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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 10 )*
------
AST RESEARCH, INC.
-------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, $.01 par value
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(Title of Class of Securities)
001907104
-----------------------------------------
(CUSIP Number)
Thomas D. Magill, Esq.
Gibson, Dunn & Crutcher
4 Park Plaza
Irvine, CA 92714
(714) 451-3855
-------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 21, 1995
-----------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with this statement [_]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-(1)a for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 001907104 PAGE 2 OF PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
(a) Samsung Electronics Co., Ltd.
(b) Samsung Electronics America, Inc.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
(a) Korea
(b) New York
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 22,290,000
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 22,290,000
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
22,290,000
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
45.4%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
This Amendment No. 10 amends and supplements the Schedule 13D dated
March 6, 1995, as amended (the "Schedule 13D") of Samsung Electronics Co., Ltd.,
a Korean corporation and its subsidiary Samsung Electronics America, Inc., a New
York corporation (collectively, "Samsung"), with respect to the Common Stock,
$.01 par value, of AST Research, Inc., a Delaware corporation (the "Company").
Unless otherwise defined herein, all capitalized terms shall have the meanings
ascribed to them in the Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION.
On December 21, 1995, Samsung and the Company entered into an Additional
Support Agreement pursuant to which Samsung has agreed to provide certain
additional support to the Company. The arrangements include execution by
Samsung of a guaranty of a bank credit line of up to $200 million and an
increase in the Company's vendor line with Samsung to up to $100 million through
November 30, 1997. In consideration of such additional support, the Company has
granted to Samsung an option (the "Option") to purchase an additional 4,400,000
shares of Common Stock for $.01 per share. The Option is exercisable at any
time after June 30, 1996 until June 30, 2001.
Samsung and AST also entered into Amendment No. 1 to Stockholder Agreement
(the "Amendment") in order to modify certain restrictions on Samsung's
acquisition, disposition and voting of the Common Stock contained in the
Stockholder Agreement dated as of July 31, 1995 between the parties. The
primary effect of the Amendment is to permit Samsung to vote its shares of
Common Stock for as many director nominees as it shall determine, subject to the
requirement that there be at least 3 independent directors. Accordingly, as a
result of Samsung's Common Stock ownership, it will be in a position to
designate and elect a majority of the Board of Directors.
Copies of the Additional Support Agreement and the Amendment are filed
herewith as Exhibits 19 and 20, respectively, and are incorporated herein by
reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Samsung currently owns 17,890,000 shares of Common Stock, representing
approximately 40% of the outstanding shares. Based on the number of outstanding
shares of Common Stock as of November 1, 1995, the 4,400,000 shares subject to
the Option described in Item 4 above, when added to Samsung's current ownership,
results in Samsung's beneficial ownership of 22,290,000 shares, or 45.4%.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NO.
-----------
19 Additional Support Agreement dated December 21, 1995
20 Amendment No. 1 to Stockholder Agreement dated December 21, 1995
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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: December 21, 1995
SAMSUNG ELECTRONICS CO., LTD.
/s/ Heon H. Chung
------------------------------------------------
Name: Heon H. Chung
Title: Executive Director
SAMSUNG ELECTRONICS AMERICA, INC.
/s/ Bo-Soon Song
-----------------------------------------------
Name: Bo-Soon Song
Title: Executive Director
2
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
19 Additional Support Agreement dated December 21, 1995
20 Amendment No. 1 to Stockholder Agreement dated December 21, 1995
3
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EXHIBIT 19
ADDITIONAL SUPPORT AGREEMENT
This Additional Support Agreement (the "Agreement") is entered into as
of December 21, 1995 by and between Samsung Electronics Co., Ltd., a Korean
corporation ("SEC"), and AST Research, Inc., a Delaware corporation ("AST").
Capitalized terms used in this Agreement and not otherwise defined herein shall
have the meanings ascribed to them in the Stock Purchase Agreement referred to
in recital A immediately below.
A. SEC and AST entered into that certain Stock Purchase Agreement
dated as of February 27, 1995, as amended by Amendment No. 1 thereto dated as of
June 1, 1995 and Amendment No. 2 thereto dated as of July 29, 1995 (as so
amended, the "Stock Purchase Agreement") pursuant to which SEC acquired certain
shares of AST's Common Stock.
B. As a result of the transactions contemplated by the Stock Purchase
Agreement, SEC is a significant stockholder of AST.
C. SEC and AST entered into that certain Stockholder Agreement dated
as of July 31, 1995 (the "Stockholder Agreement") pursuant to which certain
terms and conditions were established concerning SEC's investment in AST and
AST's corporate governance.
D. In addition to the Stock Purchase Agreement and the Stockholder
Agreement, SEC and AST entered into that certain Strategic Alliance Agreement
dated February 27, 1995 and certain other agreements that were intended to
enhance the business prospects and competitive position of AST.
E. AST has requested additional support from SEC to further enhance
its business prospects and competitive position and SEC desires to provide such
support in consideration of the issuance of the Stock Option to SEC as herein
provided.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, and covenants set forth in this Agreement, SEC and
AST hereby agree as follows:
ARTICLE 1
COMPONENT SUPPLY CREDIT LINE
1.1 Component Sales. SEC represents to AST that it has complied in
---------------
all material respects with the first sentence of Article 3 of that certain
Component Sales Agreement dated as of July 31, 1995 by and between SEC and AST
(the "Component Sales Agreement"). SEC and AST shall continue to have their
respective rights and obligations under the Component Sales Agreement,,
including rights and obligations regarding the purchase and sale of display
monitors, liquid crystal display panels, CD-ROM drives, hard disk drives,
static, video and dynamic random access memory, and other items which exist now
or may be developed in the future (the "Products"). As set forth in the
Component Sales Agreement, AST and its Subsidiaries ("Ordering Entity") may
submit purchase orders directly to SEC for Products and SEC shall supply same to
Ordering Entity pursuant to the terms and conditions of this Agreement and the
Component Sales Agreement (in the event of a conflict or inconsistency between
any terms or conditions of this Agreement and the Component Sales Agreement, the
terms and conditions of this Agreement shall supersede and control). No term or
condition set forth in any purchase order submitted to SEC by an Ordering Entity
shall modify the terms and conditions of this Agreement or the Component Sales
Agreement.
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1.2 Extended Vendor Credit Limit. As set forth in the Component
----------------------------
Sales Agreement, SEC shall provide AST pricing and terms which, when considered
in the aggregate, are at least as favorable as those offered by SEC to its most
favored customer group. Notwithstanding such terms, until November 30, 1997,
but subject to the provisions of Section 1.3 below, SEC shall extend vendor
credit to AST of up to $100 million outstanding at any given time on terms as
described in Schedule 1.2, which the parties agree shall be treated as
confidential.
1.3 Termination of Extended Credit Limit. SEC's obligations under
------------------------------------
Section 1.2 above shall terminate and be of no further force and effect if any
of the following events shall occur:
(a) Termination of Component Sales Agreement. The Component
----------------------------------------
Sales Agreement shall have been terminated in accordance with its terms
(including the provisions of the General Terms Agreement dated as of July 31,
1995 between the parties which forms a part of the Component Sales Agreement).
(b) Failure to Achieve Turnaround Plan. At the election of
----------------------------------
SEC, upon written notice to AST, if AST fails to achieve for any quarter of
fiscal year 1996 at least eighty-five (85%) of the sales objectives set forth in
AST's Fiscal Year 1996 Turnaround Plan previously provided to SEC and attached
to the resolutions presented to AST's Board of Directors in connection with its
consideration of this Agreement.
ARTICLE 2
GUARANTY
2.1 Line of Credit Guaranty. SEC shall, as promptly as practicable
-----------------------
after receipt of a request from AST, execute and deliver one or more
guaranties(the "Guaranty") of a bank line or lines of credit for the benefit of
AST in an aggregate amount not to exceed $200 million outstanding at any one
time; provided, however, that the obligation to provide such Guaranty shall not
extend beyond December 31, 1997, and provided further that the terms of such
line or lines of credit and Guaranty shall not differ materially from the forms
of Credit Agreement and Guaranty attached hereto as Exhibit 2.1 without SEC's
prior approval, which approval may be given or withheld by SEC in its sole and
absolute discretion.
ARTICLE 3
STOCK OPTION
3.1 Grant of Stock Option. AST hereby grants to SEC an irrevocable
---------------------
option (the "Stock Option") to purchase up to 4,400,000 shares of AST Common
Stock (the "Option Shares") at a purchase price of one cent ($.01) per Option
Share (the "Purchase Price"). SEC may assign the Stock Option in whole or part
to any of SEC's wholly-owned or majority-owned subsidiaries.
3.2 Exercise of Stock Option.
------------------------
(a) The Stock Option may be exercised in whole or in part at any
time or from time to time after June 30, 1996; provided, however, that the Stock
Option may not be exercised at any time that SEC is in material breach of its
obligation to provide vendor credit under the second sentence of Section 1.2 of
this Agreement or its obligations under Section 2.1 of this Agreement, and
provided further that the Stock Option shall terminate, to the extent not
theretofore exercised, at 11:59 p.m. on June 30, 2001.
2
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(b) In the event SEC or any permitted assignee wishes to exercise
the Stock Option, SEC or such assignee shall send a written notice (an "Exercise
Notice") to AST specifying the total number of Option Shares SEC or such
assignee wishes to purchase, the denominations of the certificate or
certificates evidencing such Option Shares which SEC or such assignee wishes to
receive, a date which shall be a business day which is at least five business
days after delivery of such notice, and the place for the closing of such
purchase (a "Closing"), which place will be in Orange County, California. SEC
may, in its discretion upon its exercise of the Stock Option, have any Option
Shares issued in the name of any of its wholly-owned or majority-owned
subsidiaries.
(c) Upon receipt of an Exercise Notice, AST shall be obligated to
deliver to SEC or SEC's permitted assignee a certificate or certificates
evidencing the number of Option Shares specified therein, in accordance with the
terms of this Agreement, on the later of (i) the date specified in such Exercise
Notice and (ii) the first business day on which the conditions specified in
Section 3.3 shall be satisfied.
3.3 Conditions to Delivery of Option Shares. The obligation of AST
---------------------------------------
to deliver Option Shares upon any exercise of the Stock Option is subject to the
following conditions:
(a) Such delivery would not in any material respect violate, or
otherwise cause the material violation of, any law or regulation (including any
rules or regulations of the NASDAQ National Market or any other principal stock
exchange on which the Common Stock is at the time listed or quoted) applicable
to such exercise of the Stock Option and the delivery of the Option Shares;
(b) There shall be no preliminary or permanent injunction or
other order by any court of competent jurisdiction preventing or prohibiting
such exercise of the Stock Option or the delivery of the Option Shares in
respect of such exercise; and
(c) The party exercising the Stock Option shall have represented
to AST that such exercise is in material compliance with all applicable Korean
governmental laws and regulations.
3.4 Closings. At each Closing, AST will deliver to SEC a certificate
--------
or certificates evidencing the number of Option Shares specified in the
applicable Exercise Notice (in the denominations specified therein), and SEC
will purchase such Option Shares from AST at the Purchase Price. All payments
made by SEC to AST pursuant to this Section 3.4 shall be made, at the option of
SEC, either (a) by wire transfer of immediately available United States funds in
the amount of the aggregate Purchase Price for the Option Shares being
purchased, or (b) by delivery to AST of a certified or bank check or checks
payable in the United States to or on the order of AST in an amount equal to the
aggregate Purchase Price.
3.5 Adjustments Upon Share Issuances, Changes in Capitalization, etc.
----------------------------------------------------------------
(a) In the event of any change in the capitalization of AST or in
the number of outstanding shares of AST by reason of a stock dividend, split-up,
recapitalization, reclassification, combination, exchange of shares or similar
transaction, or any other change in the corporate or capital structure of AST
(including, without limitation, the declaration or payment of an extraordinary
dividend in cash, securities or other property), the type and number of shares
or securities to be issued by AST upon exercise of the Stock Option shall be
adjusted appropriately, and proper provision shall be made in the agreements
governing such transaction, so that SEC shall receive upon exercise of the Stock
Option the number and class of shares or other securities or property that SEC
would have received if the Stock Option had been exercised immediately
3
<PAGE>
prior to such event, or the record date therefor, as applicable, and elected to
the fullest extent it would have been permitted to elect, to receive such
securities, cash or other property.
(b) In the event that AST shall enter into an agreement (i) to
consolidate with or merge into any person, and AST shall not be the continuing
or surviving corporation of such consolidation or merger, (ii) to permit any
person to merge into AST and AST shall be the continuing or surviving
corporation, but, in connection with such merger, the then outstanding shares of
AST shall be changed into or exchanged for stock or other securities of AST or
any other person or into cash or any other property, or the outstanding shares
of AST shall after such merger represent less than 50% of the outstanding shares
and share equivalents of the surviving corporation or (iii) to sell or otherwise
transfer all or substantially all of its assets to any person in a single
transaction or series of related transactions, and, in connection with such sale
or transfer the outstanding shares of AST shall be changed into or exchanged for
stock or other securities of AST or any other person or into cash or any other
property; then in any such case, proper provision shall be made in the
agreements governing such transaction so that SEC shall receive upon exercise of
the Stock Option the number and class of shares or other securities or property
that SEC would have received if the Stock Option had been exercised immediately
prior to such transaction, or the record date therefor, as applicable, and
elected to the fullest extent it would have been permitted to elect, to receive
such securities, cash or other property.
3.6 Investment Intent. SEC represents and warrants to AST that the
-----------------
Option Shares will be acquired by SEC solely for its own account, for investment
purposes only, and with no present intention of distributing, selling or
otherwise disposing of such shares. SEC understands that the Option Shares will
not have been registered under the Securities Act and that any disposition
thereof by SEC must be registered under the Securities Act or exempt from such
registration.
3.7 Sophistication. SEC represents and warrants to AST that SEC is
--------------
able to bear the economic risk of an investment in the Option Shares and can
afford to sustain a total loss on such investment, and has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the proposed investment and therefore has the capacity
to protect its own interests in connection with the purchase of the Option
Shares.
ARTICLE 4
REPRESENTATIONS
4.1 Representations. Each of the parties represents on its own
---------------
behalf to the other party that it has obtained all consents required of it under
applicable laws, rules or regulations (including, in the case of SEC, those of
Korea) for the execution, delivery and performance of its obligations under this
Agreement, that such execution, delivery and performance does not violate such
laws, rules or regulations and that this Agreement is legal, valid and binding
on such party in accordance with its terms.
ARTICLE 5
MISCELLANEOUS
5.1 Governing Law; Consent to Jurisdiction. This Agreement shall be
--------------------------------------
governed by, construed under and enforced in accordance with, the laws of the
State of Delaware without regard to its conflict-of-laws principles. SEC and
AST agree that (i) any legal action or proceeding arising out of or in
connection with this Agreement or the transactions contemplated hereby shall be
brought exclusively in the courts of the State of Delaware or the Federal courts
of the United States of America sitting in Delaware, (ii) each irrevocably
submits to the jurisdiction
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of each such court, and (iii) any summons, pleading, judgment, memorandum of
law, or other paper relevant to any such action or proceeding shall be
sufficiently served if delivered to the recipient thereof by certified or
registered mail (with return receipt) at its address set forth in Section 5.3.
-----------
Nothing in the proceeding sentence shall affect the right of any party to
proceed in any jurisdiction for the enforcement or execution of any judgment,
decree or order made by a court specified in said sentence.
5.2 Expenses. Each of the parties shall pay its own expenses
--------
incurred in connection with the negotiation and preparation of this Agreement
and the effectuation of the transactions contemplated hereby including, without
limitation, all fees and disbursements of its respective legal counsel,
advisors, and accountants.
5.3 Notices. In case of any event or circumstance giving rise to an
-------
obligation of SEC or AST to provide notice hereunder, such notice shall be
delivered within the time specifically set forth herein or, if no such time is
specified, then as promptly as practicable after becoming aware of such event or
circumstance. Any notice required or permitted to be given under this Agreement
shall be written, and may be given by personal delivery, by cable, telecopy,
telex or telegram (with a confirmation copy mailed as follows), by Federal
Express, United Parcel Service, DHL, or other reputable commercial delivery
service, or by registered or certified mail, first-class postage prepaid, return
receipt requested. Notice shall be deemed given upon actual receipt. Mailed
notices shall be addressed as follows, but each party may change address by
written notice in accordance with this paragraph.
To AST: AST Research, Inc.
16215 Alton Parkway
Irvine, California 92718
Attention: Chief Executive Officer
with a copy to: Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Los Angeles, CA 90071-3144
Attention: Thomas C. Janson, Jr., Esq.
To SEC: Samsung Electronics Co., Ltd.
Samsung Main Building
250, 2-Ka, Taepyung-Ro, Chung-Ku
Seoul, Korea 100-742
Attention: General Legal Counsel
with a copy to: Gibson, Dunn & Crutcher
4 Park Plaza, Suite 1700
Irvine, CA 92714
Attention: Thomas D. Magill, Esq.
5.4 Waiver. Each party hereto may in its sole discretion (i) extend
------
the time for the performance of any of the obligations or other acts of the
other party hereunder, (ii) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document, certificate
or writing delivered pursuant hereto or (iii) waive compliance by the other
party with any of the agreements or conditions contained herein. No term or
provision hereof shall be deemed waived and no breach hereof excused unless such
waiver or consent shall be in writing and signed by the party claimed to have
waived or consented. No waiver hereunder shall apply or be construed to apply
beyond its expressly stated terms. No failure to exercise and no delay in
exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, and no single or partial exercise of any right, remedy, power or
privilege hereunder shall
5
<PAGE>
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. No failure to insist upon strict performance
of any term or provision of this Agreement, or to exercise any right hereunder,
shall be construed as a waiver or as a relinquishment of such term, provision,
or right.
5.5 SEC Subsidiaries; Successors, Assignment, and Parties in
--------------------------------------------------------
Interest. This Agreement and the rights hereunder may not be assigned by SEC or
AST without the prior written consent of the other party, which may be given or
withheld in the other party's discretion, except that SEC may (i) exercise any
or all rights and/or fulfill any or all obligations under this Agreement in
conjunction with or through one or more wholly owned subsidiaries of SEC; and/or
(ii) assign this Agreement to an Affiliate or Affiliates of SEC; provided that
SEC shall remain liable for all of its obligations under this Agreement not
fully performed by its subsidiaries or assignees. In addition, subject to
compliance with all applicable securities laws, SEC shall have the right to
transfer any unexercised Stock Options to underwriters or brokers in connection
with an offering by such underwriters or brokers of the Stock Options or the
underlying Option Shares in transactions which comply with the provisions of
Section 3.3 of the Stockholder Agreement. This Agreement shall be binding upon
and inure solely to the benefit of SEC and AST and their respective successors
and permitted assigns, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
5.6 Entire Agreement. This Agreement, together with the Component
----------------
Sales Agreement and the General Terms Agreement, constitutes the entire
agreement between SEC and AST with respect to the subject matter hereof and
thereof and the transactions contemplated hereby and thereby and supersedes all
prior or contemporaneous, written or oral agreements or understandings with
respect thereto (including without limitation all term sheets). In the event of
a conflict or inconsistency between any terms or conditions of this Agreement
and such other agreements, the terms and conditions of this Agreement shall
supersede and control. The parties acknowledge that their agreements hereunder
and thereunder were not procured through representations or agreements not set
forth herein or therein.
5.7 Amendment. This Agreement may be amended only by a written
---------
instrument executed and delivered by a duly authorized officer of SEC and a duly
authorized officer of AST.
5.8 Cumulation of Remedies. All remedies available to any party for
----------------------
breach or non-performance of this Agreement are cumulative and not exclusive of
any rights, remedies, powers or privileges provided by law, and may be exercised
concurrently or separately, and the exercise of any one remedy shall not be
deemed an election of such remedy to the exclusion of other remedies.
5.9 Fair Construction. This Agreement shall be deemed the joint work
-----------------
product of SEC and AST without regard to the identity of the draftsperson, and
any rule of construction that a document shall be interpreted or construed
against the drafting party shall not be applicable.
5.10 Headings; References. Headings used in this Agreement are
--------------------
inserted as a matter of convenience and for reference, do not constitute a part
of this Agreement for any other purpose, and shall not affect the interpretation
or enforcement hereof or thereof. References herein or therein to Sections,
Schedules, and Exhibits are, unless otherwise designated, references to the
specified Section, Schedule or Exhibit hereof or hereto.
6
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5.11 Counterparts. This Agreement 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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
AST RESEARCH, INC., SAMSUNG ELECTRONICS CO., LTD.,
a Delaware corporation a Korean corporation
By: /s/ Ian W. Diery By: /s/ Won Suk Yang
---------------------------- --------------------------------------
Name: Ian W. Diery Name: Won Suk Yang
-------------------------- ------------------------------------
Title: President and CEO Title: Senior Executive Managing Director
------------------------- -----------------------------------
7
<PAGE>
EXHIBIT 20
AMENDMENT NO. 1
TO
STOCKHOLDER AGREEMENT
This Amendment No. 1 (the "Amendment") to Stockholder Agreement, dated
as of July 31, 1995 (the "Stockholder Agreement"), is entered into as of
December 21,1995 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 ascribed to them in the Stockholder
Agreement.
A. As a result of the consummation of the transactions contemplated
by that certain Stock Purchase Agreement dated as of February 27, 1995 between
the Purchaser and the Company (the "Stock Purchase Agreement"), the Purchaser
became a significant stockholder of the Company.
B. As contemplated by the Strategic Alliance Agreement dated
concurrently with the Stock Purchase Agreement, the Purchaser and the Company
have entered into certain commercial agreements.
C. The Company has requested the Purchaser to extend substantial
credit terms to the Company in respect of purchases of components by the Company
from the Purchaser and has also requested that the Purchaser guarantee on behalf
of the Company a substantial line of credit, and as a result of such requests
the parties have entered into that certain Additional Support Agreement of even
date herewith (the "Additional Support Agreement").
D. It is a condition to the transactions contemplated by the
Additional Support Agreement that the Stockholder Agreement be amended as set
forth in this Amendment.
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 Stockholder
Agreement is hereby amended as follows:
1. The following definitions in Article 1 are hereby amended to read
in full as follows:
"INDEPENDENT DIRECTOR" means a Director who is not currently
(apart from such directorship) an Affiliate, officer, director, employee,
agent, principal stockholder, consultant or partner of the Purchaser or the
Company or any Affiliate of either of them or of any entity that was
dependent on the Purchaser or the Company or any Affiliate of either of
them for more than five percent (5%) of its revenues or earnings in its
most recent fiscal year, and who was not at any time in the past an
Affiliate, officer, employee, director, principal stockholder or partner of
the Purchaser or the Company or any Affiliate of either of them, and does
not have, in the good faith judgment of the then existing Independent
Directors, any other direct or indirect interest in or relationship with
the Purchaser or the Company or any of their respective Affiliates so as to
be reasonably likely to cause such person to have any interest in any
transaction with the Purchaser or the Company or any of their respective
Affiliates.
<PAGE>
"STANDSTILL PERIOD" means the period commencing on July 31, 1995
and ending on the date on which the first of the following events occurs:
(i) December 15, 1998, (ii) such date as an amendment to Section 3.9 of the
Indenture dated as of December 1, 1993 between AST and First Trust National
Association relating to the LYONs (the "Indenture") shall be executed to
exempt from the definition of "Change in Control" the acquisition by the
Purchaser and/or its Affiliates of 50% or more of the then outstanding
shares of Common Stock or (iii) such date as the closing price for the
Common Stock in the principal market where the Common Stock is listed or
quoted shall have been, for any 20 of 30 consecutive trading days, at least
equal to 140% of the quotient obtained by dividing (a) the Issue Price of a
LYON, plus Accrued Original Discount, by (b) the Conversion Rate (as all of
such terms are defined in the Indenture).
2. Section 2.1.2 is amended to read in full as follows:
"2.1.2. Open Market. The Purchaser and/or its Affiliates may
purchase Shares in the open market."
3. Subsection (b) of Section 2.1.7 is amended to read in full as
follows:
"(b) has been approved by a majority of the Independent Directors and
would result in the Purchaser and/or its Affiliates owning 100% of the Voting
Stock."
4. Section 3.1 is amended to read in full as follows:
"3.1. PRO-RATA TRANSACTIONS. The Purchaser and/or any of its
Affiliates may sell any or all Equity Securities Beneficially Owned by such
persons in any transaction or transactions in which each other holder of Equity
Securities has the opportunity to sell the same percentage of such stockholder's
Equity Securities as the Purchaser and such Affiliates, at a price and on terms
no less favorable than those applicable to the sale by the Purchaser and/or its
Affiliates."
5. Section 3.2 is amended to read in full as follows:
"3.2. PUBLIC OFFERINGS AND MARKET TRANSACTIONS. The Purchaser
and/or any of its Affiliates may sell any or all Equity Securities Beneficially
Owned by such persons in one or more registered public offerings or in market
transactions if the Purchaser and/or its selling Affiliates invoke and follow or
require participating underwriters or brokers to invoke and follow appropriate
and reasonable procedures (subject to the Company's prior approval, which shall
not be unreasonably withheld) designed to prevent the sale of such Equity
Securities to any person or "group" (within the meaning of Section 13(d)(3) of
the Exchange Act) that would, after giving effect to its acquisition of such
Equity Securities, Beneficially Own or have the right to acquire more than ten
percent (10%) of the Total Voting Power."
6. Section 3.3 is amended to read in full as follows:
"3.3. DIRECTORS' APPROVAL. The Purchaser and/or any of its
Affiliates may sell any or all Equity Securities Beneficially Owned by such
persons in any transaction or transactions approved by a majority of the
Independent Directors."
7. During such time as the Purchaser Interest (calculated as provided
for in Section 2.1.7 of the Stockholder Agreement) shall be at least 40%,
Article 4 shall be amended to read in full as set forth below. At such time as
the Purchaser Interest shall have been less
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<PAGE>
than 40% for a period of at least twenty-five (25) consecutive days after the
date of this Amendment, the below amendment to Article 4 shall be rescinded and
Article 4 shall be restored to read in full as now set forth in the Agreement.
Subject to the foregoing, Article 4 is amended to read in full as follows:
"ARTICLE 4.
BOARD REPRESENTATION
4.1 INDEPENDENT DIRECTORS. At all times until such time as the
Purchaser Interest shall have been less than the 30% for a period of at least
twenty-five (25) consecutive days, or more than 90% for a period of at least
twenty-five (25) consecutive days, the Board shall include at least three
Independent Directors, and at least one Independent Director shall be designated
to serve on each committee of the Board. Subject to the foregoing requirement
and applicable law, including antitrust law, the Purchaser shall be entitled to
nominate, seek the election of and vote any Voting Stock owned by it or its
Affiliates for such Directors as the Purchaser shall determine in its sole
discretion.
4.2 PURCHASER DESIGNEES. Names of all Director nominees designated
by the Purchaser pursuant to the last sentence of Section 4.1 above shall be
furnished to the Company (a) in the case of election of Directors at an annual
meeting or otherwise pursuant to a vote of the Company's stockholders, in time
to be included in the proxy materials related to such election, and (b) at least
ten (10) days prior to election or appointment of Directors by the Board.
4.3 DIRECTORS' INDEMNIFICATION AND INSURANCE. As long as any
designees of the Purchaser serve on the Board, (a) the Amended and Restated
Certificate of Incorporation and Bylaws of the Company shall not be amended to
contain provisions less favorable with respect to indemnification and limitation
of liability of Directors than are set forth in the Amended and Restated
Certificate and Amended Bylaws as of the date of this Amendment, or in any other
manner that would affect adversely the rights thereunder of designees of the
Purchaser serving on the Board, unless such amendment, repeal or modification
shall be required by law or the fiduciary obligations of the Board, as
determined in good faith by the Board based on the written advice of outside
counsel, and (b) such designees shall be covered by any directors' and officers'
liability insurance maintained from time to time on the same terms and subject
to the same conditions as the other members of the Board, and (c) such designees
shall be entitled to the benefit of any indemnification agreements entered into
by the Company with any of its Directors; provided, that nothing in this
Amendment shall obligate the Company to maintain any such insurance or to enter
into any such indemnification agreements.
4.4 DIRECTORS' COMPENSATION. The Directors designated by the
Purchaser, if any, who are not officers or employees of the Purchaser and its
Affiliates shall have the right to receive all fees paid and options and other
awards granted and expenses reimbursed to non-employee Directors generally,
provided that all such fees and awards allocable to Directors who are not
officers or employees of the Purchaser and its Affiliates shall not be paid or
awarded or transferred to the Purchaser. Directors designated by the Purchaser
who are officers or employees of the Purchaser or its Affiliates shall have the
right to receive only such fees, options and other awards and expense
reimbursements, if any, as may be granted to employee Directors of the Company
for their service as Directors, provided that, notwithstanding Article 2 (other
---------
than Section 2.1.7), any or all such fees and awards allocable to Directors
-------------
designated by the Purchaser shall, in the Purchaser's discretion, be paid or
awarded to the Purchaser.
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<PAGE>
8. Article 6 is amended by deleting therefrom in their entirety
Sections 6.1 and 6.2 and renumbering Section 6.3 to become Section 6.1. In
addition, the reference to "Section 6.3" in the second sentence of renumbered
Section 6.1 shall be amended to refer to "Section 6.1," and the reference to
Section 6.1 in the parenthetical contained in clause (ii) of said second
sentence shall be deleted.
9. Article 7 is hereby deleted in its entirety.
10. Except as set forth in this Amendment, the provisions of the
Stockholder Agreement shall remain in full force and effect, and all references
to the Stockholder Agreement in any other agreements between the parties shall
be deemed to refer to and mean the Stockholder Agreement, as amended by this
Amendment.
11. 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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the date first above written.
AST RESEARCH, INC.
By: /s/ Ian W. Diery
--------------------------------------
Name: Ian W. Diery
------------------------------------
Title: President and CEO
-----------------------------------
SAMSUNG ELECTRONICS CO., LTD.
By: /s/ Won Suk Yang
--------------------------------------
Name: Won Suk Yang
------------------------------------
Title: Senior Executive Managing Director
-----------------------------------
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