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FILED PURSUANT TO RULE 424(b)(3)
REGISTRATION NO.33-59409
APPLIED MAGNETICS CORPORATION
Common Stock
________________
The shares of Common Stock of Applied Magnetics Corporation (the
"Company") which may be offered hereby by certain stockholders of the Company
(the "Selling Stockholders") named herein under the heading "Selling
Stockholders" will be sold to the Selling Stockholders on the exercise of
options to purchase shares of the Company's Common Stock. None of the proceeds
of any sales by the Selling Stockholders will be received by the Company. It is
anticipated that the shares will be sold through the usual brokerage channels on
the New York Stock Exchange, or otherwise, at prevailing market prices and
subject to the usual and customary commissions.
The Common Stock is traded on the New York Stock Exchange under the
symbol APM. The closing price of the Company's Common Stock on June 21, 1995
was $6.25.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_____________________
The date of this Prospectus is June 21, 1995
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
at 7 World Trade Center, Suite 1300, New York, New York 10048; and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
can be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, copies
of such reports, proxy statements and other information concerning the Company
may also be inspected and copied at the library of the New York Stock Exchange,
20 Broad Street, New York, New York 10007.
The Company has filed with the Commission a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Common Stock being offered pursuant to
this Prospectus. This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement and the
documents incorporated herein by reference which may be examined without charge
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549. Copies thereof may be obtained
from the Commission upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-6635) pursuant
to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1994;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended December
31, 1995;
3. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1995; and
4. All other documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Common Stock.
Any statement contained in a document incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus and the
Registration Statement of which it is a part to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated herein modifies or replaces such statement. Any statement so
modified or superseded shall not be deemed, in its unmodified form, to
constitute a part of this Prospectus or such Registration Statement.
The Company will provide, without charge, upon written or oral request from
any person to whom a copy of the Prospectus is delivered, a copy of any of the
documents incorporated by reference in this Prospectus, not including exhibits
to such documents. Such requests should be directed to Applied Magnetics
Corporation, 75 Robin Hill Road, Goleta, California 93117-3108, Attention:
Secretary, telephone: (805) 683-5353.
_______________________
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THE COMPANY
The Company is a leading independent supplier of magnetic recording heads and
of head stack assemblies for rigid disk drives. The Company supplies advanced
inductive thin-film disk head products, magnetoresistive ("MR") disk head
products and ferrite disk head products, including ferrite metal-in-gap ("MIG")
and double-MIG disk heads and head stack assemblies.
The Company was incorporated in California in 1957 and reincorporated in
Delaware in 1987. The Company's principal offices are located at 75 Robin Hill
Road, Goleta, California 93117-3108, telephone number (805) 683-5353.
RISK FACTORS
In addition to the other information contained in the Prospectus and the
documents incorporated herein by reference, investors should consider the
following factors before purchasing the Common Stock being offered by this
Prospectus.
The Company has experienced losses during the years ended September 30, 1990,
1991, 1992, 1993 and 1994. During these years, the Company lost market share as
its competitors responded more rapidly to changes in the market and were able to
deliver products in volume more consistently. Operating margins fell due to
several factors, including the decline in relatively high margin ferrite disk
head shipments, difficulties in thin-film production, the combination of high
fixed costs and low production and shipment volumes for thin-film operations,
substantial research and development expenditures on thin-film technology,
restructuring charges of $12 million, $18 million and $49 million in fiscal
1991, 1992 and 1993, respectively, and substantial bad debt reserves taken
following customer bankruptcies. While the Company has taken steps to correct
these problems, there is no assurance that these problems will not continue in
the future, and operating losses have continued in the first half of fiscal
1995. In August, 1994, the Company engaged the consulting firm of Grisanti,
Galef & Goldress, Inc. ("GG&G") to provide crisis management and turnaround
assistance and advice to the Company. Mr. Craig D. Crisman of GG&G, who has
considerable experience in turnaround engagements, was appointed as the
Company's Chief Executive Officer. Significant cost reductions have been
implemented, including reductions in employment, curtailment of capital
expenditures, consolidations of manufacturing activities, production and other
resources and sales of excess properties and assets. The implementation of
aggressive cash management practices and the Company's sale of its tape head
business unit to Seagate in December, 1994, have, together with other cost
reductions and control practices, improved the Company's cash and working
capital resources. The Company has also implemented additional manufacturing and
process control procedures in an effort to resolve its thin-film production
problems. There is no assurance, however, that these efforts will be successful
and that management's plan to return the Company to profitability will be
realized.
TRANSITION TO THIN-FILM FROM FERRITE DISK HEAD PRODUCTS; THIN-FILM PRODUCTION
PROBLEMS
Historically, the Company was a leading independent supplier of ferrite disk
heads, which accounted for a majority of net sales as recently as the year ended
September 30, 1993. The market for ferrite heads is declining rapidly, both
absolutely and as a proportion of the Company's business, as the disk drive
industry moves to smaller, higher capacity, higher performance drives and the
availability of higher performance thin-film heads increases. Ferrite disk
heads accounted for approximately 16% of net sales for the quarter ended
December 31, 1994, compared to approximately 34% and 49%, respectively, for the
quarters ended September 30, 1994 and December 31, 1993. Ferrite disk head
sales dropped from $34,721,000 in the December quarter of 1993 to $8,984,000 in
the December quarter of 1994. As a result of the market shift away from ferrite
disk heads, the Company has focused its long range strategies on thin-film disk
head products. Although the Company expects to continue to produce ferrite disk
head products, as long as there is demand for sufficient volume to be
profitable, it is concentrating its financial and management resources on
improving and increasing production of inductive thin-film disk heads and on the
development and commercialization of MR disk heads. The Company has
historically experienced manufacturing problems and production yield and quality
issues in achieving volume production of thin-film disk heads, and its thin-film
operations have not been profitable to date. The Company reorganized its thin-
film operations and added key management and technical personnel in 1992 and
reorganized again in 1994 in an effort to resolve its production problems. The
production yield, quality and manufacturing difficulties experienced by the
Company during fiscal 1994 included problems relating to its ability to produce
wafers for thin-film disk heads with acceptable production yields from the
Company's six-inch line. The Company has implemented additional manufacturing
and process control procedures and other steps which resulted in improved yields
in its wafer fabrication activities, including the six-inch line, during the
last quarter of fiscal 1994, and continuing into the first quarter of 1995.
There is no assurance, however, that efforts to maintain production yields at
acceptable levels will
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not be adversely affected by similar or other difficulties that may arise with
respect to new products, new product designs or changes in manufacturing
processes which would result in lower than acceptable production yields. If the
Company is unable to increase inductive thin-film production, maintain quality
and compete profitably in the thin-film disk head market, there would be a
significant continuing adverse effect on the Company's future operating results.
ABILITY TO ACHIEVE DESIGN-IN POSITIONS AND RESPOND TO CUSTOMER DEMANDS
Disk drive manufacturers develop a variety of different drive programs to meet
different design, performance and cost requirements. Magnetic recording head
suppliers, such as the Company, seek to have their heads "designed-in" for a
particular drive program and to become qualified as a primary supplier for the
new drive. Achieving such a "design-in" position is usually a significant
competitive advantage relative to suppliers who are not initially qualified on
the new drive program. The development and commencement of production of disk
head products for a new drive program involves major expenditures for product
design, production engineering and capital equipment. Often, certain production
processes must also be adjusted to accommodate the unique specifications of the
new design. The disk head industry is intensely competitive, and if the
Company's production problems and related financial difficulties, including
operating losses and limitations on capital resources, continue or recur, the
Company's ability to achieve design-in positions on future, new disk head
products and its ability, once having achieved design-in status on such
products, to execute on production programs could be adversely affected.
Accordingly, there are no assurances that the Company will be able to continue
these design-in successes. Further, its financial difficulties, limited
resources and aggressive cash management/cost reduction activities may limit or
delay the Company's ability to direct sufficient technical, research or other
resources, on a timely basis, to new products or new generations of existing
products in response to customer demands. If the Company is unable to achieve
future design-in positions on major disk drive programs or respond adequately to
customer demands, its competitive position and future years' operations will be
materially and adversely affected.
RAPID TECHNOLOGICAL CHANGES; SHORT PRODUCT LIFE CYCLES
The magnetic recording head industry is characterized by rapidly changing
technology, short product life cycles and price erosion. The demand for
smaller, lighter products with greater data storage capacity requires disk drive
and disk head manufacturers to continue to build greater performance into
smaller products. To compete in this environment, the Company must work closely
with its customers to anticipate technological changes and product lives,
develop new products and production technologies and deliver new products in
volumes consistent with customer demand. In recent years, the Company's results
of operations and market share have been adversely affected because the Company
did not adapt quickly enough to changing market conditions and was unable to
resolve its thin-film production problems so as to deliver products in
sufficient volume. If the Company is unable to adapt quickly enough to future
changes, its operating results will continue to be adversely affected and
management's plans to return the Company to profitability may be unrealized.
The Company believes that as the trend toward smaller drives with higher
capacity and performance continues, there will be significant demand for MR disk
heads which offer performance advantages in small form factor disk drives. The
Company is concentrating substantial resources on MR development and is
currently delivering prototype volumes of MR disk heads. There is no assurance,
however, that the Company will not experience production problems similar to
those experienced with respect to volume production of thin-film disk heads. The
Company's operating results could be adversely affected, however, if a market
does not develop or if the Company cannot develop the ability on a timely basis
to produce MR disk heads in volume on a cost-effective basis.
CAPITAL NEEDS; RELIANCE ON SHORT-TERM BORROWING
The magnetic recording head industry is capital intensive and requires
significant expenditures for research and development to develop and exploit
technological improvements and new technologies. The Company believes that, in
order to achieve its objectives, it will need significant additional resources
over the next several years for capital expenditures, working capital and
research and development. In fiscal 1995, the Company plans to spend
approximately $49 million on capital expenditures, primarily to improve thin-
film production processes, expand thin-film production capacity and continue
development of MR technologies. The Company has implemented an operating and
cash flow management plan intended to provide sufficient cash flow from
operations to meet its operating and capital expenditure requirements. There is
no assurance, however, that the management plan will produce funds sufficient
for fiscal 1995 needs, and in any event, the Company expects that additional
sources of capital will be needed to meet requirements in future years. There
is no assurance that such additional funds will be available to the Company, and
the Company will have greater difficulty obtaining capital from external sources
if it is unable to achieve management's goal to return the Company to
profitability. If the Company is unable to obtain such capital, it would need
to curtail its capital equipment, research and development and working capital
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expenditures which could adversely affect the Company's future years' operations
and competitive position. At March 31, 1995, the Company had outstanding
approximately $46.8 million of short-term borrowings in a floating rate demand
loan made to the Company's Malaysian subsidiary by a bank in Malaysia. The
Company has substantial manufacturing operations in this country. In May 1995,
the Malaysian subsidiary accepted an offer from the bank to continue the credit
facility. The facility is secured by the subsidiary's real estate and is subject
to certain covenants which preclude the subsidiary from granting liens and
security interests in other assets. While the Company has no reason to believe
that the bank will not continue to make this credit available in the future, if
the loan were called it would produce a serious liquidity shortage and result in
breach of covenants in other borrowing facilities maintained by the Company. The
Company has also arranged a $35 million revolving credit facility with CIT
Group/Business Credit, Inc. under which it had drawn $10 million at March 31,
1995. The balance available for additional borrowings under the credit facility,
based on eligible trade accounts receivable, was approximately $1.0 million as
of March 31, 1995.
The Company has obtained an extension until March 31, 1996, of the
maturity date of a $10.0 million revolving credit facility from a commercial
bank. This facility is secured by a letter of credit carried for the account of
Hitachi Metals, Ltd. ("HML"). The Company's obligation to reimburse HML for any
drawdown against the letter of credit is secured by a security interest in and
lien against certain machinery and equipment.
CYCLICAL PRODUCT DEMAND; UNCERTAIN LONG-TERM CAPACITY REQUIREMENTS
The disk drive industry is cyclical and has been characterized by periods of
intense product demand requiring high production levels followed by periods of
oversupply, order cancellations, pricing pressure and reduced production levels.
During periods of high demand, the Company has expanded production facilities
but at times has been unable to expand facilities and hire and train production
personnel rapidly enough to meet the demand for its products. Conversely, in
periods of lower demand, the Company has had excess production capacity and has
experienced margin declines. In recent years, both the Company and its major
competitors have expanded their production capacity, particularly for thin-film
products, and the Company intends to expand its capacity further in 1995. There
is no assurance that market demand will continue to be adequate to absorb this
expanded capacity. The Company's operating results would be adversely affected
during periods when production capacity is under-utilized and capacity exceeds
demand and the Company is unable to increase sales to cover fixed costs.
THIN-FILM PROCESS COMPLEXITY
Thin-film disk heads are produced in a complex manufacturing process involving
numerous steps, each of which is critical to high volume production at
acceptable yields and costs. The high performance characteristics of the
Company's thin-film heads require extremely fine tolerances and a controlled
manufacturing environment. Minor deviations in the wafer fabrication or
machining process or in the composition of raw materials can cause significant
yield loss and could result in the suspension of production. During the course
of the development of its thin-film manufacturing process, the Company
experienced difficulty in achieving volume production at acceptable yields. Due
to the number of steps and complexity involved in the thin-film manufacturing
process, technical and processing problems which may occur early in the
production process, but which may not be discovered until the later stages of
production, can result in a significant increase in the costs associated with
these production problems. Increasingly shortened product life cycles, which
require the Company to bring new products into production more rapidly, increase
the problems associated with process complexity. The Company believes that
manufacturing processes for MR products under development will be more complex
than for inductive thin-film products. The Company's future success will
depend, among other things, on its ability to continue to improve its yields of
thin-film products. There is no assurance that the Company will be able to
develop and produce new thin-film products in volume at commercially acceptable
yields.
FLUCTUATIONS IN OPERATING RESULTS
The Company's operating results have fluctuated and may continue to fluctuate
from quarter to quarter and year to year. Operating results may be adversely
affected by a variety of factors such as significant variations in product
yields, changes in product mix, increased production and engineering costs
associated with initial production for new customer programs, increases in cost
or limitations on availability of materials, labor shortages, excess or
inadequate production capacity and decreases in demand or selling prices.
Furthermore, the Company's sales are generally made pursuant to individual
purchase orders and production is scheduled and customer-specific materials are
ordered on the basis of such purchase orders. The Company has experienced
cancellation and rescheduling of orders or reductions in quantities as customer
requirements change. As a result, its backlog may not be a reliable indicator
of future sales. Even though the Company may in some cases be entitled to
adjust prices or recover certain costs, cancellation, rescheduling and quantity
reductions may nevertheless result in inventory losses, underutilization of
production capacity and writedowns of tooling and equipment.
COMPETITION; LIMITED NUMBER OF CUSTOMERS
The disk head industry is intensely competitive and largely dependent on sales
to a limited number of major disk drive manufacturers and systems companies. The
Company's ability to obtain new orders from customers depends
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on its ability to anticipate technological changes, develop products to meet
individualized customer requirements and timely deliver products that meet
customer specifications at competitive prices. In addition, the disk drive
industry is intensely competitive and disk drive manufacturers may quickly lose
market share as a result of technological innovations of their competitors or
various other factors. In recent years several disk drive manufacturers have
experienced bankruptcy. A reduction in orders from or the loss of a customer,
which could occur for any of a variety of reasons, could have a material adverse
effect on the Company's operations. The Company has depended and expects to
continue to depend upon a limited number of customers for most of its sales.
The Company's top four customers accounted for 86% of the Company's net sales in
fiscal 1994, and sales to Connor Peripherals, Inc. represented approximately 53%
of net sales. Maxtor, which accounted for approximately 13% of the Company's
fiscal 1994 net sales, has recently announced continuing operating losses and
significant actions to reorganize and consolidate its operations. In addition,
Quantum, which accounted for approximately 10% of the Company's fiscal 1994 net
sales, has acquired a controlling interest in a supplier that is engaged,
primarily, in the development, production and sale of MR disk heads. These or
other similar developments could restrict or limit the development of major, new
disk drive programs for which the Company anticipates supplying disk heads or
prevent Maxtor or other customers from completing existing, major disk drive
programs for which the Company supplies disk head. Similar events could occur
with respect to one or more of the Company's other customers. If the Company is
unable to increase its sales to other customers, there could be a material
adverse effect on the Company's operating results.
DEPENDENCE ON FOREIGN OPERATIONS
The Company conducts substantially all of its production assembly and test
operations at its facilities in Korea and Malaysia. In addition, the Company
has contractual relationships with unaffiliated parties who conduct
manufacturing and assembly operations on a contract-labor basis for the Company
in Malaysia and Korea. The Company's operations in Korea have, from time to
time in recent years, been affected by labor disruptions and slow downs. In
addition to risks of labor disruption, civil unrest and political instability,
the Company's foreign operations subject it to risks associated with obtaining
governmental permits and approvals, currency exchange fluctuations, currency
restrictions, trade restrictions and changes in tariff and freight rates.
DEPENDENCE ON KEY PERSONNEL
The success of the Company's thin-film and MR operations and development
programs largely depends on a limited number of key management and technical
personnel as well as on its continued ability to attract and retain skilled
engineering and technical personnel. The Company does not maintain key man life
insurance on the lives of key employees. Competition for qualified technical
and engineering personnel is intense and the Company's future will depend, in
large part, on its ability to continue to attract, retain, train and motivate
highly skilled and dedicated employees. Certain employees of the Company are
subject to the terms of confidentiality agreements with respect to proprietary
information of their former employers. The failure of these employees to comply
with the terms of their agreements could result in assertion of claims against
the Company and such employees which, if successful, might restrict their role
with the Company and could have a material adverse effect on the Company's
business.
SOURCES OF SUPPLY
The Company relies on multiple, independent suppliers for substrates,
photoresist, wire and other materials used in the manufacture of thin-film disk
heads and ferrite sliders, and for wire and other materials used in the
manufacture of ferrite disk heads. Although the Company has not experienced
significant limitations on the availability of these materials, shortages could
occur in the future. These developments could disrupt the Company's production
volume and have an adverse effect on the Company. While the Company itself
manufactures approximately one-half of its total requirements for suspensions
used in both ferrite and thin-film disk head products, it purchases most of its
remaining requirements for these components from Hutchinson Technology. Except
for standard purchase orders issued by it from time to time for the procurement
of these suspensions and customary agreements relating to proprietary and
confidential information, the Company does not have any contractual relationship
with Hutchinson. If the Company experienced quality or production problems with
its internal suspension manufacturing resources, its dependence on outside
suppliers, such as Hutchinson, for these components would be significantly
increased. Further, such circumstances could result in limited availability and
increased prices with respect to these materials. In addition, if the Company
for any reason was unable to obtain adequate quantities of suspensions from
Hutchinson, the Company's operating results would be adversely affected.
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ENVIRONMENTAL REGULATIONS AND WATER SUPPLY RESTRICTIONS
The Company uses certain hazardous chemicals in its manufacturing process and
is subject to a variety of environmental and land use regulations relating to
the use, storage, discharge and disposal of such chemicals and the conduct of
its manufacturing operations. California recently enacted legislation generally
referred to as "permit by rule." This legislation requires permits for any
treatment or transportation of materials considered hazardous wastes. Although
the Company has received the necessary permits, a failure by the Company to
comply with present or future regulations could subject it to liability or
result in production suspension or delay. In addition, environmental and land
use regulations could restrict the Company's ability to expand its present
production facilities or establish additional facilities in other locations, or
could require the Company to acquire costly equipment or to incur other
significant expenses to comply with environmental regulations or to clean up
prior discharges. The Company, which is subject to water use restrictions, uses
a significant amount of water in its manufacturing process. Although to date
the Company has been able to obtain sufficient water supplies without
significantly increased costs, stricter water use restrictions may be mandated
and additional expenditures for water reclamation and conservation may be
required. Any further restrictions on water use could require the Company to
reduce production and materially adversely affect the Company's operating
results.
VOLATILITY OF STOCK PRICE
The trading price of the Company's Common Stock has fluctuated widely in
response to quarter-to-quarter operating results, industry conditions, awards of
orders to the Company or its competitors, new product or product development
announcements by the Company or its competitors, general market and economic
conditions and other events or factors. The volatility of the stock markets in
recent years has caused wide fluctuations in trading prices of stocks of high
technology companies independent of their individual operating results. The
market value of the Company's Common Stock at any given time may be adversely
affected by factors independent of the Company's operating results.
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STOCK OPTIONS
In August 1994, the Company engaged GG&G, a consulting firm specializing in
the turnaround of troubled businesses, to provide crisis management and advise
the Company in developing and implementing a turnaround plan. Craig D. Crisman
of GG&G has been appointed as President, Chief Executive Officer and Chief
Financial Officer of the Company. Other representatives of GG&G provide
services to the Company in various capacities.
In connection with GG&G's engagement, the Company agreed on September 29, 1994
to grant GG&G an option to purchase 250,000 shares of the Company's Common
Stock. GG&G has assigned the option to an affiliated partnership GG&G Equity
Partners ("GG&G Partners"). As permitted by the terms of the option, GG&G
Partners distributed interests in the option ("Partial Options") to 11 of its
partners or trusts for their benefit (the "Selling Stockholders").
The Partial Options are exercisable at any time until the earlier of five
years from the date of grant, the date of any termination by GG&G of its
consulting agreement with the Company or 30 days after any termination of such
consulting agreement by the Company if within such 30 days the Board of
Directors of the Company determines in good faith that the objectives set forth
in the consulting agreement have not been achieved. The exercise price of the
options is $4.125 per share, the fair market value of the Common Stock on the
date of the approval of the grant of the option by the Company's Board of
Directors. The Partial Options are not assignable and may be exercised only
by the holder or, in the event of the holder's death, by a person who acquired
the right to exercise by bequest or inheritance.
SELLING STOCKHOLDERS
This Prospectus may be used in connection with the sale of certain shares of
the Company's Common Stock by the Selling Stockholders. Such shares may be
acquired by the Selling Stockholders on the exercise of the Partial Options to
purchase shares of the Company's Common Stock granted in connection with the
engagement by the Company of GG&G. The following table provides information as
to the shares of Common Stock owned beneficially by the Selling Stockholders as
of May 12, 1995, the number of shares to be sold by the Selling Stockholders and
the number of shares which will be owned by Selling Stockholders after the
offering.
<TABLE>
<CAPTION>
Number Number
of of
Name and Shares Shares Number of Shares
Relationship Owned Before Shares to to be Owned After
to the Company the Offering (1) be Sold (2) the Offering (2)
--------------------------------------- ---------------- ----------- -----------------
<S> <C> <C> <C>
Martin Batt-Keough MP 5,357 5,357 0
Craig D. Crisman, President and Chief 119,643 119,643 0
Executive Officer of the Company
Marvin A. Davis Inc. Defined Benefit 5,357 5,357 0
Pension Fund
American Consolidated Resources, Inc. 42,858 42,858 0
Retirement Trust
The J. Goldress Revocable Trust 37,500 37,500 0
Lynda Dawson 12,500 12,500 0
Lee N. Katz Profit Sharing Trust 5,357 5,357 0
Carole O'Connor 5,357 5,357 0
Richard J. Puricelli 5,357 5,357 0
Richard D. Saunders - IRA 5,357 5,357 0
W. Gary Suttle 5,357 5,357 0
-------
Total 250,000
=======
---------------------------
</TABLE>
(1) Consists of shares subject to the Partial Options and assumes the exercise
in full of all of the Partial Options.
(2) Assumes the sale of all shares purchased on the exercise of the Partial
Options.
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PLAN OF DISTRIBUTION
Shares acquired on the exercise of Partial Options may be offered and sold by
the Selling Stockholders from time to time and in such amounts as the Selling
Stockholders determine. It is anticipated that the shares will be resold to the
public through the usual brokerage channels on the New York Stock Exchange, or
otherwise, at prevailing market prices and subject to the usual and customary
commissions.
LEGAL MATTERS
The validity of the shares of Common Stock will be passed upon for the
Company by Raymond P. Le Blanc, Vice President, Secretary and General Counsel to
the Company. As of April 30, 1995, Mr. Le Blanc owned 23,133 shares of the
Company's Common Stock and held options to purchase 73,817 additional Shares.
EXPERTS
The financial statements and schedules incorporated by reference in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
INDEMNIFICATION
Section 145 of the Delaware General Corporation Law permits indemnification of
directors, officers and agents in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Act"). Article Seventh of the Bylaws of the Company requires
indemnification to the full extent authorized by the General Corporation Law of
Delaware. The Company also maintains insurance policies which insure its
officers and directors against certain liabilities.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
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No person is authorized to give any information or to make any representations
other than contained in this Prospectus in connection with the offer hereby
made, and, if given or made, such information or representations must not be
relied upon as having been authorized. This Prospectus does not constitute an
offer to buy any securities other than the registered securities to which it
relates or an offer to buy such securities in any jurisdiction to any person to
whom it is unlawful to make such offer or solicitation in such jurisdiction.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information herein is
correct as of any time subsequent to its date.
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APPLIED MAGNETICS CORPORATION
COMMON STOCK
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PROSPECTUS
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