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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(x) ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934 (FEE REQUIRED)
For the fiscal year ended September 30, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED)
For the transition period from _______________ to _________________
Commission file number __________________.
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
Applied Magnetics Corporation Employee Stock Purchase Plan (the "Plan")
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
Applied Magnetics Corporation
75 Robin Hill Road
Goleta, California 93117
<TABLE>
<CAPTION>
Financial Statements Page
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<S> <C>
Report of Independent Public Accountants 3
Statements of Financial Condition -
September 30, 1994 and 1993 4
Statements of Changes in Plan Equity for the
years ended September 30, 1994, 1993 and 1992 5
Notes to Financial Statements, September 30, 1994 6
</TABLE>
Schedules are not submitted because they are not applicable or not
required or because the required information is included elsewhere in the
financial statements or notes thereto .
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SIGNATURES
- - ----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee has duly caused this annual report to be signed by the undersigned
hereunto duly authorized.
APPLIED MAGNETICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
Date: December 22, 1994 By:/s/Mayellen Banister
--------------------
Mayellen Banister
Committee Member
Date: December 22, 1994 By:/s/Raymond P. Le Blanc
----------------------
Raymond P. Le Blanc
Committee Member
2
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Employee Stock Purchase Plan Committee of the Applied
Magnetics Corporation Employee Stock Purchase Plan:
We have audited the accompanying statements of financial condition of the
APPLIED MAGNETICS CORPORATION EMPLOYEE STOCK PURCHASE PLAN (the"Plan") as of
September 30, 1994 and 1993, and the related statements of changes in plan
equity for each of the three years in the period ended September 30, 1994. These
financial statements are the responsibility of the Plan's administrative
committee. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial condition of the Plan as of
September 30, 1994 and 1993, and the changes in Plan equity for each of the
three years in the period ended September 30, 1994, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Los Angeles, California
December 22, 1994
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APPLIED MAGNETICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
September 30,
------------------------
ASSETS 1994 1993
- - ------ ---- ----
<S> <C> <C>
Investments in common stock of
Applied Magnetics Corporation,
at market value (cost of $796,784
in 1994 and $1,207,525 in 1993) $ 441,311 $ 887,514
Cash 5 5
Contributions due from participants 18,769 27,961
--------- --------
$ 460,085 $ 915,480
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LIABILITIES AND PLAN EQUITY
- - ---------------------------
Excess contributions from
Applied Magnetics Corporation
at market value (cost of $236,486
in 1994 and $335,326 in 1993) $ 115,938 $ 243,877
Plan equity 344,147 671,603
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$ 460,085 $915,480
========= ========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
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APPLIED MAGNETICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN PLAN EQUITY
<TABLE>
<CAPTION>
For The Years Ended September 30,
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1994 1993 1992
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<S> <C> <C> <C>
Contributions from participants $ 283,365 $ 317,490 $ 370,811
Contributions from Applied
Magnetics Corporation, net 64,124 89,401 83,407
Distributions to participants (635,167) (736,372) (459,739)
Change in unrealized depreciation
of investments, net (39,778) 62,427 (10,965)
--------- --------- ---------
Decrease in plan equity (327,456) (267,054) (16,486)
Plan equity, beginning of year 671,603 938,657 955,143
--------- --------- ---------
Plan equity, end of year $ 344,147 $ 671,603 $ 938,657
========== ========== ==========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
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APPLIED MAGNETICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
September 30, 1994
Note 1. Description
-----------
The Applied Magnetics Corporation Employee Stock Purchase Plan (The
"Plan") was established by Applied Magnetics Corporation (the "Company") on
November 2, 1979, and is offered to employees of Applied Magnetics Corporation
and certain of its subsidiaries. The Plan is administered by an Employee Stock
Purchase Plan Committee (the "Committee") consisting of two members appointed
by the Board of Directors of the Company. All expenses of the Plan are paid by
the Company.
Participation in the Plan is entirely voluntary and open to each full-
time employee 18 years of age or older who has been with the Company or
participating subsidiaries for at least six full months of continuous
employment. Each participating employee must contribute a minimum of 2 percent
of his or her compensation and may also make voluntary contributions up to a
maximum of an additional 4 percent of their compensation depending on the length
of service with the Company.
The Company contributes shares of its common stock and/or cash equal in
aggregate value to one-third of the value of the common stock purchased with the
participants' total contributions. At September 30, 1994, the Company had
contributed shares in excess of the amount required by the Plan. These excess
shares were shown in the accompanying Statements of Financial Condition as
"Excess contributions from Applied Magnetics Corporation" and have been stated
at market value.
Note 2. Plan Vesting
------------
All voluntary contributions are 100 percent vested and nonforfeitable.
Company contributions will become 100 percent vested and nonforfeitable upon the
earliest occurrence of: (1) the termination of the Plan, (2) the termination of
the participant's employment with the Company on or after the attainment of age
65, (3) the termination of the participant's employment with the Company by
reason of the participant's death, total disability or layoff (as defined), (4)
the termination of the participant's employment with the Company on or after the
attainment of age 55 and the completion of a minimum of 15 years of service with
the Company, and when the age and years of service sum to 75 years or greater,
or (5) the February 1, immediately following the expiration of two years from
the end of the Plan year in which the contributions were made. At September 30,
1994,
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unvested Company contributions had a market value of $114,463 which was included
in "Investments in common stock of Applied Magnetics Corporation" in the
accompanying Statements of Financial Condition. Amounts shown as "Contributions
from Applied Magnetics Corporation, net" in the accompanying Statements of
Changes in Plan Equity are net of forfeitures. Forfeitures for fiscal years
1994, 1993 and 1992 were $30,332, $16,429 and $40,197, respectively.
Note 3. Investments
-----------
Robertson Stephens & Company has been retained by the Committee to act
as custodian over the assets of the Plan. All investments must be made in the
Company's common stock and consisted of 100,871 and 129,093 shares at September
30, 1994 and 1993, respectively. The closing sales prices of the Company's
common stock on the New York Stock Exchange on September 30, 1994 and December
22, 1994, were $4.375 and $3.125, respectively.
Note 4. Participant Withdrawals and Distributions
-----------------------------------------
Withdrawals and distributions allocated to accounts of participants who
have withdrawn from participation in the equity of the Plan as of September 30,
1994, but have not received such amounts until October, 1994 are not reflected
in liabilities and are included in "Plan equity" at September 30, 1994.
Withdrawals and distributions included in "Plan equity" as of September 30 are
as follows:
<TABLE>
<CAPTION>
1994 1993
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<S> <C> <C>
Payable to withdrawing participants $796 $110,344
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</TABLE>
Note 5. Unrealized Depreciation of Investments
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Unrealized depreciation included in investments for the years ended
September 30, 1994, 1993 and 1992 were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Balance, beginning of year $(320,011) $(265,182) $(291,671)
Change in unrealized
depreciation (35,462) (54,829) 26,489
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Balance, end of year $(355,473) $(320,011) $(265,182)
========== ========== ==========
</TABLE>
The amounts shown as "Change in unrealized depreciation of investments, net" in
the accompanying Statements of Changes in Plan Equity are primarily comprised of
the "Change in unrealized depreciation " of investments shown above, net of the
change in unrealized appreciation (depreciation) of the shares represented by
the amounts shown as excess
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contributions from Applied Magnetics Corporation in the accompanying Statements
of Financial Condition and net of the difference between the previous year-end
market value of the Company's common stock and the market value at the date of
request for withdrawal for distribution to participants.
Note 6. Federal Income Tax Status
-------------------------
The Company has received a private letter ruling from the Internal
Revenue Service with regard to the Federal income tax consequences of the Plan.
In accordance with this letter and Section 83 of the Internal Revenue Code of
1986, as amended, Company contributions generally become taxable to participants
on the date they vest in an amount equal to the market value of the stock which
vests on such date, unless certain elections are made.
There is no taxable income associated with the Plan, and no income taxes
have been provided for in the accompanying financial statements.
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