the address indicated on the Grant
Notice. All notices shall be deemed to have been given or
delivered upon personal delivery or upon deposit in the U.S.
mail, by registered or certified mail, postage prepaid and
properly addressed to the party to be notified.
16. CONSTRUCTION. This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and
are in all respects limited by and subject to the express terms
and provisions of the Plan. All decisions of the Plan
Administrator with respect to any question or issue arising under
the Plan or this Agreement shall be conclusive and binding on all
persons having an interest in this option.
17. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE STOCK
OPTION. In the event this option is designated an incentive
stock option in the Grant Notice, the following terms and
conditions shall also apply to the grant:
a. This option shall cease to qualify for
favorable tax treatment as an incentive stock option under the
Federal tax laws if (and to the extent) this option is exercised
for one or more Option Shares: (i) more than three (3) months
after the date Optionee ceases to be an Employee for any reason
other than death or permanent disability or (ii) more than one
(1) year after the date Optionee ceases to be an Employee by
reason of permanent disability.
b. If this option is to become exercisable in a
series of installments as indicated in the Grant Notice, no such
installment shall qualify for favorable tax treatment as an
incentive stock option under the Federal tax laws if (and to the
extent) the aggregate Fair Market Value (determined at the Grant
Date) of the shares of the Corporation's Common Stock for which
such installment first becomes exercisable hereunder will, when
added to the aggregate value (determined as of the respective
date or dates of grant) of the Common Stock or other securities
for which this option or one or more other incentive stock
options granted to Optionee prior to the Grant Date (whether
under the Plan or any other option plan of the Corporation or any
parent or subsidiary) first become exercisable during the same
calendar year, exceed One Hundred Thousand Dollars ($100,000) in
the aggregate. Should the number of shares of Common Stock for
which this option first becomes exercisable in any calendar year
exceed the applicable One Hundred Thousand Dollar ($100,000)
limitation, the option may nevertheless be exercised for those
excess shares in such calendar year as a non-statutory option.
c. Should the exercisability of this option be
accelerated upon a Corporate Transaction, then this option shall
qualify for favorable tax treatment as an incentive stock option
under the Federal tax laws only to the extent the aggregate Fair
Market Value (determined at the Grant Date) of the number of
shares of the Corporation's Common Stock for which this option
first becomes exercisable in the calendar year in which the
Corporate Transaction occurs does not, when added to the
aggregate value (determined as of the respective date or dates of
grant) of the shares of Common Stock or other securities for
which this option or one or more other incentive stock options
granted to Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the Corporation or any parent or
subsidiary) first become exercisable during the same calendar
year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the number of shares of Common Stock for which
this option first becomes exercisable in the calendar year of
such Corporate Transaction exceed the applicable One Hundred
Thousand Dollar ($100,000) limitation, the option may
nevertheless be exercised for the excess shares in such calendar
year as a non-statutory option.
d. Should Optionee hold, in addition to this
option, one or more other options to purchase shares of the
Corporation's Common Stock which become exercisable for the first
time in the same calendar year as this option, then the foregoing
limitations on the exercisability of such options as incentive
stock options under the Federal tax laws shall be applied on the
basis of the order in which such options are granted.
e. To the extent this option should fail to
qualify for incentive stock option treatment under the Federal
tax laws, Optionee shall recognize compensation income at the
time the option is exercised in an amount equal to the Fair
Market Value of the purchased Option Shares less the aggregate
Exercise Price paid for those shares, and Optionee must make
appropriate arrangements with the Corporation or any parent or
subsidiary employing Optionee for the satisfaction of all
Federal, state or local income and employment tax withholding
requirements applicable to such compensation income.
18. ADDITIONAL TERMS APPLICABLE TO A NON-STATUTORY
STOCK OPTION. In the event this option is designated a non-
statutory stock option in the Grant Notice, Optionee shall make
appropriate arrangements with the Corporation or any parent or
subsidiary employing Optionee for the satisfaction of all
Federal, state or local income and employment tax withholding
requirements applicable to the exercise of this option.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Amdahl Corporation (the "Corporation")
that I elect to purchase shares of the
--------------------
Corporation's Common Stock (the "Purchased Shares") at the option
exercise price of $ per share (the "Exercise Price")
------
pursuant to that certain option (the "Option") granted to me
under the Corporation's 1994 Stock Incentive Plan on
----------
, 19 to purchase up to shares
- -------------------- --- ----------
of the Corporation's Common Stock.
Concurrently with the delivery of this Exercise Notice
to the Corporate Secretary of the Corporation, I shall hereby pay
to the Corporation the Exercise Price for the Purchased Shares in
accordance with the provisions of my agreement with the
Corporation evidencing the Option and shall deliver whatever
additional documents may be required by such agreement as a
condition for exercise. Alternatively, I may utilize the special
broker-dealer sale and remittance procedure specified in my
agreement to effect the payment of the Exercise Price for the
Purchased Shares.
Date: , 19
------------------ ---
Optionee:
------------------------
Address:
------------------------
------------------------
Print name in exact manner
it is to appear on the
stock certificate:
--------------------
Address to which certificate
is to be sent, if different
from address above:
---------------------
---------------------
Social Security Number:
---------------------
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-27-1996
<PERIOD-END> MAR-29-1996
<CASH> 172,518
<SECURITIES> 390,279
<RECEIVABLES> 274,693
<ALLOWANCES> 0
<INVENTORY> 270,680
<CURRENT-ASSETS> 1,192,320
<PP&E> 1,027,696
<DEPRECIATION> 746,811
<TOTAL-ASSETS> 1,609,016
<CURRENT-LIABILITIES> 625,262
<BONDS> 0
0
0
<COMMON> 5,991
<OTHER-SE> 886,134
<TOTAL-LIABILITY-AND-EQUITY> 1,609,016
<SALES> 94,464
<TOTAL-REVENUES> 317,028
<CGS> 85,584
<TOTAL-COSTS> 244,446
<OTHER-EXPENSES> 126,916
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,216
<INCOME-PRETAX> (48,154)
<INCOME-TAX> (9,631)
<INCOME-CONTINUING> (38,523)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (38,523)
<EPS-PRIMARY> 0
<EPS-DILUTED> (.32)
</TABLE>
