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 28, 1996
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
Financial Statements Page
- -------------------- -----
Report of Independent Public Accountants 3
Statements of Financial Condition -
September 28, 1996 and September 30, 1995 4
Statements of Changes in Plan Equity for the
years ended September 28, 1996, September 30, 1995 and
September 30, 1994 5
Notes to Financial Statements, September 28, 1996 6
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 20, 1996 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 28, 1996 and September 30, 1995, and the related statements of
changes in plan equity for each of the three years in the period ended September
28, 1996. 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 28,1996 and September 30, 1995, and the changes in Plan equity for
each of the three years in the period ended September 28, 1996, in conformity
with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Los Angeles, California
December 17, 1996
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APPLIED MAGNETICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL CONDITION
As of
September 28, September 30,
------------ -------------
ASSETS 1996 1995
- ------ ---- ----
Investments in common stock of
Applied Magnetics Corporation,
at market value (cost of $612,440
in 1996 and $620,128 in 1995) $1,164,824 $1,210,594
Cash 111 408
Contributions due from participants 20,500 14,860
---------- ----------
$1,185,435 $1,225,862
========== ==========
LIABILITIES AND PLAN EQUITY
- ---------------------------
Excess contributions from
Applied Magnetics Corporation
at market value (cost of $206,465
in 1996 and $225,114 in 1995) $ 411,894 $ 394,063
Plan equity 773,541 831,799
---------- ----------
$1,185,435 $1,225,862
========== ==========
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
For The Years Ended
September 28, September 30, September 30,
------------- ------------- -------------
1996 1995 1994
---- ---- ----
Contributions from
participants $180,537 $154,541 $283,365
Contributions from Applied
Magnetics Corporation,
net of forfeitures 47,191 (554) 64,124
Distributions to participants (220,162) (337,990) (635,167)
Change in unrealized
appreciation/depreciation)
of investments, net (65,824) 671,655 (39,778)
----------- --------- --------
Increase (decrease) in
plan equity (58,258) 487,652 (327,456)
Plan equity, beginning
of year 831,799 344,147 671,603
----------- --------- ----------
Plan equity, end of year $773,541 $831,799 $344,147
========= ======== =========
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 28, 1996
Note 1. Description
-----------
The following description of the Applied Magnetics Corporation Employee
Stock Purchase Plan (the "Plan") provides only general information. Participants
should refer to the Plan agreement for a more complete description of the Plan's
provisions. 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 the
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 28, 1996, 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 28,
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1996, unvested Company contributions had a market value of $387,012 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 1996, 1995 and 1994 were $12,988, $52,068 and $30,332,
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 65,165 and 77,478 shares at September
28, 1996 and September 30, 1995, respectively. The Company's common stock is
valued at its quoted market price. The closing sales prices of the Company's
common stock on the New York Stock Exchange on September 28, 1996 and December
17, 1996, were $17.875 and $28,125, 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 28,
1996, but have not received such amounts until October, 1996 are not reflected
in liabilities and are included in "Plan equity" at September 28, 1996.
Withdrawals and distributions included in "Plan equity" as of September 28,
1996, and September 30, 1995 are as follows:
1996 1995
---- ----
Payable to withdrawing participants $4,755 $122,625
====== ========
Note 5. Unrealized Appreciation/(Depreciation) of Investments
-----------------------------------------------------
Unrealized appreciation/(depreciation) included in investments for the
years ended September 28, 1996, September 30, 1995 and September 30, 1994 were
as follows:
1996 1995 1994
---- ---- ----
Balance, beginning of year $590,446 $(355,473) $(320,011)
Change in unrealized appreciation/
(depreciation) (38,082) 945,939 (35,462)
---------- ---------- ------------
Balance, end of year $552,384 $ 590,466 $(355,473)
======== ========= ==========
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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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