-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BKfQh7m9ZOhLxcUc0SolVa4ioU8w4hiJXbQJk+jIfTbsE8ZH7ev0Zq8o/AMf183+ Wsd5WSfzQkmrZfUe4p3QXQ== 0000950149-97-001626.txt : 19970826 0000950149-97-001626.hdr.sgml : 19970826 ACCESSION NUMBER: 0000950149-97-001626 CONFORMED SUBMISSION TYPE: SC 14D9/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19970825 SROS: AMEX SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AMDAHL CORP CENTRAL INDEX KEY: 0000004427 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 941728548 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: SC 14D9/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-13308 FILM NUMBER: 97668744 BUSINESS ADDRESS: STREET 1: 1250 E ARQUES AVE CITY: SUNNYVALE STATE: CA ZIP: 94088 BUSINESS PHONE: 4087466000 MAIL ADDRESS: STREET 1: 1250 E ARQUES AVE CITY: SUNNYVALE STATE: CA ZIP: 94088 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AMDAHL CORP CENTRAL INDEX KEY: 0000004427 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 941728548 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: SC 14D9/A BUSINESS ADDRESS: STREET 1: 1250 E ARQUES AVE CITY: SUNNYVALE STATE: CA ZIP: 94088 BUSINESS PHONE: 4087466000 MAIL ADDRESS: STREET 1: 1250 E ARQUES AVE CITY: SUNNYVALE STATE: CA ZIP: 94088 SC 14D9/A 1 AMENDMENT NO. 2 TO SCHEDULE 14D-9 1 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- AMENDMENT NO. 2 TO SCHEDULE 14D-9 SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934 --------------- AMDAHL CORPORATION (NAME OF SUBJECT COMPANY) AMDAHL CORPORATION (NAME OF PERSON(S) FILING STATEMENT) --------------- COMMON STOCK, PAR VALUE $.05 PER SHARE (TITLE OF CLASS OF SECURITIES) --------------- 023905 10 2 ((CUSIP) NUMBER OF CLASS OF SECURITIES) --------------- JOHN C. LEWIS CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER AMDAHL CORPORATION 1250 EAST ARQUES AVENUE SUNNYVALE, CALIFORNIA 94088-3470 (408) 746-6000 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT) --------------- Copies to: JOHN W. LARSON, ESQ. RONALD B. MOSKOVITZ, ESQ. MICHAEL S. DORF, ESQ. BROBECK, PHLEGER & HARRISON LLP SPEAR STREET TOWER, ONE MARKET SAN FRANCISCO, CALIFORNIA 94105-1000 (415) 442-0900 - -------------------------------------------------------------------------------- 2 INTRODUCTION Amdahl Corporation, a Delaware corporation (the "Company"), hereby amends and supplements its Solicitation/Recommendation Statement on Schedule 14D-9 dated August 5, 1997, as amended by Amendment No. 1 to Schedule 14D-9 dated August 14, 1997 (as amended, the "Schedule 14D-9"), relating to the tender offer described in the Tender Offer Statement on Schedule 14D-1 dated August 5, 1997 (as amended or supplemented from time to time, the "Schedule 14D-1"), which has been filed by Fujitsu International, Inc., a Delaware corporation (the "Purchaser"), which is a wholly owned subsidiary of Fujitsu Limited, a Japanese corporation (the "Parent"), and the Parent with the Securities and Exchange Commission (the "SEC"), and in a Rule 13e-3 Transaction Statement on Schedule 13E-3 dated August 5, 1997 (as amended or supplemented from time to time, the "Schedule 13E-3"), which has been filed by the Parent, the Purchaser and the Company with the SEC, relating to an offer by the Purchaser to purchase all the issued and outstanding shares of the Company's common stock, par value $.05 per share (the "Shares"), at a price of $12.40 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Purchaser's Offer to Purchase dated August 5, 1997 as supplemented by the supplement thereto, dated August 22, 1997 (the "Supplement"), and the related Letter of Transmittal. All capitalized terms shall have the meanings assigned to them in the Schedule 14D-9, as amended to date, unless otherwise indicated herein. ITEM 2. TENDER OFFER OF THE BIDDER The first sentence of the third paragraph on page 1 of the Schedule 14D-9 under the caption "Item 2. Tender Offer of the Bidder," is hereby amended and supplemented by reference to the paragraph set forth above under "Introduction." The second sentence of the fourth paragraph on page 1 of the Schedule 14D-9 under the caption "Item 2. Tender Offer of the Bidder," is hereby amended and restated to read as follows: In the Merger, each Share outstanding immediately prior to the effective time of the Merger (except for Shares held in the treasury of the Company or by any subsidiary of the Company, Shares registered in the name of the Parent or the Purchaser and Shares held by stockholders who shall have properly demanded and perfected appraisal rights in accordance with Section 262 of the General Corporation Law of the State of Delaware (the "DGCL")) will, by virtue of the Merger and without any action by the holder thereof, be converted into the right to receive $12.40 per Share (or any higher price paid per Share in the Offer), net to the seller in cash, without interest thereon (the "Merger Consideration"), upon the surrender of the certificate formerly representing such Share. ITEM 4. THE SOLICITATION OF RECOMMENDATION BACKGROUND OF THE OFFER AND MERGER; PAST CONTACTS, TRANSACTIONS AND NEGOTIATIONS WITH THE PARENT AND THE PURCHASER The last sentence of the sixth full paragraph on page 9 of the Schedule 14D-9 under the caption "Item 4. The Solicitation or Recommendation - Background of the Transaction, Past Contacts, Transactions and Negotiations with the Parent and the Purchaser - Relationship Between the Company and the Parent and its Subsidiaries" is hereby amended and restated to read as follows: Currently the Parent holds 51,811,664 Shares, representing 42.10% of the outstanding Shares (based on the number of Shares outstanding on August 20, 1997). The third full paragraph on page 15 of the Schedule 14D-9 under the caption "Item 4. The Solicitation or Recommendation - Background of the Transaction; Past Contacts, Transactions and Negotiations with the Parent and the Purchaser - Background and Negotiations relating to the Offer and the Merger" is hereby amended and restated to read as follows: At a meeting of the Disinterested Board held on July 15, 1997, Morgan Stanley reported their preliminary estimates of valuation based on the analysis that Morgan Stanley was asked on July 8, 1997 to perform. These estimates were based on, among other things financial projections prepared by the Company on July 3, 1997 for use in connection with this transaction (the "July 3 Projections") and a risk analysis prepared by the Company and Morgan Stanley designed to quantify various risks associated with achieving the July 3 Projections. Morgan Stanley at that time noted that it was unlikely that a spin-off of either the products business or the software and services business, could be effected on a tax-free basis, nor could any such spin-off be effected without the support of the Parent. In addition, Morgan Stanley noted that the value of the products business depended on assumptions concerning new or additional financial responsibilities and contractual agreements that might be undertaken by the Parent and that the value of the software and services business was adversely impacted by its recent unprofitability. The last paragraph on page 16 of the Schedule 14D-9 under the caption "Item 4. The Solicitation or Recommendation - Background of the Transaction; Past Contacts, Transactions and Negotiations with the Parent and the Purchaser - Background and Negotiations relating to the Offer and the Merger" is hereby amended and restated to read as follows: At a telephonic meeting of the Disinterested Board held at 6 a.m. (California time) on July 30, 1997, Morgan Stanley reviewed in detail its financial analysis of the proposed Offer and Merger. As described in the section entitled "Opinion of Financial Advisor," Morgan Stanley's financial analysis of the proposed Offer and Merger was based, in part, on various financial and operating scenarious prepared by the Company's management and its advisors. These scenarious included the July 3 Projections, the risk analysis described above prepared by the Company and Morgan Stanley, and a sensitivity analysis prepared by Morgan Stanley based, in part, on the July 3 Projections and using estimates of projected industry performance. The sensitivity analysis projected the least favorable financial performance for the Company. See "Opinion of Financial Advisor." At the conclusion of its presentation, Morgan Stanley delivered to the Disinterested Board its oral opinion (which was subsequently confirmed in writing) to the effect that the proposed consideration to be received by the Company's stockholders (other than the Parent and its affiliates) in the Offer and the Merger is fair from a financial point of view to the stockholders (other than the Parent and its affiliates). Morgan Stanley's opinion regarding fairness from a financial point of view rested in part on "implied valuation ranges," which reflected Morgan Stanley's judgment as applied to various valuation methodologies. Overall, these valuations produced ranges from $7.00 to $13.00 per Share. In comparing the Company to other companies, Morgan Stanley used multiples from certain publicly traded computer hardware companies, as described in the section headed "Opinion of Financial Advisor." The Disinterested Board also reviewed the draft of the Merger Agreement that had been distributed to them by facsimile. The Disinterested Board heard a legal presentation by a representative of Brobeck with respect to its members' fiduciary duties and the terms of the proposed Offer and Merger. The Disinterested Board discussed the terms of the Merger Agreement and requested certain changes, which were subsequently agreed to by the Parent. Based on such discussions, presentations and opinion, the Disinterested Board unanimously (i) approved the Offer, the Merger and the Merger Agreement, in substantially the form presented to the Disinterested Board, and the transactions contemplated by the Merger Agreement, (ii) determined that the terms of the Offer and the Merger are fair to and in the best interests of the Company and its stockholders (other than the Parent and its affiliates) and (iii) recommended that the Company's stockholders accept the Offer and tender their Shares pursuant to the Offer and approve and adopt the Merger Agreement and the transactions contemplated thereby. The discussion on page 17 of the Schedule 14D-9 under the caption "Item 4. The Solicitation or Recommendation - Certain Litigation" is hereby amended and supplemented as follows: By order dated August 8, 1997, the Delaware Court of Chancery granted a motion for expedited discovery by the plaintiffs in several of the Delaware actions and set a hearing for a motion for a preliminary injunction in several of the Delaware actions on August 28, 1997, at 11:00 a.m. On August 11, 1997, the California Superior Court in the Lacoff and Silverman actions entered Orders holding proceedings in abeyance pending a decision by the Delaware Court of Chancery on plaintiffs' motion for a preliminary injunction in several of the Delaware actions. Following the filing of such actions, counsel for the plaintiffs and counsel for the defendants in such actions engaged in expedited discovery for the purposes of preparing for a hearing on plaintiffs' request for preliminary injunctive relief. During this discovery period, counsel for the plaintiffs and counsel for the defendants engaged in extensive discussions regarding the possibility of settling such actions. On August 20, 1997, counsel for the plaintiffs in certain of such actions entered into a Memorandum of Understanding ("MOU") with counsel for the defendants providing for a proposed settlement of such actions. The MOU provides for, among other things, (i) the filing of a consolidated amended complaint in Delaware and the dismissal of the actions in California, (ii) the creation of a settlement class composed of certain owners of shares, (iii) the increase in the Offer Price to $12.40 per Share from $12.00 per Share, (iv) certain disclosure to be disseminated to stockholders of the Company (such disclosure is included in this Supplement), (v) the certification of the consolidated actions, for settlement purposes only, as a class action, and such action to be dismissed with prejudice, (vi) a release in fact of the defendants and others, (vii) defendants' agreement not to oppose an application by plaintiffs' counsel for an award of fees not exceeding $7 million and $250,000 in expenses and (viii) the option of the Parent and the Purchaser to withdraw from the settlement if the holders of more than 20% of the common shares of the Company owned at the time of the Merger by persons other than the defendants demand appraisal rights. The MOU and the proposed settlement are conditioned on, among other things, final approval by the Delaware Chancery Court. The foregoing description of the MOU is qualified in its entirety by reference to the text of the MOU, which has been filed as an exhibit to this Schedule 14D-9. 3 ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The first sentence of the third full paragraph on page 23 of the Schedule 14D-9 under the immediately foregoing caption is hereby amended and restated to read as follows: Pursuant to a letter agreement dated July 1, 1997, the Company has agreed to pay Morgan Stanley a transaction fee, payable upon consummation of the Merger, of approximately $4.1 million, which is based on the consideration to be received by the holders of Shares other than the Parent and the Purchaser. ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED. Antitrust. The third full paragraph on page 24 of the Schedule 14D-9 under the immediately foregoing caption is hereby amended and supplemented by adding the following sentence: On August 11, 1997, the U.S. Department of Justice and the Federal Trade Commission granted the Parent early termination of the waiting period under the HSR Act. Competition Act and Investment Canada Act. The last paragraph on page 25 which is carried over to page 26 of the Schedule 14D-9 under the immediately foregoing caption is hereby amended and supplemented by adding the following sentence: On August 14, 1997, the Canadian Director issued an ARC to the Parent. European Union Regulation. The first sentence of the fifth full paragraph on page 26 of the Schedule 14D-9 under the immediately foregoing caption is hereby amended and restated to read as follows: The Parent filed a notification with the European Commission in accordance with the Merger Regulation on August 5, 1997. ITEM 9. MATERIAL TO BE FILED AS EXHIBITS. Item 9 is hereby amended and supplemented by the addition of the following: Exhibit 16 Supplement, dated August 22, 1997, to Offer to Purchase, dated August 5, 1997. Exhibit 17 Text of Joint Press Release, dated August 20, 1997, issued by the Parent and the Company. Exhibit 18 Text of Joint Press Release, dated August 22, 1997, issued by the Parent and the Company. Exhibit 19 Memorandum of Understanding, dated August 20, 1997. The Information Statement attached as Annex A to the Schedule 14D-9 is hereby amended and supplemented as follows: 4 BENEFICIAL OWNERSHIP OF SHARES The first paragraph on page A-6 of Annex A attached to the Schedule 14D-9 under the caption "Beneficial Ownership of Shares" is hereby amended and restated to read as follows: The beneficial ownership for each person or entity known by the Company to beneficially own 5% or more of the outstanding shares of Common Stock as of July 30, 1997 is shown below: The second paragraph and the table appearing immediately thereafter on page A-6 of Annex A attached to the Schedule 14D-9 under the caption "Beneficial Ownership of Shares" are hereby amended and restated to read as follows: The following table lists the beneficial ownership of Common Stock as of August 20, 1997 by each director, the chief executive officer, the four other most highly compensated executive officers, and all directors and executive officers as a group:
SHARES BENEFICIALLY APPROXIMATE NAME OWNED(1) PERCENT OWNED(2) - ------------------------------------------------------------- ------------------- ---------------- John C. Lewis................................................ 643,490 * Michael R. Hallman........................................... 15,000 * E. F. Heizer, Jr............................................. 37,000 * Burton G. Malkiel, Ph.D...................................... 31,052** * George R. Packard, Ph.D...................................... 29,000 * Walter B. Reinhold........................................... 107,605 * J. Sidney Webb............................................... 33,000 * William F. Ferone............................................ 135,450 * Michael J. Poehner........................................... 36,343*** * Bruce J. Ryan................................................ 102,551 * David B. Wright.............................................. 154,012 * All directors and executive officers as a group (20 persons)................................................... 2,003,914 1.6%
- --------------- * Less than 1%. ** Includes 1,000 Shares held by the Jonathan P. Malkiel Trust, of which Dr. Malkiel is a trustee with shared voting, but sole investment, power. *** Includes 900 Shares (450 each) held by Mr. Poehner as custodian for his two children. Mr. Poehner has sole voting and investment power over these shares. (1) The Company has advised the Parent and the Purchaser that it believes that all beneficial owners named in the table have sole voting and investment power with respect to the Shares they beneficially own. The figures include Shares that could be purchased by exercise of options within 60 days of July 30, 1997 (including options which have exercise prices above $12.40) as held by: Mr. Lewis, 369,600 Shares; Mr. Hallman, 15,000 Shares; Mr. Heizer, 29,000 Shares; Dr. Malkiel, 29,000 Shares; Dr. Packard, 28,000 Shares; Mr. Reinhold, 29,000 Shares; Mr. Webb, 29,000 Shares; Mr. Ferone, 113,800 Shares; Mr. Poehner, 23,400 Shares; Mr. Ryan, 36,250 Shares; Mr. Wright, 82,150 Shares; and all directors and executive officers as a group, 1,309,900 Shares. (2) Percent of the 123,067,004 Shares outstanding as of August 20, 1997, counting as outstanding for each named person all Shares issuable to such person on exercise of Options that are included in the first column. 5 INTERESTS OF CERTAIN PERSONS IN THE OFFER AND THIS MERGER The last sentence of the third full paragraph on page A-7 of Annex A attached to the Schedule 14D-9 under the caption "Interests of Certain Persons in the Offer and this Merger" is hereby amended and restated to read as follows: Such former directors included Mr. Keizo Fukagawa, who currently holds options to purchase 15,000 Shares, all of which are currently vested, of which 5,000 are exercisable for an exercise price over $12.40 per Share, while 5,000 are exercisable for $12.1875 per Share and 5,000 are exercisable for $7.125 per Share; and Mr. Kazuto Kojima, who currently holds (a) options to purchase 5,000 Shares at an exercise price of $5.3125 per Share, exercisable for a period of three months commencing on June 29, 1997, and (b) options to purchase 2,500 Shares at an exercise price of $12.1875 per Share and options to purchase 5,000 Shares at exercise prices above $12.40 per Share, exercisable for a period of six months commencing on June 29, 1997. The first full paragraph on page A-8 of Annex A to the Schedule 14D-9 under the caption "Interests of Board Members with Respect to Compensation and Shares" is hereby amended and restated to read as follows: Of these, options to purchase 70,000 Shares are exercisable at a price which is above the Offer Price and will, therefore, not give rise to the right to receive such excess. The fourth full paragraph on page A-8 of Annex A to the Schedule 14D-9 under the caption "Interests of Executive Officers of the Company with Respect to Shares" and the table appearing immediately thereafter on page A-9 are hereby amended and restated to read as follows: To the knowledge of the Company, as of August 20, 1997, the current directors and officers of the Company, as a group, beneficially owned, directly or indirectly, or exercise control or direction over 697,014 6 Shares, not including unexercised options, representing approximately 0.6% of the outstanding Shares. The directors and executive officers of the Company will be entitled to receive, as contemplated by the Merger Agreement, cash payments in the manner set forth in the table below (see Item 3 of the Schedule 14D-9 to which this Information Statement is attached): Shares and Option Amounts with Respect to the Company's Directors and Executive Officers
VALUE OF OPTIONS RESTRICTED CONVERTED TO CASH STOCK AND AT TIME OF OFFER AND OPTIONS TO BE DOLLAR MERGER PAID IN CASH OWNED AMOUNT AT ----------------------- AT A LATER TOTAL CASH NAME SHARES* OFFER PRICE SHARES DOLLARS DATE CONSIDERATION - -------------------------- ---------- ------------- ------- ------------- ------------- ------------- John C. Lewis............. 164,115 $2,035,026.00 258,000 $1,514,137.50 $1,561,210.00 $5,110,373.50 David L. Anderson......... 20,943 259,693.20 122,250 797,228.12 248,865.63 1,305,786.95 Michael R. Carabetta...... 1,116 13,838.40 16,900 48,253.75 252,633.75 314,725.90 William F. Ferone......... 12,387 153,598.80 133,000 992,543.74 239,726.83 1,385,869.37 William Flanagan.......... 8,551 106,032.40 78,150 517,269.37 242,975.63 866,277.40 Charles E. Fonner......... 7,625 94,550.00 46,650 344,263.12 133,653.13 572,466.25 Gregory R. Grodhaus....... 0 0.00 0 0.00 311,578.13 311,578.13 Orval J. Nutt............. 1,144 14,185.60 116,500 740,256.25 108,537.50 862,979.35 Michael J. Poehner........ 4,543** 56,333.20 31,400 197,872.50 206,125.00 460,330.70 Anthony M. Pozos.......... 53,094 658,365.60 184,450 1,143,670.62 236,465.63 2,038,501.85 William R. Riley.......... 4,384 54,361.60 20,100 137,633.74 204,187.50 396,182.84 Bruce J. Ryan............. 16,751 207,712.40 36,250 208,015.62 929,916.88 1,345,644.90 Ernest B. Thompson........ 229 2,839.60 55,300 413,801.25 68,558.75 485,199.60 David B. Wright........... 26,312 326,268.80 104,550 735,616.87 774,116.88 1,836,002.55 Michael R. Hallman........ 0 0.00 10,000 19,468.75 0.00 19,468.75 E.F. Heizer, Jr........... 8,000 99,200.00 16,000 53,431.25 0.00 152,631.25 Burton G. Malkiel, Ph.D.................... 1,052*** 13,044.80 16,000 53,431.25 0.00 66,476.05 George R. Packard, Ph.D.................... 1,000 12,400.00 15,000 45,843.75 0.00 58,243.75 Walter B. Reinhold........ 78,605 974,702.00 16,000 53,431.25 0.00 1,028,133.25 J. Sidney Webb............ 4,000 49,600.00 16,000 53,431.25 0.00 103,031.25
This table does not include options with an exercise price greater than $12.40. - --------------- * Does not include Restricted Stock. ** Does not include 900 shares held by Mr. Poehner as custodian for his two children. Mr. Poehner has sole voting and investment power over these shares. *** Does not include 1,000 shares held by the Jonathan P. Malkiel Trust of which Dr. Malkiel is a trustee with shared voting, but sole investment power. 7 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 22, 1997 AMDAHL CORPORATION By: /s/ John C. Lewis ________________________________ John C. Lewis Chairman of the Board, President and Chief Executive Officer 8 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - -------------- ----------- 1* Merger Agreement dated as of July 30, 1997 among the Parent, the Purchaser and the Company 2* Opinion of Morgan Stanley & Co. Incorporated, dated July 30, 1997 (Attached to Schedule 14D-9 mailed to stockholders as Annex B) 3* Joint Press Release of the Company and the Parent, issued July 30, 1997 4* Letter dated July 30, 1997 from John C. Lewis to the stockholders of the Company (Included with Schedule 14D-9 mailed to stockholders) 5* Article Eleventh of the Certificate of Incorporation of the Company 6* Article IX of the By-Laws of the Company 7* Amdahl/Fujitsu 1982 Agreement, dated March 4, 1982, between the Parent and the Company 8* Letter Agreement, dated April 3, 1984, between the Parent and the Company 9* Joint Development Agreement between the Company and the Parent dated December 8, 1993 (Portions of this exhibit are deleted pursuant to a request for confidential treatment) (incorporated by reference to Exhibit 10(aa) to the Company's Form 10-K for the fiscal year ended December 31, 1993) 10* Loan Agreement between the Company and the Parent dated January 29, 1994 (incorporated by reference to Exhibit 10(c) to the Company's Form 10-Q for the fiscal period ended April 1, 1994) 11* First Amendment to Loan Agreement between the Company and the Parent dated January 27, 1994 (incorporated by reference to Exhibit 10 to the Company's Form 10-Q for the fiscal period ended March 28, 1997) 12* Standstill Agreement, dated July 9 1997, between the Parent and the Company 13* Confidentiality Agreement, dated June 30, 1997, between the Parent and the Company 14* Joint Press Release of the Company and the Parent, issued August 5, 1997 15* Press Release, dated August 14, 1997, issued by the Parent 16 Supplement, dated August 22, 1997, to the Offer to Purchase, dated August 5, 1997 17 Text of Joint Press Release, dated August 20, 1997 issued by the Parent and the Company 18 Text of Joint Press Release, dated August 22, 1997 issued by the Parent and the Company 19 Memorandum of Understanding, dated August 20, 1997
* Previously filed. EX-16 2 SUPPLEMENT TO OFFER TO PURCHASE 1 EXHIBIT 16 SUPPLEMENT TO THE OFFER TO PURCHASE DATED AUGUST 5, 1997 FUJITSU INTERNATIONAL, INC. A WHOLLY OWNED SUBSIDIARY OF FUJITSU LIMITED HAS INCREASED THE PRICE OF ITS OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF AMDAHL CORPORATION TO $12.40 NET PER SHARE THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 12, 1997, UNLESS THE OFFER IS EXTENDED. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES THAT, WHEN ADDED TO THOSE SHARES HELD BY FUJITSU LIMITED (THE "PARENT") AS OF THE EXPIRATION OF THE OFFER, REPRESENTS AT LEAST 51% OF THE OUTSTANDING SHARES, (II) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE EXON-FLORIO ACT, AND (III) RECEIPT OF ANY REQUISITE APPROVALS OF THE EUROPEAN COMMISSION AND THE BANK OF JAPAN. THE OFFER ALSO IS SUBJECT TO THE OTHER TERMS AND CONDITIONS DESCRIBED IN THE OFFER TO PURCHASE AND THIS SUPPLEMENT. SEE SECTIONS 10 AND 11 OF THE OFFER TO PURCHASE AND THIS SUPPLEMENT. THE BOARD OF DIRECTORS OF AMDAHL CORPORATION (THE "COMPANY"), ACTING THROUGH THE MEMBERS OF THE BOARD WHO ARE INDEPENDENT OF THE PARENT AND FUJITSU INTERNATIONAL, INC. (THE "PURCHASER") AND WHO CONSTITUTE A MAJORITY OF THE DIRECTORS IN OFFICE, HAS UNANIMOUSLY APPROVED THE OFFER, AS AMENDED, THE MERGER AND THE MERGER AGREEMENT DESCRIBED IN THE OFFER TO PURCHASE AND HEREIN AND UNANIMOUSLY DETERMINED THAT THE OFFER, AS AMENDED, THE MERGER AND THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND THE COMPANY'S STOCKHOLDERS (OTHER THAN THE PARENT AND ITS AFFILIATES) AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES TO THE PURCHASER. ------------------------ IMPORTANT Any stockholder desiring to tender all or any portion of such stockholder's shares of common stock, par value $.05 per share (the "Shares") of the Company should either (i) complete and sign the Letter of Transmittal which accompanies the Offer to Purchase or this Supplement (or a facsimile thereof) in accordance with the instructions in such Letter of Transmittal, have such stockholder's signature thereon guaranteed if required by Instruction 1 to such Letter of Transmittal, and mail or deliver such Letter of Transmittal (or such facsimile) and any other required documents together with the certificates for such Shares to the Depositary, or tender such Shares pursuant to the procedure for book-entry transfer set forth in Section 3 of the Offer to Purchase, or (ii) request such stockholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such stockholder. A stockholder having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if such stockholder desires to tender such Shares. A stockholder who desires to tender Shares and whose certificates evidencing such Shares are not immediately available, or who cannot comply with the procedures for book-entry transfer described in the Offer to Purchase on a timely basis, may tender such Shares by following the procedures for guaranteed delivery set forth in Section 3 of the Offer to Purchase. Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth on the back cover of the Offer to Purchase or this Supplement. Additional copies of the Offer to Purchase, this Supplement, the revised (yellow) Letter of Transmittal, the revised (beige) Notice of Guaranteed Delivery and other related materials may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF THIS TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. ------------------------ The Dealer Manager for the Offer is: LEHMAN BROTHERS ------------------------ August 22, 1997 2 TABLE OF CONTENTS
PAGE ---- INTRODUCTION.......................................................................... 1 SPECIAL FACTORS....................................................................... 3 Background of the Offer and the Merger; Past Contacts, Transactions and Negotiations with the Company................................................................. 3 Opinion of Financial Advisor to the Disinterested Board............................. 4 Interests of Certain Persons in the Offer and the Merger............................ 4 Beneficial Ownership of Shares...................................................... 6 Financing the Offer and the Merger.................................................. 7 THE TENDER OFFER...................................................................... 7 Section 1. Terms of the Offer....................................................... 7 Section 3. Procedure for Tendering Shares........................................... 7 Section 5. Price Range of Shares; Dividends......................................... 8 Section 7. Certain Information Concerning the Company............................... 8 Section 10. Certain Conditions to the Offer......................................... 8 Section 11. Certain Legal Matters; Regulatory Approvals............................. 8 Section 12. Fees and Expenses....................................................... 10 Section 13. Miscellaneous........................................................... 10 EXHIBIT I Consolidated Financial Statements (unaudited) of the Company for the 6 months ended June 27, 1997
ii 3 To the Holders of Common Stock of AMDAHL CORPORATION: INTRODUCTION The following information amends and supplements the Offer to Purchase dated August 5, 1997 (the "Offer to Purchase") of Fujitsu International, Inc. (the "Purchaser"), a Delaware corporation and a wholly owned subsidiary of Fujitsu Limited, a corporation organized under the laws of Japan (the "Parent"). Pursuant to this Supplement, the Purchaser is now offering to purchase any and all outstanding shares of common stock, par value $.05 per share (the "Shares"), of Amdahl Corporation, a Delaware corporation (the "Company"), at a price of $12.40 per Share, net to the seller in cash (the "Offer Price"), without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, as amended and supplemented by this Supplement, and in the revised Letter of Transmittal (which together, as amended or supplemented from time to time, constitute the "Offer"). EXCEPT AS OTHERWISE SET FORTH IN THIS SUPPLEMENT, THE TERMS AND CONDITIONS PREVIOUSLY SET FORTH IN THE OFFER TO PURCHASE REMAIN APPLICABLE IN ALL RESPECTS TO THE OFFER, AND THIS SUPPLEMENT SHOULD BE READ IN CONJUNCTION WITH THE OFFER TO PURCHASE. UNLESS THE CONTEXT REQUIRES OTHERWISE, TERMS NOT DEFINED HEREIN HAVE THE MEANINGS ASCRIBED TO THEM IN THE OFFER TO PURCHASE. Procedures for tendering Shares are set forth in Section 3 of the Offer to Purchase and this Supplement. Tendering stockholders may use either the original (blue) Letter of Transmittal and the original (grey) Notice of Guaranteed Delivery previously circulated with the Offer to Purchase, or the revised (yellow) Letter of Transmittal and the revised (beige) Notice of Guaranteed Delivery circulated with this Supplement. While the original (blue) Letter of Transmittal refers only to the Offer to Purchase dated August 5, 1997, stockholders using such document to tender their Shares will nevertheless receive $12.40 net per Share for each Share validly tendered and not properly withdrawn and accepted for payment pursuant to the Offer, subject to the conditions of the Offer. References made herein to the Letter of Transmittal and the Notice of Guaranteed Delivery shall include references to both the original and revised versions of such documents as circulated with the Offer to Purchase and this Supplement, respectively. SHARES PREVIOUSLY VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN CONSTITUTE VALID TENDERS FOR PURPOSES OF THE OFFER. STOCKHOLDERS ARE NOT REQUIRED TO TAKE ANY FURTHER ACTION WITH RESPECT TO SUCH SHARES IN ORDER TO RECEIVE THE INCREASED OFFER PRICE OF $12.40 NET PER SHARE IF SHARES ARE ACCEPTED FOR PAYMENT AND PAID FOR BY THE PURCHASER PURSUANT TO THE OFFER, EXCEPT AS MAY BE REQUIRED BY THE GUARANTEED DELIVERY PROCEDURE IF SUCH PROCEDURE WAS UTILIZED. SEE SECTION 3 OF THIS SUPPLEMENT. SEE SECTION 4 OF THE OFFER TO PURCHASE FOR THE PROCEDURES FOR WITHDRAWING SHARES TENDERED PURSUANT TO THE OFFER. The discussion set forth in the Introduction of the Offer to Purchase is hereby amended and supplemented as follows: In the Merger, at the Effective Time, each issued and outstanding Share (except for shares held in the treasury of the Company or by any subsidiary thereof, Shares registered in the name of the Parent or the Purchaser, and Shares held by stockholders who shall have properly demanded and perfected appraisal rights in accordance with Section 262 of the DGCL) will automatically be canceled and converted into the right to receive $12.40 in cash (or any higher per Share price paid for Shares pursuant to the Offer), net to the holder, without interest. See "SPECIAL FACTORS -- The Merger Agreement." THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THE SATISFACTION OR WAIVER OF THE MINIMUM CONDITION, (II) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE EXON-FLORIO ACT, AND (III) RECEIPT 4 OF ANY REQUISITE APPROVALS OF THE EUROPEAN COMMISSION AND THE BANK OF JAPAN. THE OFFER ALSO IS SUBJECT TO THE OTHER TERMS AND CONDITIONS DESCRIBED IN THE OFFER TO PURCHASE. AS DESCRIBED IN SECTIONS 10 AND 11 OF THE OFFER TO PURCHASE, THE OFFER IS ALSO CONDITIONED UPON THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE HSR ACT. THIS CONDITION WAS SATISFIED ON AUGUST 11, 1997, WHEN THE U.S. DEPARTMENT OF JUSTICE AND THE FEDERAL TRADE COMMISSION GRANTED THE PARENT EARLY TERMINATION OF THE WAITING PERIOD UNDER THE HSR ACT. SEE SECTIONS 10 AND 11 OF THE OFFER TO PURCHASE AND THIS SUPPLEMENT. The Company has advised the Purchaser that, as of August 20, 1997, (i) the number of Shares issued and outstanding was 123,067,004, (ii) there were outstanding options (the "Options") to purchase an aggregate of 10,175,038 Shares held under the Company Option Plans and (iii) 5,433,019 Shares were available for issuance under the Company's Stock Purchase Plan. As of August 20, 1997, all of the executive officers and directors of the Company as a group owned 697,014 Shares and held Options to purchase 1,810,698 Shares (whether or not vested). The Company has advised the Purchaser that, to the best of the Company's knowledge, and subject to applicable securities laws, all of the directors constituting the Disinterested Board and all of the executive officers of the Company presently intend to tender pursuant to the Offer all Shares owned by such persons. See "SPECIAL FACTORS -- Interest of Certain Persons in the Offer and the Merger." Accordingly, based on issued and outstanding Shares, including those held by executive officers and directors of the Company (as described above), and on outstanding options to purchase Shares that will vest prior to the Expiration Date (assuming the Offer expires on September 12, 1997 and assuming the exercise of those options with exercise prices less than $12.40), in each case as of August 20, 1997, the Minimum Condition will be satisfied if, in addition to the Shares held by the executive officers and directors of the Company, approximately 11,691,422 Shares are validly tendered in the Offer and not withdrawn. THE OFFER TO PURCHASE, THIS SUPPLEMENT, AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 2 5 SPECIAL FACTORS BACKGROUND OF THE OFFER AND MERGER; PAST CONTACTS, TRANSACTIONS AND NEGOTIATIONS WITH THE COMPANY The last sentence of the last paragraph on page 3 of the Offer to Purchase under the caption "SPECIAL FACTORS -- Background of the Offer and the Merger, Past Contacts, Transactions and Negotiations with the Company -- Relationship Between the Company and the Parent and its Subsidiaries" is hereby amended and restated to read as follows: Currently the Parent holds 51,811,664 Shares, representing 42.10% of the outstanding Shares (based on the number of Shares outstanding on August 20, 1997, as advised by the Company). The fifth paragraph on page 9 of the Offer to Purchase under the caption "SPECIAL FACTORS -- Background of the Offer and the Merger; Past Contacts, Transactions and Negotiations with the Company -- Background and Negotiations relating to the Offer and the Merger" is hereby amended and restated to read as follows: At a meeting of the Disinterested Board held on July 15, 1997, Morgan Stanley reported their preliminary estimates of valuation based on the analysis that Morgan Stanley was asked on July 8, 1997 to perform. These estimates were based on, among other things, financial projections prepared by the Company on July 3, 1997 for use in connection with this transaction (the "July 3 Projections") and a risk analysis prepared by the Company and Morgan Stanley designed to quantify various risks associated with achieving the July 3 Projections. Morgan Stanley at that time noted that it was unlikely that a spin-off of either the products business or the software and services business, could be effected on a tax-free basis, nor could any such spin-off be effected without the support of the Parent. In addition, Morgan Stanley noted that the value of the products business depended on assumptions concerning new or additional financial responsibilities and contractual agreements that might be undertaken by the Parent and that the value of the software and services business was adversely impacted by its recent unprofitability. The second full paragraph on page 11 of the Offer to Purchase under the caption "SPECIAL FACTORS -- Background of the Offer and the Merger; Past Contacts, Transactions and Negotiations with the Company -- Background and Negotiations relating to the Offer and the Merger" is hereby amended and restated to read as follows: At a telephonic meeting of the Disinterested Board held at 6 a.m. (California time) on July 30, 1997, Morgan Stanley reviewed in detail its financial analysis of the proposed Offer and Merger. As described in the section entitled "Opinion of Financial Advisor to the Disinterested Board," Morgan Stanley's financial analysis of the proposed Offer and Merger was based, in part, on various financial and operating scenarios prepared by the Company's management and its advisors. These scenarios included the July 3 Projections, the risk analysis described above prepared by the Company and Morgan Stanley, and a sensitivity analysis prepared by Morgan Stanley based, in part, on the July 3 Projections and using estimates of projected industry performance. The sensitivity analysis projected the least favorable financial performance for the Company. See "Opinion of Financial Advisor to the Disinterested Board." At the conclusion of its presentation, Morgan Stanley delivered to the Disinterested Board its oral opinion (which was subsequently confirmed in writing) to the effect that the proposed consideration to be received by the Company's stockholders (other than the Parent and its affiliates) in the Offer and the Merger is fair from a financial point of view to the stockholders (other than the Parent and its affiliates). Morgan Stanley's opinion regarding fairness from a financial point of view rested in part on "implied valuation ranges," which reflected Morgan Stanley's judgment as applied to various valuation methodologies. See "Opinion of Financial Advisor to the Disinterested Board." Overall, these valuations generally produced ranges from $7.00 to $13.00. In comparing the Company to other companies, Morgan Stanley used multiples from certain publicly traded computer hardware companies, as described in the section headed "Opinion of Financial Advisor to the Disinterested Board." The Disinterested Board also reviewed the draft of the Merger Agreement that had been distributed to them by facsimile. The Disinterested Board heard a legal presentation by a representative of Brobeck with respect to its members' fiduciary duties and the terms of the proposed Offer and Merger. The Disinterested Board discussed the terms of the Merger Agreement and requested certain changes, which were subsequently agreed to by the Parent. 3 6 Based on such discussions, presentations and opinion, the Disinterested Board unanimously (i) approved the Offer, the Merger and the Merger Agreement, in substantially the form presented to the Disinterested Board, and the transactions contemplated by the Merger Agreement, (ii) determined that the terms of the Offer and the Merger are fair to and in the best interests of the Company and its stockholders (other than the Parent and its affiliates) and (iii) recommended that the Company's stockholders accept the Offer and tender their Shares pursuant to the Offer and approve and adopt the Merger Agreement and the transactions contemplated thereby. The sixth paragraph on page 11 of the Offer to Purchase under the caption "SPECIAL FACTORS -- Background of the Offer and the Merger; Past Contacts, Transactions and Negotiations with the Company" is hereby amended and restated to read as follows: Certain Litigation. Shortly after the July 30, 1997 public announcement that the Parent proposed to acquire those Shares of the Company that it did not already own, several putative class actions were filed in various courts challenging the fairness of the proposed transaction to the Company stockholders. After the filing of such actions, counsel for the plaintiffs and counsel for the defendants in such actions engaged in expedited discovery for the purposes of preparing for a hearing on plaintiffs' request for preliminary injunctive relief. During this discovery period, counsel for the plaintiffs and counsel for the defendants engaged in extensive discussions regarding the possibility of settling such actions. On August 20, 1997, the parties reached an agreement-in-principle concerning the proposed settlement of certain of such actions. Pursuant to such agreement-in-principle, the Purchaser has elected under the Merger Agreement to increase the Offer Price from $12.00 per Share to $12.40 per Share. See Section 11. OPINION OF FINANCIAL ADVISOR TO THE DISINTERESTED BOARD The first sentence of the first full paragraph on page 18 of the Offer to Purchase is hereby amended and restated to read as follows: Pursuant to a letter agreement dated July 1, 1997, the Company has agreed to pay Morgan Stanley a transaction fee, payable upon consummation of the Merger, of approximately $4.1 million, which is based on the consideration to be received by the holders of Shares other than the Parent and the Purchaser. INTERESTS OF CERTAIN PERSONS IN THE OFFER AND THE MERGER The last sentence of the fourth full paragraph on page 23 of the Offer to Purchase under the immediately foregoing caption is hereby amended and restated to read as follows: Such former directors included Mr. Keizo Fukagawa, who currently holds options to purchase 15,000 Shares, all of which are currently vested, of which 5,000 are exercisable for an exercise price over $12.40 per Share, while 5,000 are exercisable for $12.1875 per Share and 5,000 are exercisable for $7.125 per Share; and Mr. Kazuto Kojima, who currently holds (a) options to purchase 5,000 Shares at an exercise price of $5.3125 per Share, exercisable for a period of three months commencing on June 29, 1997, and (b) options to purchase 2,500 Shares at an exercise price of $12.1875 per Share and options to purchase 5,000 Shares at exercise prices above $12.40 per Share, exercisable for a period of six months commencing on June 29, 1997. The last two sentences of the carry-over paragraph at the top of page 24 of the Offer to Purchase under the subcaption "Interests of Board Members with Respect to Compensation and Shares" is hereby amended and restated to read as follows: Of these, options to purchase 70,000 Shares are exercisable at a price which is above the Offer Price and will, therefore, not give rise to the right to receive such excess. See "-- The Merger Agreement -- Effects on Securities; Stock Options and Stock Participation Plans." The first paragraph and the table appearing immediately thereafter on page 25 of the Offer to Purchase are hereby amended and restated to read as follows: To the knowledge of the Company, as of August 20, 1997, the current directors and officers of the Company, as a group, beneficially owned, directly or indirectly, or exercise control or direction over 697,014 4 7 Shares, not including unexercised options, representing approximately 0.6% of the outstanding Shares. The directors and executive officers of the Company will be entitled to receive, as contemplated by the Merger Agreement, cash payments in the manner set forth in the table below (see "-- The Merger Agreement -- Effects on Securities; Stock Options and Stock Participation Plan"): Shares and Option Amounts with Respect to the Company's Directors and Executive Officers
VALUE OF OPTIONS RESTRICTED CONVERTED TO CASH STOCK AND AT TIME OF OFFER AND OPTIONS TO BE DOLLAR MERGER PAID IN CASH OWNED AMOUNT AT ----------------------- AT A LATER TOTAL CASH NAME SHARES* OFFER PRICE SHARES DOLLARS DATE CONSIDERATION - -------------------------- ---------- ------------- ------- ------------- ------------- ------------- John C. Lewis............. 164,115 $2,035,026.00 258,000 $1,514,137.50 $1,561,210.00 $5,110,373.50 David L. Anderson......... 20,943 259,693.20 122,250 797,228.12 248,865.63 1,305,786.95 Michael R. Carabetta...... 1,116 13,838.40 16,900 48,253.75 252,633.75 314,725.90 William F. Ferone......... 12,387 153,598.80 133,000 992,543.74 239,726.83 1,385,869.37 William Flanagan.......... 8,551 106,032.40 78,150 517,269.37 242,975.63 866,277.40 Charles E. Fonner......... 7,625 94,550.00 46,650 344,263.12 133,653.13 572,466.25 Gregory R. Grodhaus....... 0 0.00 0 0.00 311,578.13 311,578.13 Orval J. Nutt............. 1,144 14,185.60 116,500 740,256.25 108,537.50 862,979.35 Michael J. Poehner........ 4,543** 56,333.20 31,400 197,872.50 206,125.00 460,330.70 Anthony M. Pozos.......... 53,094 658,365.60 184,450 1,143,670.62 236,465.63 2,038,501.85 William R. Riley.......... 4,384 54,361.60 20,100 137,633.74 204,187.50 396,182.84 Bruce J. Ryan............. 16,751 207,712.40 36,250 208,015.62 929,916.88 1,345,644.90 Ernest B. Thompson........ 229 2,839.60 55,300 413,801.25 68,558.75 485,199.60 David B. Wright........... 26,312 326,268.80 104,550 735,616.87 774,116.88 1,836,002.55 Michael R. Hallman........ 0 0.00 10,000 19,468.75 0.00 19,468.75 E.F. Heizer, Jr........... 8,000 99,200.00 16,000 53,431.25 0.00 152,631.25 Burton G. Malkiel, Ph.D.................... 1,052*** 13,044.80 16,000 53,431.25 0.00 66,476.05 George R. Packard, Ph.D.................... 1,000 12,400.00 15,000 45,843.75 0.00 58,243.75 Walter B. Reinhold........ 78,605 974,702.00 16,000 53,431.25 0.00 1,028,133.25 J. Sidney Webb............ 4,000 49,600.00 16,000 53,431.25 0.00 103,031.25
This table does not include options with an exercise price greater than $12.40. - --------------- * Does not include Restricted Stock. ** Does not include 900 shares held by Mr. Poehner as custodian for his two children. Mr. Poehner has sole voting and investment power over these shares. *** Does not include 1,000 shares held by the Jonathan P. Malkiel Trust of which Dr. Malkiel is a trustee with shared voting, but sole investment power. 5 8 BENEFICIAL OWNERSHIP OF SHARES The first paragraph and the table appearing immediately thereafter on page 27 of the Offer to Purchase under the immediately foregoing caption are hereby amended and restated to read as follows: The following table sets forth certain information, as of August 20, 1997, regarding the ownership of Shares by each person known by the Company to be the beneficial owner of more than 5% of the outstanding Shares, as well as each director of the Company, certain other officers of the Company and all executive officers and directors of the Company as a group:
SHARES BENEFICIALLY APPROXIMATE NAME OWNED(1) PERCENT OWNED(2) - ------------------------------------------------------------- ------------------- ---------------- John C. Lewis................................................ 643,490 * Michael R. Hallman........................................... 15,000 * E. F. Heizer, Jr............................................. 37,000 * Burton G. Malkiel, Ph.D...................................... 31,052** * George R. Packard, Ph.D...................................... 29,000 * Walter B. Reinhold........................................... 107,605 * J. Sidney Webb............................................... 33,000 * William F. Ferone............................................ 135,450 * Michael J. Poehner........................................... 36,343*** * Bruce J. Ryan................................................ 102,551 * David B. Wright.............................................. 154,012 * All directors and executive officers as a group (20 persons)................................................... 2,003,914 1.6% Fujitsu Limited.............................................. 51,811,664 42.1% The Prudential Insurance Company of America.................. 10,352,218 8.4% 1751 Broad Street Newark, New Jersey 07102-3777
- --------------- * Less than 1%. ** Includes 1,000 Shares held by the Jonathan P. Malkiel Trust, of which Dr. Malkiel is a trustee with shared voting, but sole investment, power. *** Includes 900 Shares (450 each) held by Mr. Poehner as custodian for his two children. Mr. Poehner has sole voting and investment power over these shares. (1) The Company has advised the Parent and the Purchaser that it believes that all beneficial owners named in the table have sole voting and investment power with respect to the Shares they beneficially own. The figures include Shares that could be purchased by exercise of options within 60 days of July 30, 1997 (including options which have exercise prices above $12.40) as held by: Mr. Lewis, 369,600 Shares; Mr. Hallman, 15,000 Shares; Mr. Heizer, 29,000 Shares; Dr. Malkiel, 29,000 Shares; Dr. Packard, 28,000 Shares; Mr. Reinhold, 29,000 Shares; Mr. Webb, 29,000 Shares; Mr. Ferone, 113,800 Shares; Mr. Poehner, 23,400 Shares; Mr. Ryan, 36,250 Shares; Mr. Wright, 82,150 Shares; and all directors and executive officers as a group, 1,309,900 Shares. (2) Percent of the 123,067,004 Shares outstanding as of August 20, 1997, counting as outstanding for each named person all Shares issuable to such person on exercise of Options that are included in the first column. 6 9 FINANCING THE OFFER AND THE MERGER The second full paragraph on page 33 of the Offer to Purchase under the immediately foregoing caption is hereby amended and restated to read as follows: The Purchaser estimates that the total amount of funds required to purchase all Shares validly tendered pursuant to the Offer, to consummate the Merger and to pay all related costs and expenses will be approximately $957 million. THE TENDER OFFER SECTION 1. TERMS OF THE OFFER. The second sentence of the first paragraph on page 38 of the Offer to Purchase under the immediately foregoing captions is hereby amended and restated to read as follows: The Expiration Date has been extended to 5:00 p.m., New York City Time, on Friday, September 12, 1997, and the term "Expiration Date" means such date and time unless and until the Purchaser, in its sole discretion or pursuant to the terms of the Merger Agreement, shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Purchaser, shall expire. The second paragraph on page 38 of the Offer to Purchase under the foregoing captions is hereby amended and supplemented by adding the following sentence: On August 11, 1997, the U.S. Department of Justice and the Federal Trade Commission granted the Parent early termination of the waiting period under the HSR Act. SECTION 3. PROCEDURE FOR TENDERING SHARES. The discussion set forth on pages 41 through 43 of the Offer to Purchase under the immediately foregoing caption is hereby amended and supplemented as follows: The revised (yellow) Letter of Transmittal, and the revised (beige) Notice of Guaranteed Delivery, distributed with this Supplement may be used to tender Shares. Tendering stockholders may also continue to use the (blue) Letter of Transmittal and the (gray) Notice of Guaranteed Delivery previously distributed with the Offer to Purchase to tender Shares in order to receive the increased price of $12.40 net per Share pursuant to the amended Offer. STOCKHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED SHARES PURSUANT TO THE OFFER AND NOT PROPERLY WITHDRAWN SUCH SHARES HAVE VALIDLY TENDERED SUCH SHARES FOR PURPOSES OF THE OFFER, AS AMENDED, AND NEED NOT TAKE ANY FURTHER ACTION IN ORDER TO RECEIVE THE INCREASED PRICE OF $12.40 NET PER SHARE PURSUANT TO THE AMENDED OFFER, IF SHARES ARE ACCEPTED FOR PAYMENT. 7 10 SECTION 5. PRICE RANGE OF SHARES; DIVIDENDS. The discussion set forth on page 44 of the Offer to Purchase under the immediately foregoing caption is hereby amended and supplemented as follows: The high and low last reported sales quotations per Share on the AMEX for the third quarter of fiscal 1997 (through August 21, 1997), as reported in published financial sources, were 12 1/4 and 8 13/16. On August 21, 1997, the last full trading day prior to the date of this Supplement, the last reported sales quotation of the Shares on the AMEX was $12 1/4 per Share. SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY. The discussion set forth on pages 45 through 50 of the Offer to Purchase under the immediately foregoing caption is hereby amended and supplemented as follows: Exhibit I to this Supplement sets forth the consolidated financial information (unaudited) relating to the Company and its subsidiaries for the 6 months ended June 27, 1997 which has been excerpted or derived from the financial statements contained in the Company's Quarterly Report on Form 10-Q for the quarter ended June 27, 1997 (the "2Q 1997 Form 10-Q"). More comprehensive financial information is included in the 2Q 1997 Form 10-Q and other documents as filed by the Company with the SEC. The financial information contained in Exhibit I to this Supplement is qualified in its entirety by reference to such 2Q 1997 Form 10-Q and such other documents, including the financial statements and related notes contained therein. The 2Q 1997 Form 10-Q and such other documents may be examined and copies may be obtained from the offices of the SEC in the manner set forth below. The carryover paragraph appearing at the bottom of page 47 and the top of page 48 of the Offer to Purchase under the foregoing caption is amended and supplemented as follows: Book value as of June 27, 1997 was $4.96 per Share. The ratio of earnings to fixed charges for the quarter ended June 27, 1997 is not relevant for the Company, given that the Company had negative earnings in such period. SECTION 10. CERTAIN CONDITIONS TO THE OFFER. The discussion set forth on pages 52 through 54 of the Offer to Purchase under the immediately foregoing caption is hereby amended and supplemented as follows: The condition to the Offer related to the HSR Act was satisfied on August 11, 1997, when the U.S. Department of Justice and the FTC granted the Parent early termination of the waiting period under the HSR Act. The condition to the Offer related to the Competition Act (Canada) was satisfied on August 14, 1997, when the Canadian Director issued an ARC to the Parent. SECTION 11. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS. Antitrust. The second full paragraph on page 55 of the Offer to Purchase under the immediately foregoing captions is hereby amended and supplemented by adding the following sentence: On August 11, 1997, the U.S. Department of Justice and the Federal Trade Commission granted the Parent early termination of the waiting period under the HSR Act. Competition Act and Investment Canada Act. The second full paragraph on page 57 of the Offer to Purchase under the immediately foregoing caption is hereby amended and supplemented by adding the following sentence: On August 14, 1997, the Canadian Director issued an ARC to the Parent. 8 11 European Union Regulation. The first sentence of the fifth full paragraph on page 57 of the Offer to Purchase under the immediately foregoing caption is hereby amended and restated to read as follows: The Parent filed a notification with the European Commission in accordance with the Merger Regulation on August 5, 1997. Litigation. The first and second paragraphs on page 59 of the Offer to Purchase under the immediately foregoing caption are hereby amended and restated to read as follows: Shortly after the July 30, 1997 public announcement that the Parent proposed to acquire those Shares of the Company that it did not already own, several putative class actions were filed in the Delaware Court of Chancery and in the California Superior Court for the County of Santa Clara challenging the fairness of the proposed transaction to Company stockholders. Cases filed in the Delaware Court of Chancery as of August 19, 1997 are: Lopez v. Amdahl Corp., et al. (Civ. Act. No. 15833NC), filed July 30, 1997; Kaltman v. Lewis, et al. (Civ. Act. No. 15834NC), filed July 30, 1997; Uzzo v. Lewis, et al. (Civ. Act. No. 15837), filed July 31, 1997; O'Shea v. Kojima, et al. (Civ. Act. No. 15838), filed July 31, 1997; Gachot & Gachot, Inc. v. Amdahl Corp., et al. (Civ. Act. No. 15839), filed July 31, 1997; Crandon Capital Partners v. Lewis, et al. (Civ. Act. No. 15840), filed July 31, 1997; Bodakian v. Amdahl Corp., et al. (Civ. Act. No. 15841), filed July 31, 1997; McCeady v. Amdahl Corp. (Civ. Act. No. 15845), filed July 31, 1997; Zicherman v. Lewis, et al. (Civ. Act. No. 15847NC), filed August 1, 1997; Halebian v. Lewis, et al. (Civ. Act. No. 15850NC), filed August 1, 1997; Cohen v. Amdahl Corp., et al. (Civ. Act. No. 15851NC), filed August 4, 1997, and Millet v. Amdahl Corp., et al. (Civ. Act. No. 15857), filed August 5, 1997. Cases filed in the California Superior Court for the County of Santa Clara as of August 1, 1997 are: Lacoff v. Amdahl Corp., et al. (Case No. CV767860), filed July 30, 1997; and Silverman v. Amdahl Corp., et al. (Case No. CV767896), filed August 1, 1997. In substance, the complaints allege that because of the Parent's ownership of approximately 42% of the Company, the relationship between the Parent and the Company and the alleged control of the Parent over the Company's officers and directors, the Parent dictated the terms of the transaction and that those terms do not reflect the fair value of the Company. The complaints also allege that the defendants -- the Parent, the Company and several individuals serving as officers or directors of one or more of those companies -- possess material non-public information regarding the fair value of the Company and breached their fiduciary and other duties to the public stockholders of the Company by failing to take adequate steps to determine the fair value of the Company or to condition the Offer on acceptance by holders of a majority of the Shares held by persons other than the Parent and its affiliates. The relief sought by the plaintiffs includes an injunction against the acquisition of Shares by the Parent; an injunction requiring that certain steps be taken to evaluate the value of the Company; a declaration that defendants have breached their fiduciary and other duties; an accounting for damages; compensatory and/or rescissionary damages; costs of suit; and attorneys' and experts' fees in unspecified amounts. By Order dated August 8, 1997, the Delaware Court of Chancery granted a motion for expedited discovery by the plaintiffs in several of the Delaware actions and set a hearing for a motion for a preliminary injunction in several of the Delaware actions on August 28, 1997, at 11:00 a.m. On August 11, 1997, the California Superior Court in the Lacoff and Silverman actions entered Orders holding proceedings in abeyance pending a decision by the Delaware Court of Chancery on plaintiffs' motion for a preliminary injunction in several of the Delaware actions. Following the filing of such actions, counsel for the plaintiffs and counsel for the defendants in such actions engaged in expedited discovery for the purposes of preparing for a hearing on plaintiffs' request for preliminary injunctive relief. During this discovery period, counsel for the plaintiffs and counsel for the defendants engaged in extensive discussions regarding the possibility of settling such actions. On August 20, 1997, counsel for the plaintiffs in certain of such actions entered into a Memorandum of Understanding ("MOU") with counsel for the defendants providing for a proposed settlement of such actions. 9 12 The MOU provides for, among other things, (i) the filing of a consolidated amended complaint in Delaware and the dismissal of the actions in California, (ii) the creation of a settlement class composed of certain owners of Shares, (iii) the increase in the Offer Price to $12.40 per Share from $12.00 per Share, (iv) certain disclosure to be disseminated to stockholders of the Company (such disclosure is included in this Supplement), (v) the certification of the consolidated actions, for settlement purposes only, as a class action, and such action to be dismissed with prejudice, (vi) a release of the defendants and others, (vii) defendants' agreement not to oppose an application by plaintiffs' counsel for an award of fees not exceeding $7 million and $250,000 in expenses, and (viii) the option of the Parent and the Purchaser to withdraw from the settlement if the holders of more than 20% of the Shares owned at the time of the Merger by persons other than the defendants demand appraisal rights. The MOU and the proposed settlement are conditioned on, among other things, final approval by the Delaware Chancery Court. The foregoing description of the MOU is qualified in its entirety by reference to the text of the MOU, which has been filed as an exhibit to the Schedule 14D-1. SECTION 12. FEES AND EXPENSES. The discussion set forth on pages 59 and 60 of the Offer to Purchase under the immediately foregoing caption is hereby amended and supplemented as follows: In addition to the expenses described above, pursuant to the MOU, the defendants in the actions described therein have agreed not to oppose an application by plaintiffs' counsel for an award of fees not exceeding $7 million and $250,000 in expenses to be paid by the Company, the Purchaser or the Parent. SECTION 13. MISCELLANEOUS. The discussion set forth on page 60 of the Offer to Purchase under the immediately foregoing caption is hereby amended and supplemented as follows: The Parent and the Purchaser have filed with the SEC amendments to the Schedule 14D-1, together with exhibits, pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-3 promulgated thereunder, furnishing certain additional information with respect to the Offer and may file further amendments thereto. The Parent, the Purchaser and the Company have filed with the SEC amendments to the Schedule 13E-3, together with exhibits, pursuant to Rule 13e-3 under the Exchange Act, furnishing certain additional information with respect to the Offer and may file further amendments thereto. In addition, the Company has filed with the SEC amendments to the Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange Act, together with exhibits and may file further amendments thereto. Such Schedule 14D-1, Schedule 13E-3 and Schedule 14D-9, including exhibits and any and all amendments thereto, may be inspected at, and copies may be obtained from, the same places and in the same manner as set forth in Section 7 of the Offer to Purchase (except that they will not be available at the regional offices of the SEC). NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF THE PARENT OR THE PURCHASER OTHER THAN AS CONTAINED IN THE OFFER TO PURCHASE, THIS SUPPLEMENT OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE PURCHASER OR THE PARENT. Except as modified by this Supplement and any amendments to the Schedule 14D-1, the terms and conditions set forth in the Offer to Purchase remain applicable in all respects to the Offer, and this Supplement should be read in conjunction with the Offer to Purchase and the revised (yellow) Letter of Transmittal. Fujitsu International, Inc. August 22, 1997 10 13 EXHIBIT I CONSOLIDATED FINANCIAL STATEMENTS FOR THE 6 MONTHS ENDED JUNE 27, 1997 (UNAUDITED) The following information has been excerpted or derived from the financial statements contained in the Company's Quarterly Report on Form 10-Q for the quarter ended June 27, 1997, filed with the SEC on August 11, 1997. I-1 14 AMDAHL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 27, 1997 AND DECEMBER 27, 1996 (DOLLARS IN THOUSANDS) (UNAUDITED) ASSETS
1997 1996 ---------- ---------- Current assets: Cash and cash equivalents......................................... $ 126,893 $ 134,646 Restricted cash................................................... -- 57,126 Short-term investments............................................ 184,002 210,671 Receivables, net of allowances.................................... 425,986 498,851 Inventories -- Purchased materials............................................ 17,610 30,766 Systems in process............................................. 28,130 26,407 Finished goods................................................. 42,969 71,582 Prepaid expenses and deferred tax benefit......................... 64,020 86,360 ---------- ---------- Total current assets...................................... 889,610 1,116,409 ---------- ---------- Long-term receivables and other assets.............................. 38,429 33,647 ---------- ---------- Property and equipment, at cost: Leased systems.................................................... 29,336 41,582 System spares..................................................... 345,465 368,209 Production and data processing equipment.......................... 327,743 318,527 Office furniture, equipment, and improvements..................... 144,788 140,050 Land and buildings................................................ 78,426 82,318 ---------- ---------- 925,758 950,686 Less -- Accumulated depreciation and amortization................. (683,959) (705,723) ---------- ---------- Property and equipment, net............................... 241,799 244,963 ---------- ---------- Excess of cost over net assets acquired, net of amortization........ 201,798 201,385 ---------- ---------- $1,371,636 $1,596,404 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable and short-term debt................................. $ 42,162 $ 45,053 Short-term debt -- stockholder (Fujitsu Limited).................. 80,000 80,000 Accounts payable.................................................. 112,111 141,697 Accounts payable -- stockholder (Fujitsu Limited)................. 24,911 68,625 Accrued liabilities............................................... 397,117 541,743 ---------- ---------- Total current liabilities................................. 656,301 877,118 ---------- ---------- Long-term liabilities............................................... 48,140 43,663 ---------- ---------- Deferred income taxes............................................... 57,812 62,375 ---------- ---------- Stockholders' equity: Common stock, $.05 par value Authorized -- 200,000,000 shares Outstanding -- 122,780,000 shares in 1997 and 121,753,000 shares in 1996.............................. 6,139 6,088 Additional paid-in capital........................................ 563,041 555,690 Retained earnings................................................. 35,395 44,313 Cumulative translation adjustments................................ 7,005 9,300 Unrealized holding losses on securities........................... (2,197) (2,143) ---------- ---------- Total stockholders' equity................................ 609,383 613,248 ---------- ---------- $1,371,636 $1,596,404 ========== ==========
The accompanying notes are an integral part of these financial statements. I-2 15 AMDAHL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER COMMON SHARE AMOUNTS) (UNAUDITED)
FOR THE THREE MONTHS ENDED ----------------------------------- JUNE 27, 1997 JUNE 28, 1996 --------------- --------------- REVENUES Equipment sales................................................ $ 129,636 $ 106,395 Service, software and other.................................... 308,840 276,459 -------- -------- 438,476 382,854 -------- -------- COST OF REVENUES Equipment sales................................................ 80,030 252,350 Service, software and other.................................... 251,611 207,398 -------- -------- 331,641 459,748 -------- -------- Gross margin................................................... 106,835 (76,894) -------- -------- OPERATING EXPENSES Engineering and development.................................... 24,121 32,198 Marketing, general and administrative.......................... 80,988 103,621 Purchased in-process engineering and development............... -- 20,700 -------- -------- 105,109 156,519 -------- -------- Income (loss) from operations.................................. 1,726 (233,413) -------- -------- INTEREST Income......................................................... 4,333 7,503 Expense........................................................ (1,972) (2,526) -------- -------- 2,361 4,977 -------- -------- Income (loss) before provision for income taxes................ 4,087 (228,436) PROVISION FOR INCOME TAXES....................................... 2,000 21,000 -------- -------- NET INCOME (LOSS)................................................ $ 2,087 $(249,436) ======== ======== PER COMMON SHARE AMOUNTS Net income (loss).............................................. $ .02 $ (2.07) ======== ======== Average outstanding shares..................................... 124,774 120,221 ======== ========
The accompanying notes are an integral part of these financial statements. I-3 16 AMDAHL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER COMMON SHARE AMOUNTS) (UNAUDITED)
FOR THE SIX MONTHS ENDED ------------------------------- JUNE 27, 1997 JUNE 28, 1996 ------------- ------------- REVENUES Equipment sales.................................................. $ 242,503 $ 200,859 Service, software and other...................................... 588,878 499,023 -------- --------- 831,381 699,882 -------- --------- COST OF REVENUES Equipment sales.................................................. 151,567 337,934 Service, software and other...................................... 471,217 366,260 -------- --------- 622,784 704,194 -------- --------- Gross margin..................................................... 208,597 (4,312) -------- --------- OPERATING EXPENSES Engineering and development...................................... 48,795 62,761 Marketing, general and administrative............................ 168,215 199,974 Purchased in-process engineering and development................. -- 20,700 -------- --------- 217,010 283,435 -------- --------- Loss from operations............................................. (8,413) (287,747) -------- --------- INTEREST Income........................................................... 9,322 15,899 Expense.......................................................... (4,827) (4,742) -------- --------- 4,495 11,157 -------- --------- Loss before provision for income taxes........................... (3,918) (276,590) PROVISION FOR INCOME TAXES......................................... 5,000 11,369 -------- --------- NET LOSS........................................................... $ (8,918) $(287,959) ======== ========= PER COMMON SHARE AMOUNTS: Net loss......................................................... $ (.07) $ (2.40) ======== ========= Average outstanding shares....................................... 122,353 119,894 ======== =========
The accompanying notes are an integral part of these financial statements. I-4 17 AMDAHL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
FOR THE SIX MONTHS ENDED ------------------------------- JUNE 27, 1997 JUNE 28, 1996 ------------- ------------- Cash and cash equivalents at beginning of period.................... $ 134,646 $ 192,980 -------- --------- Cash flows from operating activities: Net loss.......................................................... (8,918) (287,959) Adjustments to reconcile net loss to net cash provided by (used for) operating activities: Depreciation and amortization.................................. 46,506 49,154 Purchased in-process engineering and development............... -- 20,700 Write-down of processor inventories and lease systems to market........................................................ -- 130,000 Deferred income tax provision.................................. (4,563) 4,831 Loss (gain) on dispositions of assets.......................... (373) 318 Changes in assets and liabilities net of effects of business acquisitions: Decrease in receivables........................................... 68,243 28,446 Decrease in inventories........................................... 20,312 63,078 (Increase) decrease in prepaid expenses and deferred tax benefit........................................................ 20,302 (6,239) Increase in long-term receivables and other assets................ (4,614) (4,932) Decrease in accounts payable...................................... (71,725) (13,848) Decrease in accrued liabilities................................... (72,144) (8,214) Increase (decrease) in long-term liabilities...................... 7,303 (3,203) -------- --------- Net cash provided by (used for) operating activities................ 329 (27,868) -------- --------- Cash flows from investing activities: Purchases of available-for-sale short-term investments............ (64,386) (108,493) Proceeds from sales of available-for-sale short-term investments.................................................... 63,556 265,029 Proceeds from maturities of short-term investments................ 84,580 -- Payment of business acquisitions, net of cash acquired............ (3,327) (67,005) Payment of acquisition price payable to Trecom.................... (65,209) -- Capital expenditures: Leased systems.................................................... (2,584) (26,131) System spares..................................................... (10,848) (5,825) Other property and equipment...................................... (17,891) (22,739) Proceeds from property and equipment sales.......................... 8,537 2,701 -------- --------- Net cash provided by (used for) investing activities................ (7,572) 37,537 -------- --------- Cash flows from financing activities: Decrease in notes payable and short-term debt..................... (3,486) (3,994) Repayments of long-term borrowings................................ (2,480) (1,042) Sale of common stock and exercise of options...................... 7,402 6,160 -------- --------- Net cash provided by financing activities................. 1,436 1,124 -------- --------- Effect of exchange rate changes on cash............................. (1,946) (1,833) -------- --------- Net increase (decrease) in cash and cash equivalents...... (7,753) 8,960 -------- --------- Cash and cash equivalents at end of period.......................... $ 126,893 $ 201,940 ======== =========
The accompanying notes are an integral part of these financial statements. I-5 18 AMDAHL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The accompanying interim financial statements and related notes should be read in conjunction with the financial statements and related notes included in the Company's 1996 Annual Report to Stockholders. RELATIONSHIP WITH FUJITSU LIMITED During the second quarter of 1997 the Company recognized equipment sales to Fujitsu Limited (Fujitsu) under distributorship and other arrangements which contributed $1,700,000 to equipment sales compared to $1,830,000 in the second quarter of 1996 ($6,854,000 and $9,316,000 for the first six months of 1997 and 1996, respectively). Fujitsu reimburses Amdahl for certain specific engineering development activities performed by Amdahl from time to time related to products which are being jointly developed by Amdahl and Fujitsu. In connection with these development efforts, Amdahl recorded $6,832,000 as an offset to engineering and development expenses in the second quarter of 1997, compared to $6,200,000 in the second quarter of 1996 ($15,735,000 and $12,400,000 for the first six months of 1997 and 1996, respectively). In March 1997 Amdahl granted Fujitsu a license for certain storage system software for use in conjunction with Fujitsu's proprietary operating system for $4,700,000. This amount was recognized in first quarter 1997 as software revenue. In addition, Fujitsu has agreed to pay Amdahl a total of $18,200,000 during 1997 in compensation for changes requested by Fujitsu to development schedules for storage products currently being developed by Fujitsu for the Company under existing joint development programs. Of this compensation, the Company recorded $6,000,000 as an offset to engineering and development expenses in the second quarter of 1997 ($12,200,000 for the first six months of 1997, of which 6,000,000 was recorded as an offset to engineering and development expenses and $6,200,000 was recorded as an offset to equipment cost of revenues). Amounts due from Fujitsu and their subsidiaries included in receivables were $24,218,000 and $43,906,000 as of June 27,1997 and December 27, 1996, respectively. At June 27, 1997 and December 27, 1996, $80,000,000 was outstanding under the loan agreement with Fujitsu. The terms of the loan were renegotiated in January 1997, and the full amount is payable in January 1998. Interest expense associated with the loan was $1,400,000 and $1,364,000 in the second quarters of 1997 and 1996, respectively ($2,775,000 and $2,922,000 in the first six months of 1997 and 1996, respectively). SUPPLEMENTARY CASH FLOW DISCLOSURE Income taxes of $9,525,000 (net of taxes refunded of $557,000) were paid by the Company in the first six months of 1997, and income taxes of $3,162,000 (net of taxes refunded of $7,021,000) were paid by the Company in the first six months of 1996. Interest paid on all borrowings was $4,713,000 and $4,842,000 for the first six months of 1997 and 1996, respectively. NONCASH INVESTING ACTIVITIES Net inventory capitalized into property, plant and equipment was $7,002,000 in the second quarter of 1997, compared to a net transfer of Amdahl-manufactured systems from net property, plant and equipment to inventories of $3,771,000 in the second quarter of 1996. Net inventory capitalized into property, plant and equipment was $19,603,000 in the first six months of 1997 and $3,174,000 in the first six months of 1996. I-6 19 AMDAHL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) BUSINESS ACQUISITIONS On April 16, 1997, Amdahl's professional services company, DMR Trecom, Inc., acquired William J. Kelley & Co., Inc. (Kelley), a Boston-based information technology firm. Under the stock purchase agreement, $3 million of the purchase price was paid in April 1997 and $2.1 million is payable without interest in April 1998. The present value of the aggregate purchase price at the acquisition date, including acquisition costs, was $5.5 million. The acquisition was accounted for using the purchase method of accounting. Accordingly, a portion of the purchase price was allocated to the net assets acquired based on their estimated fair values. SUBSEQUENT EVENTS On July 30, 1997 the Company and Fujitsu entered into a merger agreement whereby Fujitsu, through one of its subsidiaries, will purchase for $12.00 per share in cash all outstanding shares of Amdahl stock not currently owned by Fujitsu for approximately $850 million. The merger agreement was unanimously approved by the Amdahl directors who are unaffiliated with Fujitsu. In accordance with the agreement, Fujitsu commenced a tender offer on Tuesday, August 5, 1997. The tender offer is scheduled to expire at 5:00 p.m. EDT, Friday, September 5, 1997, unless extended. Pursuant to the merger agreement, if the tender offer is consummated, Fujitsu will be obligated to acquire any remaining Amdahl shares in a cash merger at the same price as the tender offer. Fujitsu currently owns approximately 42 percent of Amdahl's shares. The tender offer is subject to several conditions, including the tender of a minimum number of shares that, when added to Fujitsu's existing 42 percent stake, will represent 51 percent of the outstanding Amdahl shares on a fully diluted basis, and other customary conditions. The merger agreement further provides that upon acquisition of the minimum number of shares by Fujitsu's subsidiary, that subsidiary will be merged with and into the Company, and the separate corporate existence of the subsidiary shall cease with Amdahl continuing as the surviving corporation. Shortly after the July 30, 1997 public announcement that Fujitsu proposed to acquire those shares of the Company that it did not already own, several putative class actions were filed in the Delaware Court of Chancery and in the California Superior Court for the County of Santa Clara challenging the fairness of the proposed transaction to Company stockholders. Cases filed in the Delaware Court of Chancery as of August 1, 1997 are: Lopez v. Amdahl Corp., et al. (Civ. Act. No. 15833NC), filed July 30, 1997; Kaltman v. Lewis, et al. (Civ. Act. No. 15834NC), filed July 30, 1997; Uzzo v. Lewis, et al. (Civ. Act. No. 15837, filed July 31, 1997; O'Shea v. Kojima, et al. (Civ. Act. No. 15838), filed July 31, 1997; Gachot & Gachot, Inc. v. Amdahl Corp., et al. (Civ. Act. No. 15839), filed July 31, 1997; Crandon Capital Partners v. Lewis, et al. (Civ. Act. No. 15840), filed July 31, 1997; Bodakian v. Amdahl Corp., et al. (Civ. Act. No. 15841), filed July 31, 1997; McCeady v. Amdahl Corp. (Civ. Act. No. 15845), filed July 31, 1997; Zicherman v. Lewis, et al. (Civ. Act. No. 15847NC), filed August 1, 1997 and Halebian v. Lewis, et al. (Civ. Act. No. 15850NC), filed August 1, 1997. Cases filed in the California Superior Court for the county of Santa Clara as of August 1, 1997 are: Lacoff v. Amdahl Corp., et al. (Case No. CV767860), filed July 30, 1997; and Silverman v. Amdahl Corp., et al. (Case No. CV767896), filed August 1, 1997. In substance, the complaints allege that because of Fujitsu's ownership of approximately 42% of the Company, the relationship between Fujitsu and the Company and the alleged control of Fujitsu over the Company's officers and directors, Fujitsu dictated the terms of the transaction and that those terms do not reflect the fair value of the Company. The complaints also allege that the defendants -- Fujitsu, the Company and several individuals serving as officers or directors of one or more of those companies -- possess material non-public information regarding the fair value of the Company and breached their fiduciary and other duties to the public stockholders of the Company by failing to take adequate steps to determine the fair value of the Company or to condition the offer on acceptance by holders of a majority of the shares held by persons other than Fujitsu and its affiliates. The relief sought by the I-7 20 AMDAHL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) plaintiffs includes an injunction against the acquisition of shares by Fujitsu; an injunction requiring that certain steps be taken to evaluate the value of the Company; a declaration that defendants have breached their fiduciary and other duties; an accounting for damages; compensatory and/or rescissionary damages; costs of suit; and attorneys' and experts' fees in unspecified amounts. The Company believes, and understands that Fujitsu believes, that all of these suits are without merit and intends to vigorously defend such suits. On May 5, 1997 a jury rendered a verdict in favor of one of the Company's suppliers in the amount of $3.8 million as a result of a lawsuit arising out of a contract dispute. The Company was also liable for interest and attorneys' fees but was entitled to a credit for equipment returned by the Company and either resold or utilized by the supplier for other purposes. Pursuant to a settlement and release agreement, the Company made a final payment to the supplier of $4.8 million on July 22, 1997. Full provision for the settlement and related legal costs have been recognized in the Company's financial statements. NEW ACCOUNTING STANDARDS In February 1997 the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 128, Earnings per Share, which will be adopted by the Company in the fourth quarter of 1997. SFAS No. 128 requires companies to compute net income per share under two different methods, basic and diluted, and to disclose the methodology used for the calculation. If SFAS No. 128 had been applied by the Company during the second quarter and six months ended June 27, 1997 and June 28, 1996, basic net income per share and diluted net income per share would not have changed from what has been reported. In July 1997 the Statement of Financial Accounting Standards (SFAS) No. 130, Reporting Comprehensive Income, was issued and is effective for fiscal years ending after December 15, 1997. The adoption of SFAS No. 130 is not expected to have a material effect on the financial statements. I-8 21 The Depositary for the Offer is: THE BANK OF NEW YORK BY MAIL: BY HAND OR OVERNIGHT COURIER: The Bank of New York The Bank of New York Tender & Exchange Department Tender & Exchange Department P.O. Box 11248 101 Barclay Street Church Street Station Receive and Deliver Window New York, New York 10286-1248 New York, New York 10286
Facsimile for Eligible Institutions: (212) 815-6213 To Confirm by Telephone: (800) 507-9357 Questions or requests for assistance may be directed to the Information Agent at its address and telephone numbers listed below or to the Dealer Manager at its address and telephone numbers listed below. Additional copies of the Offer to Purchase, this Supplement, the revised (yellow) Letter of Transmittal and the revised (beige) Notice of Guaranteed Delivery may be obtained from the Information Agent. A stockholder may also contact brokers, dealers, commercial banks or trust companies for assistance concerning the Offer. The Information Agent for the Offer is: LOGO 156 Fifth Avenue New York, NY 10010 (212) 929-5500 (call collect) OR CALL TOLL FREE (800) 322-2885 The Dealer Manager for the Offer is: LEHMAN BROTHERS 3 World Financial Center New York, NY 10285 (212) 526-2415 or (212) 526-5266 EX-17 3 TEXT OF JOINT PRESS RELEASE DATED 8/20/97 1 EXHIBIT 17 NEWS RELEASE FOR IMMEDIATE RELEASE
Contact: FOR FUJITSU: Korendo Shiotsuki General Manager, New York Office (212) 265-5360 or SITRICK AND COMPANY Jeffrey Lloyd Michael Sitrick (310) 788-2850 FOR AMDAHL: William Stewart Vice President, Public Relations (408) 746-6076
FUJITSU AND AMDAHL ANNOUNCE SETTLEMENT OF STOCKHOLDER LAWSUITS TOKYO, JAPAN & SUNNYVALE, CA., USA -- AUGUST 20, 1997 -- FUJITSU LIMITED (TSE: 6702) AND AMDAHL CORPORATION (AMEX: AMH) today jointly announced that they have reached an agreement in principle to resolve stockholder litigation filed against the companies and against certain of Amdahl's present and former directors in connection with Fujitsu's proposed acquisition of all outstanding shares of Amdahl not currently owned by Fujitsu pursuant to a merger agreement dated July 30, 1997, and subsequent tender offer. The agreement in principle provides for an increase in the offer price to $12.40 per share from $12.00 per share in both the tender offer and subsequent merger, and for certain additional disclosures to be made in a supplement to the tender offer materials. Stockholders who have already validly tendered their shares and do not withdraw their shares will be paid $12.40 per share without taking any further action, if shares are accepted for payment pursuant to the tender offer. The defendants continue to deny any wrongdoing in connection with the tender offer and proposed merger and have agreed to amend the tender offer in order to avoid the disruption and expense of further litigation. Fujitsu said that it will amend and supplement the tender offer materials to reflect these amendments and redistribute such materials to Amdahl's stockholders. # # # 2029 Century Park East, Suite 1750 Los Angeles, CA 90067 (310) 788-2850 FAX: (310) 788-2855 EX-18 4 TEXT OF PRESS RELEASE DATED 8/22/97 1 EXHIBIT 18 FOR IMMEDIATE RELEASE - --------------------- Contact: FOR FUJITSU: Korendo Shiotsuki General Manager, New York Office (212) 265-5360 or SITRICK AND COMPANY Jeffrey Lloyd Michael Sitrick (310) 788-2850 FOR AMDAHL: William Stewart Director of Financial and Public Relations (408) 746-6076 FUJITSU AND AMDAHL ANNOUNCE FILING OF REVISED TENDER OFFER MATERIALS AND EXTENSION OF TENDER OFFER TOKYO, JAPAN & SUNNYVALE, CA., USA -- AUGUST 22, 1997 - FUJITSU LIMITED (TSE: 6702) AND AMDAHL CORPORATION (AMEX: AMH) today jointly announced, in connection with Fujitsu's proposed acquisition of all outstanding shares of Amdahl not currently owned by Fujitsu, that Fujitsu today will file with the Securities and Exchange Commission and will shortly thereafter begin to distribute to Amdahl's stockholders revised tender offer materials reflecting the increase in the offer price to $12.40 per share from $12.00 per share in both the tender offer and the subsequent merger, and certain additional disclosures, pursuant to the settlement of stockholder litigation which was announced on August 20, 1997. Fujitsu today also announced that the expiration time of the tender offer has been extended to 5:00 p.m. EDT, Friday, September 12, 1997, unless further extended. The expiration time is being extended to allow time for the receipt of certain foreign regulatory approvals. Fujitsu has been informed by the Depositary that approximately 1,453,925 shares have been tendered as of 5:00 p.m. EDT, August 21, 1997. Stockholders who would like further information can contact MacKenzie Partners, Inc., the Information Agent for the offer, at (800) 322-2885. ### EX-19 5 MEMORANDUM OF UNDERSTANDING 1 EXHIBIT 19 MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (the "Memorandum") is entered into by and between the undersigned law firms on behalf of all plaintiffs in the class action litigation generally described below (collectively, "Plaintiffs"), and Amdahl Corporation ("Amdahl" or the "Company"), Fujitsu Limited ("Fujitsu"), Fujitsu International, Inc. ("Fujitsu International") and the individuals named as defendants in such litigation, including directors and former directors of Amdahl, John C. Lewis, Michael R. Hallman, E. F. Heizer, Jr., Burton G. Malkiel, George R. Packard, Walter B. Reinhold, J. Sidney Webb, Kazuto Kojima, Takeshi Maruyama, Takashi Takaya, Keizo Fukagawa and Takamitsu Tsuchimoto (collectively, "Defendants"). FACT RECITALS A. Each of the Plaintiffs is and was as of the date of the filing of such person's complaint herein the record and beneficial owner of shares of the common stock of Amdahl ("Amdahl common stock"). B. The Plaintiffs in the below-referenced stockholder class actions have challenged a tender offer (the "Offer") and merger transaction contemplated by the Agreement and Plan of Merger (the "Merger Agreement"), dated as of July 30, 1997, by and among Fujitsu, a Japanese corporation, Fujitsu International, a wholly owned subsidiary of Fujitsu, and Amdahl, a Delaware corporation, pursuant to which Fujitsu International offered to acquire all outstanding shares of common stock of Amdahl in the Offer, and, following the completion of the Offer, Fujitsu International would be merged (the "Merger") with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly-owned subsidiary of Fujitsu. 2 C. Shortly after the July 30, 1997 public announcement of the Offer, Merger and Merger Agreement, several putative class actions were filed in the Delaware Court of Chancery and in the California Superior Court for the County of Santa Clara challenging the fairness of the proposed transaction to Company stockholders. Cases filed in the Delaware Court of Chancery as of August 5, 1997 include: Lopez v. Amdahl Corp., et al. (Civ. Act. No. 15833NC), filed July 30, 1997; Kaltman v. Lewis, et al. (Civ. Act. No. 15834NC), filed July 30, 1997; Uzzo v. Lewis, et al. (Civ. Act. No. 15837), filed July 31, 1997; O'Shea v. Kojima, et al. (Civ. Act. No. 15838), filed July 31, 1997; Gachot & Gachot, Inc. v. Amdahl Corp., et al. (Civ. Act. No. 15839), filed July 31, 1997; Crandon Capital Partners v. Lewis, et al. (Civ. Act. No. 15840), filed July 31, 1997; Bodakian v. Amdahl Corp., et al. (Civ. Act. No. 15841), filed July 31, 1997; McCeady v. Amdahl Corp. (Civ. Act. No. 15845), filed July 31, 1997; Halebian v. Lewis, et al. (Civ. Act. No. 15850NC), filed August 1, 1997; Cohen v. Amdahl Corp., et al. (Civ. Act. No. 15051), filed August 4, 1997; and Millet v. Amdahl Corp., et al. (Civ. Act. No. 15057), filed on August 5, 1997 (collectively, the "Delaware Actions"). Cases filed in the California Superior Court for the County of Santa Clara as of August 1, 1997 are: Lacoff v. Amdahl Corp., et al. (Case No. CV767860), filed July 30, 1997; and Silverman v. Amdahl Corp., et al. (Case No. CV767896), filed August 1, 1997 (collectively, the "California Actions"). D. Plaintiffs shall file a consolidated amended complaint (the "Amended Complaint"), and agree to consolidate the Delaware Actions under the caption In re Amdahl Corporation Shareholders Litig., Consolidated C.A. No. 15833 (the "Consolidated Action"). Plaintiffs' counsel shall cause the California Actions to be dismissed with prejudice, and this 2 3 agreement-in-principle is contingent upon a final dismissal with prejudice of the California Actions. E. The complaints referred to in paragraph C above and the proposed Amended Complaint referred to in paragraph D (hereinafter collectively the "Actions") challenge and seek to enjoin the Offer and the consummation of the Merger between Amdahl and Fujitsu International. Under the Merger Agreement, subject to certain conditions, each shareholder of Amdahl would receive $12 for each share of Amdahl stock tendered under the terms of the Offer, and any shares of Amdahl stock not purchased in the Offer would receive $12 per share in a second-step Merger in which Fujitsu International would be merged with and into Amdahl. F. In the Actions, Plaintiffs alleged, inter alia, that various of the Defendants breached their fiduciary duties to plaintiffs in connection with the Offer and Merger by, among other things: (i) failing to act independently to maximize shareholder value in furtherance of the best interests of the shareholders and the Company; (ii) failing to explore adequately all alternatives available to the Company's stockholders; (iii) agreeing to sell the Company to Fujitsu at an inadequate price; and (iv) inadequately disclosing to Amdahl's shareholders the events leading up to the Offer and the Merger Agreement and the factors relevant to the shareholders' decision whether to tender their shares. G. The Actions further allege that Fujitsu violated fiduciary obligations it owed to the shareholders of Amdahl by virtue of its affiliation with, control of and ownership interest in Amdahl by, inter alia, failing to pay a fair price for the public shareholders' stock; failing to implement a fair process for the purchase of the shares of Amdahl's public stockholders; and failing to make full and accurate disclosures concerning the events leading up to the Offer, the 3 4 Merger Agreement and factors relevant to Amdahl's shareholders' decision whether to tender their shares into the Offer. H. After the filing of the Delaware and California Actions, Plaintiffs' counsel and counsel for Defendants engaged in expedited discovery for the purposes of preparing for a hearing on Plaintiffs' request for preliminary injunctive relief. During this discovery period, counsel for Plaintiffs and Defendants engaged in extensive and good faith discussions regarding the possibility of settling the Litigation. On August 20, 1997, the parties to the Litigation reached an agreement-in-principle concerning the proposed settlement of the Litigation as set forth below. NOW, THEREFORE, the parties hereto agree as follows: 1. Purpose And Scope Of This Memorandum. The purpose of this Memorandum is to set forth the agreement-in-principle of the parties to the Consolidated Action with respect to the matters addressed below. However, the obligations of the parties pursuant to this Memorandum are subject to modifications, if necessary. Any necessary adjustments will be made on a mutually agreeable basis so as to preserve the economic, operational and other objectives of the parties in reaching this agreement-in-principle. 2. Principal Terms Of The Settlement. The following are the principal terms of the agreement-in-principle to be embodied in definitive documents to be executed by the appropriate parties (the "Settlement"): (a) Increased Offer Price. The Offer on August 5, 1997, provided for an Offer Price, as defined in the Merger Agreement, of $12.00 net cash per share. As a result of the Actions, Fujitsu and/or Fujitsu International agree to increase the Offer Price by an additional 4 5 $0.40 per share to $12.40 net cash per share, in consideration for a release substantially in the form set forth below. (b) Defendants' Right to Withdraw. Fujitsu and Fujitsu International shall have the option to withdraw from the Settlement in the event that holders of more than 20% of the common shares of Amdahl owned at the time of the Merger by persons other than the Defendants and any person, firm, trust, corporation or other entity related to or affiliated with any of them or their successors in interest, have demanded appraisal for their common shares and have not withdrawn their demand. (c) Disclosure. Counsel for Plaintiffs have reviewed and commented upon the disclosure materials relating to the Offer, Merger Agreement and the Merger. Based upon their investigation, Plaintiffs hereby agree and confirm that such disclosure materials, as modified, adequately and reasonably disclose all material facts about the Defendants, the relationship of Amdahl and Fujitsu, the history of the negotiations leading up to the Merger Agreement, the Offer, the Merger and Merger Agreement. 3. The parties agree to enter into a stipulation of settlement (and such other and related documentation as may be necessary) which will provide for the settlement of the Consolidated Action (the "Settlement Agreement") on, among other terms, the following conditions: (a) for certification, for settlement purposes only, of a mandatory non-opt-out class under Delaware Chancery Court Rule 23(b)(1) and 23(b)(2) of all record and beneficial holders of Amdahl common stock (other than the Defendants and their affiliates) during the period beginning on and including July 30, 1997 through and including the date of the 5 6 consummation of the Merger (the "Merger Date"), including any and all of their respective predecessors, trustees, executors, administrators, representatives, heirs, transferees, successors in interest and assigns, immediate and remote, and any person claiming under any of them, and each of them, and excluding the Defendants and any person, firm, trust, corporation or other entity related to or affiliated with any of them or their successors in interest (the "Class"). The terms of the Settlement Agreement will consist of the terms outlined above in paragraph 2, as well as releases and covenants not to sue and other terms in form customarily included in such agreements. The parties agree to use their best efforts to obtain Court approval of such Settlement. (b) for the complete discharge, dismissal with prejudice, settlement and release of, and an injunction barring, all claims, demands, rights, actions or causes of action, rights, liabilities, damages, losses, obligations, judgments, suits, matters and issues of any kind or nature whatsoever, whether known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, that have been, could have been, or in the future can or might be asserted in the Actions or in any court, tribunal or proceedings (including, but not limited to, any claims arising under federal or state law relating to alleged fraud, breach of any duty, negligence, violations of the federal securities laws or otherwise) by or on behalf of any member of the Class, whether individual, class, derivative, representative, legal, equitable or any other type or in any other capacity against Defendants or any of their families, parent entities, associates, affiliates or subsidiaries and each and all of their respective past, present or future officers, directors, stockholders, representatives, employees, attorneys, financial or investment advisors, consultants, accountants, attorneys, investment bankers, commercial 6 7 bankers, engineers, advisors or agents, heirs, executors, trustees, general or limited partners or partnerships, personal representatives, estates, administrators, predecessors, successors and assigns and all other persons (collectively, the "Released Persons") which have arisen, could have arisen, arise now or hereafter arise out of, or relate in any manner to, the allegations, facts, events, transactions, acts, occurrences, statements, representations, misrepresentations, omissions or any other matter, thing or cause whatsoever, or any series thereof, embraced, involved, set forth or otherwise related, directly or indirectly, to any of the Actions, the Offer, Merger, the Merger Agreement, or any related transaction or documents, the negotiation, consideration and approval thereof, or of the fiduciary or disclosure obligation of any of the Released Persons in any tender offer materials, proxy materials, public filings or statements (including, but not limited to, public statements) by the Released Persons in connection with the Offer, Merger, or the Merger Agreement (collectively, the "Settled Claims); provided, however, that the Settled Claims shall not include (i) the right of the Plaintiffs or any members of the Class or Released Persons to enforce the terms of the Settlement Agreement, or (ii) any appraisal rights arising out of the Merger; (c) that the Defendants have denied, and continue to deny, that any of them have committed or have threatened to commit any violations of law or breaches of duty to the Plaintiffs, the members of the Class or anyone; (d) that the Defendants are entering into this Memorandum, and will be entering into the Settlement Agreement, because, among other reasons, the proposed Settlement would eliminate the burden and expense of further litigation; and 7 8 (e) subject to the order of the Court, pending final determination of whether the settlement provided for in the Settlement Agreement should be approved, that Plaintiffs and all members of the Class, or any of them, are barred and enjoined from commencing, prosecuting, instigating or in any way participating in the commencement of any action asserting any claims, either directly, representatively, derivatively or in any other capacity, against any of the Released Persons which have been or could have been asserted, or which arise out of, or relate in any way to, the Settled Claims, or which arise out of or relate in any way to any of the transactions or events described in any complaint in the Actions. 4. Cooperation. The parties, through their counsel, (i) agree to use their best efforts to pursue the Settlement of the Consolidated Action in as expeditious and comprehensive a manner as possible and acknowledge that time is of the essence; and (ii) agree to cooperate in preparing any and all necessary papers to define, pursue and effectuate the Settlement of the Consolidated Action. 5. Pending negotiation, execution and approval of the Settlement by the Delaware Court of Chancery (hereinafter, the "Court"), the Plaintiffs agree to stay any discovery, to withdraw on August 21, 1997, their motion for a preliminary injunction in the Delaware Actions, and to stay and not initiate any and all other proceedings in the Consolidated Action other than those incident to the Settlement itself. The parties also agree to use their best efforts to prevent, stay or seek dismissal of or oppose entry of any interim or final relief in favor of the Plaintiffs or any putative Class member in any other litigation against any of the parties to this Memorandum which challenges the Settlement, Offer, Merger, Merger Agreement, or related transactions. 8 9 6. The parties to the Consolidated Action will use their best efforts to agree upon, execute and present to the Court, on or before August 29, 1997, a formal Stipulation of Settlement and such other documents as may be necessary and appropriate to obtain the prompt approval by the Court contemplated herein and by the Stipulation of Settlement. 7. The Settlement will not be binding upon any party until, and is otherwise subject to: (a) a formal Stipulation of Settlement (and such other documentation as may be required to obtain final approval by the Court of the Settlement) has been executed by counsel for the parties to the Consolidated Action; and (b) final approval by the Court of the Settlement (and the exhaustion of possible appeals, if any) and the dismissal of the Consolidated Action by the Court with prejudice and without awarding costs to any party (except as provided herein) have been obtained, and entry by the Court of a final order and judgment containing such release language as is negotiated by the parties and contained in the Stipulation of Settlement. 8. If the Settlement is not consummated in accordance with Paragraph 7, this Memorandum shall be null and void and of no force and effect, and shall not be deemed, used or offered to prejudice in any way the positions of the parties or any Released Persons with respect to the Consolidated Action or otherwise, nor to entitle any party to the recovery of costs and expenses incurred to implement this Memorandum (except as provided in paragraph 10 hereof). 9. In connection with the Settlement contemplated by this Memorandum, Plaintiffs' counsel will apply to the Court for an aggregate award of attorneys' fees and expenses, including fees and expenses for or payable to any financial advisors engaged by or for the 9 10 Plaintiffs, in an amount not to exceed $7,000,000 in attorney's fees and $250,000 in expenses (collectively, the "Fees and Expenses"). Defendants agree that they will not oppose such application. Subject to the terms and conditions of this Memorandum and the terms and conditions of the Settlement Agreement contemplated hereby, Fujitsu, Fujitsu International and/or Amdahl shall pay, on behalf of and for the benefit of the Defendants in the Consolidated Action, such Fees and Expenses as may be awarded by the Court in accordance with the terms of the Stipulation in addition to the consideration referred to in paragraph 2(a) above. Except as provided herein, the Released Persons shall bear no other expenses, costs, damages or fees alleged or incurred by any of the named Plaintiffs, by any member of the Class, or by any of their attorneys, experts, advisors, agents or representatives. 10. Fujitsu, Fujitsu International and/or Amdahl shall be responsible for providing notice of the Settlement to the members of the Class. Fujitsu, Fujitsu International and/or Amdahl, on behalf of and for the benefit of all Defendants in the Consolidated Action, shall bear responsibility for all reasonable costs and expenses incurred in providing notice of the Settlement to the members of the Class. 11. The provisions contained in this Memorandum shall not be deemed a presumption, concession or an admission by any Defendant in the Consolidated Action of any fault, liability or wrongdoing as to any facts or claims alleged or asserted in the Consolidated Action, or any other actions or proceedings, and shall not be interpreted, construed, deemed, invoked, offered, or received in evidence or otherwise used by any person in the Consolidated Action or in any other action or proceedings, whether civil, criminal or administrative. 10 11 12. This Memorandum constitutes the essential terms of the agreement among the parties with respect to the subject matter hereof, and may not be amended nor any of its provisions waived except by a writing signed by all of the signatories hereto. 13. This Memorandum and the Settlement contemplated by it shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflict of laws principles. 14. This Memorandum shall be binding upon, and inure to the benefit of, the parties to the Consolidated Action, the Released Persons and their respective agents, executors, heirs, successors and assigns. 15. This Memorandum will be executed by counsel for the parties to the Consolidated Action. This Memorandum may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. By signing this Memorandum, Plaintiffs' counsel represent that they have authority to act on behalf of all Plaintiffs and their counsel in all of the Actions. 16. The parties to this Memorandum agree (a) to use their best efforts to achieve the expedited dismissal of the Consolidated Action in accordance with the terms of this Memorandum and (b) to cause the timely occurrence of all events, transactions or other circumstances described herein. IN WITNESS WHEREOF, the parties have executed this Memorandum effective as of the date set forth below. DATED: August 20, 1997 ABBEY, GARDY & SQUITIERI, LLP 11 12 /s/ ARTHUR N. ABBEY ------------------------- Arthur N. Abbey 212 East 39th Street New York, NY 10016 (212) 889-3700 WOLF POPPER LLP /s/ STEPHEN D. OESTREICH ------------------------ Stephen D. Oestreich 845 Third Avenue New York, New York 10022 MILBERG WEISS BERSHAD HYNES & LERACH, LLP /s/ DAVID BERSHAD by ANA ------------------------ David Bershad One Pennsylvania Plaza New York, New York 10019 Co-Lead Counsel for Plaintiffs and the Proposed Class MORRIS, NICHOLS, ARSHT & TUNNELL /s/ WILLIAM M. LAFFERTY ------------------------ A. Gilchrist Sparks, III William M. Lafferty 1201 N. Market Street Wilmington, Delaware 19801 (302) 658-9200 MORRISON & FOERSTER LLP /s/ MELVIN R. GOLDMAN ------------------------ Melvin R. Goldman 12 13 Jordan Eth 425 Market Street San Francisco, California 94105 (415) 268-7000 Attorneys for Defendants Fujitsu Limited, Fujitsu International, Inc., Kazuto Kojima, Keizo Fukagawa, Takeshi Maruyama, Takashi Takaya and Takamitsu Tsuchimoto RICHARDS, LAYTON & FINGER /s/ KEVIN G. ABRAMS - -------------------------------- Kevin G. Abrams One Rodney Square Wilmington, Delaware 19801 (302) 658-6541 BROBECK, PHLEGER & HARRISON, LLP /s/ ROBERT B. VARIAN - -------------------------------- Robert B. Varian One Market Plaza Spear Street Tower San Francisco, California 94105 (415) 442-0900 Attorneys for Defendants Amdahl Corporation, John C. Lewis, Michael R. Hallman, E. F. Heizer, Jr., Burton G. Malkiel, George R. Packard, Walter B. Reinhold, and J. Sidney Webb 13 -----END PRIVACY-ENHANCED MESSAGE-----