SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported)
DECEMBER 22, 1995 (DECEMBER 21, 1995)
AST RESEARCH, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-13941 95-3525565
(Commission File Number) (IRS Employer Identification No.)
16215 ALTON PARKWAY
IRVINE, CALIFORNIA 92718
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(714) 727-4141
NOT APPLICABLE
(Former name or former address, if changed since last report.)
ITEM 5. OTHER EVENTS
On December 21, 1995, AST Research, Inc. (the "Company") announced that it
signed an agreement with Samsung Electronics Co. Ltd. ("Samsung") that will
provide additional financial support to the Company as consideration for an
option to purchase 4.4 million shares of the Company's Common Stock at an
exercise price of $.01 per share, exercisable after June 30, 1996, and expiring
June 30, 2001. The additional financial support includes the following:
* A guaranty of a bank line or lines of credit of up to $200 million through
December 31, 1997.
* A vendor line of credit with Samsung of $100 million through November 30,
1997 for purchases of components.
Samsung may also provide certain other elements of support of up to $50 million
in a form which could include, among others, component discounts, joint
development, and/or technology transfers. The form and ultimate amount of such
additional support is at the sole and absolute discretion of and is not binding
upon Samsung. A copy of the press release is attached to this report as Exhibit
99.1, and is incorporated herein by this reference. A copy of the Additional
Support Agreement, Amendment No. 1 to Stockholder Agreement, the Amended Bylaws
of AST Research, Inc., and a Letter from Samsung dated December 21, 1995, are
attached to this report as Exhibits 99.2 to 99.5, respectively, and are
incorporated herein by this reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit
Number Description
99.1 Press release issued by the Registrant on December 21, 1995,
announcing that the Company reached an agreement with
Samsung for significant additional support in its turnaround
efforts.
99.2 Additional Support Agreement dated December 21, 1995.
99.3 Amendment No. 1 to Stockholder Agreement.
99.4 Amended Bylaws of AST Research, Inc.
99.5 Letter from Samsung dated December 21, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AST Research, Inc.
_______________________________________
(Registrant)
By DENNIS R. LEIBEL
Senior Vice President, Legal,
Administration and Secretary
Date: December 22, 1995
FOR IMMEDIATE RELEASE
Media Contact: Emory Epperson
(714) 727-7958
Analyst Contact: Janine Whittington
(714) 727-7780
AST REACHES AGREEMENT WITH SAMSUNG ELECTRONICS
FOR SIGNIFICANT ADDITIONAL SUPPORT IN TURNAROUND EFFORTS
IRVINE, Calif., Dec. 21, 1995 -- AST Research Inc. (ASTA-NASDAQ) today announced
it has reached final agreement with Samsung Electronics that will provide
significant support to AST, including credit and vendor benefits that are more
favorable to AST than those originally contemplated by the letter of intent
previously reported.
Included under terms of the agreement is a bank credit guarantee of up to
$200 million for two years, as well as a $100 million vendor credit line for
component purchases from Samsung. A portion of the bank credit to be guaranteed
by Samsung will be used to pay off the $50 million short-term loan recently made
to AST by Samsung.
"By significantly increasing the support levels originally outlined in the
letter of intent, this agreement takes our strategic partnership with Samsung to
the next level," said Ian Diery, AST president and chief executive officer. "It
not only enhances our competitive position and business prospects by providing
financial flexibility as we move forward on our turnaround plan, it also
strengthens the bond between our companies in terms of component supply and
technology sharing, which are essential elements we can leverage to provide
long-term benefits and product differentiation for our customers."
In consideration for this support and subject to Samsung fulfilling its
obligations under the support arrangements, AST will grant Samsung a five-year
option to purchase up to 4.4 million shares of AST common stock at one-cent per
share, excercisable beginning on July 1, 1996. If the option is excercised in
full, Samsung's ownership position would increase to approximately 45 percent,
from its present position of approximately 40 percent. An additional Samsung-
designated director also will be appointed to the AST board, allowing Samsung-
designated directors to comprise a majority representation.
In addition, certain amendments were made to the existing Stockholder
Agreement with Samsung, consistent with the foregoing board representation, as
well as modifications to the restrictions on Samsung's share ownership and
disposition. Samsung also has expressed a willingness to provide additional
support to AST in the areas of component supply, joint development, technology
transfers and/or other PC-related items, although there are no binding
arrangements with respect to such support. The letter of intent announced by
AST on Nov. 2 has been superseded by these arrangements.
CORPORATE BACKGROUND
AST Research Inc., a member of the Fortune 500 list of America's largest
industrial and service companies, is one of the world's leading personal
computer manufacturers. The $2.468 billion company develops a broad spectrum of
desktop, mobile and server PC products that are sold in more than 100 countries
worldwide. AST systems meet a wide range of customer needs, ranging from
corporate business applications to advanced home and home office use. Corporate
headquarters is located at 16215 Alton Parkway, P.O. Box 57005, Irvine, Calif.
92619-7005. Telephone (714) 727-4141 or (800) 876-4278. Fax: (714) 727-9355.
Information about AST and its products can be found on the World Wide Web at
http://www.ast.com.
# # #
ADDITIONAL SUPPORT AGREEMENT
This Additional Support Agreement (the "Agreement") is entered into as
of December 22, 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.
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.
(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 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 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 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.
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: Ian Diery By: Won Suk Yang
Title: President and Chief Title: Senior Executive
Executive Officer Managing Director
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.
"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 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.
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: Ian Diery
Title: President and Chief Executive Officer
SAMSUNG ELECTRONICS CO., LTD.
By: Won Suk Yang
Title: Senior Executive Managing Director
BYLAWS
OF
AST RESEARCH, INC.
A DELAWARE CORPORATION
(AS AMENDED, THROUGH DECEMBER 21, 1995)
TABLE OF CONTENTS
ARTICLE I. OFFICES 1
Section 1. Registered Office 1
Section 2. Other Offices 1
Section 3. Books 1
ARTICLE II. MEETINGS OF STOCKHOLDERS 1
Section 1. Place of Meetings 1
Section 2. Annual Meetings 1
Section 3. Special Meetings 1
Section 4. Notification of Business to be
Transacted at Meeting 1
Section 5. Notice; Waiver of Notice 2
Section 6. Quorum; Adjournment 2
Section 7. Voting 2
Section 8. Stockholder Action by Written
Consent Without a Meeting 2
Section 9. List of Stockholders Entitled to Vote 2
Section 10. Stock Ledger 3
Section 11. Inspectors of Election 3
Section 12. Organization 3
Section 13. Order of Business 3
ARTICLE III. DIRECTORS 3
Section 1. Powers 3
Section 2. Number and Election of Directors 3
Section 3. Vacancies 3
Section 4. Time and Place of Meetings 4
Section 5. Annual Meeting 4
Section 6. Regular Meetings 4
Section 7. Special Meetings 4
Section 8. Quorum; Vote Required for Action;
Adjournment 4
Section 9. Action by Written Consent 5
Section 10. Telephone Meetings 5
Section 11. Committees 5
Section 12. Compensation 5
Section 13. Interested Directors 5
ARTICLE IV. OFFICERS 6
Section 1. Executive Officers 6
Section 2. Election; Term of Office and
Remuneration 6
Section 3. Subordinate Officers 6
Section 4. Removal 6
Section 5. Resignations 6
Section 6. Powers and Duties 7
ARTICLE V. STOCK 7
Section 1. Form of Certificates 7
Section 2. Signatures 7
Section 3. Lost Certificates 7
Section 4. Transfers 7
Section 5. Registered Owners 7
ARTICLE VI. LIMITATION OF LIABILITY 8
ARTICLE VII. INDEMNIFICATION 8
Section 1. Action Other Than by or in the
Right of the Corporation 8
Section 2. Action by or in the Right of
\ the Corporation 8
Section 3. Determination of Right of
Indemnification 8
Section 4. Indemnification Against Expenses
of Successful Party 9
Section 5. Advances of Expenses 9
Section 6. Right of Agent to Indemnification
upon Application; Procedure Upon
Application 9
Section 7. Other Rights and Remedies 9
Section 8. Insurance 10
Section 9. Indemnity Fund 10
Section 10. Constituent Corporations 10
Section 11. Other Enterprises, Fines, and
Serving at Corporation's Request 10
Section 12. Indemnification of Other Persons 10
Section 13. Savings Clause 10
ARTICLE VIII. RECORDS 11
Section 1. Maintenance and Inspection of
Share Register 11
Section 2. Maintenance and Inspection of Bylaws 11
ARTICLE IX. GENERAL PROVISIONS 11
Section 1. Dividends 11
Section 2. Disbursements 11
Section 3. Fiscal Year 11
Section 4. Corporate Seal 11
Section 5. Record Date 12
Section 6. Voting of Stock Owned by the Corporation 12
Section 7. Construction and Definitions 12
Section 8. Amendments 12
ARTICLE X. AUTOMATIC AMENDMENT PURSUANT TO STOCKHOLDER
AGREEMENT 12
BYLAWS
OF
AST RESEARCH, INC.
A DELAWARE CORPORATION
ARTICLE I
OFFICES
Section 1. Registered Office. The address of the registered office
of the Corporation in the State of Delaware shall be 1209 Orange Street,
Wilmington, New Castle County, Delaware, 19801, and the name of its registered
agent at such address is The Corporation Trust Company.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
Section 3. Books. The books of the Corporation may be kept within or
without the State of Delaware as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at such place either within or without the State of Delaware and on such
date and at such time as may be designated from time to time by the Board of
Directors. If the Board of Directors shall fail to fix such place, the meetings
shall be held at the principal executive office of the Corporation.
Section 2. Annual Meetings. Annual meetings of stockholders shall be
held at a time and date designated by the Board of Directors for the purpose of
electing directors and transacting such other business as may properly be
brought before the meeting.
Section 3. Special Meetings. Special meetings of stockholders, for
any purpose or purposes, may be called by the Board of Directors, the Chairman
of the Board of Directors, the President, or the holders of shares entitled to
cast not less than a majority of the votes at such meeting. Special meetings
may not be called by any other person.
Section 4. Notification of Business to be Transacted at Meeting. To
be properly brought before a meeting, business must be (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors, (b) otherwise properly brought before the meeting by or
at the direction of the Board of Directors, or (c) otherwise properly brought
before the meeting by a stockholder entitled to vote at the meeting.
Section 5. Notice; Waiver of Notice. Whenever stockholders are
required or permitted to take action at a meeting, a written notice of the
meeting shall be given which shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose for which the
meeting is called. Unless otherwise required by law, such notice shall be given
not less than ten nor more than 60 days before the date of the meeting to each
stockholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be given when deposited in the mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
Corporation. A written waiver of any such notice signed by the person entitled
thereto, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends the meeting
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
Section 6. Quorum; Adjournment. Except as otherwise required by law
or provided by the Certificate of Incorporation, the holders of a majority of
the capital stock issued and outstanding and entitled to vote thereat, present
in person or represented by proxy, shall constitute a quorum for the transaction
of business at all meetings of the stockholders. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting of the time and place of the adjourned
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. If after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder
entitled to vote at the meeting.
Section 7. Voting. Except as otherwise required by law, or provided
by the Certificate of Incorporation or these Bylaws, any question brought before
any meeting of stockholders shall be decided by the vote of the holders of a
majority of the stock represented and entitled to vote thereat. Unless
otherwise provided in the Certificate of Incorporation, each stockholder
represented at a meeting of stockholders shall be entitled to cast one vote for
each share of the capital stock entitled to vote thereat held by such
stockholder. Such votes may be cast in person or by proxy, but no proxy shall
be voted on or after three years from its date, unless such proxy provides for a
longer period. Elections of directors need not be by ballot unless the Chairman
of the meeting so directs or unless a stockholder demands election by ballot at
the meeting and before the voting begins.
Section 8. Stockholder Action by Written Consent Without a Meeting.
Any action which may be taken at any annual or special meeting of stockholders
may be taken without a meeting and without prior notice, if a consent in
writing, setting forth the action so taken, is signed by the holders of all of
the outstanding shares of the Corporation. All such consents shall be filed
with the Secretary of the Corporation and shall be maintained in the corporate
records. Any stockholder giving a written consent, or the stockholder's proxy
holders, or a transferee of the shares or a personal representative of the
stockholder or their respective proxy holders, may revoke the consent by a
writing received by the Secretary of the Corporation before written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary.
Section 9. List of Stockholders Entitled to Vote. The officer who
has charge of the stock ledger of the Corporation shall prepare and make, at
least ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder of the Corporation who is present.
Section 10. Stock Ledger. The stock ledger of the Corporation shall
be the only evidence as to who are the stockholders entitled to examine the
stock ledger, the list required by Section 9 of this Article II or the books of
the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
Section 11. Inspectors of Election. In advance of any meeting of
stockholders, the Board of Directors may appoint one or more persons (who shall
not be candidates for office) as inspectors of election to act at the meeting.
If inspectors are not so appointed, or if an appointed inspector fails to appear
or fails or refuses to act at a meeting, the Chairman of any meeting of
stockholders may, and on the request of any stockholder or his proxy shall,
appoint inspectors of election at the meeting. In the event of any dispute
between or among the inspectors, the determination of the majority of the
inspectors shall be binding.
Section 12. Organization. At each meeting of stockholders the
Chairman of the Board of Directors, if one shall have been elected, (or in his
absence or if one shall not have been elected, the President) shall act as
chairman of the meeting. The Secretary (or in his absence or inability to act,
the person whom the Chairman of the meeting shall appoint secretary of the
meeting) shall act as secretary of the meeting and keep the minutes thereof.
Section 13. Order of Business. The order and manner of transacting
business at all meetings of stockholders shall be determined by the Chairman of
the meeting.
ARTICLE III
DIRECTORS
Section 1. Powers. Except as otherwise required by law or provided
by the Certificate of Incorporation, the business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors.
Section 2. Number and Election of Directors. Directors shall be
elected at each annual meeting of stockholders and each director so elected
shall hold office until his successor is duly elected and qualified, or until
his earlier death, resignation or removal. Any director may resign at any time
effective upon giving written notice to the Board of Directors, unless the
notice specifies a later time for such resignation to become effective. Unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. If the resignation of a director is effective
at a future time, the Board of Directors may elect a successor prior to such
effective time to take office when such resignation becomes effective.
Directors need not be stockholders.
Section 3. Vacancies. Except as otherwise set forth herein,
vacancies in the Board of Directors may be filled by a majority of the remaining
directors, though less than a quorum, or by a sole remaining director, except
that a vacancy created by the removal of a director by the vote or written
consent of the stockholders may be filled only by the vote of a majority of the
shares entitled to vote represented at a duly held meeting at which a quorum is
present, or by the written consent of holders of a majority of the outstanding
shares entitled to vote. Each director so elected shall hold office until the
next annual meeting of the stockholders and until a successor has been elected
and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in the event of the death, resignation, or removal of any director, or if
the authorized number of directors is increased, or if the stockholders fail, at
any meeting of stockholders at which any director or directors are elected, to
elect the number of directors to be voted for at that meeting.
The stockholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors, but any such election by
written consent shall require the consent of a majority of the outstanding
shares entitled to vote.
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office expires.
Section 4. Time and Place of Meetings. The Board of Directors shall
hold its meetings at such place, either within or without the State of Delaware,
and at such time as may be determined from time to time by the Board of
Directors. Unless otherwise approved by a majority of the Independent Directors
(as defined in Article X below), all meetings of the Board of Directors shall be
held within the United States.
Section 5. Annual Meeting. The Board of Directors shall meet for the
purpose of organization, the election of officers and the transaction of other
business, as soon as practicable after each annual meeting of stockholders, on
the same day and at the same place where such annual meeting shall be held.
Notice of such meeting need not be given. In the event such annual meeting is
not so held, the annual meeting of the Board of Directors may be held at such
place, either within or without the State of Delaware, on such date and at such
time as shall be specified in a notice thereof given as hereinafter provided in
Section 7 of this Article III or in a waiver of notice thereof.
Section 6. Regular Meetings. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware at
such date and time as the Board of Directors may from time to time determine
and, if so determined by the Board of Directors, notices thereof need not be
given.
Section 7. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, by any Vice
President, the Secretary or by any two directors, provided that no special
meeting shall be held unless at least one Independent Director is present.
Notice of the date, time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first class mail or
telegram, charges prepaid, addressed to each director at the director's address
as it is shown on the records of the Corporation. In case the notice is mailed,
it shall be deposited in the United States mail at least five days before the
time of the holding of the meeting. In case the notice is delivered personally
or by telephone or telegram, it shall be delivered personally or by telephone or
to the telegraph company at least 48 hours before the time of the holding of the
meeting. The notice need not specify the purpose of the meeting.
Section 8. Quorum; Vote Required for Action: Adjournment. Except as
otherwise required by law, or provided in the Certificate of Incorporation or
these Bylaws, a majority of the directors shall constitute a quorum for the
transaction of business at all meetings of the Board of Directors and the
affirmative vote of not less than a majority of the directors present at any
meeting at which there is a quorum shall be the act of the Board of Directors.
If a quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting, from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
A meeting at which a quorum is initially present may continue to transact
business, notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the required quorum to conduct that meeting.
When a meeting is adjourned to another time or place (whether or not a quorum is
present), notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken.
At the adjourned meeting, the Board of Directors may transact any business which
might have been transacted at the original meeting.
Notwithstanding anything to the contrary herein, two-thirds (2/3) of
the directors shall be required to constitute a quorum for, and the affirmative
vote of not less than two-thirds (2/3) of all the directors shall be required to
approve, any action that would (i) amend that certain Amended and Restated
Rights Agreement between the Corporation and American Stock Transfer & Trust
Company as Successor Rights Agent dated as of January 28, 1994, as amended by
the First Amendment thereto dated as of March 1, 1995, or any new stockholder
rights plan; or (ii) adopt any new stockholder rights plan, if such amendment or
new stockholder rights plan does not contain provisions equivalent to those set
forth in such First Amendment for the benefit of Samsung Electronics Co., Ltd.
Section 9. Action by Written Consent. Unless otherwise restricted by
the Certificate of Incorporation, any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
Section 10. Telephone Meetings. Unless otherwise restricted by the
Certificate of Incorporation, members of the Board of Directors of the
Corporation, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors or such committee, as the
case may be, by conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this Section 10 shall constitute presence
in person at such meeting.
Section 11. Committees. The Board of Directors may, by resolution
passed by a majority of the entire Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board of Directors may designate one or more directors as alternate members of
any such committee, who may replace any absent or disqualified member at any
meeting of the committee. Any committee, to the extent allowed by law and as
provided in the resolution establishing such committee, shall have and may
exercise all the power and authority of the Board of Directors in the management
of the business and affairs of the Corporation. Each committee shall report to
the Board of Directors when required.
Section 12. Compensation. The directors may be paid such
compensation for their services as the Board of Directors shall from time to
time determine.
Section 13. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or the committee thereof
which authorizes the contract or traction, or solely because his or their votes
are counted for such purpose if: (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
his or their relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (iii) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof, or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee which authorizes the contract or
transaction.
ARTICLE IV
OFFICERS
Section 1. Executive Officers. The executive officers of the
Corporation shall be a President, a Chief Executive Officer, a Chief Financial
Officer and a Secretary. The Secretary shall have the duty, among other things,
to record the proceedings of the meetings of stockholders and directors in a
book kept for that purpose. The Corporation may also have such other executive
officers, including one or more Vice Presidents, as the Board may in its
discretion appoint. The Board of Directors, if it so determines, may appoint a
Chairman of the Board and a Vice Chairman of the Board from among its members,
but such titles shall not confer upon such Board members executive officer
status. Any number of offices may be held by the same person.
Section 2. Election, Term of Office and Remuneration. The executive
officers of the Corporation shall be elected annually by the Board of Directors
at the annual meeting or a regular meeting thereof. Each such officer shall
hold office at the discretion of the Board of Directors until his successor is
elected and qualified, or until his earlier death, resignation or removal. The
remuneration of all officers of the Corporation shall be fixed by the Board of
Directors. Any vacancy in any office shall be filled in such manner as the
Board of Directors shall determine.
Section 3. Subordinate Officers. In addition to the executive
officers enumerated in Section 1 of this Article IV, the Corporation may have
one more assistant treasurers and assistant secretaries and such other
subordinate officers, agents and employees as the Board of Directors may deem
necessary, each of whom shall hold office for such period as the Board of
Directors may from time to time determine. The Board of Directors may delegate
to any executive officer the power to appoint and to remove any such subordinate
officers, agents or employees.
Section 4. Removal. Except as otherwise delegated to an executive
officer with respect to subordinate officers, any officer may be removed, with
or without cause, at any time, by resolution adopted by the Board of Directors.
Such removal shall be without prejudice to the contractual rights of such
officer, if any, with the Corporation.
Section 5. Resignations. Any officer may resign at any time by
giving written notice to the Board of Directors (or to a principal officer if
the Board of Directors has delegated to such principal officer the power to
appoint and to remove such officer). The resignation of any officer shall take
effect upon receipt of notice thereof or at such later time as shall be
specified in such notice; unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Section 6. Powers and Duties. The Board of Directors may designate
an officer as the Chief Executive Officer. The Chief Executive Officer shall,
subject to the direction and control of the Board of Directors, be the general
manager of, and supervise and direct, the business and affairs of the
Corporation and the conduct of the officers of the Corporation. The other
officers of the Corporation shall have such powers and perform such duties
incident to each of their respective offices and such other duties as may from
time to time be conferred upon or assigned to them by the Board of Directors or
the Chief Executive Officer.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chairman of the Board of Directors, the President or a
Vice President and (ii) by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation, certifying the number of
shares owned by him in the Corporation.
Section 2. Signatures. Any, or all, of the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
Section 3. Lost Certificates. The Corporation may issue a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation, alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate to be lost,
stolen or destroyed. The Corporation may, in its discretion and as a condition
precedent to the issuance of such new certificate, require the owner of such
lost, stolen, or destroyed certificate, or his legal representative, to give the
Corporation a bond (or other security) sufficient to indemnify it against any
claim that may be made against the Corporation (including any expense or
liability) on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 4. Transfers. Stock of the Corporation shall be transferable
in the manner prescribed by law and in these Bylaws or in any agreement with the
stockholder making the transfer. Transfers of stock shall be made on the books
of the Corporation only by the person named in the certificate or by his
attorney lawfully constituted in writing and upon the surrender of the
certificate therefor, which shall be cancelled before a new certificate shall be
issued.
Section 5. Registered Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise required by
law.
ARTICLE VI
LIMITATION OF LIABILITY
No person shall be liable to the Corporation for any loss or damage
suffered by it on account of any action taken or omitted to be taken by him as a
director or officer of the Corporation if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation or, with respect to any criminal matter, had no reasonable cause to
believe that his conduct was unlawful.
ARTICLE VII
INDEMNIFICATION
Section 1. Action Other Than by or in the Right of the Corporation.
Subject to Section 3 of this Article VII, the Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, and whether external or internal to
the Corporation, (other than a judicial action or suit brought by or in the
right of the Corporation) by reason of the fact that he is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise (all such persons being referred to hereafter
as an "Agent"), against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, that he had
reasonable cause to believe that his conduct was unlawful.
Section 2. Action by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed judicial action or suit
brought by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he is or was an Agent (as defined in Section 1)
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or other such court shall deem proper.
Section 3. Determination of Right of Indemnification. Any
indemnification under Sections 1 or 2 (unless ordered by a court) shall be made
by the Corporation unless a determination is reasonably and promptly made (i) by
the Board by a majority vote of a quorum consisting of directors who are or were
not parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders, that such person acted in bad faith and in a manner that such
person did not believe to be in or not opposed to the best interests of the
Corporation, or, with respect to any criminal proceeding, that such person
believed or had reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnification Against Expenses of Successful Party.
Notwithstanding the other provisions of this Article, to the extent that an
Agent has been successful on the merits or otherwise, including the dismissal of
an action without prejudice or the settlement of an action without admission of
liability, in defense of any proceeding or in defense of any claim, issue or
matter therein, such Agent shall be indemnified against all expenses incurred in
connection therewith.
Section 5. Advances of Expenses. Except as limited by Section 6 of
this Article VII, expenses incurred in defending or investigating any action,
suit, proceeding or investigation shall be paid by the Corporation in advance of
the final disposition of such matter, if the Agent shall undertake to repay such
amount in the event that it is ultimately determined, as provided herein, that
such person is not entitled to indemnification. However, no advance shall be
made by the Corporation if a determination is reasonably and promptly made by
the Board of Directors by a majority vote of a quorum of disinterested
directors, or (if such a quorum is not obtainable or, even if obtainable, a
quorum of disinterested directors so directs) by independent legal counsel in a
written opinion, that, based upon the facts known to the Board or counsel at the
time such determination is made, such person acted in bad faith and in a manner
that such person did not believe to be in or not opposed to the best interest of
the Corporation, or, with respect to any criminal proceeding, that such person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Board or independent
legal counsel reasonably determines that such person deliberately breached his
duty to the Corporation or its stockholders.
Section 6. Right of Agent to Indemnification Upon Application;
Procedure Upon Application. Any indemnification under Sections 2, 3, and 4, or
advance under Section 5 of this Article VII, shall be made promptly and in any
event within 45 days, upon the written request of the Agent, unless with respect
to applications under Sections 2, 3, or 5, a determination is reasonably and
promptly made by the Board of Directors by a majority vote of a quorum of
disinterested directors that such Agent acted in a manner set forth in such
Sections as to justify the Corporation's not indemnifying or making an advance
to the Agent. In the event no quorum of disinterested directors is obtainable,
the Board of Directors shall promptly direct that independent legal counsel
shall decide whether the Agent acted in the manner set forth in such Sections as
to justify the Corporation's not indemnifying or making an advance to the Agent.
The right to indemnification or advances as granted by this Article VII shall be
enforceable by the Agent in any court of competent jurisdiction if the Board or
independent legal counsel denies the claim, in whole or in part, or if no
disposition of such claim is made within 45 days. The Agent's expenses incurred
in connection with successfully establishing his right to indemnification, in
whole or in part, in any such proceeding shall also be indemnified by the
Corporation.
Section 7. Other Rights and Remedies. The indemnification provided
by this Article VII shall not be deemed exclusive of any other rights to which
an Agent seeking indemnification may be entitled under any Bylaw, agreement,
vote of stockholders or disinterested directors, court order or otherwise, both
as to action in his official capacity and as to action in another capacity while
holding such office, since it is the policy of the Corporation that
indemnification of Agents shall be made to the fullest extent permitted by law.
The indemnification provided by this Article shall continue as to a person who
has ceased to be an Agent and shall inure to the benefit of the heirs, executors
and administrators of such a person. All rights to indemnification under this
Article shall be deemed to be provided by a contract between the Corporation and
the Agent who serves in such capacity at any time while these Bylaws and other
relevant provisions of the General Corporation Law of the State of Delaware and
other applicable law, if any, are in effect. Any repeal or modification thereof
shall not affect any rights or obligations then existing.
Section 8. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was an Agent against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article.
Section 9. Indemnity Fund. Upon resolution passed by the Board, the
Corporation may establish a trust or other designated account, grant a security
interest or use other means (including, without limitation, a letter of credit),
to ensure the payment of certain of its obligations arising under this Article
and/or agreements which may be entered into between the Company and its officers
and directors from time to time.
Section 10. Constituent Corporations. For the purposes of this
Article, references to "the Corporation" include all constituent corporations
absorbed in a consolidation or merger as well as the resulting or surviving
corporation, so that any person who is or was a director or officer of such a
constituent corporation or is or was serving at the request of such constituent
corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise shall stand in the same position under the
provisions of this Article with respect to the resulting or surviving
corporation as he would had he served such constituent corporation in the same
capacity.
Section 11. Other Enterprises, Fines, and Serving at Corporation's
Request. For purposes of this Article, references to "other enterprise" in
Sections 1 and 10 shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed a person with respect to any employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service as a director or officer of the Corporation which
imposes duties on, or involves services by, such director or officer with
respect to any employee benefit plan, its participants, or beneficiaries; and a
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the Corporation" as referred to in this Article.
Section 12. Indemnification of Other Persons. The provisions of this
Article VII shall not be deemed to preclude the indemnification of any person
who is not an Agent (as defined in Section 1), but whom the Corporation has the
power or obligation to indemnify under the provisions of the General Corporation
Law of the State of Delaware or otherwise. The Corporation may, in its sole
discretion, indemnify an employee, trust or other agent as permitted by the
General Corporation Law of the State of Delaware. The Corporation shall
indemnify an employee, trustee or other agent where required by law.
Section 13. Savings Clause. If this Article or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each Agent against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, and whether internal or external, including a
grand jury proceeding and an action or suit brought by or in the right of the
Corporation, to the full extent permitted by any applicable portion of this
Article that shall not have been invalidated, or by any other applicable law.
ARTICLE VIII
RECORDS
Section 1. Maintenance and Inspection of Share Register. The
Corporation shall keep at its principal executive office, or at the office of
its transfer agent or registrar, if either be appointed and as determined by
resolution of the Board of Directors, a record of its stockholders, giving the
names and addresses of all stockholders and the number and class of shares held
by each stockholder.
A stockholder or stockholders of the Corporation holding at least 5%
in the aggregate of the outstanding voting shares of the Corporation or who hold
at least l% of such voting shares and have filed a Schedule 14B with the United
States Securities and Exchange Commission relating to the election of directors
of the Corporation may (i) inspect and copy the records of stockholders' names
and addresses and stockholdings during usual business hours on 5 days' prior
written demand on the Corporation, or (ii) obtain from the transfer agent of the
Corporation, on written demand and on the tender of such transfer agent's usual
charges for such list, a list of the stockholders' names and addresses, who are
entitled to vote for the election of directors, and their stockholdings, as of
the most recent record date for which that list has been compiled or as of a
date specified by the stockholder after the date of demand. This list shall be
made available to any such stockholder by the transfer agent on or before the
later of 5 days after the demand is received or the date specified in the demand
as the date as of which the list is to be compiled. The record of stockholders
shall also be open to inspection on the written demand of any stockholder or
holder of a voting trust certificate, at any time during usual business hours,
for a purpose reasonably related to the holder's interests as a stockholder or
as the holder of a voting trust certificate. Any inspection and copying under
this Section I may be made in person or by an agent or attorney of the
stockholder or holder of a voting trust certificate making the demand.
Section 2. Maintenance and Inspection of Bylaws. The Corporation
shall keep at its principal executive office, the original or a copy of these
Bylaws, as amended, to date, which shall be open to inspection by the
stockholders at all reasonable times during office hours.
ARTICLE IX
GENERAL PROVISIONS
Section 1. Dividends. Subject to limitations contained in the
General Corporation Law of the State of Delaware and the Certificate of
Incorporation, the Board of Directors may declare and pay dividends upon the
shares of capital stock of the Corporation, which dividends may be paid either
in cash, securities of the Corporation or other property.
Section 2. Disbursements. All checks or demands for money and notes
of the Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The Corporation shall have a corporate
seal in such form as shall be prescribed by the Board of Directors.
Section 5. Record Date. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock, or for the
purpose of any other lawful action, the Board of Directors may fix, in advance,
a record date, which shall not be more than 60 days nor less than ten days
before the date of such meeting, nor more than 60 days prior to any other
action. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting. Stockholders on the record date are entitled to notice and
to vote or to receive the dividend, distribution or allotment of rights or to
exercise the rights, as the case may be, notwithstanding any transfer of any
shares on the books of the Corporation after the record date, except as
otherwise provided by agreement or by applicable law.
Section 6. Voting of Stock Owned by the Corporation. The Board of
Directors may authorize any person, on behalf of the Corporation, to attend,
vote and grant proxies to be used at any meeting of stockholders of any
corporation (except this Corporation) in which the Corporation may hold stock.
Section 7. Construction and Definitions. Unless the context requires
otherwise, the general provisions, rules of construction and definitions in the
General Corporation law of the State of Delaware shall govern the construction
of these Bylaws.
Section 8. Amendments. Subject to the General Corporation Law of the
State of Delaware, the Certificate of Incorporation and these Bylaws, the Board
of Directors may by majority vote of those present at any meeting at which a
quorum is present amend or repeal these Bylaws, or enact other Bylaws as in
their judgment may be advisable for the regulation of the conduct of the affairs
of the Corporation. Unless otherwise restricted by the Certificate of
Incorporation, subject to Article X below, these Bylaws may be altered, amended
or repealed at any annual meeting of the stockholders (or at any special meeting
thereof duly called for that purpose) by a majority of the combined voting power
of the then outstanding shares of capital stock of all classes and series of the
Corporation entitled to vote generally in the election of directors, voting as a
single class, provided that, in the notice of any such special meeting, notice
of such purpose shall be given.
ARTICLE X
AUTOMATIC AMENDMENT
PURSUANT TO
STOCKHOLDER AGREEMENT
Reference is made to that certain Stockholder Agreement (the
"Stockholder Agreement") dated as of July 31, 1995 by and between the
Corporation and Samsung Electronics Co., Ltd. ("Samsung"), as amended by
Amendment No. 1 to Stockholder Agreement (the "Amendment") dated as of
December 21, 1995 by and between the Corporation and Samsung. Section 7 of the
Amendment provides for an amendment to Article 4 of the Stockholder Agreement
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%, and provides
further for the restoration of Article 4 as originally set forth in the
Stockholder Agreement (the "Restoration") in the event the Purchaser Interest
shall have been less than 40% for a period of at least twenty-five (25)
consecutive days.
In the event the Restoration occurs, then automatically and without
any further action required by the Board of Directors or the stockholders, these
Bylaws shall be amended as set forth on Exhibit 1 hereto. Notwithstanding
anything to the contrary herein, this Article X may not be amended or repealed
without the approval of a majority of the Independent Directors (as defined in
the Amendment).
CONFIDENTIAL
SAMSUNG ELECTRONICS CO., LTD.
Samsung Main Building
250 2-Ka Taepyung-Ro, Chun-Ku
Seoul, Korea 100-742
December 21, 1995
AST Research, Inc.
16215 Alton Parkway
Irvine, CA 92718
Attention: Board of Directors
Gentlemen:
This letter is provided by Samsung Electronics Co., Ltd. ("SEC") to AST
Research, Inc. ("AST") in connection with the transactions contemplated by that
certain Additional Support Agreement of even date herewith between SEC and AST
(the "Additional Support Agreement"). In addition to the extended vendor
credit and the Guaranty contemplated by the Additional Support Agreement, SEC
had indicated its willingness to provide certain other elements of support to
AST up to an aggregate amount of approximately $50 million ("Other Support").
SEC would have sole and absolute discretion to determine the terms and form of
such Other Support, which could include component discounts, joint development,
technology transfers, and/or other forms of support as may be determined by SEC.
This letter is solely an expression of SEC's good will and shall not be
binding upon or enforceable against SEC in any respect except to the extent
specifically provided in a definitive written contract for Other Support signed
by authorized representatives of AST and SEC. Except as specifically provided
in such a definitive written contract, any Other Support provided by SEC may be
discontinued by SEC at any time in its sole and absolute discretion.
If you are in agreement with the foregoing, please return a signed copy of
this letter to the undersigned.
Very Truly Yours,
SAMSUNG ELECTRONICS CO., LTD.
By: Won Suk Yang
Title: Senior Executive Managing Director
Accepted and agreed to:
AST RESEARCH, INC.
By: Ian Diery
Title: President and Chief Executive Officer
