As filed with the Securities and Exchange Commission on December 17, 1999
Registration No. 333-____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under The Securities Act of 1933
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KOMAG, INCORPORATED
(Exact name of registrant as specified in charter)
Delaware 94-2914864
(State of incorporation) (I.R.S. employer identification number)
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1704 Automation Parkway
San Jose, CA 95141
(408) 576-2000
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
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Thian Hoo Tan
President and Chief Executive Officer
Komag, Incorporated
1704 Automation Parkway
San Jose, CA 95131
(408) 576-2000
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
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Copies to:
Alan K. Austin
Brian C. Erb
James C. Creigh
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
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Approximate Date of Commencement of proposed sale to public: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
====================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Securities to be Amount to be Aggregate Price Aggregate Offering Amount of
Registered Registered Per Unit(1) Price(1) Registration Fee
- ------------------------------------------------ ------------------- --------------------- --------------------- -------------------
<S> <C> <C> <C> <C> <C>
Common stock, par value $0.01 per share...... 3,234,940 3.1875 10,311,372 2,723
====================================================================================================================================
<FN>
(1) Estimated solely for purposes of calculating the registration fee based on
the average of the high and low prices of the Common Stock on the Nasdaq
National Market on December 16, 1999.
</FN>
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
DATED DECEMBER 17, 1999
PROSPECTUS
3,234,940 SHARES
KOMAG, INCORPORATED
COMMON STOCK
The Common Stock offered hereby will be sold from time to time by the
Selling Stockholder. See "Selling Stockholder." We will not receive any proceeds
from the sale of shares by the Selling Stockholder. We will pay certain of the
expenses of this offering; however, the Selling Stockholder will bear the cost
of all brokerage commissions and discounts, if any, incurred in connection with
the sale of shares to which this Prospectus relates.
The Selling Stockholder may offer and sell all the shares in the
over-the-counter market or on one or more exchanges, or otherwise at prices and
at terms then prevailing or at prices related to the then current market price,
or in negotiated transactions, or to one or more underwriters for resale to the
public.
The Common Stock is traded on the Nasdaq National Market under the
symbol "KMAG." The last reported sale price of the Common Stock on the Nasdaq
National Market on December 16, 1999 was $3.0625 per share.
The Securities and Exchange Commission and state securities regulators
have not approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ________, 1999.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference room at 450 Fifth Street, N.W., Washington, DC 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Our SEC filings are also available from the SEC's Website at
"http://www.sec.gov."
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the following documents:
o Our quarterly report on Form 10-Q for our fiscal quarter ended
October 3, 1999;
o Our current report on Form 8-K dated August 5, 1999;
o Our quarterly report on Form 10-Q for our fiscal quarter ended
July 4, 1999;
o Our current report on Form 8-K dated June 30, 1999;
o Our current report on Form 8-K dated April 9, 1999;
o Our quarterly report on Form 10-Q for our fiscal quarter ended
April 4, 1999;
o Our annual report on Form 10-K for our fiscal year ended
January 3, 1999;
o The description of our common stock contained in our
registration statement on Form 8-A filed with the SEC on April
29, 1988; and
o Any future filings we will make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act.
We will provide you with a copy of these filings, at no cost, if you
write or telephone our Corporate Secretary at the following address:
Komag, Incorporated
1704 Automation Parkway
San Jose, CA 95131
(408) 576-2000
You should rely only on the information or representations provided in
this prospectus. We have authorized no one to provide you with different
information. We are not making an offer of these securities in any jurisdiction
where the offer is not permitted. You should not assume that the information in
this prospectus is accurate as of any date other than the date on the front of
the document.
<PAGE>
FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference forward-looking
statements that involve risks and uncertainties. Forward-looking statements can
typically be identified by the use of words such as "may," "will," "could,"
"project," "believe," "anticipate," "expect," "estimate," "continue,"
"potential," "plan," "forecasts," and the like. These statements appear in a
number of places in this prospectus and include statements regarding our
intentions, plans, strategies, beliefs or current expectations with respect to,
among other things:
o our financial prospects;
o our financing plans;
o trends affecting our financial condition or operating results;
o our strategies for growth, operations, and product development
and commercialization; and
o conditions or trends in or factors affecting the computer or
hard disk drive industry.
Forward-looking statements are not guarantees of future performance.
Forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those anticipated. The information
contained or incorporated by reference in this prospectus identifies important
factors that could cause such differences. Among the factors that could cause
actual results to differ are the following: We sell a single product into a
market characterized by rapid technological change and sudden shifts in the
balance between supply and demand. Further, we are dependent on a limited number
of customers, some of whom also manufacture some or most of their own disks
internally. Competition in the market, defined by both technology offerings and
pricing, can be intense, especially during times of excess available capacity
such as has been prevalent since 1998. We have a high fixed-cost structure that
can cause operating results to vary dramatically with changes in product yields
and utilization of our equipment and factories. In addition, our business
requires substantial investments for research and development activities and for
physical assets such as equipment and facilities that are dependent on our
access to financial resources. These and other risks are discussed more fully in
this prospectus and the documents incorporated by reference in this prospectus.
We undertake no obligation to publicly release the result of any revisions to
these forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
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<PAGE>
THE COMPANY
Komag, Incorporated designs, manufactures and markets thin-film media
(disks), the primary storage medium for digital data used in computer hard disk
drives. We believe we are the world's largest independent manufacturer of
thin-film media and are well positioned as a broad-based strategic supplier of
choice for the industry's leading disk drive manufacturers. Our business
strategy relies on the combination of advanced technology and high-volume
manufacturing. Our products serve the desktop and enterprise segments of the
disk drive market and are used in products such as personal computers, disk
arrays, network file servers and engineering workstations. We manufacture
leading-edge disk products primarily for 3-1/2 inch form factor hard disk
drives.
Komag was organized in 1983 and is incorporated in the State of
Delaware. Our principal executive offices are located at 1704 Automation
Parkway, San Jose, California 95131 and our telephone number is (408) 576-2000.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of
shares of Common Stock. See "Selling Stockholder" and "Plan of Distribution."
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<PAGE>
SELLING STOCKHOLDER
Western Digital Corporation (the "Selling Stockholder") is selling all
of the 3,234,940 shares of Common Stock offered hereby. The shares being offered
by the Selling Stockholder were acquired from the Company in a transaction
exempt from the registration requirements of the Securities Act by Section 4(2)
pursuant to an Asset Purchase Agreement between the Company and the Selling
Stockholder, dated April 8, 1999.
Pursuant to the Asset Purchase Agreement, the Company has filed with
the Commission, under the Securities Act of 1933, a Registration Statement on
Form S-3, of which this Prospectus forms a part, with respect to the resale of
the shares and has agreed to use commercially reasonable efforts to keep this
Registration Statement effective until such time as all of the outstanding
3,234,940 shares can be sold by the Selling Stockholder in a three-month period
in accordance with Rule 144 under the Securities Act.
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Stockholder that it intends
to sell all or a portion of the shares offered hereby from time to time in
transactions on one or more exchanges, including the Nasdaq National Market, or
in the over-the-counter market or otherwise, at prices and at terms then
prevailing or at prices related to the then current market prices, or in
negotiated transactions. The shares may be sold by one or more of the following:
(a) a block trade in which the broker or dealer engaged will attempt to sell the
shares as agent but may purchase and resell a portion of the block as principal
to facilitate the transaction; (b) purchases by a broker or dealer as principal
and resale by such broker or dealer for its own account pursuant to this
Prospectus; (c) an exchange distribution in accordance with the rules of such
exchange; and (d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers. In effecting sales, brokers or dealers engaged by
the Selling Stockholder may arrange for other brokers or dealers to participate
in the resales. The shares may be sold from time to time by the Selling
Stockholder.
In connection with distributions of the shares or otherwise, the
Selling Stockholder may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the shares registered hereunder in the course of hedging the positions they
assume with the Selling Stockholder. The Selling Stockholder may also sell
shares short and redeliver the shares to close out such short positions. The
Selling Stockholder may also enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the shares
registered hereunder. The Selling Stockholder may also pledge the shares offered
hereby to a broker or dealer and upon a default the broker or dealer may effect
sales of the shares pursuant to this Prospectus.
Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the Selling Stockholder in amounts to
be negotiated in connection with the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales, and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act. In addition, any securities covered by
this Prospectus which qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus. There can be no assurance that
the Selling Shareholder will sell any or all of the shares offered hereunder.
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<PAGE>
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon by Wilson
Sonsini Goodrich & Rosati, P.C., Palo Alto, California.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K for
the year ended January 3, 1999, as set forth in their report, which as to the
three years ended January 3, 1999 is based in part on the reports of Chuo
Corporation, independent auditors, and which is incorporated by reference in
this prospectus and elsewhere in the registration statement. The report of Ernst
& Young LLP contains an explanatory paragraph describing conditions that raise
substantial doubt about our ability to continue as a going concern as described
in Note 1 to the consolidated financial statements. Our financial statements are
incorporated by reference in reliance on Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.
-5-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the expenses (other than underwriting
discounts and commissions), which, other than the SEC registration fee, are
estimates, payable by the Company in connection with the sale and distribution
of the securities registered hereby:
SEC registration fee........................... $ 2,723
Printing expenses.............................. $10,000
Blue Sky fees and expenses..................... $ 1,000
Accountants' fees and expenses................. $10,000
Legal fees and expenses........................ $ 4,000
Miscellaneous.................................. $ 2,277
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Total........................ $30,000
=======
Item 15. Indemnification of Directors and Officers
The Registrant's Restated Certificate of Incorporation provides that no
director of the Registrant will be personally liable to the Registrant or any of
its stockholders for monetary damages arising from the director's breach of
fiduciary duty. However, this provision does not apply with respect to any
action in which the director would be liable under Section 174 of Title 8 of the
General Corporation Law of Delaware, nor does it apply with respect to any
liability resulting from any transaction in which the director (i) breached his
duty of loyalty to the Registrant or its stockholders; (ii) did not act in good
faith or, in failing to act, did not act in good faith; (iii) acted in a manner
involving intentional misconduct or a knowing violation of law or, in failing to
act, acted in a manner involving intentional misconduct or a knowing violation
of law; or (iv) derived an improper personal benefit.
Pursuant to the provisions of Section 145 of the Delaware General
Corporation Law, every Delaware corporation has power to 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 (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the Registrant or of any corporation,
partnership, joint venture, trust or other enterprise for which he is or was
serving in such capacity at the request of the Registrant, against any and all
expenses, judgments, fines and amounts paid in settlement and reasonably
incurred by him in connection with such action, suit or proceeding. The power to
indemnify applies only if such person acted in good faith and in a manner he
reasonably believed to be in the best interests, 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 power to indemnify applies to actions brought by or in the right of
the corporation as well, but only to the extent of defense and settlement
expenses and not to any satisfaction of a judgment or settlement of the claim
itself, and with the further limitation that in such actions no indemnification
shall be made in the event of any adjudication of negligence or misconduct
unless the court, in its discretion, feels that in the light of all the
circumstances indemnification should apply.
To the extent any of the persons referred to in the two immediately
preceding paragraphs is successful in the defense of the actions referred to
therein, such person is, pursuant to Section 145 of the Delaware General
II-1
<PAGE>
Corporation Law, entitled to indemnification as described above. Section 145
also grants power to advance litigation expenses upon receipt of an undertaking
to repay such advances in the event no right to indemnification is subsequently
shown. A corporation may also obtain insurance at its expense to protect anyone
who might be indemnified, or has a right to insist on indemnification, under the
statute.
The Registrant has entered into indemnification agreements with its
directors and officers which provide for indemnification to the fullest extent
permitted by Delaware General Corporation Law, including Section 145 thereof.
Agents, dealers, and underwriters may be entitled under agreements
entered into with us to indemnification by us against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments that such agents, dealers, or underwriters may be required to make
with respect thereto. Agents, dealers, and underwriters may be customers of,
engage in transactions with, or perform services for us in the ordinary course
of business.
Item 16. Exhibits
See Exhibit Index.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(6) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Jose, State of California, on December 17, 1999.
KOMAG, INCORPORATED
By: /s/ Thian Hoo Tan
--------------------------
Thian Hoo Tan
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officers and
directors of Komag, Incorporated, a Delaware corporation, do hereby constitute
and appoint Thian Hoo Tan and William L. Potts, Jr., and each of them, the
lawful attorneys and agents, with full power and authority to do any and all
acts and things and to execute any and all instruments which said attorneys and
agents, and any one of them, determine may be necessary or advisable or required
to enable said corporation to comply with the Securities Act of 1933, as
amended, and any rules or regulations or requirements of the SEC in connection
with this Registration Statement. Without limiting the generality of the
foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or any of them, shall do or cause to be done
by virtue hereof. This Power of Attorney may be signed in several counterparts.
II-4
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Thian Hoo Tan
- ---------------------------------- President, Chief Executive Officer and December 17, 1999
Thian Hoo Tan Director (Principal Executive Officer)
/s/ William L. Potts, Jr.
- ---------------------------------- Senior Vice President of Finance, Chief December 17, 1999
William L. Potts, Jr. Financial Officer and Secretary
(Principal Financial and Accounting Officer)
/s/ Chris A. Eyre Director December 17, 1999
- ----------------------------------
Chris A. Eyre
/s/ Irwin Federman Director December 17, 1999
- ----------------------------------
Irwin Federman
/s/ George A. Neil Director December 17, 1999
- ----------------------------------
George A. Neil
/s/ Michael R. Splinter Director December 17, 1999
- ----------------------------------
Michael R. Splinter
/s/ Anthony Sun Director December 17, 1999
- ----------------------------------
Anthony Sun
/s/ Masayoshi Takebayashi Director December 17, 1999
- ----------------------------------
Masayoshi Takebayashi
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2.1 Asset Purchase Agreement between Komag, Incorporated and
Western Digital Corporation dated April 8, 1999
(incorporated by reference to Exhibit 10.1.13 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 4, 1999)
4.1 Registration Rights Agreement between Komag, Incorporated
and Western Digital Corporation dated April 8, 1999
5.1 Opinion of Wilson Sonsini Goodrich & Rosati
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Wilson Sonsini Goodrich & Rosati (included in
Exhibit 5.1)
23.3 Consent of Chuo Audit Corporation, Independent Accountants
24.1 Power of Attorney (See signature page)
Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of April 8, 1999 by and between KOMAG, INCORPORATED, a Delaware
corporation ("Komag"), and WESTERN DIGITAL CORPORATION, a Delaware corporation
("WDC"). Komag and WDC are referred to collectively herein as the "Parties."
RECITALS
A. On April 8, 1999, Komag and WDC entered into that certain Asset
Purchase Agreement ("Purchase Agreement") pursuant to which, inter alia, WDC
agreed to sell certain of its assets and properties utilized in its Santa Clara
Disk Media Operations to Komag (the "Acquisition") in exchange for, among other
things, unregistered shares of Komag's common stock, $0.01 par value per share
("Komag Common Stock"). Capitalized terms used herein not otherwise defined
herein shall have the meanings set forth in the Purchase Agreement.
B. As an inducement to the completion of, and as a condition precedent
to the completion of, the Acquisition, Komag has agreed to provide certain
registration rights to WDC, and WDC has agreed to restrict its resale of Komag
Common Stock, in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the covenants, promises and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency is hereby acknowledged, the Parties agree as follows:
1. Definitions.
(a) For purposes of this Agreement, the following terms shall
have the following respective meanings:
(i) "1933 Act" shall mean the Securities Act of 1933,
as amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect from time
to time.
(ii) "1934 Act" shall mean the Securities Exchange
Act of 1934, as amended, or any similar federal statute enacted hereafter, and
the rules and regulations of the SEC thereunder, all as the same shall be in
effect from time to time.
(iii) "Form S-3" shall mean such form under the 1933
Act as in effect on the date hereof or any registration form under the 1933 Act
subsequently adopted by the SEC which
<PAGE>
similarly permits inclusion or incorporation of substantial information by
reference to other documents filed by Komag with the SEC.
(iv) "Initial Registrable Amount" shall equal: (i)
the number of shares of Komag Common Stock issued to WDC pursuant to the
Purchase Agreement plus (ii) all securities which are issued or received in
respect of, or in exchange or in substitution for, the shares identified in
clause (i) hereof including, without limitation, those arising from a stock
dividend, distribution, stock split, reclassification, reorganization, merger,
consolidation or other exchange of securities.
(v) "NASD" shall mean the National Association of
Securities Dealers, Inc.
(vi) "Person" shall mean an individual, a sole
proprietorship, a corporation, a partnership, a limited liability company, a
limited liability partnership, a joint venture, an association, a trust or any
other entity or organization, including a government or political subdivision,
agency or instrumentality thereof.
(vii) The terms "register," "registered" and
"registration" refer to a registration effected by preparing and filing a
registration statement ("Registration Statement") in compliance with the 1933
Act and the declaration or ordering of effectiveness of such Registration
Statement with the SEC.
(viii) "Registrable Securities" shall mean (i) the
shares of Komag Common Stock issued to WDC pursuant to the Purchase Agreement
and (ii) securities which are issued or received in respect of, or in exchange
or in substitution for, the shares identified in clause (i) hereof including,
without limitation, those arising from a stock dividend, distribution, stock
split, reclassification, reorganization, merger, consolidation or other exchange
of securities. As to any particular Registrable Securities, once issued, such
securities shall cease to be Registrable Securities when (w) a Registration
Statement with respect to the sale of such securities shall have become
effective under the Act and such securities shall have been disposed of in
accordance with such Registration Statement, (x) such securities shall have
ceased to be outstanding, (y) such securities shall have been transferred as
permitted by, and in compliance with, Rule 144 under the 1933 Act or (z) such
time as all of the outstanding Registrable Securities can be sold by WDC in a
three-month period in accordance with Rule 144 under the 1933 Act.
(ix) "Registration Period" shall mean the period
commencing on the effective date of a registration statement filed pursuant to
Section 3 or 4 hereof until such time as all of the outstanding Registrable
Securities can be sold by WDC in a three-month period in accordance with Rule
144 under the 1933 Act.
(x) "SEC" shall mean the United States Securities and
Exchange Commission.
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(b) The following terms are defined in the following sections
of this Agreement:
Terms Sections
----- --------
Acquisition Preamble
Agreement Preamble
Demand Registration 4(a)
Komag Preamble
Komag Common Stock Preamble
Parties Preamble
Piggyback Shares 2
Purchase Agreement Preamble
Resale Registration Statement 3
Unregistered Shares 3
WDC Preamble
2. Piggyback Registration. If at any time prior to one hundred and
eighty (180) days following the date hereof (the "Initial Period"), or at any
time thereafter during the Registration Period, Komag shall register any shares
of its common stock for its own account pursuant to a Registration Statement
under the 1933 Act (other than a registration relating to employee benefit plans
or to a transaction subject to Rule 145 under the 1933 Act), Komag shall use
commercially reasonable efforts to cause to be registered on such Registration
Statement and in any underwriting involved therein, subject to and in accordance
with the terms, conditions, procedures and limitations contained in this
Agreement, a number of Registrable Securities equal to (a) with respect to any
registration during the Initial Period, up to thirty percent (30%) of the
Registrable Securities (the "Piggyback Shares") or (b) with respect to any
registration after the Initial Period, up to the number of Registrable
Securities that WDC is entitled to sell pursuant to Section 10(b) below, in each
event as requested to be included by WDC. Notwithstanding the foregoing, Komag
shall have the right to delay, terminate or withdraw any registration initiated
by it under this Section 2 for any reason prior to the effectiveness of such
registration.
3. Registration on Resale Registration Statement. If all or any portion
of the Piggyback Shares are not registered within one hundred and twenty (120)
days following the date hereof (such unregistered Piggyback Shares, the
"Unregistered Shares") and the Company does not provide WDC with evidence
reasonably satisfactory to WDC that all such Unregistered Shares will be covered
by an effective registration statement prior to the one hundred eightieth
(180th) day following the date hereof, then Komag shall use commercially
reasonable efforts to prepare and file with the SEC a Registration Statement on
Form S-3 ("Resale Registration Statement") covering the Unregistered Shares for
the purpose of registering such Unregistered Shares for resale under the 1933
Act, which Resale Registration Statement shall be filed in a timeframe
reasonably expected to result in it being declared effective at the end of such
180-day period. Such registration shall be underwritten if so requested by WDC.
In addition, such registration shall be in addition to registration provided in
Section 4 and shall be subject to and in accordance with the terms, conditions,
procedures and limitations contained in this Agreement. Notwithstanding the
foregoing, Komag shall have the right to delay any registration initiated under
this Section 3 for a period of not more than sixty (60) days if the Board of
Directors of Komag, acting in good faith, determines that there exists material
nonpublic information which the Board does not wish to disclose in the Resale
Registration
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Statement. If the Board of Directors of Komag makes such determination, Komag
shall promptly advise WDC that a delay of such registration is likely.
4. Demand Registration.
(a) If, at any time, WDC is unable to sell during a
three-month period pursuant to Rule 144 under the 1933 Act, all of the
Registrable Securities it is permitted to sell pursuant to Section 10(b) hereof,
WDC shall have the right to request, by written notice, on one occasion, that
Komag file a Registration Statement on Form S-3 pursuant to Rule 415 covering
all Registrable Securities for the purpose of registering such securities under
the 1933 Act ("Demand Registration"). Any such written notice shall (i) specify
the amount of Registrable Securities intended to be sold or disposed of by WDC
and (ii) shall state the intended method or methods of disposition (including by
means of an underwritten offering) of such Registrable Securities. Promptly
after receiving the written notice of the request for Demand Registration, Komag
shall use commercially reasonable efforts to cause all Registrable Securities
specified in the written request to be registered on the Demand Registration
Statement under the 1933 Act, subject to and in accordance with the terms,
conditions, procedures and limitations contained in this Agreement.
(b) Notwithstanding the foregoing, Komag shall not be
obligated to effect the filing of a registration pursuant to Section 4(a): (i)
at any time prior to September 8, 2000, (ii) after Komag has effected one
registration pursuant to Section 4(a), or (iii) if, at the time of any request
to register Registrable Securities pursuant to Section 4(a), Komag is preparing,
or within ten (10) days thereafter engages an underwriter, and commences in good
faith to prepare, a Registration Statement for a public offering (other than a
registration relating solely to employee benefit plans) which is in fact filed
and becomes effective within ninety (90) days after the date WDC has provided
the written request, or is engaged in any material acquisition or divestiture or
other business transaction with a third party which the Board of Directors of
Komag reasonably determines in good faith would be adversely affected by the
Demand Registration to the material detriment of Komag, then Komag may at its
option direct that such Demand Registration be delayed for a period not in
excess of ninety (90) days from the date of such request.
5. Demand Obligations of Komag. Whenever Komag is required under
Section 3 or 4 of this Agreement to effect the registration of any Registrable
Securities:
(a) Komag shall (i) prepare and file with the SEC a
Registration Statement covering the Registrable Securities and use commercially
reasonable efforts to cause such Registration Statement to be declared effective
by the SEC and to keep such registration effective until the termination of the
Registration Period; (ii) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary and to comply with the provisions of the 1933 Act
with respect to the sale or other disposition of all Registrable Securities
proposed to be registered in such Registration Statement until termination of
the Registration Period; (iii) furnish to WDC such number of copies of any
prospectus (including any preliminary prospectus and any amended or supplemented
prospectus) in conformity with the requirements of the 1933 Act, and such other
documents as WDC may reasonably request, in order to effect the offering and
sale of the Registrable Securities to be offered and sold, but only while Komag
shall be required under the provisions hereof to cause the
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Registration Statement to remain current; and (iv) use commercially reasonable
efforts to register or qualify the Registrable Securities covered by such
Registration Statement under the securities or blue sky laws of such
jurisdictions as WDC shall reasonably request; provided that Komag shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such
jurisdiction where it has not been qualified.
(b) Komag shall notify WDC (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and, with
respect to such Registration Statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the SEC or any other federal
or state governmental authority during the period of effectiveness of such
Registration Statement for amendments or supplements to such Registration
Statement or related prospectus or for additional information relating to the
Registration Statement; (iii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose; (iv) of Komag's receipt of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; or (v) of the happening of any
event which makes any statement made in such Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the making of any
changes in such Registration Statement or prospectus so that, in the case of
such Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and that in the case
of the prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. Upon
the happening of any event (A) of the kind described in clauses (ii), (iii),
(iv), or (v) hereof or, (B) that, in the good faith judgment of Komag's Board of
Directors, renders it advisable to suspend use of the prospectus due to pending
corporate developments, public filings with the SEC or similar events, Komag may
suspend use of the prospectus on notice to WDC; provided, however, that with
respect to the events described in clauses (A)(v) or (B) of this sentence, Komag
shall use commercially reasonable efforts to take such steps as are necessary to
permit the continued use of the prospectus as soon as possible and, in any
event, no such suspension shall be longer than 90 days in any one year period.
Upon such suspension of the prospectus, WDC shall discontinue disposition of
Registrable Securities covered by such Registration Statement or prospectus
until copies of a supplemented or amended prospectus are distributed to WDC or
until WDC is advised in writing by Komag that the use of the applicable
prospectus may be resumed and, if so directed, WDC will deliver to Komag (at
Komag's expense) all copies, other than permanent file copies then in WDC's
possession, of the prospectus covering such Registrable Securities at the time
of receipt of such notice. Komag shall use commercially reasonable efforts to
obtain the withdrawal of any order suspending the effectiveness of such
Registration Statement, or the lifting of any suspension of the qualification
(or exemption from qualification) of any of the Registrable Securities for sale
in any jurisdiction, at the earliest practicable time. Except as expressly
provided in this Section 5(b), during the Registration Period, Komag shall fully
comply with the rules and regulations promulgated under the 1933 Act with
respect to shelf Registration Statements pursuant to Rule 415 of the 1933 Act
and upon the occurrence of any event contemplated by clause (v), promptly (and
in no event more than fifteen (15) days after such event) prepare a supplement
or post-effective amendment to such Registration
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<PAGE>
Statement or a supplement to the related prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
such prospectus will not contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
6. Additional Obligations of Komag. In connection with any offering of
Registrable Securities registered pursuant to this Agreement, Komag shall (i)
furnish WDC, at Komag's expense, with unlegended certificates representing
ownership of the Registrable Securities being sold in such denominations as WDC
shall request, (ii) instruct the transfer agent and registrar of the Registrable
Securities to release any stop transfer orders with respect to the Registrable
Securities being sold and (iii) use commercially reasonable efforts to cause all
Registrable Securities included in such Registration Statement to be listed, by
the date of the first sale of Registrable Securities pursuant to such
Registration Statement, on each securities exchange on which shares of Komag
Common Stock are then listed or proposed by Komag to be listed.
7. Furnish Information. In connection with any registration of
Registrable Securities pursuant to this Agreement, WDC shall provide all such
information and materials to Komag regarding it, the Registrable Securities held
by it and the intended method of disposition by it of such Registrable
Securities and shall take all such action as may be reasonably required in order
to permit Komag and any underwriters to comply with all applicable requirements
of the SEC and the NASD and to obtain any desired acceleration of the effective
date of the Registration Statement covering such Registrable Securities. Such
provision of information and materials is a condition precedent to the
obligations of Komag pursuant to this Agreement. Komag shall only use in a
Registration Statement or prospectus information regarding WDC expressly
designated by WDC for use in such Registration Statement or prospectus.
8. Underwriting Requirements; Underwriting Priorities.
(a) With respect to any registration effectuated pursuant to
Section 3 of this Agreement, Komag will have the right to select the investment
banker(s) and manager(s), if any, to administer any such offerings of securities
subject to the reasonable consent of WDC; and, with respect to any registration
effectuated pursuant to Section 4 of this Agreement, WDC shall have the right to
select the investment banker(s) and manager(s), if any, to administer any such
offering of securities, subject to the reasonable consent of Komag.
(b) If any registration pursuant to Section 2 is for a
registered public offering involving an underwriting, Komag shall so advise. In
such event the rights of WDC to registration pursuant to this Agreement shall be
conditioned upon WDC's participation in such underwriting and the inclusion of
WDC's Registrable Securities in the underwriting to the extent provided herein.
WDC shall (together with Komag and any other stockholders distributing their
securities through such underwriting) (i) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by Komag and (ii) complete and execute all other questionnaires,
powers of attorney, indemnities and other documents reasonably required under
the terms of such underwriting agreement. If WDC disapproves of the terms of any
such underwriting, WDC may elect to withdraw therefrom by written notice to WDC
and the underwriter.
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<PAGE>
(c) Notwithstanding any other provision contained in this
Agreement to the contrary, with respect to any registration pursuant to Section
2 hereof, if the underwriter determines that marketing factors require a
limitation of the number of securities to be underwritten, the underwriter may
limit or exclude the amount of Registrable Securities to be included in the
registration and underwriting as follows: Komag will include in such
registration (i) first, all of the securities Komag proposes to sell and (ii)
second, subject to the obligations of Komag pursuant to contractual registration
rights granted by Komag prior to the date of this Agreement, the securities
sought to be registered by WDC and the beneficial owners thereof, other than
WDC, on a prorata basis based upon the number of shares of Komag owned by WDC
and such persons. In the event of any such limitation or inclusion of fewer than
all of the Registrable Securities, Komag shall so advise.
9. Expenses. Komag shall pay all of the out-of-pocket expenses incurred
in connection with the registration of Registrable Securities pursuant to this
Agreement, including all SEC, NASD and blue sky registration and filing fees,
printing expenses, transfer agents' and registrars' fees, and the fees and
disbursements of Komag's outside counsel and independent accountants; provided
that, if any registration pursuant to Section 4 of this Agreement is
underwritten at the request of WDC, all such expenses that would not be incurred
but for the fact that such registration is underwritten shall be the obligation
of WDC. Without limiting the foregoing, WDC shall pay all underwriting discounts
and commissions and applicable transfer taxes as well as all disbursements of
any legal counsel retained by it.
10. Lockup Agreement.
(a) Except as provided in subsection (b) of this Section 10,
WDC agrees not to offer to sell, contract to sell or otherwise sell, dispose of,
loan, pledge or grant any rights with respect to (collectively, a "Disposition")
any Registrable Securities for a period of beginning on the Closing Date and
expiring on the forty-two (42) month anniversary of the Closing Date (the
"Restricted Period"), otherwise than (i) as a bona fide gift or gifts, provided
the donee or donees thereof agree to be bound by this Agreement, (ii) as a
distribution to stockholders of WDC, provided the distributees thereof agree in
writing to be bound by the terms of this Agreement, (iii) as a bona fide pledge
of the Registrable Securities by WDC to BankBoston or any of its other senior
lenders, or (iv) with the prior written consent of Komag. The forgoing
restriction is expressly agreed to preclude the holder of the Registrable
Securities from engaging in any hedging or other transaction which is designed
to or reasonably expected to lead to or result in a Disposition of Registrable
Securities during the Restricted Period even if such Registrable Securities
would be disposed of by someone other than WDC. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Registrable Securities
or with respect to any security (other than a broad-based market basket or
index) that includes, relates to or derives any significant part of its value
from Registrable Securities. Furthermore, WDC agrees and consents to the entry
of stop transfer instructions with Komag's transfer agent against the transfer
of Registrable Securities except in compliance with this Agreement.
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(b) WDC may engage in one or more Dispositions (including,
without limitation, engaging in hedging transactions) of the Registrable
Securities pursuant to the schedule set forth below:
(i) From the Closing Date until April 8, 2000, WDC
may engage in Dispositions of Registrable Securities which have been registered
for resale pursuant to Sections 2 and 3 hereof.
(ii) On and after April 8, 2000 (12 months after the
Closing Date), WDC may engage in one or more Dispositions that, when aggregated
with all prior sales of Registrable Securities, equals up to forty-five (45%) of
the Initial Registrable Amount;
(iii) On and after October 8, 2000 (18 months after
the Closing Date), WDC may engage in one or more Dispositions that, when
aggregated with all prior sales of Registrable Securities, equals up to sixty
percent (60%) of the Initial Registrable Amount;
(iv) On and after October 8, 2001 (30 months after
the Closing Date), WDC may engage in one or more Dispositions that, when
aggregated with all prior sales of Registrable Securities, equals up to ninety
percent (90%) of the Initial Registrable Amount;
(v) After October 8, 2002 (42 months after the
Closing Date), WDC may engage in one or more Dispositions of all of the
Registrable Securities.
11. Assignment of Registration Rights. The rights, duties and
obligations of Komag and WDC pursuant to this Agreement may not be assigned, by
operation of law or otherwise, except to a direct or indirect subsidiary of WDC.
12. Indemnification and Contribution. In the event of any offering
registered pursuant to this Agreement:
(a) Komag will indemnify and hold harmless WDC and WDC's
officers and directors, and each underwriter, if any, of securities being sold
by WDC, against any losses, claims, damages or liabilities to which WDC may
become subject under the 1933 Act and the 1934 Act arising out of or based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in any registration statement, or any amendment or supplement thereto,
incident to any offering registered pursuant to this Agreement, or the omission
or alleged omission to state therein a material fact necessary to make the
statements therein not misleading, or (ii) any untrue statement or alleged
untrue statement of any material fact contained in any prospectus, or any
amendment or supplement thereto, incident to any offering registered pursuant to
this Agreement, or the omission or alleged omission to state therein a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse WDC for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that Komag shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, such prospectus, or any such
amendment or supplement thereto,
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in reliance upon, and in conformity with, information relating to WDC furnished
by WDC or its agents or representatives to Komag or any underwriter specifically
for use in the preparation thereof and, provided further, that the indemnity
agreement provided in this Section 12(a) shall not inure to the benefit of WDC
where the person asserting any losses, claims, damages, liabilities or actions
arising from any untrue statement or alleged untrue statement of material fact
or omission or alleged omission to state therein a material fact had purchased
Komag securities from WDC and WDC had failed to deliver to such person in the
manner and within the time required by the 1933 Act a copy of a prospectus in
which such untrue statement or alleged untrue statement or omission or alleged
omission was corrected, unless such failure is the result of noncompliance by
Komag with Section 5(a)(iii) hereof.
The indemnity agreement in this Section 12(a) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each person, if
any, who controls WDC and each underwriter, if any, within the meaning of the
1933 Act or the 1934 Act.
(b) WDC will, if Registrable Securities held by WDC are
included in the securities to which such registration is being effected,
indemnify and hold harmless Komag and Komag's officers and directors, and each
underwriter, if any, of securities covered by such Registration Statement,
against any losses, claims, damages or liabilities to which such Person may
become subject under the 1933 Act and the 1934 Act arising out of or based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in any registration statement or any amendment or supplement thereto,
incident to any offering registered pursuant to this Agreement, or the omission
or alleged omission to state therein a material fact necessary to make the
statements therein not misleading, or (ii) any untrue statement or alleged
untrue statement of any material fact contained in any prospectus or any
amendment or supplement thereto, incident to any offering registered pursuant to
this Agreement, or the omission or alleged omission to state therein a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to Komag
or any underwriter by WDC, directly or through WDC's representatives,
specifically for use in the preparation thereof, and agrees to reimburse Komag,
Komag's officers and directors and each underwriter, if any, for any legal or
other expenses reasonably incurred by such Person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, that the liability of WDC under this Section 12(a) shall be limited to
an amount equal to the gross proceeds before expenses and commissions from all
sales of securities by WDC under any registration statement filed pursuant to
this Agreement.
The indemnity agreement in this Section 12(b) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each Person, if
any, who controls Komag and each underwriter, if any, within the meaning of the
1933 Act or the 1934 Act.
(c) Each party entitled to indemnification under this Section
12 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
receives written notice of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall
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conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at such party's expense
(unless the Indemnified Party reasonably and in good faith determines, after
consultation with independent counsel, that there are additional defenses or
claims that it may assert that are adverse to or not in the interest of the
Indemnifying Party and separate counsel is required to represent such interests,
in which case the reasonable expenses of such counsel shall be paid for by the
Indemnifying Party), and provided further that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying Party
of its obligations under this Agreement, except to the extent that the
Indemnifying Party's ability to defend against such claim or litigation is
impaired as a result of such failure to give notice. Notwithstanding the
foregoing sentence, the Indemnified Party may retain its own counsel to conduct
the defense of any such claim or litigation, and shall be entitled to be
reimbursed by the Indemnifying Party for expenses incurred by the Indemnified
Party in defense of such claim or litigation, in the event that the Indemnifying
Party does not assume the defense of such claim or litigation within sixty days
after the Indemnifying Party receives written notice thereof from the
Indemnified Party. Further, an Indemnifying Party shall be liable for amounts
paid in settlement of any such claim or litigation only if the Indemnifying
Party consents in writing to such settlement (which consent shall not be
unreasonably withheld). No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party (which
consent shall not be unreasonably withheld), consent to entry of any judgment or
enter any settlement which does not include an unconditional release of each
such Indemnified Party from all liability in respect to such claim or
litigation.
(d) The obligations of Komag and WDC under this Section 12
shall survive the completion of any offering of securities in a registration
statement under this Agreement or otherwise.
13. Amendments. No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by Komag and the
Company. No waiver by any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
14. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the SEC which may at any time permit the sale
of the Registrable Securities to the public without registration, after such
time as a public market exists for the securities of Komag, Komag agrees to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the 1933 Act, at all times after
the date hereof;
(b) Use commercially reasonable efforts to file with the SEC
in a timely manner all reports and other documents required of Komag under the
1933 Act and the 1934 Act; and
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(c) So long as WDC owns any Registrable Securities, furnish to
WDC forthwith upon request a written statement by Komag as to its compliance
with the reporting requirements of Rule 144, and of the 1933 Act and the 1934
Act, a copy of the most recent annual or quarterly report of Komag and such
other reports and documents of Komag as WDC may reasonably request in availing
itself of any rule or regulation of the SEC allowing WDC to sell any such
securities without registration.
15. Termination. The registration rights set forth in this Agreement
shall terminate (and the shares held by WDC shall cease to constitute
Registrable Securities) (a) at any time, upon mutual agreement in writing of the
Parties hereto or (b) upon such time as all of the Registrable Securities then
held by WDC can be sold by WDC in a three-month period in accordance with Rule
144 under the 1933 Act.
16. Notice. All notices and other communications required or permitted
under this Agreement shall be deemed to have been duly given and made if in
writing and if served either by personal delivery or by facsimile (with
telephonic confirmation of receipt) to the party for whom intended (which shall
include delivery by Federal Express or similar nationally recognized service) or
three business days after being deposited, postage prepaid, certified or
registered mail, return receipt requested, in the United States mail bearing the
address shown in this Agreement for, or such other address as may be designated
in writing hereafter by, such party:
If to WDC: Western Digital Corporation
8105 Irvine Center Drive
Irvine, CA 92618
Attn: General Counsel
Telephone: (949) 932-5133
Facsimile: (949) 932-7837
with a copy to: Gibson, Dunn & Crutcher LLP
1530 Page Mill Road
Palo Alto, CA 94304
Attn: Gregory T. Davidson, Esq.
Telephone: (650) 849-5300
Facsimile: (650) 849-5333
If to Komag: Komag, Incorporated
1704 Automation Parkway
San Jose, CA 95131
Attn: Chief Financial Officer
Telephone: (408) 576-2000
Facsimile: (408) 944-9255
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with a copy to: Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Attn: Steven V. Bernard
Telephone: (650) 493-9300
Facsimile: (650) 493-6811
Any party may change the address to which notices, requests, demands,
claims and other communications hereunder are to be delivered by giving the
other party notice in the manner herein set forth.
17. Counterparts and Facsimile Signatures. This Agreement may be
executed, including by facsimile signature, in one or more counterparts, each of
which when so executed shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
18. Interpretation. Unless the context of this Agreement otherwise
requires, (i) words of any gender include each gender and neuter, (ii) words
using the singular or plural number also include the plural or singular number,
respectively, (iii) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Agreement, (iv) the terms "Article" or
"Section" refer to the specified Article or Section of this Agreement; (v) the
term "including" or similar words shall be construed as to refer to such matter
without limitation thereof. Whenever this Agreement refers to a number of days,
such number shall refer to calendar days unless business days are specified. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
19. Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
20. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of Delaware.
21. Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties with respect to
the subject matter hereof and supersedes any prior understandings, agreements,
or representations by or between the Parties, written or oral, to the extent
they related in any way to the subject matter hereof.
[Remainder of Page Intentionally Left Blank]
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<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
KOMAG, INCORPORATED
By: ______________________________
Name:
Title:
WESTERN DIGITAL CORPORATION
By: ______________________________
Name:
Title:
[Registration Rights Agreement Signature Pages]
-13-
Exhibit 5.1
[Letterhead of Wilson Sonsini Goodrich & Rosati]
December 17, 1999
Komag, Incorporated
1704 Automation Parkway
San Jose, CA 95131
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by
you with the Securities and Exchange Commission on or about December 17, 1999
(the "Registration Statement"), in connection with the registration under the
Securities Act of 1933, as amended, of up to 3,234,940 shares of your Common
Stock (the "Shares"). As your legal counsel, we have examined the proceedings
taken by you in connection with the issuance and sale of the Shares.
It is our opinion that the Shares have been legally issued and are
fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
II-2
Exhibit 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Komag,
Incorporated for the registration of 3,234,940 shares of its Common Stock and to
the incorporation by reference therein of our report dated January 22, 1999,
with respect to the consolidated financial statements and schedule of Komag,
Incorporated included in its Annual Report (Form 10-K) for the year ended
January 3, 1999.
/s/ Ernst & Young LLP
San Jose, California
December 16, 1999
II-3
Exhibit 23.3
Consent of Independent Accountants
We consent to the incorporation by reference in the registration
statement of Komag, Incorporated on Form S-3 of our report dated January 22,
1999 on our audits of the consolidated financial statements of Asahi Komag Co.,
Ltd. and its subsidiary as of December 31, 1998 and 1997, and for the years
ended December 31, 1998, 1997 and 1996, which report is included in the Annual
Report on Form 10-K of Komag, Incorporated for the year ended January 3, 1999.
/s/ Chuo Audit Corporation
Tokyo, Japan
December 16, 1999
II-4
