SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the
- - --- Securities Exchange Act of 1934
For the period ended June 25, 1994.
Transition report pursuant to Section 13 or 15(d) of the
- - --- Securities Exchange Act of 1934
For the transition period from to
---------- -----------
Commission File Number 0-14016
MAXTOR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 770123732
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
211 River Oaks Parkway, San Jose, CA 95134
(Address of principal executive offices) (Zip Code)
(408) 432-1700
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 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.
X Yes No
30,855,171 shares of Common Stock and 19,480,000 shares of Class A
Common Stock were issued and outstanding as of July 29, 1994
This quarterly report on Form 10-Q contains 38 pages of which this is
page number 1.
MAXTOR CORPORATION
FORM 10-Q
June 25, 1994
INDEX
Part I. Financial Information Page
- - ------------------------------ ----
Item 1. Consolidated Financial Statements
Consolidated Statements of Loss -
Three Months Ended June 25, 1994
and June 26, 1993 3
Consolidated Balance Sheets-
June 25, 1994 and March 26, 1994 4-5
Consolidated Statements of Cash Flows-
Three Months Ended June 25, 1994
and June 26, 1993 6-7
Notes to Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-15
Part II. Other Information
- - ------------------------------
Item 1. Legal Proceedings 16
Item 6. Exhibits and Reports on Form 8-K 16
Signature Page 17
PART I. FINANCIAL INFORMATION
----------------------------------
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
MAXTOR CORPORATION
CONSOLIDATED STATEMENTS OF LOSS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
--------------------------
June 25, June 26,
1994 1993
----------- -----------
Revenue $ 218,310 $ 260,574
Cost of revenue 194,286 278,583
----------- -----------
Gross margin 24,024 (18,009)
Operating expenses:
Research and development 14,036 30,676
Selling, general and administrative 21,045 20,575
----------- -----------
Total operating expenses 35,081 51,251
Loss from operations (11,057) (69,260)
Interest expense (1,971) (3,099)
Interest income 1,439 680
----------- -----------
Loss before income taxes (11,589) (71,679)
Provision for income taxes 600 500
----------- -----------
Net loss $ (12,189) $ (72,179)
=========== ===========
Net loss per share $ (0.24) $ (2.50)
=========== ===========
Shares used in computing net loss per share 49,925 28,887
=========== ===========
See accompanying notes.
MAXTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 25, March 26,
1994 1994
------------ ------------
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $ 93,918 $ 144,520
Short-term investments 92,576 74,911
Accounts receivable, net of
allowance for doubtful accounts
of $4,100 at June 25, 1994 and
$3,653 at March 26, 1994 88,001 99,806
Inventories:
Raw materials 56,038 51,419
Work-in-process 16,262 19,196
Finished goods 25,189 25,408
------------ ------------
97,489 96,023
Prepaid expenses and other 6,910 7,936
------------ ------------
Total current assets 378,894 423,196
Property, plant and equipment, at cost:
Buildings 21,387 21,387
Machinery and equipment 175,212 195,820
Furniture and fixtures 17,524 18,195
Leasehold improvements 13,786 17,506
------------ ------------
227,909 252,908
Less accumulated depreciation and
amortization (170,388) (191,750)
------------ ------------
Net property, plant and equipment 57,521 61,158
Other assets 7,064 8,021
------------ ------------
$ 443,479 $ 492,375
============ ============
See accompanying notes.
MAXTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Continued)
June 25, March 26,
1994 1994
------------ ------------
(Unaudited) (Audited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 30,000 $ 30,000
Accounts payable 113,072 137,566
Income taxes payable 7,622 7,530
Accrued payroll and payroll-related
expenses 12,450 11,720
Accrued warranty 26,226 27,281
Accrued special and restructuring 10,731 21,777
Accrued expenses 25,882 25,700
Long-term debt and capital lease
obligations due within one year 3,777 4,155
------------ ------------
Total current liabilities 229,760 265,729
Long-term debt and capital lease
obligations due after one year 106,524 107,393
Deferred tax liabilities 66 66
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value,
5,000,000 shares authorized;
no shares issued or outstanding - -
Class A common stock (convertible),
$0.01 par value, 19,480,000 shares
authorized; issued and outstanding:
June 25, 1994 and March 26, 1994 -
19,480,000 shares 195 195
Common stock, $0.01 par value,
180,520,000 shares authorized;
issued and outstanding:
June 25, 1994 - 30,463,190 shares;
March 26, 1994 - 30,425,242 shares 304 304
Additional paid-in capital 320,695 320,564
Retained earnings (deficit) (213,938) (201,749)
------------ ------------
107,256 119,314
Less notes receivable from stockholders (127) (127)
------------ ------------
Total stockholders' equity 107,129 119,187
------------ ------------
$ 443,479 $ 492,375
============ ============
See accompanying notes.
MAXTOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
--------------------------
June 25, June 26,
1994 1993
----------- -----------
Increase (decrease) in cash and
cash equivalents
Cash flows from operating activities:
Net loss $ (12,189) $ (72,179)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 10,734 20,511
(Gain) loss on disposal of property,
plant and equipment 17 (3)
Change in assets and liabilities:
Accounts receivable, net 11,805 46,683
Inventories (1,466) (371)
Prepaid expenses and other 1,026 1,048
Accounts payable (24,494) (3,676)
Income taxes payable 92 (216)
Accrued payroll and payroll-related
expenses 730 (1,698)
Accrued warranty (1,055) (414)
Accrued special and restructuring 182 -
Accrued expenses (11,046) 3,163
----------- -----------
Total adjustments (13,475) 65,027
----------- -----------
Net cash used in operating activities (25,664) (7,152)
Cash flows from investing activities:
Purchases of short-term investments (25,094) -
Proceeds from maturity of short-term
investments 7,429 -
Purchase of property, plant and equipment (5,445) (11,445)
Proceeds from disposal of property,
plant and equipment 128 241
Other (818) 219
----------- -----------
Net cash used in investing activities (23,800) (10,985)
Cash flows from financing activities:
Proceeds from issuance of short-term
borrowings, net of payments - (6,000)
Proceeds from issuance of debt 59 5,198
Principal payments on debt (1,215) (12,455)
Principal payments under capital lease
obligations (113) (441)
Proceeds from issuance of common stock,
net of notes receivable, stock
repurchases and tax benefits 131 2,906
----------- -----------
Net cash used in financing activities (1,138) (10,792)
----------- -----------
Net change in cash and cash equivalents (50,602) (28,929)
Cash and cash equivalents at beginning
of period 144,520 135,324
----------- -----------
Cash and cash equivalents at end of period $ 93,918 $ 106,395
=========== ===========
See accompanying notes
Supplemental disclosures of cash flow information:
(In thousands) Three Months Ended
- - ---------------------------------------------------------------------
June 25, June 26,
1994 1993
- - ---------------------------------------------------------------------
Cash paid (received) for: (Unaudited)
Interest $ 279 $ 1,233
Income taxes 248 62
Income tax refunds (11) -
- - ---------------------------------------------------------------------
Supplemental information on non-cash investing and financing
activities:
Capital lease obligations approximating $22,000 and $72,000 were
incurred during the first quarters of fiscal years 1995 and 1994,
respectively.
MAXTOR CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
1. Consolidated financial statements
The accompanying unaudited consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. The consolidated financial statements include the
accounts of Maxtor Corporation (Maxtor or the Company), its wholly-
owned subsidiaries, and Maxoptix Corporation (Maxoptix), a
corporation jointly-owned by Maxtor (62%) and Kubota Corporation of
Japan (33%). In connection with the sale of the assets of Storage
Dimensions, Inc. (SDI), formerly a wholly-owned subsidiary of the
Company, Maxtor acquired a 32.8% interest in the company formed for
the purpose of purchasing the net assets of SDI. Maxtor accounts for
its investment under the equity method. All significant intercompany
transactions have been eliminated in consolidation. All adjustments
of a normal recurring nature which, in the opinion of management, are
necessary for a fair statement of the results for the interim periods
have been made. It is recommended that the interim financial
statements be read in conjunction with the Company's consolidated
financial statements and notes thereto for the fiscal year ended
March 26, 1994. Interim results are not necessarily indicative of
the operating results expected for later quarters or the full fiscal
year.
2. Short-term borrowings
In September 1993, the Company obtained a secured, asset-based
revolving line of credit of $76.0 million. This line of credit
provides for borrowings up to $76.0 million based on eligible
receivables at various interest rates over a two-year term and is
secured by receivables, certain inventories and other assets. The
line of credit expires in September 1995. As of June 25, 1994, $30.0
million of borrowings and $2.9 million of letters of credit were
outstanding. The $30.0 million of borrowings was fully repaid during
the first fiscal week of July 1994. The availability of this line of
credit in the future depends on the Company meeting covenants,
including certain financial ratios. On June 17, 1994, the Company
received an amendment to its line of credit with respect to a certain
financial ratio which is measured at the end of each quarter. With
such amendment, the Company was in compliance with all financial
ratios during the most recent quarter ended June 25, 1994. As noted
in "Management's Discussion and Analysis of Financial Condition and
Results of Operations", the Company does not expect to be profitable
during the second quarter of fiscal year 1995. Depending on the
magnitude of the quarterly loss, the Company may need to renegotiate
its line of credit agreement to be in compliance with all financial
ratios for the quarter ended September 24, 1994.
3. Special & Restructuring
During the third quarter of fiscal year 1994, the Company decided to
discontinue certain products and manufacturing activities, and
recorded special charges amounting to $68.9 million in cost of
revenue. As of June 25, 1994, current liabilities included accruals
related to these special charges totaling approximately $13.3
million. The Company anticipates that the net expenditure of
approximately $4.4 million of cash will be required during the six-
month period ending December 24, 1994 to fund the remaining expenses
accrued. Such expenditures are expected to be funded by cash flows
from operations and investments.
The decisions described above reduced the scope of the Company's
product and manufacturing activities and, as a result, the Company
then initiated a restructuring plan which provides for the
consolidation and streamlining of certain operations and
administration. The Company recorded a restructuring charge of $19.5
million in the third quarter of fiscal year 1994 related to these
activities which are expected to be completed within the twelve-month
period from the date of the charge. As of June 25, 1994,
approximately $5.3 million of the $19.5 million charge remained in
current liabilities and is primarily associated with facility
consolidations, including lease and other obligations on certain
facility leases. The Company anticipates that the completion of
restructuring actions will require the expenditure of approximately
$5.3 million of cash during the remaining six-month period and is
expected to be funded by cash flows from operations and investments.
4. Net loss per share
Net loss per share is based upon the weighted average number of
shares of all classes of common stock outstanding during the quarters
ended June 25, 1994 and June 26, 1993.
5. Contingencies
As part of the acquisition of the MiniScribe business in June 1990,
the Company was assigned a patent license agreement between
MiniScribe and Rodime plc (Rodime) covering patents related to 3.5-
inch disk drives. The Company believes that the assignment was
valid; however, Rodime has taken the position that the assignment was
invalid and would not in any event cover 3.5-inch drives manufactured
and sold by the Company before the acquisition of MiniScribe's
assets. In February 1993, Maxtor commenced an action for declaratory
relief in the U. S. Bankruptcy Court in Denver, Colorado seeking a
judgment that the assignment was valid. Rodime filed a denial and
counterclaim for patent infringement. In April 1994, the relevant
claims of the Rodime patent at issue in Rodime's counterclaims were
declared invalid in litigation between Rodime and another disk drive
manufacturer. The Company's litigation with Rodime has been stayed
pending Rodime's appeal of the finding of invalidity. Certain other
claims, including other patent infringement claims, against the
Company have arisen in the course of its business. There is
presently no litigation involving such claims, and the Company
believes the outcome of these claims and the claim concerning Rodime
described above will not have a material adverse effect, if any, on
the Company's financial position or results of operations.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto.
(Tabular information: Dollars in millions, except per
share amounts)
RESULTS OF OPERATIONS
General
Since its inception in 1982, Maxtor Corporation (Maxtor or the
Company) has been subject to the highly cyclical nature of the disk
drive industry. In fiscal year 1993, as a result of an industry-wide
increase in demand and the related stabilization in prices, the
Company grew its revenue to over $1.4 billion. However, during the
last four months of fiscal year 1993 and continuing into the third
quarter of fiscal year 1994, the disk drive industry was experiencing
intense price competition and excess industry capacity, which
resulted in lower revenue for the Company. In the fourth quarter of
fiscal year 1994, revenue declined in connection with the Company's
decision in the third quarter of fiscal year 1994 to discontinue
certain unprofitable products. In fiscal year 1994, the Company
reported revenue of approximately $1.2 billion. The Company
experienced a further decline in quarterly revenue in the first
quarter of fiscal year 1995 primarily as a result of the Company's
inability to obtain required volumes of a key component for its 7000
Series product line. These components were supplied by a sole source
vendor who was experiencing production problems. The component
shortage was resolved prior to the end of the quarter, however, and
it is not expected to adversely affect revenue and unit sales for the
remainder of fiscal year 1995.
The Company incurred quarterly losses in each of the six consecutive
quarters beginning with the fourth quarter of fiscal year 1993 and
continuing through the first quarter of fiscal year 1995. Such
losses through the second quarter of fiscal year 1994 and continuing
into the third quarter of fiscal year 1994 were primarily the result
of negative industry conditions and the Company's inability to bring
certain products to market in a timely and cost effective manner.
The negative industry conditions were primarily the result of intense
price competition and excess industry capacity. In addition, the
Company's losses were the result of insufficient differentiation
between the products of the Company and its competitors, and efforts
by better financed competitors to increase market share. The Company
began to experience an increase in demand in the third quarter of
fiscal year 1994, with most products in short supply, concurrent
easing of price reductions and price increases on certain products.
Although general industry conditions improved during the latter half
of fiscal year 1994 and continued into the first quarter of fiscal
year 1995, the Company continued to incur losses as a result of
continuing cost and time-to-market issues with regard to its new
products. The high start-up costs associated with developing and
commencing volume production on the new 1.8-inch form factor products
also contributed to the quarterly losses during that period.
Although general industry conditions improved and most of the
Company's competitors were profitable during that period of time, the
Company has not been profitable, and does not expect to be profitable
until the Company is successful in bringing new products to market in
a timely and cost effective manner. In addition, the level of price
competition increased again in the last month of the first quarter of
fiscal year 1995 and this increased price competition is expected to
continue at least through the second quarter of fiscal year 1995.
For these reasons, the Company does not expect to be profitable
during the second quarter of fiscal year 1995.
The disk drive industry is subject to rapid technological change and
short product life cycles as data storage manufacturers continually
strive for smaller form factors, larger storage capacities, higher
performance and lower cost. As a result, Maxtor expects that the
Company's new products will replace the products which accounted for
a majority of the Company's revenues in fiscal year 1994. Shorter
product life cycles also increase the importance of the Company's
ability to successfully manage product transitions. The failure to
adequately manage product transitions could result in the loss of
market opportunities, decreased sales of existing products,
cancellation of products or product lines, the accumulation of
obsolete and excess inventory and unanticipated charges related to
obsolete capital equipment.
During the fourth quarter of fiscal year 1994, the Company announced
a major shift in strategy, devoting Company resources primarily to
the design, manufacture and sale of its 7000 Series of inch-high, 3.5-
inch disk drives and its new family of mobile computing products,
including the MobileMax Family of PCMCIA-based mobile computing data
storage products. The Company believes this shift in strategy will
result in improved financial results, however, the Company's
financial results will be heavily dependent on the success of these
products. The Company's ability to anticipate market trends and to
successfully develop, manufacture in volume and sell new products in
a timely manner and at favorable gross margins will be important
factors affecting the Company's future results and there can be no
assurance that the Company will be successful in such efforts. The
Company has been less successful than its competitors in managing
product transitions, and successful new products introduced by
competitors have tended to displace older products, including the
Company's products. As noted earlier, the Company does not expect to
be profitable until the Company is successful in bringing new
products to market in a timely and cost effective manner.
The disk drive industry is intensely competitive and significant
price erosion is typical during the life of a product. Industry
participants include both independent suppliers and large computer
manufacturers that both supply their own internal requirements and
sell disk drives to third parties. Sales by such large computer
manufacturers to third parties are an increasingly important factor
in the market. Bringing new products to market on a timely basis has
become increasingly critical to competing in this market environment.
When a new product is not brought to market on a timely basis, the
selling price of older products must be reduced in order to compete
effectively with competitors' new products, which are being produced
at lower costs. If competitors introduce products which offer
greater capacity, better performance, lower prices or any combination
of these factors, or if certain customers produce more disk drives
for internal use, the Company's results of operations would be
adversely affected.
As a result of volatile business conditions in the personal computer
(PC) industry, including the trend toward consolidation among PC
manufacturers, sales to original equipment manufacturers (OEMs) have
become increasingly important to the success of the disk drive
industry participants. Although the Company intends to continue in
its efforts to increase its share of this large OEM market,
particularly in the marketing of its new products, there can be no
assurance that the Company will be successful in such efforts.
Furthermore, fluctuations in demand for computer systems, or other
end-user demand, can result, and have in the past resulted, in
deferral or cancellation of orders for the Company's products.
The Company's manufacturing process requires large volumes of high
quality components supplied by outside suppliers. The Company
periodically receives communication from vendors that they may be
unable to supply required volumes of certain key components. During
the first two months of fiscal year 1995, the Company was unable to
obtain required volumes of a key component for its 7000 Series
product line supplied by a sole source vendor. As previously
mentioned, this shortage adversely affected the Company's operating
results for the first quarter of fiscal year 1995, however it is not
expected to adversely affect the operating results for the remainder
of fiscal year 1995.
While the Company has qualified and continues to qualify multiple
sources for many components, it is reliant on, and will continue to
be reliant on, single sources for many semi-custom and custom
integrated circuits and other key components. The Company does not
have long-term supply contracts with most of its single source
vendors, some of which are companies with limited financial and
operational resources. The Company intends to continue to pursue
qualification of alternative sources for single source components
where practicable; the Company believes, however, that it will have
to continue to utilize leading edge components which may only be
available from a single source. With the expansion of production
experienced by the disk drive industry during the last quarter of
fiscal year 1994 and continuing into the second quarter of fiscal
year 1995, shortages of certain key components for the disk drive
industry have increased and the Company expects it is likely that
industry shortages of key components may continue into future
quarters. The Company will continue to aggressively work with its
vendor base to minimize its exposure. There can be no assurance,
however, that the Company will be successful in such efforts or that
in the future the Company's vendors will meet the Company's required
volumes of high-quality components in a timely and cost effective
manner.
First Quarter Fiscal Year 1995 Compared to First Quarter Fiscal Year
1994
- - --------------------------------------------------------------------
Three Months Ended
June 25, June 26, Change
1994 1993
- - ---------------------------------------------------------------------
Revenue $ 218.3 $ 260.6 $ (42.3)
Gross margin $ 24.0 $ (18.0) $ 42.0
As a percentage of revenue 11.0% (6.9%)
Net loss $ (12.1) $ (72.2) $ (60.1)
As a percentage of revenue (5.6%) (27.7%)
Net loss per share: $ (0.24) $ (2.50) $ (2.26)
- - ---------------------------------------------------------------------
Revenue
Revenue for the Company's first quarter of fiscal year 1995 decreased
by 16.2% from the same quarter of the prior fiscal year, in
connection with the Company's decision in the third quarter of fiscal
year 1994 to discontinue certain unprofitable products. However,
unit sales of the Company's 7000 Series disk drives, which accounted
for a significant portion of the Company's revenue during both
quarters, increased modestly for the first quarter of fiscal year
1995 as compared to the first quarter of fiscal year 1994. Despite
this increase in unit sales, both revenue and unit sales for the 7000
Series products were lower than expected as a result of the
significant shortage in required volumes of a key component for this
product line supplied by a sole source vendor who was experiencing
production problems. This component shortage was resolved prior to
the end of the quarter, however, and it is not expected to adversely
affect revenue and unit sales for the remainder of the fiscal year.
In addition to the component shortage, the 7000 Series product
offerings, particularly 100-200 megabyte products, were subject to
intense price competition, excess industry capacity and price erosion
during most of the first nine months of fiscal year 1994. These
factors continue to negatively impact per unit revenue in fiscal year
1995. While there was a significant shift in product mix from the
older, lower capacity products to the higher capacity 7000 Series
product offerings, average unit selling prices, in terms of megabyte
per dollar, have declined substantially between the first quarters of
fiscal year 1994 and fiscal year 1995.
During the first quarter of fiscal year 1995, the Company had one
customer which accounted for approximately 14% of the Company's
revenue. This percentage may fluctuate in future periods and there
can be no assurance that it will not decline significantly. During
the first quarter of fiscal year 1994 one customer accounted for
approximately 24% of the Company's revenue.
As a result of the Company's shift in strategy, as discussed above,
the Company will be heavily dependent on the success of certain
products. During fiscal year 1994, the Company announced several new
products, including additions to the MobileMax family of PCMCIA-
compatible storage products for mobile computing applications. These
new products did not contribute significantly to revenue in the first
quarter of fiscal year 1995, and the Company anticipates that these
products will not contribute significantly to revenue in fiscal year
1995. The Company's ability to increase revenues is dependent on its
ability to anticipate market trends and to successfully develop,
manufacture in volume and sell new products in a timely manner.
There can be no assurance that the Company will be successful in
such efforts.
Gross Margin
Gross margin as a percentage of revenue increased significantly to
11.0% for the first quarter of fiscal year 1995 from (6.9%) for the
first quarter of fiscal year 1994.
The negative gross margin for the first quarter of fiscal year 1994
was primarily attributable to the prevailing negative business
conditions in the disk drive industry, including intense price
competition and excess industry capacity, as well as to cost and time-
to-market issues with regard to certain of the Company's products.
From (6.9%) for the first quarter of fiscal year 1994, gross margin
gradually improved to (3.3%) for the second quarter, 4.8% for the
third quarter, excluding special charges of $68.9 million, 11.4% for
the fourth quarter of fiscal year 1994 and 11.0% for the first
quarter of fiscal year 1995. This improvement was the result of
increased unit sales volumes of certain products for which average
unit selling prices were relatively constant while average unit
manufacturing costs declined from quarter to quarter. In addition,
gross margin improved in the fourth quarter of fiscal year 1994 and
the first quarter of fiscal year 1995 in connection with the
Company's decision in the third quarter of fiscal year 1994 to
discontinue certain unprofitable products. Also, during the first
quarter of fiscal year 1994, the Company failed to produce planned
unit volumes of its MXT product line due to a quality problem
involving a particular supplier's component, plus higher than planned
costs due to related design and manufacturing issues. A temporary
shutdown of production of the MXT product occurred during that first
quarter and resulted in an estimated loss of $25.0 million of revenue
and an accompanying negative gross margin for this product offering
during that quarter. Design and component issues related to the 2.5-
inch product line also resulted in a negative gross margin for that
product line during the first quarter of fiscal year 1994.
As noted earlier, the level of price competition increased again in
the last month of the first quarter of fiscal year 1995 and this
increased price competition is expected to continue at least through
the second quarter of fiscal year 1995. The Company will continue
its efforts to reduce its average unit manufacturing costs and to
introduce and produce in volume new higher margin products in an
effort to improve gross margin during fiscal year 1995. However,
there can be no assurance that average unit selling prices will not
decline at a more rapid rate or that the Company will be successful
in its efforts to improve gross margin. In addition, given the
cyclical nature of the disk drive industry and the Company's
dependence on the success of certain products, as discussed earlier,
there can be no assurance that the Company will be able to maintain
or improve its current gross margin.
Operating expenses
- - ---------------------------------------------------------------------
Three Months Ended
June 25, June 26, Change
1994 1993
- - ---------------------------------------------------------------------
Research and development $ 14.0 $ 30.7 $ (16.7)
As a percentage of revenue 6.4% 11.8%
Selling, general and
administrative $ 21.0 $ 20.6 $ 0.4
As a percentage of revenue 9.6% 7.9%
- - ---------------------------------------------------------------------
Research and development (R&D) expenses for the first quarter of
fiscal year 1995 decreased from the same quarter of the prior fiscal
year primarily due to the consolidation of the Company's R&D
activities in Longmont, Colorado during the fourth quarter of fiscal
year 1994 in connection with the Company's restructuring plan. This
consolidation eliminated the need for certain facilities in San Jose,
California, and also resulted in a substantial reduction in headcount
associated with R&D and related activities previously conducted in
San Jose. R&D spending in absolute dollars is expected to increase
during the remaining quarters of fiscal year 1995 because the Company
believes that it must continue to make substantial investments in R&D
since the timely introduction and transition to volume production of
new products is essential to its future success. In addition, R&D
expenses may fluctuate in the future resulting from the cost of
acquiring rights to new technologies.
Selling, general and administrative expenses increased as a
percentage of revenue for the first quarter of fiscal year 1995
compared to the same quarter of the prior fiscal year primarily due
to the decline in the revenue base.
Interest expense and interest income
- - ---------------------------------------------------------------------
Three Months Ended
June 25, June 26, Change
1994 1993
- - ---------------------------------------------------------------------
Interest expense $ 2.0 $ 3.1 $ (1.1)
Interest income $ 1.4 $ 0.7 $ 0.7
- - ---------------------------------------------------------------------
Interest expense decreased as a result of lower average borrowings
outstanding during the first quarter of fiscal year 1995 as compared
to the same quarter of the prior fiscal year. Interest income
increased as a result of higher cash and short-term investment
balances during the first quarter of fiscal year 1995 as compared to
the same quarter of the prior fiscal year.
Provision for income taxes and effective tax rate
- - ----------------------------- ---------------------------------------
Three Months Ended
June 25, June 26, Change
1994 1993
- - ---------------------------------------------------------------------
Provision for income taxes $ 0.6 $ 0.5 $ 0.1
Effective tax rate n/a n/a
- - ---------------------------------------------------------------------
The tax provision for the first quarters of fiscal year 1995 and 1994
consists primarily of foreign taxes.
LIQUIDITY AND CAPITAL RESOURCES
- - ---------------------------------------------------------------------
Three Months Ended
June 25, 1994
- - ---------------------------------------------------------------------
Cash and cash equivalents $ 93.9
Short-term investments $ 92.6
Net cash used in operating activities $ 27.1
Net cash used in investing activities $ 22.4
Net cash used in financing activities $ 1.1
- - ---------------------------------------------------------------------
As of June 25, 1994, the Company's cash and cash equivalents of $93.9
million as compared to $144.5 million as of March 26, 1994 decreased
by $50.6 million. Partially offsetting this decrease, the Company
had short-term investments of $92.6 million as of June 25, 1994 as
compared to $74.9 million as of March 26, 1994, an increase of $17.7
million. The net decrease in the Company's cash and cash
equivalents, and short-term investments of $32.9 million was
primarily the result of operating activities including a reduction in
accounts payable and accrued special and restructuring charges.
Of the net cash used in operating activities during the first quarter
of fiscal year 1995, net loss less non-cash depreciation and
amortization accounted for approximately $1.5 million. In addition,
the decrease in accounts receivable, increase in inventory and
decreases in current liabilities accounted for approximately $25.3
million in total. The decline in accounts receivable primarily
reflects lower sales levels in the quarter ended June 25, 1994 than
in the quarter ended March 26, 1994. Inventories increased slightly
and reflect the Company's ongoing efforts to balance production with
demand and control inventory purchases. Despite the Company's
efforts to tightly control inventory levels, inventories may increase
in the future based on changes in market demand or industry-wide
production. Current liabilities decreased by approximately $36
million primarily as a result of a decrease in accounts payable
related to managing the timing of inventory purchases and payments,
and the reduction of accrued special and restructuring charges
recorded by the Company in the third quarter of fiscal year 1994.
Net cash used in investing activities was primarily attributable to
$17.7 million of short-term investment purchases, net of maturities,
and $5.5 million of capital expenditures. A significant portion of
the capital expenditure activity was related to the acquisition of
manufacturing equipment. Depending on business conditions, the
Company currently expects to make capital expenditures of
approximately $35 to $40 million during fiscal year 1995, as compared
to approximately $30 million during fiscal year 1994.
Net cash used in financing activities primarily reflects cash used to
reduce outstanding debt.
In September 1993, the Company obtained a secured, asset-based
revolving line of credit of $76.0 million. This asset-based
revolving line of credit provides for borrowings up to $76.0 million
based on eligible receivables at various interest rates over a two-
year term and is secured by receivables, certain inventories and
other assets. The line of credit expires in September 1995. As of
June 25, 1994, $30.0 million of borrowings and $2.9 million of
letters of credit were outstanding. The $30.0 million of borrowings
was fully repaid during the first fiscal week of July 1994. The
availability of this line of credit in the future depends on the
Company meeting covenants including certain financial ratios. On
June 17, 1994, the Company received an amendment to its line of
credit with respect to a certain financial ratio measured at the end
of each quarter. With such amendment, the Company was in compliance
with all financial ratios during the most recent quarter ended June
25, 1994. As noted earlier, the Company does not expect to be
profitable during the second quarter of fiscal year 1995. Depending
on the magnitude of the actual loss, the Company may need to
renegotiate its line of credit agreement to be in compliance with its
financial ratios for the quarter ended September 24, 1994.
The Company believes that its balances of cash, cash equivalents, and
short-term investments, together with expected cash flow from
operations, equipment financing and line of credit borrowing
capabilities will be sufficient to fund the Company's working capital
and capital expenditure requirements through fiscal year 1995.
DIVIDEND POLICY
The Company has never paid cash dividends on its capital stock. It
is the present policy of the Board of Directors to retain earnings
for use in the business. The Company does not anticipate paying cash
dividends in the near future. Under the terms of the Company's line
of credit and term loan facilities, the Company may not declare or
pay any dividends without the prior consent of its lenders.
PART II. OTHER INFORMATION
---------------------------
Item 1. LEGAL PROCEEDINGS
As part of the acquisition of the MiniScribe business in June 1990,
the Company was assigned a patent license agreement between
MiniScribe and Rodime plc (Rodime) covering patents related to 3.5-
inch disk drives. The Company believes that the assignment was
valid; however, Rodime has taken the position that the assignment was
invalid and would not in any event cover 3.5-inch drives manufactured
and sold by the Company before the acquisition of MiniScribe's
assets. In February 1993, Maxtor commenced an action for declaratory
relief in U. S. Bankruptcy Court in Denver, Colorado seeking a
judgment that the assignment was valid. Rodime filed a denial and
counterclaim for patent infringement. In April 1994, the relevant
claims of the Rodime patent at issue in Rodime's counterclaims were
declared invalid in litigation between Rodime and another disk drive
manufacturer. The Company's litigation with Rodime has been stayed
pending Rodime's appeal of the finding of invalidity. Certain other
claims, including other patent infringement claims, against the
Company have arisen in the course of its business. There is
presently no litigation involving such claims, and the Company
believes the outcome of these claims and the claim concerning Rodime
described above will not have a material adverse effect, if any, on
the Company's financial position or results of operations.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
b) Reports on Form 8-K:
None
c) Exhibits:
See Index to Exhibits on pages 18 to 26 hereof.
SIGNATURE
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.
MAXTOR CORPORATION
Date: August 5, 1994 By: /s/ Walter D. Amaral
------------------------
Walter D. Amaral
Chief Financial Officer
INDEX TO EXHIBITS
Sequentially
Exhibit No. Description Numbered Pages
- - ----------- -------------------------------------------- --------------
3.1 (6) Certificate of Incorporation
3.2 (8) Certificate of Amendment of Certificate of
Incorporation of Maxtor Corporation,dated
December 23, 1987
3.3 (8) By-Laws as amended July 21, 1987
3.4 (21) Amended and Restated By-Laws of Maxtor
Corporation, A Delaware Company, effective
February 3, 1994
3.5 (21) Restated Certificate of Incorporation of
Maxtor Corporation effective February 3, 1994
4.1 (3) Form of Certificate of Shares of Registrant's
Common Stock
4.2 (7) Maxtor Corporation Rights Plan
4.3 (22) Amendment to Rights Agreement between
Registrant and the First National Bank of
Boston, dated September 10, 1993
10.1 (1) Omnilease Corporation Master Lease Agreement
No. 300362, dated as of January 14, 1983 and
addenda thereof
10.2 (1) Lease Agreement between Orchard Investment
Company No. 801, formerly Nelo, a California
general partnership and Registrant, dated
March 23, 1984
10.3 (1) Lease Commitment between Walter E. Heller
& Company and Registrant, dated as of
March 11, 1985
10.4 (1) Stock Purchase Agreement between Steven P.
Kitrosser and Registrant, dated May 21, 1985
10.5 (1) Stock Purchase Agreement between James
McCoy and Registrant, dated May 21, 1985
10.6 (1) Equipment Lease Agreement between Pacific
Western (formerly Pacific Valley) Bank
and Registrant, dated June 26, 1985
10.7 (1) Continuing Guaranty between Maxtor
Singapore Limited and Bank of America
N.T. & S.A., dated July 27, 1985
10.8 (9) Lease Agreement between John Arrillaga,
Separate Property Trust, Richard T.
Perry, Separate Property Trust and
Registrant, dated August 27, 1986
10.9 (3) Marketing and Distribution Agreement
between Ricoh Company, Ltd. and
Registrant, dated October 14, 1986
10.10 (3) Land Lease Agreement between Housing and
Development Board, Singapore and Maxtor
Singapore Limited, dated December 22,
1986
10.11 (3) Indenture dated February 16, 1987
10.12 (8) Stock Bonus Plan and Cash Bonus Plan
between Storage Dimensions, Inc. and
Registrant dated June 15, 1987
10.13 (8) Merger Agreement between MAXSUB II, Inc.,
and Storage Dimensions, Inc. dated
October 26, 1987
10.14 (3) 1986 Outside Directors' Stock Option Plan
10.15 (3) Commitment from Union Bank to Registrant
regarding letters of credit for the
benefit of the officers and directors of
the Registrant
10.16 (4) Agreement and Plan of Reorganization
10.17 (9) Revised Equipment Lease Agreement between
Capital Associates International, Inc.
and Registrant, dated September 28, 1988
10.18 (9) Credit Agreement between Bank of America
National Trust and Savings Association
and Registrant, dated October 18, 1988
10.19 (9) Equipment Lease Agreement between Pitney
Bowes Credit Corporation and Registrant,
dated November 2, 1988
10.20 (9) Equipment Lease Agreement between Concord
Leasing (Asia) Pte Ltd. and Maxtor
Singapore, Limited, dated November 16, 1988
10.21 (9) Lease Agreement between Maxtor Singapore,
Limited and Jurong Town Corporation,
dated November 16, 1988
10.22 (9) Lease Agreement between Greylands Business
Park Phase II and Storage Dimensions, Inc.,
dated December 14, 1988
10.23 (8) Stock Purchase Agreement among Registrant,
Storage Dimensions, Inc., David A. Eeg, Gene
E. Bowles, Jr., David P. Williams and David
Lance Robinson
10.24 (8) Fiscal 1988 Stock Option Plan
10.25 (8) Employee Stock Purchase Plan
10.26 (8) Dual Currency Loan Agreement between Maxtor
Singapore Limited, Maxtor Delaware, Maxtor
California and American Express Bank Limited
10.27 (8) Amended and Restated Fiscal 1985 Stock Option
Plan, including the Immediately Exercisable
Incentive Stock Option Agreement and the
Immediately Exercisable Nonqualified Stock
Option Agreement
10.28 (9) Loan Agreement between Probo Pacific Pte
Ltd. and Maxtor Singapore Limited, dated
March 20, 1989
10.29 (9) Loan Agreement between Concord Leasing
(Asia) Pte, Ltd. and Maxtor Singapore
Limited, dated April 14, 1989
10.30 (10) Product Discontinuance Agreement between
Matsushita Communication Industrial Co., Ltd.
(MCI) and Registrant, dated August 23, 1989
10.31 (10) Equipment Lease Agreement between Capital
Associates International, Inc. and
Registrant, dated October 17, 1989
10.32 (10) Maxoptix Corporation 1989 Stock Option Plan
10.33 (9) Forms for Promissory Note and Amended and
Restated Promissory Note
10.34 (10) Amended and Restated Credit Agreement
between Bank of America National Trust and
Savings Association and Registrant, dated
January 31, 1990
10.35 (10) Amendment to Lease Agreement between Orchard
Investment Company No. 801, formerly Nelo, a
California general partnership, and
Registrant, dated February 15, 1990
10.36 (10) Sublease Agreement between RACAL-VADIC, a
Division of Racal Data Communications, Inc.
("Sublessor"), and Storage Dimensions, Inc.
("Sublessee"), dated February 16, 1990
10.37 (10) Collateral Sharing and Subordination
Agreement between Registrant and Standard
Chartered Bank, dated April 5, 1990
10.38 (10) Loan and Security Agreement between
Registrant and MiniScribe Corporation,
dated April 5, 1990
10.39 (11) Agreement for the Sale and Purchase of
Shares in Tratford Pte. Ltd. between the
Registrant, MiniScribe Peripherals (Pte) Ltd.
and certain Individuals, dated May 8, 1990
10.40 (11) Agreement for the Sale and Purchase of
Shares in Silkmount Limited between
MaxSub Corporation, Silkmount Limited and
certain Individuals, dated May 18, 1990
10.41 (11) Assignment of Debt between Registrant,
MiniScribe (Hong Kong) Limited and
certain Individuals, dated May 18, 1990
10.42 (10) Asset Purchase Agreement between Registrant,
MiniScribe Corporation and Standard Chartered
Bank, dated May 30, 1990
10.43 (14) License Agreement with Rodime PLC, dated
December 8, 1987 assigned to Registrant
on June 29, 1990
10.44 (14) Patent Cross License Agreement with IBM
dated October 1, 1984 assigned to
Registrant effective June 30, 1990
10.45 (14) Lease Agreement between MiniScribe
Corporation and 345 Partnership dated
June 6, 1990, assigned to the Registrant
effective June 30, 1990
10.46 (14) Lease Agreement between Maxtor Colorado
and Pratt Partnership (Lot 1A), dated
July 5, 1990
10.47 (14) Lease Agreement between Maxtor Colorado
and Pratt Partnership (Lot 1C), dated
July 5, 1990
10.48 (14) Lease Agreement between Maxtor Colorado and
Pratt Partnership (Lot 4), dated July 5, 1990
10.49 (14) Agreement for the Purchase of Land and
Improvements between Registrant and Nixdorf,
dated August 16, 1990
10.50 (15) Grant Agreement dated 25 October 1990
between the Industrial Development Authority,
Maxtor Ireland Limited and Registrant
10.51 (12) Amendment of Agreement between Registrant,
Maxtor Colorado, Maxtor California and Standard
Chartered Bank, dated November 6, 1990
10.52 (14) Guarantee for Dastek between Registrant,
Dastek and Silicon Valley Bank, dated
November 30, 1990
10.53 (10) Judgment, William Lubliner vs. Maxtor
Corporation, James M. McCoy, William J.
Dobbin, B.J. Cassin, W. Charles Hazel and
George M. Scalise
10.54 (10) Settlement Agreement, William Lubliner vs.
Maxtor Corporation, et al
10.55 (10) Fiscal 1991 Profit Sharing Plan Document
10.56 (10) Board of Director Compensation Approved for
Fiscal 1991
10.57 (14) Resignation Agreement and General Release of
Claims between Alexander E. Malaccorto and
the Registrant, dated January 11, 1991
10.58 (14) Employment Agreement between James M. McCoy
and Registrant, dated January 17, 1991
10.59 (14) Resignation Agreement and General Release of
Claims between James N. Miler and the
Registrant, dated January 20, 1991
10.60 (14) Letter Agreement between George Scalise and
the Registrant, dated February 22, 1991
10.61 (14) Resignation Agreement and General Release of
Claims between Steven Strain and the
Registrant, dated February 22, 1991
10.62 (14) Foothill Capital Credit Facility between
Registrant, Certain of Its Subsidiaries
and Foothill Capital Corporation, dated
April 22, 1991
10.63 (14) Employment Agreement between Laurence
Hootnick and Registrant, dated May 3, 1991
10.64 (14) Employment Agreement between Roger Nordby
and Registrant, dated May 7, 1991
10.65 (14) Employment Agreement between Thomas F. Burniece
and the Registrant, dated May 12, 1991
10.66 (15) Amendment of the Registrant's Continuing
Guarantee in favor of Foothill Capital
Corporation, dated July 10, 1991
10.67 (15) Settlement, Resignation and General Release
of Claims between Registrant and Taroon C.
Kamdar, dated August 2, 1991
10.68 (15) Amendment of Registrant's Continuing
Guarantee in favor Foothill Capital
Corporation, dated August 9, 1991
10.69 (15) Amendment No. 1 to Lease by and between John
Arrillaga, Trustee, and Richard T. Peery,
Trustee, and Registrant, dated August 23, 1991
10.70 (15) Amendment of Registrant's Continuing
Guarantee in favor of Foothill Capital
Corporation, dated September 20, 1991
10.71 (13) Amendment of Agreement between Registrant,
Maxtor Colorado, Maxtor California and
Standard Chartered Bank, dated December 27,
1990, and further amended July 26, 1991 and
October 4, 1991
10.72 (15) Lease Agreement between Registrant and Devcon
Associates 31, dated December 6, 1991
10.73 (15) Deed of Partial Discharge and Release between
Barclays Bank PLC and Maxtor Singapore
Limited, dated December 19, 1991
10.74 (15) Agreement for Purchase and Sale of Assets
among Registrant, Read-Rite International,
Read-Rite Corporation and Maxtor Singapore
Limited, dated November 14, 1991, and amended
December 20, 1991
10.75 (15) Asset Purchase Agreement among Registrant,
Storage Dimensions, Inc. and USD Acquisition,
Inc., dated December 27, 1991
10.76 (15) Resignation Agreement and General Release of
Claims between Registrant and David S. Dury,
dated January 31, 1992
10.77 (15) Sublease between Registrant and Hauser
Chemical Research, Inc., dated March 23, 1992
10.78 (15) First Amendment to Lease Agreement between
PCA San Jose Associates and Registrant, dated
March 25, 1992
10.79 (15) Asset Purchase Agreement among Registrant,
Maxtor Singapore LTD., and Sequel, Inc., dated
March 12, 1992, and amended March 25, 1992
10.80 (5) Fiscal 1992 Stock Option Plan
10.81 (15) Form of Indemnity Agreement between the
Registrant and each of its Directors and
Executive Officers
10.82 (15) Maxtor/Sequel 8K/Panther Subcontract
Manufacturing and Warranty Services Agreement,
dated March 23, 1992
10.83 (15) Maxtor Corporation 1992 Employee Stock
Purchase Plan
10.84 (15) Maxtor Corporation 1991 Employee Stock
Purchase Plan
10.85 (15) Maxtor Corporation FY'93 Incentive Plan
Summary
10.86 (15) Fiscal 1992 Profit Sharing Plan Document
10.87 (17) Security Agreement between Registrant
and Chrysler Capital Corporation, dated
April 14, 1992
10.88 (17) Subordination, Non-Disturbance, Estoppel
and Attornment Agreement between Loma
Mortgage USA, Inc. and Registrant, dated
June 4, 1992
10.89 (17) Office Lease between Cabot Associates and
Registrant, dated July 23, 1992
10.90 (17) Revolving Credit Agreement among Registrant,
Barclays Bank PLC and The First National Bank
of Boston, dated as of September 9, 1992
10.91 (17) Security Agreement between Registrant and
the CIT Group/Equipment Financing, Inc.,
dated September 18, 1992
10.92 (17) Deed of Priorities among Maxtor (Hong Kong)
Limited and Registrant and General Electric
Capital Corporation, dated September 25, 1992
10.93 (17) Lease among Dares Developments (Woking)
Limited, Maxtor Europe Limited and
Registrant, dated October 1992
10.94 (16) Stock Purchase and Asset Acquisition
Agreement among David A. Eeg, Gene E. Bowles,
Jr., CP Acquisition, L.P. No. 4A, CP
Acquisition, L.P. No. 4B, Capital Partners,
Inc., FGS, Inc., Registrant, Storage
Dimensions, Inc. and SDI Acquisition
Corporation, dated December 4, 1992
10.95 (17) Loan and Security Agreement between
Registrant and Household Bank, f.s.b., dated
December 11, 1992
10.96 (17) Global Master Rental Agreement between
Comdisco, Inc. and Registrant, dated
December 16, 1992
10.97 (17) Amendment No. 1 to Lease between Devcon
Associates 31 and Registrant, dated
December 21, 1992
10.98 (17) Continuing Guaranty among Maxtor
Peripherals (S) Pte., Ltd., Barclays Bank
PLC and Registrant, dated January 26, 1993
10.99 (17) Amendment No. 2 to Lease between Devcon
Associates 31 and Registrant, dated
February 1, 1993
10.100 (17) Instrument of Resignation, Appointment and
Acceptance among Registrant, The First
National Bank of Boston and Bank of America
National Trust and Savings, dated as of
March 22, 1993
10.101 (17) Waiver and First Amendment to Credit
Agreement among Registrant, Barclays Bank
PLC and the First National Bank of Boston,
dated as of April 16, 1993
10.102 (17) Waiver and First Amendment to Continuing
Guaranty Among Registrant, Barclays Bank PLC
and the Lenders dated as of April 19, 1993
10.103 (17) Security Agreement between Registrant and
Barclays Bank PLC, dated April 16, 1993
10.104 (17) Lease Agreement between Registrant and Pratt
Partnership, dated April 30, 1993
10.105 (17) Agreement for Stock Transfer Services
between Registrant and The First National
Bank of Boston, dated May 6, 1993
10.106 (17) Maxtor Corporation CY93 Profit Sharing Plan
10.107 (17) Maxtor Corporation Management Incentive Plan
for CY93
10.108 (18) Production Agreement between International
Business Machines Corporation and Registrant,
dated July 27, 1993 (with certain information
deleted and indicated by blackout text)
10.109 (19) Letter of Intent between Registrant and
Hyundai Electronics Co., Ltd., dated
August 18, 1993
10.110 (20) Financing Agreement between Registrant and
The CIT Group/Business Credit, Inc., dated
September 16, 1993
10.111 (21) Form Letter Agreement between Registrant and
All of its Named Executive Officers, except
Laurence Hootnick, dated November 17, 1993
10.112 (21) Waiver to Financing Agreement among
Registrant and The CIT Group/Business Credit,
Inc., dated January 12, 1994
10.113 (21) Stock Purchase Agreement between Registrant
and Hyundai Electronics Industries Co., Ltd.,
Hyundai Heavy Industries Co., Ltd., Hyundai
Corporation, and Hyundai Merchant Marine Co.,
Ltd., dated September 10, 1993
10.114 (22) Confidential Resignation Agreement and
General Release of Claims between
Registrant and Thomas F. Burniece III,
dated February 4, 1994
10.115 (22) License Agreement between Registrant and
MiniStor Peripherals Corporation, dated
February 23, 1994
10.116 (22) Confidential Resignation Agreement and
General Release of Claims between Registrant
and John P. Livingston, dated April 8, 1994
10.117 (22) Tenancy Agreement between Barinet Company
Limited and Maxtor (Hong Kong) Limited,
dated April 26, 1994
10.118 Confidential Resignation Agreement and
General Release of Claims between
Registrant and Laurence R. Hootnick, dated
June 14, 1994 27 - 31
10.119 Confidential Resignation Agreement and General
Release of Claims between Registrant and
Mark Chandler, dated June 28, 1994 32 - 37
11.1 Computation of Net Income (Loss) Per Share 38
- - -------------------------------------------------------------------
(1) Incorporated by reference to exhibits to Registration
Statement No. 2-98568 effective August 7, 1985
(2) Incorporated by reference to exhibits to Registration
Statement No. 33-4092 effective April 2, 1986
(3) Incorporated by reference to exhibits to Registration
Statement No. 33-12123 effective February 26, 1987
(4) Incorporated by reference to exhibits to Registration
Statement No. 33-12768 effective April 23, 1987
(5) Incorporated by reference to exhibits to Registration
Statement No. 33-43172 effective October 7, 1992
(6) Incorporated by reference to exhibits to Registration
Statement No. 33-8607 effective September 10, 1986
(7) Incorporated by reference to exhibits of Form 8-K
filed February 8, 1988
(8) Incorporated by reference to exhibits to Annual Report
on Form 10-K effective June 24, 1988
(9) Incorporated by reference to exhibits to Annual Report
on Form 10-K effective June 24, 1989
(10) Incorporated by reference to exhibits to Annual Report
on Form 10-K effective June 1, 1990
(11) Incorporated by reference to exhibits of Form 8-K filed
July 13, 1990
(12) Incorporated by reference to exhibits of Form 8 filed
November 13, 1990
(13) Incorporated by reference to exhibits of Form 8 filed
January 8, 1991
(14) Incorporated by reference to exhibits to Annual Report
on Form 10-K effective July 15, 1991
(15) Incorporated by reference to exhibits to Annual Report
on Form 10-K effective June 25, 1992
(16) Incorporated by reference to exhibits of Form 8-K filed
January 8, 1993
(17) Incorporated by reference to exhibits to Annual Report
on Form 10-K effective May 27, 1993
(18) Incorporated by reference to exhibits of Form 10-Q
filed August 10, 1993
(19) Incorporated by reference to exhibits of Form 8-K
filed August 19, 1993
(20) Incorporated by reference to exhibits of Form 10-Q
filed November 8, 1993
(21) Incorporated by reference to exhibits of Form 10-Q
filed February 7, 1994
(22) Incorporated by reference to exhibits of Form 10-K
filed June 24, 1994
CONFIDENTIAL RESIGNATION AGREEMENT
AND GENERAL RELEASE OF CLAIMS
1. Laurence R. Hootnick ("Hootnick") was employed by Maxtor
Corporation (the "Company") pursuant to a written employment
agreement of on or about May 5, 1991. It is now the desire and
intention of Hootnick and the Company to terminate their
employment relationship on an amicable basis, to provide Hootnick
with certain compensation and benefits that he would not
otherwise be entitled to receive upon the termination of his
employment with Maxtor, and to settle and resolve all claims and
disputes which Hootnick has or may have against the Company. In
recognition of those desires and intentions, Hootnick and the
Company agree as set forth below.
2. Hootnick hereby resigns from his employment with the
Company effective September 30, 1995 (the "Resignation Date").
3. Hootnick agrees that his service as President and Chief
Executive Officer of the Company and his service as a director of
the Company shall cease effective as of the conclusion of the
Company's annual shareholders' meeting on August 18, 1994.
Hootnick further agrees that his service as an officer or
director of any subsidiary of the Company shall also cease
effective as of the conclusion of the Company's annual
shareholders' meeting on August 18, 1994.
4. The Company agrees to provide Hootnick with the following
compensation and benefits:
(a) Hootnick shall not be required to perform any work or
services for the Company during the period between the effective
date of this Agreement (the eighth day after Hootnick signs this
Agreement if not revoked by him before then) and the Resignation
Date (the "Employment Period") except as may be reasonably
requested by the Company; such work or services shall not require
more than 20 hours per month of Hootnick's time after August 18,
1994 and may include, but not be limited to, work in connection
with appropriate special projects or in connection with the
transition of Hootnick's positions;
(b) during the Employment Period, the Company shall
continue to pay Hootnick his base salary as follows:
(i) Hootnick shall receive salary payments at his
current salary rate ($43,333.33 per month) through December 31,
1994; and
(ii) Hootnick shall receive salary payments equal to
4/9ths of his current salary rate ($19,259.26 per month) from
January 1, 1995 through the Resignation Date; all salary payments
will be made in accordance with the Company's normal payroll
procedures and less applicable withholding, and will be paid to
Hootnick's estate in the event of his death before the end of the
Employment Period;
(c) during the Employment Period the Company shall
continue to provide Hootnick with the same standard employee
benefits approved by the Company's Board of Directors that he is
receiving as of the date of this Agreement, including, but not
limited to, group medical insurance, and such benefits may only
be changed or terminated during the Employment Period to the
extent that they are similarly changed or terminated for other
executive employees of the Company at the same time; provided,
that Hootnick shall not accrue any vacation during the Employment
Period, and any unused vacation accrued by Hootnick prior to the
Employment Period shall be paid to him upon the Resignation Date;
(d) on June 14, 1994, the Company will issue a mutually-
acceptable press release announcing Hootnick's resignations as
described in paragraph 2, and stating that Hootnick will remain
affiliated with the Company until the Resignation Date;
(e) at the same time (or shortly after) the press
release described in subsection (d) is issued, the Company and
Hootnick will issue a mutually-acceptable memorandum to the
Company's employees announcing Hootnick's resignation; and
(f) the Company and Hootnick will develop a mutually-
acceptable plan for the transition of Hootnick's duties and
responsibilities.
With respect to any stock options granted to Hootnick by the
Company, those options will continue to be governed by and
subject to the terms and conditions of the applicable Company
stock option plans and stock option agreements between Hootnick
and the Company. Following the Employment Period, Hootnick shall
be entitled to elect continued insurance coverage in accordance
with federal law (COBRA). Hootnick understands and acknowledges
that he shall not be entitled to any compensation or benefits
from the Company other than those expressly set forth in this
paragraph.
5. In exchange for the compensation and benefits described
in Paragraph 4, Hootnick and his successors and assigns release
and absolutely discharge the Company and its shareholders,
present and former directors, present and former officers,
employees, agents, investors, attorneys, successors and assigns
of and from any and all claims, actions and causes of action,
whether now known or unknown, which Hootnick now has, or at any
other time had, or shall or may have against the Company based
upon or arising out of any matter, cause, fact, thing, act or
omission whatsoever occurring or existing at any time to and
including the effective date hereof, including, but not limited
to, any claims relating to or arising out of his employment with
the Company or the termination of that employment such as breach
of contract, wrongful termination or age, sex, disability or
other discrimination under the Civil Rights Act of 1964, the Age
Discrimination In Employment Act of 1967, the Fair Employment and
Housing Act, the Americans With Disabilities Act or any other
applicable law. As used in this paragraph and Exhibit A, "the
Company" includes any and all divisions, subsidiaries or
affiliated entities of Maxtor Corporation. As further
consideration for the compensation and benefits described in
paragraph 4, Hootnick agrees to sign the Release of Claims
attached hereto as Exhibit A on or after September 30, 1995.
Provided, that the foregoing releases of claims shall not affect
Hootnick's right to be indemnified by the Company in accordance
with any indemnity agreements between Hootnick and the Company,
or its by-laws, from any claims made against Hootnick which
relate to or arise out of the course and scope of Hootnick's
employment; to the extent that the Company maintains directors
and officers insurance coverage for its directors and/or officers
during the Employment Period, it shall also maintain such
coverage for Hootnick with respect to such claims.
6. Hootnick acknowledges that he has read section 1542 of
the Civil Code of the State of California which states:
A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him
must have materially affected his settlement with the
debtor.
Hootnick waives any right which he has or may have under section
1542 to the full extent that he may lawfully waive such rights
with respect to this general release of claims.
7. During the Employment Period Hootnick shall not, directly
or indirectly, provide any services or financial assistance as an
employee, consultant, partner, officer, director, shareholder,
investor or otherwise to any person or entity which is engaged
in, or plans to become engaged in, any activity which is
competitive with any of the Company's activities or planned
activities that are specific to the disk drive industry. In the
event that Hootnick breaches this paragraph 7, the Company shall
have no further obligation or liability to Hootnick hereunder.
Provided, that this paragraph shall not apply to Hootnick's
ownership of one percent or less of the stock of any publicly-
traded corporation.
8. Hootnick acknowledges and agrees that he shall continue
to be bound by and comply with the terms of any proprietary
rights or confidentiality agreements between the Company and
Hootnick.
9. Hootnick agrees that he shall not, at any time in the
future, make any critical or disparaging statements about the
Company or any of its officers, directors, employees, affiliates
or products to any other person or entity. Provided, that this
paragraph shall not prevent Hootnick from truthfully testifying
in response to a validly-issued subpoena or as otherwise may be
required by law.
10. The prevailing party shall be entitled to recover from
the losing party its attorneys' fees and costs incurred in any
lawsuit or other action brought to enforce any right arising out
of this Agreement.
11. Hootnick agrees that he shall not directly or indirectly
disclose any of the terms of this Agreement to anyone other than
his immediate family or counsel, except as such disclosure may be
required for accounting or tax reporting purposes or as otherwise
may be required by law. The Company agrees that it shall not
directly or indirectly disclose any of the terms of this
Agreement to anyone other than its officers, directors or
counsel, except as such disclosure may be required for accounting
or tax reporting purposes or as otherwise may be required by law.
12. The members of the Board of Directors of the Company
(other than Hootnick) have approved the principal economic terms
of this Agreement. Notwithstanding any provision above, the
parties hereto shall have no continuing obligations under this
Agreement after September 30, 1995, except those obligations
described in paragraphs 5, 6, 8, 9, 10, 11, 13 and Exhibit A.
13. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and
supersedes all prior negotiations and agreements, whether written
or oral, with the exception of any stock option plans or
agreements or indemnity agreements between the parties and any
agreements described in paragraph 8. This Agreement may not be
modified except by a document signed by an authorized officer of
the Company and Hootnick.
HOOTNICK UNDERSTANDS THAT HE SHOULD CONSULT WITH AN ATTORNEY
PRIOR TO SIGNING THIS AGREEMENT AND THAT HE IS GIVING UP ANY
LEGAL CLAIMS HE HAS AGAINST THE COMPANY BY SIGNING THIS
AGREEMENT. HOOTNICK FURTHER UNDERSTANDS THAT HE MAY HAVE 21 DAYS
TO CONSIDER THIS AGREEMENT, THAT HE MAY REVOKE IT AT ANY TIME
DURING THE 7 DAYS AFTER HE SIGNS IT, AND THAT IT SHALL NOT BECOME
EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS PASSED. HOOTNICK
ACKNOWLEDGES THAT HE IS RESIGNING FROM THE COMPANY AND SIGNING
THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE
FOR THE COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 4.
Dated: June 14, 1994 /S/ L. R. Hootnick
--------------------
Laurence R. Hootnick
Dated: June , 1994
---
Maxtor Corporation
By: /S/ Walter D. Amaral
--------------------
Its: V.P. Finance & CFO
--------------------
EXHIBIT A
RELEASE OF CLAIMS
1. In exchange for the payments and benefits provided to me
pursuant to that certain Confidential Resignation Agreement and
General Release of Claims between Maxtor Corporation (the
"Company") and me of June , 1994 (the "Agreement"), I release
the Company and its shareholders, present and former directors,
present and former officers, employees, agents, investors,
attorneys, legal successors and assigns of and from any and all
claims, actions and causes of action, whether now known or
unknown, which I now have, or at any other time had, or shall or
may have against the Company based upon or arising out of any
matter, cause, fact, thing, act or omission whatsoever occurring
or existing at any time to and including the date hereof,
including, but not limited to, any claims relating to or arising
out of my employment with the Company or the termination of that
employment such as breach of contract, wrongful termination or
age, sex, disability or other discrimination under the Civil
Rights Act of 1964, the Age Discrimination In Employment Act of
1967, the Fair Employment and Housing Act, the Americans With
Disabilities Act or any other applicable law.
2. I acknowledge that I have read section 1542 of the Civil
Code of the State of California which is set forth in the
Agreement. I hereby waive any rights which I have or may have
under section 1542 of the Civil Code to the full extent that I
may lawfully waive such rights with respect to this Release of
Claims.
3. I acknowledge that I have had 21 days to review and
consider this Release of Claims, and I understand that I may
revoke it at any time during the 7 days after I have signed it,
and that it shall not become effective until that 7-day period
has passed. I further acknowledge that I am signing this Release
of Claims knowingly, willingly and voluntarily in exchange for
the compensation and benefits described in the Agreement.
4. Except as modified by this Release of Claims, the
Agreement shall remain in full force and effect.
Dated: September 30, 1995
--------------------------
Laurence R. Hootnick
CONFIDENTIAL RESIGNATION AGREEMENT
AND GENERAL RELEASE OF CLAIMS
1. Mark Chandler ("Employee") hereby resigns from his position
as general counsel and secretary of Maxtor Corporation ("Maxtor"),
and as an officer of Maxtor and/or any of its subsidiaries, and as
the Maxtor Corporation Shareholder Representative to Maxtor
Peripherals (S) Pte. Ltd., effective June 28, 1994, and hereby
resigns his employment with Maxtor effective July 20, 1994.
2. In exchange for the release of claims set forth below, on
July 20, 1994, Maxtor shall pay to Employee the sum of $8,587.68,
less applicable tax withholdings, constituting the difference
between nine months' pay ($112,500.00) and the balance outstanding
($103,912.32, including $100,000 principal and $3,912.32 accrued
interest) on Employee's promissory note to Maxtor dated November 24,
1993, which upon such payment shall be deemed paid in full and the
original returned to Employee marked to indicate that it has been
paid in full. Employee will be eligible to continue his health
coverage at his own expense in accordance with federal law,
provided, however, that if Employee continues to use Maxtor's health
insurance program, Maxtor shall reimburse Employee his health
insurance premiums for a nine month period after July 20, 1994.
Employee shall also receive from Maxtor all amounts held by Maxtor
for him in his 401(k) account and all amounts withheld to date for
his account under the Maxpurchase 423 Plan. The amounts owing under
the 401(k) and 423 Plans will be paid to Employee in accordance with
Maxtor's customary policy with respect to employees who leave the
company. In addition to the above amounts, Employee will receive
payment for his accrued vacation allowance, less applicable
withholdings, on July 20, 1994, and Employee will be paid his base
salary, less applicable withholdings, through July 20, 1994.
Employee shall be entitled to exercise as vested, for a period of
six months after July 20, 1994 all of his outstanding stock options,
as shown on the attached schedule, whether or not otherwise vested
as of July 20, 1994. Subject to the provisions contained in
Paragraph 9 below, Employee shall be allowed to retain the fax
machine, modem, disk drive and operating software provided to him by
the Company which are located at Employee's residence. Employee
acknowledges that he shall be entitled to no compensation or
benefits from Maxtor other than those expressly set forth in this
paragraph.
3. In exchange for the benefits described in paragraph 2 above
and the release of claims against Employee set out below, Employee,
for himself and his respective legal successors and assigns,
releases and absolutely discharges Maxtor and its shareholders,
directors, officers, employees, agents, attorneys, affiliates,
investors, legal successors and assigns of and from any and all
claims, actions and causes of action, whether now known or unknown,
which Employee has, owns or holds, or at any time other time had,
owned or held or shall or may have, own, or hold against Maxtor
based upon or arising out of any matter, cause, fact, thing, act or
omission whatsoever occurring or existing at any time up to and
including the date hereof, including but not limited to, any claims
of breach of contract, wrongful termination, or race, sex,
disability or other discrimination under the Civil Rights Act, the
Americans with Disabilities Act, the Fair Employment and Housing
Act, or any other applicable law (all of which are hereinafter
included within the "Released Matters"). As used herein, "Maxtor"
includes any all parents, divisions or subsidiaries of Maxtor
Corporation. In consideration for Employee's promises and other
undertakings herein, Maxtor and its parents, divisions and
subsidiaries, and Maxtor's officers, directors, legal successors and
assigns, hereby release Employee and his heirs, legal
representatives, estates, legal successors and assigns, from all
claims, rights, demands, actions, obligations, and causes of action
of any and every kind, nature and character, known or unknown, which
they may now have against Employee, or have ever had against him, up
to and including the date hereof, which claims arise from or in any
way relate to his employment relationship with Maxtor. Maxtor (other
than through Employee) has received no complaints or other notice of
any unlawful or tortious conduct by Employee up to the date of this
Agreement, and Employee has received no complaints or other notice
of any unlawful or tortious conduct by Employee and/or Maxtor up to
the date of this Agreement which Employee has not disclosed in
writing to Glenn Stevens as part of the normal transition of
Employee's duties as General Counsel. As further consideration for
the mutual promises and consideration described herein, the parties
agree to extend the effectiveness of the foregoing releases through
July 20, 1994 by signing Attachment A hereto on or after July 20,
1994. This release shall not extend, however, to any claims either
party may have in connection with any breach by the other party of
this Agreement or the agreements described in Paragraph 5 hereof.
4. Each party acknowledges that it is familiar with Section
1542 of the California Civil Code which states as follows:
A general release does not extend to claims which the creditor
does not know or
suspect to exist in his favor at the time of executing the
release, which if
known by him must have materially affected his settlement with
the debtor.
Each party hereby waives any right or benefit which it has or may
have under Section 1542 of the California Civil Code to the full
extent that it may lawfully waive such rights and benefits
pertaining to the subject matter of this General Release of Claims
(the "Release"). Each party acknowledges that it may hereafter
discover claims or facts in addition to or different from those that
it now knows or believes to exist with respect to the subject matter
of this Release, and that it is its intention to fully, finally and
forever settle all of the Released Matters in exchange for the
benefits set forth above.
5. Employee acknowledges and agrees that he shall continue to
be bound by and comply with the terms of that certain Employee
Agreement Regarding Confidentiality and Inventions between Maxtor
and Employee dated June 8, 1992. Maxtor and Employee shall continue
to be bound by the terms of the Indemnification Agreements between
Maxtor and Employee dated September 13, 1990 and July 20, 1993 for
the terms stated therein, and with respect to Stock Option
Agreements as described in Paragraph 2 above. With respect to that
certain Letter of Credit in the amount of $175,000 previously
provided by Maxtor to Employee in accordance with the above
indemnification agreements (the "Letter"), the parties agree that
Maxtor shall have no obligation to maintain in effect or renew the
Letter (or any other letter of credit for Employee's benefit) after
its expiration on November 30, 1996. The parties further agree that
Melonie Brophy's letter of June 14, 1994 regarding the Letter is
hereby rescinded, and the Company agrees that it will not cancel the
Letter before its expiration on November 30, 1996.
6. Employee agrees he shall not make any critical or
disparaging statements or distribute any critical or disparaging
written materials concerning Maxtor, its officers, directors,
employees and/or products; provided, however, this shall not
preclude Employee from giving truthful testimony in any legal
proceeding or responding truthfully (a) to any inquiries from any
Maxtor officers or directors or (b) as necessary in the performance
of his duties at Maxtor through July 20, 1994 and thereafter
pursuant to Paragraph 8. Before giving any such testimony, Employee
shall provide Maxtor with at least five days' written notice of his
intent to provide such testimony, and Employee agrees to cooperate
fully with Maxtor in taking any steps (at Maxtor's expense) which
may be reasonably necessary and available to maintain the
confidentiality of such testimony, including, but not limited to,
the securing of appropriate protective orders. Maxtor agrees that
its officers, directors and executive staff members shall not make
any critical or disparaging statements or distribute any critical or
disparaging written materials concerning Employee; provided,
however, that this shall not preclude Maxtor from giving truthful
testimony in any legal proceeding, nor from discussing, evaluating
or commenting upon Employee's work either among Maxtor employees or
with Maxtor's outside counsel who have a business reason to be
discussing, evaluating or commenting upon such work. Before giving
any such testimony, Maxtor shall provide Employee with at least five
days' written notice of its intent to provide such testimony, and
Maxtor agrees to cooperate fully with Employee in taking any steps
(at Employee's expense) which may be reasonably necessary and
available to maintain the confidentiality of such testimony,
including, but not limited to, the securing of appropriate
protective orders.
7. In the event Maxtor receives any requests for information
regarding Employee from potential employers, it will make reasonable
efforts to direct all such inquiries to Walter Amaral. Walter Amaral
will make no negative or derogatory statement about Employee, but
will respond to such inquiries with the information contained in
Attachment B. In the event that Maxtor issues any press release
concerning Employee, such press release shall not contain any
information other than that set out in Attachment B or some part
thereof.
8. Employee agrees to make himself available to Maxtor through
July 20, 1994, on up to a full time basis if requested, for the
purposes of providing information and assistance, transitioning his
duties and responsibilities and/or performing other reasonable
tasks. After July 20, 1994, Employee agrees that he will cooperate
with Maxtor in any investigations, lawsuits or other matters
involving Maxtor or its subsidiaries or affiliates concerning issues
as to which Employee had specific involvement, knowledge or
responsibility, or where subsequent assistance, information and
cooperation is reasonably necessary or appropriate. Upon reasonable
notice and at reasonable times and for reasonable periods, Employee
will make himself available for such things as interviews,
depositions, trials and the like.
9. Employee has returned or will return to Maxtor's General
Counsel (other than Employee) by July 20, 1994, all Maxtor
information and Maxtor property, in whatever form or medium,
including, but not limited to, reports, files, memoranda, records,
credit cards, keys, passes, computer access codes, software, and any
other Maxtor information or property which is in his possession or
control and which he prepared, helped to prepare or acquired in
connection with his employment. Employee will not retain any
copies, duplicates, reproductions or excerpts of same. Employee
will also terminate any access which he has to Maxtor computers,
including any access from his residence or other locations outside
Maxtor facilities. As used herein, the term "Maxtor information"
shall include information received from third parties in confidence
or as to which third parties may possess other proprietary rights,
and other Maxtor technical, business, marketing, legal or financial
information. Notwithstanding the foregoing, Employee may, subject
to the prior written consent of Maxtor's General Counsel (other than
Employee), retain blank copies of general business forms developed
by Employee for use in Maxtor's business which do not contain any
confidential or proprietary information of the Company. Such consent
shall not be unreasonably withheld. Employee may also identify (but
not retain the originals or any copies of) a reasonable number of
non-technical Maxtor documents, copies of which documents shall be
forwarded to Maxtor's outside counsel (Gray Cary Ware & Freidenrich)
by Maxtor's General Counsel (other than Employee) with a request
that the documents be maintained by Maxtor's outside counsel for a
period of three years following the date of this Agreement or until
any legal proceedings in which such documents are or may be involved
are finally concluded, whichever occurs later. Such identification
shall be delivered to Maxtor's General Counsel (other than Employee)
in writing on or before July 20, 1994.
10. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all
prior negotiations and agreements, whether written or oral
(including, but not limited to, the Letter Agreement dated December
1, 1993), with the exception of the agreements described in
paragraph 5 and any stock option agreements between Employee and
Maxtor. The prevailing party shall be entitled to recover from the
losing party its attorneys' fees and costs incurred in any lawsuit
or other action brought to enforce any right arising out of this
Agreement. This Agreement may not be altered or amended except by a
written document executed by Maxtor and Employee. Employee agrees
that he shall not directly or indirectly disclose any of the terms
of this Agreement to anyone other than his immediate family or
counsel except as such disclosures may be necessary for accounting
or tax reporting purposes (provided, that Employee shall advise any
parties to whom he makes such disclosures that the information being
disclosed is confidential) or as otherwise may be required by law.
Before making a disclosure which is "otherwise required by law",
Employee shall provide Maxtor with at least five days' written
notice of his intent to make such disclosure, and Employee agrees to
cooperate fully with Maxtor in taking any steps (at Maxtor's
expense) which may be reasonably necessary and available to maintain
the confidentiality of such disclosure, including, but not limited
to, the securing of appropriate protective orders.
EMPLOYEE UNDERSTANDS THAT HE SHOULD CONSULT WITH AN ATTORNEY PRIOR
TO SIGNING THIS AGREEMENT AND THAT HE IS GIVING UP ANY LEGAL CLAIMS
HE HAS AGAINST MAXTOR BY SIGNING THIS AGREEMENT. EMPLOYEE FURTHER
ACKNOWLEDGES THAT HE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY
AND VOLUNTARILY IN EXCHANGE FOR THE BENEFITS DESCRIBED IN PARAGRAPH
2
Dated: June 28, 1994 /S/ ...Mark Chandler
--------------------
Employee
Dated: June 28, 1994 /S/ Brett Pauly
--------------------
Witness
Brett Pauly
--------------------
Print Name of Witness
MAXTOR CORPORATION
Dated: June , 1994 /S/ Walter D. Amaral
--- ----------------------
ATTACHMENT A
By signing this Attachment A, the parties hereto acknowledge and
agree that with respect to the general releases of claims given in
Paragraph 3, "the date hereof" as used in that paragraph shall be
deemed to be July 20, 1994.
Dated: July , 1994
--- ------------------------------
Employee
Dated: July , 1994
--- ------------------------------
Witness
------------------------------
Print Name of Witness
Dated: July , 1994 MAXTOR CORPORATION
--- ------------------------------
ATTACHMENT B
In response to inquiries from potential employers, Mr. Amaral
will state substantially the following:
Mark joined Maxtor in July 1988 as Director of Legal Affairs and
became General Counsel in September 1990. He became Vice
President, Corporate Development and Venture Management in June
1992, and became Vice President, Corporate Development and
General Counsel in July 1993. He resigned from Maxtor in July
1994. His knowledge of the industry is excellent and his work,
including his negotiating skills, was excellent, well-respected
and valued.
MAXTOR CORPORATION
EXHIBIT 11.1
COMPUTATION OF NET LOSS PER SHARE
For the Three Months Ended June 25, 1994 and June 26, 1993
(In thousands, except per share data)
Three Months Ended
- - ---------------------------------------------------------------------
June 25, June 26,
1994 1993
- - ---------------------------------------------------------------------
PRIMARY & FULLY DILUTED
Weighted average number of common
shares outstanding during the period 49,925 28,887
=========== ===========
Net loss $ (12,189) $ (72,179)
=========== ===========
Net loss per share $ (0.24) $ (2.50)
=========== ===========
