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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, 1995
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
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<CAPTION>
Financial Statements Page
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<S> <C>
Report of Independent Public Accountants 3
Statements of Financial Condition -
September 30, 1995 and 1994 4
Statements of Changes in Plan Equity for the
years ended September 30, 1995, 1994 and 1993 5
Notes to Financial Statements, September 30, 1995 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 12, 1995 By: /s/ Mayellen Banister
----------------------
Mayellen Banister
Committee Member
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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, 1995 and 1994, and the related statements of changes in plan
equity for each of the three years in the period ended September 30, 1995. 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, 1995 and 1994, and the changes in Plan equity for each of the three years in
the period ended September 30, 1995, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Los Angeles, California
December 12, 1995
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APPLIED MAGNETICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL CONDITION
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<CAPTION>
September 30,
-------------------------
ASSETS 1995 1994
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<S> <C> <C>
Investments in common stock of
Applied Magnetics Corporation,
at market value (cost of $620,128
in 1995 and $796,784 in 1994) $1,210,594 $441,311
Cash 408 5
Contributions due from participants 14,860 18,769
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$1,225,862 $460,085
========== ========
LIABILITIES AND PLAN EQUITY
Excess contributions from
Applied Magnetics Corporation
at market value (cost of $225,114
in 1995 and $236,486 in 1994) $ 394,063 $115,938
Plan equity 831,799 344,147
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$1,225,862 $460,085
========== ========
</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
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<CAPTION>
For The Years Ended September 30,
---------------------------------
1995 1994 1993
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<S> <C> <C> <C>
Contributions from participants $ 154,541 $ 283,365 $ 317,490
Contributions from Applied
Magnetics Corporation, net (554) 64,124 89,401
Distributions to participants (337,990) (635,167) (736,372)
Change in unrealized appreciation/
(depreciation) of investments, net 671,655 (39,778) 62,427
--------- --------- ---------
Increase (decrease) in plan equity 487,652 (327,456) (267,054)
Plan equity, beginning of year 344,147 671,603 938,657
--------- --------- ---------
Plan equity, end of year $ 831,799 $ 344,147 $ 671,603
========= ========= =========
</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, 1995
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 one member of the
Company's management 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 by
the participants' total contributions. At September 30, 1995, 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,
1995, unvested Company contributions had a market value of $346,875 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 1995, 1994 and 1993 were $52,068, $30,332 and $16,429,
respectively.
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Note 3. Investments
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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 77,478 and 100,871 shares at September
30, 1995 and 1994, respectively. The closing sales prices of the Company's
common stock on the New York Stock Exchange on September 30, 1995 and December
12, 1995, were $15.625 and $15.25, 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, 1995, but have not received such amounts until October, 1995 are not
reflected in liabilities and are included in "Plan equity" at September 30,
1995. Withdrawals and distributions included in "Plan equity" as of September 30
are as follows:
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<CAPTION>
1995 1994
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<S> <C> <C>
Payable to withdrawing participants $122,625 $796
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</TABLE>
Note 5. Unrealized Appreciation/(Depreciation) of Investments
-----------------------------------------------------
Unrealized appreciation/(depreciation) included in investments for the
years ended September 30, 1995, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
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<S> <C> <C> <C>
Balance, beginning of year $(355,473) $(320,011) $(265,182)
Change in unrealized appreciation/
(depreciation) 945,939 (35,462) (54,829)
--------- --------- ---------
Balance, end of year $ 590,466 $(355,473) $(320,011)
========= ========= =========
</TABLE>
The amounts shown as "Change in unrealized appreciation/(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 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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