<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT #4
TO
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
----------
AST RESEARCH, INC.
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(NAME OF SUBJECT COMPANY)
SAMSUNG ELECTRONICS CO., LTD.
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(BIDDER)
Common Stock, $.01 par value per share (Including the Associated Rights)
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(TITLE OF CLASS OF SECURITIES)
001907104
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(CUSIP NUMBER OF CLASS OF SECURITIES)
Jae Chang Lee
Samsung Electronics Co., Ltd.
Samsung Main Building
250, 2-Ka, Taepyung-Ro, Chung-Ku
Seoul, Korea 100-742
011-82-2-727-7100
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
Copy to:
Thomas Magill, Esq.
Gibson, Dunn & Crutcher
Jamboree Center, 4 Park Plaza
Irvine, CA 92714
(714) 451-3855
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<PAGE>
This Amendment No. 4 amends and supplements the Tender Offer Statement on
Schedule 14D-1 and Schedule 13D dated March 6, 1995, as amended (the
"Schedule 14D-1"), of Samsung Electronics Co., Ltd., a Korean corporation
(the "Purchaser"), filed in connection with the Purchaser's offer to
purchase up to 5,820,000 shares of the outstanding Common Stock, par value
$.01 per share, and the associated preferred stock purchase rights of AST
Research, Inc., a Delaware corporation (the "Company"), as set forth in the
Schedule 14D-1 (the "Offer"). Capitalized terms used herein without
definition shall have the meanings given such terms in the Schedule 14D-1.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
ACCOUNTING RESTATEMENT.
In its Proxy Statement dated June 7, 1995, the Company disclosed the
following information:
In connection with a review by the staff of the Securities and
Exchange Commission (the "Commission") of the proxy materials for the
Special Meeting of Stockholders of the Company to be held on June 30, 1995,
and after extensive discussions with the staff, the Company has restated
its financial statements for the fiscal year ended July 2, 1994 ("fiscal
1994") with respect to certain adjustments arising from the Company's
acquisition in 1993 of certain assets and liabilities of Tandy Corporation
("Tandy"). In addition to four manufacturing facilities located in the
United States and Scotland, the assets acquired by the Company from Tandy
included the GRiD and Victor brand desktop and non pen-based notebook
product lines and the GRiD pen-based product lines.
In connection with the financial statements for the fiscal year ended
June 3, 1993 ("fiscal 1993"), the Company made a preliminary purchase price
allocation and preliminarily determined that $15 million of the inventory
acquired from Tandy was excess and obsolete at the date of the acquisition.
The Company then proceeded to identify, on a product line basis, the
inventory acquired and to evaluate the fair value attributable to such
inventory. The Company ultimately determined that the realizable value of
the pen-based product inventory was significantly lower than that
established in the preliminary valuation and, in the financial statements
for fiscal 1994, reallocated approximately $33.6 million of the purchase
price from inventory to goodwill and was amortizing such goodwill over a
ten-year period.
However, after extensive discussions with the staff of the Commission,
the Company's financial statements for the year ended July 2, 1994 have
been restated from those originally issued to reflect the $33.6 million
reduction in the carrying value of GRiD pen-based products inventories,
made in the fourth quarter of fiscal 1994, as a charge to cost of sales
rather than an increase in the carrying value of goodwill (the
"Restatement"). The principal effect of such restatement is to reduce the
Company's net income in the fourth quarter of fiscal 1994 from net income
of $14.1 million to a net loss of $8.1 million and, in subsequent periods,
to increase pre-tax income by approximately $3.6 million per year due to
the reduction in amortization associated with the lower amount of goodwill.
Set forth below are selected financial data relating to the statement
of operations and balance sheet data for the fiscal year and the quarter
ended July 2, 1994, as previously reported by the Company, together with
such data as restated by the Company. Such data is derived from the
Company's Proxy Statement dated June 7, 1995.
2
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AS REPORTED AND AS RESTATED FINANCIAL DATA
<TABLE>
<CAPTION>
YEAR ENDED QUARTER ENDED
JULY 2, 1994 JULY 2, 1994
------------ -------------
(Amounts in thousands,
except per share data)
<S> <C> <C>
AS REPORTED:
Statement of Income Data
Total revenue $2,367,274 $584,505
Total operating costs and expenses 2,280,593 566,790
Income tax expense 25,503 5,216
Net income $ 53,501 $ 14,122
Net income per share, fully diluted $1.59 $ .41
Balance Sheet Data
Cash and cash equivalents $ 153,118
Inventories 333,729
Goodwill 61,912
Total assets 1,038,312
Total shareholders' equity 383,954
AS RESTATED:
Statement of Income Data
Total revenue $2,367,274 $584,505
Total operating costs and expenses 2,313,285 599,482
Income tax expense (benefit) 15,003 (5,284)
Net income (loss) $ 31,309 $ (8,070)
Net income (loss) per share, fully diluted $.95 $ (.25)
Balance Sheet Data
Cash and cash equivalents $ 153,118
Inventories 333,729
Goodwill 29,220
Total assets 1,005,620
Total shareholders' equity 361,762
</TABLE>
AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT.
Following the Restatement, the Company and the Purchaser entered into
Amendment No. 1 to Stock Purchase Agreement, dated as of June 1, 1995.
Amendment No. 1 to Stock Purchase Agreement provides, among other things,
for the following:
Waiver. The Purchaser agreed that the Restatement and the change
in the Company's method of accounting for the acquisition of the
personal computer manufacturing operations of Tandy set forth in the
Restatement (the "Accounting Change") shall not constitute a breach of
any representation, warranty or agreement or the failure of any
condition set forth in the Stock
3
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Purchase Agreement and agreed that it shall not have the right to terminate
the Agreement as a result of the Restatement or the Accounting Change.
Contingent Shares Issuances. In the event that at any time or
from time to time an action results in an Adverse Event (as defined
below) that requires the payment by the Company of amounts in
settlement of such action and the aggregate amounts actually so paid
by the Company, including, without limitation, any amounts paid by the
Company for attorneys' fees, (all such amounts being referred to
herein as "Specified Amounts") exceeds the Excess Loss Amount (as
defined below), then the Company shall issue to the Purchaser, without
the payment by the Purchaser of any additional consideration, a number
of additional shares (rounded to the nearest whole share) of Common
Stock (the "Contingent Shares") equal to the Excess Loss Amount
divided by the Market Price (as defined below); provided, that in the
event that the number of shares to be issued pursuant to the above
formula would cause the Purchaser to exceed the maximum Purchaser
Interest of 49.9% permitted pursuant to the Stockholder Agreement,
then, in lieu thereof, the Company shall issue to the Purchaser (i)
such number of shares of Common Stock as will cause the Purchaser
Interest to equal 49.9% and (ii) a number of shares of Series A non-
voting Junior Preferred Stock, par value $.01 per share (the
"Preferred Stock"), having the rights, preferences and privileges
substantially as set forth in the Certificate of Designations attached
as Exhibit A to Amendment No. 1 to Stock Purchase Agreement, equal to
the difference between the number of shares of Common Stock which
would have been issued pursuant to the above formula and the number of
shares of Common Stock actually issued pursuant to clause (i), above.
Issuance of Contingent Shares Prior to Tandy Note Settlement. In
the event that (a) Contingent Shares are issued pursuant to Amendment
No. 1 to Stock Purchase Agreement prior to the maturity of the Tandy
Note, (b) the Purchaser is entitled to reimbursement pursuant to the
Letter of Credit Agreement and (c) the Purchaser elects, pursuant to
the Letter of Credit Agreement, to be reimbursed, in whole or in part,
in shares of Common Stock, then to the extent that the number of
shares to be issued pursuant to such reimbursement would cause the
Purchaser Interest to exceed 49.9%, the Company shall issue, in lieu
thereof, to the Purchaser (i) such number of shares of Common Stock as
will cause the Purchaser Interest to equal 49.9% and (ii) a number of
shares of Preferred Stock equal to the difference between the number
of shares of Common Stock which would have been issued pursuant to the
reimbursement under the Letter of Credit Agreement and the number of
shares of Common Stock actually issued pursuant to clause (i), above.
Additional Closing Condition. No party to any material
instrument shall have declared, or shall have notified the Company in
writing of its intention to declare, the Company in default or breach
(which default or breach has not been cured or waived at or prior to
the Closing) under such instrument as a result of the Restatement,
where any such declaration would have a material adverse effect, and
there shall not have been issued or commenced (and not dismissed) by
the Commission any formal order of investigation or formal enforcement
proceeding relating to the Restatement or the Accounting Change, nor
shall the Commission have notified the Company in writing that it
intends imminently to issue or commence any such formal order of
investigation or formal enforcement proceeding.
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"Adverse Event" shall mean (i) the settlement by the Company of
any litigation, whether now pending or hereafter filed, brought by or
on behalf of the holders of Shares which, at the time of the
settlement, includes one or more claims or causes of action based upon
or arising out of the Restatement or the Accounting Change or (ii) the
entry of a final judgment, not subject to appeal, by a court of
competent jurisdiction against the Company in any litigation, whether
now pending or hereafter filed, brought by or on behalf of the holders
of Shares which, at the time of such judgment, includes one or more
claims or causes of action based upon or arising out of the
Restatement or the Accounting Change.
"Excess Loss Amount" shall mean (a) all Specified Amounts
therefore paid by the Company less (b) the sum of (i) $5 million plus
(ii) any amounts paid or to be paid to the Company by way of
reimbursement, contribution or indemnification by any insurance
company or third party. The computation of the Excess Loss Amount
shall be made in respect of any second or subsequent Adverse Event on
a cumulative basis, taking into account all amounts previously paid by
the Company and paid or to be paid to the Company in connection with
all previous Adverse Events. In the event that the settlement
includes any securities, property or other non-cash consideration to
be issued or delivered by the Company, the value of such securities,
property or other non-cash consideration shall be determined by mutual
agreement of the Company and the Purchaser. In the event the Company
and the Purchaser shall be unable to reach such agreement after a
period of 30 days, such value shall be determined by a nationally
recognized investment banking firm to be designated for that purchase
by the Company and the Purchaser or, failing agreement on such
investment banking firm after an additional period of 10 days, by
Merrill Lynch and Salomon Brothers Inc.
"Market Price" shall mean the average of the closing prices of
the Common Stock on the Nasdaq National Market System, or, if the
Common Stock is not then quoted on the Nasdaq National Market System,
on the principal United States securities exchange or quotation system
on which the Common Stock is then listed or quoted, for the period of
20 consecutive trading days beginning on the first trading day
following the first public announcement of an Adverse Event; provided,
that the Market Price shall not be less than 50% of the closing price
of the Common Stock on the Nasdaq National Market System on the date
of the Closing of the Second Issuance (the "Reference Price") nor
greater than 150% of the Reference Price.
Since the Contingent Shares will be issued to the Purchaser
without the payment of any additional consideration, any such issuance
will have a dilutive effect on the other stockholders of the Company.
The number of additional shares, if any, that would be issuable to the
Purchaser will depend on the amount of any settlement or judgment in
any current or future litigation as a result of the Restatement,
available issuance coverage and the Market Price of the Common Stock
at the time of any Adverse Event. In light of, among other things,
the uncertainty as to whether any litigation would result from the
Restatement and uncertainties involved in estimating at the current
time the outcome of any current or future litigation, the extent of
any such dilution can not currently be estimated. However, Amendment
No. 1 to Stock Purchase Agreement provides that the Market Price that
will be used to determine the number of additional shares, if any,
will not be lower than 50%, nor greater
5
<PAGE>
than 150%, of the closing price of the Common Stock on the Nasdaq National
Market System at the Closing of the Second Issuance.
Such Amendment also provides that, in the event that the issuance
of the Contingent Shares would cause the Purchaser Interest to exceed
the maximum of 49.9% established by the Stockholder Agreement, the
number of shares to which the Purchaser is entitled in excess of 49.9%
will be issued in the form of shares of the Preferred Stock. Each
share of the Preferred Stock will be entitled to dividends in the same
amount and at the same time as a share of Common Stock, will be non-
voting, except as required by law, and will share equally with the
Common Stock in the distribution of any assets upon the dissolution,
winding up or liquidation of the Company, after payment to the holders
of the Preferred Stock of a preferential amount of $.01 per share. In
addition, each share of the Preferred Stock will be convertible into
one share of Common Stock at any time after the expiration of the
Standstill Period.
Amendment No. 1 to Stock Purchase Agreement also extends the optional
termination date of the Stock Purchase Agreement from June 30, 1995 to
July 31, 1995.
A copy of Amendment No. 1 to Stock Purchase Agreement is filed as
Exhibit (a)(12) to the Schedule 14D-1 and is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
On June 8, 1995, Purchaser issued a press release announcing that the
Offer has been extended and that the Offer, proration period and withdrawal
rights will now expire at 12:00 midnight, New York City time, on Monday,
July 10, 1995, unless further extended.
A copy of the press release issued by Purchaser is filed as Exhibit
(a)(13) to the Schedule 14D-1 and is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(12) Amendment No. 1 to Stock Purchase Agreement dated as of June
1, 1995 by and between the Purchaser and the Company.
(a)(13) Press release, dated June 8, 1995.
6
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: June 7, 1995
SAMSUNG ELECTRONICS CO., LTD.
/s/ Heon H. Chung
--------------------------
Name: Heon H. Chung
Title: Executive Director
7
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
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<C> <S>
(a)(12) Amendment No. 1 to Stock Purchase Agreement
dated as of June 1, 1995 by and between the
Purchaser and the Company
(a)(13) Press release, dated June 8, 1995
</TABLE>
8
<PAGE>
EXHIBIT (a)(12)
AMENDMENT NO. 1
TO
STOCK PURCHASE AGREEMENT
This Amendment No. 1 (the "AMENDMENT") to the Stock Purchase Agreement, dated
as of February 27, 1995 (the "AGREEMENT"), is entered into as of June 1, 1995,
by and between Samsung Electronics Co., Ltd., a Korean corporation (the
"PURCHASER"), and AST Research, Inc., a Delaware corporation (the "COMPANY").
Capitalized terms used in this Amendment and not otherwise defined herein shall
have the meanings set forth in the Agreement.
WHEREAS, in connection with the review of the Company's proxy material for
the Special Meeting of its stockholders to be held to consider and vote upon
the Stockholder Proposals, the Commission has requested that the Company
restate its financial statements for the fiscal year ended July 2, 1994 in
certain respects;
WHEREAS, in order to permit the mailing of the proxy material for the Special
Meeting in a timely fashion the Company has agreed to restate its financial
statements for the fiscal year ended July 2, 1994 and subsequent periods
substantially to the effect set forth in the drafts of the financial statements
for such periods previously provided to the Purchaser (the "RESTATEMENT"); and
WHEREAS, the Purchaser and the Company desire to amend the Agreement as set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the undersigned, intending to
be legally bound hereby, agree as follows:
ARTICLE 1
WAIVERS
1.1 WAIVERS. The Purchaser hereby agrees that the Restatement and the change
in the Company's method of accounting for the acquisition of the personal
computer manufacturing operations of Tandy Corporation set forth in the
Restatement (the "ACCOUNTING CHANGE") shall not constitute a breach of any
representation, warranty or agreement or the failure of any condition set forth
in the Agreement and agrees that it shall not have the right to terminate the
Agreement as a result of the Restatement or the Accounting Change.
ARTICLE 2
CONTINGENT SHARES
2.1 CONTINGENT SHARE ISSUANCES.
2.1.1. "Adverse Event." For purposes of this Amendment and the Agreement
the term "ADVERSE EVENT" shall mean (i) the settlement by the Company of
any litigation, whether now pending or hereafter filed, brought by or on
behalf of the holders of Shares which, at the time of the settlement,
includes one or more claims or causes of action based upon or arising out
of the Restatement or the Accounting Change or (ii) the entry of a final
judgment, not subject to appeal, by a court of competent jurisdiction
against the Company in any litigation, whether now pending or hereafter
filed, brought by or on behalf of the holders of Shares which, at the time
of such judgment, includes one or more claims or causes of action based
upon or arising out of the Restatement or the Accounting Change.
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<PAGE>
2.1.2. Issuance of Contingent Shares Following Adverse Event. In the
event that at any time or from time to time an action results in an Adverse
Event that requires the payment by the Company of amounts in settlement of
such action or in satisfaction of a judgment in such action and the
aggregate amounts actually so paid by the Company including, without
limitation, any amounts paid by the Company for attorneys' fees, (all such
amounts being referred to herein as "SPECIFIED AMOUNTS") exceeds the Excess
Loss Amount, as defined below, then the Company shall issue to the
Purchaser, without the payment by the Purchaser of any additional
consideration, a number of additional shares of Common Stock (the
"CONTINGENT SHARES") determined in accordance with Section 2.1.3. For
purposes of this Amendment, the term "EXCESS LOSS AMOUNT" shall mean (a)
all Specified Amounts theretofore paid by the Company less (b) the sum of
(i) $5 million plus (ii) any amounts paid or to be paid to the Company by
way of reimbursement, contribution or indemnification by any insurance
company or third party. The computation of the Excess Loss Amount shall be
made in respect of any second or subsequent Adverse Event on a cumulative
basis, taking into account all amounts previously paid by the Company and
paid or to be paid to the Company in connection with all previous Adverse
Events. In the event that the settlement includes any securities, property
or other non-cash consideration to be issued or delivered by the Company
the value of such securities, property or other non-cash consideration
shall be determined by mutual agreement of the Company and the Purchaser.
In the event the Company and the Purchaser shall be unable to reach such
agreement after a period of 30 days, such value shall be determined by a
nationally recognized investment banking firm to be designated for the
purpose by the Company and the Purchaser or, failing agreement on such
investment banking firm after an additional period of 10 days, by Merrill
Lynch & Co. and Salomon Brothers Inc.
2.1.3. Determination of Number of Contingent Shares. The number of
Contingent Shares to be issued shall equal such number of shares of Common
Stock (rounded to the nearest whole share) determined by dividing the
Excess Loss Amount by the Market Price; provided, that in the event that
the number of shares to be issued pursuant to the above formula would
exceed the maximum Purchaser Interest permitted pursuant to Section 2.1.7
of the Stockholder Agreement, then, in lieu thereof, the Company shall
issue to the Purchaser (i) such number of shares of Common Stock as will
cause the Purchaser Interest to equal 49.9% and (ii) a number of shares of
Series A Junior Preferred Stock, par value $.01 per share (the "PREFERRED
STOCK"), having the rights, preferences and privileges substantially as set
forth in the Certificate of Designations attached hereto as Exhibit A,
equal to the difference between the number of shares of Common Stock which
would have been issued pursuant to the above formula and the number of
shares of Common Stock actually issued pursuant to clause (i), above. For
purposes of this Amendment, the term "MARKET PRICE" shall mean the average
of the closing prices of the Common Stock on the NASDAQ National Market
System, or, if the Common Stock is not then quoted on the NASDAQ National
Market System, on the principal United States securities exchange or
quotation system on which the Common Stock is then listed or quoted, for
the period of 20 consecutive trading days beginning on the first trading
day following the first public announcement of an Adverse Event; provided,
that the Market Price shall not be less than 75% of the closing price of
the Common Stock on the NASDAQ National Market System on the date of the
Closing of the Second Issuance (the "REFERENCE PRICE") nor greater than
125% of the Reference Price.
2.1.4. Issuance of Contingent Shares Prior to Tandy Note Settlement. In
the event that (a) Contingent Shares are issued pursuant to this Agreement
prior to the maturity of the promissory note due July 11, 1996, issued by
the Company to Tandy Corporation, a Delaware corporation, (b) the Purchaser
is entitled to reimbursement pursuant to Article 3 of the Letter of Credit
Agreement and (c) the Purchaser elects, pursuant to Section 3.3(b) of the
Letter of Credit Agreement, to be reimbursed, in whole or in part, in
shares of Common Stock, then to the extent that the number of shares to be
issued pursuant to such Section 3.3(b) would cause the Purchaser Interest
to exceed the maximum Purchaser Interest permitted pursuant to Section
2.1.7 of the Stockholder Agreement, the Company shall issue, in lieu
thereof, to the Purchaser (i) such number of shares of Common Stock as will
cause the Purchaser Interest to equal 49.9% and (ii) a number of shares of
Preferred Stock equal to the difference between the number of shares of
Common Stock which would have been issued pursuant to Section 3.3(b) of the
Letter of Credit Agreement and the number of shares of Common Stock
actually issued pursuant to clause (i), above.
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2.2. DELIVERY OF CONTINGENT SHARES. Subject to the receipt of any necessary
approvals of any Governmental Authority, Contingent Shares shall be issued no
later than 30 Business Days after any payment of a Specified Amount in respect
of which Contingent Shares are issuable hereunder, at such date, time and place
as may be agreed upon by the Purchaser and the Company. At each issuance of
Contingent Shares, the Company shall deliver to the Purchaser a certificate or
certificates, registered in the name of the Purchaser or its permitted nominee,
in such denominations as the Purchaser may request, evidencing the full number
of Contingent Shares.
2.3. APPROVAL OF SETTLEMENTS, ETC. Notwithstanding the provisions of the
Stockholder Agreement, any Board decisions with respect to the approval of the
settlement of any litigation that would result in an Adverse Event or with
respect to the conduct of any litigation that could result in an Adverse Event,
shall be made by the affirmative vote of both (i) a majority of the full Board
of Directors and (ii) a majority of the Directors of the Company not designated
by the Purchaser.
2.4. STATUS OF CONTINGENT SHARES. Except as set forth in the Certificate of
Designations with respect to the Preferred Stock, the Contingent Shares shall
confer the same rights, and shall be subject to the same restrictions, as the
Shares. The provisions of Section 2.4 of the Stockholder Agreement shall not
apply to the acquisition by the Purchaser of Contingent Shares, or the
acquisition of shares of Common Stock upon conversion of shares of Preferred
Stock, acquired from the Company pursuant to this Article 2.
ARTICLE 3
THE OFFER AND THE SPECIAL MEETING
3.1. SPECIAL MEETING DATE. The first sentence of Section 6.1.2 of the
Agreement is hereby amended to read in its entirety as follows: "As promptly as
practicable, the Company shall schedule and set a date for a special meeting of
its stockholders to occur not later than July 14, 1995 at which the Stockholder
Proposals will be submitted to a vote of the Company's stockholders."
3.2. EXTENSION OF OFFER. Promptly following the announcement of the date of
the Special Meeting the Purchaser shall amend the Offer and the Schedule 14D-1
to extend the expiration date of the Offer to midnight, New York City time, on
the fifth Business Day after the date of the Special Meeting.
3.3. EXTENSION OF OUTSIDE DATE. Clause (ii) of Section 8.3 of the Agreement
is hereby amended by substituting "July 31, 1995" for "June 30, 1995".
3.4. ADDITIONAL CLOSING CONDITION. Section 7.2 of the Agreement is hereby
amended to add the following:
7.2.11. Effect of Restatement. No party to any material Instrument shall
have declared, or shall have notified the Company in writing of its
intention to declare, the Company in default or breach (which default or
breach has not been cured or waived at or prior to the Closing) under such
Instrument as a result of the Restatement, where any such declaration would
have a Material Adverse Effect, and there shall not have been issued or
commenced (and not dismissed) by the Commission any formal order of
investigation or formal enforcement proceeding relating to the Restatement
or the Accounting Change, nor shall the Commission have notified the
Company in writing that it intends imminently to issue or commence any such
formal order of investigation or formal enforcement proceeding.
ARTICLE 4
MISCELLANEOUS
4.1. EFFECT OF AMENDMENT. Except as set forth in this Amendment, the
provisions of the Agreement shall remain in full force and effect and all
references in the Agreement, the Investment Agreements and the Commercial
Agreements shall be deemed to refer to and mean the Agreement, as amended by
this Amendment.
4.2. COUNTERPARTS. This Amendment may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
4.3. TERMINATION. The provisions of Article 2 shall become effective at the
Closing and shall terminate on the first date on which the Purchaser Interest
shall be less than 19.9% for a period of at least 25 consecutive days.
4.4. EXPENSES. The fees and expenses of any investment banking firm engaged
pursuant to Section 2.1.2 shall be shared equally by the Company and the
Purchaser.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
AST RESEARCH, INC.
By: /s/ Safi U. Qureshey
---------------------------------
Safi U. Qureshey
Chairman and Chief Executive
Officer
SAMSUNG ELECTRONICS CO., LTD.
By: /s/ H.D. Yoo
---------------------------------
H.D. Yoo
Vice President and General
Manager
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EXHIBIT A
CERTIFICATE OF DESIGNATIONS
OF THE
SERIES A NON-VOTING JUNIOR PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
OF
AST RESEARCH, INC.
----------------
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
----------------
The undersigned DOES HEREBY CERTIFY that the following resolution was duly
adopted by the Executive Committee of the Board of Directors of AST Research,
Inc., a Delaware corporation (the "Corporation"), at a meeting duly convened
and held on [Date], at which a quorum was present and acting throughout:
RESOLVED, that pursuant to the authority expressly granted to and vested in
the Board of Directors by Article 4(b) of the Restated Certificate of
Incorporation of the Corporation, dated [July , 1995] (the "Certificate of
Incorporation"), as delegated to the Executive Committee thereof (the
"Executive Committee"), the Executive Committee hereby authorizes and approves
the creation of a series of Series A Non-Voting Junior Preferred Stock, par
value $.01 per share, of the Corporation (the "Series A Preferred Stock") upon
the terms and conditions set forth in these resolutions which fix the
designation and number of shares of the Series A Preferred Stock and the
powers, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations and restrictions thereof (in
addition to those set forth in the Certificate of Incorporation that may be
applicable to the Series A Preferred Stock) as follows:
1. DESIGNATION AND AMOUNT; FRACTIONAL SHARES; PAR VALUE. There shall be a
series of Preferred Stock of the Corporation designated as "Series A Junior
Preferred Stock" and the number of shares constituting such series shall be
[ ]. The Series A Preferred Stock is issuable solely in whole shares that
shall entitle the holder thereof to exercise the voting rights, to participate
in the distributions and to have the benefit of all other rights of holders of
Series A Preferred Stock as set forth herein and in the Certificate of
Incorporation. The par value of each share of Series A Preferred Stock shall be
$.01. For purposes of this Certificate, the "Issue Date" of the Series A
Preferred Stock shall be [Date].
2. DEFINITIONS. As used herein, the following terms shall have the respective
meanings given thereto in the Section indicated below:
<TABLE>
<CAPTION>
DEFINED IN
DEFINED TERM SECTION
------------ ----------
<S> <C>
"Board of Directors"........................................... 3(a)
"Common Distributions"......................................... 3(a)
"Common Stock"................................................. 3(a)
"Issue Date"................................................... 1
"Liquidation".................................................. 4
"Parity Stock"................................................. 4
</TABLE>
3. DIVIDENDS. (a) Dividends Rights. Except as set forth below, the holder of
the shares of Series A Preferred Stock shall not be entitled to receive any
distribution with respect to the shares of Series A Preferred
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<PAGE>
Stock. Subject to the prior preferences and other rights of shares of any class
or series of stock of the Corporation authorized after the Issue Date ranking
senior to, or on a parity with, the Series A Preferred Stock as to the payment
of dividends or other distributions, if the Board of Directors of the
Corporation, or, to the extent permitted by applicable law, a duly authorized
committee thereof (the "Board of Directors"), shall at any time or from time to
time declare a dividend with a record date after the Issue Date with respect to
the shares of Common Stock, par value $.01 per share, of the Corporation (the
"Common Stock"), then the holders of the Series A Preferred Stock shall be
entitled to receive, out of funds legally available therefor, a dividend with
respect to each share of the Series A Preferred Stock equal to the dividend
payable per share of Common Stock. The record date for any dividend payable on
shares of Series A Preferred Stock shall be the same as the record date for the
relevant dividend payable on the Common Stock.
(b) Priority as to Dividends. Subject top Section 3(c), no dividends shall be
declared or paid or set apart for payment on the preferred stock of any series,
or stock of any other class which, in either case, ranks, as to dividends or
upon Liquidation junior to the Series A Preferred Stock unless at the time of
such declaration or payment or setting apart for payment all dividends to which
holders of Series A Preferred Stock are entitled pursuant to Section 3(a) have
been or contemporaneously are declared and paid (or declared and a sum
sufficient for the payment thereof set apart for such payment) on the Series A
Preferred Stock for the period commencing on the Issue Date and terminating on
or prior to the date of payment of such dividends on such junior stock.
(c) Notwithstanding anything to the contrary in Section 3(b) hereof,
dividends on any Parity Stock may be paid if dividends shall be declared upon
shares of Series A Preferred Stock and such Parity Stock on a pro rata basis so
that in all cases the amount of dividends declared per share on the Series A
Preferred Stock and such parity Stock shall bear to each other the same ratio
that accrued dividends per share on the shares of Series A Preferred Stock and
such parity Stock bear to each other.
4. LIQUIDATION PREFERENCE. Subject to the prior payment in full of the
preferential amounts to which the shares of any other series or class of stock
of the Corporation ranking, as to distributions upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary
(any such event, a "Liquidation"), senior to the Series A Preferred Stock, are
entitled in the event of any Liquidation, each holder of a share of Series A
Preferred Stock shall be entitled to receive, and be paid out of the assets of
the Corporation available for distribution to its stockholders, a liquidation
preference in the amount of $0.01 per share, plus all accumulated and unpaid
dividends on such share to the date of final distribution to the holders of
shares of Series A Preferred Stock, whether or not declared, without interest,
and no more, and thereafter each holder of a share of Series A Preferred Stock
will share pro rata with the holders of Common Stock, and any other class or
series of the Corporation's stock ranking junior to the Series A Preferred
Stock with respect to such Liquidation, based upon the respective number of
shares of Series A Preferred Stock and such other stock outstanding at the
record date for determining holders of record entitled to receive any such
distribution. If upon any Liquidation the amounts payable with respect to the
liquidation preference of the Series A Preferred Stock and with any shares of a
class or series of the Corporation's stock ranking on a parity with the Series
A Preferred Stock as to distributions upon such Liquidation ("Parity Stock")
are not paid in full, the holders of Series A Preferred Stock and of such other
shares will share pro rata in the amounts payable and other property
distributable with respect to such Liquidation so that the per share amounts to
which holders of Series A Preferred Stock and the holders of such shares of
Parity Stock are entitled will in all cases bear to each other the same ratio
that the liquidation preferences of the Series A Preferred Stock and such
shares of Parity Stock bear to each other. After payment in full of the
preferences in respect of the shares of the Series A Preferred Stock upon
Liquidation, the holders of such shares in their capacity as such shall not be
entitled to any further right or claim to any remaining assets of the
Corporation. Neither a consolidation or merger of the Corporation with or into
another corporation, nor a merger of any other corporation with or into the
Corporation, nor the sale of all or substantially all of the Corporation's
property or business (other than in connection with a winding up of its
business) will be considered a Liquidation for purposes of this Certificate.
6
<PAGE>
5. VOTING RIGHTS. The holders of Series A Preferred Stock will not have any
voting rights except such rights as from time to time are required by the
Delaware General Corporation Law. Any shares of Series A Preferred Stock held
by the Corporation or any subsidiary of the Corporation shall not have voting
rights hereunder and shall not be counted in determining the presence of a
quorum or in calculating any percentage of shares under this Section 5.
6. RANKING UPON LIQUIDATION. Any class or series of stock of the Corporation
shall be deemed to rank:
i) senior to the Series A Preferred Stock, as to dividends or upon
Liquidation, if the holders of such class or series shall be entitled to
the receipt of dividends or of amounts distributable upon Liquidation, as
the case may be, in preference or priority to the holders of Series A
Preferred Stock.
ii) on a parity with the Series A Preferred Stock, as to dividends or
upon Liquidation, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share thereof are different from
those of the Series A Preferred Stock, if the holders of such class or
series of stock and the Series A Preferred Stock shall be entitled to the
receipt of dividends or of amounts distributable upon Liquidation, as the
case may be, in proportion to their respective amounts of accumulated and
unpaid dividends per share or liquidation prices, as the case may be,
without preferences or priority one over the other.
iii) junior to the Series A Preferred Stock, as to dividends or, to the
extent specified above, upon Liquidation, if such stock shall be Common
Stock or any other class or series of capital stock of the Corporation if
the holders of Series A Preferred Stock shall be entitled to receipt of
dividends or of amounts distributable upon Liquidation, as the case may be,
in preference or priority to the holders of shares of such other stock.
7. CONVERSION PRIVILEGES.
(a) Rights of Conversion. Each holder of shares of Series A Preferred Stock
shall have the right, at such holder's option, to convert all or a portion of
the shares held, at any time or from time after [the termination date of the
standstill provisions] into one fully paid and nonassessable share of Common
Stock, or such other securities and property as hereinafter provided.
(b) Conversion Procedures. Any holder of shares of Series A Preferred Stock
desiring to convert such shares pursuant hereto shall surrender the certificate
or certificates evidencing such shares at the office of a transfer agent for
the Series A Preferred Stock, which certificate or certificates, if the
Corporation shall so require, shall be duly endorsed to the Corporation or in
blank, or accompanied by proper instruments of transfer to the Corporation or
in blank, accompanied by (i) an irrevocable written notice to the Corporation
that the holder elects to convert such shares and specifying the name or names
(with address or addresses) in which a certificate or certificates evidencing
shares of Class A Common Stock are to be issued; and (ii) if required pursuant
to Section 7(e), an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation demonstrating that such
taxes have been paid).
The holder of a share of Series A Preferred Stock at the close of business on
a record date shall be entitled to receive the dividend payable thereon on the
corresponding dividend payment date notwithstanding the conversion thereof
during the period between the record date with respect to such dividend and the
corresponding dividend payment date or the Corporation's default in the payment
of the dividend due on such dividend payment date. No payments or adjustments
in respect of dividends on shares of Series A Preferred Stock surrendered for
conversion (whether or not in arrears) or on account of any dividend on the
Common Stock issued upon conversion shall be made upon the conversion of any
shares of Series A Preferred Stock.
The Corporation shall, as soon as practicable after such surrender for
conversion of certificates evidencing shares of Series A Preferred Stock and
compliance with the other conditions herein contained, deliver at such offices
of such transfer agent to the holder whose shares of Series A Preferred Stock
are so surrendered, or to the nominee or nominees of such person, certificates
evidencing the number of full shares
7
<PAGE>
of Common Stock to which such person shall be entitled, together with a cash
payment in respect of any fraction of a share of Common Stock as hereinafter
provided. Subject to the following provisions of this paragraph, each
conversion shall be deemed to have been effected immediately prior to the close
of business on the date on which the certificates for shares of Series A
Preferred Stock to be converted shall have been surrendered together with the
irrevocable written notice and the payment of taxes (if applicable), all as
provided in this Section 7(b), and the person or persons entitled to receive
the Common Stock deliverable upon conversion of such Series A Preferred Stock
shall be treated for all purposes as the record holder or holders of such
Common Stock at such time on such date, unless the stock transfer books of the
Corporation shall be closed on such date, in which event such person or persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer books are
open. No holder of Series A Preferred Stock shall have any rights as a holder
of Common Stock (or any other securities into which the Series A Preferred
Stock may become convertible) unless and until such conversion has been
effected.
(c) No Fractional Shares. No fractional shares or scrip representing
fractional shares of Common Stock shall be issued upon conversion of Series A
Preferred Stock. If a certificate or certificates representing more than one
share of Series A Preferred Stock shall be surrendered for conversion at one
time by the same record holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of Series A Preferred Stock so surrendered by such
record holder as provided in Section 7(a). In lieu of any fractional share of
Common Stock that would otherwise be issuable upon conversion of any shares of
Series A Preferred Stock, the Corporation shall pay a cash adjustment in
respect of such fractional share in an amount equal to the same fraction of the
Closing Price (as defined below) of the Common Stock on the Trading Day
immediately (as defined below) preceding the date of conversion, calculated to
the nearest cent, with one-half cent rounded upward.
"Closing Price" with respect to any security on any day shall mean the
closing sale price, regular way, on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices,
regular way, in each case on the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation System (the "NASDAQ
NMS") or if such security is not quoted on the NASDAQ NMS, on the principal
national securities exchange or quotation system on which such security is
quoted or listed or admitted to trading or, if not quoted or listed or admitted
to trading on any national securities exchange or quotation system, the average
of the closing bid and asked prices of such security on the over-the-counter
market on the day in question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting service, or if not so
available, in such manner as furnished by any New York Stock Exchange member
firm selected from time to time by the Board of Directors for that purpose or a
price determined in good faith by the Board of Directors (such determination to
be conclusive and evidenced in a resolution adopted by the Board of Directors).
"Trading Day" shall mean (x) if the applicable security is quoted on the
NASDAQ NMS, a day on which a trade may be made on the NASDAQ NMS, (y) if the
applicable security is listed or admitted for trading on a national securities
exchange, a day on which such national securities exchange is open for business
or (z) if the applicable security is not otherwise listed, admitted for trading
or quoted, any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
(d) Adjustment of Change in Capital Stock; Reorganization of the
Corporation. If, after the Issue Date, the Corporation:
i) subdivides its outstanding shares of Common Stock into a greater
number of shares;
ii) combines its outstanding shares of Common Stock into a smaller
number of shares; or
iii) issues by reclassification of its Common Stock any shares of its
capital stock (other than any dividends or distribution to the holders
of Common Stock of any dividends or distribution to the holders of
Common Stock rights to purchase, warrants or options for its capital
stock),
8
<PAGE>
then the conversion rights in effect immediately prior to such action shall be
adjusted so that the holder of shares of Series A Preferred Stock thereafter
converted may receive the number of shares of capital stock of the Corporation
which such holder would have owned immediately following such action if such
holder had converted the shares of Series A Preferred Stock immediately prior
to such action. The adjustment shall become effective immediately after the
effective date of subdivision, combination or reclassification.
If the Corporation is a party to a consolidation or a merger which
reclassifies or changes its outstanding Common Stock, the person obligated to
deliver securities, cash or other assets upon conversion of shares of Series A
Preferred Stock shall make provisions in its certificate or articles of
incorporation or other constituent document to establish that the holder of
shares of Series A Preferred Stock may convert such shares into the kind and
amount of securities, cash or other assets which such holder would have
received immediately after the consolidation or merger if such holder had
converted such shares immediately before the effective date of the transaction.
Such certificate or articles of incorporation or other constituent document
shall provide for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Section 7(d).
(e) Reservation of Shares; Transfer Taxes, Etc. The Corporation shall at
all times reserve and keep available, out of its authorized and unissued
stock, solely for the purpose of effecting the conversion of the Series A
Preferred Stock, such number of shares of its Common Stock free of
preemptive rights as shall from time to time be sufficient to effect the
conversion of all shares of Series A Preferred Stock from time to time
outstanding.
The Corporation shall pay any and all United States issue or other taxes that
may be payable in respect of any issue or delivery of shares of Common Stock
upon conversion of the Series A Preferred Stock. The Corporation shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue or delivery of Common Stock (or other securities
or assets) in a name other than that in which the shares of Series A Preferred
Stock so converted were registered, and no such issue or delivery shall be made
unless and until the person requesting such issue has paid to the Corporation
the amount of such tax or has established, to the satisfaction of the
Corporation, that such tax has been paid.
(f) Prior Notice of Certain Events. In case:
i) the Corporation shall take any action that would require an
adjustment pursuant to Section 7(d) hereof; or
ii) the Corporation shall take any action that would require any
person to make provisions in a certificate or articles of incorporation
or other constituent document as contemplated by Section 7(d) hereof:
or
iii) of a Liquidation;
then the Corporation shall cause to be mailed to the holders of record of the
Series A Preferred Stock, at their last addresses as they shall appear upon the
stock transfer books of the Corporation, at least ten days prior to the
applicable date hereinafter specified, a notice stating the date on which the
subdivision, reclassification, consolidation, merger or Liquidation is expected
to become effective (but no failure to mail such notice or any defect therein
or in the mailing thereof shall affect the validity of the corporate action
required to be specified in such notice).
8. OUTSTANDING SHARES. For purposes of this Certificate, all shares of
Series A Preferred Stock issued by the Corporation shall be deemed
outstanding except, (i) from the date of surrender of a certificate
evidencing shares of Series A Preferred Stock, all shares of Series A
Preferred Stock represented by such certificate and surrendered for
conversion into Common Stock and (ii) from the date of registration of
transfer, all shares of Series A Preferred Stock held of record by the
Corporation or any direct or indirect majority-owned subsidiary of the
Corporation.
9
<PAGE>
9. STATUS OF ACQUIRED SHARES. Shares of Series A Preferred Stock acquired
by the Corporation will be restored to the status of authorized but
unissued shares of preferred stock, without designation as to class, and
may be issued, but not as shares of Series A Preferred Stock.
10. NO REDEMPTION. The shares of Series A Preferred Stock shall not be
subject to redemption, either mandatorily or at the option of the
Corporation or the holder thereof.
11. SEVERABILITY OF PROVISIONS. Whenever possible, each provision hereof
shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to
he extent of such prohibition or invalidity, without invalidating or
otherwise adversely affecting the remaining provisions hereof.
IN WITNESS WHEREOF, AST Research, Inc. has caused this Certificate to be made
under the seal of the seal of the Corporation and signed by [Name], its
[Title], and attested by [Name], its [Title], on the day of [Date].
AST RESEARCH, INC.
By:
-----------------------
Name:
Title:
Attest:
- -------------------------------
Name:
Title:
10
<PAGE>
NEWS RELEASE MACKENZIE
PARTNERS, INC.
156 FIFTH AVENUE
NEW YORK, NY 10010
212 929-5500
FAX 212 929-0308
CONTACT:
- -------
STANLEY J. KAY
(212) 929-5940
FOR IMMEDIATE RELEASE:
- ---------------------
SAMSUNG ELECTRONICS CO., LTD. ANNOUNCES
EXTENSION OF AST TENDER OFFER
SAN JOSE, CA., June 8, 1995 -- Samsung Electronics Co., Ltd. announced
today that it has extended its cash tender offer to acquire up to 5,820,000
shares of common stock of AST Research, Inc. (NASDAQ:ASTA) at $22.00 per
share. The extension is being made to accommodate the special meeting of
AST's stockholders which has been scheduled to take place on June 30, 1995.
The purpose of the meeting is to allow AST's stockholders to vote upon the
proposed transaction with Samsung which, if consummated, will result in
Samsung owning approximately 40.25% of the outstanding shares of common
stock of AST. In accordance with Securities and Exchange Commission
("SEC") Regulations, the tender offer will remain open until 5 business
days following the stockholder meeting, and accordingly the tender offer,
proration period and withdrawal rights will now expire at 12:00 midnight,
New York City time, on Monday, July 10, 1995, unless further extended.
Samsung's acquisition of the AST shares is subject to approval of the
Korean government. All U.S. government approvals have been obtained.
Samsung has been informed by the Depositary that approximately 25,858,472
shares of AST have been tendered as of June 7, 1995.
In a related matter, it was also announced that AST has filed
documents with the SEC to restate the company's financial statements for
the fiscal year ended July 2, 1994 and subsequent quarterly periods.
According to AST, the restatement occurred following discussions with the
SEC in connection with the SEC's review of AST's proxy materials for the
special stockholder meeting and relates to certain adjustments arising from
AST's acquisition in 1993 of the PC manufacturing operations of Tandy
Corporation. AST's proxy statement for the special stockholder meeting
states that the financial statements for the year ended July 2, 1994 have
been restated from those originally issued to reflect a $33.6 million
reduction in the value of certain inventory acquired from Tandy, made in
the fourth quarter of fiscal 1994, as a charge to cost of sales rather than
an increase in the carrying value of goodwill associated with the Tandy
acquisition. According to AST's proxy statement, the principal effect of
the restatement is to reduce AST's net income in the fourth quarter of
fiscal 1994 from net income of $14.1 million to a net loss of $8.1 million,
and, in subsequent periods, to increase pre-tax income by approximately
$3.6 million per year due to the reduction in amortization associated with
the lower amount of goodwill.
<PAGE>
It was also announced that Samsung and AST have entered into an amendment
to the Stock Purchase Agreement originally executed by the parties on February
27, 1995. The amendment provides that the restatement and the related change in
AST's method of accounting for the Tandy acquisition do not constitute a breach
of the Stock Purchase Agreement and that Samsung does not have a right to
terminate the agreement as a result of the restatement or such accounting
change. The amendment further provides that if AST is required to pay by way of
settlement or final judgment in excess of $5 million (net of insurance or other
reimbursement) in respect of any litigation which includes one or more claims or
causes of action arising out of the restatement or accounting change, then AST
is required to issue to Samsung, at no additional cost, a number of shares of
AST common stock (and in certain cases, preferred stock) equal to the amount of
any such excess loss divided by the average closing price of the AST common
stock for the 20 trading days following announcement of any such excess loss,
provided that in no event will the issue price be less than 50% nor more than
150% of the closing price of AST common stock on the date of consummation of
Samsung's purchase of its 40.25% interest in AST. The amendment also adds an
additional condition to Samsung's obligation to consummate its purchase of AST
shares, including in the tender offer, that there shall not exist any uncured
default under any material contract or loan agreement of AST as a result of the
restatement, nor shall there be pending or threatened before the SEC any formal
order of investigation or formal enforcement proceeding relating to the
restatement or related change in accounting.
2
