<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 21, 1995.
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
DELL COMPUTER CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 2112 KRAMER LANE, BUILDING 1 74-2487834
(State or other jurisdiction of AUSTIN, TEXAS 78758-4012 (I.R.S. Employer
incorporation or organization) (512) 338-4400 Identification No.)
(Address, including ZIP code, and
telephone number, including area
code, of registrant's principal
executive offices)
</TABLE>
---------------------
MICHAEL S. DELL
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
DELL COMPUTER CORPORATION
2112 KRAMER LANE, BUILDING 1
AUSTIN, TEXAS 78758-4012
(512) 338-4400
(Name, address, including ZIP code, and telephone number,
including area code, of agent for service)
---------------------
Copies to:
THOMAS B. GREEN LARRY W. SONSINI
GENERAL COUNSEL WILSON, SONSINI, GOODRICH & ROSATI
DELL COMPUTER CORPORATION PROFESSIONAL CORPORATION
2112 KRAMER LANE, BUILDING 1 650 PAGE MILL ROAD
AUSTIN, TEXAS 78758-4012 PALO ALTO, CALIFORNIA 94304
(512) 338-4400 (415) 493-9300
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
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/
CALCULATION OF REGISTRATION FEE
<TABLE>
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- ------------------------------------------------------------------------------------------------------
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(1) PRICE(1) FEE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value........ 5,263,125 shares $45.25 $238,156,407.00 $82,123.00
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
---------------------
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 OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may
not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any State in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED FEBRUARY 21, 1995
PROSPECTUS
5,263,125 SHARES
DELL (LOGO)
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
---------------------
TO BE OFFERED BY SEVERAL HOLDERS OF THE COMMON STOCK OF DELL COMPUTER
CORPORATION
---------------------
This Prospectus relates to the offering (the "Offering") of up to 5,263,125
shares (the "Shares") of common stock, par value $.01 per share (the "Common
Stock"), by the Selling Stockholders named herein under "Selling Stockholders"
of Dell Computer Corporation (the "Company" or "Dell"), which have been issued
to the Selling Stockholders upon the conversion of shares of the Company's
Series A Convertible Preferred Stock (the "Series A Preferred Stock") pursuant
to the Company's conversion offer. Pursuant to the conversion offer, the Company
offered to pay to holders of Series A Preferred Stock a conversion premium of
$8.25 per share of Series A Preferred Stock converted into shares of Common
Stock during a special conversion period which expired on March 22, 1995. The
distribution of the Shares by the Selling Stockholders is not subject to any
underwriting agreement. The Company will receive no part of the proceeds of
sales made hereunder. All expenses of registration incurred in connection with
this offering are being borne by the Company, but all selling and other expenses
incurred by Selling Stockholders will be borne by such Selling Stockholders.
None of the shares offered pursuant to this Prospectus have been registered
prior to the filing of the Registration Statement of which this Prospectus is a
part.
The Shares may be sold from time to time through April , 1995 pursuant to
this Prospectus, by the Selling Stockholders. It is anticipated that the Selling
Stockholders will generally offer Shares for sale at prevailing prices in the
over-the-counter market on the date of sale. The Shares may be sold only in
ordinary brokerage transactions and transactions in which brokers solicit
purchasers. See "Plan of Distribution."
THIS PROSPECTUS MAY NOT BE USED FOR SALES MADE AFTER APRIL , 1995.
The Common Stock of the Company is traded on the Nasdaq National Market
under the symbol "DELL". As of the close of trading on February 14, 1995, the
closing sale price of the Common Stock as quoted on the Nasdaq National Market
was $45 3/8 per share.
FOR A DISCUSSION OF CERTAIN FACTORS TO BE CONSIDERED IN CONNECTION WITH AN
INVESTMENT IN THE COMMON STOCK, SEE "INVESTMENT CONSIDERATIONS."
Each Selling Stockholder and any broker executing selling orders on behalf
of the Selling Stockholders may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").
Commissions received by any such broker may be deemed to be underwriting
commissions under the Securities Act.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
THE DATE OF THIS PROSPECTUS IS MARCH , 1995.
<PAGE> 3
AVAILABLE INFORMATION
No person is authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering described herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or any Selling Stockholder. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, nor shall there be any sale of these
securities by any person in any jurisdiction in which it is unlawful for such
person to make such offer, solicitation or sale. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create an
implication that the information contained herein is correct as of any time
subsequent to the date hereof.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance with the
Exchange Act, the Company files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). The reports,
proxy statements and other information can be inspected and copied at the public
reference facilities that the Commission maintains at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
located at 7 World Trade Center, 13th Floor, New York, New York 10048, and Suite
1400, Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois
60661. Copies of these materials can be obtained at prescribed rates from the
Public Reference Section of the Commission at the principal offices of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement.
---------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
0-17017) pursuant to the Exchange Act are incorporated in this Prospectus by
reference:
1. The Company's Annual Report on Form 10-K for the Fiscal Year Ended
January 30, 1994;
2. The Company's Quarterly Reports on Form 10-Q for the Fiscal
Quarters Ended May 1, 1994, July 31, 1994, and October 30, 1994; and
3. The description of the Company's Common Stock in Item 1 of the
Company's Registration Statement on Form 8-A dated June 20, 1988.
4. The Company's Current Report on Form 8-K dated February 21, 1995.
All other documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Prospectus and
to be part hereof from the date of filing such documents.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents that are incorporated by
reference, other than exhibits to such documents not specifically incorporated
by reference. Requests for such copies should be directed to Dell Computer
Corporation,
2
<PAGE> 4
2112 Kramer Lane, Building 1, Austin, Texas 78758-4012, Attention: Investor
Relations, telephone (512) 728-8315.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
THE COMPANY
Dell designs, develops, manufactures, markets, services and supports
personal computer systems worldwide under the Dell(R) brand name, which is one
of the leading brand names in the personal computer industry. The Company
provides all of the elements of complete personal computer solutions to its
customers, including personal computer hardware, software, peripherals,
communications capabilities, and service and support programs.
Dell primarily markets its personal computer products and services directly
to its customers, which include major corporate, government and education
accounts as well as small businesses and individuals. The Company believes that
its direct customer relationships provide it with a competitive advantage in
that the information the Company gathers and analyzes as a result of these
relationships enables it to better understand and respond to customer demands
for personal computer products and services. Dell supplements its direct
marketing strategy by selling personal computer systems through certain
value-added remarketers and system integrators. The Company has pursued a
build-to-order manufacturing strategy, which is designed to allow it to rapidly
produce personal computer solutions customized to customer specifications.
INVESTMENT CONSIDERATIONS
In addition to reviewing the Company's Annual Report on Form 10-K for the
fiscal year ended January 30, 1994, the other documents incorporated herein by
reference and the other information in this prospectus, the following factors
should be considered carefully in evaluating the Company and its business before
purchasing the Common Stock offered hereby:
Competition. The personal computer industry is highly competitive and is
characterized by the frequent introduction of new products, continual
improvement in product price/performance characteristics, price sensitivity on
the part of customers, and a large number of competitors. The Company and other
manufacturers of personal computers that adhere to industry standards generally
have access to and make use of many of the same components, often from the same
group of suppliers. The prices of many of these components decline periodically,
and the general practice of the Company and other personal computer
manufacturers is to reduce the prices of their personal computer products to
reflect these component price declines. The Company may take additional pricing
actions as it attempts to maintain a competitive mix of price, performance and
customer support services while managing its liquidity, profitability and
growth. The Company attempts to mitigate the effects of price reductions by
improving product mix, further reducing component costs and lowering operating
costs. There can be no assurance that pricing actions will be effective in
stimulating higher levels of sales or that cost reduction efforts will offset
the effects of pricing actions on the Company's gross margins. Some of the
Company's competitors have greater financial, marketing, manufacturing and
technological resources, broader product lines, greater brand name recognition,
and larger installed customer bases than those of the Company. There can be no
assurance that the Company will continue to compete successfully.
Dependence on Direct Marketing Strategy. Dell primarily markets its
personal computer products and services directly to customers by means of
telephone and catalogues, and provides related sales, technical support and
other customer services primarily by means of telephone. Accordingly, the
Company is dependent on the growth of direct distribution channels in order to
have a growing
3
<PAGE> 5
market in which to sell its products and services. There can be no assurance
that worldwide direct marketing channels will grow or that the Company would be
able to establish a more significant presence in indirect channels of
distribution if it becomes necessary or desirable in the future.
New Product Development. To maintain its competitive position, the Company
must continue to improve its existing products while developing and improving
new products. To do so it must obtain and incorporate new hardware, software,
communications and peripheral technologies that are primarily developed by
others. The Company believes that it is necessary for its products to adhere to
generally accepted industry standards, which are subject to change in ways that
are not within the control of the Company. There can be no assurance that the
Company's product development activities will be successful, that new
technologies will be available to the Company, that the Company will be able to
deliver commercial quantities of new products in a timely manner, that those
products will adhere to generally accepted industry standards, or that the
products will achieve market acceptance. Some new products introduced by the
Company are intended to replace existing products. Although the Company monitors
the products that are intended to be replaced and attempts to phase out the
manufacture of those products in a timely manner, there can be no assurance that
such transitions will be executed without adversely affecting the Company's
results of operations or financial condition.
Fluctuations in Operating Results, Economic Conditions and Customer
Spending Patterns. The Company's operating results have varied and may continue
to fluctuate from quarter to quarter and will depend on numerous factors,
including, but not limited to, customer demand and market acceptance of the
Company's products, new product introductions, product obsolescence, component
price fluctuations, varying product mix and other factors. In addition, the
Company has operated without a material backlog so that net sales in a given
quarter are dependent on customer orders received in that quarter and operating
expenditures are primarily based on forecasts of customer demand. As a result,
if demand does not meet the Company's expectations in any given period, the
sales shortfall may result in an increased impact on operating results due to
the Company's inability to adjust operating expenditures quickly enough to
compensate for such shortfall. The Company's business is sensitive to the
spending patterns of its customers, which in turn are subject to prevailing
economic conditions and other factors beyond the Company's control. The
Company's results of operations could be materially adversely affected by
changes in economic conditions or customer spending patterns for personal
computer products.
International Sales and Operations. Sales outside the United States of
America represented approximately 36% of the Company's consolidated net sales in
the first nine months of fiscal 1995. The Company currently sells personal
computer products in more than 125 countries and manufactures products in the
United States and other countries. The success and profitability of
international sales and operations may be adversely affected by risks associated
with international activities, including local economic and labor conditions,
political instability, tax laws (including U.S. taxes on foreign subsidiaries),
and changes in the value of the United States dollar versus the local currency
in which products are sold. Changes in exchange rates may adversely affect the
Company's net consolidated sales (as expressed in United States dollars) and
gross profit margins from international operations. The Company attempts to
mitigate this exposure through hedging transactions.
Reliance on Key Suppliers. The Company's manufacturing process requires a
high volume of quality components that are procured from third-party suppliers.
Reliance on suppliers, as well as industry supply conditions, generally involves
several risks, including the possibility of defective parts, a shortage of
components, increases in component costs, and reduced control over delivery
schedules, any or all of which could adversely affect the Company's financial
results. The Company has several single supplier relationships, and the lack of
availability of timely and reliable supply of components from these sources
could adversely affect the Company's business. Also, the Company occasionally
experiences certain defective components, which can affect the reliability and
reputation of its products. There can be no assurance that the Company will be
able to continue to obtain additional supplies of reliable components in a
timely or cost-effective manner. In particular,
4
<PAGE> 6
the Company obtains its supply of microprocessors, from Intel Corporation,
although certain comparable microprocessors are available from other sources.
The Company is continuing to increase its shipments of products incorporating
Intel's Pentium microprocessor, for which there is no comparable microprocessor
currently available in commercial quantities from other sources. Consolidated
net sales from the Company's Pentium processor-based products represented 28%
and 20% of consolidated net sales of the Company for the third fiscal quarter
and nine months ended October 30, 1994, respectively. In November 1994, an
inaccuracy in Intel's Pentium microprocessors was publicized that, in some
cases, may cause errors in division. Based on information from Intel
Corporation, the Company believes only a limited number of its Pentium
microprocessor customers perform calculations affected by the inaccuracy.
Nonetheless, Intel has offered replacement microprocessors to end-users for any
Pentium microprocessor exhibiting this inaccuracy. By early February 1995, all
of the Company's new shipments of Pentium processor-based products contained the
corrected Pentium microprocessors. Although the Company had an inventory of
Pentium microprocessors that exhibited the inaccuracy and previously shipped
products which included such microprocessors, the Company believes that the
costs associated with this inventory and replacement of Pentium microprocessors
which exhibit this inaccuracy previously shipped to customers will not have a
material adverse effect on the Company's results of operations or financial
condition.
Intellectual Property Rights. From time to time, other companies and
individuals assert exclusive patent, copyright, trademark and other intellectual
property rights to technologies or marks that are important to the personal
computer industry or the Company's business. The Company evaluates each claim
relating to its products and, if appropriate, seeks a license to use the
protected technology. For example, the Company has entered into a licensing
agreement with IBM providing for a license under certain IBM computer patents.
The licensing agreement with IBM does not require IBM to assist the Company in
duplicating its patented technology and does not protect the Company from trade
secret, copyright or other violations by the Company or its suppliers in
developing or selling these products. There can be no assurance, however, that
the Company will be able to obtain licenses to intellectual property of third
parties on commercially reasonable terms, if at all. In addition, the Company
could be at a disadvantage if its competitors obtain licenses for protected
technologies with more favorable terms than does the Company. If the Company or
its suppliers are unable to license protected technology used in the Company's
products, the Company could be prohibited from marketing those products or may
have to market products without desirable features. The Company could also incur
substantial costs to redesign its products or to defend any legal action taken
against the Company. If the Company's products should be found to infringe
protected technology, the Company could be enjoined from further infringement
and required to pay damages to the infringed party. Any of these results could
have a material adverse effect on the Company.
Management of Growth. The Company has experienced rapid growth, which has
required it to enhance and expand its management team, information systems,
manufacturing operations, and other aspects of its infrastructure. If the
Company continues to experience rapid growth, of which there can be no
assurance, it will need to continue to improve and expand its infrastructure.
There can be no assurance that the Company will be able to manage expansion of
its infrastructure to support future growth effectively, nor can there be any
assurance that the Company's results of operations will not be adversely
affected by any such growth, enhancements or expansion.
Reliance on Key Executives. The Company depends on the services of members
of its executive staff, including Michael S. Dell, the founder of the Company
and its Chairman and Chief Executive Officer. The loss of the services of
members of its executive staff, including Michael S. Dell, could have a material
adverse effect upon the Company.
Share Ownership of Michael S. Dell. As of February 14, 1995, Michael S.
Dell owned 8,999,735 shares of Common Stock representing approximately 23% of
the outstanding shares of Common Stock as of that date. Although Mr. Dell does
not hold a majority of the outstanding Common Stock,
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<PAGE> 7
he is likely to be in a position to influence significantly the election of some
or all of the members of the Company's Board of Directors and the outcome of
most corporate actions requiring stockholder approval. See "Description of
Capital Stock."
Impediments to Changes in Control. Certain provisions in the Certificate of
Incorporation and Bylaws of the Company may make more difficult or discourage
attempts to change the composition of the Board of Directors, may make more
difficult or discourage takeovers of the Company, including those in which
holders of the Company's Common Stock might receive a substantial premium for
some or all of their shares, and could potentially depress the market price of
shares of Common Stock. In addition, the ability of the Board of Directors to
issue shares of preferred stock or rights to purchase preferred stock and to fix
the voting, redemption, conversion and other rights thereof without stockholder
approval could hinder any proposed tender offer, merger or other attempt to gain
control of the Company. See "Description of Capital Stock."
Hedging Activities. On November 30, 1992, the Securities and Exchange
Commission's Division of Enforcement notified the Company about an informal
inquiry regarding the Company's accounting practices for foreign currency
hedging and trading activities and the completeness of the Company's public
disclosure about those activities. The Company and its independent accountants
are voluntarily cooperating with the Commission in the informal inquiry. For
more information on the hedging activities of the Company, see the discussion
under the caption "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Hedging Activities" in the Company's
Annual Report on Form 10-K for the Fiscal Year Ended January 30, 1994 and under
the caption "Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Hedging Activities" in the Company's Quarterly
Report on Form 10-Q for the Quarterly Period Ended October 30, 1994, which
reports are incorporated by reference herein.
Volatility of Stock Price. The Common Stock is currently quoted on the
Nasdaq National Market. The Company believes that factors including but not
limited to new product or other announcements by the Company, its competitors or
suppliers and quarterly fluctuations in the Company's and competitors' results
of operations have caused significant fluctuations in the market price of the
Common Stock and could continue to do so in the future. In addition, substantial
sales of the Company's Common Stock in excess of historical trading volumes, as
may be occasioned by the sale of Shares offered hereby, are likely to have an
adverse effect on the trading price of the Company's Common Stock. Further, the
Company competes in a highly dynamic industry which may result in increased
volatility of the Company's Common Stock price. See "Market Prices of Common
Stock."
6
<PAGE> 8
MARKET PRICES OF COMMON STOCK
The Common Stock is quoted on the Nasdaq National Market under the trading
symbol DELL. The following table sets forth, for the fiscal quarters indicated,
the high and low reported bid prices for the Common Stock as reported on the
Nasdaq National Market.
<TABLE>
<CAPTION>
HIGH LOW
---- ----
<S> <C> <C>
Fiscal Year Ending January 28, 1996
First Quarter
(January 30, 1995, through February 14, 1995)................. $45 5/8 $39 1/2
Fiscal Year Ending January 29, 1995
Fourth Quarter................................................... $47 3/4 $36 3/4
Third Quarter.................................................... $44 $27 1/2
Second Quarter................................................... $30 3/4 $21 1/2
First Quarter.................................................... $30 1/8 $19 1/8
Fiscal Year Ended January 30, 1994
Fourth Quarter................................................... $28 1/8 $20 1/8
Third Quarter.................................................... $21 5/8 $15 1/8
Second Quarter................................................... $34 3/4 $13 7/8
First Quarter.................................................... $49 1/4 $27 5/8
</TABLE>
The Common Stock was held of record by approximately 3,313 persons as of
February 14, 1995.
DIVIDEND POLICY
COMMON STOCK
Dividends on the Common Stock are payable when, as and if declared by the
Board of Directors of the Company. The Company has never paid cash dividends on
its Common Stock. The Company intends to retain earnings for use in its business
and, therefore, does not anticipate paying any cash dividends on the Common
Stock for at least the next twelve months. In addition, the Company's current
line of credit generally prohibits the payment of cash dividends by the Company
on the Common Stock except in certain circumstances.
PREFERRED STOCK
Holders of shares of the Series A Preferred Stock are entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available therefore, cash dividends at an annual rate of $7.00 per share,
payable quarterly in arrears. Dividends are cumulative and are payable to the
holders of record as they appear on the stock transfer books on such record
dates as are fixed by the Board of Directors. The Series A Preferred Stock has
priority as to dividends over the Common Stock. See "Description of Capital
Stock -- Series A Preferred Stock."
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<PAGE> 9
CAPITALIZATION
The following table sets forth the actual capitalization of the Company at
October 30, 1994, and the pro forma capitalization adjusted to reflect the
assumed conversion of all of the outstanding shares of Series A Preferred Stock
to Common Stock and the payment of the aggregate conversion premium and the
estimated expenses of the Company's conversion offer commenced February 21,
1995. Pursuant to the conversion offer, the Company offered to pay to holders of
Series A Preferred Stock a conversion premium of $8.25 per share of Series A
Preferred Stock converted into shares of Common Stock during a special
conversion period which expired on March 22, 1995. This table should be read in
conjunction with the Company's Annual Report on Form 10-K for the Fiscal Year
Ended January 30, 1994, and Quarterly Report on Form 10-Q for the Quarterly
Period Ended October 30, 1994, incorporated herein by reference.
<TABLE>
<CAPTION>
OCTOBER 30, 1994
---------------------
PRO
ACTUAL FORMA
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt(1).................................................... $100,000 $100,000
Stockholders' equity:
Preferred Stock, $.01 par value (liquidation preference $100.00 per
share); shares authorized: 5,000,000; shares issued and
outstanding (liquidation preference $100.00 per share):
1,250,000 actual and no shares outstanding pro forma............ 13 --
Common Stock, $.01 par value; shares authorized: 100,000,000;
shares issued and outstanding: 39,086,664 actual and 44,349,789
pro forma(2).................................................... 391 444
Additional paid-in capital......................................... 342,909 342,869
Unrealized loss on short-term investments.......................... (2,451) (2,451)
Retained earnings.................................................. 253,114 242,501
Translation adjustment............................................. (12,155) (12,155)
-------- --------
Total stockholders' equity................................. 581,821 571,208
-------- --------
Total capitalization....................................... $681,821 $671,208
======== ========
</TABLE>
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(1) Consists of the Company's 11% Senior Notes Due August 15, 2000.
(2) Excludes 10,262,391 shares of Common Stock reserved for issuance under the
Company's employee benefit plans. Options for 6,203,033 shares under such
plans were outstanding at October 30, 1994.
8
<PAGE> 10
SELLING STOCKHOLDERS
The following table sets forth the name of each Selling Stockholder and
relationship with the Company and (i) the number of shares of Common Stock owned
by each Selling Stockholder as of February 21, 1995, (ii) the maximum number of
shares of Common Stock which may be offered for the account of such Selling
Stockholder under this Prospectus, and (iii) the amount and percentage of Common
Stock to be owned by the Selling Stockholder after completion of the offering
assuming the sale of all the Common Stock which may be offered hereunder.
<TABLE>
<CAPTION>
AMOUNT AND PERCENTAGE
OF COMMON STOCK
OWNED AFTER
MAXIMUM NUMBER OF THE OFFERING(2)
NAME OF SHARES OWNED SHARES WHICH MAY BE -----------------------
SELLING STOCKHOLDER PRIOR TO OFFERING(1) SOLD HEREUNDER AMOUNT PERCENTAGE
- ----------------------------- -------------------- ------------------- -------- ----------
<S> <C> <C> <C> <C>
</TABLE>
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(1) Beneficial ownership as of , 1995 based upon information
provided by the respective Selling Stockholders.
(2) Assumes sale of all shares of Common Stock registered hereunder, although
Selling Stockholders are under no obligation known to the Company to sell
any shares of Common Stock at this time.
The Company will pay the expenses of registering the shares of Common Stock
being sold hereunder, which are estimated to be $ .
9
<PAGE> 11
PLAN OF DISTRIBUTION
The Shares may be sold pursuant to the offer made hereby from time to time
through April , 1995, by the Selling Stockholders. The sales may be made only
in ordinary brokerage transactions and transactions in which brokers solicit
purchasers at prices and at terms then prevailing or at prices related to the
then current market price of the Common Stock on the Nasdaq National Market.
The Shares consist of Common Stock issued to the Selling Stockholders upon
conversion of the Company's Series A Preferred Stock. The Selling Stockholders
must effect sales to or through broker-dealers, and the broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholders or the purchasers of the shares of Common Stock for
that the broker-dealer is selling, or both.
The Company has advised the Selling Stockholders that the anti-manipulative
Rules 10b-6 and 10b-7 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), may apply to their sales in the market and has informed them of
the need for delivery of copies of this Prospectus. The Company is not aware as
of the date of this Prospectus of any agreements between any of the Selling
Stockholders and any broker-dealers with respect to the sale of the shares
offered by this Prospectus. The Selling Stockholders and any broker, dealer or
other agent executing sell orders on behalf of the Selling Stockholders may be
deemed to be "underwriters" within the meaning of the Securities Act, in which
case the commissions received by any such broker, dealer or agent and profit on
any resale of the shares of Common Stock may be deemed to underwriting
commissions under the Securities Act. The commissions received by a broker,
dealer or agent may be in excess of customary compensation. The Company will
receive no part of the proceeds from the sale of Shares hereunder.
Pursuant to the Registration Agreement entered into by and among the
Company and the Selling Stockholders, the Selling Stockholders will pay their
costs and expenses of selling the Shares hereunder, including commissions and
discounts of underwriters, brokers, dealers or agents, and the Company has
agreed to pay the costs and expenses incident to its registration and
qualification of the Shares offered hereby, including registration and filing
fees. In addition, the Company has agreed to indemnify the Selling Stockholders
against certain liabilities, including liabilities arising under the Securities
Act.
There can be no assurance that any of the Selling Stockholders will sell
any or all of the shares of Common Stock offered by them hereunder.
10
<PAGE> 12
DESCRIPTION OF CAPITAL STOCK
The following summary description is qualified in its entirety by reference
to the Company's Certificate of Incorporation, as amended, which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
authorized capital stock of the Company consists of 100,000,000 shares of Common
Stock, par value $.01 per share, and 5,000,000 shares of preferred stock, par
value $.01 per share (the "Preferred Stock").
COMMON STOCK
The Company is authorized to issue up to 100,000,000 shares of Common
Stock. As of February 14, 1995, there were 39,695,611 shares of Common Stock
outstanding. The holders of Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders. Because
holders of Common Stock do not have cumulative voting rights, the holders of a
majority of the shares of Common Stock represented at a meeting have the power
to elect all of the directors to be elected at that meeting. Subject to the
prior rights of holders of Preferred Stock, the holders of Common Stock are
entitled to dividends, when and as declared by the Board of Directors out of
funds legally available therefor. The terms of the Company's line of credit
restrict payment of cash dividends except in certain circumstances. See
"Dividend Policy." If the Company dissolves or is liquidated, the holders of
Common Stock are entitled to share ratably in all assets remaining after payment
of liabilities and the liquidation preferences of any outstanding shares of
Preferred Stock.
Holders of Common Stock have no preemptive rights and have no right to
convert their Common Stock into any other securities. All of the outstanding
shares of Common Stock are, and all shares of Common Stock offered hereby are or
will be, upon conversion of Series A Preferred Stock, fully paid and
nonassessable.
The Certificate of Incorporation of the Company divides the Board of
Directors of the Company into three classes, each class to be as nearly equal in
number of directors as possible. At each annual meeting of stockholders,
directors in each class are elected for three year terms to succeed the
directors of that class whose terms are expiring. Paul O. Hirschbiel, Donald J.
Carty and Thomas W. Luce, III, are Class I directors with their terms of office
expiring in 1995. Michael S. Dell and Michael H. Jordan are Class II directors
with their terms of office expiring in 1996. George Kozmetsky and Claudine B.
Malone are Class III directors with their terms of office expiring in 1997. The
Certificate of Incorporation and Bylaws of the Company also provide that
directors may be removed from office only for cause (as defined in the
Certificate of Incorporation), that stockholder action must be taken at a duly
called annual or special meeting (and not by written consent), and that
stockholders follow an advance notification procedure for certain stockholder
nominations of candidates for the Board of Directors and for certain other
stockholder business to be conducted at an annual meeting.
The existence of these provisions of the Company's Certificate of
Incorporation and Bylaws may be disadvantageous to the extent they discourage
takeovers in which stockholders might receive a substantial premium for some or
all of their shares. Therefore, stockholders who desire to participate in such a
takeover may not be afforded the opportunity to do so, even when such
stockholders believe participation to be in their best interest. Also, such
provisions may reduce temporary fluctuations in the market price of the Common
Stock that may accompany the accumulation of large blocks of Common Stock and
thereby deprive stockholders of an opportunity to sell their stock at a
temporarily higher price. In addition to reducing temporary market fluctuations,
such provisions could potentially depress the market price of shares of Common
Stock and may have the effect of discouraging changes in control, particularly
those that are opposed by the Company's incumbent management, even if a majority
of stockholders desire the change in control. Such provisions thereby could also
prevent the removal of management.
11
<PAGE> 13
In addition, the ability of the Board of Directors to issue shares of
Preferred Stock and to fix the voting, redemption, conversion and other rights
thereof without stockholder approval could hinder any proposed tender offer,
merger or other attempt to gain control of the Company. See "Description of
Capital Stock -- Blank Check Preferred Stock."
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.
BLANK CHECK PREFERRED STOCK
Pursuant to the Certificate of Incorporation of the Company, the Board of
Directors has the authority, without further stockholder approval, to provide
for the issuance of up to 5,000,000 shares of Preferred Stock in one or more
series and to determine the dividend rights, conversion rights, voting rights,
rights and terms of redemption, liquidation preferences, the number of shares
constituting any such series, and the designation of such series. Because the
Board of Directors has the power to establish the preferences and rights of each
series, it may afford the holders of any Preferred Stock preferences, powers and
rights (including voting rights) senior to the rights of the holders of Common
Stock. Other than the shares of Series A Preferred Stock described below, no
shares of Preferred Stock have been issued and remain outstanding before this
Offering. The issuance of shares of Preferred Stock or the issuance of rights to
purchase shares of stock may have the effect of delaying, deferring or
preventing a change in control of the Company.
SERIES A PREFERRED STOCK
The Series A Preferred Stock has been authorized as a series of Preferred
Stock, consisting of 1,250,000 shares. As of February 14, 1995, 1,250,000 shares
of Series A Preferred Stock were issued and outstanding. The terms and
provisions of the Series A Preferred Stock are set forth in the Certificate of
Designation (the "Certificate of Designation") creating the Series A Preferred
Stock. Certain terms and provisions are summarized below. This summary does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, all the provisions of the Certificate of Designation, including
the definitions therein of certain terms, which is incorporated herein by
reference. A copy of the Certificate of Designation may be obtained from Dell
Computer Corporation, 2112 Kramer Lane, Building 1, Austin, Texas 78758-4012,
Attention: Investors Relations.
Dividends. Holders of shares of Series A Preferred Stock are entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available therefore, cash dividends at an annual rate of $7.00 per share,
payable quarterly in arrears. Dividends are cumulative and are payable to the
holders of record as they appear on the stock transfer books on such record
dates as are fixed by the Board of Directors.
The Series A Preferred Stock has priority as to dividends over the Common
Stock and any other series or class of the Company's stock thereafter issued
that ranks junior as to dividends to the Series A Preferred Stock, when and if
issued (collectively, "Junior Dividend Stock"), and no dividend (other than
dividends payable solely in stock that is Junior Dividend Stock and that ranks
junior to the Series A Preferred Stock as to distribution of assets upon
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary (such stock that is junior as to liquidation rights, "Junior
Liquidation Stock") (the Common Stock and any other capital stock of the Company
that is both Junior Dividend Stock and Junior Liquidation Stock, "Junior Stock")
may be paid on any Junior Dividend Stock, and no payment may be made on account
of the purchase redemption, retirement, or other acquisition of Junior Dividend
Stock or Junior Liquidation Stock (other than such acquisitions pursuant to
employee or director incentive or benefit plans or arrangements, or acquisitions
or exchanges solely for Junior Stock), unless all accrued and unpaid
12
<PAGE> 14
dividends on the Series A Preferred Stock for all dividend payment periods
ending on or before the date of payment of such dividends on Junior Dividend
Stock, or such payment for such Junior Dividend Stock or Junior Liquidation
Stock, as the case may be, have been paid or declared and set apart for payment.
The Company may not pay dividends on any other series or class of the Company's
stock hereafter issued that ranks on a parity with the Series A Preferred Stock
as to dividends ("Parity Dividend Stock"), and may not make any payment on
account of the purchase, redemption, retirement or other acquisition of shares
of Parity Dividend Stock or any other series or class of the Company's stock
hereafter issued that ranks on a parity with the Series A Preferred Stock as to
distributions of assets upon liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary (such stock that has parity with the
Series A Preferred Stock as to liquidation rights, "Parity Liquidation Stock")
(other than such acquisitions pursuant to employee or director incentive or
benefit plans or arrangements, or acquisitions or exchanges solely for Junior
Stock), unless all accrued and unpaid dividends on the Series A Preferred Stock
for all dividend payment periods ending on or before the date of payment of such
dividends on Parity Dividend Stock, or such payment for such Parity Dividend
Stock or Parity Liquidation Stock, as the case may be, have been paid or
declared and set apart for payment.
Liquidation Rights. In the case of the voluntary or involuntary
liquidation, dissolution or winding up of the Company, holders of shares of
Series A Preferred Stock are entitled to receive the liquidation preference of
$100.00 per share, plus an amount equal to any accrued and unpaid dividends to
the payment date, before any payment or distribution is made to the holders of
Common Stock or any other series or class of the Company's stock hereafter
issued that ranks junior to the Series A Preferred Stock as to distributions of
assets upon such liquidation, dissolution or winding up, but the holders of the
shares of the Series A Preferred Stock will not be entitled to receive the
liquidation preference of such shares until the liquidation preference of any
other series or class of the Company's stock hereafter issued that ranks senior
to the Series A Preferred Stock as to distributions of assets upon such
dissolution, liquidation or winding up ("Senior Liquidation Stock") has been
paid in full. The holders of Series A Preferred Stock and all series or classes
of the Company's stock hereafter issued that rank on a parity with the Series A
Preferred Stock as to distributions of assets upon such liquidation, dissolution
or winding up of the Company are entitled to share ratably, in accordance with
the respective preferential amounts payable on such stock, in any distribution
(after payment of the liquidation preference of the Senior Liquidation Stock)
which is not sufficient to pay in full the aggregate of the preferential amounts
payable thereon. After payment in full of the liquidation preference of the
shares of the Series A Preferred Stock, the holders of such shares will not be
entitled to any further participation in any distribution of assets by the
Company. Neither a consolidation or merger of the Company with another
corporation nor a sale or transfer of all or part of the Company's assets for
cash, securities or other property will be considered a liquidation, dissolution
or winding up of the Company.
Voting Rights. The holders of the Series A Preferred Stock have no voting
rights except as described below or as required by law. In exercising any such
vote, each outstanding share of Series A Preferred Stock will be entitled to one
vote, excluding shares held by the Company or any affiliate of the Company,
which shares have no voting rights.
Whenever dividends on the Series A Preferred Stock or on any outstanding
shares of Parity Dividend Stock have not been paid in an aggregate amount equal
to at least six quarterly dividends on such shares (whether or not consecutive),
the number of members of the Company's Board of Directors will be increased by
two, and the holders of the Series A Preferred Stock, voting separately as a
class with the holders of Parity Dividend Stock on which like voting rights have
been conferred and are exercisable, will be entitled to elect such two
additional directors at any meeting of stockholders at which directors are to be
elected held during the period such dividends remain in arrears. Such voting
rights will terminate when all such accrued and unpaid dividends have been
declared and paid or set apart for payment. The term of office of all directors
so elected will terminate immediately upon the termination of such voting
rights.
13
<PAGE> 15
In addition, so long as any Series A Preferred Stock is outstanding, the
Company may not, without the affirmative vote or consent of the holders of at
least 66 2/3% (unless a higher percentage shall then be required by applicable
law) of all outstanding shares of Series A Preferred Stock, voting separately as
a class, (i) amend, alter or repeal any provision of the Company's Certificate
of Incorporation or Bylaws so as to affect adversely the relative rights,
preferences, qualifications, limitations, or restrictions of the Series A
Preferred Stock, (ii) create, authorize or issue, or reclassify any authorized
stock of the Company into, or increase the authorized amount of, any series or
class of stock that ranks senior to the Series A Preferred Stock as to dividends
or distributions of assets upon liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, or any security convertible into any
such class or series of such stock, or (iii) enter into a share exchange that
affects the Series A Preferred Stock, consolidate with or merge into another
entity, or permit another entity to consolidate with or merge into the Company,
unless in each such case each share of Series A Preferred Stock remains
outstanding and unaffected or is converted into or exchanged for convertible
preferred stock of the surviving entity having powers, preferences and relative
participating optional or other rights and qualification limitations and
restrictions thereof identical to that of a share of Series A Preferred Stock
(except for changes that do not affect the holders of the Series A Preferred
Stock adversely).
Redemption at Option of the Company. The Series A Preferred Stock may not
be redeemed before August 25, 1996. On and after that date, the Series A
Preferred Stock may be redeemed by the Company, at its option, in whole or in
part at any time, subject to the limitations, if any, imposed by applicable law,
at a redemption price per share of $104.67 if redeemed at any time during the
period from August 25, 1996, through August 15, 1997, and at the following
redemption prices per share, if redeemed during the 12-month period ending
August 15:
<TABLE>
<CAPTION>
PRICE
YEAR PER SHARE
---- ---------
<S> <C>
1998.............................................. $103.89
1999.............................................. 103.11
2000.............................................. 102.33
2001.............................................. 101.56
2002.............................................. 100.78
</TABLE>
and thereafter at $100.00 per share, plus, in each case, accrued and unpaid
dividends to but excluding the redemption date.
Conversion Rights. The holder of any shares of Series A Preferred Stock has
the right, at the holder's option, to convert any or all shares into Common
Stock at any time at the rate of 4.2105 shares of Common Stock for each share of
Series A Preferred Stock (equivalent to a conversion price of $23.75 for each
share of Common Stock), subject to adjustment in certain circumstances, except
that if the Series A Preferred Stock is called for redemption, the conversion
right will terminate at the close of business on the fifth business day prior to
the date fixed for such redemption.
LEGAL MATTERS
The validity of the shares of Common Stock being sold in the offering is
being passed upon for the Company by Wilson, Sonsini, Goodrich, & Rosati,
Professional Corporation, Palo Alto, California.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the Fiscal Year Ended January
30, 1994, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
14
<PAGE> 16
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Company........................... 3
Investment Considerations............. 3
Market Prices of Common Stock......... 7
Dividend Policy....................... 7
Capitalization........................ 8
Selling Stockholders.................. 9
Plan of Distribution.................. 10
Description of Capital Stock.......... 11
Legal Matters......................... 14
Experts............................... 14
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5,263,125 SHARES
DELL COMPUTER
CORPORATION
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
---------------------
DELL (LOGO)
---------------------
PROSPECTUS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by Dell Computer Corporation (the
"Registrant") in connection with the registration of the securities offered
hereby are as follows:
<TABLE>
<S> <C>
SEC filing fee........................................................... $ *
Printing and engraving expenses.......................................... *
Legal fees and expenses.................................................. *
Accounting fees and expenses............................................. *
Transfer agent and registrar fees........................................ *
Miscellaneous............................................................ *
--------
Total.................................................................. $ *
=========
</TABLE>
- ---------------
* To be supplied by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's 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 as a director. However, this 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 in which the director (i) breached his duty of loyalty to the
Registrant; (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, shall have acted in a manner
involving intentional misconduct or a knowing violation of law; or (iv) derived
an improper personal benefit.
The Registrant's Certificate of Incorporation and Bylaws provide that it
will indemnify its officers and directors and former officers and directors
against any expenses, judgments or settlement payments sustained or paid by such
persons as a result of having acted as an officer or director of the Registrant,
or, at the request of the Registrant, as an officer, director, agent or employee
of another business entity. The Bylaws further provide that the Registrant may,
by action of its Board of Directors, provide indemnification to employees and
agents of the Registrant, individually or as a group, with the same scope and
effect as the indemnification of directors and officers.
The Registrant has entered into indemnity contracts with some of its
executive officers and directors. Each such indemnity agreement provides for
indemnification of officers and directors of the Registrant to the greatest
extent permitted by the General Corporation Law of Delaware and additionally
provides (i) that such persons shall be indemnified for amounts paid in
settlement of derivative actions, (ii) for advances of investigation and
litigation expenses subject to repayment if indemnification is disallowed, (iii)
that indemnification is available unless the Board of Directors or independent
legal counsel determines that the relevant standards were not satisfied, with
the Registrant bearing the burden of proving same in any suit for
indemnification, (iv) for partial indemnification where the officer or director
is not entitled to full indemnification, (v) that no claim or cause of action
may be asserted by or on behalf of the Registrant after the expiration of two
years from the date such persons cease to be directors and/or officers with
respect to claims against them in such capacities, and (vi) for payment to such
persons of expenses incurred in connection with the successful prosecution, in
whole or in part, of any amount not timely paid (generally within 30 days of
demand) by the Registrant. In addition, the Registrant currently maintains
directors and officers liability insurance.
II-1
<PAGE> 18
Pursuant to the provisions of Section 145 of the General Corporation Law of
Delaware, every Delaware corporation has the 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 any corporation, partnership, joint venture, trust or other
enterprise, against any and all expenses, judgments, fines and amounts paid in
settlement and reasonably incurred 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 interest, or not
opposed to the best interest, 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, believes that in 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 entitled pursuant to Section 145 to indemnification as
described above.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers or persons controlling the Registrant pursuant to the foregoing
provisions, the Registrant has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ---------------------------------------------------------------------------------------------
<C> <S>
3.1 -- Certificate of Incorporation of the Registrant, as amended
(incorporated by reference to Exhibit 3.1 of the Registrant's Annual
Report on Form 10-K for the year ended February 2, 1992, Commission
File No. 0-17017).
3.2 -- Certificate of Amendment to the Certificate of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.2 of the
Registrant's Annual Report on Form 10-K for the year ended January
31, 1993, Commission File No. 0-17017).
3.3 -- Certificate of Correction to the Certificates of Amendment of
Certificate of Incorporation filed on May 9, 1988 and July 10, 1992,
respectively, of the Registrant (incorporated by reference to Exhibit
3.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter
ended May 1, 1994, Commission File No. 0-17017).
3.4 -- Certificate of Stock Designation of the Registrant (incorporated by
reference to Exhibit 3.3 of the Registrant's Registration Statement
on Form S-4 as filed with the Securities and Exchange Commission on
October 1, 1993, Registration No. 33-69680).
3.5 -- Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of
the Registrant's Annual Report on Form 10-K for the year ended
February 2, 1992, Commission File No. 0-17017).
5.1* -- Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional
Corporation.
10.1 -- Severance Agreement dated September 15, 1994, between the Company and
Joel Kocher.
</TABLE>
II-2
<PAGE> 19
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ---------------------------------------------------------------------------------------------
<C> <S>
23.1 -- Consent of Price Waterhouse LLP
23.2* -- Consent of Wilson, Sonsini, Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
24.1 -- Power of attorney (included on the signature page on Part II of this
Registration Statement).
99.1 -- Registration Agreement among the Registrant and the Selling
Stockholders named herein.
</TABLE>
- ---------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act.
(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 thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this 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 the undertakings set forth in Paragraph (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
that are incorporated by reference in this Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act, 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.
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. That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
section 13(a) or section 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement 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> 20
Insofar as indemnification for liabilities arising under the Securities Act
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 Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than 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 Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
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 Austin, State of Texas, on February 20, 1995.
DELL COMPUTER CORPORATION
By: /s/ MICHAEL S. DELL
Michael S. Dell
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby authorizes and appoints Michael S. Dell, Thomas J. Meredith, Thomas B.
Green and Dalton W. Kaye, or any of them, as his or her attorney-in-fact to sign
on his or her behalf, individually and in the capacity stated below, all
amendments and post-effective amendments to this Registration Statement as that
attorney-in-fact may deem necessary or appropriate.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- --------------------------- ------------------
<C> <S> <C>
/s/ MICHAEL S. DELL Chairman of the Board and
Michael S. Dell Chief Executive Officer
(Principal Executive
Officer) February 20, 1995
/s/ THOMAS J. MEREDITH Chief Financial Officer
Thomas J. Meredith (Principal Financial and
Accounting Officer) February 20, 1995
/s/ DONALD J. CARTY Director
Donald J. Carty February 20, 1995
/s/ DR. GEORGE KOZMETSKY Director
Dr. George Kozmetsky February 20, 1995
/s/ PAUL O. HIRSCHBIEL, JR. Director
Paul O. Hirschbiel, Jr. February 20, 1995
/s/ THOMAS W. LUCE, III Director
Thomas W. Luce, III February 20, 1995
/s/ MICHAEL H. JORDAN Director
Michael H. Jordan February 20, 1995
/s/ CLAUDINE B. MALONE Director
Claudine B. Malone February 20, 1995
</TABLE>
II-5
<PAGE> 22
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NUMBER
- ----------------------------------------------------------------------------------------------
<C> <S> <C>
3.1 -- Certificate of Incorporation of the Registrant, as amended
(incorporated by reference to Exhibit 3.1 of the Registrant's Annual
Report on Form 10-K for the year ended February 2, 1992, Commission
File No. 0-17017).
3.2 -- Certificate of Amendment to the Certificate of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.2 of the
Registrant's Annual Report on Form 10-K for the year ended January
31, 1993, Commission File No. 0-17017).
3.3 -- Certificate of Correction to the Certificates of Amendment of
Certificate of Incorporation filed on May 9, 1988 and July 10, 1992,
respectively, of the Registrant (incorporated by reference to Exhibit
3.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter
ended May 1, 1994, Commission File No. 0-17017).
3.4 -- Certificate of Stock Designation of the Registrant (incorporated by
reference to Exhibit 3.3 of the Registrant's Registration Statement
on Form S-4 as filed with the Securities and Exchange Commission on
October 1, 1993, Registration No. 33-69680).
3.5 -- Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of
the Registrant's Annual Report on Form 10-K for the year ended
February 2, 1992, Commission File No. 0-17017).
5.1* -- Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional
Corporation.
10.1 -- Severance Agreement dated September 15, 1994, between the Company and
Joel Kocher.
23.1 -- Consent of Price Waterhouse LLP
23.2* -- Consent of Wilson, Sonsini, Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
24.1 -- Power of attorney (included on the signature page on Part II of this
Registration Statement).
99.1 -- Registration Agreement among the Registrant and the Selling
Stockholders named herein.
</TABLE>
- ---------------
* To be filed by amendment.
<PAGE> 1
September 15, 1994
Mr. Joel J. Kocher
9201 Simmons Road #109
Austin, Texas 78759
Dear Joel:
This letter sets forth the mutual agreement (the "Agreement") between Dell
Computer Corporation for itself and its subsidiaries (collectively, the
"Company") and you regarding your voluntary election to terminate your
employment by the Company.
1. You and Dell agree that this Agreement is entered into in connection
with the amicable termination of your employment by Dell, and that your
employment will be terminated effective 11:59 p.m. local time in Austin, Texas
on October 4, 1994 (the "Termination Effective Date"). The Company agrees to
pay to you in full all of your salary and every other type of benefit due and
owing to you or accrued to you (including any accrued right to present or
future deferred compensation) through and including the Termination Effective
Date. Dell will also pay your health insurance through the Termination
Effective Date. After that date, you will be responsible for the payments to
continue health insurance provided under Dell's group policy, if you wish to
continue such insurance, pursuant to the conditions of COBRA. Disability
insurance benefits will be discontinued on the effective date of this letter
agreement, which is September 15, 1994 (the "Execution Date"). The Company
will pay for all services provided to you by Price, Waterhouse & Co. through
the Termination Effective Date in accordance with your present entitlements to
Price, Waterhouse tax preparation services.
2. You agree that you are not entitled to receive from Dell, or from any of
its officers, managers, directors, employees, agents or representatives, any
form of consideration or the payment of any amount other than what is expressly
set forth in this Agreement. You agree that you are not entitled to receive
from Dell any payment or distribution of any other type of property, except as
expressly set forth in this Agreement. You further agree that as of the
Execution Date you do not own and do not hold any rights to outstanding vested
and unexercised stock options to purchase shares of Dell's Common Stock from
the Company with the exception of the following shares at the indicated exercise
prices: 21,000 shares at $3.92/share; 23,070 shares at $17.33/share; 40,950
shares at $9.77/share; 9,000 shares at $23.66/share; 35,000 shares at
$.0100/share; and 2,400 shares at 30.69/share. As provided in
<PAGE> 2
Mr. Joel Kocher
September 15, 1994
Page 2
the option agreements, the period for you to exercise all of such options will
expire and terminate automatically without further notice at 11:59 p.m. local
time in Austin, Texas on November 3, 1994. In addition, as provided in the
option agreements, if you fail to exercise any or all of the options listed in
this paragraph prior to 11:59 p.m. on November 3, 1994, you will lose the right
to acquire the shares subject to any of such options which remain unexercised at
that time, and all of such unexercised options shall become null and void and
of no further force or effect without any further action or notice of any
kind. In the exercise of such options, as well as in connection with any other
transactions involving Dell's securities, you understand and agree that you are
and will be subject to all the requirements of applicable laws, rules and
regulations, including but not limited to the provisions and requirements of
Federal securities laws and regulations with regard to "short-swing" trading;
and you agree to comply with all such laws, rules and regulations. You further
agree to inform the Company regarding, and provide the Company with a copy of,
any divorce decree or other agreement that may affect your ability to retain
ownership of any or all of the stock options specified in this Agreement, prior
to exercising any of such options.
3. On September 14, 1994, you resigned from all positions as a corporate
officer or director of Dell Computer Corporation and its subsidiaries and
affiliates, without prejudice to your rights to compensation through the
Termination Effective Date.
4. You agree that the consideration and promises set forth in this
Agreement constitute full and adequate consideration to support this Agreement
and each provision hereof. In addition to the other consideration granted to
you in this Agreement, the Company agrees to allow you to retain, as your sole
property, the Dell 486P computer, monitor and printer and Dell Latitude XP
notebook computer currently in your possession. The Company further agrees
that you may retain the office chair, as your sole property, which you are
currently using at the Execution Date at the Company's place of business. You
shall have access to these items and to your personal office during regular
office hours until 5:00 p.m. local time on Saturday, September 17, 1994 as
necessary to remove these items and your personal belongings.
5. Your vested balance in Dell's 401(k) Plan Trust (if any) and Dell's
Deferred Compensation Plan will be available for you to withdraw or roll over
in accordance with the provisions of the Plan after the end of the current
calendar quarter, subject to applicable laws and regulations. Any balance you
may have in Dell's Employee Stock Purchase Plan will also be available for you
to withdraw in accordance with the provisions of the Plan. The Company holds
9000 shares of Dell's Common Stock belonging to you, which will be available
for delivery to you in accordance with the stock option agreement, as amended
by this letter, under which such stock was issued. You agree to inform the
Company, and provide the Company with a copy, of any divorce decree or other
agreement that may affect your rights of ownership or right to retain such
stock, as well as any balance in Dell's 401(k) Plan Trust, Dell's Deferred
Compensation Plan, or Dell's Employee Stock Purchase Plan prior to the time
that you withdraw or roll over any balance in either of the above plans.
<PAGE> 3
Mr. Joel Kocher
September 15, 1994
Page 3
6. From and after the time of your resignation as set forth in Paragraph 3
you will have no duties, obligations or responsibilities to perform any work or
services for or on behalf of the Company except as expressly provided in this
Agreement. You agree to cooperate with the Company and provide a mutually
acceptable amount of assistance, at no additional charge, to the Company in
preparing its defense to the litigation it is currently involved in instituted
by some of its shareholders. The Company will pay, or, at your election,
reimburse your actual, reasonable out-of-pocket expenses incurred in connection
with such assistance. You further agree that you will comply with any
continuing obligation under the Federal Securities Laws, including any
reporting requirements regarding your trading activity in Dell's securities;
and that you will promptly provide the Company with copies of any reports you
submit to the U.S. Securities and Exchange Commission regarding your trading
activities in Dell's securities. You will be free to undertake other employment
after the Execution Date so long as your employment and services do not
contravene any other provision of this Agreement. The Company represents and
agrees that it has and shall continue to have after the execution date, an
obligation, in accordance with the provisions of Dell's Charter and Bylaws, to
indemnify you against, and hold you harmless from, any and all third party
claims, demands and causes of action (including those based on negligence or
gross negligence but excluding those based on intentional misconduct or the
willful violation of any statute or law), and from all liability, damages,
fines, penalties and other assessments or obligations of any kind (including
costs of defense and amounts paid in settlement) asserted by any third party to
the extent attributable to your status as an employee or officer (except for
claims based on intentional misconduct or the willful violation of any statute
based on intentional misconduct or the willful violation of any statute or
law). This indemnity shall be limited as necessary to assure compliance by the
Company with any law, rule or regulation prohibiting indemnification of the
Company's officers or employees for specific kinds of claims. The Company also
represents that you are and will continue to be an "insured" with respect to
any claim which may become subject to the foregoing indemnity under all
policies of insurance maintained by the Company from time to time insuring such
risks.
7. The Company is immediately entitled to receive and recover from you any
of the profits received by you from the stock options with accelerated vesting,
as further described in Paragraph 17, in the event, and only in the event, and
to the extent, and only to the extent, of any loss or expense incurred by the
Company due to your breach of any provision of this Agreement, including any
provision requiring future compliance with the Federal Securities Laws, to the
extent that such loss or expense would otherwise be recoverable in an action
for breach of the Agreement.
8. You agree that by execution of the Agreement you fully, finally,
completely and generally release the Company and each of its officers,
managers, directors, control persons, employees, agents and representatives,
individually and separately, from any and all claims, actions, liabilities,
obligations, demands, and/or causes of action, of whatever kind or character,
whether known or unknown, arising from, relating to, or in any way connected
with (i) any of the foregoing persons, (ii) your employment, resignation or
termination of employment with the
<PAGE> 4
Mr. Joel Kocher
September 15, 1994
Page 4
Company, (iii) your decision to move to or from or accept employment in Austin,
Texas, (iv) your severance of employment with your former employer prior to
accepting employment with the Company, or (v) any act or omission that has
occurred on or before the Execution Date in connection with any activity
related to any of the foregoing persons or to any activity, statements,
controversy or dispute related to your employment, resignation or termination of
employment with the Company. The foregoing release does not cover any claim,
demand, or cause of action to the extent that it arises out of any breach of or
default under this Agreement or any other act or omission after the Execution
Date.
9. The release set forth in Paragraph 8 above shall be construed as broadly
as possible and shall include without limitation: (1) any tort, contractual or
other claim you may have; (2) any claim arising out of or in connection with
the initiation, termination or existence of your employment relationship with
the Company, or any act, service or omission performed or not performed by or
on behalf of the Company; (3) any claim arising under the Federal Age
Discrimination in Employment Act, the Civil Rights Act of 1964, or any
applicable Texas statute or regulation; and (4) except as to rights under the
plans described in Paragraph 4 above and the stock options described in
Paragraph 2 above, any claim regarding accrued vacation, bonuses, deferred
compensation or any other form of tangible or intangible benefit from or
attributable to the Company or any of the persons described in Paragraph 8. You
represent that you have not assigned to any other person any of the claims and
causes of action described in this Paragraph and in Paragraph 8 and that you
have the full right to grant the release set forth in this Agreement.
10. The Company hereby fully, finally, completely and generally releases
you from any and all claims, actions, demands and/or causes of action, of
whatever kind or character, whether known or unknown, arising from, relating
to, or in any way connected with any act or omission by you that has occurred
on or before the Execution Date in connection with your employment by the
Company; provided, however, that such release shall not be applicable to any
acts or omissions by you which constitute willful or intentional misconduct, or
willful or intentional wrongdoing. The foregoing release does not cover any
claim, demand, or cause of action to the extent that it arises out of any
breach of or default under this Agreement or any other act or omission after
the Execution Date.
11. The release set forth in Paragraph 10 above shall be construed as
broadly as possible and shall include without limitation: (1) any tort,
contractual or other claim the Company may have; (2) any claim arising out of
or in connection with the initiation, termination or existence of your
employment relationship with the Company; and (3) any claim arising out of any
act, service or omission performed or not performed by you; but shall not
include any act or omission by you which constitutes willful or intentional
misconduct, or willful or intentional wrongdoing. The Company represents that
it has not assigned to any other person any of the claims and causes of action
described in this Paragraph and in Paragraph 10 and that it has the full right
to grant the release set forth in this Agreement.
<PAGE> 5
Mr. Joel Kocher
September 15, 1994
Page 5
12. You represent that you do not have in your possession or under your
control any correspondence, any memoranda, or any other documents or tangible
media of any kind (whether duplicated, copies or originals) which contain any
information belonging to the Company or related in any manner whatsoever to its
business. You agree that you will not take any such documents or media as
described above from the control or premises of the Company, and that if you
should find yourself in the possession of any of the same, you will return all
of the same (and any duplications and copies thereof) to the Company
immediately. You will have the right to review the Company's records at any
reasonable time upon reasonable notice, and to make copies or extracts thereof,
as necessary to respond to any third party claim, demand, or inquiry into the
propriety of your conduct while employed by the Company, provided that the
Company may take any measures deemed by it to be necessary (including denial of
access by you) to protect its trade secrets or Confidential and Proprietary
Information as herein defined. The Company agrees to provide you with access to
all of the nonconfidential business files currently in your office, at a
reasonable location within the Company's Braker 1 building selected by the
Company, during regular business hours through Friday, September 23, 1994 for
the purpose of abstracting from such business files such managerial and other
information as you choose which does not constitute valuable proprietary
"Confidential Information" (as defined elsewhere in this Agreement) belonging
to Dell, and taking such abstracts with you for your future use. You agree not
to make exact copies of, or remove from the Braker 1 building, any of such
business files or any document therein. You also agree to permit Dell's General
Counsel or his designee to inspect the location where you have been abstracting
files each day immediately prior to your departure from that location.
13. For the duration of the "Restriction Period" (which for purposes of
this Agreement shall be defined to mean the period from the Execution Date,
through and including October 31, 1996), except as permitted under Paragraph 4
above, as incidental to the negotiation and documentation of this agreement, or
as otherwise requested or permitted in writing by the Company, you will not
return to the place of business where you were employed by the Company, you
will not travel to or visit any of the Company's business locations, and you
will not call or visit any of the Company's employees during working hours or
in any way or at any time disrupt or undertake any activity that would have a
tendency to disrupt the business endeavors of the Company or its employees.
Upon the Company's prior written request or permission, you may visit the
Company for the purpose of establishing and maintaining a business relationship
between your new employer and the Company.
14. You acknowledge that the Company conducts business in all fifty states
of the United States and in numerous foreign nations including but not limited
to the countries of the U.K., Eire, France, Germany, Spain, Italy, Switzerland,
Finland, Norway, Sweden, Canada, Mexico, Australia, Japan, the Czech Republic
and Poland. In addition, you acknowledge that at the Execution Date the
Company's products are sold through distributors and resellers in more than 100
additional nations throughout the world and that you were since May, 1993
ultimately in charge of and responsible for the Company's sales in all such
nations. You further acknowledge and agree that in your position with the
Company you have since May, 1993
<PAGE> 6
Mr. Joel Kocher
September 15, 1994
Page 6
represented the Company throughout the world and have since May, 1993 acted as
the Company's most senior officer (except for the CEO) everywhere in the world;
that you have received from the Company unique and special knowledge and
training which was not previously available to you before your employment with
the Company; that the Company possesses and utilizes at the Execution Date
trade secrets not known or used by the Company's competitors, which trade
secrets give the Company an advantage over its competitors; that during your
employment with the Company you have received knowledge of and confidential
information about the Company's trade secrets including but not limited to
those relating to its production, research, marketing, service, support,
pricing and sales practices and policies; that at the Execution Date the
Company's manufacturing, administrative and other premises are restricted by
security procedures put in place by the Company and that Company-hired security
guards are on duty at all times to monitor and protect the Company's premises
and information; that it would take any person or entity a significant amount of
time to enter any of the Company's markets and to achieve substantial
commercial success in such markets because the necessary understanding of any
technical data and information relating to such markets (and to their
customers, pricing, product offerings and service delivery methods) would be
difficult and costly to develop; that you were involved in organizing the
Company's pricing practices and had access to the Company's sales data and
customer lists; that the Company's customer lists at the Execution Date contain
information not readily ascertainable to its competitors relating to such
matters as credit histories and credit ratings, customer preferences and the
name of customer decision-makers; and that unauthorized use by you of the
knowledge, information, data and trade secrets of the Company described above
would seriously damage the Company and hinder its ability to do business
worldwide. The character of any knowledge or information as a trade secret will
be determined from time to time according to the facts then prevailing and
applicable law. Nothing in this Paragraph 14 will cause any knowledge or
information which is not in fact a trade secret to be treated as such.
15. Non-Competition. For the duration of the Restriction Period, you agree
----------------
that you will not manage, operate, join, control or participate in, directly or
indirectly, consult on behalf of or for the benefit of, or derive any benefit
whatsoever from (other than receipt of any amount from a "Competitor," after
you have terminated all relationships with that Competitor, payable pursuant to
any agreement entered into before the Competitor's commencement of activities
proscribed by this Section 15 and in connection with acquisition by a third
party of a controlling interest in the Competitor), or be an officer, director,
employee, partner, agent, consultant or shareholder of, any business or
activity, or any parent, subsidiary or affiliate of any business or activity
(the "Competitor"), that designs, develops, manufactures, assembles, sells or
resells personal computers or computer workstations anywhere in the world (the
"PC/Workstation Industry"). You will not be in violation of this Paragraph 15
merely because you own publicly traded securities issued by a Competitor as long
as you own less than 5% of any class of such securities then outstanding. You
will not be in violation of this Paragraph 15 because you engage in any of the
above described transactions or relationships with a Competitor if your
relationship, transactions, and other involvement with that Competitor are
limited to a line of business and activities other than the PC/Workstation
Industry, and if the
<PAGE> 7
Mr. Joel Kocher
September 15, 1994
Page 7
annual revenue received by the Competitor and all of its parent, subsidiary,
and affiliated entities (taken in the aggregate) from the PC/Workstation
Industry is and continues to be less than both $50 million per year and 5% of
the total aggregate annual revenue of the Competitor and all of its parent,
subsidiary, and affiliated entities. The prohibition of this Paragraph 15 will
cease to apply if and when there is a final judicial determination by a court
of competent jurisdiction that the Company has committed a substantial breach
or default in the performance of any of its material obligations under this
Agreement. You will not be in violation of this Paragraph 15 merely because you
have entered into an employment relationship with Artisoft, Inc. or its
subsidiary or affiliated corporations, unless the nature of the business
conducted by Artisoft, Inc. or its subsidiary or affiliated corporations
changes materially after the Execution Date.
16. You agree that the non-competition provision set forth in Paragraph 15
is ancillary to this Agreement, that this Agreement is an otherwise enforceable
agreement, and that the non-competition provision is therefore ancillary to an
otherwise enforceable agreement. You further agree that the non-competition
provision contains reasonable limitations as to the time, geographical area and
scope of activity for which you are to be restrained; that the limitations of
this Agreement and your covenant not to compete with the Company do not impose
a greater restraint than is necessary to protect the goodwill or other business
interests of the Company; and that the primary purpose of this Agreement does
not obligate you to render personal services to the Company.
17. As separate consideration for the non-competition provision set forth
in Paragraph 15, the Company hereby agrees to pay you, within seven (7) days
after final execution of this letter agreement, the gross amount of Three
Hundred Ninety Thousand and No/100 Dollars ($390,000.00) (subject to withholding
of all taxes and other amounts required by applicable law) by check. As further
separate consideration for the same non-competition provision, the Company and
you hereby amend the stock option grant agreements relating to stock options
previously granted to you, but currently unvested, so as to accelerate the
vesting dates for the following currently unvested options which you hold to
purchase shares of Dell's Common Stock at the indicated exercise prices per
share: 6,930 shares at $17.33/share; 13,500 shares at $23.66/share; 9,600
shares at $30.69/share; 22,000 shares at $22.50/share; 17,408 shares at
$26.00/share; and 68,250 shares at $9.77/share. The vesting dates for each of
such options are hereby accelerated so as to cause 25% of each such option to
vest on each of the following dates: January 1, 1995; April 1, 1995; July 1,
1995; and October 1, 1995. In addition, you and the Company hereby amend the
stock option grant agreements related to such options to extend the deadline
dates for exercise of all of such options to 5:00 p.m. local time in Austin,
Texas on October 31, 1995. You understand and agree that you will have no
right to exercise options or purchase Dell's Common Stock from the Company
except as set forth in this letter Agreement, and you and the Company further
agree that the stock option agreements between you and the Company which
relate to the options described in Paragraph 2 and this Paragraph 17 are
amended to the extent necessary (and only to the extent necessary) to
accelerate the vesting dates for the options described in this Paragraph 17,
and to permit you to exercise the options
<PAGE> 8
Mr. Joel Kocher
September 15, 1994
Page 8
described in Paragraph 17 more than thirty (30) days after your employment with
the Company has terminated and as otherwise set forth in Paragraph 2 above. You
also understand and agree that your right to exercise options and purchase
Dell's Common Stock in accordance with this Agreement is further conditioned
upon your compliance with the provisions of the stock option agreements (as
amended hereby) in effect between you and the Company, and upon your full and
complete compliance with the remaining provisions of this Paragraph 17. No
earlier than the fifth day prior to, and no later than the fifth day after each
Vesting Date listed above, you will execute and deliver to the Company a sworn
affidavit (the "Compliance Affidavit"), in the form attached hereto as Exhibit
A. In the Compliance Affidavit, you will attest under oath that as of the date
of the affidavit and at all times prior thereto, you are and have been in full
and complete compliance with the terms of this Agreement, including without
limitation, the non-competition, non-solicitation, non-disclosure and non-use
provisions hereof. You will not be entitled to receive the number of shares
scheduled to vest on the then-scheduled Vesting Date, and such vesting shall
not occur, unless and until you have executed and delivered a true and accurate
Compliance Affidavit to the General Counsel of the Company in accordance with
the terms set forth above. If any or all of the options specified in this
Paragraph are not exercised on or before October 31, 1995, such unexercised
options will automatically expire and become null and void on that date without
further notice of any kind.
In addition to your other holdings of the Company's stock, you presently
own 9,000 shares of the Company's common stock which were issued to you upon
your exercise of an option under the Special and Nonstatutory Stock Option
Agreement under Dell Computer Corporation 1989 Stock Option Plan dated June 22,
1992 (the "1992 Option Agreement") and which are subject to restrictions on
transfer (the "Two Year Restriction") for a period of two years in accordance
with the paragraph of the 1992 Option Agreement entitled "Limitations on
---------------
Ownership of Common Stock received on Exercise." You are also presently entitled
- ------------------------------------------------
to acquire an additional 21,000 shares of the Company's common stock under the
1992 Option Agreement which will be subject to the Two Year Restriction.
The Company hereby waives the Two Year Restriction as to the 9,000 shares
and 21,000 shares described above insofar as the Two Year Restriction would
extend beyond October 31, 1994, it being the intent of this waiver that those
shares not be subject after October 31, 1994 to any restriction on transfer
imposed by the 1992 Option Agreement. At your request at any time after
October 31, 1994 the Company will take appropriate steps to remove from any
certificate representing the 9,000 shares or the 21,000 shares, any legend
reflecting the Two Year Restriction.
You acknowledge and agree that the rights granted to you by the
provisions of this Paragraph 17 were not otherwise available to you and
constitute substantial independent consideration for your agreement not to
compete set forth in Paragraph 15.
18. The Company agress that, upon your exercise of the options described
in Paragraphs 2 and 17 of this Agreement, you shall have the right to sell any
or all of the shares acquired
<PAGE> 9
Mr. Joel Kocher
September 15, 1994
Page 9
through such exercise immediately or at any time thereafter, subject to the
provisions of applicable laws and regulations, and the provisions of the option
agreements between you and the Company, as amended hereby. You agree that it
shall be your sole responsibility to comply with all applicable laws related to
the exercise of such options and sale of such shares, and the use and
disposition of all proceeds therefrom, and to pay all applicable taxes, fees
and other charges related thereto. You understand that it is your
responsibility to keep the Company informed of your trading activities
regarding these shares in accordance with the requirements stated in Paragraph
6 above and that you may owe the Company any profits resulting from your sale
of such shares unless you have fully complied with all reporting and other
requirements under the Federal Securities laws.
19. Non-Solicitation. You agree that you will not, during the Restriction
-----------------
Period, alone or with others, directly or indirectly, solicit or recruit for
your benefit, or for the benefit of any person or entity, the employment or
other services of any person who is an employee of the Company or who within
the six month period preceding such solicitation or recruitment has been an
employee of the Company. You agree that you will not, during the Restriction
Period, cause or facilitate (by providing information or otherwise) the
solicitation or the recruitment of such employment or other services by or for
the benefit of any person or organization with which you may be associated.
20. In addition to the other agreements contained herein, you agree that
you will not use, publish, misappropriate or disclose in any manner, directly
or indirectly, for yourself or for the benefit of any other person or entity,
any Confidential and Proprietary Information. "Confidential and Proprietary
Information" means, without limitation, any information that you have learned
or originated during your employment with the Company, to the extent that such
information is related to the products, marketing plans, sales plans, operating
procedures, properties, or financial condition, prospects, or results of
operations of the Company, which information is commercially valuable and is
not publicly available to or readily ascertainable by third parties through
proper means, and any information disclosed by third parties in confidence to
the Company. Confidential and Proprietary Information specifically includes,
without limitaiton, all such information of the kinds described in
subparagraphs A through G below:
A. Manufacturing and research processes currently in use, planned or
under development, including design rules, device characteristics, process
flow, manufacturing capabilities and yields.
B. Computer product, process and device strategies planned or under
development, including device specifications, system architectures, logic
designs, circuit implementations and long-range plans.
C. Software products in use, planned or under development, including
operating system adaptations or enhancements, language compilers,
interpreters and translators, system design and evaluation tools, and
application and diagnostic programs.
<PAGE> 10
Mr. Joel Kocher
September 15, 1994
Page 10
D. Information relating to Company employees; actual and anticipated
relationships between the Company and other companies or persons;
sales levels, profit levels, pricing and other unpublished financial
data; and budget, staffing compensation, equipment and related plans.
E. Information relating to the Company's customer, supplier and
vendor relationships. This includes performance requirements,
development and delivery schedules, device and product pricing and
quantities, and other information communicated to the Company by its
customers, suppliers or vendors.
F. Information relating to the compensation, skills, and work
histories of the Company's employees.
G. Any Intellectual Property defined below and any copyrightable
works described below, except as publicly disclosed in patents and other
publicly available documents.
21. You agree that all discoveries, ideas, improvements or inventions you
have created, conceived, developed or discovered, alone or with others, during
your employment with the Company which relate to the Company's business or
which result from the use of the Company's equipment, supplies, facilities or
information, and which are protectable under applicable patent or copyright
laws (collectively, the "Intellectual Property"), in whatever form, is the
Company's sole and exclusive property. You hereby assign to the Company all of
your rights in any Intellectual Property. You agree that you will assist the
Company at the Company's expense in all ways in the future, including giving
evidence and executing any documents deemed helpful or necessary by the
Company, to establish, perfect and register worldwide, at the Company's
expense, the Company's title and exclusive ownership in the Intellectual
Property. You agree that you will not do anything in conflict with the
Company's rights in the Intellectual Property and that you will cooperate fully
to protect the Intellectual Property against misappropriation or infringement.
22. You agree that the Company is the copyright owner in all coprightable
works of every kind and description created or developed by you, solely or
jointly with others, during the time of your employment with the Company. If
so requested at any time, and for no additional consideration, you will execute
in writing any acknowledgements or assignments of copyright ownership of such
works as may be appropriate in the opinion of the Company for preservation of
the worldwide ownership in the Company of such copyrights.
23. You agree that your obligations pursuant to Paragraphs 20 and 21 with
respect to the Intellectual Property will survive the satisfaction or
completion of any other term of this Agreement and will continue for the
duration of the Restriction Period as to Paragraph 20 and in perpetuity as to
Paragraph 21 except as otherwise specified herein. You and the Company
acknowledge that you have entered into previous agreements with the Company
from time to
<PAGE> 11
Mr. Joel Kocher
September 15, 1994
Page 11
time, including the "Special Nonstatutory Stock Option Agreement under Dell
Computer Corporation 1989 Stock Option Plan" dated June 22, 1992, in respect of
Confidential and Proprietary Information and Intellectual Property, covenants
not to compete, non-solicitation and non-hire provisions, and provisions
concerning non contravention of your employment agreement; and you and the
Company agree that all such agreements are merged into and superseded by the
provisions of this Agreement, the intent being that your only obligations with
respect to Confidential and Proprietary Information and Intellectual Property,
covenants not to compete, non-solicitation and non-hire provisions, and
provisions concerning non contravention of your employment agreement, shall be
as provided herein.
24. You acknowledge that your breach of any of the non-competition,
non-solicitation, non-disclosure or non-use provisions set forth above will
cause irreparable harm to the Company, for which there may be no adequate
remedy at law and for which the ascertainment of damages would be difficult.
You therefore agree that in the event of your breach of any such provision, in
addition to and without having to prove the inadequacy of other remedies at
law, the Company shall be entitled to receive specific performance by you of
any such provision that you have breached, and the Company will furthermore be
entitled to the issuance of a court order directing full and immediate
injunctive relief against you without the Company being required to post any
bond or other security. However, the provisions of this Paragraph should not
be interpreted in any way as a limitation on the Company's right to obtain
money damages against you in the event of a breach of any of the provisions set
forth above. You agree that in the event the Company files legal proceedings
against you for a breach or threatened breach of such provisions, the Company
has the right to suspend immediately by written notice to you, all further
vesting of any of the then-unvested stock options to purchase Dell's Common
Stock held by you, and the further right to require you to exercise all
then-vested stock options to purchase Dell's Common Stock held by you within
thirty (30) days after written notice from the Company. In the event, however,
that the Company does not prevail in such legal proceedings, vesting of all
then-unvested shares shall occur immediately upon final judgement in your
favor, and you shall have nine (9) months after such final judgement or, if
later, until October 31, 1996, to exercise all such shares as well as any
previously vested shares that were not exercised prior to the final judgment,
after which all of such options shall terminate and expire without further
action or notice of any kind.
25. You and the Company agree to maintain in confidence the terms of this
Agreement and not to disclose the same publicly or to any third parties except
as may be required in compliance with the requirements of applicable law or
this Agreement, or pursuant to your decree of divorce entered September 9,
1994. You and the Company further agree to the joint issuance of a press
release in the form of Exhibit B attached hereto, and that thereafter, except
as provided in the next sentences, neither you nor any representative of the
Company will make further comment, on or off the record, for attribution or
otherwise with regard to the circumstances of your departure except as
authorized in writing in advance by the party about whom the comment is made.
In addition, you will make no comment, on or off the record, for attribution or
otherwise, during the Restriction Period, about your employment with the
<PAGE> 12
Mr. Joel Kocher
September 15, 1994
Page 12
Company, or about the Company or any aspect of its business or operations,
without the express prior written agreement of the Company, except as you may
be required to do so under oath in response to a subpoena. You also agree that
in the event you breach this covenant of confidentiality and the Company is
damaged as a result of such breach, you shall be personally liable for all
damages arising from such breach, including reasonable attorneys' fees and
costs incurred by the Company in pursuing such claim against you. Neither the
Company nor any person acting on behalf of the Company shall make any
disparaging remark to any person concerning your employment, your performance
or conduct as an employee of the Company, or the termination of your employment
with the Company.
26. You agree that all time periods which commence with the termination of
your employment with the Company begin to run as of the Termination Effective
Date.
27. This Agreement shall be governed in all respects by the internal laws
of the State of Texas, excluding its rules regarding conflicts of laws, and all
venue hereunder shall be solely in Travis County, Texas.
28. In the event of litigation or other proceeding (through and including,
without limitation, any appeals process) to enforce the provisions of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorney's fees and costs of such litigation or other proceeding from the
non-prevailing party.
29. You agree that you have had sufficient opportunity to thoroughly
discuss the implications of this Agreement with independent legal counsel of
your choice and that you have retained legal counsel of your choice to review
this Agreement and to advise you regarding same prior to your signing and
delivering this agreement to the Company. In signing the Agreement, you agree
that you have not relied on or been induced to execute this Agreement by any
statement, representations or agreements made by any person other than what is
expressly set forth in this Agreement.
30. This Agreement constitutes the entire agreement of the parties and,
except as otherwise provided herein, supersedes any and all prior and/or
contemporaneous oral or written agreements with the Company concerning the
subject matter hereof. This Agreement may not be modified except by a written
instrument executed by you and by an authorized officer of the Company.
31. Any waiver of any term or condition of this Agreement shall be
effective only if set forth in a written document signed by an authorized
officer of the Company. A waiver of any breach or any failure to enforce any
of the terms or conditions of this Agreement shall not in any way affect, limit
or waive a party's rights under this Agreement at any time to enforce strict
compliance thereafter with each and every term or condition of this Agreement.
Any decision by the Company to enforce its rights or withhold the performance
of its obligations under this Agreement will be made by a majority of the Board
of Directors of Dell Computer Corporation.
<PAGE> 13
Mr. Joel Kocher
September 15, 1994
Page 13
32. If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future law effective during the term hereof,
such provision shall be fully severable. In such event, this Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof and the remaining portions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance from this Agreement.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically as part of this Agreement a new provision or a
reformed provision as similar in terms and effect to such illegal, invalid or
unenforceable provision as may be legal and enforceable.
33. Any notice required or permitted under this Agreement shall be given by
certified mail, receipted overnight courier service, or completed telecopy
transmission to the party entitled thereto, addressed as follows:
If to you: Joel J. Kocher
________________________________
________________________________
________________________________
With copy to: Clark, Thomas & Winters,
a Professional Corporation
700 Lavaca Street, 12th Floor
Austin, Texas 78701
Attn: C. Joseph Cain
Telecopy: (512) 474-1129
If to the Company: Dell Computer Corporation
2214 W. Braker Lane
Austin, Texas 78758
Attn: General Counsel
Telecopy: (512) 728-3773
Either party may change its notice address by written notice to the other
party. Notice shall be deemed to have been received on the earlier of actual
receipt or the fourth day after dispatch.
<PAGE> 14
Mr. Joel Kocher
September 15, 1994
Page 14
34. For purposes of this Agreement, the term "Company" shall be deemed to
include any organization, partnership, corporation, trust or entity controlled
by or under common control with the Company. For this purpose, the concept of
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of another, whether
through the ownership of voting securities, by contract, or otherwise.
35. This Agreement is binding upon and shall inure to the benefit of the
parties and their respective heirs, representatives, successors and assigns.
<PAGE> 15
Mr. Joel Kocher
September 15, 1994
Page 15
If this letter accurately sets forth your agreement with respect to the
matters set forth herein, please so signify by signing this letter where
indicated below and then delivering to the Company your executed original of
this Agreement.
DELL COMPUTER CORPORATION
By: /s/ Thomas B. Green
___________________________
General Counsel & Secretary
Dated: 10/4/94
________________________
<PAGE> 16
Mr. Joel Kocher
September 15, 1994
Page 16
I have carefully read the foregoing Agreement. On behalf of myself, my
executor, heirs, successors and assigns, I agree to, and agree to be bound by,
each and all of the terms of the Agreement. I acknowledge recepit of a copy of
the Agreement, and I agree to the sufficiency of the consideration and payments
recited in the Agreement.
/s/ JOEL J. KOCHER
___________________
Joel J. Kocher
Dated: Oct. 4, 1994
____________
<PAGE> 17
EXHIBIT A
_________
COMPLIANCE AFFIDAVIT
____________________
STATE OF _______________
COUNTY OF ______________
I, JOEL J. KOCHER, residing at __________________________________________
______________________, being duly sworn, declare under oath that the following
statements are true and correct:
1. I am providing this Compliance Affidavit to and for the benefit of
Dell Computer Corporation and its subsidiaries and affiliates
(collectively, the "Company") pursuant to that certain letter
agreement (the "Agreement") between the Company and me dated
__________________, 199_, regarding matters relating to my
employment with the Company and termination thereof.
2. I hereby certify, declare and attest under oath that as of the date
of this Compliance Affidavit and at all times prior to the date
hereof, I am and have been in full and complete compliance with the
terms of the Agreement, including without limitation, the
non-competition, non-solicitation, non-disclosure and non-use
provisions contained in the Agreement, and I acknowledge and
reaffirm all of my obligations as set forth in the Agreement.
______________________________
JOEL J. KOCHER, Affiant
SUBSCRIBED AND SWORN TO before me on the ____ day of ____________, 199___.
(SEAL) __________________________________
Notary Public--State of
My Commission Expires:
__________________________________
_____________________ Printed Name of Notary Public
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated March 2, 1994 appearing on page 24 of Dell Computer Corporation's Annual
Report on Form 10-K for the Fiscal Year Ended January 30, 1994. We also consent
to the reference to us under the heading "Experts" in such Prospectus.
/s/Price Waterhouse LLP
PRICE WATERHOUSE LLP
Austin, Texas
February 17, 1995
<PAGE> 1
DELL COMPUTER CORPORATION
REGISTRATION AGREEMENT
FOR SHARES OF COMMON STOCK
ISSUED UPON CONVERSION OF
SERIES A CONVERTIBLE PREFERRED STOCK
PURSUANT TO ITS OFFER OF PREMIUM DATED FEBRUARY 21, 1995
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, MARCH 22, 1995,
UNLESS EXTENDED BY THE COMPANY.
PLEASE SIGN AND COMPLETE BELOW
TO HAVE SHARES REGISTERED IN THE RESALE REGISTRATION
EXACT NAME OF HOLDER:___________________________________________________________
STREET ADDRESS OF HOLDER:_______________________________________________________
PHONE NUMBER:______________________________ TELECOPY NUMBER: ___________________
NUMBER OF SHARES OF COMMON STOCK BENEFICIALLY OWNED AS OF FEBRUARY 21, 1995
(EXCLUDING SHARES ISSUABLE UPON CONVERSION OF SERIES A PREFERRED STOCK):
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF SERIES A PREFERRED
STOCK TO BE REGISTERED UNDER THIS AGREEMENT [IF NO INDICATION IS MADE, ALL SUCH
SHARES OF COMMON STOCK ISSUED UPON CONVERSION OF SERIES A PREFERRED STOCK WILL
BE REGISTERED]:_________________________________________________________________
SIGNATURE OF HOLDER:____________________________________________________________
[IF AN ENTITY] By:______________________________________________________________
Name (please print):_____________________________________________
Title (please print):____________________________________________
NUMBER OF PROSPECTUSES NEEDED (LIMIT OF 20):____________________________________
<PAGE> 2
The Conversion Agent:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data Distribution, c/o Citicorp Data Distribution, Corporate Trust Window
Inc. Inc. 111 Wall Street, 5th Floor
P.O. Box 7072 404 Sette Drive New York, New York
Paramus, New Jersey 07653 Paramus, New Jersey 07652
Confirm by Telephone:
(800) 422-2066
</TABLE>
Delivery of this Registration Agreement to an address other than as set
forth above will not constitute a valid delivery. In order for shares of Common
Stock issuable upon conversion to be registered for resale, the beneficial owner
of the shares of Series A Preferred Stock being tendered for conversion must
complete, sign and deliver this Registration Agreement to the Conversion Agent
before 12:00 midnight, New York City time, on Wednesday, March 22, 1995, unless
extended by the Company. EVEN IF YOU ARE TENDERING SERIES A PREFERRED STOCK
THROUGH A BROKER OR OTHER CUSTODIAN WHO HOLDS STOCK FOR YOUR ACCOUNT, THE SHARES
OF COMMON STOCK ISSUABLE UPON CONVERSION WILL NOT BE REGISTERED FOR RESALE UNDER
THE SECURITIES ACT OF 1933 UNLESS YOU TIMELY SIGN AND DELIVER THIS REGISTRATION
AGREEMENT TO THE CONVERSION AGENT.
REGISTRATION AGREEMENT
This REGISTRATION AGREEMENT (the "Agreement") is made and entered into by
and among Dell Computer Corporation, a Delaware corporation (the "Company"), and
the undersigned holders (the "Holders") of the Series A Convertible Preferred
Stock of the Company (the "Series A Preferred Stock"), effective as of the
closing of the Conversion Offer (hereinafter defined).
RECITALS
A. The Company has offered to register under the Securities Act and
applicable U.S. state securities laws, the resale from time to time of the
shares of Common Stock to be issued upon conversion of the Series A Preferred
Stock by the holders thereof pursuant to that certain Offer of Premium Upon
Conversion dated February 21, 1995, the related Special Conversion Notice, and
this Registration Agreement (which together constitute the "Conversion Offer").
B. To facilitate the transactions contemplated by the Conversion Offer and
to provide certain information required by the Company to be included in the
Registration Statement (hereinafter defined), the Company and the Holders desire
to enter into this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the Company and the Holders hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following terms
shall have the following respective meanings:
(a) "Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular
purpose.
(b) "Common Stock" means the Company's common stock, par value $.01
per share.
2
<PAGE> 3
(c) "Conversion Offer" means the Company's offer to the holders of the
Series A Preferred Stock to convert such shares into the Company's Common
Stock pursuant to that certain Offer of Premium Upon Conversion dated
February 21, 1995, the related Special Conversion Notice, and this
Agreement.
(d) "Effective Date" means the date on which the Commission declares
the Registration Statement effective or on which the Registration Statement
otherwise becomes effective.
(e) "Exchange Act" means the Securities Exchange Act of 1934, or any
successor thereto, as the same shall be amended from time to time.
(f) "Expiration Date" means the date upon which the Conversion Offer
expires.
(g) "Prospectus" means the final prospectus contained in the
Registration Statement or filed pursuant to Rule 424(b) under the
Securities Act, as it may be amended or supplemented by the Company from
time to time.
(h) "Registrable Securities" means the shares of Common Stock to be
issued to Holders upon conversion of the Series A Preferred Stock pursuant
to the Conversion Offer and identified on the signature page for each of
such Holders and to be registered by the Company in accordance with this
Agreement.
(i) "Registration Expenses" has the meaning assigned thereto in
Section 4 hereof.
(j) "Registration Statement" means the Company's registration
statement on Form S-3 or such other successor form, in the form it is
declared effective by the Commission, registering for resale the
Registrable Securities.
(k) "Securities Act" means the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.
2. Registration under the Securities Act. The Company agrees to use its
reasonable commercial efforts to register the resale by the Holders from time to
time during the Resale Window (hereinafter defined) of the Registrable
Securities under the Securities Act and any applicable U.S. state securities or
"blue sky" laws and to have the Registration Statement declared effective by the
Commission as soon as reasonably practicable after the Expiration Date;
provided, however, that the Company may, in its sole discretion, delay the
effectiveness of such Registration Statement until a later date as the Company
determines may be required or advisable. The Company further agrees to use its
reasonable commercial efforts to keep the Registration Statement covering the
Registrable Securities effective for a period of 30 calendar days after the
Effective Date (the "Resale Window"). In counting the days in the Resale Window,
the day the Registration Statement is declared effective shall count as the
first day if it is declared effective at or before 10:00 a.m., New York City
time. The Company will promptly notify the Holders of the Registrable Securities
of the Effective Date at the address and telecopy number provided by such
Holders on the signature page above.
3. Covenants of the Holders. As a condition of the Company's obligation to
register the Registrable Securities and any and all other obligations of the
Company under this Agreement, each Holder hereby represents, warrants and
agrees:
(a) to furnish to the Company the information requested next to such
Holder's signature below, which shall include such Holder's name exactly as
it appears upon the stock transfer records of the Company, its current
street address, phone number, telecopy number, relationship to the Company,
if any, the exact number of shares of Series A Preferred Stock beneficially
owned by such Holder, and the exact number of shares of Common Stock
beneficially owned by such Holder and such other information reasonably
available to such Holder as the Company may reasonably request;
3
<PAGE> 4
(b) that such Holder shall not take, directly or indirectly, any
action that is designed to or which has constituted or that might
reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Common Stock;
(c) that such Holder will comply with Rule 10b-6 under the Exchange
Act, which requires a seller of Registrable Securities and all affiliates
of the that seller (as "affiliate" is defined in such rule) to suspend all
bids for or purchases of shares of Common Stock at least two business days
before and during any offers and sales of Registrable Shares by that seller
and until that seller's offers and sales terminate;
(d) that such Holder will comply with Rule 10b-7 under the Exchange
Act, which prohibits any person from stabilizing the prices of a security
to facilitate and offering of that security;
(e) that such Holder shall not offer, sell, contract to sell,
establish any short position in, or otherwise offer or dispose of any other
Registrable Securities prior to the Effective Date; and
(f) that such Holder will not offer, sell, pledge or otherwise dispose
of the Series A Preferred Stock and the Common Stock issuable upon
conversion thereof prior to the Effective Date;
(g) that such Holder will offer and sell the Registrable Securities
only in the manner described in the Registration Statement;
(h) that such Holder will deliver or cause to be delivered a
Prospectus to the buyer at or before any sale of Registrable Securities;
(i) that, if such Holder sells Registrable Securities on the Nasdaq
National Market in an ordinary brokerage transaction, such holder will
deliver to its broker (i) a copy of the letter attached as Exhibit A
completed and executed by such Holder (the "Seller's Letter"), and (ii) a
copy of the letter attached as Exhibit B (the "Broker's Letter"), and shall
cause its broker to execute the Broker's Letter and promptly to deliver
both the Seller's Letter and the Broker's Letter to the transfer agent for
the Common Stock and to the Company, attention: General Counsel, and that
the Company may refuse to authorize transfer of such Registrable Securities
if such letters are not delivered to the Company in form and substance
satisfactory to the Company;
(j) that, if such Holder sells Registrable Securities directly to
another person other than in an ordinary brokerage transaction on the
Nasdaq National Market, such holder will deliver to the transfer agent for
the Common Stock and to the Company, attention: General Counsel, a copy of
the Seller's Letter completed and executed by such Holder, and that the
Company may refuse to authorize transfer of such Registrable Securities if
such letter is not delivered to the Company in form and substance
satisfactory to the Company;
(k) that such Holder will immediately suspend all offers and sales of
Registrable Securities pursuant to the Registration Statement upon
termination of the Resale Window or, if earlier, upon notification from the
Company that the Prospectus may no longer be used for offers or sales; and
(l) that such Holder is the beneficial owner of the shares of Series A
Preferred Stock and Common Stock set forth on the signature page of such
Holder hereto.
4. Registration Expenses. The Company agrees to bear and to pay or cause to
be paid promptly upon request being made therefor all expenses incident to the
Company's performance of or compliance with this Agreement, including, without
limitation, (a) all Commission registration and filing fees and expenses, (b)
all fees and expenses in connection with the qualification of the Common Stock
for offering and sale under any U.S. state securities and "blue sky" laws, (c)
all expenses relating to the preparation, printing, distribution and
reproduction of each registration
4
<PAGE> 5
statement required to be filed hereunder, each prospectus included therein or
prepared for distribution pursuant hereto, each amendment or supplement to the
foregoing, the certificates representing the Common Stock and all other
documents relating hereto, (d) messenger and delivery expenses, (e) internal
expenses (including, without limitation, all salaries and expenses of the
Company's officers and employees performing legal or accounting duties), (f)
fees, disbursements and expenses of counsel and independent certified public
accountants of the Company (including the expenses of any opinions or "cold
comfort" letters required by or incident to such performance and compliance),
and (g) fees, expenses and disbursements of any other persons, including special
experts, retained by the Company in connection with such registration
(collectively, the "Registration Expenses"). Notwithstanding the foregoing, the
Holders shall pay all agency fees and commissions, underwriting discounts and
commissions, and transfer and other taxes attributable to the sale of such
Registrable Securities and the fees and disbursements of any counsel or other
advisors or experts retained by such Holders (severally or jointly).
5. Indemnification.
(a) Indemnification by the Company. On and after the effectiveness of the
registration of the resale of the Registrable Securities pursuant to Section 2
hereof, and in consideration of the agreements of the Holders contained herein,
the Company agrees to indemnify and hold harmless each of the Holders in any
offering or sale of the Registrable Securities against any losses, claims,
damages or liabilities, joint or several, to which such Holder may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement under which such Registrable Securities
were registered under the Securities Act, or any final prospectus contained
therein or furnished by the Company to any such holder, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company agrees
to reimburse such Holder for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that the Company shall not be
liable to any such person in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement or final prospectus, or amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by such person expressly for use therein; provided, further, that the
Company shall not be liable to any person to the extent such loss, claim,
damage, or liability results from the fact that there was not delivered by such
person a final prospectus the delivery of which would have avoided such loss,
claim, damage or liability.
(b) Indemnification by the Holders. Each of the Holders, severally, hereby
agrees (i) to indemnify and hold harmless the Company, and all other Holders,
against any losses, claims, damages or liabilities to which the Company or such
other Holders of may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or any
final prospectus contained therein or furnished by the Company to any such
Holder, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only 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 the Company by such
Holder expressly for use therein, and (ii) reimburse the Company for any legal
or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim; provided, however, that no
such Holder shall be required to undertake liability to any person under this
Section 5(b) for any amounts in excess of the dollar
5
<PAGE> 6
amount of the proceeds to be received by such Holder from the sale of such
Holder's Registrable Securities pursuant to such registration.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of written notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 5, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party other than under the indemnification provisions of or
contemplated by Section 5(a) or 5(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, such indemnifying party shall not be
liable to such indemnified party for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation.
(d) Contribution. Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 5(a) or Section 5(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or by such indemnified party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contributions pursuant to this
Section 5(d) were determined by pro rata allocation (even if the holders or any
agents or underwriters or all of them were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 5(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages, or
liabilities (or actions in respect thereof) referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 5(d), no Holder shall
be required to contribute any amount in excess of the amount by which the dollar
amount of the proceeds received by such Holder from the sale of any Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) exceeds the amount of any damages which such holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations in this Section 5(d) to contribute
shall be several in proportion to the principal amount of Registrable Securities
registered by them and not joint.
(e) The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of
each Holder and each person, if any, who controls any Holder
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within the meaning of the Securities Act; and the obligations of the Holders
contemplated by this Section 5 shall be in addition to any liability which the
respective Holder may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his consent, is named in any registration statement as about to become
a director of the Company) and to each person, if any, who controls the Company
within the meaning of the Securities Act.
6. Miscellaneous.
(a) Specific Performance. The parties hereto acknowledge that there may be
no adequate remedy at law if any party fails to perform any of its obligations
hereunder and that each party may be irreparably harmed by any such failure, and
accordingly agree that each party, in addition to any other remedy in which it
may be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of any other party under this Agreement in
accordance with the terms and conditions hereunder, in any court of the United
States or any State thereof having jurisdiction.
(b) Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, if delivered personally or by courier, or
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested), or upon electronic confirmation of
receipt if delivered by telecopy, as follows: If to the Company, to it at Dell
Computer Corporation, 2112 Kramer Lane, Building 1, Austin, Texas 78758-4012,
Attention: General Counsel, Telecopy number: (512) 728-3773, and if to a Holder,
to it at the address and telecopy number provided by such Holder herein, or to
such other address as any party may have furnished to the others in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
(c) Successors and Assigns. All the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by
the respective successors and assigns of the parties hereto.
(d) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Agreement or made pursuant
hereto shall remain in full force and effect regardless of any investigation (or
statement as to the results thereof) made by or on behalf of any Holder, any
director, officer or partner of such Holder, or any controlling person of such
Holder, and shall survive the effectiveness of the Registration Statement.
(e) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
(f) Headings. The descriptive headings of the several Sections and
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
(g) Entire Agreement. This Agreement and the other writings referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter, and supersede
all prior agreements and understandings between the parties with respect to its
subject matter.
(h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective the closing of the Conversion Offer.
DELL COMPUTER CORPORATION
By:
Thomas J. Meredith
Chief Financial Officer
THE SIGNATURE OF THE HOLDER ON THE COVER OF THIS
REGISTRATION AGREEMENT SHALL BE A COUNTERPART
SIGNATURE TO THIS REGISTRATION AGREEMENT
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<PAGE> 9
EXHIBIT A
SELLER'S LETTER
__________________, 1995
General Counsel
Dell Computer Corporation
2112 Kramer Lane, Building 1
Austin, Texas 78758-4012
Telephone: (512) 338-4400
Telecopy: (512) 728-3773
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Telephone: (718) 921-8200
(212) 936-5100
Telecopy: (718) 236-4588
Re: Dell Computer Corporation
Common Stock Issued Upon Conversion of Series A Convertible Preferred
Stock
Ladies and Gentlemen:
The undersigned has sold_______________________[insert number] shares
("Shares") of Common Stock of Dell Computer Corporation (the "Company") to
________________________________________[insert name] (the "Purchaser"). Terms
having their initial letter capitalized but not defined in this letter have the
meanings ascribed them in the Registration Agreement between the undersigned and
the Company. In order to induce you to transfer the Shares and to issue,
register and countersign new certificates representing the Shares without a
legend restricting the transfer thereof, the undersigned acknowledges and
represents to the Company and American Stock Transfer & Trust Company as
follows:
1. The undersigned delivered, or caused to be delivered, to the
Purchaser a copy of the Prospectus of the Company relating to the Shares at
or before the written confirmation of the sale of the Shares to the
Purchaser.
2. No written materials other than the Prospectus and confirmation
were used in connection with the sale.
3. The sale was made in compliance with all applicable state
securities or blue-sky laws.
4. The undersigned also acknowledges and represents that the
undersigned has complied with all its covenants in the Registration
Agreement, including without limitation the covenants regarding compliance
with Rule 10b-6 and Rule 10b-7 under the Exchange Act and the prohibits
against offering or selling the Shares before the Effective Date of the
Registration Statement. I represent that I am not, and at no time have
been, an affiliate of the Company.
INDIVIDUAL:
________________________________________
(Signature of Selling Security Holder)
________________________________________
(Printed Name of Selling Security
Holder)
________________________________________
PARTNERSHIP, CORPORATION OR TRUST:
Print Name of Entity:
By:_____________________________________
(Signature of Authorized Officer or
Representative)
________________________________________
(Print Name of Authorized Officer or
Representative)
________________________________________
(Title)
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<PAGE> 10
EXHIBIT B
BROKER'S LETTER
______________, 1995
General Counsel
Dell Computer Corporation
2112 Kramer Lane, Building 1
Austin, Texas 78758-4012
Telephone: (512) 338-4400
Telecopy: (512) 728-3773
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Telephone: (718) 921-8200
(212) 936-5100
Telecopy: (718) 236-4588
Re: Dell Computer Corporation
Common Stock Issued Upon Conversion of Series A Convertible Preferred
Stock
Ladies and Gentlemen:
We have read the letter of ________________________________ [print name
of seller] dated ______________________, 1995, concerning the proposed sale of
shares (the "Shares") of Common Stock of Dell Computer Corporation (the
"Company") through us and advise you that, in connection with the sale of the
Shares:
1. We have sold or will sell the Shares in a brokerage transaction as
agent for the named seller.
2. The undersigned delivered, or caused to be delivered, to the
purchaser of the Shares a copy of the Prospectus of the Company relating to
the Shares at or before the written confirmation of the sale of the Shares
to the Purchaser through the undersigned firm.
3. No written materials other than the Prospectus and confirmation
were used in connection with the sale.
4. The selling of the Shares by the undersigned as agent for the named
seller does not constitute participation by the undersigned in a
distribution within the meaning of the Securities and Exchange Commission's
Rule 10b-6(c)(5). We understand that this determination may depend on the
magnitude of the number of shares we are asked to sell, or foreseeably will
be asked to sell, and the presence of any special selling efforts or
selling methods. If our participation constitutes participation in a
distribution within the meaning of Rule 10b-6(c)(5), we represent and
acknowledge to you that we have complied with Rule 10b-6.*
Sincerely,
______________________________________
(Print Name of Firm)
______________________________________
(Signature of Authorized
Representative)
______________________________________
(Print Name and Capacity of Signer)
______________________________________
(Telephone Number)
- ---------------
*Note: In the view of the Securities and Exchange Commission, additional
compensation offered to registered representatives or a favorable
research report or any recommendation by the broker are indicia of
special selling efforts and may indicate the transaction constitutes a
distribution for purposes of Rule 10b-6. When a broker-dealer agrees with
one or more shareholders to act as their exclusive agent in connection
with sales off a shelf registration statement, the broker-dealer will be
subject to Rule 10b-6, and the broker-dealer will be prohibited from
engaging in market making or other activities proscribed by Rule 10b-6.
10
