SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 10, 1996
STORAGE TECHNOLOGY CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-7534 84-0593263
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(State or other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
2270 South 88th Street, Louisville, Colorado 80028-4309
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (303) 673-5151
Not applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
On June 10, 1996, the Company announced that it had entered into an
OEM agreement with IBM Corporation ("IBM"), concerning the Company's mainframe
online storage products. The term of the agreement expires in December 1999.
Under the terms of the agreement, the Company will manufacture for IBM storage
subsystems currently sold by the Company under the brand names Iceberg(R),
Kodiak(R) and Arctic Fox(R), including certain related software. Beginning on
July 1, 1996, the Company intends to use IBM as its main worldwide distribution
channel for these products. IBM will market these products under the names IBM
RAMAC Virtual Storage Array, IBM RAMAC Scalable Storage Array and IBM RAMAC
Electronic Storage Array. The agreement is non-exclusive; however, the Company
does not currently anticipate that it will continue to directly, or through
other channels market these products. The Company will continue to accept
orders for these products from customers and distributors through June 30,
1996. The agreement does not cover any of the Company's other product lines.
The agreement includes certain purchase commitments by IBM. The
volume commitments are subject to reduction based upon the Company's failure to
achieve agreed upon quality, availability, supply, delivery and technical
milestones, and, under certain circumstances, may be eliminated. The agreement
also places various product performance, pricing and delivery conditions on the
Company, and includes transition arrangements.
The agreement includes termination provisions. The Company may
terminate the agreement if IBM fails to meet its minimum volume commitments and
would be entitled to receive certain amounts from IBM. IBM may elect to
terminate the agreement for convenience or for cause, or upon certain instances
of change in control or the occurrence of certain other conditions. Upon a
termination for cause, the Company may be required to pay certain amounts to
IBM, including damages, and royalties in order to use certain IBM technology
associated with these products.
It is expected that substantially all of the Company's products sold
by IBM under the agreement will be serviced by IBM. The Company will continue
to service its installed products sold outside of this agreement.
During the term of the agreement, IBM has agreed to finance certain
research and development activities associated with the future development of,
and specific enhancements relative to these online products. Technology
developed pursuant to the agreement will be owned by IBM, subject to licensing
rights by the Company. IBM disk drives will be integrated into these products
on a consignment basis. In conjunction with entering into the agreement, the
parties entered into various licensing and
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product development agreements concerning existing products covered by the
agreement and new products and enhancements developed in the future.
Future revenue from the products covered by the agreement is
dependent on IBM's continued support for these products and its marketing and
distribution activities, and the Company's ability to manufacture products at
projected costs and timely develop new mainframe online products and
enhancements. Delays in developing and delivering products to IBM may have a
material adverse effect on the Company's business.
ITEM 7. EXHIBITS
The following financial statements, pro forma financial information and
exhibits are filed as part of this report:
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Not applicable
(B) PRO FORMA FINANCIAL INFORMATION.
Not applicable
(C) EXHIBITS.
None.
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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 hereunto duly authorized.
Storage Technology Corporation
By: /s/ DAVID E. LACEY
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David E. Lacey
Executive Vice President and
Chief Financial Officer
Date: June 12, 1996
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