DELL COMPUTER CORP, 10-Q, 1995-12-08

DELL COMPUTER CORP
10-Q, 1995-12-08
ELECTRONIC COMPUTERS

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<PAGE> 1
================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED OCTOBER 29, 1995

COMMISSION FILE NUMBER:0-17017

DELL COMPUTER CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 74-2487834
(State of incorporation) (I.R.S. Employer ID No.)

2214 WEST BRAKER LANE, SUITE D
AUSTIN, TEXAS 78758-4053
(Address of principal executive offices)
(512) 338-4400
(Telephone number)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING TWELVE MONTHS AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ]

AS OF DECEMBER 6, 1995, 93,081,168 SHARES OF THE REGISTRANT'S COMMON STOCK, PAR
VALUE $.01 PER SHARE, WERE OUTSTANDING.

================================================================================
<PAGE> 2
PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DELL COMPUTER CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)

<TABLE>
<CAPTION>
ASSETS
OCTOBER 29, JANUARY 29,
1995 1995
----------------- -----------------
<S> <C> <C>
Current assets:
Cash $ 69,586 $ 42,953
Short-term investments 501,186 484,294
Accounts receivable, net 772,835 537,974
Inventories 463,640 292,925
Other current assets 135,892 112,215
----------------- -----------------
Total current assets 1,943,139 1,470,361
Property, plant and equipment, net 158,534 116,981
Other assets 11,250 6,658
----------------- -----------------
$ 2,112,923 $ 1,594,000
================= =================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 531,739 $ 402,682
Accrued and other liabilities 431,538 323,791
Income taxes 33,919 24,937
----------------- -----------------
Total current liabilities 997,196 751,410
Long-term debt 113,242 113,429
Other liabilities 109,189 77,425
Commitments and contingencies
Stockholders' equity:
Preferred stock: $.01 par value; shares authorized: 5,000,000;
shares issued and outstanding: 60,000 and 1,250,000, respectively 1 13
Common stock: $.01 par value; shares authorized:
300,000,000 and 100,000,000, respectively; shares issued and
outstanding: 92,999,232 and 79,359,276, respectively 930 794
Additional paid-in capital 420,824 360,784
Unrealized loss on short-term investments (383) (2,628)
Retained earnings 500,663 311,217
Unearned compensation (18,585) (4,413)
Cumulative translation adjustment (10,154) (14,031)
----------------- -----------------
Total stockholders' equity 893,296 651,736
----------------- -----------------
$ 2,112,923 $ 1,594,000
================= =================
</TABLE>

The accompanying notes are an integral part of these
condensed consolidated financial statements.

1
<PAGE> 3
DELL COMPUTER CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------- ----------------------------
OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30,
1995 1994 1995 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales $ 1,415,699 $ 884,552 $ 3,757,225 $ 2,442,680
Cost of sales 1,125,175 703,129 2,967,907 1,921,788
------------- ------------- ------------- -------------
Gross margin 290,524 181,423 789,318 520,892
Operating expenses:
Selling, general and administrative 160,060 104,861 434,998 302,384
Research, development and engineering 25,980 17,016 71,506 47,916
------------- ------------- ------------- -------------
Total operating expenses 186,040 121,877 506,504 350,300
------------- ------------- ------------- -------------
Operating income 104,484 59,546 282,814 170,592
Financing and other income (expense), net 1,735 (1,418) 1,954 (43,620)
------------- ------------- ------------- -------------
Income before income taxes 106,219 58,128 284,768 126,972
Provision for income taxes 30,803 16,774 82,579 38,086
------------- ------------- ------------- -------------
Net income 75,416 41,354 202,189 88,886
Preferred stock dividends 105 2,187 11,848 6,562
------------- ------------- ------------- -------------
Net income available to common
stockholders $ 75,311 $ 39,167 $ 190,341 $ 82,324
============= ============= ============= =============
Earnings per common share:
Primary $ 0.75 $ 0.47 $ 1.98 $ 1.00
============= ============= ============= =============
Fully diluted $ 0.75 $ 0.43 $ 1.92 $ 0.95
============= ============= ============= =============
</TABLE>

The accompanying notes are an integral part of these
condensed consolidated financial statements.

2
<PAGE> 4
DELL COMPUTER CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
------------------------------------
OCTOBER 29, OCTOBER 30,
1995 1994
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 202,189 $ 88,886
Charges to income not requiring cash outlays:
Depreciation and amortization 27,708 23,624
Net (gain) loss on short-term investments (302) 21,218
Other 3,977 1,825
Changes in:
Operating working capital (179,819) (34,389)
Non-current assets and liabilities 23,185 21,257
---------------- ----------------
Net cash provided by operating activities 76,938 122,421
Cash flows from investing activities:
Short-term investments:
Purchases (3,036,884) (3,202,716)
Maturities and other redemptions 2,996,090 3,011,348
Sales 28,651 113,406
Capital expenditures (66,501) (47,007)
---------------- ----------------
Net cash used in investing activities (78,644) (124,969)
Cash flows from financing activities:
Preferred stock dividends paid (12,743) (6,562)
Issuance of common stock under employee plans 42,146 21,580
Other (502) (147)
---------------- ----------------
Net cash provided by financing activities 28,901 14,871
Effect of exchange rate changes on cash (562) 2,476
---------------- ----------------
Net increase in cash 26,633 14,799
Cash at beginning of period 42,953 3,355
---------------- ----------------
Cash at end of period $ 69,586 $ 18,154
================ ================
</TABLE>

The accompanying notes are an integral part of these
condensed consolidated financial statements.

3
<PAGE> 5
DELL COMPUTER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 -- BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto filed with the Securities and Exchange Commission (the
"Commission") in the Company's Annual Report on Form 10-K for the fiscal year
ended January 29, 1995, as amended. In the opinion of management, the
accompanying condensed consolidated financial statements reflect all
adjustments (consisting only of normal recurring accruals) considered necessary
to present fairly the financial position of Dell Computer Corporation and its
consolidated subsidiaries at October 29, 1995 and January 29, 1995 and the
results of their operations for the three-month and nine-month periods ended
October 29, 1995 and October 30, 1994. Reclassification of certain prior
period amounts has been made for comparative purposes.

NOTE 2 -- STOCK SPLIT

On October 9, 1995, the Company's Board of Directors declared a 2-for-1
stock split of the Company's common stock in the form of a 100% stock dividend
to stockholders of record as of October 20, 1995. The distribution of such
dividend occurred on October 27, 1995. All share and per share information has
been retroactively restated in the condensed consolidated financial statements
to reflect the stock split.

NOTE 3 -- PREFERRED SHARE PURCHASE RIGHTS

On November 29, 1995, the Company's Board of Directors declared a dividend
of one Preferred Share Purchase Right (a "Right") for each outstanding share of
the Company's common stock. The distribution of the Rights will be made on
December 13, 1995 to the stockholders of record on that date. Each Right
entitles the holder to purchase one one-thousandth of a share of a new series
of preferred stock at an exercise price of $225. The Rights will be
exercisable only if a person or group acquires 15% or more of the Company's
common stock or announces a tender offer, the consummation of which would
result in such person or group owning 15% or more of the Company's common
stock.

If a person or group acquires 15% or more of the outstanding Company common
stock, each Right will entitle all the holders (other than such person or any
member of such group) to purchase, at the Right's then current exercise price,
a number of shares of the Company's common stock having a market value of twice
the exercise price of the Right. In addition, if the Company is involved in a
merger or other business combination transaction at any time after the Rights
have become exercisable, each Right will entitle its holder to purchase, at the
Right's then current exercise price, a number of the acquiring company's common
shares having a market value at that time of twice the exercise price of the
Right. Furthermore, at any time after a person or group acquires 15% or more
of the outstanding Company common stock but prior to the acquisition of 50% of
such stock, the Board of Directors may, at its option, exchange part or all of
the Rights (other than Rights held by the acquiring person or group) for shares
of the Company's common stock at an exchange rate of one share of common stock
for each Right.

The Company will be entitled to redeem the Rights at $.001 per Right at any
time before a 15% or greater position has been acquired by any person or group.
Additionally, the Company may lower the 15% threshold to not less than the
greater of (a) any percentage greater than the largest percentage of common
stock known by the Company to be owned by any person (other than Michael S.
Dell) or (b) 10%. The Rights expire on November 29, 2005.

Neither the ownership nor the further acquisition of Company common stock
by Michael S. Dell will cause the Rights to become exercisable or nonredeemable
or will trigger the other features of the Rights.

The Company has 5,000,000 shares of $.01 par value preferred stock
authorized for issuance, of which 200,000 shares have been designated by the
Board of Directors as Series A Junior Participating Preferred Stock

4
<PAGE> 6
and reserved for issuance upon exercise of the Rights. Each of such preferred
shares will be entitled to an aggregate dividend equal to the greater of $1.00
per share or 1,000 times the dividend declared on the common stock. Upon
liquidation, the holders of such preferred shares will be entitled to receive
an aggregate liquidation payment equal to the greater of $1,000 or 1,000 times
the payment made per share of common stock. Each of such preferred shares will
have 1,000 votes, voting together with the common shares. In the event of any
merger, consolidation or other transaction in which common stock is exchanged,
each of such preferred shares will be entitled to receive 1,000 times the
amount received per common share. Such preferred shares will be nonredeemable.
At December 7, 1995, none of these preferred shares was issued or outstanding.

NOTE 4 -- PREFERRED STOCK CONVERSION

On February 21, 1995, the Company offered to pay a cash premium of $8.25
for each outstanding share of its Series A Convertible Preferred Stock (the
"Convertible Preferred Stock") that was converted to common stock. The offer
of premium upon conversion was available to holders of the Convertible
Preferred Stock through the closing of the special conversion period on March
22, 1995. The Company also offered to register the resale of the shares of
common stock issued upon conversion of the Convertible Preferred Stock with the
Commission for a 50-day period, which ended June 15, 1995. Holders of
1,190,000 shares of Convertible Preferred Stock elected to convert and, as a
result, received an aggregate of approximately 10.0 million shares of common
stock and $9.8 million in cash during the first quarter of fiscal 1996. The
$9.8 million conversion premium and $0.5 million of expenses of the conversion
offer were treated as an additional dividend on the Convertible Preferred Stock
for financial reporting purposes. Accordingly, $11.8 million, comprised of the
conversion premium, conversion offer expenses and dividends, were deducted from
net income for the first nine months of fiscal 1996 to determine the net income
available to common stockholders. In addition, the weighted average shares
outstanding used to compute primary earnings per common share for the first
nine months of fiscal 1996 includes the shares of common stock issued upon
conversion from the closing of the conversion period until the end of the
nine-month period.

NOTE 5 -- INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

On July 21, 1995, the Company's stockholders approved an amendment to the
Company's Certificate of Incorporation to increase the number of shares of
common stock, par value $.01 per share, that the Company is authorized to issue
from 100 million to 300 million. The amendment was filed in the office of the
Secretary of State of the State of Delaware on August 3, 1995. In accordance
with the provisions of the Delaware General Corporation Law, such amendment
became effective upon filing.

NOTE 6 -- RESTRICTED STOCK

As discussed in the Company's Annual Report on Form 10-K for the fiscal
year ended January 29, 1995, as amended, the Company granted certain restricted
stock during fiscal 1995 that typically vests over a seven-year period. During
the first nine months of fiscal 1996, the Company granted approximately 660,000
additional shares of restricted stock to employees pursuant to its long-term
incentive plan. The unearned compensation associated with restricted stock at
October 29, 1995 has been presented separately in the Condensed Consolidated
Statement of Financial Position. Prior to the second quarter of fiscal 1996,
the unearned compensation was combined with additional paid-in capital, but the
amount at January 29, 1995 has been reclassified in the accompanying Condensed
Consolidated Statement of Financial Position to conform with the current period
presentation.

NOTE 7 -- COMMITMENTS AND CONTINGENCIES

5
<PAGE> 7
few of many lawsuits of this type that have been filed, often naming Apple,
Atex, Compaq, IBM, Keytronic and other major suppliers of keyboard products.
The Company currently is not able to predict the outcome of these suits. It is
possible that the Company may be named in additional suits. Ultimate
resolution of the litigation against the Company may depend on progress in
resolving this type of litigation overall. However, the Company does not
believe that the outcome of these matters will have a material adverse effect
on the Company's financial condition or results of operations.

On August 11, 1993, the Company received a subpoena from the United States
Department of Commerce, Office of Export Enforcement of the Bureau of Export
Administration, requiring the Company to provide all documents relative to any
and all exports of 486/66 personal computers or related components to Russia,
Ireland, Iran or Iraq during the period from January 1992 through August 1993
in connection with an investigation to enforce regulations under the Export
Administration Act of 1979, as amended. In September 1995, the Company
received a letter from the Dallas Field Office of the Department of Commerce
closing out the investigation into the shipments to Russia and Ireland. The
Department of Commerce found no wrongdoing by the Company with regard to these
destinations. The Company is still awaiting a response from the Department of
Commerce regarding its voluntary self disclosure of certain shipments to Iran
in June 1992. If the Office of Export Enforcement's investigators determine
that the Company has violated applicable regulations, the government could
potentially file civil or criminal charges. The Company has fully responded to
the subpoena and, in accordance with its policy to comply fully with export
laws and regulations, intends to cooperate with the Office of Export
Enforcement. The Company does not believe that this investigation or its
outcome will have a material adverse effect on the Company's financial
condition or results of operations.

The Company received a subpoena from the Federal Trade Commission (the
"FTC"), dated July 18, 1994, in connection with an inquiry with respect to
whether the Company may have misrepresented or improperly failed to disclose
patent rights that would conflict with open use of a local high-speed personal
computer bus standard promulgated by the Video Electronics Standards
Association. On November 2, 1995, the Company and the FTC announced that they
had entered into a consent agreement under which the Company will ensure that
any Company employees who are members of standards committees fully understand
and disclose patents that may be related to standards under consideration by
those committees. In agreeing to the consent decree, the Company did not admit
to any wrongdoing, nor did the FTC find that the Company had violated any law
or regulation. In addition, the FTC did not impose any fines or sanctions
against the Company. The consent decree is subject to public comment until
January 1996 before it becomes final.

In March 1995, the Company was named along with twelve other personal
computer or computer monitor manufacturers in a complaint filed by the District
Attorney for Merced County, California. The complaint alleges that each of the
defendants has engaged in false or misleading advertising with regard to the
size of computer monitor screens and seeks unspecified damages and injunctive
relief. In May 1995, several other district attorneys in other California
counties joined this lawsuit as co-plaintiffs. On September 27, 1995, a
settlement was reached and a Stipulated Judgment was entered by the court under
which the Company and the other defendants have agreed to new guidelines in
future monitor screen size advertising and to pay an aggregate amount of $1.5
million in retail value of computer equipment and $200,000 in aggregate cash
payments to the State of California. The Company's share of the settlement
costs has not had, and the cost of adopting and following the new advertising
guidelines will not have, a material adverse effect on the Company's financial
condition or results of operations.

In May 1995, the Company was named, along with two other personal computer
manufacturers and one computer monitor vendor, in a class action complaint
filed in the California Superior Court for Marin County. The case has been
transferred to Orange County, California. A second class action complaint,
naming the Company and 47 other manufacturers or vendors of personal computer
monitors, was filed in Santa Clara County, California and was served on the
Company in August 1995. Two other similar class action complaints naming the
Company and others as defendants have been filed in Orange County, California.
A motion has been filed by all defendants in all of the cases to consolidate
all of the cases before a single judge in Santa Clara County, California. All
proceedings in all of the cases have been stayed pending resolution of the
motion to consolidate. The complaints allege that each of the defendants has
engaged in false or misleading advertising with regard to the size of computer
monitor screens. The plaintiffs seek restitution in the form of refunds or
product exchange, damages, punitive damages and attorneys' fees. The Company
plans to vigorously contest the allegations of the complaints.

6
<PAGE> 8
This litigation is currently at a preliminary stage and no discovery has
occurred to date. As such, it is too early for the Company to adequately
evaluate the likelihood of the plaintiffs prevailing on their claims. There
can be no assurance that an adverse determination in this litigation would not
have a material adverse effect on the Company's financial condition or results
of operations.

In June 1995, the Company was served with a class action complaint filed in
State District Court in Travis County, Texas. The complaint alleges that the
Company has included "used parts" in its "new" computer systems and has failed
to adequately inform its customers and prospective customers of that practice.
According to the complaint, these facts constitute fraud, negligent
misrepresentation, breach of contract and breach of warranty. The plaintiffs
seek refund of the purchase price for computer systems purchased from the
Company, damages in an unspecified amount, injunctive relief, interest and
attorneys' fees. The Company plans to vigorously contest the allegations of
the complaint. This litigation is currently at a preliminary stage, and no
discovery has occurred to date. As such, it is too early for the Company to
adequately evaluate the likelihood of the plaintiffs prevailing on their
claims. There can be no assurance that an adverse determination in this
litigation would not have a material adverse effect on the Company's financial
condition or results of operations.

NOTE 8 -- EARNINGS PER COMMON SHARE

Primary earnings per common share are computed by dividing net income
available to common stockholders by the weighted average number of common
shares and common stock equivalents (if dilutive) outstanding during each
period. Common stock equivalents include stock options. The Convertible
Preferred Stock is not a common stock equivalent for purposes of computing
earnings per common share. The number of common stock equivalents outstanding
is computed using the treasury stock method. The weighted average shares
outstanding used to compute primary earnings per common share for the first
nine months of fiscal 1996 includes the shares of common stock issued upon
conversion of the Convertible Preferred Stock from the closing of the
conversion period until the end of the nine-month period. Shares used in the
calculation of fully diluted earnings per common share have been adjusted for
the assumed conversion of all of the Company's outstanding Convertible
Preferred Stock for all periods presented.

NOTE 9 -- SUPPLEMENTAL FINANCIAL INFORMATION (IN THOUSANDS)

Supplemental Condensed Consolidated Statement of Financial Position
Information:

<TABLE>
<CAPTION>
OCTOBER 29, JANUARY 29,
1995 1995
------------- -------------
<S> <C> <C>
Inventories:
Production materials $ 416,932 $ 262,150
Work-in-process and finished goods 46,708 30,775
------------- -------------
$ 463,640 $ 292,925
============= =============

Accrued and other liabilities:
Accrued warranty costs $ 79,218 $ 65,468
Royalties and licensing 81,107 34,815
Taxes other than income taxes 63,411 39,873
Book overdraft 48,697 44,389
Other liabilities 159,105 139,246
------------- -------------
$ 431,538 $ 323,791
============= =============
</TABLE>

7
<PAGE> 9
Supplemental Condensed Consolidated Statement of Income Information:

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------------- --------------------------
OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30,
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Financing and other income (expense), net:
Investment income (loss), net:
Short-term investments $ 6,558 $ 3,679 $ 17,708 $ (12,393)
Investment derivatives -- -- -- (23,948)
Interest expense (3,493) (3,450) (11,331) (8,008)
Foreign currency transactions (406) (605) (2,493) 1,999
Other (924) (1,042) (1,930) (1,270)
----------- ---------- ---------- ----------
$ 1,735 $ (1,418) $ 1,954 $ (43,620)
=========== ========== ========== ==========
Weighted average shares used to compute
earnings per common share:
Primary 100,060 84,182 96,338 82,018
=========== ========== ========== ==========
Fully diluted 100,976 95,680 99,804 93,888
=========== ========== ========== ==========
</TABLE>

Supplemental Condensed Consolidated Statement of Cash Flows Information:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
-----------------------------------
OCTOBER 29, OCTOBER 30,
1995 1994
-------------- ---------------
<S> <C> <C>
Changes in operating working capital accounts:
Accounts receivable, net $ (218,608) $ (69,520)
Inventories (171,067) (53,486)
Accounts payable 127,315 78,822
Accrued and other liabilities 97,674 12,820
Other current assets (24,441) (26,858)
Income taxes payable 9,048 15,954
Other, net 260 7,879
-------------- ---------------
$ (179,819) $ (34,389)
============== ===============

Changes in non-current assets and liabilities:
Other assets $ (4,370) $ 55
Other liabilities 27,555 21,202
-------------- ---------------
$ 23,185 $ 21,257
============== ===============
</TABLE>

The Company accounts for highly liquid investments with maturities of three
months or less at date of acquisition as short-term investments and reflects
the related cash flows as investing cash flows. As a result, significant
portions of the Company's gross investment maturities and purchases disclosed
as investing cash flows are related to highly liquid investments.

8
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

All percentage amounts used in describing operating results are based on the
related dollar amounts rounded to the nearest thousand which are set forth in
the Condensed Consolidated Financial Statements and related notes thereto.
Operating results for the three-month and nine-month periods ended October 29,
1995 are not necessarily indicative of the results that may be expected for the
full fiscal year.

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated the percentage
of consolidated net sales represented by certain items in the Company's
condensed consolidated statement of income.

<TABLE>
<CAPTION>
PERCENTAGE OF CONSOLIDATED NET SALES
-----------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------- --------------------------
OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30,
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales:
Americas 70.4% 72.3% 66.1% 70.0%
Europe 24.1 23.5 27.0 26.8
Other international 5.5 4.2 6.9 3.2
----- ----- ----- -----
Consolidated net sales 100.0 100.0 100.0 100.0
Cost of sales 79.5 79.5 79.0 78.7
----- ----- ----- -----
Gross margin 20.5 20.5 21.0 21.3
Operating expenses:
Selling, general and administrative 11.3 11.9 11.6 12.4
Research, development and engineering 1.8 1.9 1.9 2.0
----- ----- ----- -----
Total operating expenses 13.1 13.8 13.5 14.4
----- ----- ----- -----
Operating income 7.4 6.7 7.5 6.9
Financing and other income (expense), net 0.1 (0.2) 0.1 (1.8)
----- ----- ----- -----
Income before income taxes 7.5 6.5 7.6 5.2
Provision for income taxes 2.2 1.9 2.2 1.6
----- ----- ----- -----
Net income 5.3 4.6 5.4 3.6
Preferred stock dividends 0.0 0.2 0.3 0.3
----- ----- ----- -----
Net income available to common
stockholders 5.3% 4.4% 5.1% 3.3%
===== ===== ===== =====
</TABLE>

Net Sales

The third quarter of fiscal 1996 marked the Company's seventh consecutive
quarter of sequential growth in consolidated net sales. Consolidated net sales
increased 60% and 54% in the third quarter and the first nine months,
respectively, of fiscal 1996 over the comparable periods of fiscal 1995, and
increased 17% over the second quarter of fiscal 1996. These increases were due
primarily to an increase in units sold. Unit volumes increased 57% in the
third quarter and 47% in the first nine months of fiscal 1996 over the
comparable periods of the prior year mainly as a result of strong demand for
the Company's Pentium(R) processor-based products, its desktop product
offerings and its Latitude(TM) family of notebook computers. Additionally,
because the Company's Pentium processor-based products are generally higher
priced than its 486-based products, and the Company's notebook products are
generally higher priced than the rest of the Company's product portfolio
(excluding servers which account for a relatively small percentage of system
revenue), average total revenue per unit increased 2% in the third quarter and
5% in the first nine months of fiscal 1996 as compared with the respective
periods of fiscal 1995.

The Company believes that its future success is largely dependent upon
continued expansion of its notebook product line, its ability to expand its
presence in the network server market and its ability to continue to
efficiently manage the transition to Pentium processor-based computers and
other technological advancements as they become commercially available. There
can be no assurance that the Company's development activities will be
successful, that product technologies will be available to the Company, that
the Company will be able to deliver commercial quantities of computer products
in a timely manner or that such products will achieve market acceptance. Some
new products introduced by the Company are intended to replace existing
products. Although

9
<PAGE> 11
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.

Growth in consolidated net sales was experienced in all geographic
regions, with other international net sales comprising a significantly
increased percentage of consolidated net sales during the third quarter and the
first nine months of fiscal 1996 compared with the same periods of fiscal 1995.
Sequential growth was experienced in both the Americas and in Europe, but other
international net sales declined from the prior quarter due in part to a more
competitive pricing environment in Japan. After taking into account the
results of the Company's foreign currency hedging activities, consolidated net
sales (expressed in United States dollars) were not significantly affected in
the third quarter or in the first nine months of fiscal 1996 as a result of
fluctuations in foreign currency exchange rates from the comparable periods of
the prior year.

The Company believes that a significant opportunity exists for continued
growth in international operations. In October 1995, the Company completed
construction of a 238,000 square foot combination office and manufacturing
facility on a nine-acre site in Penang, Malaysia to meet the needs of its
expanding Asia-Pacific business. This manufacturing facility began production
in November 1995. The Company intends to continue to expand its international
activities by increasing its market presence in existing markets through
ongoing revisions and improvement of its marketing and sales compensation
programs to more effectively reach its customers, by improving its support
systems, by pursuing additional distribution opportunities and by entering new
markets. There can be no assurance that the Company will be successful in its
efforts to expand its international activities.

The Company was affected by component shortages during the third quarter
and by demand levels that exceeded its internal forecasts, which contributed to
the backlog of $179.0 million at quarter-end. Backlog was $186.5 million at
the end of the second quarter of fiscal 1996 and was $78.2 million at the end
of the third quarter of fiscal 1995. There can be no assurance that the
backlog at the end of a quarter will translate into sales in any subsequent
quarter, particularly in light of the Company's policy of allowing customers to
cancel or reschedule orders without penalty prior to commencement of
manufacturing. The Company anticipates that industry-wide shortages of
component parts will continue to be a factor affecting its business operations.
In early November, Sony Corporation, the Company's sole supplier of lithium ion
batteries used in Latitude XP and XPi notebook computers, had a fire in the
testing area of its lithium ion battery plant in Koriyama, Japan. The Company
currently has an inventory of lithium ion batteries on hand and in transit and
is actively managing its current battery supply. The Company believes that
Sony Corporation is aggressively working its recovery plan for the plant, but
at this time the Company is not certain what impact the plant fire will have on
its sales of notebook computers during the fourth quarter. In the third
quarter of fiscal 1996, approximately 80% of notebook computer sales, or 12% of
consolidated net sales, were attributable to notebook computers utilizing
lithium ion batteries.

Gross Margin

Gross margin increased $109.1 million in the third quarter of fiscal 1996
and $268.4 million in the first nine months of fiscal 1996 from the comparable
periods in the prior year primarily as a result of the increase in unit
volumes. The Company's gross margin as a percentage of consolidated net sales
remained relatively stable at 20.5% and 21.0% for the third quarter and the
first nine months of fiscal 1996, respectively, compared to 20.5% and 21.3% in
the third quarter and the first nine months of fiscal 1995, respectively. The
third quarter gross margin percentage decreased, however, from the 21.8%
reported in the second quarter of fiscal 1996 due primarily to a more
aggressive pricing environment in Europe in the third quarter, an unfavorable
shift in the desktop mix to lower margin desktops and an unfavorable seasonal
shift in the geographic mix of the Company's net sales from Europe, where
margins are generally higher, to the Americas. This seasonal shift in
geographic mix is the result of increased sales in the United States to the
government sector in the third fiscal quarter, which the Company believes
reflects the budgetary spending practices of the U.S. federal government, and
decreased sales in Europe in the third fiscal quarter, which the Company
believes is the result of the holiday schedule in European countries in the
late summer months. The gross margin percentages for the third quarter and the
first nine months of fiscal 1996 were negatively impacted by the Company's more
aggressive pricing strategy in comparison to the prior year, offset by lower
warranty and inventory obsolescence costs and certain economies of scale.

10
<PAGE> 12
The Company may take pricing actions as it attempts to maintain a
competitive mix of price, performance and customer 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, if taken, 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.

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 have a material adverse effect on 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 any of these
sources could have a material adverse effect on the Company's business.
Alternative sources of supply are not available for some of the Company's
single sourced components. Even when multiple suppliers are available, the
Company may establish a working relationship with a single source when the
Company believes it is advantageous due to performance, quality, support,
delivery, capacity or price considerations. While the Company has supply
agreements with certain suppliers, such agreements typically only specify
general terms and conditions, subject to release of purchase orders by the
Company and acceptance thereof by the component supplier. Where alternative
sources are available, qualification of the alternative suppliers and
establishment of reliable supplies of components from such sources may result
in delays and could have a material adverse effect on the Company's
manufacturing processes and results of operations. The Company occasionally
experiences delays in receiving certain components, which can cause delays in
the shipment of some products to customers, thereby increasing backlog.
Additionally, the Company has occasionally experienced 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
supplies of reliable components in a timely or cost-effective manner. In
particular, the Company obtains its supply of microprocessors from Intel
Corporation, although certain comparable microprocessors are available from
other sources.

Operating Expenses

The Company's goal is to manage operating expenses, over time, relative to
gross margin. Over the last year, the Company has strengthened its management
team and increased staffing worldwide to meet the demands of its growth and to
expand its international presence, resulting in increased compensation-related
expenses. The Company also expended additional resources relating to its
investment in global information systems. These infrastructure expenditures
resulted in an increase in selling, general and administrative expenses of 53%
and 44% in the third quarter and the first nine months, respectively, of fiscal
1996 from the comparable periods of the prior year. However, selling, general
and administrative expenses as a percentage of consolidated net sales decreased
in both the third quarter and the first nine months of fiscal 1996 over the
same periods of the prior year. The Company increased headcount to support
increased product development activities and improved quality and
time-to-market of its products as well as to support the growth of its
business. Furthermore, the Company incurred additional development costs in
conjunction with the development of new notebook computer products. These
expenditures resulted in an increase in research, development and engineering
expenses of 53% and 49% in the third quarter and the first nine months,
respectively, of fiscal 1996 over the comparable periods of the prior year.

The Company believes that its ability to manage operating costs is an
important factor in its ability to remain price competitive. However, the
Company will continue to invest in information systems and infrastructure to
manage and support its growth. The Company is currently investing in a key
global information systems project which it expects to complete in fiscal 1999.
No assurance can be given that the Company's efforts to manage future operating
expenses will be successful.

11
<PAGE> 13
Financing and Other Income (Expense), net

Financing and other income (expense), net was $1.8 million for the third
quarter of fiscal 1996 compared with ($1.4) million for the third quarter of
fiscal 1995 and was $2.0 million for the first nine months of fiscal 1996
compared with ($43.6) million for the comparable period in the prior year. The
table below sets forth for the periods indicated the components of financing
and other income (expense), net (in thousands):

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------- --------------------------
OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30,
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Financing and other income (expense), net:
Investment income (loss), net:
Short-term investments $ 6,558 $ 3,679 $ 17,708 $ (12,393)
Investment derivatives -- -- -- (23,948)
Interest expense (3,493) (3,450) (11,331) (8,008)
Foreign currency transactions (406) (605) (2,493) 1,999
Other (924) (1,042) (1,930) (1,270)
---------- ---------- ---------- ----------
$ 1,735 $ (1,418) $ 1,954 $ (43,620)
========== ========== ========== ==========
</TABLE>

The short-term investment losses for the first nine months of fiscal 1995
were primarily due to recognized losses during the first half of fiscal 1995 of
$23.1 million on certain of the Company's short-term investments as a result of
interest rate increases in the United States, Canadian, Japanese and European
interest rate markets, partially offset by investment income of approximately
$10.7 million for the first nine months of fiscal 1995. The increase in
investment income in the first nine months of fiscal 1996 over the $10.7
million for the comparable period of the prior year was primarily due to higher
average investment balances and higher effective yields.

Realized and unrealized net losses on interest rate derivatives recognized
in the first nine months of fiscal 1995 were primarily a result of interest
rate increases in the United States, Canadian, Japanese and European interest
rate markets. The Company closed all remaining investment derivatives during
the second quarter of fiscal 1995. Consequently, no gains or losses associated
with investment derivatives have been recognized in fiscal 1996. The Company
intends to use derivative financial instruments only to manage its exposure to
fluctuations in foreign currency exchange rates and to manage market risk on
components of its debt and equity.

All of the Company's foreign exchange and interest rate derivative
instruments involve elements of market and credit risk in excess of the amounts
recognized in the financial statements. The counterparties to financial
instruments consist of a number of major financial institutions. In addition
to limiting the amount of agreements and contracts it enters into with any one
party, the Company regularly monitors the credit quality of the financial
institutions that are counterparties to these financial instruments. The
Company does not anticipate nonperformance by the counterparties.

Interest expense in the third quarter of fiscal 1996 was relatively flat in
comparison with the third quarter of fiscal 1995. Interest expense increased
in the first nine months of fiscal 1996 from the comparable period of the prior
year primarily due to higher borrowings and higher interest rates in fiscal
1996. Concurrently with the issuance of the 11% Senior Notes Due August 15,
2000 (the "Notes") in the third quarter of fiscal 1994, the Company entered
into interest rate swap agreements to manage the interest costs associated with
the Notes. The swap agreements effectively changed the Company's interest rate
exposure from a fixed-rate to a floating-rate basis. However, in response to
increasing interest rates, in August 1994, the Company entered into offsetting
swap agreements to effectively change its interest rate exposure back to a
fixed-rate basis. The interest rate swap agreements mature on August 15, 1998,
the first available redemption date of the Notes. At the end of the third
quarter of fiscal 1996, the Company had outstanding receive fixed/pay floating
interest rate swaps with an aggregate notional amount of $100 million offset by
receive floating/pay fixed interest rate swaps with an aggregate notional
amount of $100 million. The weighted average interest rate on the Notes,
adjusted by the swaps, was 13.8% for the third quarter and the first nine
months of fiscal 1996 compared with 12.9% and 11.4% for the third quarter and
the first nine months of fiscal 1995, respectively.

12
<PAGE> 14
Income Tax

The Company's effective tax rate was 29% for the third quarter and the
first nine months of fiscal 1996 compared with 29% for the third quarter and
30% for the first nine months of fiscal 1995. The change in the effective tax
rate resulted from changes in the geographical distribution of income and
losses.

Fluctuations in Operating Results

The Company's operating results may fluctuate from period to period and
will depend on numerous factors, including customer demand and market
acceptance of the Company's products, new product introductions, product
obsolescence, component supply, component price fluctuations, varying product
mix, foreign currency exchange rates, foreign currency and interest rate
hedging and other factors. Net sales in a given quarter are primarily
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 adverse effect on operating results
due to the Company's inability to adjust operating expenditures quickly enough
to compensate for the 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. Changes in
economic conditions or customer spending patterns for personal computer
products could have a material adverse effect on the Company's results of
operations.

HEDGING ACTIVITIES

The results of the Company's international operations are affected by
changes in exchange rates between certain foreign currencies and the United
States dollar. The financial statements of the Company's international sales
subsidiaries have generally been measured using the local currency as the
functional currency. An increase in the value of the United States dollar
increases costs incurred by the Company's international operations because many
of its component purchases are denominated in the United States dollar.
Changes in exchange rates may negatively affect the Company's consolidated net
sales (as expressed in United States dollars) and gross margins from
international operations. Effective January 30, 1995, most of the Company's
European sales are made from a U.S. dollar functional currency entity.

The purpose of the Company's hedging program is to reduce the Company's
exposure to the risk that the dollar-value equivalent of anticipated cash flows
will be adversely affected by changes in foreign currency exchange rates. The
Company attempts to reduce its exposure to currency fluctuations involving
anticipated, but not firmly committed, transactions and involving transactions
with firm foreign currency commitments through the use of purchased foreign
currency option contracts and forward contracts.

Realized and unrealized gains or losses and premiums on foreign currency
purchased option contracts that are designated and effective as hedges of
probable anticipated, but not firmly committed, foreign currency transactions
are deferred and recognized in income in the same period as the hedged
transaction. The risk of loss associated with purchased options is limited to
premium amounts paid for the option contracts, which could be significant.
Forward contracts designated as hedges of anticipated transactions are
accounted for on a mark-to-market basis and included in income as a component
of net sales or cost of sales, depending upon which transaction is hedged.
Transaction exposures representing firm foreign currency commitments are
generally hedged using foreign exchange forward contracts. Forward contracts
related to transaction exposures are accounted for on a mark-to-market basis
with realized and unrealized gains or losses included in financing and other
income (expense) as an offset to the underlying hedged transaction. The risk
of loss associated with forward contracts is limited to the exchange rate
differential from the time the contract is made until the time it is settled.

The Company enters into foreign currency purchased options and, to a lesser
extent, forward contracts to hedge a portion of its anticipated, but not firmly
committed, transactions including sales by international subsidiaries, which
includes international sales by a U.S. dollar functional currency entity and
intercompany shipments to certain international subsidiaries, and foreign
currency denominated purchases of certain components. Foreign currency
purchased options generally expire in twelve months or less and forward
contracts

13
<PAGE> 15
generally mature in three months or less. The principal hedge currencies are
the German mark, the British pound and the Japanese yen. At October 29, 1995,
the Company held purchased option contracts that were designated and effective
as hedges of anticipated sales by international subsidiaries with a total
notional amount of $826.2 million and a combined net realized and unrealized
loss of $11.4 million. During the third quarter of fiscal 1996, the Company
closed option contracts that were designated and effective as hedges of
anticipated foreign currency denominated purchases. At October 29, 1995, the
net realized loss relating to these contracts was $4.9 million. Forward
contracts with maturity dates of less than three months designated to hedge
foreign currency transaction exposures of $167.2 million were outstanding at
October 29, 1995.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash flow from operating activities for the first nine
months of fiscal 1996 was $76.9 million and represented the Company's primary
source of cash during the nine-month period, along with $42.1 million from the
issuance of common stock under employee plans. Working capital totaled $945.9
million at October 29, 1995 compared with $719.0 million at January 29, 1995.
Days in accounts receivable at the end of the third quarter of fiscal 1996
increased to 49 days from 47 days at the end of fiscal 1995. Days in accounts
payable decreased slightly to 43 days at the end of the third quarter of fiscal
1996 from 44 days at the end of fiscal 1995. Inventory levels increased to 37
days of supply at the end of the third quarter of fiscal 1996 from 32 days at
the end of fiscal 1995. Maintaining a low inventory level is dependent upon
the Company's ability to achieve targeted revenue and product mix, to further
minimize complexities in its product line and to maximize commonality of parts.
There can be no assurance that the Company will be able to maintain low
inventory levels in future periods.

The Company used $66.5 million of cash during the first nine months of
fiscal 1996 to construct facilities and to acquire information systems and
personal computer office equipment. Capital expenditures for the fourth
quarter of fiscal 1996 are expected to be approximately $20 million, primarily
related to the construction of facilities, the acquisition and development of
an integrated management information system and the acquisition of equipment,
including computer equipment for internal use. The Company believes that its
cash and short-term investments and its cash flow from operating activities
will be adequate to fund its capital expenditures planned for the remainder of
fiscal 1996.

The Company has entered into a series of line of credit facilities,
each of which bears interest at a defined Base Rate or Eurocurrency Rate and
has a covenant based on quarterly maintenance of net worth. Maximum aggregate
amounts available under the new credit facilities are limited to $200 million
less the aggregate of outstanding letters of credit under these facilities.
During the commitment period, the Company is obligated to pay a fee on the
unused portion of the credit facilities. No borrowings or letters of credit
were outstanding under these credit facilities as of October 29, 1995, and the
maximum available totaled $200 million.

On November 30, 1995, several of the Company's subsidiaries entered
into a transaction pursuant to which Dell Receivables L.P. ("Dell
Receivables"), a newly-formed wholly-owned subsidiary of the Company, purchases
certain accounts receivable and related assets from other Company subsidiaries
and in turn transfers such accounts receivable and related assets to the Dell
Trade Receivables Master Trust (the "Master Trust"). The Master Trust will
issue certificates evidencing fractional undivided interests therein, which
certificates may be sold to investors. This arrangement will give Dell
Receivables the ability to raise up to $150 million through the sale of
certificates of interest in the Master Trust and replaces the Company's
receivables securitization arrangement that was scheduled to expire on June 22,
1996. At December 7, 1995, this facility was unused. Dell Receivables is
obligated to pay a commitment fee on the unused portion of the facility.

14
<PAGE> 16
The Rights will be exercisable only if a person or group acquires 15% or more
of the Company's common stock or announces a tender offer, the consummation of
which would result in such person or group owning 15% or more of the Company's
common stock. Once exercisable and under specified circumstances, each Right
(a) may be exercised to purchase one one-thousandth of a share of a new series
of preferred stock at an exercise price of $225, (b) may be exercised to
purchase a number of the Company's common shares having a market value of twice
the exercise price, (c) may be exercised to purchase common stock of any
acquiring company having a market value of twice the exercise price or (d) may
be exchanged for the Company's common stock on the basis of one common share
for each Right. The Rights expire on November 29, 2005 and may be redeemed by
the Company under certain circumstances at a price of $.001 per Right. Neither
the ownership nor the further acquisition of Company common stock by Michael S.
Dell, the Company's founder, Chairman and Chief Executive Officer and largest
stockholder, will cause the Rights to become exercisable or nonredeemable or
will trigger the other features of the Rights. The Rights are designed to
protect the Company's stockholders in the event of an unsolicited attempt to
acquire the Company.

On July 21, 1995, the Company's stockholders approved a proposed amendment
to the Company's Certificate of Incorporation to increase the number of shares
of common stock, par value $.01 per share, that the Company is authorized to
issue from 100 million to 300 million. The additional authorized shares can be
used for any proper purpose approved by the Company's Board of Directors and
will provide the Company with the flexibility it may need in the future to
raise capital, negotiate acquisitions, restructure debt, issue stock dividends,
consummate stock splits or for other corporate purposes.

On February 21, 1995, the Company offered to pay a cash premium of
$8.25 for each outstanding share of its Convertible Preferred Stock that was
converted to common stock. The offer of premium upon conversion was available
to holders of the Convertible Preferred Stock through the closing of the
special conversion period on March 22, 1995. The Company also offered to
register the resale of the shares of common stock issued upon conversion of the
Convertible Preferred Stock with the Securities and Exchange Commission for a
50-day period, which ended June 15, 1995. Holders of 1,190,000 shares of
Convertible Preferred Stock elected to convert and, as a result, received an
aggregate of approximately 10.0 million shares of common stock and $9.8 million
in cash during the first quarter of fiscal 1996. The $9.8 million conversion
premium and $0.5 million of expenses of the conversion offer were treated as an
additional dividend on the Convertible Preferred Stock for financial reporting
purposes.

During the first nine months of fiscal 1996, the Company granted
approximately 660,000 shares of restricted stock to employees pursuant to its
long-term incentive plan. Due to the granting of these additional shares, the
unearned compensation associated with restricted stock grants has increased
from $4.4 million at January 29, 1995 to $18.6 million at October 29, 1995.
Such unearned compensation is being amortized to expense over the vesting
period of the underlying restricted stock.

Repayment of the Company's $100 million in Notes, repayment of a loan
in the original amount of $14 million secured by one of its facilities in Round
Rock, Texas and payment of its operating lease commitments constitute the
Company's long-term commitments to use cash.

Management believes that sufficient resources will be available to meet
the Company's cash requirements through at least the next twelve months. Cash
requirements for periods beyond the next twelve months depend on the Company's
profitability, its ability to manage working capital requirements and its rate
of growth.

15
<PAGE> 17
PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company has been named as a defendant in approximately 30
repetitive stress injury lawsuits, most of which are in New York state courts
or United States District Courts for the New York City area. Several are in
state courts in New Jersey. One is in the Federal District Court for the
Eastern District of Pennsylvania, and one is in Federal District Court in
Kansas. Two cases have been dismissed; the remainder are at various stages of
the process leading to trial. The allegations in all of these lawsuits are
similar. Each plaintiff alleges that he or she suffers from symptoms generally
known as "repetitive stress injury," which allegedly were caused by the design
or manufacture of the keyboard supplied with the computer the plaintiff used.
The Company has denied or is in the process of denying the claims and intends
to vigorously defend the suits. The suits naming the Company are just a few of
many lawsuits of this type that have been filed, often naming Apple, Atex,
Compaq, IBM, Keytronic and other major suppliers of keyboard products. The
Company currently is not able to predict the outcome of these suits. It is
possible that the Company may be named in additional suits. Ultimate
resolution of the litigation against the Company may depend on progress in
resolving this type of litigation overall. However, the Company does not
believe that the outcome of these matters will have a material adverse effect
on the Company's financial condition or results of operations.

On August 11, 1993, the Company received a subpoena from the United
States Department of Commerce, Office of Export Enforcement of the Bureau of
Export Administration, requiring the Company to provide all documents relative
to any and all exports of 486/66 personal computers or related components to
Russia, Ireland, Iran or Iraq during the period from January 1992 through
August 1993 in connection with an investigation to enforce regulations under
the Export Administration Act of 1979, as amended. In September 1995, the
Company received a letter from the Dallas Field Office of the Department of
Commerce closing out the investigation into the shipments to Russia and
Ireland. The Department of Commerce found no wrongdoing by the Company with
regard to these destinations. The Company is still awaiting a response from
the Department of Commerce regarding its voluntary self disclosure of certain
shipments to Iran in June 1992. If the Office of Export Enforcement's
investigators determine that the Company has violated applicable regulations,
the government could potentially file civil or criminal charges. The Company
has fully responded to the subpoena and, in accordance with its policy to
comply fully with export laws and regulations, intends to cooperate with the
Office of Export Enforcement. The Company does not believe that this
investigation or its outcome will have a material adverse effect on the
Company's financial condition or results of operations.

16
<PAGE> 18
In May 1995, the Company was named, along with two other personal
computer manufacturers and one computer monitor vendor, in a class action
complaint filed in the California Superior Court for Marin County. The case
has been transferred to Orange County, California. A second class action
complaint, naming the Company and 47 other manufacturers or vendors of personal
computer monitors, was filed in Santa Clara County, California and was served
on the Company in August 1995. Two other similar class action complaints
naming the Company and others as defendants have been filed in Orange County,
California. A motion has been filed by all defendants in all of the cases to
consolidate all of the cases before a single judge in Santa Clara County,
California. All proceedings in all of the cases have been stayed pending
resolution of the motion to consolidate. The complaints allege that each of
the defendants has engaged in false or misleading advertising with regard to
the size of computer monitor screens. The plaintiffs seek restitution in the
form of refunds or product exchange, damages, punitive damages and attorneys'
fees. The Company plans to vigorously contest the allegations of the
complaints. This litigation is currently at a preliminary stage and no
discovery has occurred to date. As such, it is too early for the Company to
adequately evaluate the likelihood of the plaintiffs prevailing on their
claims. There can be no assurance that an adverse determination in this
litigation would not have a material adverse effect on the Company's financial
condition or results of operations.

In June 1995, the Company was served with a class action complaint
filed in State District Court in Travis County, Texas. The complaint alleges
that the Company has included "used parts" in its "new" computer systems and
has failed to adequately inform its customers and prospective customers of that
practice. According to the complaint, these facts constitute fraud, negligent
misrepresentation, breach of contract and breach of warranty. The plaintiffs
seek refund of the purchase price for computer systems purchased from the
Company, damages in an unspecified amount, injunctive relief, interest and
attorneys' fees. The Company plans to vigorously contest the allegations of
the complaint. This litigation is currently at a preliminary stage, and no
discovery has occurred to date. As such, it is too early for the Company to
adequately evaluate the likelihood of the plaintiffs prevailing on their
claims. There can be no assurance that an adverse determination in this
litigation would not have a material adverse effect on the Company's financial
condition or results of operations.

ITEM 2. CHANGES IN SECURITIES

Adoption of Rights Plan. On November 29, 1995, the Company's Board of
Directors adopted a Preferred Share Purchase Rights Plan that is designed to
protect the Company's stockholders in the event of an unsolicited attempt to
acquire the Company. The terms of such plan, the Preferred Share Purchase
Rights that will be issued in connection with the implementation of such plan
and the new series of preferred stock that was created in connection therewith
are described in the Company's Current Report on Form 8-K, dated November 29,
1995 and filed with the Securities and Exchange Commission on November 30,
1995, which description is incorporated herein by reference.

Amendments to Bylaws. On November 29, 1995, the Board of Directors
approved certain amendments to the Company's Bylaws. Such amendments (a)
permit the Board of Directors to postpone a previously scheduled meeting of
stockholders by giving public notice of such postponement prior to the date
previously scheduled for such meeting, (b) permit the chairman of a meeting of
stockholders to fix and announce the date and time of the opening and closing
of the polls for each matter upon which the stockholders will vote at the
meeting, (c) permit the Board of Directors to designate the chairman of any
meeting of stockholders and (d) permit the chairman of a meeting of
stockholders to determine the rules of order and procedure to be followed in
the conduct of such meeting. The complete text of such amendments is filed as
Exhibit 3.2 to this Report.

In addition, the Board of Directors, on November 29, 1995, adopted Restated
Bylaws for the Company, which Restated Bylaws incorporate the amendments
described above, as well as other Bylaw amendments previously approved by the
Board since the original adoption of the Bylaws. The complete text of the
Restated Bylaws is filed as Exhibit 3.3 to this Report.

17
<PAGE> 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

The following exhibits are filed as a part of this Report:

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<S> <C>
3.1 Certificate of Designations of Series A Junior Participating Preferred Stock, dated November
29, 1995 and filed December 4, 1995
3.2 Amendments to Bylaws, adopted November 29, 1995
3.3 Restated Bylaws, as adopted on November 29, 1995
4 Rights Agreement, dated as of November 29, 1995, between the Company and Chemical Bank, as
Rights Agent (incorporated by reference to Exhibit 4 to the Company's Current Report on Form
8-K, dated November 29, 1995 and filed with the Securities and Exchange Commission on
November 30, 1995, Commission File No. 0-17017)
10 Supplement to Schedule of Similar Agreements, listing additional agreements substantially
identical to the Committed Credit Line Agreement filed as Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 1995
11 Statement Re Computation of Per Share Earnings
27 Financial Data Schedule
</TABLE>

(b) Reports on Form 8-K

The Company did not file any Current Reports on Form 8-K during the
fiscal quarter to which this Report relates. On November 30, 1995, the Company
filed a Current Report on Form 8-K reporting under Item 5 the adoption by the
Board of Directors of the Preferred Share Purchase Rights Plan referred to in
Item 2 of this Report.

18
<PAGE> 20
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

DELL COMPUTER CORPORATION

December 8, 1995 /s/ Thomas J. Meredith
----------------------------------------
Thomas J. Meredith
Senior Vice President
(On behalf of the registrant and as
principal financial officer)

19
<PAGE> 21
INDEX TO EXHIBITS

<PAGE> 1
EXHIBIT 3.1

CERTIFICATE OF DESIGNATIONS

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

DELL COMPUTER CORPORATION

(Pursuant to Section 151 of the
Delaware General Corporation Law)

Dell Computer Corporation, a corporation organized and
existing under the General Corporation Law of the State of Delaware
(hereinafter called the "Corporation", hereby certifies that the following
resolution was adopted by the Board of Directors of the Corporation as required
by Section 151 of the General Corporation Law at a meeting duly called and held
on November 29, 1995:

RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of the Corporation and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:

Series A Junior Participating Preferred Stock:

Section I. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be 200,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

Section II. Dividends and Distributions.

A. Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar
<PAGE> 2
stock) ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of Common Stock, par value $.01
per share (the "Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of
March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of
(a) $1 or (b) subject to the provision for adjustment hereinafter set
forth, 1000 times the aggregate per share amount of all cash
dividends, and 1000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a
dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a
share of Series A Preferred Stock. In the event the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.

B. The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph
(A) of this Section immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment

-2-
<PAGE> 3
Date, a dividend of $1 per share on the Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.

C. Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.

Section III. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:

A. Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 1000 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of

-3-
<PAGE> 4
Common Stock that were outstanding immediately prior to such event.

B. Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.

C. Except as set forth herein, or as otherwise provided
by law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.

Section IV. Certain Restrictions.

A. Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:

1. declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;

2. declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;

3. redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either

-4-
<PAGE> 5
as to dividends or upon dissolution, liquidation or winding
up) to the Series A Preferred Stock; or

4. redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.

B. The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.

Section V. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.

Section VI. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $1000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1000 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except distributions made ratably on the

-5-
<PAGE> 6
Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

Section VII. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case each share of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1000 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.

Section VIII. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable.

Section IX. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of assets, junior
to all series of any other class of the Corporation's Preferred Stock.

-6-
<PAGE> 7
Section X. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single class.

IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its Chairman of the Board and attested
by its Secretary this 29th day of November, 1995.

/s/ Michael S. Dell
---------------------------------------
Chairman of the Board

Attest:

/s/ Thomas B. Green
- ---------------------------------------
Secretary

-7-

<PAGE> 1
EXHIBIT 3.2

DELL COMPUTER CORPORATION

AMENDMENTS TO BYLAWS AND ADOPTION OF RESTATED BYLAWS

WHEREAS, the Board of Directors of the Company deems it advisable and in the
best interests of the Company and its stockholders to amend the Bylaws of the
Company (the "Bylaws");

WHEREAS, in accordance with Article IX of the Bylaws, the Board of Directors is
(subject to certain exceptions specified therein) authorized to amend the
Bylaws, without any action by the stockholders, by a vote of a majority of the
directors;

WHEREAS, the Board of Directors deems it desirable and convenient for the
administration of the Company to restate the Bylaws, incorporating therein the
amendments set forth below and all amendments to the Bylaws previously adopted
by the Board of Directors and making various non-substantive changes therein
(such as page numbers and references thereto in the Table of Contents);

NOW, THEREFORE BE IT RESOLVED AS FOLLOWS:

(a) The Bylaws are amended as follows:

(1) Section 2 of Article II is hereby amended by deleting
the title thereof and replacing it with the following title
(making the corresponding change to the Table of Contents):

Section 2. Quorum; Adjournment and Postponement of
Meetings; Vote Required.

(2) Section 2 of Article II is hereby amended by adding
the following sentence to the end of the second paragraph
thereof:

Any previously scheduled meeting of stockholders may
be postponed by resolution of the Board of Directors
upon public notice given prior to the date previously
scheduled for such meeting of stockholders.

(3) Section 9 of Article II is hereby amended by adding
the following sentence to the end of the second paragraph
thereof:

The chairman of the meeting shall fix and announce at
the meeting the date and time of the opening and the
closing of the polls for each matter upon which the
stockholders will vote at the meeting.
<PAGE> 2
(4) Section 10 of Article II is hereby amended by
deleting such provision in its entirety and replacing it with
the following:

Section 10. Conduct of Meetings. Unless
otherwise determined by resolution of the Board of
Directors, the Chairman of the Board shall, or shall
designate an appropriate officer of the Corporation
to, call any annual or special meeting of
stockholders to order, act as chairman of any such
meeting and determine the rules of order and
procedure to be followed in the conduct of any such
meeting. The Secretary or an Assistant Secretary (if
the Secretary is absent, is otherwise unable to act
or delegates such duties to such Assistant Secretary)
shall act as Secretary of each meeting of
stockholders.

(b) The Restated Bylaws attached hereto as Exhibit A (including any
and all additional amendments effected thereby) are hereby approved and
adopted as the Bylaws of the Company and henceforth may be referred to
as, and may be presented as, the Bylaws of the Company; and the
Secretary is authorized and directed to insert a copy thereof into the
records of the Company where the Company's organizational documents
are held.

<PAGE> 1
EXHIBIT 3.3

RESTATED BYLAWS

DELL COMPUTER CORPORATION

A DELAWARE CORPORATION

DATE OF ADOPTION -- OCTOBER 22, 1987

DATE OF RESTATEMENT -- NOVEMBER 29, 1995
<PAGE> 2
RESTATED BYLAWS

DELL COMPUTER CORPORATION

TABLE OF CONTENTS

<TABLE>
<S> <C>
ARTICLE I -- OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Section 1. Registered Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Other Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE II -- STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Section 1. Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Quorum; Adjournment and Postponement of
Meetings; Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 3. Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 5. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 6. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 7. Stock List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 8. Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 9. Voting; Elections; Inspectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 10. Conduct of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 11. Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 12. Action Without Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE III -- BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Section 1. Power; Number; Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3. Place of Meeting; Order of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4. First Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5. Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 8. Vacancies; Increases in the Number of Directors . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 9. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 10. Action Without a Meeting; Telephone Conference Meeting . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>

ii
<PAGE> 3
<TABLE>
<S> <C>
Section 11. Approval or Ratification of Acts or Contract by Stockholders . . . . . . . . . . . . . . . . . . 9
Section 12. Nomination of Directors; Stockholder Business at
Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE IV -- COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Section 1. Designation; Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2. Procedure; Meetings; Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3. Substitution of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE V -- OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Section 1. Number, Titles and Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2. Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4. Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5. Powers and Duties of the Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . 13
Section 6. Powers and Duties of the Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 7. Powers and Duties of the President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 8. Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9. Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 10. Assistant Treasurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 11. Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 12. Assistant Secretaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 13. Action with Respect to Securities of Other Corporations . . . . . . . . . . . . . . . . . . . . 14

ARTICLE VI -- INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND
AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Section 1. Right to Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2. Indemnification of Employees and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3. Right of Claimant to Bring Suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4. Nonexclusivity of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6. Savings Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE VII -- CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Section 1. Certificates of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2. Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 3. Ownership of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4. Regulations Regarding Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5. Lost or Destroyed Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>

iii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE VIII -- MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Section 1. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2. Corporate Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3. Notice and Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4. Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5. Facsimile Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6. Reliance upon Books, Reports and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

ARTICLE IX -- AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>

iv
<PAGE> 5
RESTATED BYLAWS

DELL COMPUTER CORPORATION

A DELAWARE CORPORATION

ARTICLE I

OFFICES

SECTION 1. REGISTERED OFFICE. The registered office of the Corporation
required by the General Corporation Law of the State of Delaware to be
maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.

SECTION 2. OTHER OFFICES. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.

ARTICLE II

STOCKHOLDERS

SECTION 1. PLACE OF MEETINGS. All meetings of the stockholders shall be
held the principal office of the Corporation, or, if the meeting is called by
the Chairman of the Board, or by a majority of the Board of Directors, at the
principal office of the Corporation or at such other place within or without
the State of Delaware as shall be specified or fixed in the notices or waivers
of notice thereof.

SECTION 2. QUORUM; ADJOURNMENT AND POSTPONEMENT OF MEETINGS; VOTE
REQUIRED. Unless otherwise required by law or provided in the Certificate of
Incorporation or these bylaws, the presence, in person or represented by proxy,
of the holders of a majority of the voting power of the shares of capital stock
of the Corporation entitled to vote on any matter shall constitute a quorum for
the purpose of considering such matter at a meeting of the stockholders.

If a meeting of stockholders cannot be organized because a quorum has not
attended, the stockholders entitled to vote thereat, present in person or
represented by
<PAGE> 6
proxy, shall have the power to adjourn such meeting from time to time, without
notice other than announcement at the meeting at which the adjournment is taken
of the time and place of the adjourned meeting, until a quorum shall be present
and represented. Furthermore, after a meeting has been duly organized, the
chairman of the meeting or the holders of a majority of the voting power of the
shares of capital stock of the Corporation present in person or represented by
proxy at the meeting shall have the power to adjourn the meeting from time to
time, without notice other than announcement at the meeting at which the
adjournment is taken of the time and place of the adjourned meeting. When a
meeting is adjourned to another time or place, notice need not be given of the
adjourned meeting if the time and place thereof are announced at the meeting at
which the adjournment is taken. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at such meeting. At any adjourned
meeting at which a quorum shall be present or represented, the Corporation may
transact any business which might have been transacted at the original meeting.
The stockholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal from the meeting of
a sufficient number of stockholders such that the number of stockholders that
continue to be present or represented by proxy at the meeting is less than a
quorum. Any previously scheduled meeting of stockholders may be postponed by
resolution of the Board of Directors upon public notice given prior to the date
previously scheduled for such meeting of stockholders.

Unless otherwise required by law or provided in the Certificate of
Incorporation or these bylaws, in all matters other than the election of
directors, the affirmative vote of the holders of a majority of the voting
power of the shares of capital stock of the Corporation present in person or
represented by proxy at the meeting and entitled to vote on the subject matter
shall be the act of the stockholders. Directors of the Corporation shall be
elected by a plurality of votes of the shares present in person or represented
by proxy at the meeting and entitled to vote on the election of directors.

SECTION 3. ANNUAL MEETINGS. An annual meeting of the stockholders shall
be held for the election of directors on such date in each year and at such
time as shall be designated by the Board of Directors. An annual meeting shall
be held at such place, within or without the State of Delaware, as shall be
determined by the Board of Directors. At each annual meeting, the stockholders
shall elect by a plurality vote the successors of the directors whose terms
expire at such meeting, and shall transact such other business as may be
properly brought before the meeting. A failure to hold the annual meeting at
the designated time or to elect a sufficient number of directors to conduct the
business of the Corporation shall not affect otherwise valid corporate acts or
work a forfeiture or dissolution of the Corporation, except as otherwise
required by law.

SECTION 4. SPECIAL MEETINGS. Unless otherwise provided in the Certificate
of Incorporation, special meetings of the stockholders for any purpose or
purposes may be called at any time by the Chairman of the Board (if any), or by
a majority of the Board of

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<PAGE> 7
Directors, and shall be called by the Chief Executive Officer, the President or
the Secretary upon the written request therefor, stating the purpose or
purposes of the meeting, delivered to such officer, signed by the holders of at
least fifty percent (50%) of the issued and outstanding stock entitled to vote
at such meeting.

SECTION 5. RECORD DATE. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action. If the Board of Directors does not fix a record
date for any meeting of the stockholders, the record date for determining
stockholders entitled to notice of or to vote at such meeting shall be at the
close of business on the day next preceding the day on which notice is given,
or, if in accordance with Article VIII, Section 3 of these bylaws notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. If, in accordance with Section 12 of this Article II,
corporate action without a meeting of stockholders is to be taken, the record
date for determining stockholders entitled to express consent to such corporate
action in writing, when no prior action by the Board of Directors is necessary,
shall be the day on which the first written consent is expressed. The record
date for determining stockholders for any other purpose shall be at the close
of business on the day on which the Board of Directors adopts the resolution
relating thereto.

A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for
the adjourned meeting.

SECTION 6. NOTICE OF MEETINGS. Written notice of the place, date and hour
of all meetings, and, in case of a special meeting, the purpose or purposes for
which the meeting is called, shall be given by or at the direction of the
Chairman of the Board (if any) or the President, the Secretary or the other
person(s) calling the meeting to each stockholder entitled to vote thereat not
less than ten (10) nor more than sixty (60) days before the date of the
meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.

SECTION 7. STOCK LIST. A complete list of stockholders entitled to vote
at any meeting of stockholders, arranged in alphabetical order for each class
of stock and showing the address of each such stockholder and the number of
shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any

3
<PAGE> 8
purpose germane to the meeting, during ordinary business hours, for a period of
at least ten (10) days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice
of the meeting, or if not so specified, at the place where the meeting is to be
held. The stock list shall also be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.

SECTION 8. PROXIES. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to a corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy. Proxies for use at any meeting of stockholders shall be filed with the
Secretary, or such other officer as the Board of Directors may from time to
time determine by resolution, before or at the time of the meeting. All
proxies shall be received and taken charge of and all ballots shall be received
and canvassed by the secretary of the meeting who shall decide all questions
touching upon the qualification of voters, the validity of the proxies, and the
acceptance or rejection of votes, unless an inspector or inspectors shall have
been appointed by the chairman of the meeting, in which event such inspector or
inspectors shall decide all such questions.

No proxy shall be valid after three (3) years from its date, unless the
proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.

Should a proxy designate two or more persons to act as proxies, unless such
instrument shall provide the contrary, a majority of such persons present at
any meeting at which their powers thereunder are to be exercised shall have and
may exercise all the powers of voting or giving consents thereby conferred, or
if only one be present, then such powers may be exercised by that one; or, if
an even number attend and a majority do not agree on any particular issue, each
proxy so attending shall be entitled to exercise such powers in respect of the
same portion of the shares as he is of the proxies representing such shares.

SECTION 9. VOTING; ELECTIONS; INSPECTORS. Unless otherwise required by
law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as the bylaw (or comparable instrument) of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors (or
comparable body) of such corporation may determine. Shares registered in the
name of a deceased person may be voted by his executor or administrator, either
in person or by proxy.

All voting, except as required by the Certificate of Incorporation or where
otherwise required by law, may be by a voice vote; provided, however, that upon
demand therefor

4
<PAGE> 9
by stockholders holding a majority of the issued and outstanding stock present
in person or by proxy at any meeting a stock vote shall be taken. Every stock
vote shall be taken by written ballots, each of which shall state the name of
the stockholder or proxy voting and such other information as may be required
under the procedure established for the meeting. All elections of directors
shall be by ballot, unless otherwise provided in the Certificate of
Incorporation. The chairman of the meeting shall fix and announce at the
meeting the date and time of the opening and the closing of the polls for each
matter upon which the stockholders will vote at the meeting.

At any meeting at which a vote is taken by ballots, the chairman of the
meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector. Unless otherwise provided in the
Certificate of Incorporation, cumulative voting for the election of directors
shall be prohibited.

SECTION 10. CONDUCT OF MEETINGS. Unless otherwise determined by
resolution of the Board of Directors, the Chairman of the Board shall, or shall
designate an appropriate officer of the Corporation to, call any annual or
special meeting of stockholders to order, act as chairman of any such meeting
and determine the rules of order and procedure to be followed in the conduct of
any such meeting. The Secretary or an Assistant Secretary (if the Secretary is
absent, is otherwise unable to act or delegates such duties to such Assistant
Secretary) shall act as secretary of each meeting of stockholders.

SECTION 11. TREASURY STOCK. The Corporation shall not vote, directly or
indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.

SECTION 12. ACTION WITHOUT MEETING. Any action required or permitted to
be taken by the stockholders of the Corporation must be effected at a duly
called annual or special meeting of such holders and may not be effected by any
consent in writing by such holders.

ARTICLE III

BOARD OF DIRECTORS

SECTION 1. POWER; NUMBER; TERM OF OFFICE. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.

5
<PAGE> 10
The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the Board of
Directors (provided that no decrease in the number of directors which would
have the effect of shortening the term of an incumbent director may be made by
the Board of Directors). If the Board of Directors makes no such
determination, the number of directors shall be the number set forth in the
Certificate of Incorporation. Each director shall hold office for the term for
which he is elected, and until his successor shall have been elected and
qualified or until his earlier death, resignation or removal.

Unless otherwise provided in the Certificate of Incorporation, directors
need not be stockholders nor residents of the State of Delaware.

SECTION 2. QUORUM. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.

SECTION 3. PLACE OF MEETING; ORDER OF BUSINESS. The directors may hold
their meetings and may have an office and keep the books of the Corporation,
except as otherwise provided by law, in such place or places, within or without
the State of Delaware, as the Board of Directors may from time to time
determine by resolution. At all meetings of the Board of Directors business
shall be transacted in such order as shall from time to time be determined by
the Chairman of the Board (if any) , or by resolution of the Board of
Directors.

SECTION 4. FIRST MEETING. Each newly elected Board of Directors may hold
its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.

SECTION 5. REGULAR MEETINGS. Regular meetings of the Board f Directors
shall be held at such times and places as shall be designated from time to time
by resolution of the Board of Directors. Notice of such regular meetings shall
not be required.

SECTION 6. SPECIAL MEETINGS. Special Meetings of the Board of Directors
may called by the Chairman of the Board (if any), or, on the written request of
any two directors, by the Secretary, in each case upon the giving of personal,
written, telephone, telegraphic, or facsimile notice to each director. Such
notice, or any waiver thereof pursuant to Article VIII, Section 3 hereof, need
not state the purpose or purposes of such meeting, except as may otherwise be
required by law or provided for in the Certificate of Incorporation or these
bylaws.

6
<PAGE> 11
SECTION 7. REMOVAL. Any director or the entire Board of Directors may be
removed, but only for cause, by a vote of the holders of a majority of the
shares then issued and outstanding. Cause shall mean willful and gross
misconduct by the director that is materially adverse to the best interests of
the Corporation, as determined conclusively by a majority of the disinterested
directors of the Corporation.

SECTION 8. VACANCIES; INCREASES IN THE NUMBER OF DIRECTORS. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.

If the directors of the Corporation are divided into classes, any directors
elected to fill vacancies or newly created directorships shall hold office
until the next election of the class for which such directors shall have been
chosen, and until their successors shall be duly elected and shall qualify.

SECTION 9. COMPENSATION. Unless otherwise restricted by the Certificate
of Incorporation, the Board of Directors shall have the authority to fix the
compensation of directors.

SECTION 10. ACTION WITHOUT A MEETING; TELEPHONE CONFERENCE MEETING.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State of Delaware.

Unless otherwise restricted by the Certificate of Incorporation, subject to
the requirement for notice of meetings, members of the Board of Directors, or
members of any committee designated by the Board of Directors, may participate
in a meeting of such Board of Directors or committee, as the case may be, by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation in such a meeting shall constitute presence in person at such
meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.

SECTION 11. APPROVAL OR RATIFICATION OF ACTS OR CONTRACT BY STOCKHOLDERS.
The Board of Directors in its discretion may submit any act or contract for
approval or

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<PAGE> 12
ratification at any annual meeting of the stockholders, or at any special
meeting of the stockholders called for the purpose of considering any such act
or contract, and any act or contract that shall be approved or be ratified by
the vote of the stockholders holding a majority of the issued and outstanding
shares of stock of the Corporation entitled to vote and present in person or by
proxy at such meeting (provided that a quorum is present) , shall be as valid
and as binding upon the Corporation and upon all the stockholders as if it has
been approved or ratified by every stockholder of the Corporation. In
addition, any such act or contract may be approved or ratified by the written
consent of stockholders holding a majority of the issued and outstanding shares
of capital stock of the Corporation entitled to vote and such consent shall be
as valid and as binding upon the Corporation and upon all the stockholders as
if it had been approved or ratified by every stockholder of the Corporation.

SECTION 12. NOMINATION OF DIRECTORS; STOCKHOLDER BUSINESS AT ANNUAL
MEETINGS. Subject to the rights of holders of any class or series of stock
having a preference over the Common Stock as to dividends or upon liquidation,
nominations for the election of Directors may be made by the Board of Directors
or any Nominating Committee appointed by the Board of Directors or by any
stockholder entitled to vote in the election of Directors generally. However,
any stockholder generally entitled to vote in the election of Directors may
nominate one or more persons for election as Directors at a meeting only if
written notice of such stockholder's intent to make such nomination or
nominations has been given, either by personal delivery or by United States
mail, postage prepaid, to the Secretary of the Corporation not later than (i)
with respect to an election to be held at an annual meeting of stockholders, 60
days in advance of such meeting, and (ii) with respect to an election to be
held at a special meeting of stockholders for the election of Directors, the
close of business on the seventh day following the date on which notice of such
meeting is first given to stockholders. Each such notice shall set forth: (a)
the name and address of the stockholder who intends to make the nomination and
of the person or persons to be nominated; (b) a representation that the
stockholder is a holder of record of stock of the Corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a description of
all arrangements or understandings between the stockholder, each nominee or any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission, had the nominee been nominated, or
intended to be nominated, by the Board of Directors; and (e) the consent of
each nominee to serve as a Director of the Corporation if so elected. At the
request of the Board of Directors any person nominated by the Board of
Directors for election as a Director shall furnish to the Secretary of the
Corporation that information required to be set forth in a stockholder's notice
of nomination which pertains to the nominee. No person shall be eligible for
election as a Director of the Corporation unless nominated in accordance with
the procedures set forth herein. A majority of the Board of Directors may
reject any nomination by a stockholder

8
<PAGE> 13
not timely made or otherwise not in accordance with the terms of this Section
12. If a majority of the Board of Directors reasonably determines that the
information provided in a stockholder's notice does not satisfy the
informational requirements of this Section 12 in any material respect, the
Secretary of the Corporation shall promptly notify such stockholder of the
deficiency in writing. The stockholder shall have an opportunity to cure the
deficiency by providing additional information to the Secretary within such
period of time, not to exceed ten days from the date such deficiency notice is
given to the stockholder, as a majority of the Board of Directors shall
reasonably determine. If the deficiency is not cured within such period, or if
a majority of the Board of Directors reasonably determines that the additional
information provided by the stockholder, together with the information
previously provided, does not satisfy the requirements of this Section 12 in
any material respect, then a majority of the Board of Directors may reject such
stockholder's nomination. The Secretary of the Corporation shall notify a
stockholder in writing whether the stockholder's nomination has been made in
accordance with the time and information requirements of this Section 12.

At an annual meeting of the stockholders, only such business shall be
conducted as shall have been brought before the meeting (a) by or at the
direction of the chairman of the meeting or (b) by any stockholder of the
Corporation who complies with the notice procedures set forth in this Section
12. For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing
to the Secretary of the Corporation. To be timely, a stockholder's notice must
be delivered to or mailed and received at the principal executive offices of
the Corporation not less than 60 days prior to the meeting; provided, however
that in the event that less than 70 days notice or prior public disclosure of
the date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be received not later than the close of business
on the tenth day following the earlier of the day on which such notice of the
date of the annual meeting was mailed or such public disclosure was made. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address,
as they appear on the Corporation's books, of the stockholder proposing such
business, (c) the class and number of shares of the Corporation which are
beneficially owned by the stockholder and (d) any material direct or indirect
interest, financial or otherwise of the stockholder or its affiliates or
associates in such business. The Board of Directors may reject any stockholder
proposal not timely made in accordance with this Section 12. If the Board of
Directors determines that the information provided in a stockholder's notice
does not satisfy the informational requirements hereof, the Secretary of the
Corporation shall promptly notify such stockholder of the deficiency in the
notice. The stockholder shall then have an opportunity to cure the deficiency
by providing additional information to the Secretary within such period of
time, not to exceed ten days from the date such deficiency notice is given to
the stockholder, as the Board of Directors shall determine. If the deficiency
is not cured within such period, or if the Board of Directors determines that
the additional information provided

9
<PAGE> 14
by the stockholder, together with the information previously provided, does not
satisfy the requirements of this Section 12, then the Board of Directors may
reject such stockholder's proposal. The Secretary of the Corporation shall
notify a stockholder in writing whether the stockholder's proposal has been
made in accordance with the time and information requirements hereof.

This provision shall not prevent the consideration and approval or
disapproval at an annual meeting of reports of officers, directors and
committees of the Board of Directors, but in connection therewith no new
business shall be acted upon at any such meeting unless stated, filed and
received as herein provided. Notwithstanding anything in these bylaws to the
contrary, no business shall be conducted at an annual meeting except in
accordance with procedures set forth in this Section 12.

ARTICLE IV

COMMITTEES

SECTION 1. DESIGNATION; POWERS. The Board of Directors may, by resolution
passed by a majority of the whole board, designate one or more committees,
including, if they shall so determine, an executive committee, each such
committee to consist of one or more of the directors of the Corporation and the
Board of Directors shall designate the chairman of such committee. Any such
designated committee shall have and may exercise such of the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which may
require it. In addition to the above such committee or committees shall have
such other powers and limitations of authority as may be determined from time
to time by resolution adopted by the Board of Directors.

SECTION 2. PROCEDURE; MEETINGS; QUORUM. Any committee designated pursuant
to Section 1 of this Article shall keep regular minutes of its proceedings and
report the same to the Board of Directors when requested, shall fix its own
rules or procedures, and shall meet at such times and at such place or places
as may be provided by such rules, or by resolution of the such committee or
resolution of the Board of Directors. At every meeting of any such committee,
the presence of a majority of all the members thereof shall

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<PAGE> 15
constitute a quorum and the affirmative vote of a majority of the members
present shall be necessary for the adoption by it of any resolution.

SECTION 3. SUBSTITUTION OF MEMBERS. The Board of Directors may designate
one or more directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of such committee. In the
absence or disqualification of a member of a committee, the member or members
present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified
member.

ARTICLE V

OFFICERS

SECTION 1. NUMBER, TITLES AND TERM OF OFFICE. The officers of the
Corporation shall be a Chief Executive Officer, President, one or more Vice
Presidents (any one or more of whom may be designated Executive Vice President
or Senior Vice President), a Treasurer, a Secretary and, if the Board of
Directors so elects, a Chairman of the Board and such other officers as the
Board of Directors may from time to time elect or appoint. Each officer shall
hold office until his successor shall be duly elected and shall qualify or
until his death or until he shall resign or shall have been removed in the
manner hereinafter provided. Any number of offices may he held by the same
person, unless the Certificate of Incorporation provides otherwise. Except for
the Chairman of the Board, if any, no officer need be a director.

SECTION 2. SALARIES. The salaries or other compensation of the officers
and agents of the Corporation shall be fixed from time to time by the Board of
Directors.

SECTION 3. REMOVAL. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.

SECTION 4. VACANCIES. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.

SECTION 5. POWERS AND DUTIES OF THE CHIEF EXECUTIVE OFFICER. The Chairman
of the Board shall be the chief executive officer of the Corporation unless the
Board of Directors designates the President as chief executive officer.
Subject to the control of the

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<PAGE> 16
Board of Directors and the executive committee (if any) , the chief executive
officer shall have general executive charge, management and control of the
properties, business and operations of the Corporation with all such powers as
may be reasonably incident to such responsibilities; he may agree upon and
execute all leases, contracts, evidences of indebtedness and other obligations
in the name of the Corporation and may sign all certificates for shares of
capital stock of the Corporation; and shall have such other powers and duties
as designated in accordance with these bylaws and as from time to time may be
assigned to him by the Board of Directors.

SECTION 6. POWERS AND DUTIES OF THE CHAIRMAN OF THE BOARD. If elected,
the Chairman of the Board shall preside at all meetings of the stockholders and
of the Board of Directors; and he shall have such other powers and duties as
designated in these bylaws and as from time to time may be assigned to him by
the Board of Directors.

SECTION 7. POWERS AND DUTIES OF THE PRESIDENT. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board and
the Chief Executive Officer or if there be no Chairman of the Board or Chief
Executive Officer, preside at all meetings of the stockholders and (should he
be a director) of the Board of Directors; and he shall have such other powers
and duties as designated in accordance with these bylaws and as from time to
time may be assigned to him by the Board of Directors.

SECTION 8. VICE PRESIDENTS. The Vice Presidents shall perform such duties
and have such other powers as the Board of Directors may from time to time
prescribe.

SECTION 9. TREASURER. The Treasurer shall have responsibility for the
custody and control of all the funds and securities of the Corporation, and he
shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.

SECTION 10. ASSISTANT TREASURERS. Each Assistant Treasurer shall have the
usual powers and duties pertaining to his office, together with such other
powers and duties as designated in these bylaws and as from time to time may be
assigned to him by the chief executive officer or the Board of Directors.

SECTION 11. SECRETARY. The Secretary shall keep the minutes of
all-meetings or the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation

12
<PAGE> 17
and attest the affixation of the seal of the Corporation thereto; he may sign
with the other appointed officers all certificates for shares of capital stock
of the Corporation; he shall have charge of the certificate books, transfer
books and stock ledgers, and such other books and papers as the Board of
Directors may direct, all of which shall at all reasonable times be open to
inspection of any director upon application at the office of the Corporation
during business hours; he shall have such other powers and duties as designated
in these bylaws and as from time to time may be assigned to him by the Board of
Directors; and he shall in general perform all acts incident to the office of
Secretary, subject to the control of the chief executive officer and the Board
of Directors.

SECTION 12. ASSISTANT SECRETARIES. Each Assistant Secretary shall have
the usual powers and duties pertaining to his office, together with such other
powers and duties designated in these bylaws and as from time to time may be
assigned to him by the chief executive officer or the Board of Directors. The
Assistant Secretaries shall exercise the powers of the Secretary during that
officer's absence or inability or refusal to act.

SECTION 13. ACTION WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.

ARTICLE VI

INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS

SECTION 1. RIGHT TO INDEMNIFICATION. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding") , by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was or has agreed
to become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other capacity while serving or having agreed to
serve as a director or officer, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment) against all expense,
liability and loss (including, without

13
<PAGE> 18
limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered
by such person in connection therewith and such indemnification shall continue
as to a person who has ceased to serve in the capacity which initially entitled
such person to indemnity hereunder and shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that the Corporation
shall indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the board of directors of the Corporation.
The right to indemnification conferred in this Article VI shall be a contract
right and shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition;
provided, however, that, if the Delaware General Corporation Law requires, the
payment of such expenses incurred by a current, former or proposed director or
officer in his or her capacity as a director or officer or proposed director or
officer (and not in any other capacity in which service was or is or has been
agreed to be rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in advance of the
final disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.

SECTION 2. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Corporation may,
by action of its Board of Directors, provide indemnification to employees and
agents of the Corporation, individually or as a group, with the same scope and
effect as the indemnification of directors and officers provided for in this
Article.

SECTION 3. RIGHT OF CLAIMANT TO BRING SUIT. If a written claim received
by the Corporation from or on behalf of an indemnified party under this Article
VI is not paid in full by the Corporation within ninety days after such
receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the

14
<PAGE> 19
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.

SECTION 4. NONEXCLUSIVITY OF RIGHTS. The right to indemnification and the
advancement and payment of expenses conferred in this Article VI shall not be
exclusive of any other right which any person may have or hereafter acquire
under any law (common or statutory), provision of the Certificate of
incorporation of the Corporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.

SECTION 5. INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as a director,
officer, employee or agent of the Corporation or is or was Serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.

SECTION 6. SAVINGS CLAUSE. If this Article VI or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify and hold harmless each director and
officer of the Corporation as to costs, charges and expenses (including
attorneys' fees) , judgments, fines, and amounts paid in settlement with
respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative to the full extent permitted by any applicable
portion of this Article VI that shall not have been invalidated and to the
fullest extent permitted by applicable law.

ARTICLE VII

CAPITAL STOCK

SECTION 1. CERTIFICATES OF STOCK. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any) , President or a Vice President and the
Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer
certifying the number of shares (and, if the stock of the Corporation shall be
divided into classes or series, the class and series of such shares) owned by
such stockholder in the Corporation; provided, however, that any of or all the
signatures on the certificate may be facsimile. The stock record books and the
blank stock certificate books shall be kept by the Secretary, or at the office
of such transfer agent or transfer agents as the Board of Directors may from
time to

15
<PAGE> 20
time by resolution determine. In case any officer, transfer agent or registrar
who shall have signed or whose facsimile signature or signatures shall have
been placed upon any such certificate or certificates shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued by
the Corporation, such certificate may nevertheless be issued by the Corporation
with the same effect as if such person were such officer, transfer agent or
registrar at the date of issue. The stock certificates shall be consecutively
numbered and shall be entered in the books of the Corporation as they are
issued and shall exhibit the holder's name and number of shares.

SECTION 2. TRANSFER OF SHARES. The shares of stock of the corporation
shall be transferable only on the books of the Corporation by the holders
thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.

SECTION 3. OWNERSHIP OF SHARES. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.

SECTION 4. REGULATIONS REGARDING CERTIFICATES. The Board of Directors
shall have the power and authority to make all such rules and regulations as
they may deem expedient concerning the issue, transfer and registration or the
replacement of certificates for shares of capital stock of the Corporation.

SECTION 5. LOST OR DESTROYED CERTIFICATES. The Board of Directors may
determine the conditions upon which a new certificate of stock may be issued in
place of a certificate which is alleged to have been lost, stolen or destroyed;
and may, in their discretion, require the owner of such certificate or his
legal representative to give bond, with sufficient surety, to indemnify the
Corporation and each transfer agent and registrar against any and all losses or
claims which may arise by reason of the issue of a new certificate in the place
of the one so lost, stolen or destroyed.

16
<PAGE> 21
ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 1. FISCAL YEAR. The fiscal year of the Corporation shall be such
as established from time to time by the Board of Directors.

SECTION 2. CORPORATE SEAL. The Board of Directors may provide a suitable
seal, containing the name of the Corporation. The Secretary shall have charge
of the seal (if any). If and when so directed by the Board of Directors or a
committee thereof, duplicates of the seal may be kept and used by the Treasurer
or by the Assistant Secretary or Assistant Treasurer.

SECTION 3. NOTICE AND WAIVER OF NOTICE. Whenever any notice is required
to be given by law, the Certificate of Incorporation or under the provisions of
these bylaws, said notice shall be deemed to be sufficient if given (i) by
telegraphic, cable or wireless transmission or (ii) by deposit of the same in a
post office box in a sealed prepaid wrapper addressed to the person entitled
thereto at his post office address, as it appears on the records of the
Corporation, and such notice shall be deemed to have been given on the day of
such transmission or mailing, as the case may be.

Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting,
except when the person attends a meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders, directors, or members of a committee of directors need be
specified in any written waiver of notice unless so required by the Certificate
of incorporation or the bylaws.

SECTION 4. RESIGNATIONS. Any director, member of a committee or officer
may resign at any time. Such resignation shall be made in writing and shall
take effect at the time specified therein, or if no time be specified, at the
time of its receipt by the chief executive officer or secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.

SECTION 5. FACSIMILE SIGNATURES. In addition to the provisions for the
use of facsimile signatures elsewhere specifically authorized in these bylaws,
facsimile signatures of any officer or officers of the Corporation may be used
whenever and as authorized by the Board of Directors.

17
<PAGE> 22
SECTION 6. RELIANCE UPON BOOKS, REPORTS AND RECORDS. Each director and
each member of any committee designated by the Board of Directors shall, in the
performance of his duties, be fully protected in relying in good faith upon the
books of account or reports made to the Corporation by any of its officers, or
by, an independent certified public accountant, or by an appraiser selected
with reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.

ARTICLE IX

AMENDMENTS

The Board of Directors is hereby expressly authorized to adopt, amend or
repeal the bylaws of the Corporation or adopt new bylaws, without any action on
the part of the stockholders, by the vote of a majority of the directors;
provided, however, that no such adoption, amendment, or repeal shall be valid
with respect to bylaw provisions which have been adopted, amended, or repealed
by the stockholders; and further provided, that bylaws adopted or amended by
the Directors and any powers thereby conferred may be amended, altered, or
repealed by the stockholders. Notwithstanding the foregoing and anything in
these bylaws to the contrary, Article II Section 1, Article II Section 4,
Article II Section 12, Article III Section 6, Article III Section 7, Article
III Section 12 and Article IX of these bylaws shall not be amended, repealed,
altered or added to by the stockholders, and no provision inconsistent
therewith shall be adopted by the stockholders without the affirmative vote of
the holders of at least 66-2/3 % of the Corporation's voting stock issued and
outstanding.

<PAGE> 1
EXHIBIT 10

SUPPLEMENT TO
SCHEDULE OF SIMILAR AGREEMENTS

The following is a schedule of other Committed Credit Line Agreements
entered into by the Company, each of which agreements is substantially
identical to the Committed Credit Line Agreement filed as Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30,
1995 (and the additional Committed Credit Line Agreements identified in the
"Schedule of Similar Agreements" filed therewith), except as to the identity of
the Bank that is a party thereto (which is indicated below):

<TABLE>
<CAPTION>
Name of Agreement Identity of Bank
----------------- ----------------
<S> <C>
Committed Credit Line Agreement,
dated as of September 8, 1995 . . . . . . . . . Bank of Tokyo, Ltd.
Committed Credit Line Agreement,
dated as of September 8, 1995 . . . . . . . . . Sanwa Bank Limited
</TABLE>

<PAGE> 1
EXHIBIT 11

DELL COMPUTER CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------- ----------------------------
OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30,
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Primary earnings per common share:

Calculation of weighted average shares:
Weighted average shares of common stock
outstanding 92,081 77,475 88,909 76,758
Weighted average shares of common stock
equivalents, utilizing the treasury stock method 7,979 6,707 7,429 5,260
----------- ----------- ----------- -----------
Weighted average shares outstanding 100,060 84,182 96,338 82,018
=========== =========== =========== ===========
Earnings:
Net income available to common stockholders $ 75,311 $ 39,167 $ 190,341 $ 82,324
=========== =========== =========== ===========

Earnings per common share $ 0.75 $ 0.47 $ 1.98 $ 1.00
=========== =========== =========== ===========

Fully diluted earnings per common share:

Calculation of weighted average shares:
Weighted average shares of common stock
outstanding 92,081 77,475 88,909 76,758
Weighted average shares of common stock
equivalents, utilizing the treasury stock method 8,390 7,679 8,481 6,604
Assumed conversion of Convertible Preferred Stock 505(a) 10,526 2,414(a) 10,526
----------- ----------- ----------- -----------
Weighted average shares outstanding 100,976 95,680 99,804 93,888
=========== =========== =========== ===========
Earnings:
Net income available to common stockholders $ 75,311 $ 39,167 $ 190,341 $ 82,324
Add: preferred dividends 105 2,187 1,502(b) 6,562
----------- ----------- ----------- -----------
Adjusted net income available to common
stockholders $ 75,416 $ 41,354 $ 191,843 $ 88,886
=========== =========== =========== ===========

Earnings per common share $ 0.75 $ 0.43 $ 1.92 $ 0.95
=========== =========== =========== ===========
</TABLE>
__________

(a) Assumes conversion of the 60,000 shares of outstanding Convertible
Preferred Stock at the beginning of the third quarter and the
nine-month period and assumes conversion of the remaining Convertible
Preferred Stock (those shares which were converted in March 1995)
from the beginning of the nine-month period to the actual conversion
date.

(b) Preferred dividends are exclusive of the conversion premium and
expenses of the conversion offer.

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DELL
COMPUTER CORPORATION FINANCIAL STATEMENTS AS OF AND FOR THE NINE MONTH PERIOD
ENDED OCTOBER 29, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-28-1996
<PERIOD-END> OCT-29-1995
<CASH> 69,586
<SECURITIES> 501,186
<RECEIVABLES> 772,835
<ALLOWANCES> 0
<INVENTORY> 463,640
<CURRENT-ASSETS> 1,943,139
<PP&E> 158,534
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,112,923
<CURRENT-LIABILITIES> 997,196
<BONDS> 0
<COMMON> 930
0
1
<OTHER-SE> 892,365
<TOTAL-LIABILITY-AND-EQUITY> 2,112,923
<SALES> 3,757,225
<TOTAL-REVENUES> 3,757,225
<CGS> 2,967,907
<TOTAL-COSTS> 2,967,907
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,331
<INCOME-PRETAX> 284,768
<INCOME-TAX> 82,579
<INCOME-CONTINUING> 202,189
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 202,189
<EPS-PRIMARY> 1.98
<EPS-DILUTED> 1.92

</TABLE>