<PAGE> 1
RULE 424(b)(2)
RS No. 33-59863
PROSPECTUS
209,549 SHARES
[DELL LOGO]
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
---------------------
TO BE OFFERED BY SEVERAL HOLDERS OF THE COMMON STOCK OF DELL COMPUTER
CORPORATION
---------------------
This Prospectus relates to the offering (the "Offering") of up to 209,549
shares (the "Shares") of common stock, par value $.01 per share (the "Common
Stock"), by the Selling Stockholders named herein under "Selling Stockholders"
of Dell Computer Corporation (the "Company" or "Dell"), which have been issued
to the Selling Stockholders upon the conversion of shares of the Company's
Series A Convertible Preferred Stock (the "Series A Preferred Stock") pursuant
to the Company's conversion offer. Pursuant to the conversion offer, the Company
offered to pay to holders of Series A Preferred Stock a conversion premium of
$8.25 per share of Series A Preferred Stock converted into shares of Common
Stock during a special conversion period which expired on March 22, 1995. The
distribution of the Shares by the Selling Stockholders is not subject to any
underwriting agreement. The Company will receive no part of the proceeds of
sales made hereunder. All expenses of registration incurred in connection with
this offering are being borne by the Company, but all selling and other expenses
incurred by Selling Stockholders will be borne by such Selling Stockholders.
None of the shares offered pursuant to this Prospectus have been registered
prior to the filing of the Registration Statement of which this Prospectus is a
part. The shares of Series A Preferred Stock which were converted into the
Common Stock offered hereby were originally issued by the Company in private
transactions.
The Shares may be sold from time to time through June 15, 1995 pursuant to
this Prospectus, by the Selling Stockholders. It is anticipated that the Selling
Stockholders will generally offer Shares for sale at prevailing prices in the
over-the-counter market on the date of sale. See "Plan of Distribution."
THIS PROSPECTUS MAY NOT BE USED FOR SALES MADE AFTER JUNE 15, 1995.
The Common Stock of the Company is traded on the Nasdaq National Market
under the symbol "DELL". As of the close of trading on June 8, 1995, the closing
sale price of the Common Stock as quoted on the Nasdaq National Market was
$53.63 per share.
FOR A DISCUSSION OF CERTAIN FACTORS TO BE CONSIDERED IN CONNECTION WITH AN
INVESTMENT IN THE COMMON STOCK, SEE "INVESTMENT CONSIDERATIONS."
Each Selling Stockholder and any broker executing selling orders on behalf
of the Selling Stockholders may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").
Commissions received by any such broker may be deemed to be underwriting
commissions under the Securities Act.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
THE DATE OF THIS PROSPECTUS IS JUNE 9, 1995.
<PAGE> 2
AVAILABLE INFORMATION
No person is authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering described herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or any Selling Stockholder. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, nor shall there be any sale of these
securities by any person in any jurisdiction in which it is unlawful for such
person to make such offer, solicitation or sale. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create an
implication that the information contained herein is correct as of any time
subsequent to the date hereof.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance with the
Exchange Act, the Company files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). The reports,
proxy statements and other information can be inspected and copied at the public
reference facilities that the Commission maintains at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
located at 7 World Trade Center, 13th Floor, New York, New York 10048, and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of these
materials can be obtained at prescribed rates from the Public Reference Section
of the Commission at the principal offices of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement.
---------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
0-17017) pursuant to the Exchange Act are incorporated in this Prospectus by
reference:
1. The Company's Annual Report on Form 10-K for the Fiscal Year Ended
January 29, 1995, as amended by Amendments No. 1 and No. 2 thereto; and
2. The Company's Current Report on Form 8-K dated May 2, 1995; and
3. The description of the Company's Common Stock in Item 1 of the
Company's Registration Statement on Form 8-A dated June 20, 1988.
All other documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Prospectus and
to be part hereof from the date of filing such documents.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents that are incorporated by
reference, other than exhibits to such documents not specifically incorporated
by reference. Requests for such copies should be directed to Dell Computer
Corporation, 2112 Kramer Lane, Building 1, Austin, Texas 78758-4012, Attention:
Investor Relations, telephone (512) 728-8315.
2
<PAGE> 3
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
INVESTMENT CONSIDERATIONS
In addition to reviewing the Company's Annual Report on Form 10-K for the
fiscal year ended January 29, 1995, the other documents incorporated herein by
reference and the other information in this Prospectus, the following factors
should be considered carefully in evaluating the Company and its business before
purchasing the Common Stock offered hereby:
Competition. The personal computer industry is highly competitive and is
characterized by the frequent introduction of new products, short product life
cycles, continual improvement in product price/performance characteristics,
price sensitivity on the part of customers, and a large number of competitors.
The industry also has been characterized by rapid technological advances in
software functionality and hardware performance and features based on existing
or emerging industry standards. The Company and other manufacturers of personal
computers that adhere to industry standards generally have access to and make
use of many of the same components, often from the same group of suppliers. The
prices of many of these components decline periodically, and the general
practice of the Company and other personal computer manufacturers is to reduce
the prices of their personal computer products to reflect these component price
declines. The Company may take additional pricing actions as it attempts to
maintain a competitive mix of price, performance and customer support services
while managing its liquidity, profitability and growth. The Company attempts to
mitigate the effects of price reductions by improving product mix, further
reducing component costs and lowering operating costs. There can be no assurance
that pricing actions will be effective in stimulating higher levels of sales or
that cost reduction efforts will offset the effects of pricing actions on the
Company's gross margin. Some of the Company's competitors have greater
financial, marketing, manufacturing and technological resources, broader product
lines, greater brand name recognition, and larger installed customer bases than
those of the Company. There can be no assurance that the Company will continue
to compete successfully.
Dependence on Direct Marketing Strategy. Dell markets its personal computer
products and services directly to businesses, government agencies, medical and
educational institutions and individuals, primarily by means of telephone and
catalogs and through a growing field sales force calling on major customers. The
Company provides related technical support and other customer services primarily
by telephone as well as through on-site field service contracts. Accordingly,
the Company is dependent on the growth of direct distribution channels in order
to have a growing market in which to sell its products and services. There can
be no assurance that worldwide direct marketing channels will grow or that the
Company would be able to establish a more significant presence in indirect
channels of distribution if it becomes necessary or desirable in the future.
New Product Development. To maintain its competitive position, the Company
must continue to enhance its existing products while developing new products. To
do so it must obtain and incorporate new hardware, software, communications and
peripheral technologies that are primarily developed by others. The Company
believes that it is necessary for its products to adhere to generally accepted
industry standards, which are subject to change in ways that are not within the
control of the Company. There can be no assurance that the Company's product
development activities will be successful, that new technologies will be
available to the Company, that the Company will be able to deliver commercial
quantities of new products in a timely manner, that those products will adhere
to generally accepted industry standards, or that the products will achieve
market acceptance. Some new products introduced by the Company are intended to
replace existing products. Although the Company monitors the products that are
intended to be replaced and attempts to phase out the manufacture of those
products in a timely manner, there can be no assurance that such transitions
will be executed without adversely affecting the Company's results of operations
or financial condition.
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<PAGE> 4
Fluctuations in Operating Results, Economic Conditions and Customer
Spending Patterns. The Company's operating results have varied and may continue
to fluctuate from quarter to quarter and will depend on numerous factors,
including, but not limited to, customer demand and market acceptance of the
Company's products, new product introductions, product obsolescence, component
price fluctuations, varying product mix, foreign currency exchange rates,
foreign currency and interest rate hedging, and other factors. In addition, the
Company has operated without a material backlog so that net sales in a given
quarter are dependent on customer orders received in that quarter and operating
expenditures are primarily based on forecasts of customer demand. As a result,
if demand does not meet the Company's expectations in any given period, the
sales shortfall may result in an increased impact on operating results due to
the Company's inability to adjust operating expenditures quickly enough to
compensate for such shortfall. The Company's business is sensitive to the
spending patterns of its customers, which in turn are subject to prevailing
economic conditions and other factors beyond the Company's control. The
Company's results of operations could be materially adversely affected by
changes in economic conditions or customer spending patterns for personal
computer products.
International Sales and Operations. Sales outside the United States of
America represented approximately 37% of the Company's consolidated net sales in
fiscal 1995. The Company currently sells personal computer products in more than
125 countries and manufactures products in the United States and other
countries. The success and profitability of international operations may be
adversely affected by risks associated with international activities, including
economic and labor conditions, political instability, tax laws (including U.S.
taxes on foreign subsidiaries), and changes in the value of the United States
dollar versus the local currency in which products are sold. Changes in exchange
rates may adversely affect the Company's net consolidated sales (as expressed in
United States dollars) and gross profit margins from international operations.
The Company attempts to mitigate this exposure through hedging transactions.
Reliance on Key Suppliers. The Company's manufacturing process requires a
high volume of quality components that are procured from third-party suppliers.
Reliance on suppliers, as well as industry supply conditions, generally involves
several risks, including the possibility of defective parts, a shortage of
components, increases in component costs, and reduced control over delivery
schedules, any or all of which could adversely affect the Company's financial
results. The Company has several single supplier relationships, and the lack of
availability of timely and reliable supply of components from these sources
could adversely affect the Company's business. 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. In addition,
alternative sources of supply are not available for some of the Company's single
sourced components. 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 adversely affect 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. Also, 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 additional 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. The Company is continuing to
increase its shipments of products incorporating Intel's Pentium microprocessor.
Consolidated net sales from the Company's Pentium processor-based products
represented 44% and 29% of system revenue of the Company for the fourth fiscal
quarter and year ended January 29, 1995, respectively. In November 1994, an
inaccuracy in Intel's Pentium microprocessors was publicized that, in some
cases, may cause errors in division. Based on information from Intel
Corporation, the Company believes only a limited number of its Pentium
microprocessor customers perform calculations affected by the inaccuracy.
Nonetheless, Intel has offered replacement microproces-
4
<PAGE> 5
sors to end-users for any Pentium microprocessor exhibiting this inaccuracy. By
early February 1995, all of the Company's new shipments of Pentium
processor-based products contained the corrected Pentium microprocessors.
Although the Company had an inventory of Pentium microprocessors that exhibited
the inaccuracy and previously shipped products which included such
microprocessors, the Company believes that the costs associated with this
inventory and replacement of Pentium microprocessors which exhibit this
inaccuracy previously shipped to customers will not have a material adverse
effect on the Company's results of operations or financial condition.
Intellectual Property Rights. From time to time, other companies and
individuals assert exclusive patent, copyright, trademark and other intellectual
property rights to technologies or marks that are important to the personal
computer industry or the Company's business. The Company evaluates each claim
relating to its products and, if appropriate, seeks a license to use the
protected technology. The licensing agreements generally do not require the
counterpart to assist the Company in duplicating its patented technology nor do
these agreements protect the Company from trade secret, copyright or other
violations by the Company or its suppliers in developing or selling these
products. There can be no assurance, however, that the Company will be able to
obtain licenses to intellectual property of third parties on commercially
reasonable terms, if at all. In addition, the Company could be at a disadvantage
if its competitors obtain licenses for protected technologies with more
favorable terms than does the Company. If the Company or its suppliers are
unable to license protected technology used in the Company's products, the
Company could be prohibited from marketing those products or may have to market
products without desirable features. The Company could also incur substantial
costs to redesign its products or to defend any legal action taken against the
Company. If the Company's products should be found to infringe protected
technology, the Company could be enjoined from further infringement and required
to pay damages to the infringed party. Any of the foregoing could have a
material adverse effect on the Company.
Management of Growth. The Company has experienced rapid growth, which has
required it to enhance and expand its management team, information systems,
manufacturing operations, and other aspects of its infrastructure. If the
Company continues to experience rapid growth, of which there can be no
assurance, it will need to continue to improve and expand its infrastructure.
There can be no assurance that the Company will be able to manage expansion of
its infrastructure to support future growth effectively, nor can there be any
assurance that the Company's results of operations will not be adversely
affected by any such growth, enhancements or expansion. The Company is in the
process of transitioning its management information systems to more fully
integrate them on an enterprise wide basis, to reduce redundancy and to
incorporate enhanced functionality. The Company currently expects this
transition, which involves both hardware and software enhancements, to continue
at least through 1998. There can be no assurance that this management
information system transition can be accomplished on a timely basis or without
disruptions of the Company's operations, or management information functions,
which could have a material adverse effect on the Company's results of
operations.
Reliance on Key Executives. The Company depends on the services of members
of its executive staff, including Michael S. Dell, the founder of the Company
and its Chairman and Chief Executive Officer. The loss of the services of
members of its executive staff, including Michael S. Dell, could have a material
adverse effect upon the Company. The Company does not maintain key man life
insurance on any of its key executives.
Share Ownership of Michael S. Dell. As of May 31, 1995, Michael S. Dell
owned approximately 8,357,000 shares of Common Stock representing approximately
18.5% of the outstanding shares of Common Stock as of that date. Although Mr.
Dell does not hold a majority of the outstanding Common Stock, he is likely to
be in a position to influence significantly the election of some or all of the
members of the Company's Board of Directors and the outcome of most corporate
actions requiring stockholder approval. See "Description of Capital Stock."
5
<PAGE> 6
Impediments to Changes in Control. Certain provisions in the Certificate of
Incorporation and Bylaws of the Company may make more difficult or discourage
attempts to change the composition of the Board of Directors, may make more
difficult or discourage takeovers of the Company, including those in which
holders of the Company's Common Stock might receive a substantial premium for
some or all of their shares, and could potentially depress the market price of
shares of Common Stock. In addition, the ability of the Board of Directors to
issue shares of preferred stock or rights to purchase preferred stock and to fix
the voting, redemption, conversion and other rights thereof without stockholder
approval could hinder any proposed tender offer, merger or other attempt to gain
control of the Company. See "Description of Capital Stock."
Volatility of Stock Price. The Common Stock is currently quoted on the
Nasdaq National Market. The Company believes that factors including but not
limited to new product or other announcements by the Company, its competitors or
suppliers and quarterly fluctuations in the Company's and competitors' results
of operations have caused significant fluctuations in the market price of the
Common Stock and could continue to do so in the future. In addition, substantial
sales of the Company's Common Stock in excess of historical trading volumes, as
may be occasioned by the sale of Shares offered hereby, are likely to have an
adverse effect on the trading price of the Company's Common Stock. Further, the
Company competes in a highly dynamic industry which may result in increased
volatility of the Company's Common Stock price. See "Market Prices of Common
Stock."
6
<PAGE> 7
THE COMPANY
Dell Computer Corporation designs, develops, manufactures, markets,
services and supports a broad range of personal computers, including desktops,
notebooks and servers compatible with industry standards under the Dell(R) brand
name. With revenue of nearly $3.5 billion for 1995, Dell is the world's leading
direct marketer of personal computers and one of the top five personal computer
vendors in the world.
Dell primarily markets its personal computer products and services directly
to its customers, which include major corporate, government, medical and
education accounts as well as small businesses and individuals. The Company
believes that its direct customer relationships provide it with a competitive
advantage because the information that the Company gathers and analyzes from
these relationships enables it to better understand and respond to customer
demands for computer products and services. Additionally, such information
enables the Company to focus its computer product development efforts on the
technologies that are most valued by its customers. Dell's approach also
generally avoids the inefficiency and mark-ups associated with the typical
industry model, where products move through a multi-step process involving
manufacturers, distributors, retail stores and a variety of value-added service
providers. Dell supplements its direct marketing strategy by selling personal
computer systems through certain value-added remarketers and system integrators
and, in certain international geographical regions, third-party distributors and
consumer retailers.
The Company employs a build-to-order manufacturing process that enables the
Company to achieve rapid inventory turnover and reduced inventory levels, which
reduces the Company's exposure to the risk of declining inventory values. This
flexible manufacturing process also allows the Company to rapidly incorporate
new technologies and components into its product offerings.
The Company's product development efforts are focused on designing and
developing personal computer products which adhere to industry standards and
incorporate technologies and features at reasonable price levels that the
Company believes are the most desired by its customers. As of March 31, 1995,
the Company offered 59 personal computer systems, many of which can be custom
configured with a variety of hardware including multimedia and communication
devices as well as an assortment of memory, mass storage and other options. As
part of its commitment to provide personal computer solutions, the Company also
markets a wide range of software, peripherals, and service and support programs.
Dell Computer Corporation was originally incorporated in Texas in May 1984.
In October 1987, the current Delaware corporation was formed and the renamed
successor to the Texas company became a subsidiary of the Delaware corporation.
Based in Austin, Texas, the Company operates wholly-owned subsidiaries in the
Americas, Europe, Japan, Asia, Australia, and other international locations.
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<PAGE> 8
MARKET PRICES OF COMMON STOCK
The Common Stock is quoted on the Nasdaq National Market under the trading
symbol DELL. The following table sets forth, for the fiscal quarters indicated,
the high and low reported bid prices for the Common Stock as reported on the
Nasdaq National Market.
<TABLE>
<CAPTION>
HIGH LOW
---- ----
<S> <C> <C>
Fiscal Year Ending January 28, 1996
Second Quarter
(May 1, 1995 through June 8, 1995)............................ $58 5/8 $48 1/2
First Quarter.................................................... $54 7/8 $39 1/2
Fiscal Year Ending January 29, 1995
Fourth Quarter................................................... $47 3/4 $36 3/4
Third Quarter.................................................... $44 $27 1/2
Second Quarter................................................... $30 3/4 $21 1/2
First Quarter.................................................... $30 1/8 $19 1/8
Fiscal Year Ended January 30, 1994
Fourth Quarter................................................... $28 1/8 $20 1/8
Third Quarter.................................................... $21 5/8 $15 1/8
Second Quarter................................................... $34 3/4 $13 7/8
First Quarter.................................................... $49 1/4 $27 5/8
</TABLE>
The Common Stock was held of record by approximately 2,763 persons as of
May 31, 1995.
DIVIDEND POLICY
COMMON STOCK
Dividends on the Common Stock are payable when, as and if declared by the
Board of Directors of the Company. The Company has never paid cash dividends on
its Common Stock. The Company intends to retain earnings for use in its business
and, therefore, does not anticipate paying any cash dividends on the Common
Stock for at least the next twelve months. In addition, the Company's current
line of credit generally prohibits the payment of cash dividends by the Company
on the Common Stock except in certain circumstances.
PREFERRED STOCK
Holders of shares of the Series A Preferred Stock are entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available therefore, cash dividends at an annual rate of $7.00 per share,
payable quarterly in arrears. Dividends are cumulative and are payable to the
holders of record as they appear on the stock transfer books on such record
dates as are fixed by the Board of Directors. The Series A Preferred Stock has
priority as to dividends over the Common Stock. See "Description of Capital
Stock -- Series A Preferred Stock."
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<PAGE> 9
CAPITALIZATION
The following table sets forth the actual capitalization of the Company at
January 29, 1995, and the pro forma capitalization adjusted to reflect the
conversion of 1,190,000 of the 1,250,000 previously outstanding shares of Series
A Preferred Stock to Common Stock and the payment of the aggregate conversion
premium and the estimated expenses of the Company's conversion offer which
expired on March 22, 1995. Pursuant to the conversion offer, the Company paid to
holders of Series A Preferred Stock a conversion premium of $8.25 per share of
Series A Preferred Stock converted into shares of Common Stock during a special
conversion period which expired on March 22, 1995. This table should be read in
conjunction with the Company's Annual Report on Form 10-K for the Fiscal Year
Ended January 29, 1995, incorporated herein by reference.
<TABLE>
<CAPTION>
JANUARY 29, 1995
---------------------
PRO
ACTUAL FORMA
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt(1).................................................... $113,429 $113,429
Stockholders' equity:
Preferred Stock, $.01 par value; shares authorized: 5,000,000;
shares issued and outstanding (liquidation preference $100.00
per share): 1,250,000 actual and 60,000 shares outstanding pro
forma........................................................... 13 1
Common Stock, $.01 par value; shares authorized: 100,000,000;
shares issued and outstanding: 39,679,638 actual and 44,690,122
pro forma(2).................................................... 397 447
Additional paid-in capital......................................... 356,768 356,730
Unrealized loss on short-term investments.......................... (2,628) (2,628)
Retained earnings.................................................. 311,217 300,871
Translation adjustment............................................. (14,031) (14,031)
-------- --------
Total stockholders' equity................................. 651,736 641,390
-------- --------
Total capitalization....................................... $765,165 $754,819
======== ========
</TABLE>
- ---------------
(1) Consists of the Company's 11% Senior Notes Due August 15, 2000.
(2) Excludes 9,542,405 shares of Common Stock reserved for issuance under the
Company's employee benefit plans. Options for 5,591,523 shares under such
plans were outstanding at January 29, 1995.
The payment of the conversion premium and the expenses of the conversion
offer totalled approximately $10,346,000 and will be treated as an additional
dividend on the Series A Preferred Stock for financial reporting purposes.
Accordingly, the aggregate amount of the conversion premium and expenses paid
will be deducted in determining net income applicable to common stockholders for
the first quarter of 1996. Additionally, the effect of the conversion will be to
increase primary weighted average common shares outstanding for the first
quarter of 1996 by approximately 2,147,000 shares and for subsequent quarters by
approximately 5,010,000 shares. Supplementary primary earnings per common share
for the year ended January 29, 1995 would have been $3.20 assuming the Series A
Preferred Stock was converted at the beginning of fiscal 1995.
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<PAGE> 10
SELLING STOCKHOLDERS
The following table sets forth the name of each Selling Stockholder and
relationship with the Company and (i) the number of shares of Common Stock owned
by each Selling Stockholder as of May 31, 1995, (ii) the maximum number of
shares of Common Stock which may be offered for the account of such Selling
Stockholder under this Prospectus, and (iii) the amount and percentage of Common
Stock to be owned by the Selling Stockholder after completion of the offering
assuming the sale of all the Common Stock which may be offered hereunder.
<TABLE>
<CAPTION>
AMOUNT AND
PERCENTAGE
OF COMMON STOCK
OWNED AFTER
MAXIMUM NUMBER OF THE OFFERING(2)
NAME OF SHARES OWNED SHARES WHICH MAY BE --------------------
SELLING STOCKHOLDER PRIOR TO OFFERING(1) SOLD HEREUNDER AMOUNT PERCENTAGE
- ----------------------------------- -------------------- ------------------- ------- ----------
<S> <C> <C> <C> <C>
First Hawaiian Bank Custodian For 10,526 10,526 0 0.00%
Hotel Union Pension Trust Fund
1132 Bishop Street
Honolulu, Hawaii 96813
Laterman Strategies: 90's L.P. 42,105 42,105 0 0.00%
5 East 59th Street
New York, New York 10022
Offshore Strategies, Ltd. 124,630 124,630 0 0.00%
Citco Building
P. O. Box 662
Roadtown, Tortola
British Virgin Islands
Smith Barney Travelers Series Fund, 14,736(3) 11,236 0 0.00%
Inc. -- Alliance Growth Portfolio
388 Greenwich Street
22nd Floor
New York, New York 10013
Bank of America Custodian for 21,052 21,052 0 0.00%
Taliac-Fund THY
1150 South Olive
Los Angeles, California 90015
------- ------- -------
Total 213,049 209,549 0
======= ======= =======
</TABLE>
- ---------------
* Less than 1%.
(1) Beneficial ownership as of May 31, 1995 based upon information provided by
the respective Selling Stockholders.
(2) Assumes sale of all shares of Common Stock registered hereunder, although
Selling Stockholders are under no obligation known to the Company to sell
any shares of Common Stock at this time.
(3) Includes 3,500 shares of Common Stock previously registered by the Company
for resale under a Registration Statement on Form S-3 (Registration Number
33-57775) and assumes that such shares are sold thereunder, although such
Selling Stockholder is under no obligation known to the Company to sell any
shares of Common Stock at this time.
The Company will pay the expenses of registering the shares of Common Stock
being sold hereunder, which are estimated to be $40,000.
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<PAGE> 11
PLAN OF DISTRIBUTION
The Shares may be sold pursuant to the offer made hereby from time to time
through June 15, 1995, by the Selling Stockholders. The Selling Stockholders may
sell the Shares being offered hereby: (i) in ordinary brokerage transactions, in
transactions in which brokers solicit purchasers and to or through marketmakers
in the Nasdaq National Market, (ii) in privately negotiated direct sales or
sales effected through agents not involving marketmakers or established trading
markets, and (iii) through transactions in put or call options or other rights
(whether exchanged-listed or otherwise) established after the effectiveness of
the Registration Statement of which this Prospectus is a part. The Shares may be
sold at prices and at terms then prevailing or at prices related to the then
current market price of the Common Stock on the Nasdaq National Market or at
other negotiated prices. In addition, any of the Shares that qualify for sale
pursuant to Rule 144 may be sold in transactions complying with such Rule,
rather than pursuant to this Prospectus.
The Shares consist of Common Stock issued to the Selling Stockholders upon
conversion of the Company's Series A Preferred Stock. The shares of Series A
Preferred Stock were originally issued by the Company in private transactions
exempt from the registration requirements of the Securities Act. In the case of
sales of the Shares effected to or through broker-dealers, such broker-dealers
may receive compensation in the form of discounts, concessions or commissions
from the Selling Stockholders or the purchasers of the shares of Common Stock
for that the broker-dealer is selling, or both.
The Company has advised the Selling Stockholders that the anti-manipulative
Rules 10b-6 and 10b-7 under the Exchange Act may apply to the sale of the Shares
and purchases and bids for, and stabilization activities, if any, with respect
to, shares of the Company's Common Stock in the market. In addition, the Company
will make copies of this Prospectus available to the Selling Stockholders and
has informed them of the need for delivery of copies of this Prospectus to
purchasers on or prior to sales of the Shares offered hereby. The Company is not
aware as of the date of this Prospectus of any agreements between any of the
Selling Stockholders and any broker-dealers with respect to the sale of the
Shares offered by this Prospectus. The Selling Stockholders and any broker,
dealer or other agent executing sell orders on behalf of the Selling
Stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act, in which case the commissions received by any such broker,
dealer or agent and profit on any resale of the Shares of Common Stock may be
deemed to underwriting commissions under the Securities Act. The commissions
received by a broker, dealer or agent may be in excess of customary
compensation. The Company will receive no part of the proceeds from the sale of
Shares hereunder.
Pursuant to the Registration Agreement entered into by and among the
Company and the Selling Stockholders, the Selling Stockholders will pay their
costs and expenses of selling the Shares hereunder, including commissions and
discounts of underwriters, brokers, dealers or agents, and the Company has
agreed to pay the costs and expenses incident to its registration and
qualification of the Shares offered hereby, including registration and filing
fees. In addition, the Company has agreed to indemnify the Selling Stockholders
against certain liabilities, including liabilities arising under the Securities
Act.
There can be no assurance that any of the Selling Stockholders will sell
any or all of the shares of Common Stock offered by them hereunder.
11
<PAGE> 12
DESCRIPTION OF CAPITAL STOCK
The following summary description is qualified in its entirety by reference
to the Company's Certificate of Incorporation, as amended, which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
authorized capital stock of the Company consists of 100,000,000 shares of Common
Stock, par value $.01 per share, and 5,000,000 shares of preferred stock, par
value $.01 per share (the "Preferred Stock").
COMMON STOCK
The Company is authorized to issue up to 100,000,000 shares of Common
Stock. As of May 31, 1995, there were 45,243,441 shares of Common Stock
outstanding. The holders of Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders. Because
holders of Common Stock do not have cumulative voting rights, the holders of a
majority of the shares of Common Stock represented at a meeting have the power
to elect all of the directors to be elected at that meeting. Subject to the
prior rights of holders of Preferred Stock, the holders of Common Stock are
entitled to dividends, when and as declared by the Board of Directors out of
funds legally available therefor. The terms of the Company's line of credit
restrict payment of cash dividends except in certain circumstances. See
"Dividend Policy." If the Company dissolves or is liquidated, the holders of
Common Stock are entitled to share ratably in all assets remaining after payment
of liabilities and the liquidation preferences of any outstanding shares of
Preferred Stock.
Holders of Common Stock have no preemptive rights and have no right to
convert their Common Stock into any other securities. All of the outstanding
shares of Common Stock are, and all shares of Common Stock offered hereby are or
will be, upon conversion of Series A Preferred Stock, fully paid and
nonassessable.
The Certificate of Incorporation of the Company divides the Board of
Directors of the Company into three classes, each class to be as nearly equal in
number of directors as possible. At each annual meeting of stockholders,
directors in each class are elected for three year terms to succeed the
directors of that class whose terms are expiring. Paul O. Hirschbiel, Donald J.
Carty and Thomas W. Luce, III, are Class I directors with their terms of office
expiring in 1995. Michael S. Dell, Michael H. Jordan and Klaus S. Luft are Class
II directors with their terms of office expiring in 1996. George Kozmetsky,
Claudine B. Malone and Michael A. Miles are Class III directors with their terms
of office expiring in 1997. The Certificate of Incorporation and Bylaws of the
Company also provide that directors may be removed from office only for cause
(as defined in the Certificate of Incorporation), that stockholder action must
be taken at a duly called annual or special meeting (and not by written
consent), and that stockholders follow an advance notification procedure for
certain stockholder nominations of candidates for the Board of Directors and for
certain other stockholder business to be conducted at an annual meeting.
The existence of these provisions of the Company's Certificate of
Incorporation and Bylaws may be disadvantageous to the extent they discourage
takeovers in which stockholders might receive a substantial premium for some or
all of their shares. Therefore, stockholders who desire to participate in such a
takeover may not be afforded the opportunity to do so, even when such
stockholders believe participation to be in their best interest. Also, such
provisions may reduce temporary fluctuations in the market price of the Common
Stock that may accompany the accumulation of large blocks of Common Stock and
thereby deprive stockholders of an opportunity to sell their stock at a
temporarily higher price. In addition to reducing temporary market fluctuations,
such provisions could potentially depress the market price of shares of Common
Stock and may have the effect of discouraging changes in control, particularly
those that are opposed by the Company's incumbent management, even if a majority
of stockholders desire the change in control. Such provisions thereby could also
prevent the removal of management.
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<PAGE> 13
In addition, the ability of the Board of Directors to issue shares of
Preferred Stock and to fix the voting, redemption, conversion and other rights
thereof without stockholder approval could hinder any proposed tender offer,
merger or other attempt to gain control of the Company. See "Description of
Capital Stock -- Blank Check Preferred Stock."
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.
BLANK CHECK PREFERRED STOCK
Pursuant to the Certificate of Incorporation of the Company, the Board of
Directors has the authority, without further stockholder approval, to provide
for the issuance of up to 5,000,000 shares of Preferred Stock in one or more
series and to determine the dividend rights, conversion rights, voting rights,
rights and terms of redemption, liquidation preferences, the number of shares
constituting any such series, and the designation of such series. Because the
Board of Directors has the power to establish the preferences and rights of each
series, it may afford the holders of any Preferred Stock preferences, powers and
rights (including voting rights) senior to the rights of the holders of Common
Stock. Other than the shares of Series A Preferred Stock described below, no
shares of Preferred Stock have been issued and remain outstanding before this
Offering. The issuance of shares of Preferred Stock or the issuance of rights to
purchase shares of stock may have the effect of delaying, deferring or
preventing a change in control of the Company.
SERIES A PREFERRED STOCK
The Series A Preferred Stock has been authorized as a series of Preferred
Stock, consisting of 1,250,000 shares. As of May 31, 1995, 60,000 shares of
Series A Preferred Stock remained issued and outstanding. The terms and
provisions of the Series A Preferred Stock are set forth in the Certificate of
Designation (the "Certificate of Designation") creating the Series A Preferred
Stock. Certain terms and provisions are summarized below. This summary does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, all the provisions of the Certificate of Designation, including
the definitions therein of certain terms, which is incorporated herein by
reference. A copy of the Certificate of Designation may be obtained from Dell
Computer Corporation, 2112 Kramer Lane, Building 1, Austin, Texas 78758-4012,
Attention: Investors Relations.
Dividends. Holders of shares of Series A Preferred Stock are entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available therefore, cash dividends at an annual rate of $7.00 per share,
payable quarterly in arrears. Dividends are cumulative and are payable to the
holders of record as they appear on the stock transfer books on such record
dates as are fixed by the Board of Directors.
The Series A Preferred Stock has priority as to dividends over the Common
Stock and any other series or class of the Company's stock thereafter issued
that ranks junior as to dividends to the Series A Preferred Stock, when and if
issued (collectively, "Junior Dividend Stock"), and no dividend (other than
dividends payable solely in stock that is Junior Dividend Stock and that ranks
junior to the Series A Preferred Stock as to distribution of assets upon
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary (such stock that is junior as to liquidation rights, "Junior
Liquidation Stock") (the Common Stock and any other capital stock of the Company
that is both Junior Dividend Stock and Junior Liquidation Stock, "Junior Stock")
may be paid on any Junior Dividend Stock, and no payment may be made on account
of the purchase redemption, retirement, or other acquisition of Junior Dividend
Stock or Junior Liquidation Stock (other than such acquisitions pursuant to
employee or director incentive or benefit plans or arrangements, or acquisitions
or exchanges solely for Junior Stock), unless all accrued and unpaid dividends
on the Series A Preferred Stock for all dividend payment periods ending on or
before the
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<PAGE> 14
date of payment of such dividends on Junior Dividend Stock, or such payment for
such Junior Dividend Stock or Junior Liquidation Stock, as the case may be, have
been paid or declared and set apart for payment. The Company may not pay
dividends on any other series or class of the Company's stock hereafter issued
that ranks on a parity with the Series A Preferred Stock as to dividends
("Parity Dividend Stock"), and may not make any payment on account of the
purchase, redemption, retirement or other acquisition of shares of Parity
Dividend Stock or any other series or class of the Company's stock hereafter
issued that ranks on a parity with the Series A Preferred Stock as to
distributions of assets upon liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary (such stock that has parity with the
Series A Preferred Stock as to liquidation rights, "Parity Liquidation Stock")
(other than such acquisitions pursuant to employee or director incentive or
benefit plans or arrangements, or acquisitions or exchanges solely for Junior
Stock), unless all accrued and unpaid dividends on the Series A Preferred Stock
for all dividend payment periods ending on or before the date of payment of such
dividends on Parity Dividend Stock, or such payment for such Parity Dividend
Stock or Parity Liquidation Stock, as the case may be, have been paid or
declared and set apart for payment.
Liquidation Rights. In the case of the voluntary or involuntary
liquidation, dissolution or winding up of the Company, holders of shares of
Series A Preferred Stock are entitled to receive the liquidation preference of
$100.00 per share, plus an amount equal to any accrued and unpaid dividends to
the payment date, before any payment or distribution is made to the holders of
Common Stock or any other series or class of the Company's stock hereafter
issued that ranks junior to the Series A Preferred Stock as to distributions of
assets upon such liquidation, dissolution or winding up, but the holders of the
shares of the Series A Preferred Stock will not be entitled to receive the
liquidation preference of such shares until the liquidation preference of any
other series or class of the Company's stock hereafter issued that ranks senior
to the Series A Preferred Stock as to distributions of assets upon such
dissolution, liquidation or winding up ("Senior Liquidation Stock") has been
paid in full. The holders of Series A Preferred Stock and all series or classes
of the Company's stock hereafter issued that rank on a parity with the Series A
Preferred Stock as to distributions of assets upon such liquidation, dissolution
or winding up of the Company are entitled to share ratably, in accordance with
the respective preferential amounts payable on such stock, in any distribution
(after payment of the liquidation preference of the Senior Liquidation Stock)
which is not sufficient to pay in full the aggregate of the preferential amounts
payable thereon. After payment in full of the liquidation preference of the
shares of the Series A Preferred Stock, the holders of such shares will not be
entitled to any further participation in any distribution of assets by the
Company. Neither a consolidation or merger of the Company with another
corporation nor a sale or transfer of all or part of the Company's assets for
cash, securities or other property will be considered a liquidation, dissolution
or winding up of the Company.
Voting Rights. The holders of the Series A Preferred Stock have no voting
rights except as described below or as required by law. In exercising any such
vote, each outstanding share of Series A Preferred Stock will be entitled to one
vote, excluding shares held by the Company or any affiliate of the Company,
which shares have no voting rights.
Whenever dividends on the Series A Preferred Stock or on any outstanding
shares of Parity Dividend Stock have not been paid in an aggregate amount equal
to at least six quarterly dividends on such shares (whether or not consecutive),
the number of members of the Company's Board of Directors will be increased by
two, and the holders of the Series A Preferred Stock, voting separately as a
class with the holders of Parity Dividend Stock on which like voting rights have
been conferred and are exercisable, will be entitled to elect such two
additional directors at any meeting of stockholders at which directors are to be
elected held during the period such dividends remain in arrears. Such voting
rights will terminate when all such accrued and unpaid dividends have been
declared and paid or set apart for payment. The term of office of all directors
so elected will terminate immediately upon the termination of such voting
rights.
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<PAGE> 15
In addition, so long as any Series A Preferred Stock is outstanding, the
Company may not, without the affirmative vote or consent of the holders of at
least 66 2/3% (unless a higher percentage shall then be required by applicable
law) of all outstanding shares of Series A Preferred Stock, voting separately as
a class, (i) amend, alter or repeal any provision of the Company's Certificate
of Incorporation or Bylaws so as to affect adversely the relative rights,
preferences, qualifications, limitations, or restrictions of the Series A
Preferred Stock, (ii) create, authorize or issue, or reclassify any authorized
stock of the Company into, or increase the authorized amount of, any series or
class of stock that ranks senior to the Series A Preferred Stock as to dividends
or distributions of assets upon liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, or any security convertible into any
such class or series of such stock, or (iii) enter into a share exchange that
affects the Series A Preferred Stock, consolidate with or merge into another
entity, or permit another entity to consolidate with or merge into the Company,
unless in each such case each share of Series A Preferred Stock remains
outstanding and unaffected or is converted into or exchanged for convertible
preferred stock of the surviving entity having powers, preferences and relative
participating optional or other rights and qualification limitations and
restrictions thereof identical to that of a share of Series A Preferred Stock
(except for changes that do not affect the holders of the Series A Preferred
Stock adversely).
Redemption at Option of the Company. The Series A Preferred Stock may not
be redeemed before August 25, 1996. On and after that date, the Series A
Preferred Stock may be redeemed by the Company, at its option, in whole or in
part at any time, subject to the limitations, if any, imposed by applicable law,
at a redemption price per share of $104.67 if redeemed at any time during the
period from August 25, 1996, through August 15, 1997, and at the following
redemption prices per share, if redeemed during the 12-month period ending
August 15:
<TABLE>
<CAPTION>
PRICE
YEAR PER SHARE
-------------------------------------------------- ---------
<S> <C>
1998.............................................. $103.89
1999.............................................. 103.11
2000.............................................. 102.33
2001.............................................. 101.56
2002.............................................. 100.78
</TABLE>
and thereafter at $100.00 per share, plus, in each case, accrued and unpaid
dividends to but excluding the redemption date.
Conversion Rights. The holder of any shares of Series A Preferred Stock has
the right, at the holder's option, to convert any or all shares into Common
Stock at any time at the rate of 4.2105 shares of Common Stock for each share of
Series A Preferred Stock (equivalent to a conversion price of $23.75 for each
share of Common Stock), subject to adjustment in certain circumstances, except
that if the Series A Preferred Stock is called for redemption, the conversion
right will terminate at the close of business on the fifth business day prior to
the date fixed for such redemption.
LEGAL MATTERS
The validity of the shares of Common Stock being sold in the offering is
being passed upon for the Company by Wilson, Sonsini, Goodrich, & Rosati,
Professional Corporation, Palo Alto, California.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the Fiscal Year Ended January
29, 1995, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
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<PAGE> 16
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Investment Considerations............. 3
The Company........................... 7
Market Prices of Common Stock......... 8
Dividend Policy....................... 8
Capitalization........................ 9
Selling Stockholders.................. 10
Plan of Distribution.................. 11
Description of Capital Stock.......... 12
Legal Matters......................... 15
Experts............................... 15
</TABLE>
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209,549 SHARES
DELL COMPUTER
CORPORATION
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
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[DELL LOGO]
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PROSPECTUS
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